Full text of Commercial and Financial Chronicle : December 19, 1957, Vol. 186, No. 5700, Section 1

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

WW
INVESTMENT BANKERS ASSSOCIATION CONVENTION

;UE'£S7 In 2 Sections
-Section'!"
~g? -x -

Volume

1

186

Number 5700

New York 7, N. Y.,

Price 50 Cents

Thursday, December 19, 1957

again Congress and the country

Jo be plunged into

a

The Trade

about

are

■TT-ATT

Stability The Investment Bankers
Free World Security Association of America Holds

shipping

ing and increased taxes
comitant

return to

such negotiated
and

alterations

would survive

in

now

are

as

failure of any

a

threat

to

fiscal

war

and

with its

—-

economic

con¬

strength.

presented in this issue.

assistance,

con¬

and revamp defense outlays. Warns we
play the Communist game of destroying our-

cannot

tinuation of the present law authorizing admin¬
istrative changes in the statutory rates. In sev¬
eral respects, however, the protectionists have

selves by "our

/

We

in

are

this nation.

with tariff
of 1934, and
are said to be prepared to put up the fight of
their lives to prevent the Administration having
jits way with a proposed new law which in broad
/effect would continue present arrangements for
grown
progressively dissatisfied
schedules negotiated under the Act

All of

us

The Investment Bankers Association of Ameri¬

extravagances."

own

ca

concern

to every one in

Texas,

occurred, one after the other, in the past three
months, since Congress adjourned.
Within a week I
conferred

with

for the

the

Secretary
Treasury on the fiscal situation,
attended a 3-day-session of Senate

Armed
the

Services

military

pated in

Subcommittee

Origin

President

Agreements Act is of New Deal
the wily Franklin Roosevelt who
came
early in his first administration
-with the idea that Congress might and ought to
'be persuaded to "pass the buck" to the Admin¬
istration in this matter of reducing tariff rates,
and that in this way it might be possible to

ing,

It

but

IBA
of

H. Craft, Presi¬
International In¬

iary
Bank, New York.

say

I

as

that

one

dents: William M.

of

Company, Detroit;
Jr., William R.
Staats & Co., Los Angeles; Wil¬
liam D. Kerr, Bacon, Whipple &
W. C. Jackson, Jr.
Co;, Chicago; W. Carroll Mead,
Mead, Miller & Co., Baltimore; William H. Mor¬
ton, W. H. Morton & Co., Incorporated, New York.

J. Earle Jardine,

in

United States Sena¬

a

received

much

so

disap¬

encouraging fact.

a

news

short
there

Sputnik has

out of

our complacency.
Our great country
forward, I believe, as rapidly as possible
to regain the ground we have lost. It is not my purpose

will

us

now

vice-presi¬
Adams, Braun,

Bosworth &

classified,
my long

was

never

time. From all of the bad

is
shaken

Much

The Associa¬

tion also elected five

explained

were

pointing information in such

Harry F. Byrd

move

Continued

on

page

THE

NEW

PRESIDENT

Except for three and one-half years with the
U. S. Navy during World War II, Mr. Jackson has

98

address

by Senator Byrd before the National Association of
Manufacturers, New York City, Dec. 5, 1957.

96

Continued

on

;

CONVENTION
Investment

the

told

were

can

have

tor

*An

page

we

I

experience

working arrangement than could be
hoped for if each and every rate in a complicated
tariff schedule had to be debated and finally
adopted by a Congress divided, as Congresses
always are, on the subject of protectionism and
on

conditions

and

what

get a better

Continued

Chase

Corporation, whollyforeign financing subsid¬
of The Chase Manhattan

Eisenhower

with the utmost frankness.

was
forward

.

forthcoming year. He suc¬
Robert

owned

These meetings were all enlighten¬

Trade

The

origin.

Jackson,

vestment

on

the legislative situation.

on

Southwest

C.

elected President of the Association

dent,

and partici¬
5-hour White House Con¬

a

Hollywood,
Jr.,
Company,. Dallas,

William

1-6.

First

was

ceeds

situation,

with

ference

:

Dec.

of

"

Of New Deal

from

President,

know the tremendous events which

have

have

held its 46th Annual Convention at

Fla.,

situation of vital

a

number of years.

a

short of

—

our

Advocates Congress write a limitation on
expenditures,
reduce foreign economic aid and emphasize more
military

The schedules of the 1930 Act, ameliorated only

effect

business

should

we

spending to permit neces¬
military effort prior to contemplating deficit financ¬

sary

jof others interested in freer international trade

by

balanced budget" in "preaching"

a

first cut non-essential federal

next June, and it is

a

Meeting at Hollywood, Fla., Dec. 1-6, amidst changing
and national, defense •-conditions,- - hears vad- i i
dresses by incoming President William C. Jackson, Jr.; J
outgoing President Robert H. Craft; Canadian Finance
Minister Donald M. Fleming; Richard S. Reynolds; Ed¬
ward N. Gadsby; John H. Stambaugh, and George S.
Trimble, Jr. Text of these addresses, also Committee I
Reports and other Convention developments -are

Senator Byrd denies he would "sacrifice
security wor¬

Ahe desire of the Administration, and of course,

something be clone to prevent

S. Senator From Virginia c
i:T.",
-■*".

•

V

■•

often

Agreements Act of 1934,

jas often amended, expires

That

/

By HONOR ABLE HARRY F. BYRD*

typical tariff controversy

Avith the usual differences of opinion and

bitterness.

Copy

U. S. Economic
to

Once

w.

,:.j.

c

.

EDITORIAL

a

FICTURES—Candid

Bankers

Fla.,

Association

86

photos taken during the 46tli Annual Convention

of

America at Hollywood Beach Hotel, Hollywood,

State, Municipal

Two of today's Issue.

in Section

appear

page

Ill

U. S. Government,
Stale and

and

•"

UNDERWRITERS

Municipal

BROKERS

Public

and

Housing Agency

DEALERS

;

Securities

telephone:

*

-

INDUSTRIAL"

HAnover 3-3700

COPIES

OF

OUR

REPORT

'

Bonds and Notes

"INVESTING IN THE

.

RAILROAD

PUBLIC

CHEMICAL

&

CORN EXCHANGE

DRUG INDUSTRY"

UTILITY

FOREIGN

1

ON

BANK
BOND

THE FIRST NATIONAL CITY BANK

DEPARTMENT

Burnham
..

30 BROAD ST.,

N.Y.

MEMBERS NEW

Company

and

YORK 5, N.Y.

•

Members New York

120

TELETYPE NY 1-22S2

COBURNHAM

Bond Dept.

Net

To

Active

Members

Orders

Canadian

CANADIAN

Exchange

BROAD STREET

DIRECT

NEW YORK 4, N. Y.
,

FIRST

iOMPANY




j

r '

:

BRIDGEPORT

•

*.

'

coast

to

,

WIRES TO

PERTH AMBOY

for

Brokers

115 BROADWAY
-

NEW YORK

California:
Municipals

Executed On All

Municipal Bond

DEPARTMENT

Department

MONTREAL AND TORONTO

&

I

NORTH

DoMRfioK Securities

LA SALLE ST

CHICAGO

iBank of Amcri ca

(ORPORATIOTI

Co.

MEMBERS NEW YORK STOCK EXCHANGE
.

bank

coast

Exchanges

Goodbody
-

/

Maintained

Banks and

Teletype NY 1-2270

25

from

5

BONDS & STOCKS

Commission

Stock

offices

THE

Chase Manhattan

Stock Exchange

BR0A0WAY, NEW YORK

CANADIAN

New York Stock Exchange
American

Markets

Dealers,

34

C2

CANADIAN

1832

ESTABLISHED

Teletype: NY 1-708

&

SECURITIES

T. L. Watson &Co.
BANK AND

V

OF NEW YORK

Dl 4-1400

REQUEST

Harris. Upham

YORK ANO AMERICAN STOCK EXCHANGES

15 BROAD STREET, NEW
CABLE:

INSURANCE STOCKS

BOND DEPARTMENT

NOW AVAILABLE

ARE

SECURITIES

40

Exchange Place, New Y ork 5, N.Y
'

Teletype NY 1 -702-3

WHltehall 4-8161

W

300 MONTGOMERY STREET

■i. J M

SAN FRANCISCO 20. CALIFORNIA'

3

';•<

The Commercial and Financial Chronicle
2

.

.

.

(2634)

The

Brokers, Dealers only

For Banks,

Security I Like Best

This

Forum

A continuous forum in which, each

Year-End Tax-Switch

la the investment and advisory

Problems?

participate and give their

week, a different group of experts
field from all sections of the country

reasons

for favoring

(The articles contained in this forum

nationwide private wire sys¬

Our

they to be regarded,

are

as an

Louisiana Securities

Groups
Omaha, Nebr.

full facilities
assistance and reli¬

long experience and
get prompt

to

service

able

lem.

Protective

issues

40(1

just call

available to

are

you.

vestor

New York Hanseatic

a

Exchange

i

Protective
PHILADELPHIA
Private

CHICAGO

•

SAN

•

Wires

§

earnings.

1956

s

the facts

^

Adjusted
Earnings

1952.-

12.12

_

1953-

E. Buffett

Warren

con¬

•*

12/25

_

15.05

2

lively

added

nrovidfl

c„hst:intH1

f1™

s™stan™1 ica^1_tai1 ^lns,

owns

company

lead-

Insurance Co. of America, a

insurer
Pennsylvania
insurer
witli
400,000 policyholders. After
allowing for inter-company items,
Home Protective has very little in
the way of other assets and liabilities. As a practical matter, with
only 1 Vo % of the stot'k of Home
Life held by others, Home Protec-

rnnitnl

ffainc

to todays buyer at t.ie 8a level in
the Over-the-Counter market,

IfcpONNELI&fO.
Members

York Stock

Exchange

Stock

Exchange

American

BROADWAY, NEW YORK 5

120

TEL. REctor

2-7815

tive

Co.

ance

Home Life

is the

Co.

from

America

of

Whereas

a

back the
company had a very dubious financial position, strict adherence
to the highest standards of investment
in the placement of new
funds plus utilization of retained
earnings
in
very- substantial
charges against over-valued assets
have given Home a very strong
financial picture.While in 1946
government-guaranteed mortgages
only accounted for about 13% of
assets, they now represent over
50% of assets which is greatly
above the industry average. During the same period the average

Trading Markets

Air Control

Products, Inc.

Bank of Virginia

Alabama-Tennessee Natural
Gas

First

Company

Colony Life Insurance Co.

Scott, Horner & Co.
Lynchburg, Va.
LD 33

Tele. LY 62

some

rate earned
from

Opportunities Unlimited
our

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

an

offer

any

or

solicitation

for

particular securities

stockholder

The

latter
.

is

business

ordinary

and

fully

The security I like best offers
stability, high intrinsic value and

built-in growth of income which
should have appeal during this
time of unsettied market
conditions,
generally,
Southdown
Sugars, Inc.,
owns in fee
over 4 6,0 0 0
acres of land
located in the

almost

industrial

entirely
with

profitable

as

as

LAMBORN & CO., Inc.

has been

STREET

5, N. Y.

SUGAR

profitable
mineral

—

branch

our

offices

marked

under

been

of

acres

lease

to

has

Southdown

stocks

major

and

years,

been

japanese

land

fee

For

information

current

receiving

Call

write

or

royalty income since the discovery

Yamaichi

of the Gibson Field in Terrebonne

1937.

Lease and royalty

income has increased from $550,500
to

Securities
of

$1,275,000 (before taxes) in'the

New

five

and

annum)
of

Affiliate

(average 26%

years

gives

Inc.

of'

per

Yamaichi

indica¬

every

continuing to

Company

York,

increase

approximately this rate.

Securities

Co., Ltd.

Tokyo, Japan

at

Brokers

111

Investment

&

Bankers

Broadway,N.Y.6C0rtlandt 7-5680

The development of the oil and
gas

industry,

discovery

combined

of

plus

large

industry.

announced

been

for

the

CHRISTMAS

Plans

such

by,

AND

THE

Dow Chemical, W. R.

as

Aluminum,

Kaiser

Grace,

BEST WISHES

make

to

center

a

petro-chemical
have

of

reserves

combined

Louisiana

south

the

sulphur

ample supply of fresh

an

have

water,

with

substantial

NEW YEAR

Olin

and duPont for the invest¬

revere

.

ment of

more

than $250 million in

located

plants

along

the

Missis¬

Members

and Baton Rouge. Additions to the
world's

largest

oil

Baton Rouge

refinery

Oil

of

Midwest
Detroit

—

1051

plant—to the

Indiana's

refinery

♦

MORELAND & CO.

sippi River between New Orleans

Stock
Stock

Exchange
Exchange

Penobscot

Building

DETROIT 26,
WOodward 2-3855

at

Branch

MICH.

'DE15

Office—Bay

City, Mich.

Destrehan have also served to fur¬

ther

industrialize

of

discovery
Gulf of

oil

this

and

The

area.

the

in

gas

Mexico,,off. the Louisiana

coast, has also served to intensify

oil and gas in

in

activity

this

and

area

has

ho*)R mof

brought considerable expansion in
Shelb

Friedrichs

stable

a

and

business, the

cane sugar

income, after taxes, from

the advantages of partici-

en3°ys

pation in the results of production

very

oil field

equipment and allied in¬
*•

dustries.

The result of all of this has been

£

to bring about much improvement

has

company

flnv

Liquid

some

the books.

However, the
been maintaining a steady march upward
and with a continuation of higher
power

mortality,
ness

share
DIgby 4-2727




a

should

creases

in

of

with-

ou! assumm8 ™5 01 tne attendant
addition, the land value

has

also

stantial

increases

tion

the

of

brought
in

the

n

adding

area,

to

the

values of land for residential pur¬

Approximately 13,000

poses.

acres

the

Mississippi

the

remainder

has

greater base of busicreate

further

earnings.

Home

With each

Protective

senting $1,100 in assets,

in-

a

repre-

Vz of 1%

commercial

and

adds

purposes,

sub-

stantially to the intrinsic value of
r_

stock.
The

company

integrated

refiner

of

a com-

producer

and

operating

cane

,,

.

7

.

,

three raw sugar factories and one
refinery. Southdown has approxiland
other

pacity

and

acres

purchases

growers

to

of cultivable
cane

The

ports Cuban

is

and

traversed

highways

or

all

on

of

by

other

or

both.

company

raw sugar

In

an

attempt

intrinsic
been

values

created,

my

to

have

firm (after

thus
con¬

sultation

with

land

and real estate experts)

has

men

made

the

oil

the

measure

that

geologists

and

accompanying

ap¬

N. Q. B.
OVER-THE-COUNTER
INDUSTRIAL STOCK INDEX
18-Year Performance of

35 Industrial Stocks

from praisal of Southdown's properties.

supply the

requirements of its

factories.

main

River

»

is basically

pletely

either

waterways,

J

*

sub¬

for

industrial,

m

popula¬

of Southdown's land is located

years

while the capital base is enlarged
in line with the amount of busi-

Exports—Imports—Futures

acreage

of the attendant

/1IS S*

writing residential

been

the 50-cent annual rate will prob-

on

its fee

on

t assumine

industry

of much of South down's property

ably be continued for

ness

Southdown Sugars

commg yeais

yields, low lapsation and favorable mately 18,000
Refined

46,000

companies in recent

ard

the

low indieating well-seasoned business and
experienced mortality has beefi
company

earnings

—

oil

a

Shell plant at Norco and to Stand¬

the

dowrrassets to realistic values and

Raw

have

Fsso's

most attractive on-shore
area for the
exploration of

The lapse ratio of the operations

former.

the

NEW YORK

the

of

companies

,MA

to

.

Dividends have been small while

WALL

c11&arc

^own Sugars, Inc.

gain

excellent.

99

cnil4hHAU/n

Mobile, Ala.
Direct wires

no guesses as to what
in land values, particularly those
belongs to him and what really
®
eased to major oil corn- situated along strategic
waterways, V>
belongs to the policyholder. Cur- pames last year exceeded net insuch as the Mississippi River, the
rently Home has close to $300 mil- come from sugar operations, and
lion of insurance in force with will increase materially over the Intra-Coastal Canal, etc., and the
practically no low-profit group. oornin0 vparq
major highways.
cnnfhHmvn q„«arc
This influx of

Stock

Nomura Securities Co., Ltd.
is

Members, New Orleans Stock Exchange
and Midwest Stock Exchange

NY 1-1557

need make

Monthly

The

orders

This

3.60%.

to

Home's business ig entirely non-

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

This

Partner: Howard, Weil, Laboujsee,
Friedrielis & Co., New Orleans, La.

'

New Orleans, La.- Birmingham, Ala

the company. - Nearly all

on

salt and

FKIEDRICHS

on

participating.

IN JAPAN
for

SHELBY

the United
present assets of $1,100 States — south
G
per share amounts to over $16 per Louisiana. Alshare annually.
though operating
2.04%

based

Write

years

assets has increased

on

G.

Insur-

stockholder standpoint.

effect

deposits,

ing

over

Exchange

American Stock Exchange

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

The exploration for oil and gas
Louisiana, dating back to.

to

greater investor recognition should

98>/2% of the outstanding stock of the Home Life

SCRIP

/

tion
appears

Uembers New York Stock

Members

in south

last

A continuation of such increases

which

Steiner, Rouse & Go.

18.42
22.62

...

61/463
Shares Of stock outstanding.
The

Since 1917

New

G.

—

HAnover 2-0700

Parish in

A9.92

_

1954—

to

Share

per

1951

Home Protective has only

&

indi¬

years:

six

are

Year

cerning the company should result
in a substantially higher appraisal,

Specialists in

earnings

following

cated for the past

education of

RIGHTS

Inc.

related the early 1930s, has had

when

in force at conservative rates,

ance

Any

investors

greater

only 61,463 shares outstanding.

the

times

four

substantially

Adjusting for changes in insur-

currently sell¬
ing at less than

FRANCISCO

Principal Cities,

to

to

the

of

price earnings ratio
placed on com¬
parable com¬
panies. Home

Teletype NY 1-40

BOSTON

j

Sugars,

Friedrichs, Partner,
Howard, Weil, Labouisse, Friedrichs & Co., New Orleans, La.
(Page 2).
Shelby

year

particularly

value,

than

less

have

can

lowest

Broadway, New York 5

120

WOrth 4-2300

t

half

1920

Stock

past

Given proper zoning such holdings

the

security to sell

Member

Associate

aware¬

ness causes

Corporation
American

the

Bought—Sold—Quoted

Omaha, Neb. (Page 2).

Southdown

fully effective,
a change

— Sev¬
Groups,

The company possesses an addi¬
probably
operation has been in the
tional "kicker" in large holdings this
represents the last "undiscovered'
equity security of a major life in- 0f contiguous undeveloped land on neighorhood of $1,500,000 per an¬
surance company. This lack of inthe Main Line
in Philadelphia. num, before taxes.v

'Tlanseatic."

Established

be

to

,

and it has
not yet been reflected in Home's
earnings.

Co.

Protective

Home

time

E. Buffett, Manager

ren

have witnessed such

within

Life Insurance Stock)

(A

erable

Company—War¬

eral Private Investment

ing power. While it takes considwe

HOME PROTECTIVE CO.

any OTC prob¬
markets* in over

on

Primary

Investment

Priv ate

Manager-Sev eral

nor

$5.50 per share change in earn-

a

tem,

help solve your problems for you.
Take advantage today of our

be,

to

offer to sell the securities discussed.)

WARREN E. BUFFETT

reaching hanks, brokers and
dealers all over the country, can

intended

not

are

abama &

A

Their Selections

Home

Try "HANSEATIC"

Week's

Participants and

particular security.

a

Thursday. December 19,1857

ca-

sugar

also im-

to fill

re-

change in interest rates represents finery requirements. Income from

The

values

attributed

are

of

the

FOLDER

ON

REQUEST

"horse-back variety and take into
consideration

well

as

mineral

surface

values

values.

Continued

In

as

my

National Quotation Boreaa
Incorporated

46 Front Street
on

page

119

New York 4.N.Y.

Volume

Number 5700

186

.

The Commercial and Financial-ChrofftHle

.

.

(2635)

INDEX

The Outlook lot the 1958 Maiket
V;.

•

.V';

v.j-VBy SHELBY CULLOM DAVIS*

LlCMfRSTEIfl

"
Articles and News

/

<

Page

"

Managing Partner, Shelby Cullom Davis & Co.
Members New York Stock Exchange

Mr. Davis maintains two basic bullish factors

'j'

high

prospective

^

:

economic

U

activity stemming, from

':

and 1

"

V

current

A

Inflation: Cause and Prospects—Lawrence Fertigi
The Business Outlook—Herbert V. Prochnow

threats to nation's defense and scientific status. Holds present £•
unfavorable conditions have been largely discounted by mar¬

v

Stability Key to Free World Security
—Sen Harry F. Byrd—
1
_"__J
The Outjook for the 1958 Stock Market
—Shelby Culiom Davis-

.

position;

0

drop; and coming industrial revival will similarly be anticipated marketwise. Favors chemical, oil, motor,
and life and casualty insurance groiips for 1958; with general i:
market laying groundwork for resumption of bull market's
advance to new highs by 1959.
x
;

«*•

V

.

■S.-tr.
I

?!

of

the

stock

Puerto Rican at Home: Operation Bootstrap
—Edward Marcus

Two

dustry,

the

to mobile

affairs,

might

qualify
a

to

some¬

talk

to

one

Shelby Cullom Davis

,

,

no

.

.

There is only

know of

such

as

decline in

a

one consolation.

one

who is

an

It

is

today's

Was it not Dr. Faust
drama

who

incurred

the wrath of the Gods for his at->

at

;

' *

*

the

on

HAILE

;

*//v;.\;• ;•' /.;a;;

';■

Canadian Dollar Noted by

(universal

macrocosm

LISBON URANIUM
'

• ■

LITHIUM CORP.
,<

3

Bank

Scotia_-2^_-___--__^^i_i^—?

—Edward

had to content
microcosm1 (the

himself -with
world in

miniature)? Instead of a
world's eye view, he had to take
a worm's eye view.
So must

"

en<j

"cocktail set"

about how low

is

The. startling

brought

well turn into

,

it

39

Exchange PI., Salt Lake City

DAvis 8-8786

28

Securities Committee

State

Legislation

Public

Utility

stocks,

view
m

30

—III—II—II

32

34

....

J.

35

2»—

Securities

Aquafilter

33

....

Committee

Governmental

market

;2—

—

Committee.

Canadian Committee

Railroad

Committee.^

through

complex

from

the

stock

worm's

of my own specialty, and
microcosm,
achieve

the

view

or

macrocosm.

•

Frankly I am glad to be talking
to you today rather than just after
Labor Day. And in this I am quite
unlike the farmer in the story
who
was
trying to direct the
stranger who was lost. As a matter of fact, this particular stranger
was a motorist who got lost in the
hills of Kentucky while on his
way to Louisville to see the Derby,
-

He

and

crossroads cabin

a

this

asked

farmer, who was
native,1 the direction
the road to Louisville. ''Well,"
the old man, "Louisville is
away.' You
could go down
there road, but it runs plumb

ancient

an

and

said
that

that
up

stopped at

again, the mountain. You could

take this here road but it ends up
at the river. There is another road

going in. the* right

direction but
it ends smack up in Okey Wilkerson's pasture.
Mister," said the
old man, scratching his head in
perplexity, - "if I were agoin'> to
•

1

♦An

r

1

address

by

Davis

lhat

before the

beiieve

and

million

170

otherwise.

Americans

.

If

Industry

Committee

Securities

38

Committee..

Oil and Natural Gas

Pacific Uranium

37

Committee

Trans Canada

39

—

IBA Holds 4Gth Annual Convention

;

will

.Cover

jnt0

sonable to

W. Carroll Meads Reports on'Activities of IBA Education
2 Committee. 2
2
87

themselves

to

slip

quietly

'

a
deep recession in business
and economic activity? Is it rea<-

that we shall

suppose

—

As

prochement

with

See

and

Business

HA 2-0270

Direct Wires

Dealer-Broker

.108
—

the Investment

Field—•

—

NSTA

Notes

News

About

'
Banks

Observations—A.

and

.118
—

—

—

case

of

jitters

on

this

*

a

Securities

But there are few today who will

?e^tsy,DD^.Hri95"inR' New York Uni~

'-."-r. Continued

on.page

Salesman's

Corner...—

Washington and You—

97

2

—

The Market . .. ,< and You—By Wallace
The Security I Like Best
:
The State of Trade and Industry

119

—

—

110
114

—

—

.....—...

_

_

——...——a—..—--—-—

Hydra Power*

92

——

Streete

United Western Minerals

86

__

...

score.

103

—101

—

had

Epsco Inc.

5

—

.

Several times the market

18
20

—

—

—

possible rapSoviet Russia,

116

—

—

—

May.
—
Our Reporter on Governments,
—i.
^
Our Reporter's Report
——.12Public Utility Securities
1.
Railroad Securities
—.—.———~
Securities Now in Registration.
———
Prospective Security Offerings^
1—
—
—

Lithium Corp.

8

_

—--

-

—

Bankers—2_:—

Wilfred

18

_

...—.—.

—

—_—

8

_

on

Funds

8

_

British Fight Against Wage-Price Rise"
From Washington Ahead of the News—Carlisle Bargeron
Indications of Current Business Activity..
Mutual

10

-

2.

i.—

Recommendations

Einzigt "Guarded Optimism

Angeles

Dallas

Cover

Bookshelf

Investment

N.Y.

to

Los

Chicago

(Editorial)....
Stocks

it

inc.

40 Exchange PI.,

Teletype NY 1-1825 & 1-4844 ;

Insurance
Man's

Coming Events in

will be allowed to happen. Some
months, ago the talk was of disr
a

We

Bank

Given the present world situar
tion, which is etched in bold relief
so that he who runs may read, I
do not believe that these things

and

42

Regular Features

friendly and close relations with
important members of the Middle
East and African regions? Will we
allow Soviet Russia to move into
a vacuum created by .our1 own
economic ineptitude?

armament

Mackie,

&

Philadelphia

maintain

to

Singer, Bean

—.

CANDID PICTURES taken during the course of the Con¬
vention appear in today's 24-page Pictorial Section.

■

depression of magnitude? If we
are in mortal peril, will we allow
a
man-made depression to cost

opportunity

——

Candid Pictures Taken at Convention

a

our

86

In Attendance at the Convention—

willingly allow our/decreased economic activity and consequently
lower imports to draw our friends
in the rest of the free world into;

us

Pipe

Common & Units'

rresident-elect William C, Jackson, Jr.'s Inaugural
Address
_2_r,
U

allow

bad

:

Mr.

Teller

Edward

Ray McDermott

36

-

the,nation is in mortal peril, as in
]942.
is it reasonable to expect

the

Teletype: SU 155

Committee——.

Foreign Investment Committee—

us

Nuclear

1958

Teletype: JCY 1160

27

i

Securities

scientists / such

Dr.

EfEnderson 4-8304

DIgby 4-4970

Understanding Friend

.

Industrial

to read the statements of eminent
as

v

Exchange PI., Jersey City
•

Municipal

difficult

is

1

-COMMITTEE REPORTS-

struggle for

a

least

At

.

Spokane Stock Exchange

25

the Doorway to Space
—George S. Trimble, Jr.„_x

race .which

survival.

Members Salt Lake City Stack Exch.

26
an

—Hon. Donald M. Fleming-

Satellites

:

developments

arms

J.F.Reilly&Co.,Inc.

24

talking.,

now

of Soviet science have
an

-

Gadsby—

the market is go-

to the brink of
may

N.

H. Stambaugh—.2
Speaking in Frankest Terms as

jng rather than how high—always
a good sigm
"
(2)

-addresses

:—John

I, who have made whatreputation I may have as an
expert: in the field of insurance

ever

the world

STATES

NATURAL GAS

Coverage of IB A Convention:

Aluminum's New Era—Richard S.
Reynolds, Jr.—
The Return of Power to State Governments

*

.

knowledge)—and

eye view

MINES

2

Financing Problems of Small Business

the. highest since 1932. The week-

s

-16

—_

Current Economic Situation and Prospective Fiscal Policies
'—Robert H. Craft—
:J.
22

-

buyers (at the low prices of November).The short interest is at

Goethe

15

'-ii—2—2.__—_W 20'

,

stronger technical market position
I by coriverting potential sellers (at

simply
changing

in

everything.

Nova

Editorial

JulylS high prices)/ into potential

these 'fields.

tempt

of

..

expert

impossible

m

Changing Pressures

AQUAFILTER

14

—

Realty and Mortgage Markets

on

±.,ri';....,;;i,\s

3

business andL

^n?w everything about

all

in

—

Frederick G. Shull Suggests Changing Role of the Rediscount
-V Rate (Letter to.Editor)—--—^-;_^105

Resulting decline in corporate
profits,/and
it
has
created
a

stock market.
.

;}/
;

a

b out the

.

__

Cobleigh—

—Hugo Steiner —2

tc

past which seem to occur
every, decade—in J946/; in
1937, in 1929-in 1917, in 1907. The
present decline' has accomplished
two /objectives:, it has discounted
potential bad news in the future;,

which

seem

————

Effect of Recent Events

about

attain¬

ments

11

in,the

domestic poli¬
tics—or any of

the

Points 0

YORK

-12

Short-Run Interest Rate Outlook—Edward E. Brown.—

;of'100 points. This decline ranks
historically with the great declines

industry, for¬
eign

Fundamental

The stock market, as measured by the Dow-Jones Industrial
Averages, has suffered a decline

WALL STREET, NEW

Telephone: WHitehall 4-6551

*.

Tight Money and Faith—Roger W. Babscn2._22.2________—_2 18

'

,

(1)

in¬

steel

a u

-

Two From Texas—Ira U.

.know—-two funda¬

mental-points.

market/the
business, cycle,
the

we

99

—

——

mechanics

what

-

The

neither

with

obsoletes !

—Hon. James P. Mitchell—i._^—__i
Challenges to Banking in 1958—Howard P. Parshall-—

the

those without

—even

Specific Labor Proposals of the Eisenhower Administration

an

son

TO EVERYONE

—

—

approach

am

MERRY CHRISTMAS

_i—_____

Gearing Economic Policy to the Crisis Before Us
—Harry A. Bullis_—

proper

I

Vision—Clifford F. Hood—*—

Economic Outlook Implications for Interest Rates and Deposits
—J. Brooke Willis
'

this subject with Louisville,>1 wouldn't start from humility. It is obvious that herel'V err
;
a
prophet nor the
I don't feel'that way. The path- '
Neither am I way to the; stock market future
of a /prophet
xV'Vv,;Vr';- seems better marked. Let us start
expert in

:

Time for

!

..-Cover

Meeting Deep-Seated Problems with a Firm National '<
Purpose—Nelson A. Rockefeller——i
i_

ket's 100-point
-

AKC COWAWY

U. S. Economic

the market's r

are

healthier atmosphere with improved technical

3

16
2

4

San Juan Racing

.120

—

_

Common & v. t. c.
Published

Twice

1

Weekly

Drapers'

land

The COMMERCIAL

For many years we

have

specialized in

FINANCIAL

PREFERRED STOCKS

Reg.-U. S.

25

Spencer Trask & Co.
25

BROAD

New

York

Stock Exchange

'

B.

Park

Reentered

as

DANA

COMPANY, Publishers

Place, New York 7, N.




Vitro Corp.
*

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

Y.>

Subscription

SEIBERT, Editor & Publisher

Thursday, December 19,

United States,
U.
Territories and
Members

Possessions,

Union,

Dominion

,

^

.

TELETYPE NY 1-5

•

Chicaga

Schenectady

»

•

Glens Falls

Worcester

•

Rates

in

Pan-American

WILLIAM DANA SEIBEKT, President
"
'i.
'

Every

vertising

•

Eng¬

second-class matter Febru¬

Subscriptions

plete

Boston

Nashville

C.

Copyright 1957 by William B. Dana
Company

CHRONICLE
Patent Office

Canada,

Other

1957

of

Countries,

(general news and ad¬
and every Monday (com¬

Thursday
issue)

issue—market quotation
corporation news, bank clearings
and city news, etc.).
statistical

Bank
$40.00

Other

Chicago

Offices:

3,

111.

135

South

La

Salle

St.

(Telephone STate 2-0613);

and
per

Note—On

records,
state

$65.00

$72.00

per

$68.00
per

year,

per

S.

Prospectus

the rate

of

year,

INCORPORATED

39

BROADWAY, NEW YORK 6

year.

made

3-3960

Publications

Record — Monthly
(Foreign Postage extra.)

account

of the

exchange,

fluctuations

in

remittances for for¬

eign subscriptions and ad"ertisements must
be

request

in

Quotation

year.

on

m V. FRANKEL & CO.

of

WHitehall
Other

•

E.

Smith.

REctor 2-9570 to 9576
HERBERT D.

i

ST., NEW YORK 4, N. Y.

TELEPHONE IIAnover 2-1300

Albany

London,

&

ary

WILLIAM

Members

Gardens,

Edwards

c/o

and

in New York funds.

Teletype NY 1-4040 & 4041
Direct

PHILADELPHIA

Wires to

SALT LAKE CITY

4

The Commercial and Financial Chronicle

(2636)

market

our

A Time for Vision
By CLIFFORD F.

neering
work

HOOD*

nation's economic

the

cause

upward climb. Though confident the
stitute
ever

of the most remarkable

one

Mr. Hood

seen,

warns

to

years

their

maintain

to

resources

will

come

fellow in

con¬

spent

of progress we have

eras

critical decisions facing

in

us

answering "grim" fairy tales being told about America's

atomic

eco¬

of

system. Alarmed at profit and tax-cost squeeze, the
industrialist states we must understand the natural laws of
economics
assume

and

.

.

"keep

and

The eyes of the world, of course,
focused

upon

for the immediate and long-range
tutu re.
It is

consumer

'!$$$&&*
KSSftd

has

know what
the
final re_
will

suits

this

for

tie.

the

no s

eco-

ing firms in this nation

al-

are

ucts

;.'coming in the
last few weeks
To

ulation.

have

reminded, however, that
principal stumbling block for
who have sought to use eco¬
nomic history as a means of pre¬
dicting the future of our economy

sia.

many

is

the

cardinal

One

is

economy

the
impa¬

that

it

There

characteristic

this

is

achievements
motivates

of

the

to go;

us

of

the

with

fqrw;ai<d.

America.

Commerce

of

an

It

spot

It

is

pleasing

is among those or¬

understanding of this problem.
to be hoped that this new

is

awareness

that

on

a

hopeful

ganizations which have indicated

sion and which point to the fact

should not forecast

few

will

continue

to

grow

national scale,

a

and soon
positive action.

re¬

scattered economic showers as the

sult in

advent

Of course, 1 could mention a
number of other factors.
There

of

Perhaps,

nation-wide

a

selves of

a

symptoms

flood.

remind

should

we

our¬

few of these

numerous

business

advance¬

of

ment.

For example, there is
new

that

fertile

products

are

industrial

area

where

created and

keep

vestment

shape

in

American
more

the move.
rising industrial in¬

our economy on

The results of

new

in

research

the

the individual plans

are

industry

to

allied

are

taking

plans-of

introduce

products between

address

annual meeting
of
Commerce,

9,

ex¬

in the automobile and
industries, in the petroleum

chemical

and

industries

to

men¬

tion only a few.
In U. S.

Steel,

now

by Mr. Hood before the
of Indiana State Chamber
Indianapolis, Ind., Dec.

1957.

have been ex¬

pressing our faith in a number of
ways here in Indiana as most\ of
you are aware. This is indicative,

might add, that we believe not
only in the future of America, but
in

the continuance

the center of
It

is

our

a

one

of

unshakable

of the

of

progress
seen.
Our

Indiana

as

strong market area.
belief

that

will constitute

most remarkable eras

this nation has ever
research people and

ESTABLISHED 18941;

other

be

going in business, and

ing to be

are

we

have

we

no

tomorrow. Our efforts
technical and commercial re¬
a

business management is to
economic resources of

the

cause

nation

MUNICIPAL BONDS

CORPORATE BONDS
LOCAL STOCKS

to

maintain

their

up¬

ward climb.
It

however,

me,

that

those who might doubt this should
be reminded of a wise observation
attributed

to

The

Robinson-Humphrey Company,Inc.

week

Board

the Federal Reserve

its

released

report

in¬

on

dustrial production for the month
of

November, and according to its

index,

declined

output

the

for

third consecutive month.

The

board's

showed

index

a

drop of two points from that of
October, the figure standing at
139% of its 1947-49 average. This
represented a full eight points be¬
low the record high of 147 at¬
tained

December.

last

vember,

No¬

For

the index stood at

1956

Some

economists,
it is reported, look for output to
drop
further,
cautioning
that
there's

government

cials

do

not

ahead

news"

bad

"more

business.

for

However, the offi¬
any prospect of

see

depression,
nor
are
they in
agreement with a prediction last
a

week by Dr. Emerson P.

jdirector

research

what

of

Schmidt,
United

the

calls

he

the

will be "at least

as

recession

1958

severe"

as

Index
"

It

through

was

visualize

the

American

ability to

our

potential of the

economic

system

that

motivated, in past years,
it into the most pro¬

were

develop

on

conditions

was

that while in¬

production continued to
decline in November, construction
activity held at record levels. It
pointed out that a reduction in
employment became widespread
and
unemployment
increased.

business loans declined

further and total bank credit

the employ¬

shows

that

mid-

unemployment
rose
700,000 over the previous month,
bringing the jobless ranks to the
highest level for the month since
1949, according to a joint survey
by the United States Departments
V

of Labor and Commerce.

At

the

time, employment
to a total of 64,900,000, the lowest point since April,
1956, the above source noted.
The agencies attributed the bigsame

fell 1,100,000

rise

in

unem¬

ployment, which totaled 3,200,000, largely to greater non-farm
layoffs and to people unsuccess¬
fully searching for Christmas jobs.
A rise of 165,000 in trade employ¬
ment

"comparatively smaill"

was

for the

pre-holiday season; the re¬
port said.
,
:
•
The latest employment level re¬
flected a drop of 190,000 from a
year earlier, while the new jobless
total was an increase of 526,000

Factory
employment
dropped
by 230,000 during the month to a
total
of 16,600,000, the agencies

dustrial

Then too,

ductive system known to man.

report

situation

November

frpm mid-NovemJber last year, the
report added.
.* *
i

ness

men," he said, "is the need for

ment

the

downturns of 1949 and 1954.

of

vision and the readiness to follow

A further

ger-than-seasonal

146%.

So^ne of the developments the

ex¬

Most Solid Basis for Progress

Continuing, it stated that, "ac¬
tivity was curtailed generally at

revealed, pointing out that this
was
"substantially more than
usual"

for

this

time

the

of

year.

The decline reflected cutbacks in
the

metals, machinery and aircraft
industries, while employment in
automobile

increased

plants

production of

new

as

models went up.

panded.

We need to

the

potential
resides

knowledge
have

realize, today, that
of American indus¬

in

the

and

reservoir

ideas

developed and

of

which

we

capacity

our

both

factories

mill

and

mines.

operations continued

cline

and

November

in

October.

In

Steel

to

de¬

were

6%

to turn them into useful products.
No economy in the history of the

below

experiencing

ity in most producers' equipment

early Decem¬

ber, mills operated at 70% of ca¬
and
ingot capacity
was
world ever had a more solid basis pacity
for progress.
We may encounter, 30% below a year ago. There were
plateaus, such as the one we are additional curtailments in activ¬
the

at

moment.

There may be

periods of.levelingoff, but certainly, if I read the
signs correctly, such periods are
nothing to be unduly alarmed
about. Rather, they should serve
to sharpen our vision and
strengthen our determination to
perform the necessary tasks which
This is hot to say that we have

left all of the
behind

complex problems

that

us or

counter

serious

continue

to

well

that

be

critical

forward.

go

en¬

as

It

the

of

some

to

be

made.

the

in

to

I

realm

expansion and in
forts

shall not

we

obstacles

we

may

most

decisions of management

still

decisions

our

visualize
of

lines

in

November

cutbacks

in

the

further

and

aircraft industry.

"Auto

assemblies,
at
579,000
units, were up sharply from the
reduced
October level, but out¬
schedules

put

indicate

some

de¬

cline in December.

Production of

television

furniture

sets

and

was

curtailed in November.

"Output

nondurable

of

goods,

which had edged up to a new high
in September,

declined in October
as activity in the

November

and

textile,
apparel
and
petroleum
refining industries fell off. Pro¬
duction of bituminous coal, crude
oil

and

metal

ores

was

also

cur¬

tailed."
The current employment situa¬

employee rela¬ tion shows that the number of
tionships.
The most perplexing newly laid-off workers filing job¬
problem, however, in the entire less pay claims rose by 66,600 to
area of management affairs is the
396,000 during the first week in
matter of rising costs versus di¬
December, according to the Bu¬
minishing profits.
reau of Employment Security.

Now, I know

you are aware that

this task of guiding the American
economy

to ever-higher levels of

achievement

is

it

Not too many years

was.

once

not

simple

as

nation

ago, most everyone in this
believed in and practiced

The

principles

man

of

as

a

few

economics.

of the house followed

his occupation, firm in the convic¬
tion that his income

was

the prod¬

uct of his

ability multiplied by his
effort. The housewife was, in most

strings

purse

ceeded

with

that

if

a

conscious

expenses

ex¬

income, the family would

RHODES-HAVERTY BLDG.

ATLANTA 1, GEORGIA

soon

WALNUT 0316

LONG DISTANCE 421

goes

without saying that

our

children

be

in dire

the

trouble.

same

Continued

on

And

we

it

taught

economic

page

102

The agency noted that 44 states

reported

larger volumes
employment claims.
It

seasonal

of un¬
added,

curtailments in the

con¬

struction, apparel, textile and food
processing industries, layoffs in
metals

and machinery industries
rescheduling of claims be¬
cause of the Thanksgiving holiday
in the previous week accounted
and

for

the

substantial

rise

in

initial

claims.
The

largest increases in new
claims were reported by Pennsyl¬
vania, 10,700; California, 7,100 and
Illinois 6,700.
For the like week last year, the
total of new claims for unemploy¬
ment

insurance

was

269,100.

In¬

sured unemployment rose by 202,400
to
1,721,900 in the week
ended Nov. 30 this year, it further
noted. The total for the like week
last year was 1,132,200.

industry this week
shutdowns in

holiday

heavy

steel will present

distorted pic¬

a

ture that conflicts with the under¬

lying strength of the market. Cur¬
tailments from

until the end

now

of the year

will be sharp and Jan¬
uary and February will produce
little or no improvement, states
"The Iron Age," national metalworking weekly on Wednesday of
this week.
It

the

adds,

should

show

and

Another

quarter

second

an

improvement
mand

in

other

upturn

due

automotive
seasonal

to
de¬

factors.

bright spot

is the fore¬
major indus¬
tries
that buy
steel call for a
slight improvement in 1958 over
casts for most of the

No drastic cutbacks

1957.

are

ex¬

pected anywhere.
The current slump

in steel is
inventory
But this
may turn out to be a blessing in
disguise. If inventory reductions
continue at the present pace, the
inventory correction may be over
due

largely

drastic

to

cutbacks by steel users.

much

capital

constant ef¬

the steel

In
the

earlier

than

had

been

ex¬

pected.
Mills this month

improve

awareness




Production

Business Failures

J
This

board noted in its survey of busi¬

instances, the keeper of the family

4

Industry

Price

Auto

Sir Richard Living¬

to

Commodity Price Index
Food

and

stone of Oxford. "An eternal trait

we

Retail Trade

State of Trade

States Chamber of Commerce that
to

seems

it."

Production

Electric Output

CaiToadings

scientist

moment,

a

doubt whatsoever that there is go¬

the

Steel

The

no

contrary, the future of

realistic

STATE AND

to

were

gamble. We know where

are

we

the years to come
♦An

being

1

reported

re¬

lie ahead.

pressed by firms within my own

new

industrial processes are developed
to

some

industry,

Symptoms of Advancement
research

one

nation and its industry is not

try

to know that the Indiana Chamber

America, but rather,

we

another

is

in

ment

on the symp¬
which exist in great profu¬

a

hours of

quarters about the everincreasing size and cost of govern¬

I shall not
rely so much on statistics in an¬
alyzing the economic climate of
toms

every 24

many

past which

in mind,

With this

gain

the horizon that bears men¬
tioning. In my opinion, it may be
the most significant symptom of
all. It is the growing concern in

as

being, satisfied

never

average

upon

"Divine
Discontent," and I agree with, him
quality

The important fact, however,

business and industry.

yesterday's rate of
Charles Steinmetz

referred to this

Rus¬

8,000 new customers for the prod¬
ucts
and
services
of American

with

progress.

higher

rate of increase in

that

an

of

of

our

is probably

it

and

or

people make markets for
the products we produce, and at
the present time, we are netting

to under¬

fact.

motivations

primary

American

tience

failure

their

of

than the

the

one

percentage-wise, we
the highest rates of

higher than that of Japan

India,

been

Perhaps few Americans

one

It is

am

has

On the
our

made

population increase in the world.

past.

stand

has

research

realize it, but

least, this lack
of statistical guides is somewhat
of a handicap in one's efforts to
judge the future by the immediate
I

which

Then there is the matter of pop¬

the

say

plan¬

available.

of this month.
Clifford F. Hood

are

ning capital expenditures for the
purpose of bringing out new prod¬

^ways.forth;

World

that one-third of all manufactur¬

prog-

t i cations

which

end

II, and I need not remind you in
impetus given to our econ¬
search are predicated on the fact
omy by this capital investment.
that the American economy will
Aside from the greater efficiency
continue to grow and expand. In
of these new production facilities,
the same manner, the principal
it was pointed out in recent survey
aim of

soon

nomic

since

War

year,

too

The manufactur¬

doubled

the

then replied, "Perhaps he knows
something we don't know."

of the

be

and it is a lit—

for

almost

The

tomorrow.

ing capacity of American industry

to° e a r 1 y to

WZWWi

items.

if there

as

thought about this for

during any other
equal period in our history.
Another symptom is to be found
in our capacity to manufacture

American in¬
dustry, wondering about our plans
are

bling

than

1960

Toward

convention,

marked that he seemed to be gam¬

feet on the ground if we are to
gigantic tasks and responsibilities" that is
being asked of industry.

.

theories.

the

tively heavy betting and

our

Thursday, December 19, 1957

.

T

particular, it is reported,
time at the gambling
than he did discussing

two friends
happened to notice his compara¬

nomic

.

more

tables

of

for

Vegas, Nevada. The uninhibited
atmosphere of that community
was something new and attractive
to
the attending scientists.
One

U. S. Steel head declares in
to

preparing

and engi¬
already at
this inevi¬

Not long ago, a meeting of nu¬
clear scientists was held in Las

nothing to be unduly alarmed about,
affirming principal aim of business

are

sales
are

table job.

President, United States Steel Corporation

Leveling-off periods

and

people

.

are

producing

fewer tons of steel than .they are

shipping.

One large mill says it
will be producing 10-15% below
its shipping rate. This is a rever¬
sal

of

the

situation

of

several

months ago when production was

exceeding shipments.
Even one of the old

standbys of

the steel market is showing

of

signs

and

tear, says "The Iron
Age,"
This
is
the market for
large diameter welded pipe, usu¬
ally called linepine. But the situa¬
wear

tion

is not clear-cut.

It is due in

to delays in obtaining Fed¬
eral Power Commission approval
part

of natural gas pipeline projects.
Some of these are taking as much
as

three years to clear FPC.

other factor is
in the tariff

a

on

An¬
proposed increase

United States pipe

going into Canada.
"The Iron Age" points out that
linepipe is still the longest de¬
livery major steel product in the
United States.
ders

for

All mills have or¬

three

years ahead.
But
openings are developing —r with

Continued

on

page

100

Volume 186

Number 5700

.

.

The Commercial and Financial Chronicle

.

(2637)

Keep in mind that both the fully
detailed

as

versions

Observations

as

Ine

should

report
ana

well

of

creasingly

the short form

come

annual
carefully read

changes, indicating progress and
growth oyer a goodly intervening

By A. WILFRED MAY

period,
panies

The first
precept that I want to

give

you

tant

in

qualitative factors, or to
glamorize. Don't get too far

is both extremely impor¬

scrutinizing the financial

the

from

condition; and operating results of

statistics.
to

bedrock
In

your company
'

%-:,y

'

:•

*''

*-

••'

and also

•

sure

the

test

key to

your
attitude
to
your

of

a

is

relative

over-

away

facts

and

connection

comparative
to
weigh
achievement

other

be
ap¬

the

by
in¬

companies in the same
dustry; For example, you would

conduct

as-a

•

this

proach,;. that

as

use

stock-

•

No

holder

must

you

yourself
a
partof a pri¬

if

as

'

vately

owned

business;
which

owner¬

ship status, I want you to remem¬
ber, you are in as a shareholder
in a corporation.
jobs

as

evaluation of your management.

Get-several management advisory
and appraisal agencies to help you
evaluate the advantages of your

different companies. For example,
can
use
the American In¬
stitute of Management, which is a

you

nonprofit

organization

.

con¬

with

ratings and over - all
management
function that par¬
managements

doing.

arc

Their appraisals are based on an
elaborate questionnaire system of

hundred

a

are

.

or

sent

questions which

so

to

which

each

over

are

out

concerns

then

earnings, and
of
dividend payments. Overall, good
hard objective appraisal has the

health

of

"You
of

basically

earnings, etc., etc.
also

can

Sometimes

this

done

companies via

in¬

on

the

as

Business,

For¬

low

dividend

payout

should

be

ma¬

companies, giving a definite
to the intangible qualities of
management and its policies. More
informally and irregularly, indi¬
vidual volunteer representatives of
the minority stockholder, as Lewis
andJ John Gilbert, express opin¬
jor

effect

of

The

at

of

one

the

New

-

''«•

- -

of relevant

of the

areas

:..w:
•;;; -■

•

.

/the .Comparative Test

Again, in

.

'

,

your

to

growth,

or

techno- Adolf Berle and Gardner Means
in

that great epochal volume
"The! Modern ^Corporation and
Private Property," in which they

be able to pay for its keep.)

Finally,

from

first

continuing

his

reports the stockholder
an
all-over impression,

company
can

-

-

.

4

.

-

company's liquid position, is
highly
important, but its con¬

for abuse.

sideration

Full Disclosure Available

The

to

particularly

must

It is still sometimes asked by the

if

assets

is

be

linked

..

stated.

The

answer

to this worrisome question

to

Company Report

much

power,

of-

the

than

current

alive:"

management.

.

.

..

What specific

information should
in your company's

likely to affect
now

'

your
and in the future.

investment

correct

whether

there

closure

a

is

is

and

definite

truthful

.

othor

facct

o£ the

he

finds

both

himself;-without

versus

government .intervention. This
js.-in contrast to other sectors of
community '/represented
by
vocally effective pressure groups,

dis-

in

whom the

share-

without .political-

power

contrast

holder

to

With .management s
With management's ordi- ^
ordi
0rganization. remains the Teal
narily honest \ inclinations
but¬
"forgotten man.'1
tressed by a multitude of safe¬
guards imposed by the SEC and
Raider or Rescuer*
the
Stock
Exchange
reporting
Now what is being-done to. pro¬
Depreciation Impact
regulations
in
the case of tect
you in this/unfortunate pocompanies,
complete aition? In the absence «f service
A
few
words
here about the registered
honesty and fullness of reports o£
important item of depreciation.
largo 3cale trade organizaWhereas it is impossible to mea¬ are insured. Difficulty is not-with y
'the current safeguarding of
the honesty of reports, but with
'
&
®
sure the actual depreciation of a
.Continued on page WO
plant during a single 12-month awakening the shareholder out of

set

aside

for

amortization

depreciation
have

become

ves.
'yes."

-.

WE

ARE

PLEASED

TO

OF

AN

SAN

and
in¬

ANNOUNCE THE
OFFICE

OPENING

IN

FRANCISCO

60S MARKET STREET

GArfield

1-4920

UNDER THE MANAGEMENT OF
MR. THOMAS E. LIEBERMANN

G. A. Saxton

Schneider, Bernet
& Hickman, Inc.:

&

Dallas

Hendricks

&

Eastwood,

Inc.

Philadelphia
at

Reinholdt
St.

&

McAndrew &
San

Gardner

Louis

Co.,

Inc.

Teletype NY 1-609

-

Co., Inc.

NY 1-610

52 Wall St., New York 5, N. Y.
WHitehall 4-4970

MR. GORDON DICKINSON WILLIAMS

WILL

BE

MEMBERS

WITH

THIS

OFFICE

NEW

YORK

STOCK

EXCHANGE

NEW YORK
BOSTON

Trading Markets in Public Utility, Natural Gas and Industrial Securities

ASSOCIATED

R. W. PRESSPRICH & CO.

Francisco




power

-other, groups as well

as

TO

'

public

stockholder's impotence is his position in the community where

£he

direct and resounding

TELEPHONE:

WIRES

~

scrutiny of the

/WEST COAST LIFE BUILDING

PRIVATE

cold, hard

facts.

logical improvement (Remembering, always, that new plant must

dead

of

a current series
School for Social

'

a

plifywith
charts,' graphs and
pretty/pictures, with'the'neglect

the

meetings, they issue full re¬
you
dig for
ports at the end of each year, their
financial
reports?
Beyond * the period,
reactions being to a great extent
nevertheless, accepted ac¬
earnings data, today's reports can counting practice determines the
concentrated on abuses as those
be invaluable in informing you,
depreciation charge by spreading
surrounding compensation, place
the stockholder, what your com¬ the cost of
of meetings- alike.
plant facilities over
pany
is doing to improve its the
estimated
total
production
In your reaction to these man¬
products, how it is meeting com¬ during their youthful lives.
In
agement
appraisals
of
various
petition, of its labor
relations, recent years,
particularly, swelled
kinds, either formal or informal, the impact of the government's
by special provisions permitted
be sure not to overemphasize the
regulations and other policies, and
h
by temporary statutes, amounts
a
whole
host of other matters
lectures

the -shareholder,
tendency to •oversim-

spoon-feed

There is

public and worried about bv the
shareholders,
whether
company
reports are truthful, whether particularly in "bull" markets, earnings are hidden or perhaps over-

company

of your stock and for arrival at
judgments again about the quality

at

♦Transcript of

mitment

earning

the

of

tant both for the market valuation

ions about management.
Followings their indefatigable attendance

of

to

showed .. most vividly'how
ownership which' is scattered perget
haps through hundreds of thouabove. ■ and
beyond the specific sands of shareholders is unreitems, making possible a certain lated
to
control —w h i c h
is
amount of "playing it by ear ' to in
the hands
ofmanagement
supplement or perhaps temper which may have very little or no
The Working Capital
but never supplant, the raw value stock.' This basic.situation leads to
;•
.
. .
a host of complications and bases
working capital, indicating factors.

meaning that
could readily liquidate to
The primary source of specific they
information about operations 2>cr give more than their market price.
But since liquidation is habitually
se
and in comparison with com¬
peting companies, is the annual problematical, the generous work¬
ing capital should be considered
report. Cognizance of your com¬
mainly a
safety factor backing
pany's statistical results in the fi¬
the earnings and dividends.
nancial operating area is impor¬

score

Research, New York City.

the reports, usually with, the aid
of the public relations professions

.

chronically tied up in inventory.
Usually there are available many
companies that are "worth more

affairs

The

by Forbes Magazine of
which annually evalu¬

ates the executive direction of

beneficial

which he has entrusted his capital.

tune Magazine profile type of
write-up. Also available are group

ra'tings,

of

the

impressions
journalistically.

is

distortion

awakening the public stockholder
from his habitual apathy toward

get

managements

dividual

in

pertinent categories,
research development,

including

overstress the past duration

to

10

of

for

.

sometimes fortuitous

100,000
rated

watched

can

appraisal and study encourages checked with the management, as
the public to an investment value to possibly good reasons, before
approach instead ot' accentuating broadcasting c o m p 1 a i n t. Inci¬
the superficial blue chip-itis pro¬ dentally,
studies' show
that
in
cases,
with other factors
clivity to picture managements of most
being
equal,
dividend
payout
a, relatively few popular compa¬
nies as gods and the others as tends to raise the market's valua¬
burns.
It also has the advantage tion, as manifested in the priceof mitigating the popular tempta¬ earnings ratio.
tion to emphasize short-term, and

appraisal

ticular

be

for example,, earnings results. The principal efr
showing growth of sales, assets, feet vis-a-vis the investor of the
earnings, etc., lor 50 years. Look high
rates
of
the
accelerated
at the dollar sales volume, cou¬ depreciation and amortization it
pling the absolute current figure that while they depress current^
with the past annual trend; and earnings, they represent a source
watching out for increases that of internally generated cash for
may
be due to price; inflation future needs and build up plant
rather than unit increase. In this account
for ^ increased
-future
item of sales trend particularly, profits. For the lay and uninitiated

.

is it that this kind of management

rating

managements and their boards of
directors as a communal service.

They .are not management
sultants but arc concerned

.

„

shareholder is to make

a

apathy

example, accelerated amort- is readily available to Rim.
in
excess
;of
normal
Here we get to one of the main
depreciation to stimulate strate- flaws
in <. reporting, * which
is
getically needed production has stimulated by the desire to over¬
reached very high amounts as in. come the stockholders
apathy. I
the chemical companies, and must refer to the
over-glamorization of

Steel,

.

One of your main functions and

an

to

'

.

owner

Wilfred- May

inclination

r

always;.con¬
duct

natural

ard

yo u

are,

go

his

to scrutinize the information that

comparison with other com¬ investor who is uncertain 1 about results disclosed
in* * the Teport
panies be made. With companies the realization and amortization you. apply the comparative test—?
making a r variety of
different charges, it behooves him to turn that invaluable/: yardstick., In
products, furnishing a breakdown to the security' analyst or his other words,;-in..; such things as
.of sales, covering these products advisor for expert interpretation
/profit ratios, that is percentage
textile, as contrasted to managcshould he supplied and studied. of these depreciation factors.
of profit to sales andrto plant, and
mcnt
in
boom
industries
like
Where a holding company is in- also in growth of
Jointly with the sales figure, there
chemical or life insurance.
sales, is the
may be specified,- often with the volved, be ..sure to look at the comparison between your cornpie type of illustration, the aver¬ consolidated statement with trans- pany and other companies in the
Appraising Appraisals
age dollar of income allotted to actions within the company elim- game 1
industry; a/ mighty
Vital
Actually, how good are manage¬
salaries, wages, and other em¬ inated. In the case of companies factor.
ment appraisals, either formal or
ployee benefits, to material and expanding through merger or a
info mi at, likely to be?
The cur¬
The Stockholder's Essential
services, taxes and depreciation change in capitalization, concen¬
rent efforts at arriving at com¬
and
/Status
finally to the net income trate your attention to the l'inai
parative appraisal of management
divided between cash dividends earnings per share item, bearing
Now for a word on your status
quality admittedly have little sci¬ and undistributed
portion retained in mind that the trickle-down to as
a
public
stockholder.
The
entific validity and many short¬
in the business.
the final net constitutes the simple stockholder finds himself
impo¬
comings.
Nevertheless, they are
hard-boiled investment test.
tent in two basic ways.
First,
extremely worthwhile and (con¬
Dividend Aspects
Other items to look for in the he is powerless within his comstructive, and move in the right
pany versus his management. This
Regarding
the
dividend,
you company report are the amount
direction, in applying tests spe¬
of unfilled orders, as an indicator status stems from: the/basic techcifically to each company accord¬ should ask yourself whether it
of the succeeding year's volume nique of our ^corporate
system,
ing to some logical standard, in¬ represents a reasonable proportion
and earnings; and the current and
under whiclr ownership is sepastead
of overglamorization
and of the earnings, and whether it
planned expenditures on plant, rated from control, this was origdramatization following public re¬ gives you a fair return on your
management's
com- Jnally pointed out 25 years ago by
A
lations dictates.
Most important capital ..invested,.
persistently measuring

certainly apply a different stand¬
of profit or success to any
matter how. management operating in a de¬
small a shares- pressed, industry,
like coal and
h older.

10 years. Some com¬
much further
back;

guy

Bethlehem

in-

the

ization
•

to

YOU—AND YOUK COMPANY*

in

For

company

be

scrutinized with attention paid

important
showing.

5

DECEMBER

PHILADELPHIA
16,

1957V.

SAN

-

FRANCISCO

'*

6

The Commercial and Financial Chronicle

(:e:sj

'

when

Inflation: Cause and Piospects

is

Economic Affairs, New York City

on

Economist insists inflation remains

inflation, but if, on the other
it is financed by bankcredit, then inflation takes
place. As Mr. Humphrey put it,
"increased
capital investment
(more tools, more factories, more
equipment) is necessary to provide the jobs with the high wagelevels which are paid in this counis

be clarified.

Cites

basic the fact that price

as

currency

monetization of the debt and
ness

and individuals. Asserts

level rise is

inflation, exemplified by wartime
postwar credit inflation by busi¬
upward thrust of wages is impor¬

tant

factor

Denies possibility of a
"creeping inflation." While expecting present bull market in
bonds to continue into 1958, predicts as inflationary moves

and specific factors in the economy,
Chicago banker forecasts for the year ahead: (1) total con¬
struction equal to the $47 billion expected for 1957, which

take

effect, industrial activity

would be

;

provided by excessive bank credit

in

creases

well as wages and prices will
again start upward.
as

investment are

capital

inflationary.

expansion,
To

lliey arc
extent they

the

financed

are

to

near

It is

try.

continuing inflation.

2% above 1956; (2)

if sales come
that may
be sold in 1957; (3) declines in capital and inventory spend¬
ing, employment, industrial production; and (4) increased
defense expenditures. .All in all, Mr. Prochnow anticipates
some
easing in bank loan demand.

*

the principal means by
which
we
can
raise our living
standards. To the extent such in¬

in

B.v HERBERT V. PROCHNOW*

After analyzing broad

-

created

abroad, and hence prevalent confusion about its nature should

merely the result of

*

Vice-President, The First National Bank of Chicago

no

hand,

main problem here and

as

The Business Outlook

of industry
financed out of savings, there
if expansion

that

out

rr,

not

am

d

e

e

v

a

I

Reserve

money

and unless that is supplied

ft will

starve in

Board itself

I

recognized the

rency.

easing
f 1

t i

a

in-

of
o n a

ry

In

,.

,,

^

„

,

.

~y

it was 25%.
months a p d
Plainly the figures which Mr*/" even years in
Humphrey quoted show that the
'.a (1 v a n e e. If
inflationary push has been: grow.
there is a con¬
ing weaker. We have been l'inahc-siderable > injng expansion more out of saving'sv "h v. Prochnow
*e 1 v3.1 be-,,
and
less
out
of
bank-created
*
*
/ .. t we e n ., the

Inflation has been defined

100

"a

_

.

May I say
who thinks that inflation is dead
in, this country is dangerously de¬
luding himself. Some people said
that in 1953. I recall very well the

letters

many

of

disagreement

1

received in that year when I wrote
a
column
entitled "Is Inflation
Dead?" and answered positively

increase in dollars which tends to

dollar

price level, so that every living during the past year?
buys less. Sometimes the ; Turnover of Bank Deposits
0
ol
Deposits
rise does not immediately
'

price

the inflation of the money

follow

time.

is

It

.U

Well, the

time lag—but
respond in due

supply—there is
prices generally

a

incorrect

call

to

often

the

the inflation of the

problem

the

dead

while at times
in

inflation

upsurge,
and
downdraft occurs, this
is not
that

sudden

a

is not ab¬

historically. Even inflation

a

in

having

one-way street.
this country we

The fact
are

now

recession which may be
-attributed in a large measure to
the previous restraining action of
the

a

monetary

authorities during
the past year, does not in
any way

alter
in

the

fact

that

we

inflationary

an

era

living
which gives

promise

of

continuing

every

are

despite

short-term
reversals
direction from time to time.
Inflation is the long-term

in

lem

of

practically

out

way

of

country

every

in- the world today.
this process seems

Why? Because
like

an

easy

nation

every

a

1

dilemma. The idea is to give
people
the illusion of
prosperity by creat¬

ing more money instead of per¬
mitting the market to correct the
waste, inefficiency and bad judg¬
which

ment

grows

cumulatively

during a lush period of inflation.
Halting inflation is more a politi¬
cal problem than it is a
monetary
While

one.

administration

every

will pay lip-service to the
stability
of the dollar, while
every respon¬
sible government will
try to curb

of the

some

of

inflation,

vociferous signs
they will all find it

more

difficult to grapple with the hard
core
of the inflation itself.
The
voters have been led to believe
that
every
year

they can have prosperity
week, every month, every

without readjustment of

Ikind.

Since

the

people

any

believe,

this, their representatives

will try
give it to them. They will use
the process of inflation
up to the
point where it doesn't work any

to

more.

Now since inflation is the
great

problem of the age the first thing
we
ought to find out is, What is
it? There
of

seems

confusion

believe that
*

An

Day
New

on

to be

this

a

great deal

point, yet I

basically the problem

how

increased?

by

Mr. Fertig at Dean's
for Commerce Alumni,

Homecoming
York
University,

Dec.

7,




1957.

the

is

a'i
°r
dollar of

money

first

The

way

supply
is

ana

from

idle

has

The

sold

were

the

to

effect

credit

on

the

nnr-p

So the speed \
with

the

which

011

into

cash

paid for
purchases. Thus government debt
monetized—it

coursing through the

money

nomic
war

bloodstream.

there

mand

active

became

eco¬

Before

the

$36 billion of de¬
bank deposits and currency.

After the

was

there

and-thlt

a

be£

ve

com¬

government

.

is used, or itsi velocity.
velocity.
big difference,
ocity has
1 ncreasIng
steadily for the past few years. As
confidence
and

makes

increases

find pools
they use it and
price structure

of idle money,
this affects the

they

their books, and this
converted

was

when

it

as

bank
lying

dollar

money

mercial banks who merely set up
a
credit for
the
United
States

Treasury

work

a

peopled

rest

-lncrease*

1

account to

bank

no

structure

•

*

more

whereas

what
happened
The government
needed money and printed bonds.
Some of these bonds were bought
by the public out of their savings.

,

has more im-

money

does

account,

best

•

1S S

11

pact

exemplified by
during the war.

'

Yon

nn

rpadilv

hnw

cop

fhp

hv

k

no

win

hnw

!*

hncinpw

nast

licuiid

vear

The

consumer
price level
70% between 1940 and 1950.

rose

Now after that vast direct infla¬

tion,

there

was

necessity

no

in

this country for any more of it. In
due time all prices and all costs
would have adjusted themselves

properly to the
let's

new

remember

situation. But

that

we

super¬

imposed a second kind of inflation
right on top of the first. The
second type is credit inflation
by
business and individuals. Banking
authorities permitted the money

supply

to

increase substantially
because
the
government

not

needed

to

because
and
and

finance its deficits, but
demand of industry

the

individuals

practically

was

great,
could get

very

everyone

the loans he wanted. Therefore
vast

credit

a

expansion took

this

matter

himself

as

who

Mr.

Secretary of the Treas¬

ury, made an

interesting statement

ijng

trust

as^pfq

havp

and

investment

funds

0ierx

also must be concerned with the
fluctuations of business., Governments, likewise, find that their
revcnues
a

r

expenditures are to
extent dependent

the restless movement of the

Up0n
,

an(j

great

yery

.

t>

•

— expenditures
for plant < and
equipment, and purchases of goods

for inventories.,

:

Within this framework of refereriee, one may attempt to arrive at
some-

judgment

of

level of
esti-

the

future business activity by

mating the probable volume of
purchases by each of these three
main segments of our economy-

the consumers, governments and
business.
Consumer

Spending:

The volume of spending

tends

sumers

►

be

to

by

.

V:

con-;

influenced

largely by two important factors..
One is the consumers'

income, or
ability to buy, and the other is the);
willingness^ to spend

consumers',

.

Personal income has

this income.
risen
war
^

period and in the third quar-.
was at a"record level,

terof1957

51^%.!above the same period last
year>
The number of persons

holding jobs has remained high,
despite layoffs in certain in-,
dustrles and areas, unemployment

and

has been at

low figure for most

a

of the postwar period.

As

a

con¬

of the high level of em-

sequence

income,

ployment :and

consumer

have
risen .every
year since World War II, includ-j
ing the recession years of 1949 and
1954.
Although employment continues high, personal income declined in September and October,
expenditures

1

The future wiiiingness of conto
to

sumers
sumers

;tneir
their

spend
spend

incomes,
incomes,

»ejvis.difficult to deterrtineg
^Possibility of some error, Tba Fed^.al Reserve System each

18 helpful -to ftry to eY?1Me year asks the University'of Mich'1
economic forces^ andtar jgan to conduct a survey to detereIfett °q|be future of business. mine the buying intentions of con1
One method of forecasting is to sumers. The last survey, conconsider the total output of goods ducted some months ago, indicated
and services of the country and that there: was some hesitancy
purchase these goods and

and

soods

amonJ

con*T?*sales
F
Retail

'

spending.

t0

rose

sub-

stantially from March to August

produce However, sales (estimated) were
down in October for the second
consecutive month and were the
huge economic lowest they have been since April.

services

annuallY

we

G?«sidered

a

little

50%

over

billion

$4

about

from

a

noint

as

a

fhis t°tal Department store sales have followed somewhat the saipe pattern

G1 oss ^ational Pi oduct. Smce
the end of World War n> thls Pie
avaSe cash balances for S has been Showing larger each
ness purposes, thus increasing the
year* The Gioss National Product
velocity of money. It is this inflom an annual rate of $429
creased
velocitv or
turnover
of
in the tiist Quartei of 1957
money which
has increased de- to S439 billion in the third quarmand for goods and prices in a fer, and the third quarter was. $22
neriod when the monev suddIv ^Dlion over the same quarter last
itself was growing at the rateof year- Tbere
two major reausine their

ernment securities and

onlv

about
,,

why

sons

war

n

n

'

.

'

hwSC

,

°

+2n

Gross

our

First,

we

running a little
in the corresponding

been

have

iower than

period last year. If these declines
jn consumer purchases reflect the
attitude consumers will take in
(he months ahead, they are of real
concern,

because

consumers

buy

about two-thirds of our Gross Na-

tional Product,

National

Product has been growing larger

each year-

and

Business and Governmental

Sectors

have been

woSd^eem that producin^ more goods and serv" Spending by the governmental
this increased velodty of molrey^ef-alld second' prices have been
f .^L^Te^n^outnut
so'lo^speak—i"s beginntagd to°lose There are three prinoipal gr0UDS of" golds' and services, is well
iflnm.nLm

last

year

BuMt

Tf

to

signs'

show

The

fact

which

is

of

slowing

monSar?

that

controls

will ultimatelv

monev

vSocity

Dolicv

Ynnfml

of

fhe

of money whidi is based.
psychological factor to a

upon

a

great

extent

It

is

the

the volume of money

deciding factor
time.

^
who buy bur Gross National Proddow"i uct First' a"d by
' 16 m0S

vomm^

the

over

Inflation

if

it

new

of

which is the
a period
of

cannot

is

continue

starved

money

Policy

control

by reand credit.

Compels

More

Inflation
Now

one

important
factors in the continuing inflation

Continued

on

page

90

above ]ast year.

Spending by the

Federal Government has risen this
''"Dortant, are the consumers, ap- year and when combined with
proximateiy 171 million of them, rising expenditures of state and
Th°y Purchase about two-thirds of local governments, for such proj-

al)
second

a

'

,

4

aie

the

governments

tne governments

-

ectf aS tfU r°adf'
water systems puts total spending Qf

^1S sector of the economy

Fedei'al Government, the state 10% above last year. Recent ingovernment and the countless mu- ternational 'developments also
nicipalities and local governments
across

20%

the country—who purchase

of the output of

the nation.

Finally, the third segment, business,

of the most

•

steadily in the entire post-*

.

business cycle- Fortunately there
1 n^?b®5 °A e.conoJmic„ tor?es
t^uuJ,,uv*

to

George

distinguished

panies, and all institutions hand-

brineini? cornnrate-liauiditv down

bv

place.
for long
Bank
loans
increased
from
$52
billion in 1950 to over $92 billion stricting
today.
Labor
On

,

our factories, mines,
farms and in other ways, may be

shrunk

was

inflation of the money supply that
inevitably had to influence all
prices—the price of labor and the
price of goods. The market ad¬
justed itself to this vast inflation.

jn

sume or

h

hLdleTilsgliqu0id
1hp

bec^mes.an inGvit"
any

the planning of

well-managed business enterprise.

velocity of bank deposits increases

$106 bil¬ a
little
over
60%.
Corporations
lion of checkbook money and cur¬
have been cashing in their govrency.
That
was
a
three
fold
war

Humphrey,
address

....

.,

goes
Now

was

prob¬

a

.

Inflation

of

Types

There-

addition, individuals building
time-lag between the
re-Restates,.,,.banks, insurance1 com-

When money is used more active-

currency.

A

Two

there is hesitation

the

normal

re¬

became
by 1955. Inflation is the
of
our
lifetime.
And

•

is

cept time-lag is one use. years.
of money and its of Often

prices "inflation." The rise
in the price level is the result of

Well,

fluctuations.

ablc

.U

.

business

U\S *Spart of
risky'

a
a

that theie

answer is

in

fore, despite the fact that forecast-

that

rise in

vived rather quickly and
menace

in the cost of

raise the

a

~no.

of about 3%

crease

...

^

;

by the Committee on Economic
Accord, a group of more than

.

cars

often be made

in

distinguished economists, as
change in the volume of cir¬
Why then talk
credit.
Less
money
has ' been', time raw materials are purchased
about infla- culating media (that is bank de¬
manufactured by the banks. How and the time they are sold as fintion and its posits and currency) tending to
Fertig
does it happen then, many people ished
products, a manufacturer
problems ? reduce the purchasing power of
will ask, that there was an in- may be subject to serious hazards
at the start that anyone the monetary unit." This means an
pressure?

Lawrence

and

12%

was

.1944-48

time. By money
deposits and cur¬

bank

mean

it

1948-52

year

Forecasting the future ot busi- of this huge pie Business purness is a precarious but necessary chases are divided into two parts

a

F

good auto

a

equaling the approximate six million

out of savings
thev are not"
occupation.
Good management
mind-reader, but I is not nearly as complex as it
He then pointed with pride to requires the most careful planem
quite sure that some of you,, seems. I would, make the un¬
the fact that from 1952 to 1955 aU ___
"J1"® ahead
feel that this discussion is out¬ qualified statement — which is
forms of borrowing—both public
business must
dated. Some of you are probably supported
by the economists of
and private—exceeded savings by
p,1 a n p u r ~
saying isn't the Federal Reserve Board and
\ Vchases, pr oour
problem the Treasury as well as economists only $10.7 billion or 7% of total
iiew
borrowing. This AVas a far
auction, sales,
deflation? in the academic world—that you
better record than had prevailed
mmffijjm inventories
Isn't this the cannot have a rising price level
the
previous two four-yeaiv».^B|^Hfev® -and
for any great length of time with¬ in
capital
condition* we
new
bank-createdexpenditures,
out a significent increase in the periods when
face today —
money
supply.
Inflation
is
a money formed a much larger por- ^Plans for exhasn't the
tion of total increased borrowing.
pansion must
money
disease. It feeds on new

I

Thursday, December 19,1957

.

.

for

stand

the

on

was

days in July before the Senate :
Finance
Committee.
He pointed'.,
14

By LAWRENCE FERTIG*
Columnist

he

.

purchases the remaining 15%

may

fense

mean

increase in de-

some

spending

in

the

^dtb™4tP^afsmfe
expenditures
tinue

their

are

slow

likely

months
mrd locM

to

con-

upward

rise,

Correspondents,

would indicate that the volumG
of goods and services demanded

1% ?£?.National Bank of Chicas°' Dec'

Continued on page 92

*An

the

address

Conference

by

Mr.

of

Bank

Prochnow

before

Volume

136

Number 5700

.

.

The Commercial ancl Financial Chronicle

.

(2639)

World War in Southeast Asia and

Meeting Deep-Seated Problems
With a Firm National Purpose

now

Bolivar, the great liberator
America, saw that no
sovereign nation could be in

South

new

position to defend its

President, International Basic Economy Corporation

nor

,»

to

provide

life

of

Former Assistant Secretary of State

~

18th century,

Simon

of

borders

economic level

an

which

own

could

satisfy

its

people without help from the out¬
side. He

Rejecting negative stance and belated response usually mark¬
ing our foreign policy, Mr. Rockefeller recounts pertinacious
revolutionary changes facing us, whether U. S. S. R. were
miraculously transformed or not, which he avers requires
knowing not only "what we are against," but, also, knowing
"what we are /or." Advocates: (1) regional and functional
groupings encompassing all free world nations;
poration of existing and

the

up—adequately financed with
(4)
We

in

progress

fortunate

our

;

are

as

lationships among states

It

previous
society.
The

from

that

all

remains
done

be

to

at

home.

:

"

would be

It

easy to speak
about specific

\

abroad

the

*

and

satellite

Soviet

tinental missiles,

East,

intercon¬

etc.

threats

these

j However,

the

—

are

deep-seated
problems, specifically of the revo¬
lutionary forces that confront us
in the world today and our lack
of a clear national purpose in re¬
of

symptoms

more

This makes it dif¬

lation to them.

ficult for
in
in

to establish priorities

us

planning, to shape events

our

and

advance

crisis

thus

avoid

to

a

Unfortu¬
nately, we. often do not know a
problem exists until it has become
a

coming

us.

upon

We

had

have

life.

prisoner.

conveys

out

of

to

Just

country
ordinary rise in

To

we

so

of

and
our

the extra¬
standard of

to

and

that

their

they

deeply. The difficulty is that too
many don't understand that re-

Continued

on

page

Equipment Trust Certificates

unconditionally as to payment of par value and dividend warrants by
by Northern Pacific Railway Company.
MATURITIES AND YIELDS
(Accrued dividends

of

the

I960

to

be added)

3.85%

1961-73

3.875%

and

Fid

wo

our ac¬

of

reality

revolutionary forces

3.75% \

nation

a

awareness

our

the

world"

the

as

(.

a

1959

which

Issuance and sale

of these Certificates are subject to authorization by the Interstate Commerce Commission.
Offering Circular may be obtained hi any State in which this announcement is circulatedfrom only
such of the undersigned and other dealers as may lawfully offer these securities in such State.

The

the

exist;'

in the world—their character and

inter-relationship.

HALSEY, STUART & CO.

revolutions

Four

INC.

occurring

are

DICK

simultaneously:

R. W. PRESSPRICH

MERLE-SMITH

..

,

original motivating force
which
impelled people into an
unexplored continent was a belief
in
spiritual
independence
and
human dignity.
„

And

since

ever

whole po¬

our

social

and

litical

history

shown the importance
of purpose.

has

of the role

One has only to look

at the Federalist papers to see its

design in the minds of the

clear

Founding Fathers which produced
a

BAXTER &.

& CO.

COMPANY

the breakup of the' oldsystem of world order through,
imperial alliances and the appear¬
of

ance

in

foreign policy

Fourth,

pur¬

has been on the whole nega¬
tive.
We have primarily wanted

With

tions

alone to work out

left

be

own

destiny.

tion

has

been

historic

posi¬

different

too

of many of the neutral

from that

of

nations

Our

not

our

who

today

also

want

peace

without prior involvement.

When

we

has

it

have intervened abroad

usually

been

belated

a

recognition that our security and
of

that

other

free

directly challenged.
This

World
This

our

was

nations
-

were

,

position

in

two

two

was

our

in

position

such

con¬

as

the

Even

our

alliance

notion

of

peace

been essentially passive.

has

to

should

must

that

these

be

discard

(First installment of an aggregate

revolu¬

clear

the

end

if

negative
these

Chicago and North Western
Railway Company

prob¬
Soviet

somehow miraculous¬

were

we

the

■

should

stance

forces

is

realize

with
not

that

relation

Equipment Trust of 1958

a

to

being true to
them were

ourselves for many of

inspired

5V4c/c

produced
by the
example and American

or

American

(Philadelphia Plan)
.

Let's
The

look

back

for

a

minute.

decade

a

later

with

its

call

ca's

Annual

Dec.

12,

Meeting,

New

of Ameri-

York

1957.




City,

mature

$103,000 annually January 1, 1959 to

1973, inclusive

To be guaranteed

unconditionally as to payment of par value and dividends
Chicago and North Western Railway Company

by endorsement by

Maturities and Yields
1959

4.75c/o

1960

5.00

5.15%

1961
1962-73

5.25

for

Liberty, Equality and Fraternity.
This started two revolutionary
trends:1.

of these Certificates are subject to authorization by the Interstate Commerce Commission.
Offering Circular may be obtained in any State in which this announcement is circulatedJrom only
such of the undersigned and other dealers as may lawfully offer these securities in such State.

Issuance and sale
The

First, the breakup of the system

and

by Mr. Rockefeller before

To

American

Revolution, based
on liberal 18th century thought in
England and Franpe, proclaimed;
a
new
doctrine
of
political
equality and the inalienable right
of
all men to life,
liberty and
happiness.

with the concrete set of active
address

Equipment Trust Certificates

actions.

of

*An

of not exceeding $3,690,000)

about

assump¬

international

our

would

And

We have

fhe Life Insurance Association

HAMMILL & CO.

,545,000

of

imperialism.

ly transformed.

considered it the absence of war;
rather than concerning ourselves
re¬

SHEARSON,

INC.

and

'

Marshall Plan.

CO.,

new.

The French Revolution followed-

programs

&.

December 19, 1957.

things:

We

Wars.

structive

50

-

communism

relation

we

pose

to

the unholy

international

Union

our

than

more

Sino-Soviet

tion

Negative Foreign Policy

McMASTER HUTCHINSON & CO.

IRA HAUPT & CO.

WM. E. POLLOCK

Second, the surge of rising ex¬
pectations and population growth.
Third," the
ever ; accelerating
rapidity of scientific development.

political structure at once the
and most progressive in

But

FREEMAN & COMPANY

sovereign nation states.

lems

-

y

First,

stablest

the world.

'

Changes Facing Us

empires, which had for so long
provided the basis of world order

trade; and
Second, the creation of

a large
sovereign nations,
in the Western Hemisphere
Europe,
after
the
Second

number of free

first
and

HALSEY, STUART &. CO.
R. W. PRESSPRICH

&. CO.

INC.

McMASTER HUTCHINSON & CO.
I

December 12,

1957

en¬

This hope is a constructive force
one with which we sympathize

endorsement

centered

are

share.

and

$247,000 annually January 9,1959 to 1973, inclusive

mature

To he guaranteed

his focus

This involves

us.

titled

(Philadelphia Plan)

his family broad¬

understanding
ceptance

when

as

encompass

must broaden

around

S.

in

our

37/s% Serial

We need to find a new
larger

him,

over.

Railway
Equipment Trust of 1958

short, if we do not *
will become their

of purpose.

around

world

Northern Pacific

we

himself and

ens

great revolutionary force of rising
expectations among the people the

$3,705,000

of

sense

a

young person grows up,
which has always been
on

dustrial development have been
responsible for the surge of the

,

and broader orientation—a
sense

These new political and social
concepts, and the tremendous in¬

tre¬

gave

material achievements and power

.Constantly digging oneself out?
from under.avalanches started,by

national

clear

a

in terms of our domestic

The

-

become

our position will i
increasingly manipulative.

In

nations.

crisis.

purpose

-

often,

matters, worse,

shape events

Revolution

especially was suc¬
translating its political
philosophy
into
economic
and
social
reality.
The
spectacular

to lag be¬
1..
p

us

too

hardly

the

no

.7.

direction.

Middle

-

is

*

.

threats
Nelson A. Rockefeller

19th

social

and
determined
by
initiatives
or
other.'

aspects of the
from

the

of

U.

cessful

century, the
equality was
added to that of political equality.
This
challenged the
traditional
view that poverty and want were
doctrine

will- become;.in¬
creasingly defensive and, to make

others

the

of

lands, par¬
underdeveloped
newly independent

and

survival,

JSocial Equality

Our /course

appear

advent

of

countries

profound effect

,

stance

pressures."

abroad,

coincidental

ticularly

a

of all

gj'j

actions

haphazard

the peoples

on

mendous

■-

Communist

is

ydespite

>

causes

events.

Our

chief

.security

always

hind

to. this

.

passive

a

longer enough.

any

threat

But

~

living have had

which
T-;

on

ultimately depends.

peace,

revolutionary force.

v-During

domestic social gains.

perhaps no
other people in history in having
achieved
a
degree
of material
well-being for more of our peopie than in

,

than

rise.

and

economic distortions;

no

The

free

The

national

a

questioned

,

second

and rehabilitated defense set¬

program

of

be

death.

Gradually it was recognized that
underprivileged groups within a
community could not make proper
use
of
their
right of political
participation.
.
As a result, most governments
in the West gradually undertook
programs dedicated to social and
economic justice.

Industrial

,

training and research

the first to advocate

association

to

and

People who had never known
impetus both to the need
hope before are feeling increas¬
Thus he was pointing the way to for and the possibility of realizing
ingly that they have a chance
a
new
basis
for
international these objectives.
for a better life, that the world
The level of the well-being of
order.'.
possesses the means of producing
the citizens of the West began to
> This ,leads us to the basis of the
more than the bare necessities for

(2)< incor¬

groupings to assist in meeting functional needs; (3)

more

•

sovereign nations who could Work
together in their common interest.

international institutions in such

new

was

free

no

illness

At the end of the

By NELSON A. ROCKEFELLER*

4

in Africa.

1

117

8

The Commercial and Financial Chronicle

(2640)

Beneficial Standard Life Insurance Company

II.

firms mentioned

send interested parties the

to

will

he

Products Refining

Jackson &

Co.

—

55

in

Co.,

issue is

missiles

Fund

and

and

field

rocket

shares

whose

are

companies

held

world supply and demand for
propulsion purposes—Atomic Devel¬
opment Securities Co., Inc., 1033 Thirtieth Street, N. W.,
Washington 7, D. C.
citing

study of

a

View

Burn ham

Analytical brochure
Co., Inc.. 14 Wall Street, New York 5, N. Y.

Golden

able is current Foreign
Canadian

investment letter

Monthly

—

Inc.,

Sons,

&

—

review

Year-end

Church

Bonds

—

Railroad Bonds

Circular

—

—

Ross,

& Co.

Knowles

liam

—

Keenan

New York
Fire

&

Analysis

Growth

Clarey,

Inc.,

25 Broad
—

Report

Also available is

a

list of 45 selected

common

Analytical brochure

—

—

ris, Upham & Co., 120 Broadway, New York 5, N. Y.
available is a report on Standard Brands, Inc.
Japanese Stocks

—

Current information

Company of New York, Inc.,

—

Also

York

Co.—Memorandum—Playden, Stone & Co.,

—

Data

6, N. Y.

Illinois

Yamaichi Securities

Thrifty

Japan's International Accounts—Discussion in current issue of
"Nomura's

Investors Beacon"—Nomura

11 Wall

— Joseph
Faroll & Co., 29 Broadway,
Also in the same bulletin are data on

Drug

pany,

Stocks

—

Analysis

—

Gas

Pipeline

Memorandum

—

Now, I

Doyle,

—

ers,

Co., 135 South La Salle Street. Chicago 3, 111.

up

Conklin Organi¬
Also available is a

market

performance

over

a

13-year

period

to

It is

—

ing

National Quotation Bureau, Inc., 46 Front Street, New York

of

Russian

Scientific Breakthrough

as

It

Affects

the

if

with

■

countries

I

posing

eign

of

N. Y.
Stalwart

Stocks

—

Article

in

current

issue

of

"The

the

National

Insurance

Equipment,

Corporation—Card

t

The
are

the

Bulletin—Laird, Bissell & Meeds,

Broadway, New York 5, N. Y.
& Lomb
Report — Herbert E. Stern & Co., 52 Wall
Street, New York 5, N. Y.

it

that

Your

prom¬

There

movement

in

is

this

Mr.

as

with

Dulles

than those of
which

shpuld
once one is grounded in
every high spftdol grad¬

uate should be.

into

it

his

tremendous

a

son

that

you

not

to be Secretary of

foreign expert.

COMING

EVENTS

now
In

Sulli¬
was

about

more

Investment

Field

be¬

member

of

than
our
Certainly

and

presum¬

Jan. 17, 1958 (Baltimore, Md.)

Baltimore Security Traders As¬
sociation 23rd
annual
mid¬
winter

dinner

at

the

Southern

Hotel.
Jan. 27, 1958
Bond

(Chicago, HI.)

Traders

Club

of

Chicago

annual Midwinter Dinner at the
Sheraton
Feb.

28,

Hotel.

1958

•

(Philadelphia,

Pa.)

Investment Traders Association
was

the

important

an

firm

head

foreign

or a

have

but

many

he

got

years

ago

that he would like to be Secretary
of
State to lend
his knowledge
of

your

for¬

This firm

them

was

Sup¬
or

we

a

law firm

know

to

of

there

diplomats

our

and Cromwell.

dealt

of the last session of Con¬

as

leading

troubles

with

famous

member

languages

Latin and

global

ably still does.
Carlisle Bargeron

undoubt-

come easy

—

diplomat
a

foreign
governments
State Department did.

with it.
grades

foreign

for

men

purported

calculus
all

are a

situation

van

ly harder to make
—

120

Bausch

y,

»goes
memoran¬

St. Louis 2, Mo.

Company

r

you

expert

of the

geome-

and

dum—Scherck, Richter Company, 320 North Fourth Street,
Bankers Trust

can

these.

So I would suggest

thereafter.

in international law

mathemat¬

ics,

.^

and

foreign aid.

more

of

one

raise

surrounding him at
NATO. Mr. Dulles spent his career

latter with all
of

Stores—Analysis—du Pont, Homsey & Company, 31

Building

Justice

feeling against foreign aid.

Take Mr. Dulles and the bright

I would
unhesitatingly

Co.—Memorandum—Moreland,

life

young

moon,

Milk Street, Boston 9, Mass.
Bank

a

9

Brandenberger, -Johnston & Currie, Cotton Exchange Build¬
ing, Galveston, Tex.
American

increasing

gress,

foreign experts since
came a global leader.

the

choose
American

either

and,

and

take

to

one

...

•

being

might

Ex¬

change"—The Exchange Magazine, 11 Wall Street, New York
5, N. Y.—10c per copy; $1 jjer year.
-.
."
;
9

under

or

of

told by these foreign
as global lead¬

grant

or

State

take

government.

scientist which

306

am

ise

just begun, or at least that is

.

o r

Market—Study—Parrish & Co., 40 Wall Street, New York 5,

But

a

exotic

and

Stock

but

faced

diplomacy which takes

foreign

to

one

class

youngster

a

Estate

Bond & Stock
Averages—Bulletin—Amott, Baker
Incorporated, 150 Broadway, New York 38, N. Y.

little early to be address¬

graduating

a

career

& Co.
The

a

were

4, N. Y.
Real

Department

I don't think Mr. Dulles

By CARLISLE BARGERON

Jones Averages and the 35 over-the-counter industrial stocks

and

can never

behind

have simply got to make
minds. Either reduce our

we
our

tariffs

Washington
Ahead of the News

Over-tlie-Counter Index—Folder snowing an up-to-date com¬
parison between the listed industrial stocks used in the Dow-

yield

is

country in favor of higher tariffs

Building—Suggested equities—Peter P. McDerCo., 42 Broadway, New York 4, N. Y.

as

The

You

grace.

one

against them.

From

Com¬

Averages, both

annoying

an

1958 Portfolio

used in the National Quotation Bureau

to

rosy

you.

Stores Co.—Bulletin—De Witt

zation, 120 Broadway, New York 5, N. Y.
on Koehring Company.

9477 Brighton Way, Beverly Hills, Calif.

mott &

intend

we

has started anti-trust proceedings

Securities Co., Ltd.,

Paradise Securities

hell with what

tell when

Broadway, New York 6, N. Y. Also in the same issue are
discussions of the Shipbuilding and Gasochemical Industries.
Insurance

to

their

Don't think things are
with West Germany either.
Their little Volkswagens are mov¬
ing in and out of our traffic with

61

Life

tries
in

much.

so

report

New York.

he

base

propagandists that,

Natural

O'Connor &

Broadway, New York 7,

Ill

when

market, and Britain needs dollars
so

Insurance Industry.
Texas

it

missile

a

militarily—deals with
our raising the tariff on
bicycles
when
they began to enter our

Shulton—Studjr—Kidder, Peabcdy & Co., 17 Wall Street, New
York 5, N. Y. Also available is a
study of the Fire-Casualty

Har¬

strongly about this, I am
intend to tell Mr.

about

do for them

Food Fair Stores.

1957 lows.

em¬

The Danes

and they

—to

an

Safeway Stores
New

to

was

clothes pegs

lish

Street, New York 4, N. Y.

Company—Report—Thomson & McKinnon,
Street, New York 5, N. Y.

fied categories—Francis I. du Pont & Co., 1 Wall Street, New

did

we
on

Oh, just take Britain, our Eng¬
speaking ally. Their grievance

—

Kuheroid

Guides for Buyers of Common Shares—Suggestions in diversi¬

stocks available close to

Company

Inc.—Memorandum—Goodbody & Co., 115
Broadway, New York 6, N. Y.

Companies—Study—Hugh W. Long & Company, In¬

propa¬

industry which

an

establish

Robinson Aviation

—

corporated, Westminster at Parker, Elizabeth 3, N. J.

Investing in the Drug Industry

told,

do?

we

by free trade

country.
Steel

Phillips Petroleum

First
Corporation, 15 Broad Street, New York 5, N. Y.
Stocks

protect

Dulles

Monterey Oil Company—Analysis—Dean Witter & Co., 14 Wall

Outlook—Report—Bache & Co., 26 Wall Street,

What do

told

am

ployed only 70 people.

Analysis — Shearson, Hammill &
Co., 14 Wall Street, New York 5, N. Y.

Vilas & Hickey, 26

—

making a livelihood out
making and exporting these

feel very

Parchment Company — Analysis — Wil¬
Company, 135 South La Salle Street, Chicago

&

industry of making clothes
a (lot of their peo¬

increase the tariff
to

are

;

are the Danes going to
say
No, they want to talk about

gandists that what

a

Vegetable

Blair

Star

Lone

5, N. Y.

York 5. N. Y.

Also available is

you

"

clothes pegs.

Street, New York 5, N. Y.

Casualty Insurance Company

Boston

Co.,

&

"hurrah,

were

of

Simpson

3, 111.
&

Broadway, New York 4, N. Y.
Electric Utility

ple

are

and how

pegs

I

Wall Street, New York 5, N. Y.
on Sterling Drug Inc.

1

Kalamazoo

Pillsbury Building, Minneapolis 2, Minn.
Depressed

their

Consolidated Gold Mines, Ltd.—Analysis—McLeod,
Young,
Weir & Company, Ltd., 50 King Street, ' West,
Toronto, Ont., Canada.

Ltd., 25 Adelaide Street, West, Toronto. Ont., Canada.
Catholic

E.

to

would say

this?

IIollinger

East, Winnipeg, and Royal Bank Build¬
ing, Toronto, Canada.
Market

Cycle

said

saviour."

But

memorandum

173 Portage Avenue,

Canadian

tives

Blyth &

—

simplify one's theme.

our

Ilershey Chocolate Corp.—Memorandum—A. M. Kidder & Co.,

Letter.

Market—Bulletin—James Richardson

Bond

—

Corporation—Analysis—B.
California Building, Denver 2, Colo.

3urnham and
Company, 15 Broad Street, New York 5, N. Y. Also avail¬
—

Co.—Analysis in current issue of

analysis of Portland General Electric Company.

Pacific Corporation

Georgia

al¬

Denmark, for ex¬
going to estab¬
lish a guided missile base in your
country, the Danish representa¬

Associates, Inc.—Analysis—Singer, Bean &
Mackie, Inc., 40 Exchange Place, New York 5, N. Y. •

uranium for power and

World"

"Free

our

ample, that-we

Electronic Research

the

by

an

a

has

-

But it sounds good and tends

Dulles

Paine, Webber,

—

that

You would think that when Mr.

"Business and Financial Digest"—Loewi & Co., Incorporated,
225 East Mason Street, Milwaukee
2, Wis. Also in the same

Liberty Street, New York 5, N. Y.

Atomic Letter (No. 33)—Discussing seven additional

to

Memorandum

of

some

lies.

Curtis, 209 South La Salle Street, Chicago 4, 111.

Cornell Paperboard Products

American Economy—Review—Alfred L. Vanden Brceck &

Co., 44 Wall Street,

Iladley Corporation — Analysis — Sebright, Ahalt &
O'Connor, Inc., 115 Broadway, New York 6, N. Y.

Corn

World,"

expression

coined by the propagandists
because I don't see the freedom

Central

pleased

"Free

the

loose

been

of

following literature:

about

rather

Hardy & Co., 30 Broad

—

J. I. Case. Company—Analysis—Grimm &
New York 5, N. Y.

Recommendations & Literature
It is understood that the

L. Bohack Co., Inc. — Analysis
Street, New York 4, N. Y.

Thursday, Deceihber 19,1957

.

.

forth

of Los Angeles—
Report—Kay and Co., Inc., 2316 South Main, Houston 2, Tex.

Dealer-Broker Investment

.

governments

to

our

country, undoubtedly because

an

of

Philadelphia

Winter

annual

Dinner

Mid-

Bellevue-

at

Stratford Hotel.

April 23-25, 1958
Texas

(Houston, Tex.)

Group Investment Bank¬
annual meeting

Association

ers

the Shamrobk Hotel.

at

'

ancestor had served in this capac¬

ityFOREIGN

INVESTORS

,

Being the

,

June 9-12, 1958 (Canada)

',

of energy

man

that

he

Reason's

<§>rrrtings

'Ara<nitine

trailer

and

manufacturing

Sirat

BHisljca

to

TROSTER, SINGER & CO.



tion §eeks

corpora¬

foreign inves¬

is, at his age, I doubt he has
ever regretted the day he finally
got to be Secretary of State. In
the way the doctors tell us that to
continue to live one must keep
up
his activities, Mr. Dulles is

here, there, issuing statements or
meeting the press every time you
can

Investment

Manoir Richelieu,

M

\frite to,4'ROLLER

29-Oct. 3, 195S
Springs, Colo.)

—

Carcarana-

we

would
and

gether

Argentine Republic".

Russia

me

be

our

we

sonally
the

(Colorado

Sept.

National Security Traders Asso¬
ciation Annual Convention
at
the

Broadmoor.

turn around.

Now, he is in Paris at the meet¬
ing of NATO. You would think
this

S. A. C. I.

Murray Bay.

Quebec.

Nov.

tors.

Dealers' Association

of Canada annual convention at

I

easy.

allies

Obviously if

don't

stick

Per¬

doubts

could sink anybody,
but
prevailing minds are against
I intend to speak hence¬

and

the

Nov.

that

my

(Boca Raton, Fla.)

National Security Traders Asso¬
ciation
Annual
Convention
at

to¬

will all be sunk.
have

2-5, 1959

Boca Raton
80-Dec.

Beach,

5,

Club.
1958

(Miami

Fla.)

Investment Bankers Association
of
at

America

annual

convention

the Americana Hotel.

Volume

186

Number 5700

The Commercial and Financial Chronicle

.

(2641)

sued

reasonably conservative poli¬

continue

cies.

Gearing Economic Policy

When the Second World War

eyes

ended, the national debt

was $2791 growth, rather than on the fiscal
Today it is $275 billion. outcome of the budget per se. If

billion.

To the Crisis Before Us

Yet in

Mr. Eullis urges

ploring

economic

to

growth.

lion

Asks business to:

In

this

crisis,

time

should

keep prices

line,

Have

United

States

searching

a

had

index.

radar

Yet

nental

sort of

has
into

of

sense

the

us

what

take

leadership

in

Harry A.

defense

best

give

to

pause

far out ahead

so

as

first

world domination?
If

be

time

affirmative,

for

the

it is

the

nation

to

those

do

will

continue

will

insure

things

in

this

business

billion

the. war?
What

which

the

brought

the

rises

have

did

the

duction?

Gross

The

National

first

of

these

.the wartime doubling in

As

comes.

America
where

a

result, the

could

Pro¬
was

total in¬

women

been

Business

investment

expected

increased

increased

which

capital and out of

Finally, there

peoole

the pcnt-un

'representing the long list of goods
the consuming public wanted. Our
doubled incomes and
lated

savings

;tbe- void

our accumu¬

rushed in to fill

now

bv

created

the

drop

military spending. We had
ness

instead of

boom

a

a

in

busi¬

.

generated

was

are

now

We

Present

have

had

not

a

hopeless

inflation" during the
past ten-year period. Start-

"creeping
entire

address

<*th

Annual

h=»r

"f

by

Press

Commerce

Washington, D.

Mr.

Bu'lij

Symposium
of

before

of

the

Dec. IS, 1957.




the

Cham-

States,

as

.

possible by reductions in nonmilitary sections of the budget.
balanced budget
is highly de¬

A

fetish

if

but

national

threatened

be

not

should

it

a

security would

thereby,

or

eco¬

is

the solution

of

of

conditions

which

will

power be

will

to

take

stimulate

should

government

em¬

make

effort to check the wage
price spiral. Part of the responsi¬
falls

on

the

shoulders

of

unions which seek wage increases

productivity and which

statement

which

maximum

every

bility

base

the
new

wea-

re-create

high productive employment

American

standard

of

people

This

announcement

oidlook

as

they

in

must be

higher prices.
of

The

Richard

T.

Building and Construction Trades

the
Industry

come forth with new
products and
procedures.
We
can
have
both rockets and new
products.;, *

..Most

to

asking
abandon

construction
their

fight

important;, businessmen

should

not

permit themselves to );
victims of psychological

become

fears. ;We should ravoid excessive

retrenchment in

our

grams,
but
rather
schedule purchases
able basis.

buying

an

offer

is under

to

buy

any

no

circumstances

to

be construed

as

an

NEW

We should continue to

out our long range plans
modernizing our plants and
equipment and for expansion to
carry

meet

future

population.

needs

of

a

Financial

and

and

foreign invest¬

ment.

Positive Factors
As

we

there

look

are

factors

a

forward

number

which

be
given
weight. I have already mentioned

easier

conditions

money

help to stimulate home build¬
ing and automobile sales.
Consumer spending is still at a
high level in the face of increased
unemployment and a shorter work
week.

Population

continues

and the demand for

and

other

bound

to

consumer

increase.

Continued

offer

to

sell

or as a

on

has

already

solicitation

1, 1972

been

Price

told

that

us

interest

rates

100% and Accrued Interest

have

reached their peak and that money

accumulating.

loans
money

Liquidation

are

combining

conditions

easier

in

market. Easier money

have

a

substantial

to

the

The Prospectus may

of

demand

reduced

and

for

ment

create

or

is circulated

brokers

and

also on the sales of

such

Control

should

be

as

as

are

the money

and

the

policv by such

measures

Lynch, Pierce, Fenner 8C Beane

Blair 8C Co.

A. G. Becker 8C Co.

Incorporated

Incorporated

Hornblower 8C Weeks

Paine, Webber, Jackson 8i Curtis

Hallgarten & Co.
Estabrook & Co.

appropriate.

The next
area

of

important step lies in
the Federal budeet.

Tn this budeet we have an element
of

Merrill

consumer

eas¬

monev

or other dealers
lawfully offer these securities in such State.

automobiles.

au¬

ier

may

the

fiscal

eronomy

State in which this announce-

money

on

supply
geared to the needs of

over

any

from only such of the undersigned

rates should

effect

housing and construction industrv
durables,

as

be obtained in

st»v>ncrth. largely because

the Federal Government has pur¬

Laurence M. Marks & Co.

Spencer Trask & Co.

is
are

page 104

step, lowering the re¬

rate,

grow

goods

People

Corporation
Due December

to

food, clothing

Policies
The first

which

will

$5,000,000

Mccn by the Federal Reserve au¬
thorities.
In this way they have

1958,
positive

of

December 19, 1957

Dated December 1, 1957

i

to

should

5% Sinking Fund Debentures Due 1972
Government

growing

We should encourage

foreign trade

ISSUE

Consolidated Cement

reason-

a

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

can

pro¬
/should

we

on

for

and for wage increases next year, was

of

and

are

how

uncertain,

of

the

living

-

known.

ever

step up its research and
developments programs, so as to

Gray, President of the AFL-CIO

workers

in¬

should

maintained. To this end,

and producing the econami<r Department,

expansion

of

ployment. At the same time, it is
equally important that purchasing

on

for

prepared

government

upon

recent

increasing

be

our

To curtail such aid where

passed

defense outlays

pons

should

to our double

now

and

could easily cre¬
calling for much
heavier expenditures later on.
The Employment Act of
1946
requires
that
the
government

the

the

world has

given

also,

area

fiscal parsimony

or

given

highest

greater than average increases in

growth inhibited.

Clearly, economic growth rather
than financial

foreign

maintain

far

pro¬

be

Although our technology has
developed "sputniks," it has

necessary,

action

and

should

not

situations

bent

sales

efforts

creased.

employment and purchasing
power. If unemployment increases
materially, it is therefore incum¬

as

sirable,

is

ate

economy.

economic outlook?

the
<:An

it

Therefore

new

the

nations.

The increases in defense spend¬

ing should be compensated

them.

motional

to offer appropriate financial aid
to our allies and to certain needy

bination of the two, will be stimu¬

lating to the

must also tell the consumer about

they

thorities should reinforce the

Situation

two
policies whicn is
adopted, or even a com¬

these

finally

customer needs and wants, but we

trade

economic policies he geared to the

t^e
The

additional

.

by

fearful

more

With conditions

the

recession.

Why are we toda3r where we are?

for

;

be

of inflation.

are

is

was

accumulated "starved demand"

deter¬

can

be

discriminating in

the

industry must not
only produce the things that the

prob¬

Tariffs

on

of

We

billion

deflation and depression than

discount

income.

out¬

to

a high pla¬
adjustments have
place. The upward

•

of

$2V2

or

is

needs

many

spend two /dollars

liquid savings were in¬
creased by $225 billion, and thus
we were all able to buy both out

of

in

boom

high expenditures by industry for
plant and equipment, together
with increasing consumer demand,
has lost its pushing^ power. Many

they previously had spent

Next,

small

The

has been on

taking

thrust

of

only one dollar.

been

rise.

not

and

teau

■

cline in

The

we

will

(GATT)

government

in

induced by a cut in taxes. Either

was

over.

as

becoming more
his purchases.

be
ana

Since last spring, the American-

on

1%' de¬

now

soon

Agreement

In

military outlays for guided mis¬
siles, w? shall be able to find out
which policy is most appropriate
—an
increase in budget outlays
for
defense
purposes,
or a
de¬
crease
in budget revenues to be

problem

economy

factors

a

As

foreign

there

should
wholehearted support.

for

our economy

customer is "king" and that he is

not

are

Trade

arise,

instrument

an

for

but

controls and

from the 1957 level.

economy

through with less than

This,

it

also

the

nomic

lays in 1958 are
reduced bv 7%,

"i

'

.

three

well

is

peace.

plants.

ended.

spending on
'

.

were

it

needs

should

saving

important
to keep
end, we

that

We should
resist unwarranted wage demands.
We
should
remember
that
the

laws

agreements encouraged. The Gen¬
eral

protection

our

war

protection of

fact

index

predicted

substantially

a year

but
the

new

price

the'United; States

back

cut

incomes

most months and the October price

low the war's end. What else could

its $100

boom

for

clear

is

utmost

To

should improve cost

strong financially
and which have a shortage of dol¬
lar exchange. Therefore, it is im¬
portant
that
foreign
trade
be
liberalized and reciprocal trade

budget is not only

instrument

an

outlook

not

which

only $7.4 billion.

when defense and

the

with

The inflation is

that economic recession would fol¬

would

investment

workers'

,

when

by

rose

pected.

present business siump win
probably be of limited duration.
It is interesting to note the extent
to which the ''breathing period"
in
our
economy
was misjudged
only last summer. In fact, as re¬
cently as last month views were
expressed that inflation was our
greatest concern.
When World War II ended, about

happen

in

partly financed by bank credit
enlargement, produced the 5%%
price rise, which was to be ex¬

the

economists

The Federal

-

together

The net result of all this is that

our

business

by

billion
an esti¬

billion, while the rise in budget
was

rates

encourage

are

production techniques.

premium

Tax

It

our

stable.

for

ably be some decline in exports,
especially to European countries

remarkable progress. The rise in
revenues in the budget was $13.1

expenditures

The present tax

do

we

not

are

need

taking by capital.

The
is

that

on spending in¬
saving, with the result
economic
development
is

,

risk

responsibilities.

prices

of

distorted.

that

economy
a

reductions

unions

some

a period of economic uncer¬
tainly, businessmen have definite

output gain while
in the fiscal area.

tax

adjusted to

mated $1.5 billion budget surplus
in the present fiscal year. This is

be

modern age of space.

95 %. of

,

that

strong

so

if

a

stead

Korean

$4.2
budget deficit in 1955 to

goods from the

which

survival

outlays

increased

leadership and

our

our

.

place

defense

the

the

from

moved

ahead of any enlarged outflow of

assist the

can

rose

price

consumer

plant and equipment

This

dynamics and genius of American
industry. Our industrial produc¬
know-how

hourly wages

$8*2 billion. The increase was 28%.

United States to rely more heavily
than ever before on the productive

tion and

this

nine months of 1957, the in¬

new

again
of

Government

United
In

less than 4%.

rose

vestment

to these last ques¬

our answer

tions

the

known.

ever

by a plain old-fashioned business
investment boom. In 1956 and the

to

who would seek

any

had

we

This 5Vz% peacetime rise, which
has lasted 18 months, was caused

a

position of overwhelming strength
in scientific knowledge so ad¬
vanced and

period

index

in the eyes of the

Is not the

early 1956,

20%, but the

over

rocket weapons

world?

has

entire

BuIIit

a

in

recovery

we

mine

period

States

and

was

about the most stable

as

level

price

regain

science

1950

forgotten.

economists have char¬

some

acterized

offensive

to

which

inflation,

From 1951 to

secu¬

not

almost

magnitude of that price

51//2%
rise in the cost of living from
March, 1956 to September, 1957.

Should

rity?
we

of

false

a

consumer

have had in the recent period

we

that

lulled

first

amounted to nearly
three-quarters of all the price rise

Magi¬

line

not

wartime

deflation

bomb¬

to become

ers

the

in

cut

after

of

that

giving heed to such responsibility.
Responsibilities of Business

and

could easily

we

evidence

In

view,

penny-wise

penny

a

tax reform.

reduction

truce, and brought about

February,

to

been

has

and

the

$100

Even

effective

tax

be

possible, there is urgent

year.

became

This

1954.

1,

counteracted

This occurred from

1948

August,

and

interconti¬

which

expenditures

we

4%, decline in the

a

price

con¬

defense
our

Jan.

year.

by the release of the
"suppressed inflation,"

permitted the

we

lose

saving

$73.5 billion

fiscal

present

duction

ing with the end of the postwar
1947-48 boom, which was caused

political

warning
our

tinental

a

the

1958 than this

estimated

an

will

pound-foolish and

This
increase is largely the product of
economic
growth induced as a
result of the $7.4 billion tax re¬

a

world

ourselves

ask

question:
radar

of

in

we

Sees business higher in

to

the

in

our

stable, increase sales and promotional efforts, step up research
and development, and avoid becoming a victim of psychologi¬
cal fears.

we

year, receipts of the Federal
budget have risen from $60.4 bil¬

Sputnik and economic recession. De¬

do not take the broader

we

cal

overwhelming strength in scientific knowledge, reliance
private industrial enterprise, and fiscal policies dedi¬

cated

na¬

economy

Furthermore, since the 1955 fis¬

defense
upon

gross

billion in 1957.

1946 to $435

Mills, Inc.

Maginot military stance, Mr. Bullis wants in

a

production of our

has increased from $209 billion in

bold, aggressive plans for American industry

double threat of

to meet

the interval, the

tional

By HARRY A. BULLIS*
Chairman of the Board, General

balanced budget.
Our
be on economic

a

should

9

G. H. Walker & Co.

1

10

The Commercial and Financial Chronicle

(2642)

the

Economic Outlook Implications
For Interest Rates and Deposits

Willis

Mr.

foresees:

,

decline in business demands for

(1)

being greater than net increases in housing credit

1958

While unable to detect

long-run concern in
vention.,and rapid

Board-

Conference

Industrial

While there need be

manufacturers'
ture
are

UP>

it did in the 1930

as

x

has

topped

of our I ederal budget and, according to some observers, has revived
the thieat of inflation which only
recently

boom

j

,

&nd, judged by certain indicators,
the economy has already been ex-

+

iu

•,

„

periencing a

includinir

ather factors including the Presitactois,
the Presi

readjustment
for

dent's health, have greatly compli¬
cated
the analyses of economic

consid¬

a

erable

period

conditions.

of time.

The Federal
Reserve

Nevertheless, the fact is that for
time being business has lost

in¬

dustrial

the

pro¬

duction

index

reached
last

147

how

to

stand

now

The

Gross

142.

capital expendiindications

given by declining manufac-

ness,

,

Per

capita personal income, after
taxes, has risen 3% in the past
However, rising prices have

accounted for most of the reported

gains in the national product ac¬
counts and all of the gain in in¬
come

per person.

Within

significant

economic

having the most bearish lmplications is the decline in busi-

J. Brooke Willis

prices has continued to rise reach¬
ing $439 billion in the third quarter, as compared with $417 billion

year.

.

taking place and the

now

-

months

recent

•

sta¬

new

Business

plant and
investment

m plant and equipment has been
dle ma|n dynamic expansionary
force in the economy for the past
two years.
It was reinforced to
extent

by inventory accu¬
mulation and by a rise in our ex¬
port trade balance with foreign
some

countries.

But

these

latter forces

have been waning and, except for
a

the

spending for

equipment.

probable

in

rise

governmental

tistical evidence has increased that

expenditures and in
construction, there is

the economy is experiencing some-

tivity

thing

more

at the

than

a

"breather.'' Yet

time, political events
moving with unusual
startling rapidity and are
imposing new influences upon

have

same

been

and

economic

behavior.

The

break-

through into space by the Russian
Sputnik has raised doubts about
the

adequacy of our national secu¬
rity, has precipitated a reappraisal
.

•An
11th

address

annual

National

by Mr. Willis before the

Mid-Year

Association

of

Meeting

of

Mutual

the

Savings
Banks, New York City, Dec. 9, 1957.

residential
no

new

ac-

calculated to take up the
slack resulting from the culmination

of

boom.

retail

the

business

investment

The promise of expanding

trade, to which not

economists

looked

earlier this Fall,

fulfilled.

for

a

a

cljrVpv rplpn<?pH

on

in

the

few

stimulus

consumer

ft

are

a

further rise in the third quarter,

capacity

/i

mu

v

x

cur-

by

sains

placed privately through the undersigned with

in

Final

Shiskirt

Declaration

of

the

Forty*

*.

ton, N. iJ.—cloth—$5.

a

or

electric

Italian

gas

utilities plan

an
'

that-consumer

and

Operations were at 86%
capacity at the end of 1956 and

average.

of

at 92%

Philadelphia

Federal

Re¬

Bank's Survey indicates that

manufacturers in that

area

in 1958

will spend 13% less than in 1957.
An overwhelming preponderance
of firms surveyed are reported to
be decreasing their outlays. These
intentions are confirmed by slack-

ening in the demand for plant sites
and recent weakening in the market

for

industrial

the Philadelphia
For

The

important analytical

tion is not whether

The
serve

some

time

real

area.

it

has

estate

in

1

type

one

ap¬

of

greater than
cline
can

it

in

munications :with

env-

pean

ques¬

:•

Pension Plans with Special Fund-

ing—John Hancock Mutual Life
Insurance Company, 200 Berke;

the

secondary

>

omy.

purchasing them for investment.
of record only.

e.g..:

and

Recovery

-4-

McCord

Wright—Amer¬
Enterprise
Association,

ican

between

1012 14th Street, N. " W.,
Washington 5, D. C.—paper—
$1.

capacity

production, the,particular as¬
I have emphasized.
Thereiore, it is worth while examining

Refrigeration, Air Conditioning &
Cold Storage — Chilton Book

pect

specific

areas

where

-

Division, 56th & Chestnut Sts.,
Philadelphia 39, Pa.—$17.50.
L

demand

most likely to pick up.

appears

„

Regulation

Residential Construction

Residential

*n

1957

Recently, housing starts
to have leveled off and for

as

whole

a

a

will

rise

dential

Report

total nearly

Next year could result

modest

in

starts

construction.

-

,!

.

By

Banks,

„

:

:

and.

resi¬

on

Motor

-

Ernest

—

W.

Rate
Wil¬

liams, Jr.—Harper & Brothers,
49 East 33rd Street, New York
16, N. Y. (cloth), $4.50.

recessionary phase for about

a

of, Rail

Competition

//'

construction has been

Superintendent

Republic

of
for

Peru

of

1956 — Superintendent
Banks, Lima, Peru (paper).

year

of
'

!

Survey of Manufacturing Activity
in Australia
Department of
Trade, Melbourne, Australia-i—

The Joint Department of Labor,

Department

NEW ISSUE

German

Kingdom

Economic readjust¬ /'•/ Inc.,

two years.

panies to anticipate creeping in-

David

effects

West

War

Mass.-^
" O

;

"

and

outlays in plant and equipment
running ahead of the probable

Boston,. 17,
-

United

ment implies the correction of im¬

balances.

Street,

Post

given a de¬
expenditures, we
not,

or

engenders.

ley

paper.

be

parent that the extraordinary rise
in

56 Via Yeneto,~ Rome, Italy"
(paper), 15c per copy; $1 per
year. J;
'

increase in

will

Euro!

Other

Countries; Popular Tourist

Provisions, etc.—Italian Affairs,
;

decrease in another,

a

capital

escape

an

spending

whether

but

the

been

;

role in their calculations.

at the end of 1955.

on

1957,
Economic

Income; the Customs and ExT
cise Guards^ Italy's Rail Com¬

_(,i

in plant and equipment
outlays to be quite moderate; they

(3) The main reason given for ^rnment spending will more than
the' dKJP^in maniracturing Js ex- offset -lower-business investment;
cess capacity' which on the Sur- and they have
great faith in the
vey. date, was 82% as compared twjn economic stabilizers of monwith 90% of capacity reported on e^ary anrj fiscai policy Population
previous surveys as the preferred gro^th also plays an i?npo?tant
an

:

\•.

September,

Balance Sheet and the National

.

believe

Affairs,

containing articles

decline

and

increase of 3%.

institutions

Tins advertisement
appears as a matter

Busi!

and

Research,
Inc.,:v 261 •; Madison
Avenue, New York 16, N. Y.^4
paper—$1.,t V, •" * -'
•'«.

.

doubt-

at worst visualize 1958 as a
shallow saucer. They expect the

turing where plans call for a 16%
reduction next year. In contrast,

in

were

Computers

Indicators—Julius

—National Bureau of Economic

»_

economists expect to see
sidewise movement in
economic - activity - at high levels,

in 1958

1,000,000.

securities

■

morf

therefore, in expenditures
These

Electronic

of

Many

(2) The drop in capital expendi-

appear

rent personal income, reported

—

,

corn-

damp-

izations
Eli
Ginzberg and
Evving W. Reilley — Columbia
University Press, 2960 Broad¬
way, New York 27, N. Y.—$3.50,

—

reduced levels in 1959.

econ-

been

potential

appear

•

Efforts by individual

have

actual decline in

Effecting Change in Large Organ-

ness

x;x..x^

...1

t

Avenue,
(paper),-

.

<■

growth requirements of the

an

cost

Park

J

inducing
V

u

other

durables

high

factor

460

22,VnXY.

—

was

by

one

Inc.,

York

Fourth National Foreign Trade
0,1 rePlies received during late ful. This together with the high
•''
Convention
Scptember and early October.) :•» cost of capital and smaller profit
National Foreign
;
~t~v,„.
margins is -causing managements
Trade Council, Incl, 111 Broad!
(1) That busmess plans to x- f0cut hack
expansion plans until
way, New York 6, N. Y.—paper.
dwee capital expenditures m l 58-;
economjc c i r c u m s tances appear
hv
fi
11
by $2.6 hill inn n»* 7% nvpr-atl as more lavorable.
billion or lfjL over-all as
Financing Highways — A sympo¬
compared with 1957; and most
sium
Tax Institute, Incorpo¬
companies plan to stay at their
Possible Offsets
rated, 457 Nassau St., Princes-

the prospects for automobiles and

ened

the

procluiVity

ex-

penditures for nondurables showed

the

past,

labor has been

.

p.$1.50.

size of the facilities.

i..

Nov

Board,
New

turing orders, particularly orders management to substitute equipmqchinery.
~ ment £0], iabor
However, when
The highlights of the McGraw- plant is used at less than optimum

has not yet been

Although

period when

a

for

one

prod¬

-

most

change

...

.

.

in

we are

Forum

—National Industrial Conference
.

sive current revisions in capital
expenditure, programs. As matters

Similar

survey.

tures is concentrated in manufac-

Investment

Business

uct in current

l

long and how deep?

ml

bad declined^
national

en¬

a

and

October

by

and

recessionary phase at least
temporarily. The big questions are

De¬

cember

momentum

forward

tered

a

of

peak

its

ference Board Economic

there

s,

are grounds for expecting exten-

WA.tioillonl.. '

,

during the past nine months

business

obsolescence

survey of capital ap-: additional capital outlays are govpropriatiofls, the McGraw-Hill erned more;and more by what
survey of business plans for capi- they promise in near-term econtal spending, and the Federal
omy of operation and less and less
Reserve Bank of Philadelphia by the sheer need to enlarge tne

economic progress.
The

no

of in-

era

Newsweek

public spending and easier money to put economy back on a
rising trend, the author sees, however, basic economic growth
factors generating, in due course, resumption of postwar

out

an

'"".ythat: capital investment will dry Business Outlook for 1958—Con-'

plant and equipment outlays is
clearly indicated by a variety of
evidence including the National

future forces other than expanded

near

tion falls.

penditures have been rising for
2V2 years, they are now trending
A continuation of the downtrend

interest rates fall.

as

appropriate to examine curtendencies in further detail,

in

play; (3) slower rate of deposit growth accompanying halt
in personal income rise; and (4) less intense competitive pres¬
from commercial banks in

more

I We know from experience that
fixed capital investment shows-

seems

downward.

or

government borrowing; (2) a decline in interest rates, should
business decline continue and easier monetary policy come into

sures

resulting in overcapacity in
and more industries,

plant

equipment has been the key

tant fact is that whereas these ex-

implications for savings deposit and interest rate trend.

funds

•

shares

:

great variation historically.
Just
for 1957 will achieve as inventories become excessive
a record level of $37.2 billion, 6%. when sales decline, plant
capacity
above 1956. However, the impor-. becomes excessive when procluc-

general economic prospects and

banker reviews

Since capital investment in
and

Thursday, December 19,1957

These outlays

Vice-President, Savings Banks Trust Company, New York City

Prominent

/ /

.

.

flation in costs and to gain larger
of industry markets were

for

Department

factor in the business situation, it
rent

By J. BROOKE WILLIS*

their

Commerce

September.

.

of

Commerce

fore¬

paper.

.

cast^, released

Nov. 15, estimated
starts at 1,100,000.
Total
new
residential
building,
private and public, was expected
to rise by 8% from $17.0 billion
to $18.4 billion.
This reflects. a
$675 million increase in new pri¬
vate units put in place, an increase
of $335 million expenditures for
alterations and repairs and an in¬
crease
of $345 million for new
public residential buildings.
1958

$3,000,000

Eagle

Terminal

Tankers, Inc.

Debentures due 1963

housing

These

With Options to Purchase 240,000 Shares

were

based

on

the assumption that changes in in¬
come

Class B Common Stock

estimates

be

and

employment would not

great

enough

affect

to

of

before

discount

tHe
rates

Banks.

Reserve

recent

lowering

the

by

Federal

&

Co.

it

would

seem

that

December 16,1957.




serve

by

Ninth

341

1, N. Y.

Avenue,

New

(on request):*

Hayden, Stone S Co.
Will Admit Two
Hayden, Ltcne & Co., 25 Broad
Street, New York City, members
of the New York Stock Exchange,
Jan.

1

will

admit

Jones and Joseph E.

partnership.

William

R.

Swan, Jr. to

Mr. Jones has been

with the firm for

some

time.

E. F. Huitcn & Go.

the

availability of funds will be im¬
proved

York

To Admit New Partner

next year.
Now

tics,

The

supply of
mortgage funds was then regarded
by the estimators as the chief lim¬
iting factor upon home building

F. Eberstadt

ing —- U.
S.
Department
of
Labor, Bureau of Labor Statis¬

on

new

construction significantly and were
made

White Collar Jobs in Manufactur¬

an

easier Federal Re¬

policy but it is not clear by
Continued

on

page

94

E.

F.

Hutton

way, New York

&

Co., 61

Broad¬

City, members of

the New York Stock

Exchange, on

Jan. 1 will admit Walter V. Dixon
to

partnership.

Volume

186

Number 5700

.

.

.

The Commercial and Financial Chronicle

Specific Labor Proposals of
Eisenhower Administration




$8,700,000

Louisville and Nashville Railroad

Equipment Trust, Series Q
3%% Equipment Trust

'

.

•

'

;

*

-

•

-

Certificates

.*

'

(Non-callable)
To l»e dated

January 15, 1958. To mature $580,000 each January
Issued under the

15 from 1959 to 1973

Philadelphia Plan uith

20% cash equity
maturities and yields
1959

3.50%

1961

3.70%

1960

3.60

1962-1973

3.75

These Certificates

received

by

us,

are

offered subject to prior

sale, when,

as

and if issued and

subject to approval of the Interstate Commerce Commission.

Salomon Bros. & Hutzler
Drexel & Co

Eastman Dillon, Union Securities & Co
Stroud & Company
I

December 18, 1957,

ncOTporated

12

The Commercial and Financial Chronicle

(2644)

things that a bank can
improve its relations with
its
employees and secure high
grade people.
Of course, I re¬
peat, the main one is adequate
salaries
good working condi¬
are

Challenges to Banking in 19S8
By HOWARD P. PARSIIALL*

President, Bank of the Commonwealth, Detroit, Mich.

know

I

which

little

a

which

at

My

p.m.

and

friend
i

m

of

i

e

n

n-

formed

me

that

re-

the

discount
H.

P.

for

Parshall

rate

banks

borrowing
from

had

the

Federal

Reserve

Bank

been lowered

namely:

New

Richmond
This

by four banks,
York,
Atlanta,

and

was

a

and

of

St.

Louis,

of

move

to

3%.

magnireaching effects,
say not many
people knew that this action was
tude
Yet

I

far

venture

be

to

to

•'»-

'

-

•

Savings Interest

Going

:

back

before

•

the

bank

loans

on

somewhat

were

higher than they are at the present time. On many of the "Overthe-Counter"

6%.

After

loans, the rate

the

bank

was

debacle

of

the

'30s, regulations were passed
limiting the interest that could be
paid on savings accounts to 2%,
eliminating entirely the payment
of

interest
,

.

to

i

my

in the business.

in

bad

that

this fashion,

lation, but it

was

privilege to be
a

Too many of our

services

were in the past, and
some today, are free. We can no

,

rates

too

on

regu-

we

.

This

are

is

deposits is paramount.
for

the

officers

of

a

more

calls, although

money,

draft

cashier's check.

or

to

good

pay

depend

long

as

duces

a

on

,'

until

both

businessman

sufficient

volume

will

new

War I.

in

War

our

II.

economy

will

I

check

to

not

to

banks have

a

man

who

devotes

of

his

a

time

their staff this kind of

on

They do have the
knowledge that is possessed by
their correspondent banking con¬
nections to draw upon. Also, there
expert.

are

some

very

good bank invest¬

ment counselors for

guidance, not
connection
with
their

only
in
government

bond

portfolio, but
all other investments, also good
rating agencies.

deposits

These shares have been
as

at

fall

in

these

two

lor

should be at least 1%

total

deposits,

on

tunities to

buying

payment

should

and

selling
more

capital gains by
selling
securities.

times when
take

taxes and all

expenses.

It

a

a

government securities.
possible to take losses by

is

rities

Government

Our stock in trade is

some

t

ir;

.

;

This is due entirely to the
peculiarity of our tax laws and
especially the capital gains pro¬
years.

vision.

Do

not

think

think

that

should bring

we

attention.

your

Inflation

I

tinuous

inflation
currency

We

not

will

discussion

into

go

Price $5.75

Faith

and

that

the

the

board

Federal

controlling
with

the

symptom

,

111

Durham, North Carolina

memories
'
snort.

are

so

very,

very

antl

A note of warning is in order

;

the payment of savings ihter-

on

:

est.

.

In

u;~u

opinion, 3% is
V
lu 4-iv,

my

\xt~

i

too

vailing interest rates

on

pre-

mortgage

loans, business loans and the yield
bonds is

.

•

u

be
t

realistic

and

,

it

is to

.

.„

hoped that .these rates will

prevail

for

a

long

present conditions,

time.
2%

a

staff

show

1%

and national

try

at present

are

savings.
_

banks

Under
rate

coun-

paying 2%

A couple of months

_

^

a

survey

was

,

conducted

on

ago,

,.'

which

showed that banks throughout the

77"
An

the

,

t

address

Michigan

,

by

: - f

Mr.

Bankers

>

* ■>

.»,. .■ j

Parshall

Study

,;

before

must

Keep

that

,

FIRST SECURITIES

CORPORATION

York, N. Y.

Corcoran Street

Do

nSLsee4k additional earnings by
your portfolio those sewith a high rate of re-

curities

turn;

when

December 16, 1957

for
you

generally
speaking,
seek rates higher than

\hose. Prevailing for the security
mmd, the intrinsic value of the
security declines as the rate of

m

For Banks, Brokers and Dealers

return increases,
p

Capital Cities Television

ers®linel

.

so^e*-T^T staff-°4 "w

Corporation

banks cannot be over-emphasized,

We have

many

advantages

Capital Stock

over

employees in other industries, but
nothing takes the place of adeqnate pay for services rendered.
We need

—the

more

in

men

banks

our

„

,

,

,

•

•

CASPER ROGERS CO.

thank

worpen. are good and
.v

Bought—Sold—Quoted

.

•

■

40

Confer-

University of Michigan. Ann Arbor,;
Mich., Dec. 5, 1957.

ence,




hank

earnings.

on

of the state
in this

good

a

figure in mind, please.

savings would be in order, and I
might add that 43%

members,

adding to

u

high. We do believe that the

on

c®jniminity, to

its shareholders, to its depositors

chnrf

SHORE

COMPANY

-VC1Y nature Ot things,. they cause
a
rapid rate of turnover.
There

Telephone:

Exchange Place
BOwIing Green 9-6244

New York
Teletype: NY 1-4949

are

what
to

governors

inflation,

New

Our

balances,

detailed

seems

Reserve

50 Broad Street

commercial

on

they

It

of

of record only.

share

economy.
a

confidence

make it effective.

stock

per

semi-

a

and

this subject.
The
equipped to do that.
We will simply mention that our
currency is very, very delicate.

l^e °f va!u^,to

.

]

of

deposits. Those banks which

that

.

writer is not

&

.

-

and

managed

HAROLD C.

pay

..

intimated

it to

topics together, not because they
are
synonymous; but rather be¬
cause
they are opposites.
Since
going off the gold standard in
3933, we have had almost con¬

remember this—that in order to

.

OTTn

am

Inflation and sound money .. . .
mention
these
two
economic

to

have

I

....

are making 1% net on your deposits after paying good salaries
are
to
be
congratulated.
Let's

.

banks

that

advocating taking losses — I am
profit man myself; but I did

a

would again like to be permitted

.

secu¬

actually improve your
earnings over a period of

(Par Value $1.00 per share)

deposits—so the yardstick should

bond

and

bank's

t,he various ratios of capital funds

to deposits.

can

and

recently,
we
have
had
opportunities to take losses

good

fully subscribed. This

matter

common

bank's

bonds

government

52,000 shares

capital lunds, due to

bank

a

capital gains by

of

difficult to measure

for

exist

make

and

are

TELEVISION CORPORATION

average

after

demand

simultaneously. Also, in connec¬
tion with the larger government
bond portfolios, there are
oppor¬

CAPITAL CITIES

adtli!j,onsTtto ca?ital fHnds
growth.
Its
net
earnings

the

deposits

conditions

industries employing like skills;
Pay liberal dividends to its shareholders—provide for losses and

in

Sometimes, quite often in

fact,

salaries,
;

and

one

off

ISSUE

comparable with salaries in other

your

,

portion

handling of the government
bond portfolio—he is an expert.
Smaller banks just cannot afford
an

a

bonds

to the

to have

meet

increase

an

loans.

staggering

the

on

government

considerable

notice appears
NEW

World

by our banks; but it is
billions of dollars. We con¬
sider government bonds second¬
ary reserve in banking, and I be¬
lieve rightly so. Most large city

all of his expenses, his

pay

these

of

a

you

time

with

owned

the

on

practically

many

as

earnings

likewise

and

were

with statistics—I didn't

bother

amount

pro¬

that

banking
have
drastic change.

a
bonds

factor

you

even

methods

Remember, that

new

II,

economy

prior to

World

bore

procedure than
the officers to make

Rentals

of safe deposit boxes are entirely
too low.
A bank should show sufficient
earnings

to

prime

a

new

successful

desirable.

as

high

savings accounts, and

unknown

in their community, to
engage
in all worthwhile com¬
munity
activities
and
to
call
upon
their
customers.
Many
banks have "specials," men whose
sole activity is the acquiring of
new
accounts, .mainly commercial
but
also
savings business.
We

are

creased. The fees for transferring

of

amount

Government debt did not become

It is good
bank to be

.

pay as

Government

pillars

the

They are not too high.
charges should be
in-

bonds
same

Bonds

War

whole

government debt

govr

by selling

through

gone

salt

large

a

acquisition of

a

earnings on

getting

banks

as

our

to

terest rates we now charge, under
present conditions, seem
to be

are

...

again

high,

again permitted to
3%

had

it
a

Now,

,

.danger of

the

only worth

World

our

of

opinion,

my

should attempt to
sufficient
short
term

selling
Since
and

ex¬

nave

Service

le5st

intended.

purpose

In

In

provide

There

time

of

found that you should select
afford to give our services
men
who are salesmen, who like
without pay than a well run department store can afford to give people and who enjoy the promo¬
its merchandise away. We have tional effort. They are the ones
made considerable improvement to be in your new business de¬
in these later years and the in- partment. We believe that this is

more

certainly needed

and did much good.

^

we

size order. The

period of
45
years.
It is my considered
opinion that over all of that period, or practically all of it, bank
earnings have been far too low.
We appear to apologize for being

ac-

,

too

Its

come

commercial

on

-I,

counts.

are

cannot

demand.

Earnings

is

and for the shortest length
that will accomplish the

money

stock in trade
we

upon

both by wire and letter,
an^ the charge for drafts should
banks
on
savings accounts was be increased. The fees should rise
3%. The banks also paid interest ™ the amount of money transon many commercial accounts and
ferred increases. It is ridiculous
correspondent bank accounts, the to charge the same price for a $10
prevailing rate being 2%. Inter- draft as you charge for a $100,000

holiday, in the early '30s, the prevailing rate of interest paid by

est rates

We

our

them

ways

.

in

good loan:

a

the

for

Government

1.1

_

is

this

Here

business.

definition of

Deposits

5.9

:

Here again,

with

contend

to

banking

It

all

on

have

my

get these deposits in.
Put
work profitably and al¬
return them to the owners

part of banking for

acquiring deposits.

the

There

them

It has been
a

the

and more important than
activities with the exception

all

avail

to

books

realistic.

taken.
;

some

if

are

without

ist.,

14.7

/

rang
broker

a

of

job.

Other

on

Thursday,

of

bank,
all

bank¬

Split-Rate

this

phone

people

Business and

Deposits
and

19.1

3%

of

activities

other

maturity.

maturities,

It

5.1
43.2

__—

2y>%

illustra-..

4:00

of

excellent

an

your

enumerable

New

10.9

lVi%

tion

,14

institute

doing

edge that is being offered.

Paying said Rate

1%
2%

good

Nov.;

making of loans and buy¬
ing of securities is just as impor¬
as

maturities

10-year

The

tant

staggered

bank should not have
very many,
if any, bonds beyond a

Loans

themselves of the banking knowl¬

Percentage of Bks.

A

happened

is

ing

are

rtatePaid

eminent bonds.

times.

phases
of
banking.
Encourage
dog-eared banking manuals.

happen tomorrow.

american

own

country are paying savings inter-

will

you

provided.

Encourage

important thing, I believe,

is

management must and

be

The

and

bank,

every bank, large or small, must
Today, as have men
of
discernment
and
never
before, courses in banking training in order to make proper
and economics are being offered
'loans. This is such a vast subject
by many universities,
and our that I will not dwell upon it. We
should

est rates as follows:

that

about

bit

yesterday, and
perhaps last week; but know littie or nothing concerning that
happened

in

cessors

Thursday, December 19,1957

.

and

—

upon

produce a profit for
he is a valuable asset
can multiply him many

.

the

tions, the five day week, weekly
pay and of course employee train¬
ing. In other words, personnel is
very
important; and should be
given adequate attention.
Suc¬

45 years of banking experience, Mr. Parshall
broadly reviews several items that bankers will have to con¬
tend with in 1958 and offers a succinct prescription to "cure"
inflation. The Detroit banker emphasizes that "bank earnings
have been far too low," and suggests securance of a good profit
margin by: lowering present high interest rates, on savings
accounts, increasing service charges, and supervising govern¬
ment securities more carefully. Charges Federal Reserve Board
with dealing with symptoms of inflation and not the disease
itself, and notes we have had almost continuous inflation and
semi-managed economy since leaving gold in 1933.
Drawing

salary

many

to

do

.

System,
are

me

of

in

dealing

and not with

Volume

the

186

Number

disease

itself.

have

.

.

a

and drudgery,

cure

Reduce

annual

our

billion.

This

budget

would

leave

lion, and do

$5

taxes

$6

or

poem
Be

by eliminating as
possible
the
excessive

as

so

in the

higher brackets.

I

tical for the

cal

party

am

l

would
that

in

and

inflation

very

that

it;

it

would

itself

and

not

I

I

randum

wrote

a

R.

Pressprich & Co., mem-

W.

Rutter Co to Admit
&

Rutter

lift,

covering the knowledge

would

one
will have to

bankers

a young man I was
Assistant Cashier of a small bank

Ligonier, Ind.

Co.,

have

Exchange

20

fice

Rutter

York City, members

the

management

Exchange,

Liebermann.

limited partnership. -

to

San Francisco of¬

a

Market

605

nounces

that

The

I

And

dishes in

savory meat
Meat in all its

variety

cans

the most convenient

now

mealtime

while I knew the

dishes

businessmen of

town

fairly well, I was not
well acquainted with many

of* the farmers.

This

I

if

doubt

financial

a

the day

was

files.

credit,
what

I

statement

at that time.

Of the

113

here
This

town.

was

clothing
small

make

an

minute

the

now

was

and
see
either
Jacobs; and when

Eli
that

me

loan was good

a

good, that was excel¬

not

loans

the

turned

out

as

they said.
of

one

will say.

chain

a

in

office

head

that

supposing

Now,
been

this

had

bank with

Indianapolis,

Well,

we

a

we

just know that

it.would have been physically im¬

possible for

a

apolis to get
time

and

from

man

Indian¬

to Ligonier in
Meyer or
Eli
make
that
loan.
It
over

talk

to

Jacobs

to

just couldn't be done. So . . . this
is
one
good reason for locally
owned banks operated
by local
men
who know the people
and
the community needs. We have a
form of branch banking in Detroit
and I believe it is good;, and it
might

be

that

at

the

some

time

future

boundary

of

line

branches could be extended some¬

due

what,

much of
of

our

to the fact
business and

that

so

so many

people are moving to the
suburban areas.
Let's hold fast
to our form of banking—locally
our

owned
locally operated. Inde¬
pendent banking for independent
people operating in an independ¬
—

ent economy.
*

Conclusion

;i

have

the

touched

upon

some

things that will demand

attention
and

of

bankers

next

of

the
year

probably for many years, and

there

are

such

as

also many other matters

operations,

build¬

bank

ings^ protective devices, and I am
sure

of

many-other items, including

course

There

our

is also

old
one

I would like to

stand-by taxes.
other item

that

mention in detail.

This I know bankers will have to
'

contend

with

in

1958

—

it

is

so

very, very important and-such a
little word; only four letters.'' The
word
is
work.
Some
people
■think

meats!

can

cans
are
..

what's

-

*

-

easy to store and to keep—is
actually about 99% steel, tin-coated

able,

for corrosion resistance.

Next, in order:

1

canned

ham, chile

con

carne,

stew, corned beef hash.

•

.

than

75% of American
relish these products
for their protein-packed palatability,
their meal-preparing convenience in
the home, on outings. But Americans
have "gone for" this "tinned" staple,

families today

since

as

far back

as

1872 when the

first successful canned meat—corned

beef—was

a

'

the

quantities of tin plate

more

duced

each

year

to

of-their

work

as

onerous




bring

go

cans

into
pro¬

you

the

hundreds of products packed in cans

today.

And

our

Weirton Steel

Company division is a major supplier
of both electrolytic and hot-dipped
tin

plate for the canning industry.

Tin plate is just one of the many
steels made by National, where our

it's

constant

goal is

steel for

the

Today,

billion

than 40

total of 1,270,000,000

introduced.

estimated that

Vast

beef

to

produce better

industries

of America.

a

advice, and I always followed

and

available in the all-con-

sanitary "tin"
the top favorite?
Luncheon

of meat and/or meat products
turned out annually.
The "tin" can—sanitary, unbreak¬

meats, meat spreads or
of meats
and other

NATIONAL STEEL

CORPORATION

way

or

they told

delay of

a

two, and would go out

or

back,

Meyer

I would

time,

for

excuse

came

tide' them

to

harvest

until

over

farmers

loans

Sir,

Well,

store.
the

of

some

for

it

dry goods store.

down the block on the
Meyer
Jacobs
owned
a

when

lent

Jewish

a

way

men's

or

of

corner

Next door to us, Eli

Jacobs owned the

in.

bank

our

was

main

the

on

community.

alley,

also

an¬

Dickinson

been

Securities,

formed

with

GRANT

BUILDING

PITTSBURGH, PA.

Inc.

offices

at

has
52

Broadway, New York City, to en¬
gage

in

a

securities business.

SEVEN GREAT DIVISIONS
WELDED INTO ONE COMPLETE

STEEL-MAKING

STRUCTURE

Steel Company •

•

•

Weirton

Stran-Steel Corporation

Ilanna Iron Ore Company •

Corporation

staple because of tin plate

venient and

More

However,

Half

firm

E.

Products Company

combinations

the

Thomas

Great Lakes Steel Corporation

just
21; and they thought me
for that title.
I had
authority * to
make
loans,
and

situated

Form Vanguard Sees.

under

you'll find 103 other

actually

was

young

was

of

Gordon

Cashier of the bank, but had

before

Street

Vanguard

Dec. 26 will admit Mildred H.

on

opened
at

turned

knew

be the Manager.

ef¬

sound

preserve

with

,

In a
previous issue of the
"Chronicle," reporting the open¬
ing of the new office, it was in¬
correctly indicated that Mr. Wil¬

liams would

member when

very

associated

/,

curb

contend, for a number of years.
happen to believe strongly in
the American system of banking,
and are the only country in the
world which has so many inde¬
pendently operated banks. I re¬

our

be

politi¬
but I
be

We

too

will

office.

bers of New York Stock Exchange,

to

memo¬

new

vital, live issue;

a

with which

in

this

Opens Coast Office

a

of the New York Stock

recently

Go.

was

the

struggle, face it—tis Place, New

Independent Banking
is

R. W. Pressprich

should

J

here

God's gift.

money. It deals with the disease
itself and not with a symptom.

This

banks

prac¬

no

adopt

reason

certain

fective

not

point:

my
are

to do and loads to

shun not the

the

afraid

am.

illustrating
brave—we

hard work

principal of our
debt each year. Well, there it is
for what it is worth—simple, isn't
it?

Williams

good superin¬

amazed—he has to
"superman"—and all
banking
profession are
"supermen."

of

play, to dream, to drift, we have

In¬

clude in the $61 billion budget an
item for approximately $8 billion
on

a

branch

of

,

bil¬

Reduce

pay

training that

be almost

Here is the first stanza of a short

a

lion.

to

and

us re¬

possess.

bil¬

taxes

of

many

tendent

by

budget of approximately $61

far

and

gard it as one of God's blessings.

Here it is:

13

(2645)

The Commercial and Financial Chronicle

.

Fortunate, indeed,, are those who
are
in
the
latter
classification.

for inflation.

$10

I

5700

•

•

National Steel

The Ilanna Furnace

National Mines Corporation

14

The Commercial and Financial Chronicle

(2C46)

would

The Puerto Rican at Home:

in

than

a

acres

Operation Bootstrap

probably be

Puerto

Rico.

tenth

of

no

greater than
less

Moreover,

of

the

two

million

agricultural land is first

grade, while about 800,000 can be
considered arable.
Of the latter,
sugar accounts for 35%
to 45%.
Much of the country is mountain¬
ous—beautiful like El Yunque, the

By EDWARD MARCUS
Associate Professor of Economics

Brooklyn College, New York City

rain

Economic

forest, but poorly suited to
support a people haid-pressed for

Consultant, Ira Maupt <£r Co., New York City

existence.

profit gains of American firms in Puerto Rico
compared to mainland earnings, the excellence of the local
labor

force, strategic intermediate fabricator position between

the

raw

U.

S.

material supplying countries of South America and the
market, and prospects for greater integration of the

Island's firms in supplying the domestic market are indications,

according

to

opportunities.

Professor

Marcus,

Products bearing

of
a

Rican

Puerto

business

low transportation cost to

selling price constitute the Island's strongest forte and, as the
writer points out, testifies to success of "Operation Bootstrap"
in countering population
growth and succeeding in raising the
standard

of

living

second

highest,

Venezuela,

to

in

rate

Although the Commonwealth of
by

Rico

air
the

only
the

American

average
of

is

from

a

lew

hours

as

he is of the

«as

more

junior high school level

distant

to Ricans!

parts of the
Pacific
be

is

that

Yet,

Ocean

the

Vaguely

area.

all

are

the-casual

visitor

must

to

wonder

is

the

brought thou¬

is

the

has

delightful place to forget
rigors of the colder North.

Nor

panying that

—

It

here is

accom¬

sands

even

tourist

Island

a

this

prosperity limited

trade;

there

is

an

all

the

are

no

Common¬

1950), thus making
doubly exempt. Only
if the corporation's income is sub¬
(since

the location

sequently distributed, for exam¬
ple, as dividends to the mainland
parent, does it become lully tax¬
able. (Unlike dividends within the
48

this distribution would
given an 85% credit.)
In

states,
be

not

is

the

per

some

death

eral

Electric, Union Carbide—also
15% below 1940, participated; To date the bulk of
thousand

rate

was

popu¬

7.0

per

additions

the

in

been

have

tex¬

to

over

the

immense

un¬

in¬

Thursday, December 19,1957

.

.

Mainland

has

average

gone

up

fifth. The former, of course,
still lower, amounting to per¬

only
is

a

third the latter. Al¬
has gained relatively,

only
he

haps

a

though

absolute

the

differential

is

still

wide for the typical Puerto
Rican factory worker, so that the
very

advantage

competitive

has

not

been lessened.

Moreover, these gains have been
employed in very visible ways to
raise
local living standards.
Throughout the Island homes in
the $6,000-8,000 class have sprung

financed mainly by the Rock¬

up,

International

efeller-supported
Basic

^Economy Corporation
("IBEC").
A 5% downpayment
it

makes

who;

accessible

had

to

previously
slums

demned'to

thousands

been

and

trip through any urban
the

reveal

con¬

shacks.-

widespread

A

will

area

housing

boom, sporting television antennae
and the numerous electrical ap¬

pliances that the masses all over
for. Meanwhile, as an extra
ducts with low transport-toa quarter of a century.
assist, the cost of distribution is
finished
price ratios would find being attacked through the rapid
As recently as 1950 per capita
the relocations suitable.
introduction of supermarkets, thus
income was estimated at $322, less
'«As would be expected, most of enabling the newly-won dollar to
than half that of the poorest,of the
the beneficiaries have been Main¬ go that much further.
San Juan
48 states, and about a sixth the
land-financed establishments. Half alone has rinore than a dozen to
New York State
yearn

--

average.

To

hotel construction.is evidence that

immigra¬

status

Puer¬

certainly a pleasant
place to spend one's winter vaca¬
tion, and the boom in San Juan's

the unrestrict¬
tion

are

the

i

Commonwealth

tion.

citizens, for
ed

to

up

why there is this wholesale migra¬

aware

they

schoolchildren

wood

taxes

in

apparel, electronics, and
thousand, or 60% below 1940.
Were it not for migration, such an plastics,
reflecting the Island's
increase would double the total in transportation problem—only pro¬

largest city, and that there is one
Puerto Rican living in the United

hattan

the

wealth

force

tiles,

the States for every three in the Com¬
ignorant monwealth. One-third of all Man¬

Island

32.9

lation, only

mainland,
is

was

while

Latin America.

Puerto

of

longer in

addition, Puerto Rico allows flexi¬
low-grade or waste, so that effi¬ ble depreciation at whatever an-*
cient methods cannot be used to nual
rate
the
company
wishes,
harvest the commercially valuable thus introducing still further sav¬
types. Even desertland claims ings if desired.
e -_
J ■
%
some of the precious space.
As a result, in part, of the above
legislation, many companies have
Accounting for and increasing
the
population pressures is the been induced to establish units, at
high
birth
rate," while modern first mainly the smaller producer,
sanitation has reduced the death but as time passed more and .more
late sharply. In 1956-57 the birth of the larger"corporations—Gen¬

The real pre-tax

.

Much

income

corporate

.

meet

the net

these

challenges, - the
Rico;-has
been trying to induce rapid in¬
dustrialization through its "Opera¬
tion Bootstrap", primarily by at¬
tracting mainland firms to estab¬
lish plants in the Island.; By tun¬
neling its surplus labor into man¬
ufacturing, me over-all- produc¬
tivity can be raised, and with it
the standard of living.
Govern¬
ment-aided enterprises with the
bright "Fomento" insignia indicat¬
ing their sponsorship have sprung
up all over the Island, and now
Government

of

i^nvestment has come from

mainland.

the

Puerto

dotted

now

with

Island

the

And

is

the

But

haven.

tax

all

with

that

cated

turn

S.

Puerto

the

had

former

re¬

a

latter

(in

latest

the

1955,

for which data were availa¬

year

Furthermore,
not

popula-

;I '
Puerto Rican

: 'v''

■',/

the

'V

"overboard"

in his
FHA foreclosure sta¬
tistics indicate a rate only onefourth
that
experienced
in i the
gone

prosperity.

United States itself.

(

,

Rico

indi¬

in

than half again as high

more

as' the

a

corporations

firms
U.

been

l'or

search

recent study com¬
profit margins for

A

paring pretax
American

the

just

quarter-million

' ;'

has

has

motivation

than

more

tion.

familiar

names

to the Stateside resident.

its

serve

might be noted that this in¬

It

dustrial

has

progress

not

limited to the larger centers.
Government

been

has

been
The

making

new busi¬
the
smaller

particular efforts to get
in

locate

to

nesses

furling of creative energies indic¬
ble). Only four years earlier the
ative of a people on the move.
two had been about the same, but communities, and since 1950 the
account for about a sixth of the
proportion of employment in the
Only when viewed against the
with
the
experience gained in
sands—to the larger urban centers,
The
factories
tremendous problems that this Commonwealth's incom e.
promoted in these
these new operations, the Puerto
und, in particular,, New York City.
progra m
is combatting can a Puerto Rican standard of living Rican worker
regions has more than doubled,
slowly stepped up
Like the many waves that pre¬
has been raised to the highest hi
while the absolute number em¬
clearer
picture be
obtained
of
productivity, and with it the mar¬
ceded them, these newcomers are
these various cross-currents that the Caribbean, second only to oilployed there has risen almost ten¬
gin of profit. Of course, thanks to
found mainly in the lower paid
rich Venezuela among the Latin
fold.
make the composite Puerto Rico
the tax differential, the after-tax
and unskilled jobs, reflecting the
American countries.
today.
Probably the biggest disappoint¬
margin had been much greater for
lot of the first generation immi¬
I.
the
Operation Bootstrap
Puerto
Riean-based
firm iw ment and continuing problem is
II.
Real Business Gain
grant, strange, unfamiliar, and in¬
both years, some threefold that of the lack of local participation in
itially unsuited to the "American
To produce the magnet for the
According to the 1950 Census
To
the American-based company in the over-all industrialization.
way of life". Each day more planes Puerto Rico had a
population of American industrialist, the Com¬
some
extent this is unavoidable;
1955.
arrive from San Juan, the capital, almost
two-and-a-quarter million monwealth resorted to a series of
The quality of the labor force large amounts of capital are often
adding still further to the housing living in an area of 3,435 square measures
designed to lessen the
problem now faced by so many of miles, or almost 700 per square tax burden on the new entrant. has also been an asset, and has necessary for such undertakings
their brothers. It is estimated that mile.
proved more pliable than is gen¬ and the local markets simply do
This overcrowding can be For
example, a corporation could
jNew York City alone has between illustrated
erally expected of a rural, un¬ not have the means for mobilizing
by a simple compari¬ be exempt from the Common¬
trained area. The high birth rate, the necessary capital.
two and three times the number son: were all the
world's peoples wealth income tax for ten years
of Puerto Ricans that now live in to move into
But even among the areas tra¬
its own
the present conti¬ on income earned in the Island. although it has created
San Juan,
pressures, has provided a plentiful ditionally
native-owned the rec¬
the Commonwealth's nental United States, the density
Moreover, Federal individual and
supply of young, strong employees, ord has been unimpressive. From
able and willing to learn the new- 1949 to 1957 employment declined
trade techniques.
Moreover, the a quarter compared with almost
II r
typical worker—male or female— a 50% gain for the Governmentdeed, hun¬

Edward

Marcus

dreds of thou¬

ill

I!

i

pi

ill

I!

lM

Pi

lii

mi

Pi

I

|p

We maintain

m

an

i

active interest in all

m

ill
im

mi

M

i

m i

lit i
||| i

unusual

terity coupled
operation. Unlike

manual

dex¬

precision

with

of the
Mainlanders, they have shown
themselves
well adapted to the
long production runs characteris¬
tic of modern industry, and show
less tendency to boredom.
They
like their jobs, and understand¬
ably so, since they realize that the
alternative
is
low
paid
back breaking agricultural work. Even
the
women
reflect
this feeling,
so many

PUERTO

RICO

m

municipal

•

commonwealth

"dressing up" when they

i

m

work.

I

lii

Nor

•

revenue

lii
»ii

mi

!«

ISSUES

11|
ill
l
i

PI
pi

lii
i

IRA HAUPT & CO.
Members New York Stock
and other

I

Exchange

leading exchanges

1

'

I

1

main office

branch office

111 BROADWAY

141 WEST JACKSON BLVD.

NEW YORK

MI




CHICAGO

pi
pi

lii
i

pi

«
:■

labor

The

paid sweat¬
Commonwealth
a

sanctu¬

for that type of finn, and has
own

minimum wage for purely

local

industries; those
interstate and foreign
subject

are

Labor

to

the

course,

selling

are

in

commerce

Federal

Standards

minima, of

the

that

Act.

Fair
These

lower than

the ability
competition
the increased

or

sterner

brings

III.
What

about

Accomplishments

have

been

the

results

of

these

attempts to raise the Island's
living standards primarily through

efforts—Operation

own

Boot¬
title?
much
1950-51 to

strap, to give its popular
Certainly, there has been

accomplished.
1956-57

a

rate

Product

5% of the total payroll.

is

some

55%,

average

worker,

per

earnings

than $1,000 per an¬

Had

or

some

$2,000

it not been for

the

a

more

family.

per

that is first industrializing,
gradually entering the local
wage
structure, though these
probably account for no more than

plants the

now

are

num

rose

higher than on the Main¬
In
the Government-spon¬

land.

sored

From

the Commonwealth Gross

National

counterparts, but
productivity.
Actually,
as
the latter improves, the mini¬
mum is usually raised. Even fringe
benefits, usually lacking in an
area

program, there is no question
that the income of the Common¬
wealth's

That the

illii

plainly from

and

facturing

the

wage.

average

During

manu¬

the

five years the Puerto Rican
age

past
aver¬

has risen about half, while the

rapidly expanding popu¬
shown
decrease. '

lation would have actually

Construction

are

attempt to raise wages
productivity has not been an
empty gesture can be seen quite

ii

pressures

decline.
produce
that they

so

efficiency.

the

is

ill

I

markets,

the

meet

to

a
severe
Rican firms

Puerto

lack

Stateside

their
so

lii
i ii

local

does not wish to become

its

to

showed

omy,
Few

for external

its

is

shop wages.
ary

BOND

come

Sugar, once the
country's econ¬

sponsored sector.
mainstay of the

-

m

ill
WI

shown

has

been the

employment
has
outstanding gainer, partly

because the

type of labor required
especially
suitable
for
the
agricultural worker. The

former

Island's industrialization and tour¬
ist programs
new

jobs

in

have made for

adding highways, and
Continued

many

buildings,

erecting

putting in

on

page

19

Volume

186

Number 5700

.

.

The Commercial

.

and Financial

Chronicle

(2647)

expected to advance another 20%

:V

V;

'1 By DK. IRA U. COBLEIGH

and

in; 1948.

Two From Texas

unusual velocity, reflected by a
rise in share prices. The stock sold
at 5 in 1953.
This year it has
ranged from a low of 15% to a
high of 31%. The stock, at the

The

upward march of
income has been equally im~
pressive. M was $370,000 in 1948,
and should reach $3,500,000 this

net

%.

Enterprise Economist

year.

A year-end

look

at

two

up-and-coming Texas companies, in

entirely unrelated fields

We

don't; know

Star Steel

just

how

the

of

about

28; the

stock >appears

com pa
nies,
operating in •
expanding;;

•segments
our,

ariT^ ***'
y

entries

lve

^

Both

should

not

m o re.

e

v

Star

back

shares

market

their
and

backs

on

plumping

"growth"
for prime

stocks
bonds

and durable

records

blue chips with long
of unbroken dividend

current price of around 24%, must
be somewhere near a buying level

The Texas viewpoint,
however, is that if something isn't
big and growing bigger, you
might as well throw it back into

for those interested in

the

an

animate

payments.

Gulf

of

Mexico.

Well

these

.

has

a

paid

no

cash

dividends, and

widows and orphans, however.

in

•

earnings

in

power,

both

in-

to

situation

back!

certainly"

are

;

wherein

net

earnings

in

'

recent' weeks,

!'

been

turning

confident security market.

■"

darlings of the
that's going

here's

one

possibly,
cash dividend lor the first

pay a
time.

(There

,

this; and both1,

dividend

should

this

make

a
genuine appeal to inves-

tors

Steel

steel

the

moment,

'

r;than

with

to look better in 1958 and

next

money
yea

.

While

mak

risen

management is not particularly
In some ways, this piece today stances, is so pronounced as to
^Ge^gjJy^yhdSplays *enthusi-'':Interested in commencing same, is a bit on the daring side since suggest rising quotations for each
asm for Texas, and enthusiasm for This is essentially a plow-back most of the security savants have, stock in anything resembling a
Lone

economy.:,

Here's

have

.

..

of;'

.

worth

stock makes absolutely no appeal electronic equity with high-volt- two companies are big and grow¬
f° yield-minded buyers since it age possibilities.- It's not for ing bigger. The sustained trends

/.

bracketing ; for today's piece got adequately ; discounted.

theseg Texa^

;Capitalization consists of 3,200,000 shares of common preceded
by $7 million in funded debt. The

Com¬

and Texas Instruments, Inc.

pany
er.

of endeavor—Lone

net

15

in

year.)

Lone

and

Quite

Star

25%

was ; a

1949

Steel

a

company,

a

deep

—

stock

10%'one'

in

the

hearths of Texas!

seeking

growth
ties

assum-

ing of
that

Texas

course,

such

—

equi- i.
1

Instruments, Incorporated

And
Ira

U.

jolt,

Cobieigh

let's

switch

electronics,

have not gone out of fashion
the. tired markets of today. ,f; *

\v.'%'v

in

same

stand the
steel
to

but

sticking to the
withal.
Let's
talk negotiable * instru- /
wit, the. securities/of •"
>

some

ments,; to

;;

can

from

,State,

about

L

if you

now,

7jb°ne Star;Steel Company ^ •-■ Texas'"Instruments, Tnc,
Lone Star Steel-has experienced
a

was

is

an

rise in corporate

,'swift

It

founded

in

stature,

1942, and

now

integrated producer major-

lng/in steel' and
Government
blast

cast

iron; pipes,
operator of a
built-'and
owned

Starting off-as

N -Texas Instruments makes tranr.sistors; a gadget that does whatr;
electron

during the war, it
mp
buying the plant at
twenty cents on the dollar of cost

due

in

1948.

*

at

Texan

wasn't

mines

just

steel

the

Star, Texas (how
you get?)
but 56,000

can

of

acres

It

Lone

lands

ore

in

and

Oklahoma

with the deal.

In

also

1950

eoal

some

went

iron

cast

a

pipe foundry (30,000 ton

pressure

capacity)

was

built.

In 1951 Lone

Star

arranged a $87 million loan
(RFC) with which funds it built,

in the next two years, an electricwelded steel pipe mill, and related

slab

and

strip mills.

This

was

a

big venture stepping up annual
mgot capacity to 550,000 tons. But
it was a smart, investment.
.

When

built

facilities

and

under

ready

was

the

the

and

finest

oil

way,

able
well

all

were

Lone

to

Star

turn

out

pipe

around,
and it had the very great advantage of being within 500 miles of
three-fourths

ing in the
•

CJ.

all

S.

A

the

oil

drill-

fine product,

customers

to

nearness

of

and

big

a

find their way into
electronic: guidance

course,

computers,
control

and

wound

mill

'-/These;.•transistors,svyill,^in";

space.

dn

furnace

lubes used >to do

vacuum

—but better and in 1/100th of. the

lion- the
tions
.

in

systems, not to.

most
radios

' The

recent,

launchings
at

common

and

TV

spate

(and

sets. '.V

;-

missile .'
releases!) s

of

press

Cape Canaveral, points

fact that we're

men-

iapplica-;;

the

up

going, all-out
in rocketry. This is all to the good
for Texas Instruments, Inc., since
now

,

•

about one-third of its business has
been

the

supply

of

electronic

guidance systems for both manned
and unmanned aircraft and missiles.
This division of company

operations

to

bound

seems

Hotels and Beaches, San Juan

in-

importantly in 1958.

crease

Related

to the foregoing is the
company's optical division. Here
are produced a wide assortment of

<

Significant Facts Regarding Puerto Rico's

spherical,

cylindrical and prismatic lenses
used
for
strategic
mapping, military target location,
and in infrared devices for detec-

Tax

tion,

guidance, tracking and
photography.
Another
interesting
facet
of

Exempt Public Obligations

FISCAL YEAR ENDED JUNE 30,

operations is Geophysical Service Inc. This division is a

1957

company

bulge on competitors due to lower
transport costs — all these have
kept Lone Star Steel humming,

for

In

MUNICIPAL

COMMONWEALTH

is

addition, the

company

does

a

rapidly expanding business in cast
iron pipes for water supply which,
in

the

Southwest, has become
major long range problem.

;

a

Lone Star

has, with the exception of a strike this Fall, been
operating at capacity. It expects
to continue that way in 1958, in
sharp contrast with many of its
.

brethren

who've

in

been

the

steel

singing

business

the

blues

contractor

field

of

exploration
kinds. On

many

going on all over the world,
GSI (using instruments made byIndustrial Instrumentation Division of the Company) makes surveys and reports based on detec-

tica devices which locate and
record the depth, probable extent,
and character of oil and other
mineral-bearing zones within the
earth's crust. This is a profitable
business and a rapidly expanding
one-

Right

of

shares

share

$1.64
This

of

capitalization

common.

of

JftSSfc
The per

earnings have risen
in 1955 to $3.50 for
year

they

should

from

1956.

cross

$4,

and analysts are talking about $5
for
1958.
The
common
trades
over

the

NET DEBT

$

48,600,000

$ 22,000,000

$

3,500,000

DEBT

SERVICE

REQUIREMENTS

$

3,500,000.

.

<

NET INCOME OF THE ECONOMY

RATIOS

Instruments

has

Inc.

its

$ 1.007.000.000

•

Net debt to:

cash

plication

Lone Star is about $56 million in. silicon
000

$ 33,000,000

indebtedness has

postponement

now

$ 197,500,000

•

main plant at Dallas, Texas, and
its Industrial Instrumentation
dividends even though
earnings Division in Houston. -The plant
have been zooming
ahead.
But has
a 1 w a y s
been non-union,
the plowback of these earnings,
Whether in spite, or because, of
plus heavy depreciation and de- that fact, labor
relations have
pletion allowances (about $1.30 a been excellent and plant effishare this year) have enabled a ciency high.
large-scale debt reduction (from
Research at Texas Instruments
$37 million to $56 million) in six Inc. has been patient and effeeyears:
and still left $37 million ^ve and led to pioneer production
in net current assets as of 9/30/57. o£ the earliest transistors used in
Sales are expected to cross the radios. Later on, experiments in
$100 million mark for the first silicon led to substantial productime, this year.
tion of that element, and its apThe king size

dictated

PUBLIC REVENUES

shore and off shore search for oil

Texas

lately.

for

minerals

counter

having

ranged
in 1957 between a low of 22% and
a high of 42%.
At current quotes




,

to

the

transistors.

Instruments
leader

in

Today

this

field

been phenomenal.
,

.

,

s

2.0%

Appraised Valuation

2.6%

1.2%

1.8%

10.6%

0.3%

0.3%

$21

$10

*

Debt Service

Public

Requirements to:

Revenues

Commonwealth

NET

DEBT PER

Net

Income

CAPITA

Texas

i 1 i

Commonwealth

of

Puerto

Rico

c o n

GOVERNMENT DEVELOPMENT BANK

-

,

growth of this
.

of

4.5%

of

is, the; recognized

transistors.
The

manufacture

Assessed Valuation

For 1948, sales
.

FOR PUERTO RICO

company has

.

_

..

SAN

JUAN, PUERTO RICO

w0re -lust a shade below $5 milHon.
the

This
$65

year

million

they should
mark.

cross

Sales

are

New York Information Office —37 Wall Street, New

York 5, N. Y.

16

(2648)

The Commercial and Financial Chronicle

Short-Run Inteiest Rate Outlook

■i

Chairman of the Board, The First National Bank of Chicago

l*he

Dean of

Chicago bankers finds

recession is mild,

our

far;

so

interest rates

our

historical standards;

are

billion,

resenting

interest rates during December and the first six
entirely upon the level of busi¬
by the Federal Reserve Board will have only, a

war,

Actions

minor effect.

United States and most other countries of the

Tne

world
can

are

last

before

it may go.
To

a

mild

recession.

No

one

it

turns

or

how much

deeper

it seems most unlikely that
recession will end in the first

months

of

think

the

'58.

that

Assuming this to be the

six

case,

interest

rates, both short- and
long-term, will certainly not increase in the
next six or seven months and probably will
decline

somewhat.

businesses

With

a

mild

recession

not

are

about the future and the rate of savings is increasing.
A lessened demand for money and increased savings can only
mean somewhat lower interest rates, both short- and
long-term.
Rates and Business

banks

or

more

reducing reserve requirements they may give the
to loan and thus slightly hasten the time of a

money

decrease in interest rates.

interest

rates

But the all-decisive factor determining

during the next six

or

months

seven

will

be

the

development of the business picture.
Let

not

forget

3,000 Junior Achievement
companies as best in the nation in
the annual contest sponsored by
the Exchange.
Junior Achieve¬
ment

companies

high

school

♦Remarks made by Mr. Brown at Business
National Bank of Chicago, Dec. 10, 1957.

Outlook

organized by

are

students

Conference of

the

First

as

practical

a

economic

program

of

education.

Taking bows for their winning
report
and

David C. Wynstra, 1/,
George, 16.
Both

were

Larry

V.

boys

securities business from offices at

a

1 East 47th

at 261

Street, New York City.

Joins Eastman Dillon
Mass.

—

James

offices

Broadway, New York City.

With

.

(Special to The Financial Chronicle)

BOSTON,
Cleary has

securities business from

seled

by

The

Smith, La Hue

ST.

F.

joined the staff of
Dillon, Union Securities
& Co., 50 State Street.

Eastman

PAUL,

Minn.

—

Also

National

honored

coun¬

Bank

Harry

of

J.

an¬

accept

Wilmington was counseled
by E. I. du Pont de Nemours Co.;

Jerome

Wysong, 17, of Poly Prod¬
ucts, of Dayton, Ohio, which was

counseled

by the Dayton Rubber
Co.; Patricia Stewart, 16, of CONGfNCO, Birmingham, Ala., which
counseled by Continental Gin

Co., and Rolf Houkom, 17, of Tot
Toy Products, Duluth, Minn.,
which was counseled by the West¬
ern
Electric Company.
The

teen-age

tycoons

heard

dustrial

rally

a

make

The in¬

far

average,

it

Standard

Oil

Co.

(N.

J.)

accomplishments of Junior
Achievement and the spirit and

ability of the

people" who

young

prepared the winning reports.
On

hand

for

the

on

the

the

Exchange

A.

were

members

Achievement
J.

award

cere¬

trading floor
400

over
o

f

in

New

the

York,

Bridgeport, New Haven, and Hart¬
Conn.,

Elizabeth,

Newark,

Passaic,

Pa.;

Wilmington, Del., and Balti¬

Philadelphia,

Md.

more,

STORES

J.;

N.

Finance

and

metropolitan
oring the

industry

area

young

in

the

joined in hon¬

people with

over

400 adult executives in attendance.

Prior
a

to

the

reception

award

and

Exchange operations
the

trading floor,

The
gram
over

agers

Junior

is
200

was

held

of
on

Achievement

with

pro¬

operating

in

56,000 teen¬

show

was

small

a

times

when

making

Tax
tor

sf

selling

in

#

sign

was

still

fac¬

a

continued decline,
but Street talk laid much of
the liquidation, to

discouraged

investors
better

who

had

treatment

but

expec^a

at

a

have

now

shambles of the

a

J

..

year-

become

the

first

year

fiscal

to

either

were

sentiment

or

American

has

effort behind

its

put

major

the

low-priced,
Rambler—the only

compact

that
in the

hasn't

and

race

been

in¬

for lower,

expensive

more

automobiles.

the

market—steel operations

con¬

The

bet would

seem

to

turn

rive

until

1958

are

$1012

for the better won't

sometime

in

ar¬

mid-

spur any

V

As

it

in

1957

million

and for the first two

months of the

new

fiscal year

hardly calculated to was able to spur a more than
action this early.
50% increase in Rambler
sales to get

into the black ink

frequently does, the category.

market
the

even
ignored some of
hopeful spots, notably the

high

activity

is

Aircraft-Missiles Favored

Despite their poor market
performance, the aircraft-mis¬

sile shares were still highly
regarded by market analysts.
fully as soft as
the general market when the Douglas had retreated to
where the yield was around
going was rough. United Air¬
craft, in fact, was prominent 6% for an above-average re¬
more

at
a

a

less

or

shares

These

assured.

were

new

1957

distinctly

low, which is
note in this

new

And

turn.

Last

$8.96

New Lows for

the

omens

aren't

all bad for this company.

at

section.

year's earnings of
covered the $4

well

Steels, Motors dividend

and the final

figure
is expected to
tune with the economic ba¬
compare favorably so
the
rometers, were the steels and dividend is far from being in
motors and their strings of
any jeopardy. Douglas' civil¬
appearances
at new lows ian production is expected to
were
long. Chrysler was the account for about a third of
The

heavier

harder-hit
section

while

sections,

item

more

the

in

the

times

steels

in for

auto

than

not

rather

were

universally easy. Bethlehem
and Youngstown Sheet gave
ground a bit more readily
than the rest.
tfi

While

new

lows

enrolled,

this

gross

far

year

this

the

year

more

and this is by
profitable end

of the business. Moreover, the
company has a
in the missile

good foothold
business

and

missile sales for the first half
of this year came

#

if

lion

the

motordom

Big Three of
appearing at
simultaneously,

were

Motors

in

was

that

These

Supermarkets Serving

-

a

it

The

1956.
at

to $75 mil¬
$140 for all of

against

least,

business,

missile

is growing
for

continue

bit

The

and will
time

food

shares

1939—inclusive

1895

to

to

1928—inclusive

1914

to

1956—inclusive

1926

Mississippi

have

it

1908

231 Communities in 11 States

to

1952—inclusive

Available for immediate sale in New York City

Subject to prior sale.




ATLANTA,

GEORGIA

ap¬

parently.

not

some

Beautifully Bound Sets of

"CHRONICLES"

OFFICES:

be

paying off for American. The
tinuing to dip, auto sales lag¬ company had • rolled
up
an
ging, layoffs spreading and
operating loss of S31 million
forecasts generally far from
in
the
1956
fiscal year,
hopeful. Predictions that the trimmed it to

"FOR SALE

GENERAL

of

last

above-average action.

longer
help

no

quarter

largely responsible

was

for the

volved
Basic indices

re¬

place the $2.9 million loss

maker

distinguished

East of the

at

selling

than $3 million will

more

the

American

460

plus

general

a-profit /of

■f

1

v

currently
cities

ceremonies

explanation

only was far from threaten¬
ing its low but even able to

An interim
encouragement, ap¬
report to stock¬
peared to be in the process of holders
from
the
company
testing the October low.
indicating that

Junior

representing

programs

STREETE

lending

Funston, President of the aircraft-missile section where
Exchange, M. J. Rathbone, Presi¬ continued
of

AND YOU

.

from list otherwise/

Keith

and

INCORPORATED'

to

doubly discouraging.

four

fifth-place honors were:
Jerry Szabo, 17, representing DelJa-Co., Wilmington, Del. Del-Ja-

ford,

COLONIAL

when

of

second- to

of

Smith, La Hue & Co., Pioneer
Building.

put

Dipping Indices
the

were

runner-up companies in the
nual contest.
On hand to

teen-age

Holmes has been added to the staff

season

traditional

Commerce of Seattle.

monies held

(Special to The Financial Chronicle)

to

dejected.

was

the

Sidney Ungar Opens

is

end

dent

Sidney J. Ungar is engaging in

a

continued

a

Trans-Oceanic Traders

George Alpert, President of
N.Y., N.H. and Hartford RR. praise

Ralph Winthrop Opens

week at

served half-year terms as
President of Trans-Oceanic.

and

Ralph Winthrop is engaging in

Stocks

their worst foot forward this

float

who

stock, make and sell products and
actually operate a small-scale bus¬
iness

Thursday, December 19, 1957

.

.

By WALLACE

among

was

that

by historical standards the level of
business activity is still high in this country, that the recession
which we are experiencing is so far slight, and that interest rates
in this country are still below those in most of the world and are
low except in comparison with those of the last 25
years.
We
cannot expect to live forever at the top of a boom period.
\
us

Achievement company whose an¬
nual report has been selected from

Co. of

think that any action of the Federal Reserve Board
would have much effect one way or the other.
By open market
I do not

operations

net profit

a

The company was Trans-Oceanic
Traders of Seattle, Wash., a Junior

on,

voluntarily going to increase
going to decrease capital
new
plant and equipment
below the level of last year, and savings are
almost certain to increase. Savings in the past
Edward E. brown
have always increased when people generally
still had their jobs and had some worry about
the security of their jobs in the future. That is the situation now,
employment and income are still high, but people are concerned
are

inventories, they
expenditures for

Interest

firm with

a

of $9.95.

...

me,

present
I

in

with certainty how long the recession

say

will

now

on

last year

months of 1958 will depend almost
ness.

companies have an
market value of $201
Dec. 17 paid tribute to

[wo import-export executives rep¬

and that the interest rate trend will

correlate closely wkh the business picture.
Barring

listed

aggregate

low by present world experience and by

our

THE MARKET.

New York Stock Exchange,

whose

.

mmmm

■

Award Winners

By EDWARD E. BROWN*

;

.

Write: Edwin L. Beck
Phone:

c/o Chronicle, 25 Park

REctor 2-9570

New York

7, N. Y.

Place

Volume

Number 5700

186

emerged

as

.

.

The Commercial and Financial Chronicle

definitely de¬

a

fensive section

selling is

i

when

market

and have been

on,

among the better-acting items
at other times. It follows the

ments

lately have risen to

much

as

800

of

have to

Also

difference is

bucker

The

yield

*

[The

Ruberoid

a

is

Joins

definitely expected to show increased
to here. H. J. sales despite the dip in home
The

in

a

44-54. The
of

around

10-point range of
stock offers a yield
5% and a price-

*

of only

ratio

times-earnings

where others in the food

712

line sell around 12-times earn¬

modernization to fill the gap,
And bome
is

building next

PALM

this

at any

Cruttenden, Podesta & Co.

those

year

The stock has been
at around

614%

the New York City
Street.

Jerry Thomas Staff

Mr.

an¬

BEACH, Fla.—Nioma B.

Jerry

Thomas

&

the

Co.,

staff

Inc.,

30

of

of

and

for

more

than

formerly man¬
of the Municipal Department

Bruns,^

was

Nordeman

Co.

&

in

Singer, Deane Appoints

(Special to The Financial Chronicle)

Fla.

BEVERLY HILLS, Calif.—Ron¬
ald A. Zane has been added to the

staff of J.

B.

ANGELES, Calif.—Donald

H. Willson is with Cradock Secu¬

rities

Limited, 215 West Seventh

Street.

-

Dorice

r-,

a

m

1

i

Diran,

A' C'al)!

T.

Form

Diran, Norman

i.

Norman

engaging in

Kidder & Co., Inc., 16 South Palm

offke of Singer, Deane & Scribner,

from

Avenue.

120

New York

now

with

A.

Broadway.

offices

&

Rails

at

80

City.

scanned
a
long
while, both because they have
been severely depressed and
because the group on occasion
has shown an ability to re¬
bound sharply from what is
apparently an oversold posi¬
being

were

first

the

in

time

tion.

Special Situations

„

Missouri

Pacific

possibility

were

in

&

which

it

of

stockholder

favored for the increase
that would

net income

sult

Texas

with

Railroad
dominant

the

is

the

where

for eventual

is

consolidation
Pacific

like

situations

Special

the

from

re¬

Like
others, Missouri Pacific has
suffered a dip in profit this
year
but earnings are still
merger.

substantial.

&

Denver

boost

to

Grande

Rio

has

that

road

one

is

been able

first

the

net,

10

months

producing $5.24 a
share against $4.44 for the
similar period last year. Even
with a slowdown in the prof¬
it-making in the final two
months, the line is still pro¬
jected

to

high

record

a

in

earnings with the $2.50 divi¬
dend well sheltered and a re¬

recent

at

'offered

70

around

of

turn

Both

prices.

decline
have

from

its

the

15-point

yield and the

high

year's high

discounted the

possi¬

SHED

FARM

bility of lower earnings next
year.

IN

Bright Spots

A

BUCKET"

The leisure time stocks are

candidates

for maintained

or

higher profits for next

even

year.

One of them

—

Bruns-

wick-Balke-Collender—is

be¬

America's farmers outproduce the
in food,

world

thanks to the tremendously effi¬

farmer

depends for power and lubrication,

performs another vital service.

ing projected to earnings of
'dollar or better above the

cient tractors,

equipment developed for them by the farm

shed"—a

.final

machinery industry.

the weather and

a

figure for this year when

some
were

rsales

:for

of

appeal

store

often

The

automatic pinsetters

alleys.

bowling

.start of the year

'had
a

planned

month

as

Shed space

sharp increase in

incurred.
is the

'here

charges

extraordinary

on
a

the

At

the

cultivating and harvesting

is often lacking in which to

these machines;
are

exposed to

consequently they

the weather for

months, when not in use.
Here

again, petroleum, on which the

Out of

a

bucket

comes a

low-cost "farm

rust-preventive coating that defies
protects his machinery.

Working with industry, Texaco research
has

developed such coatings to fight rust,

the great

destroyer

.

.

.

another way in
itself a

which Texaco research has proved
vital partner

THE
TEXAS

COMPANY

in industrial progress.

company

500 pinsetters

goal but ship¬




TEXACO Progress

.

..

Co.,

Inc.

is

securities business

a

dozen years ago.

for

Co., 140

{Special to The Financial Chronicle)

LOS

pomted man8er o£ the New York

is

&

With Cradock Securities

M.

Sargeant

Hanauer

South Beverly Drive.

New York.

A. M. Kidder & Co. Adds
SARASOTA,

(Spe-.ial to The Financial Chronicle)

,

years

ager

238

office, 37 Wall

Knepple has been active in

the securities field

Royal Palm Way.

ment with easier money now
in effect.

necessarily
with

{Special to The Financial Chronicle)

expected to show improve¬

ings. The stock's dividend his¬ available
tory of unbroken payments is
nearing the half-century line
although it wasn't available
publicly until less than a

in

expressed

not

has Wiggins has joined

company

1956, has been holding all this stressed maintenance and
year

do

coincide

of the
nounced that Howard W. Knepple
They are presented
has been made manager of their
those of the author only.]
Municipal Bond Department in

trend-

which

that this group was

neglected up
Heinz, which sold for 60 in building.

Knepple With
Gruttenden, Podesta

17

With J. B. Hanauer

H. W.

Chronicle."
as

is

above-average

an

views

article

S'f

something of

for

return.

time

backlog.

adage that "people
eat" despite economic

conditions.

as

devices.

More importantly, no sizable
dents have been made in the
*

ages-old

the

(2649)

at your service

Wall

Street,

The Commercial and Financial Chronicle

,

Thursday, December 19,1957

.

.

(2650)

18

British
Fight Against Wage-Price Rise NSTA

Guarded Optimism on

And F»«i>

Notes

ROGER

By

By PAUL EINZIG

Popular

determination to
successful conclusion and to

Impressed by British Government's genuine
carry

its deflationary policy to a

tight
BOND

Dr. Einzig admits this runs
counter to his misgiving previously held. Expects private firms
to reduce their profit margins to help check wage-price infla¬
tion.
Failure to hold wages may lead, the writer opines, to
further credit squeeze to check consumption.
for higher wages,

resist demands

t

ever,

inaugurated
in¬

the

with

of

the

bank rate to

7%
19.

Sept.

on

There are,

however,

a

indica¬

few

which

tions

Chicago, Inc.)

Whenever

material

their

of

excess

in Govern¬
and in indus¬
by the Govern¬

departments
controlled
In

ment.

r

to

addition

the

recent

profits, tends to discour¬
age expenditure by many people
whose incomes have not as yet

ey"
an

direct

The

of

effect

this

President: Adolph C. Egner,

subordinate!'part in the cost

very

Chicago.

due

at

any

to abstain from
Both the Prime

rate

them.

Minister, Mr. Maemillan, and the
Chancellor of the Exchequer, Mr.

Thorneycroft, have been making
speech after speech emphasizing
the imperative need for passing on
to

the

technological

of

benefits

the

consumer

in¬

improvements

stead of dividing them between
employees and shareholders.
It
remains

to

be

whether

seen

this

campaign will produce the desired
effects.
But judging by past ex¬
perience employers are much more

likely to be influenced by official
exhortations

this

of

kind

than

employees.
In

effective

Britain

will

be

first step

disinflation

in

disinflation

a

of

profits.

Under the influence of
pressure by the Government many
firms

are

margins
their

likely to cut their profit
in order to contribute

share

check

the

towards the
wage

-

price

effort to

inflation.

Whether the Trade Unions will be
inclined

to

follow

this

example

seems
highly doubtful, judging by
past experience. Although they al¬
ways insist on higher wages when¬
ever there is an increase in
prof¬
its, they would be most indignant
if anyone dared to suggest a low¬
ering of wages following on a de¬
cline of profits. The most that can
be hoped for would be that they
might moderate their wage de¬

mands.

through the willingness of Trade
to

example

follow

lower dividends

ready
more

the

emnloyees'

through the effect of

as

there

on

are

cautious

snending.

indications

spirit

Al¬
of

a

the

among

higher-income groups. The luxury
hotels of London are not nearly as
crowded

as

cent years.

they have been in
There is

a

re¬

noticeable

decline in the activities of various

these

cuts

are

not

in

sufficiently

large
Digitized for to make an appreciable
FRASER


dif-

r.

e

'

\

.

be

seen

.•
" ~ \
/ ..
Gratza, Hornblower and Weeks.

The
-

yet

Security Traders Association

oi New York, having just

the following

mem¬

population

of

evident.

catering

To

tion, the people must have a sane
education
and
a
sane
religious
faith.

will

have

to

reinforce

of credit

order to

ensure

the

will

it

John

Bernard

McLaughlin

F.

J.

to

would

mean

restrictions
and

instalment

It

ing power.

also

mean the
d*-we

economy

in Government departments.
to either

official

lowering

a

This,

in

the

ceiling fixed for the vol¬

of

ume

with

credit,

produce the

may

and

determination

displays genuine

to

carry

its

clusion.
in

the

lose

Such

is

countrv

its

that

little

verv

it

to

stands

politically

adopting further uimoDular

by

meas¬

Its ul+imate political fate de-

ures.

nends

the

on

flatioary
auestion
sure

came

be

life

that

so

And in

anv

djsin-

it

death

or

to the

of its

is

to

a

en¬

ca^e.

if

Minis¬

worst,

hanged

fur

a

as

lamb: or, to use a diUm-cnt

metaohor.

they

feel

that

if

they

must go down they might as well
go

down fighting for a good

cause.

of

Isaac

Sir

great periods of prosperity.
their
effectiveness
because they were not

However,
for

used

spiritual advancement.

I

Barney

Salvatore

Nieman

J.

Wilbur Krisam

Rappa

President: John F. McLaughlin,

McLaughlin, Cryan & Co.

First Vice-President: Bernard J. Conlon, P. F, Fox &
Second Vice-President: Barney

Co.

Nieman, Carl Marks & Co., Inc.

Secretary:

Salvatore J. Rappa, F. S. Moseley & Co.

Treasurer:

Wilbur Krisam, John C.

Legg & Co.

Directors (Two-year Term): Joseph H.
Walter H. Filkins, Troster, Singer & Co.;
New York Hanseatic

Billings, Cowan & Co.;

John D. Ohlandt, Jr.,

Corp.; Arnold J. Wechsler, Ogden, Wechsler

& Co.
Trustees of

Gratuity Fund (Two-year Term): G. Harold Noke.
Co.; Joseph D. Krasowich, Gregory 8c Sons.

Francis I. du Pont &

National Committeemen:

Samuel F.

Co.; Stanley L. Roggenburg, Roggenburg & Co.
National

Alternates:

Harry L. Arnold,

shows
legislative

such

useless.

been

suicidal.
wages,

The

and

clearly that all
attempts
have

Several
,

Legislation

Depressions?

Prevent

To

fixing

rents

have

of

been

prices,

has been tried

times during preceding cen¬
turies.
All have failed.
So will

many

Walker.

,

Nominating Committee: Harry L. Arnold, Goldman, Sachs &
George L. Collins, American Securities Corp.; Joseph C.
Eagan. Frank C. Masterson & Co.; Raymond C. Forbes, Shearson,
Co.;

Hammill & Co.
INVESTMENT

I
TRADERS

ASSOCIATION

OF

PHILADELPHIA

The Investment Traders Association of Philadelphia will

hold
Bellevueluncheon and reception to be

their Annual Mid-Winter Dinner

on

Stratford

a

held at 12

Can We Depend Upon

History

Gold¬
man, Sachs & Co.; Joseph R. Dorsey, Bache & Co.; Walter F.
Saunders, Dominion Securities Corp.; Stanley M. Waldron, Merrill
Lynch, Pierce, Fenner & Beane; Graham Walker, McManus &
Committeemen

might add other causes of socalled
prosperity,' such
as
the
growth of instalment selling, radio
and TV advertising, high wages
without a corresponding increase
in
production.
All these things
may
have their usefulness, but
they lead to inflation and higher
living costs. Inflation is like stim¬
ulation by liquor.
The habit of
depending upon either becomes
slowly destructive.! We need only
look at Europe to realize the curse
of slow inflation. To try to remedy
"tight money" by issuing more
money is suicidal.

Colwell, W. E. Hutton &

feel that they mieht as

may

a

success

poUcv,
of

success.

worse

ters

con¬

unnonularity

in¬

weakened

disin¬

flationary pobcv to successful

as

harnessing of steam by Watt,
the electrical age by Edison

gave

gratifying to note that the
now

research

work

scientific

the

desired results.
Government

the

Newton, the discovery of America,

budgeting
up purchas¬

mop

may

■

experts today
large appropriations

approaching
$10,000,000,000 per
year. This, however, will not have
us.
The development of printing,

mean

accentuation of the

Spent Upon

Research

lieve'research

of

increase in Purchase Tax.

an

Possibly it may
for a surplus to

>

against depressions. I be¬
spending is now

surance

at¬

selling,

Funds

being spent upon

in

reinforcement

a

on

pre¬

they discarded
they deteriorated

financial

consider

Conlon

exist¬

have

de¬

lost

:

Many

Having tackled the prob¬
lem from the production end with¬
success,

had

people
exercising their

religions;

.' v.'

mand.

out

also

the

But

Great

the

tempt to deal with the situation
from the consumption end.
This

con¬

Greece,

spiritually and collapsed.-

reduction of de¬

a

must

Rome,

nations

in

Pos¬

saueeze

all,

for

However,

their

Government

measures

ing

The,

cious right to vote;

to failure.

the

of

interest

jority of firms, the Government's
existing disinflationary measures
case

optimism.

cf Life," with
enterprise and equal

Way

other

and

prices of their goods. If this should
be so in respect of the large ma¬

be doomed

for

reason

mocracies.

justified in continuing to grant
wage increases, on the assumption
that they will have no difficulty
in adding the extra cost to the

that

are

opportunities

sibly under the influence of their
mass demand employers will feel

In

'■J

living in poverty.
benefit from a large popula-"

con¬

ever.

Roger W. Babson

now

pop -;

big

freedom

de¬

these

to

is brisker than

but

oriental

many

"American

whether

wage

,

is

optimistic

.

Our democratic government is a

indication of any decline in
spendings by the lower-in¬
groups.
Christmas trade in

sumers

This

us.

come

districts

ahead

growta

basic

no

the

about

have

ASSOCIATION OF NEW YORK, INC.

completed its 21st Anniversary, .has elected
bers to hold office for the year 1958:
1
•

,

hear

much

nations

<

in themselves

conceding

t of

factor:

For the present there is as

mands.

e c

underly-

tinue.

to

from

firms

for

involved

'

Sufficient to discourage industrial

well

/

totals

becomes

these symptoms are

of companies.
actual

effect

remains

luxury trades. This is the result of
dividend cuts by a limited number

The

of

operation may become, in
an influence of some

It is

Profit disinflation may result In
all-round disinflation, not so much

Unions

;

'

*v""

Treasurer: William J.

TIIE SECURITY TRADERS

is also

There

employees.

would

all probability the

towards

Bank

course,

It

dustrial firms to lower their prices

raising

National

importance.

paign of exhortation to induce in¬
or

First

Strong,
v

pany.

trades and by those who
depend on the spendings

indirect

cam¬

ther¬

is not a
but only

the

Donald D. Schubert; Dempsey-Tegeler and Com¬

Secretary:

in luxury

But its

a

t

ulations and

Broadcasting Corporation have
been flatly rejected.
upon

Schubert

spending by employees engaged

employees, the claims of the em¬
ployees of the nationalized Brit¬
ish Railways and of the British

embarked

D.

an

is likely to produce
widespread effect through the op¬
eration of the "multiplier." There

the

ment has

Donald

Strong

Sheargon, Hammill and Company.

H.

Orville

Vice-President:

income groups

is

H.

Orville

Adolph C. Egner, Jr.

of

of

Govern¬

a

mon¬

We

new

living is ad¬

trend on the cost of

likely to be a decline of capital
expenditure in luxury trades. It
may take a little time before this

the

"tight,

like the

are

ing wrong. ..."...

v.-'

turn

time

;

ba-

a

f f

e

some

been affected.

in

same

v

cause,

of lower

of the claims put for¬
ward by National Health Service

the

•>.

the air pressure read¬

or

e

"Tight

rejection

At

Money fates

by
m

o

to*

and other present- C

money

spect of their incomes. So the evi¬
dence of lower dividends, and even

is the

towards wage demands

the

>

The difficulty today is not

ing

living index. On the other hand,
the fall in demand of the higher-

attitude

answer:

mometer

shareholders of many other
firms regard it as a warning that
this is liable to happen also in re¬

hopeful

own

and declares

is

temperature recording of

a

Government's

high

very

"Faith"

money."

effect.

mittedly negligible. It only affects

sign
Einzig

a

spiritual" - growth,
true

'

the demand for articles which play

most

finds

correlation between "material and

V

l-1-'<

to

exposed by Mr.

are

who

''

concerning

antidotes

.:day difficulties.

The

mism.

tries

V.

;

firm reduces its divi¬

a

Babson

'

tight

justify some
degree of
guarded opti¬

ment

-

dend

crease

Paul

"

They have produced, how¬
a psychological effect far in

ing.

opinion about the effec¬
of the British disinfla¬
tionary policy

an
tiveness

press

/.

-

spend¬

volume of

the

in

ference

Eng.—At present it
to try to ex¬

LONDON,

would be premature

4«

selected to serve as officers for the
Bond Traders Club of Chicago, Inc. for--' the year 1958.
(Effective
March 1,
1958, name will be Security Traders Association of

and

money

depression

OF CHICAGO

CLUB

TRADERS

The following have been

W. BABSON

shibboleths

Hotel
noon.

at

7

p.m.

with

Feb. 28, 1958 at the

our

farm

attempts to fix or subsidize
price likewise fail.
Unem¬

ployment insurance and pensions
seem to be worthy legislation, but
they
have
not worked.
They
were tried in Rome, France, Eng¬
land, and
World
Such
blamed

even

War

in Germany before

I.

legislation
was
usually
"tight money," as was

on

Volume

the

186

Number 5700

The Commercial and Financial Chronicle

socialist

Rican: market

movement
ledf by.
Jennings Bryan in the
early 'Nineties. They were backed
by selfish groups seekihg 'featherbedding" without regard for the
good of the nation as a whole.
William

that
the

firms

(2651)

moreLattractive, so achieve the industrial expansion
sell both within necessary to meet such a chal-

and

the

Mainland, lenge. If American industry were
thus achieving longer and; more to put only one-half of one
pereconomical. production runs. And, cent of its normal expansion exfinally, there is always the possi- penditures
into
the
CommonManufacturers fought for tariffs; bility that atomic. power will be wealth,-the
resulting impact on
home builders for 95% loans; while employed to supplement the Is- local
living standards would be
labor unions succeeded in remain¬

land's

ing exempt from anti-monopoly power.
legislation.
Frankly, these false
How

limited

.

movements

due

were

real

lack

to

of

religion,, which caused
"tight mortey" of those days.
Material

proves" that

History

/•

these

of

sourees

V

-■ •

.

*-

,

electric

," .vA

v

;

far .can .the Commonwealth

No

one

can

make

a

two:

r

j

-

rv

«'»•

'j'

age Mainlander today. Since >1950
progress together.
When a'
per capita persohal incomes "'ini
nation is actuated by sane reli- ^
Island have been rising at a rate
gious growth based upon the Ten ji
faster than that

•

explosive
modern

,m^ed speed

Estabrook & Co.

_

material

DETROIT,
Lerchen

&

members
Detroit
1

-

.

Mich.
Co.,

of

the

YOUNGSTOWN,

Building,

New

York
on

and

with

(Special to The Financial Chronicle,

> rjAcurvAT

tut

„

.

„

,

•

I

.

Robert A.

ner*& Beane.

&

Co.,

15

State

street, members of the New York
and Boston Stock Exchanges. Mr.
witbeck was previously with
Rockland Atlas

National Bank of

On

the New York and Midwest Stock

Exchanges.

Jan.

Joins Walston Staff

Rich¬

(Special to The Financial Chronicle)

formerly

Pierce, Fen-

'

*

PORTLAND,
Foster is

He

:

now

Oreg.

—

31

Dec.

John

H.

Savage,

become

limited

a

William G.
be

partner,

Lerchen

will

to

general partner, but will re¬

a

a

was

formerly with Foster
•„

A. G. Curtis

Opens

12th Street.

limited partner.

is "tight" today is because
people have gone haywire
materially seeking money, enter¬
tainment, and more gadgets,, in¬
cluding stylish clothes, autos, TV
most

Church

CREATIVE

statistics

quote

leaders

INVESTMENT

church attendance, but church

on

attendance

is

largely the "froth"
The best barometers
religious state of this
nation
are
Sunday
Observance,
Family Prayers, Temperance, De¬
voted' Families, Respect for Law,
Civic Interest, Honesty, Industry,
of
of

at

religion.

the true

the

and

Practice

of

home

and

abroad

Golden

the

Rule.

Truly
spiritually
minded
people always have Faith—in God,
their
country,
their fellowmen,
,

Such

themselves.

and

is

Faith

what America needs today.

It will

provide the only relief from
called "Tight Money."

Continued from page

so-

14

Puerto Rican at Home:

Operation Bootstrap
the

associated

ices such

Government

serv¬

Symbol of Service Throughout the World

pipes.
Moreover, although the
as

sewer

overall

'employment figures do not show
a
very sharp rise, part time un¬
employment
has
been
reduced
markedly.
More and more peo¬
ple are putting in a complete
workweek, with the accompany¬
ing increase in annual take-home

How W. R. Grace & Co. is

W.

The diversified interests of W. R.

But more

important is the

these forces.
obstacle is to get the

plan going — to get it off the
ground, so to speak. It is as a
catalyst, multiplying the impact
of each

plant

dollar

expended for

investment,

and

Government's

efforts

that

dollar

every

erates

least

at

ditional

new

that

the

be

so

spent

of

ad¬

with
the accompanying aid to increased
employment.
Thanks

its

to

income,

location

Puerto

Rico offers the maufacturer many

booming South American markets
and the United States mainland,
the

Island

could

serve

as

an

materials of each

raw

many

.countries. Active in chemicals and international

industry, trade and transportation, the 103-year-old Grace organization
conducts

operations in the UnjTcnl States, Latin America, Canada,

Europe, and Australia..

•

to feed

finished

products to the
other.
the petroleum industry
moved
in, and Venezuelan

crude

oil'

refined

is

for

sale

in

this

country. This role would be
especially important where the
weight of the products involved
bears a
low
transportation cost
relative

to

W.

R.

GRACE &

the

selling price, so
carrying charges would not
large in total costs.
With further development

a

and

industry, continues to move ahead
chemical processing and manufac¬

century of experience in business

1

—in

I

turing

1

Latin America

a

greater

comes

would

make

the




in world trade, trans¬

I
m

|

CRYOVAC COMPANY DIVISION

I

DAVISON CHEMICAL COMPANY DIVISION

industrially and geographically, these far-flung

Grace

enterprises have in common an aggressive,

policy of management. Through local production for
tion, Grace

forward-looking

local

DEWEY AND ALMY CHEMICAL COMPANY

i

DIVISION

m

DEWEY AND ALMY OVERSEAS COMPANY

i

consump¬

I

DIVISION

m

GRACE CHEMICAL COMPANY

expand with the economic developmen t of the country.
1

In 23 countries Grace subsidiaries and affiliates are

sharing in

the

growth of such industries as chemicals, transportation, paper,

paints, textiles, merchandising, mining and

foodstuffs.

GRACE LINE INC.

DIVISION

§

LATIN AMER1GAN PAPER AND CHEMICAL

1
I

POLYMER CHEMICALS DIVISION
SOUTH AMERICAN GROUP

!

development hoth at home and abroad.

W. R. GRACE & CO
5xecuf/Ve Offices; 7 Hanover

Square, New York 5

1
i

PACIFIC COAST DIVISION

i

expanding in creative investments basic to national economic

&

GRACE RESEARCH AND DEVELOPMENT

GROUP

previously, Grace is rapidly

1

DIVISION

GRACE NATIONAL BANK OF NEW YORK

I

By plowing hack earnings, investing new money and moving into
countries where it has not been active

i

FOSTER AND KLEISER COMPANY

i

M

0.

DIVISION

'//A

capital and know-how participate in basic national

industries that

.1
I

Diversified hoth

!

integra¬

Puerto

...

portation and finance.

tion of the Island's

various indus¬
trial components.
For example,
the petrochemical industry could
serve as a feeder of
synthetics to
local textile, apparel, and plastics
industries.
Expanding local in¬

m

in basic industries throughout

bulk

come

I
Ss

...

that

should

CO., backed by more

than

,

Already
has

I

in¬

termediate fabricator, drawing on
the

in

tries
•

Situated between the

advantages.

indus¬

gen¬

three-to-four

dollars

many

ex¬

can

It is estimated

pected to pay off.

Grace & Co. involve

mo¬

mentum generated by
The largest

participating in the

development of basic industries in 23 countries.

pay.

&

,

BROOKLYN, N. Y. —Alan G.
Curtis is engaging in a securities
business from offices at 1414 East

money

sets, and all the other things their
neighbors have.

H.

a

and

cease

John

with Walston & Co.,

901 Southwest Washington Street.

general partner in the firm, will

main

Boston.

;

Ohio—Joseph
affiliated with'

Marshall.

.Witbeck has become associated
with Estabrook

Merrill Lynch,

now

Wick & Co., Union Na¬
tional Bank Building, members of

Mr. Ireland

were

.

Butler,

Ireland, Al¬

fred B. Moran and Paul D.

partnership.

Butler, Wick
The Financial Chronicle)

~

Watling,

—

Stock Exchanges,

will admit Guy L.

to

A. Scarsella is

Ford

and'Mr. Richmond

:

'

.

;*■

Admil Three Partners

mond to

;

:

(Special

;

A- With

.

en joyed by^any
it- enjoys con-K
state Jh the, unipn.
If this rate,
growth.
On the
can
be maintained, it would cerother hand, when material growth
tainly make that goal attainable.
exceeds spiritual growth, then de¬
Moreover,
it would
not
take
pression follows with its falling
prices, unemployment, and busi¬ excessive amounts of capital* to.
ness failures.
The real reason why
tinned

any

Puerto Rico on the

.theMass.

Commandments,

as

industrial

r?ar

irkc/v*

must

Xt

+

his goal a standard of livitig by
1975 that is the equal ed the aver"L,'z*»nir •''.

in

P

trust-.

as
'

beneficially

as

-witnessed

-AV:

worthy guess, but its present Gov-ernor, Luis Munoz Marin, has set;

Growth

Spiritual

vs.

go?

the.

.

>

,

on

Joins

Walling, Lerchen to

could

Island

19

1

The Commercial and Financial Chronicle

(2652)

20

.

.

and

Effect of Recent Events

Alfred H.

the

on

Thursday, December 19,1957

.

News About Banks

Realty and Mortgage Markets

NEW

BRANCHES

NEW

OFFICERS, ETC.

Davison

as

enlarged

Bankers

and

Klemperer, of
elected

was

Secretary, succeeding in
continue

REVISED

President, Hugo Steiner, Inc., New York City

P.

that

of¬

fice J. Delalield

CONSOLIDATIONS

By HUGO STEINER

von

foreign department.

Daniel

responsibilities

general

CAPITALIZATIONS

DuBois, who will
Vice-President with

a

banking

nounced

in

the

Also

field.

the

were

an¬

appointments

of

Robert H. Gaunt, Jr., as cor¬
porate trust officer and LeRoy A.

Through doubtful Federal Reserve will return to the easy

policy first abandoned ten years ago this month, mort¬
banker expects recent events may spell easier credit con¬
ditions to support a "guns" and not a "butter" economy.
Mr. Steiner explains, however, why easier credit shift should
not be construed as an endorsement of renewed widespread
money

Penfield

R.

gage

Donald

and

Brown

D. Miner have been elected VicePresidents

It

policy.

the

that

1947

Board

n-

a

nounced

2-

a

another

point reduct i

count, rate

the

in

o n

V

believe that

political
i d

e

easy

by

as

(influenced by
the

that

Hugo Steiner

or

era

It

1953-54.;

bered

witnessed

period

1923-1947

the

c 0 n-

rations

does not

will return to the

we

money

as

in

recently

be

remem¬

Federal

Reserve

must

the

the various districts,
have the privilege of choosing the
Banks,

Keynesian

in

theory) and the necessity of fi¬
nancing
the heavy
burden of discountable assets that the Mem¬
World War II, successive waves of ber Banks present for borrowing

in

the

corporate market and
mortgage field. The Union Pacific

Railroad, for example,
float

a

debenture

was able
issue
with

to
a

2V2% coupon—-svirtually unheard
of in railroad

financing. While the
pegged price of the U. S. 2V2S was
lowered 011 Dec. 24, 147 to 101, it
not

was

March

until

tinuation of further favorable
tion

toward

easier

R. Penfield Brown

the national debt ceiling lifted to
the $300 billion mark when Con¬

"guns" instead
economy will have a
different impact upon our
general economy. In this writer's
opinion a less stringent money
policy should not be viewed as a

gress reconvenes. A

of

on

Chairman. ' Both

Helm,'

with
sion

Dee.

bank's

the
at

30

17

by Harold

investment

are

divi¬

Street.

Mr.

Chemical in

1946

Broad

joined

Brown,

became Assistant Vice-Presi¬

and

in

dent

they cracked the

par (100) level.
interval, residential own¬
ers
were
widely wooed by gen¬
blanket endorsement of renewed
erous offers from lending institu¬
tions to refinance their outstanding widespread activity in the realty
and mortgage markets at this time.
5, 5V2 and 6% mortgages; mort¬

In this

Given

gagees even absorbed

continuation

of cold

the cost of
refinancing. Keen competi¬ activity, we will not return to the
easy
credit
era
of
Federally underwritten generally
mortgages produced liberal pre¬ recent memory.
Rather we can
miums of four to 5V2 points for expect
an
adequate
supply
of
large scale housing under Section money, at somewhat lower inter-,
est levels, to facilitate the "guns"
608; in instances where originators
retained a servicing fee of Vs % or instead of "butter"
era
directly
V\% somewhat lower prices pre¬ before us.
vailed. Generous premiums were
also paid for residential housing
Schneider, Bernet Hickman
loans, under other Sections of the
In New Location
National
Housing Act.
Gradual
liberalization of lending laws gov¬
DALLAS, Tex. — Schneider,
erning savings banks in the East¬ Bernet & Hickman, Inc., members
ern States permitted these institu¬
of the New York Stock Exchange,
a

war

such
tion

Miner

Mr.

1953.

sistant Vice-President in

quest for FHA insured and VA
guaranteed mortgages. The pres¬

announce

fices to

the removal of their of¬

new

and enlarged quarters

in
the
Dallas
Federal
Savings
seeking investment Building, 1505 Elm. The firm is
at one time was so strong that VA
celebrating its twenty - fifth an¬
guaranteed mortgages were ab¬ niversary this year.
sorbed with closing costs included
in the mortgage. This period co¬
Form Palmbrook In v.
incided with the peak of the easy
MT. VERNON, N. Y.—John A.
money market in the housing seg¬
of funds

sure

ment of the economy.

Severino and

1955.

Conversely, the first casualty of
hard money

Frederick

Sikes,

Jr.

former

a

f,t

The
Post

s;-.

$

rates

was

the mort¬

appointment

as

New

York

Horace C.

Trust

H.

Company,

announced

was

by

Flanigan, Chairman of

the Board
Mr.

Dirck

of

Assistant Treasurer of

an

Manufacturers

Dec. 17.

on

Post

boom

early 1957

of

1955-56

Trust

Company's central credit
department training program in
1954.

,

At

the

Department at the

not only absorbing
the normal savings of the country
but

also

cilities.

was

office, 55 Broad Street, and
assigned to the division which

is

serves

Its

business

in

the

Mid-

73

Of

McCain

this

brought

about high interest rates.
The surprise action of the Fed¬

eral Reserve, in reducing
discount

rate,

electrifying
market.

had

effect

The

day

an

on

the

re¬

«

Richard
of

cer

New
was

J.

-60.

Z:

M.
I'.

!>

the




was

a

long illness.
Mr.
of Dillon,

President

Read & Co. Inc., from 1939 to
and retired as a director of

firm in 1956. He

was

also

a

1951
that

former

the

board

bond

Bank

the

Bank).

of

(now

the

Chase

Chase

National

Manhattan

upon

Morgan's

Park

in

Bank,

of

was

of

1953.

Mr.

board

Bank

of

was ap-

Vice-Presi-

His

Davison

Assistant

of the

•

.

principal field
has been South

America.

*

The

Assistant

an

of specialization

elected President.
*

meeting

a

pointed
dent in

Y.,

N.

>

von

Morgan bank in 1951 and

to

came

since

Klemperer started work
in the foreign department of the

Company of

*

At

Mr.

President

and

department,

sistant Vice-President in 1954.

the

its merger with Chase

National he

Albert

Morgan

Co.,

&

Dec.

Inc.,

His

4.

age

*■
tit

Thomas

:j:

since

Cbairman

was

appointed

gan & Co. in January 1956.

of

an

Secretary of J. P. Mor-

New

*

President

tinues

*

.

,

*

Alleghany

a

$

Jr.,

director

Corp.,

Viceof

the

elected

was

a

director of the Industrial Bank of

succeed him

C.

of

State

Bank

given approval by the New York
State Banking Department to in¬
crease its capital stock from
$2,188,300, consisting of 87,532 shares
value

par

shares of the

same

O

The
New

of

$25

consisting

York

value.

par

since

man

of

Fifth

the

Bank

on

previously

Dec.

Cashier

1951

and

an

continue

years

of

recent

bank

of

Trustees

and

in

of

ex¬

departments
years

*

White
on

Plains,

N.

his affiliation

the

bank

a

as

member

Vernon

advisory

He

year.

continue

Mount

Y.

Dec. 18 that he will

will

the

as

*

Dec. 31, of this

on

on

with

of

the

board,

Mr. Goldmann has

standing

been assobanking in Mount

with

Vernon since 1933 whmi he served

27th President of New York's first

Mount Vernon Trust ComPany as special, representative of
„ie
Lirectois and Vice-

in

1784,

be

.v.

Elliman

,,

,

he

1942 and

1J33,
position of

the

to

rose

President. He became President

„

A

the staff of

joined

the Corn Exchange Bank
where

also

was

the Board of Trustees.

to

WT

Mr

will

who

founded

bank,

in

Relations

Vernon
TrustCompany
County Trust merged, he was
named
to
his
present
position,
Last
year,
Mr.
Goldmann
was
gjven
the
additional
title
of
regional Vice-President, in charge

New

of

Department.
joined The Bank

Elliman

in

York

President

1956

Vice-

as

in

its

Fifth

Office.

Bank

He

was

charge of the

offices,
Mr.

0f the four

Avenue

the

appointed

be

1957.

Joseph

A.

Office,

Bank

Directors

*

of

the

of

20c

share,

of

and

2%

plus an
in stock,

dends will be payable Feb.

the
The

on

17, to

Feb.

1.

paid
outstanding

persent

dividend

stock

will

increase the number of shares
outstanding from 280,500 to 286.4

Edward

of

George

Assistant
Marine

the

of N. Y„ died
;n

*

Stocker,

70,

a

Vice-President

Midland

Trust

J.

*

P.

Morgan

New York

&

Co.

was

Incorpo-

announced

19

Peter

Bank's

since

1942

and

was

years.

been elected directors.
_

William

Cashier,

"
Mondadri, formerly
,

F.

.

elected

was

Vice-

a

President of the Tappan Zee Natlonal Bank, Nyack, N. Y.
_

^

.

.

_

..

,

Scarsdale National Bank and

elected

*

by Henry C. Alexander,
Chairman. They
are
Samuel R.
Callaway, Harrison V. Smith and
.

Bank

Trust Company, Scarsdale, N. Y„
*

Dec

Rindlaub, who has been
County Trust Company
1928, has been an officer of

T^e merger between the Rockland National Bank, Suffern, N. Y.,
and the National Bank of Haverstraw and Trust Company, Nyack,
N.bas been completed. Total
resources of the Bank are $38,000,900. George A. Frimpter, Chair™an °f *be National Bank of
Haverstraw & Trust Co., and M.
Ambrose McCabe, President have

Co.

He retired

Dec. 13.

1954

rated,

five

a

*

Election of four Vice-Presidents
of

will

City,

Henry L. Schenk, President, said
both the regular and extra divi-

on

He

capacity by

Avenue, Mount Vernon office for
Bank

New York

per

dividend

extra

area.

this

elected Vice-President in 1947. He
^has
been
with the 2 Gramatan

declared the usual quarterly dividend

in

The

since

*

Trade

Company,

Vernon

succeeded

Mr.

Hannan,

in those duties and will head
Fifth Avenue

County Trust offices in

Andrew A. Rindlaub.

bank's midtown

Jr.,
Vice-President, succeeds Mr. Elli-

Trust

Mount

-i.with

j

m

later, when The

Mount

charge of the Commercial and
Mr.

10 years

ancj

Vice-President and Senior Officer

Assistant

Sanger has 23
perience in various
the

retire

dated

Elliman,

only

1954.

Mr.

Company,

as

President

Board.

Goldmann, First Viceof The County Trust

announced

Mr. Downey

and

as

E.

President

The

retired

as

of the

the

Mr.

shares.

Assistant

member

Fred

1.

from

with

bank and members of its

former

in

John

Bank

York,

Traphagen

will

17

During his 20 years' service, Mr.
Bergmann became an Assistant
Manager of the Foreign Depart¬

retire

*

President

as

merger

New

of

Bank

of

Perigone has been with the

in

Mr.

shareholders of record

bank for 29 years and has worked
in all departments.
He became
Assistant Cashier in 1954.

ment

1, but who will continue

a

The cash dividend will be

National

announced

were

Jan.

New

vice-Chairman of the Board. Both
Mr.

Rodney C. Ward,

who became
of

a

1952.

will

Avenue

its

until

since

who

Bank

1948.

Bank

Mr.

Downey, who served

*

V

Qrace

each, to
89,283

of

the

York in 1931, and has been Chair-

and
was

of

He will succeed

succeeded

The

*

the

tive Jan. 1. Mr. Loomis has been

Trustee

President.

as

Traphagen,

President

the

Trust Company of New York

$2,232,075,

ings Bank, Brooklyn, N. Y. effec-

con-

elected to

was

Simmonds

Mr.

and

❖

Commercial

of

Board

Donald lVI. Elliman

man

Commerce, New Y'ork.
O

1948, was

Richard B. Loomis, was elected
President of South Brooklyn, Sav-

Chief Executive Officer,

as

John

Jr.,
elected

executive Vice-President in

Deegan,

and

Simmonds,

of the

in

J.

C.

President

Bank

,

Rogers, Trust Offi¬

died

York,

Mr.

President and former Chairman of

immediate

following

following

j0jnecj

1950, he was appointed an investment officer in 1951 and an As-

a

was

Vice-President

as

National

and

in

West.

Cashiers.

McCain

passed away Dec. 13 at the age of

straining all lending fa¬
itself

Simonton

York

the

Do¬

bank's

main

three

Charles S. McCain

New

of

He

Ark.

investments

the

Ark.,

Cashier

Mr. McCain

Rock.

elected

present he is with

mestic

gone, Henry E. Bergmann, and
David T. Sanger, to the office of
Assistant
Vice-President.
All

Charles

in

committee.

the promotion of Albert E. Peri-

and

Little

joined Manufacturers

Severino

market.
The extrordinary
demand for capital to finance the

Smith

L

officer

for-

McGehee,

Prescott,

organizer

an

1941

Investing

First Street to engage in a securi¬
ties business.

McCain

started

in

became

of

York,

S.

gage

business

later

trustees

Company with offices at 22 West

Mortgages First Casualty

McCain

joined

have formed Palmbrook

Manlio

w

«.•

for

tions to range nationwide in their

Mr

^

of the Bankers Trust

Chemical in 1935 and became As¬

"butter"

that, vastly

1951

^

bank

Bank

Donald D. Miner

H.

ac¬

tions by the monetary authorities.
It Would not be surprising to see

Golding, Chairman of

Simonton

Mr.

and

condi¬

credit

Hf

nam^an intestalnt

73.

refinancing had caused a long bull at the "Fed" window. This is the Assistant Vice-President of the
market in fixed obligations. Long- point where the flow of funds is First National City Bank of New
York,
which he had
served in
term U. S. Bonds, which in 1933 really turned on and off.
The need to prepare for a great¬ Russia and Belgium, died Dec. 5
carried a 41/4 % coupon, sold at a
substantial discount; in 1947, the er defense effort to counteract the at the age of 64.
He retired in
21/;js of 1972-67, a war born issue, dramatic Russian successes of re¬ 1940.
«
#
were pegged at 103.
Prior to this cent weeks and to increase our
the issue had traded at better than striking power in the air and via
Edward A. Klug, an investment
the submarine route, coupled with ofiicer in the Chase Manhattan
an 11 point premium or on a yield
basis of approximately 2.12%.
A the general decline in business Bank's trust department died Dec.
comparable pattern manifested it¬ now underway, suggest a con¬ 4 at the age of 51.
self

M

gg "ft™ A^stant Vice-Presi-

small

announced

No Compete Return

?

This observer, however;

1967.

s

S

Callaway has been with the

hf

Boaid.

also

pegged buying
price of the
2i/2s of 1972Induced

ahead.

the months

in

Assistant Treasurer

an

deoartr^nT sin^e

Bank

banking business by organizing

redis¬

the

in

as

in the loan department.

fn divestment
rrier
President and Board Chairj/.3"ce£
1'951 and an Assistant
man of
the Chase National Bank
Vlce-president in 1954.
of N. Y.
(now Chase Manhattan
Mr. Vermilye was employed by
Bank) died Dec. 13 at the age of J- p- Morgan & Co. in 1941 in the

by

reduction

Sterling National

^

of the market has
high official
sources.
This may come about as
a
result of further purchases of
Treasury bills or even possibly
hinted

been

of

Charles

gains have been posted indicating
the
powerful reversal of trend.

in

De¬

waFfnLC«r?ryo„NDecYir2k'bv
the

Further easing

was

that day

on

Loan

Samuel H.

the Government
of December 1957 announcement,
market scored
the largest
will be the Tenth Anniversary of Bond
the date when the Federal Reserve price advance ever recorded in a
Board
took
its
initial
step
in single trading session. Additional
money

the

Fortune Pope was elected a director

activity in the realty and mortgage markets at this time.

easy

in

Mr.

Exchange Bank, New York, it was

The 24th day

abandoning its

Martella

specialized

Corn

Chemical

of

has

partment.

H.

Vermilye

investments

E.

W.

Stearns,

formerly

Vice-President and Cashier, an
Executive Vice-President. John J.
Link Jr. formerly Assistant VicePresident, was appointed a VicePresident.
,

'

"

'

the

Manufacturers and Traders Trust

department;

C°-> Buffalo, N. Y., elected Fred

all

in

Volume

A.

186

Number 5700

.

.

The Commercial and Financial Chronicle

.

ity

Erwin
Weber,
Assistant
VicePresident, will be in charge of its
Foreign Department, succeeding
A. F. Hauck, Vice-President, who

and

retired Dec.

Newark

Manske, President of the Na¬

tional Gypsum Co., a director.

stock

to

it

pay

value

the

which

dividends

and

of
had

'

sjs

Plan

of

of

Superior

Court

Manufacturers and Traders Trust

determination

Company,

under

stock

and.

the title Manufacturers and Trad¬

could

take

Trust

ers

Buffalo,

Y.,

N.

Company

filed with

was

Fidel¬

of

of

what

a

over.

for slightly
property.'

the

*

s

state

state's suit

The

more

precise

unclaimed

dividends

was

the New York State Banking De¬
partment.

for

than $50,000
;

' ' '

'

''

j

.Approval

given to increase
of the Manu-r

was

Buffalo, N. Y. from $9,429,consisting of 1,885,898 shares

pany,

$9,481,990

consisting

shares of the

same

to

1,896,393
value.

announces

meeting in

a

Vice-President of Mellon National
Bank

the Banking Department. He was

Central

appointed

Senior

land,

of Mellon

Bank in

Jonathan
and

burgh,
the

S.

Raymond,

Trust

has

Pa.,

of

Board

Senior

Company, Pitts¬
been

elected

Directors

of

to
the

*

•

.

Metzner

Vice-President
1953.

Bank

Girard

Corn

Trust

that

announces

n

.

Investment Officer of
Bank

has been

The elec¬

Philadelphia,

Bank,

its 26th office

tion took place at the board's reg¬
ular monthly meeting on Dec. 9.

on

as

opened

The

prove

a

■

-

-

-

the

bank's

j

lAs

Investment

Officer

Oneida,

Bank

tirement has
He
•

been announced.

Continued

on

Syracuse, N. Y. Holders of
the Madison County Trust Com¬
pany would receive $55 a share

pany,

under the terms of the agreement.
A total of

16,000 is outstanding.
t't

New

The

Canaan

Bank,

New

Canaan, Conn, and officials of .the
Stamford
Conn,

Trust

Stamford,

Co.,

the

that

announced

First

National Bank and Trust Co. plans
in

March to join with

banks that
form

three other
merging Jan. 1 to

are

Fairfield

the

Company. The
will

than

County

Trust

trust company

new

have total

of

resources

more

and total de¬
posits will exceed $114,000,000.

$125,000,000,
*

*

V

Stockholders ol Montclair Trust

Co.,

Montclair,

N.

First National

Montclair,

J.,

X.

the

and

J.,

of Montclair,

Bank

approved plans

If approval is given
by the Controller of the Currency,

lor a merger.

it will become effective Dec. 2.
t;<

f,t

■

j;s

National

The

State

Bank

of

Newark, N. J. Dec. 12 announced
that it would pay a 19,000 share
stock dividend

of

ers

approval

and

the

14

its

of

subject

to

shareholders

Comptroller of the Cur¬
dividend will be at

The

rency.

the rate of
23

Jan. 24 to hold¬

on

Jan.

record

the

one

share for.each

new

held.
The

dividend

stock

will result

in

increasing the bank's capitali¬
zation; to
456,000
shares from
437,000 and raise the capital of
the bank to $5,700,000 from $5,Shareholders will vote at

462.500.

the Annual

Meeting

Jan. 14.

on

The bank states that after pay¬

dividend

ment of the stock

ticipates continuation of
annual
on

the

A

55

dividend

of

a

$2.20

it

an¬

regular
a

share

larger capitalization.

regular quarterly dividend of

cents

plus

extra

cents

10

on

the

present shares was also voted

for

payment Jan. 2

to stockhold¬

of

20.

ers

Dec.

record

Boardwalk

The

of Atlantic

Ventnor
Ventnor

stock

tive

as

was

and

ter

$200,000,

of

National

com¬

Sl.800,000; and The
National
Bank,

City, N. J., with
Dec.

common

merged effec¬
The

3.

consolida¬

of

Bank

The

of

Boardwalk

Atlantic

City.

At the effective date of consoli¬

dation the consolidated
have

bank will

stock of $2,000,000,
divided into 20,000 shares of com¬
mon
stock of the par value of

surplus of $2,900,000;
profits of not less

strates
creases

the strength of

with. Besides, it
to
a

The New

U

could take

*

*

Jersey Supreme Court
ruled
over

bearings to begin

provides high resistance

corrosion. And it imparts to bearings

their

remarkable capacity to retain

this

Indium is also used in dental

alloys,

recovered

recovery

Anaconda

from

residues. In
has

been

that

the

state

unclaimed

stock

and dividends of the Clinton Trust

Company, Newark, N. J. The court
held ; the state could -require the
Fidelity Union. Trust Company- of




The

a

AnacondA

pioneer. And thanks in great measure
to

its

patented

process

indium from zinc

for extracting

Company

plant residues, produc¬

tion of this relatively rare and versatile
metal has gone
come

protective oil film.'

be

must

chemical and metallurgical

up—while the price has

The American Brass Company

down.

This

Anaconda Wire & Cable

in iridium research

leadership

making transistors, for bonding glass-

in

gives

a

est combination

cooler-running engine.

of

Greene Cananea

supply of indium was a matter of grams.
Indium is not found in a native mineral
f

'f

_

•»

'

't 1

<

-

'

■

■

-

"

!

and metal products

Anaconda Sales

v*

non-ferrous metals

vanced
more

technical

effectively.

-r

and the most ad¬

Copper Company?

Anaconda Aluminum Company

broad¬
•

1924, the entire, world

As recently as

Company*

Mining Company* 4

Chile Copper Company

the whole non-ferrous metal field. Ana¬

conda offers industry the world's

Andes Copper

exemplifies Anaconda's role throughout

additive, indium steps up efficiency and

$795,673.

Dec.

the

properties this metal demon¬
in aircraft bearings. Indium in¬

are

but

state,

to-glass and glass-to-metal. As a gasoline

undivided

£

on

probably be hearing more about
the good reasons why

indium. Among

capital

each;

$100
and

than

You'll

effected under the char¬

title

airplane engine bearings S ways better

Bank

City

of

tion

National

City, N. J., with

stock of

mon

makes

#

jjs

j

_

International Smelting and
Refuting Company

,

57277Bt

|

Company -pM

'5.

help in using them

the

,

joined Central National in

Com¬

Trust

and

of

bank, Metzner- will assume the
management of the bank's invest¬
ment portfolio, formerly admin¬
istered by C. M. Colyer whose re¬

Charles E. Kinsey was elected a

Foreign Department of Lee Hig-

serve

Economist, a-posi¬

proposed merger of the
County Trust Company,
N. Y., into the Lincoln

National

Cleve¬

tion he has held since 1951.

new

stockholders will be asked to ap¬

Madison

of

announced

President, will continue to

Exchange

Pa.,

Dec. 9.

the

January,

.

by J. M. Killpack, Executive Vice-

the

also

as

National

Ohio,

'

bank

❖

.

The appointment of Russell H.

President. Metzner, who is a Vice-

bank, according to an announce¬
ment
by
Richard
K.
Mellon,

"■

The
At

Trust Company of Maryland, Bal¬
timore.

When

merged
with
Union
Trust Company, Mr. Raymond became Vice-President in
charge of

-

of

par

Vice-President.

as

Vice-President, Raymond F. Ehr-*

bank

branch is located on 63rd Street
Philadelphia,
promotion of ; Mr. Raymond started his bank¬ near Girard Avenue. ; \
V
August F. Seemet from Assistant ing career, in 1924 with the First
HansA.
Jungels,
Assistant
Treasurer to Assistant Vice-Presi-] National BankTof Boston and sub¬ Treasurer of the
bank, will man¬
dent. Mr. Seemet will be in charge sequently became Manager of the
age the new office/ with John W.
of
Provident
Tradesmen's
6th bank's credit department; In 1928,'
Fox,*as Assistant Manager.*
'
*
:js
i;:
'•
'
and Spring Garden Streets office.; he was appointed Manager of the
Pa.

faeturers and Traders Trust Coin-

of the par value of $5.00 each,

Tradesmen's

and Trust Company,

capital stock

490

the

*

Chairman of the Board.

'

Provident
the

Bank
$

21

hart and Gerald T. Burger Assist¬
ant Vice-Presidents of the Union

.

4

\ ' '

ginson & Company in Boston and
later
became
Manager
of
the
firm's Banking Department.
In
1937, he joined Mellon National

1.

Trust

into

Silver Creek

of

14 years.

Union purchased the assets
obligations of the Clinton
Company. The case was re¬
manded to the Chancery Division

together with
compliance of the
respective corporations providing
for the merger of The First Na¬
of

tional Bank

unclaimed

been

merger

certificate

(2653)

[

page

108

£2

The Commercial and Financial Chronicle

(2654)

hundred

Nineteen

a

been

By ROBERT II.

fifty-seven

of

transition—

a

year

A

most

al¬

This

tilt.

defense

was

manifest

costs

we

and achieve Kruschev's objective of
Defends Federal Reserve

gross

national prod¬

itations,

the

and

uct

general stand¬
ard

of

147.

But

storm

hoisted.
time

It

that

boom

was

the

signals

obvious

at

bounds and that the

Illusion and

there
being

As

was

known that

rising for

large

a

come

was

private debt had been
time and that too

some

proportion of personal in¬

being channeled into savings. Be¬
of the

cause

heavy and persistent

demands for loans

system,
ing in

a

credit
*An

ping
the

condition

which

further

on

some

expansion
appeared

address

down

as

the

was

banking
develop¬

limitation

of

the

on

bank

inevitable.

continuous

rise

in

fact

created

President
46th

of

the

Annual

prices.

economy

volume




price

illusion

still

was

ventories

rise

moving

cumulation

in

The

for¬

of

took

to

reduction
in

product

re¬

of

almost

solely a rise in
prices. In brief, the economy was
being supported increasingly by

eral

time. Last month

Reserve

clined

became

at

to

Board

142,

in

the

more

but

a

business
apparent

a

is

it

spending

by

somewhat
retail

and

sales

which

we

conduct

particularly

affairs,

monetary and fiscal front.

gauging the outlook for the
private sector two factors should
be borne in mind. These are first,

operating-

that

business

through

an

advance

at

since

War

high

has

been

going
uninterrupted

almost

II, and

time in

pace.

remain

upon

In

and

probably

in

national
the

on

industry to 78%

accelerated

these

their respec¬
responsibilities, but the an¬
also depends heavily upon

manner

the

end

of

World

for the first

second,

long while there is over¬

a

not

cies
in

as

Now

in

in the economy generally.
the

how
gun

business.!

far

question

the

will

slide which

carry

Distribution

arises

and

has

how

be-

long

it

of

sons,'
>

missiles would be

won

a

Detroit

Minneapolis
San Diego

error.

first,
to

The

but

track meet is

Russians

have

we

before

and

believe that

have
come

there

do

history this has been the

so

we

is

will

again. In fact, through¬

because

of

a

perience

of

democracies.

ex-

We

ing for

tion at the outbreak of both World

Los Angeles

Fresno

serious

a

the

out

goods to the same de¬

our

•

Stocks

Banks and Insurance

Oakland

ir¬

are

not

Municipals

Spokane

over.

reason

Complete Trading Facilities

Pasadena

we

addition, the

no

Industrials

Cleveland

but

behind

Public Utilities

Pittsburgh

race

yet

scored

centers.

Philadelphia

the
our

found ourselves in the

located in principal

Boston

that

In

principally

Bonds

Chicago

'•

Sputnik has had
shaking us out * of

world for various rea-

year's.

out

correct

shortage of dollars, is not clamor-

through 24 offices

San Francisco

set

1

distributing facilities

New York

to

buying of the

three

a

deficien¬

Unquestionably the Russians have

i

financial and business

such

manner

conclusion

snap

Primary Markets

Coast to coast retail

at

exist and to

may

cool

a

take

consumer

rest of the

to

as

for

and

retrievably behind in the field of

last

vance

heavy

look

off

complacency. But to jump to the

the

by

stand

"

effect

f

present position.

Certainly

from

filled

time

a

our

thern,

ing the impetus for a further ad¬

situation

is

orderly

an

have

well

to

good hard

business expenditures are provid¬

de¬

this

time

situation,

suggest that this is

panic, nor is it a time
our heads in the sand.

burying

Rather

not

pretty

temporary
markets as

disproportionately

healthy

a

like to

time for

no

for

capacity in industry coming at a
when
consumer
pipelines

time

been

a

linanciaFand business community

they also have leveled out, and
currently neither government nor

the year in a reduced level of in¬

ventory

the

part

question that

no

from! .the fact- that
piece of minor news seemed

produce

A

our

capacity indicate that business
again moved toward liquidat¬

While

principal

early

in

steel

ing inventories,

the Fed¬

index

great.

has

forces acting to sap part of its
underlying strength and the boom
was
beginning to live on bor¬
rowed

the

in

is

jitters in* the

appraisal of

the

subse¬

not

carloadings,

in

drop

rate

national

in

was

to

answer

such

wide swings in prices. If this
truly
reflects the state of mind of the

in which management

manner

swer

ac¬

place

it

The

depends

...

with

launching of the Rus¬

tive

persistent weakness in prices
metals, the more

the

gross

some

,

several

apparent

.waseach

pres¬

of

and labor face up to

nonferrous

recent

of

while

and

months

quent

the

that

extent

small

the

quarter of 1957 in¬
were
liquidated
to a

first

the

Conven¬

tion, Hollywood Beach, Fla., Dec. 2, 1957,

The

the

the

adding to

production was show¬
ing little change. The increase in

change
IB A

the

In

last.

questions

its inventories at
annual rate of about $5 billion.

been

on

accelerated

and

will

During most of 1956 business had

Reality

wore

ward; whereas in fact the physical

by Mr. Craft before step¬

Association's

year

the

flected

being spent rather than

state

strength in the econ¬
reasonable
long-term growth picture is "as bright as it has ever been."

these
sources of potential difficulty be¬
came more obvious, although they
were
somewhat camouflaged
by

that

beginning to produce
excess capacity. Profit margins of
business
had
been
undergoing
a
squeeze,
wage increases
were
Outrunning productivity. We had

the

There

market. The

would

spending

capital

succumb to unwise political

we

unfolded

sian Satellites created

of credit policy's lim¬

The banker opines the current adjustment can be held within

omy.

the

in

even

lush economy of a year ago,

of inflation's return if

warns

last

psychology has under¬
gone a sharp change,(and prob¬
ably it ; has been heavily influ¬
enced by the action of the stock

peacefully destroying private capitalism.

expresses awareness

the

business

and presents list of encouraging factors providing

sures,

living

Robert H. Craft
we were then
experiencing.
In December of last year the Fed¬
eral Reserve Board index rose to

some

policies,

have

effects.

financing. Mr. Craft holds the latter would undermine our domestic economy

personal in¬

of

events

rapidity that it is difficult to ap¬
praise- their snort run economic

through sizable deficit

afford to finance such costs

cannot

employment,
disposable
come,

re¬

in

levels of

the

than fiscal deficits is recommended by

tiring IBA President in pointing out that though we can afford any necessary

full

at

the

,

months

Imposition of additional taxes rather

for

case

years.

Calls for Cool Appraisal

Corporation

The

was

operating

has been the

as

Association of America

President, Chase International Investment

ago
domestic

economy

its high of

gree

year

the

were

CRAFT*

Retiring* President, Investment Bankers

readjustment.

of

period

a

i

Fiscal Policies
past few

transition from a boom economy

to

Thursday, December 19, 1957

.

.

*

Current Economic Situation and Prospective
has

.

•

Seattle

Louisville

Eureka
Palo Alto

Portland
Indianapolis

Sacramento
oxnard

same

situa¬

Volume

136

Number 5700

.

The Commercial and Financial Chronicle

.

.

Wars, but in looking at our pres¬
position we should have in

forts

mind

sound

ahead

ent

that

This

spending

mere

of

the

results

country

of

defense

to

preserve

cannot

we

afford

can

thgt

fact,

cost

any

security,

we

redouble

ef¬

and

not inflationary forces are in

achieve

the

the

ascendency

avoiding

un¬

to

are

objective

of

budgets. As

harsh
to

as-it

a

may

that with

our

matter, of
sound,it

to finance that cost

me

an

economy

through sizable Federal budgetary because of increased defense
deficits and in the process under¬ should come not from deficits but.,
mine the domestic economy. The if necessary, through the imposi¬
Soviet objective could be just as • tion of additional taxes. We have
effectively achieved economically" a choice here of paying as we;go
as
it. could militarily. Kruschev,' or s paying
more
heavily
later
as

matter

a

of

fact, is on record
is not military

that his objective

.conquest but rather destruction of
the

capitalistic

prise
is

collective

tained

and

to

enter¬

free

security
survival, but

our

security cannot be

without

sus¬

domestic

sound

a

economy.
The Administration is conscious
.

jof the inherent dangers of
balanced

budgets

un¬

deficit

and

deflationary

the

portion

moment.

forces,

into

u

circumstances

all of
.■

to

us.

Now

revival

v,.y,r

about

of

the

incongruous

dangers

inflationary

of

a

pressures

period when the domes¬
tic economy is experiencing some
reduction in activity—when as a
matter of fact deflationary forces
during

a

Defends

that

pre¬

in

which

to

be found in

the

borrowing

the

at

fact

reserves

in

about

the

level

same

in

provide enough

money to finance
expansion, without creating

sound

excessive amount of credit that

an

would
tive

have

encouraged

specula¬

and the

inflationary expansion.
Moreover, it is significant that

money

the

more

spending of newly created
by the consumer, industry,
Federal, state and local
governments.
The
solution
lay
rather in restraint of credit, and
or

by

in the

channeling of

a

higher

pro¬

or

restrictive

monetary

did not prevent the

policy

floatation of

when

record

corporate

Reserve

breaking
issues,

total

and

of

close

of the

aware

inflationary

V

'whatever

been

heavy as they
during the past year,
a proper credit policy can and has
prevented a much sharper rise in
prices than the one we actually
experienced. Similarly, too much
should

be

not

of

reversal

sile

from

measure

phases

•

and

must

of

in

the

He

a

sees

a

reasonable chance for

Continued

fi-

desirable

sential,
said

are

and

program

- that
'
h i 1 e
absolutely es¬
these the President

out

programs

deferred

to

to

time

a

.mands

further

.the

not

are

survival.

The
that

hardest

tasks

that

when

de- •/.

to

President
this

will

and

be

our

need

of New York

said

oneof

distasteful

most

the

coming sessions of
Congress must face and pressure
will

-groups

CITY BANK

them,v

other

crucial

as

time

a

when the budget will stand
and

The FIRST

w

not

be

must

other

domestic

pointed

domestic

some

-

in anguish.
I:
gathering that

wail

tell

not

this

.the base of the 1939-1957 inflation
which
of

cut

the

the

dollar

lished

purchasing
in

half

power

estab-;

was

by additions to the

money

State

-

through
the
deficits
of
World War II and in the post war

supply

Once

years.

rationing

was

aban¬

donee and price controls were re¬
moved
activation of that money

supply was-,the
sequent

of the sub¬

cause

inflation.

postwar

As

I

have indicated in my recent

during

period

a

of

ment additions to

and

talks,
employ¬

full

the money sup¬

ply do not create additional goods.
Creation

of

additional

money

in

an

economy operating at capacity
simply intensifies thg demand for

goods
is

the

and

created

the

more

that

money

greater the rise

prices.

Municipal

in

..

.

During

a
period of as high
activity as that which
have experienced
during the

economic
we

past

several

years substantial
budget surpluses should
provided for debt re¬

Federal
have

been

duction and for much needed

tax

reform

the

and

tax

relief.

With

negligible progress that has been
in

made

reducing the debt, how¬

we cannot

ever,

afford to

run

the

risk of unbalanced budgets. Adop¬
tion of this expedient during
a

period
simply

of high national income
would lay the basis for

Municipal

rekindling the smoldering fires of
inflation.

Favors Heavier Taxes
The

Administration

active

support of

efforts
:

to

needs

all of

provide

the

us

in

funds

Bond

the

its
for

Department

missile purposes and for whatever
is

else

required

for

defense

through the elimination
sential

expenditures in

of

unes¬

all

other

TELETYPE NY 1-708

In passing, I might add
holding of Federal ex¬
penditures
within
reasonable
programs.

that

the

bounds is not going to be an easy
accomplishment during an elec¬
tion year. Nevertheless, I sincere¬
ly believe that the majority of the

people

still

of economy

made

clear

to

the

Congress dur¬
this year. Of
course, the difficulty now lies in
again persuading the Congress of
fact.

New York

78 Offices in Greater New York

are heavily in favor
in government, as was

ing the Easter

this

Head Office: 55 Wall Street,

In

recess

the

crucial




times

j

lftl2*lor?7 j C

Member Federal

Deposit Insurance Corporation

a

new

to

large

in

military

nonessential

spending.

in

come

cutbacks

from

policy.

Easy
money will not necessarily stem
an economic decline.
Easy money
provides no guarantee that money
will be borrowed by business, un¬
less business can put that money
to productive use and unless busi¬

Russians in the mis-

field

expected

credit

additional expenditures

the

-surpass

from

sources are as

"may be called for to catch up and
•

pressures

other

nancing. In his Oklahoma City
speech the President made this
quite clear when he indicated that

•

System
I
am
limitations of

have

ness
a

defending the policies of the

credit policy. Credit policy cannot
directly offset wage increases that
outstrip gains in productivity, but

of

were

municipal

quite

Reserve

1956. What the
system endeavored to do was to

they

and

during the period

banking system this year re¬

as

state

Federal

the

matter

a

of

Federal

policy, it is interesting to
note that reserves in the banking
system did not actually contract.

mained

not

Reserve

System pursued the so-called tight

Reserve

.was

Federal

money

As

encouragement of

record

23

financings.

and investment.

Of course, all

vailed up until a month or so ago
it seems to me that the Federal

lems

V

it may sound

talk

income

personal

our

In

proportionate

i, ; In dhe

of

savings

how¬

could be very short lived if
political pressures result in dis¬

ever <

System had no practical
alternative but to pursue the re¬
strictive credit policies to which
through depreciation of the cur¬ they had adhered during the past
rency, and if this is, the alterna¬ .two years. The solution to our re¬
tive the choice should be clear to cent economic and financial prob¬

Collective

system.

essential

These

for

expenditures
for
operating at even the level prob¬ defense without compensating
able for next year, whateveriaddi- cuts in other phases of the mili¬
tional funds the government needs, tary and domestic programs,

seems

required
but we

be

may

our

afford

seeking.

are

must

we

if

balanced

does not necessarily guar¬

money
antee

the

(2655)

on

page

29

The Commercial and Financial Chronicle

(2G56)

24

.

Thursday. December 19, 1957

.

.

Financing Problems of Small Business
this organizational

By EDWARD N. GADSBY*

Surely it is unnecessary for me

will

explain to such a group as this
the
breadth
and
depth of our
mutual interest in the financial
to

health

Chairman, Securities and Exchange Commission

because of

with what laws and regulations require

1 f-interest

s e

strong

ship,

agency

Gadsby denies h'.s

could

places undue restraints, and

come

small businessman's reluctance to

"get mixed up" with SEC.

we,

respon¬

sibility,
realize

all
the

importance of
a

strong

tem of
Edward N. Gadsby

private

finance.

A

know

we

such

sys¬

strength depends

n

d

that

public

on

private citizens to study whether
Securities
and
Exchange
Commission is placing excessive
restraint on long-term financing
by small business and is exceed¬
ing the intent of Congress." This
resolution implied a serious criti¬
cism of the Commission. As I hope
all know,

you

it

has

been

never

confidence, and public confidence

the Commission's intention to im¬

depends on fundamental fairness
and honesty. With so much com¬

pose

mon
we

it is imperative that

concern,

keep in close touch with each

other.

restraint upon fi¬
nancing by small or large business
than is required by the statutes
which it is our responsibility to
any

problems that con¬
cern us all, one of long standing
has recently come back into
prominence, and I have a sugges¬
tion for .joint action to urge upon
you. I refer to the financing prob¬
lems of small business.

prised

would be

we

disappointed

and

formed

not

were

doing

out

carry

persons

our

or

im¬

that

so

of

as

the

late

In

held

in

called
ence

tion

September
Washington^

there

Technical

Research

for

Confer¬

Distribu¬

and

the

came a

Small

appoint

•An address

46th
ment

Annual

of

Association

Fla., Dec. 2,

of

the

Invest¬

in

the

financing.

consensus

It
the

of

the

called

a

Nov.

on

and
our

investment

myself,

staff, and

bankers,

Fulton,

Chairman

Business

was

of

Committee.

Mr.
your

Vari¬

that
conferences

we
on

Specif¬
might
a
local

of

small businessmen, law¬
and
investment bankers
dealing at this level, at which

yers,

members

of

the

Commission's

plain in detail what

Core

of

Problem

At the

meeting, I suggested that
at least a large part of small business's trouble in public financing
not

comes

and

from

small

what

the

laws

the

SEC

businessman

and

even

requirements, and what might
of

the

regulations.

our

do

create

a

businessman's

mixed

reluctance

part

to

up" with the SEC. I

that lack

of

was

much

be

could

on

a

the

done

joint

their

by

and

our

real

a

vigorous educa¬

difficulty,
embark¬
pro¬

financial

laws and regu¬

think

that

member

1

Exchange, will become a partner
in
Murphey
&
Marseilles,
65
Broadway, New York City,
bers

of the

New

lift

to

the

dark

understanding
obstacles

real

curtain

that

of

erected

mem¬

Stock

Ex¬

the

by

quires

a

tion for real
that your

ST.

C.
Scherck, Rich¬
ter Company, 320 North
Fourth
Street, members of the Midwest
Stock Exchange.
He was previ¬
ously with Fusz-Schmelzle & Co.

however,

enthusiastic
success.

re¬

tive

in

ences.

take

organizing

Mo. —Edward

with

It is my hope

Davis & Davis Branch
FALL

appropriate national and regional
will

now

coopera¬

association, through the

committees,

LOUIS,

Maue is

program,

your

Scherck, Richter

(Special to The Financial Chronicle)

un¬

Requests Aid of IBA
Such

With

mis¬

presents

the

such

initia¬

confer¬

If you will do your part in

RIVER,

Co

&

Purchase

10

at

management

of

Taradash.

HEIGHTS

MINNEAPOLIS

BOSTON

WINSTON-SALEM
CHARLOTTE
DURHAM

Broadway, New York 5, N. Y.

RALEIGH
CITY

ATLANTIC
EAST

ORANGE

MORRISTOWN
RIDGEWOOD

VINELAND

SAN

Underwriters and Distributors of Corporate Securities

FRANCISCO

BERKELEY
CARMEL
,
_

Underwriters and Distributors of State, Municipal
and Revenue Bonds

OAKLAND

SACRAMENTO
SALINAS
SAN

MATEO

SANTA

CRUZ

SANTA

ROSA

STOCKTON

Primary Markets in Many Unlisted Securities

SWITZERLAND

GENEVA,

Correspondents in:
ALEXANDRIA

Brokers in Securities and Commodities

BUFFALO

CHICAGO
DENVER

DES

Advisory Service

MOINES

DETROIT

INDIANAPOLIS
KANSAS

Exchange, American Stock Exchange,
Principal Exchanges

Mass.—Davis

Davis has opened a

CHICAGO




York

change.

CHICAGO

and Other

of

to¬

Welles Murphey, Jr.,
New York Stock

LANCASTER

Members New York Stock

far

the

of

YORK

Investment

go

"Admit
Jan.'

On

SCRANTON

,

as¬

Murphey & Marseilles

PHILADELPHIA

•

your

is the sort

of private industry and
governmental agencies.

ALLENTOWN

'

ed¬

elements

BROOKLYN

.

with

my

pleas¬
an

demonstrating the possibil¬

SYRACUSE

120

and

ity and benefits of intelligent co¬
operation between the responsible

NEW YORK

office:

it

would

ROCHESTER

main

me

more

tional program we should be able

"get

extent

educational

legal

the

financing small busi¬

but with

sug¬

inform small businessmen

counsellors of

remove

at

on

familiarity and

knowledge

to

We

imagination.

gested further that to the

and

These

program

endeavor

during the

work out such

I

laws and

regulations.

cannot

obstacles

per¬

haps the investment bankers with
the

and

to

ucational

ward

agree

beneficial, and 1
look forward to

very

than

to

we can

Offices in:

v.

mem¬

conferences

in this direction

sociation.

,

laws

our

our

regulations require and how one
goes about meeting these require¬
ments
in - a practical way. We
could also answer questions as to
our
practices and policies under

in fact require,
familiarity of the

regulations

but from lack of

gram to

them

basis

procedures.

suggest

economies and communication.

industry.

Among

and

ically, I
organize

staff, and any other persons whose
advise might be helpful, could ex¬

ing

Small

was

lations

plight of small
business arises from problems of

lawyers, and executives in private
Yost

Commission

business

that

group

factors

Small

attended by Com¬

certain members of

America,

1957.

our

rather

was

the

Washington

Patterson

15

say

imposing excessive restraints
small

on

this

pleased to

present seemed to be¬

one

lieve that

fact

ance

Administrator,

in

missioner

panel

of

meeting

con¬

bj^pMr. Gadsby before the

Convention

Bankers

Hollywood,

Business

about

no

resolution,

Barnes,

was

Administration

appropriate

an

Wendell

this

25, which

resolution that the

Business

Mr.

to

response

of

Benefit

Small Business." Out of this

ference

was

meeting

a

President's

"The

on

In

that

from

arose

am

be deemed the foreboding appear¬

Congress.
SEC Criticized

meeting, but I

ness,

job

intent

the

in¬

we were

posing excessive restraints
to

sur¬

if

reasonable

and

should conclude that

we

suggestions

ous

more

administer. And

Of the many

be

or

fellow Commissioners
ure

"The

seemed

coming winter.
Nothing would give

because of of¬

ficial

cooperate.

that those

meetings

hope that

calls for investment bankers' participation in an educational campaign to over¬

citizen¬

and

Chairman

action

feelings of
good

work, the SEC

fully

say

meeting

ington

that such

for small business' public financing

troubles.

en-

lightened
and

and

glad to

association who hap¬
pened to be present at the Wash¬

SEC head blames small businessman's and investment banker's unfamiliarity

You,

country.

readily

am

bers of your

this

of

I

CITY

LINCOLN
MIAMI

OMAHA
PITTSBURGH

ST.

LOUIS

SIOUX

CITY

TnonwTA

&

branch office

Street

under

Bernard

A.

the

G.

Volume

Number 5700

186

.

.

.

The Commercial and Financial Chronicle

25

(2657)

Aluminum's New Era
The

brief

aluminum

history,

and

substantial

ices

of the

ing

made frequent

calls

known facts and the best opinions
available.
We were seeking, not

By RICHARD S. REYNOLDS, JR.*

in its

industry,

has

President, Reynolds Metals Company

;

predictions, but guidelines for the

serv¬

upon

investment bank¬

10

as

being at the threshold of

it

"revolutionary break-through" from

a

has

to

come

the

industry.

items

as

community
cei\ ed

—

$21/2

vitality

and

growth

potential

the opinion
abundance of

ices
S.

R.

demands

In
the

greater in the

even

ahead.
my

opinion aluminum is on

threshold

of

new

a

era

—

a

revolutionary break-through. For
the

first

in

time

the

history

of

non-ferrous

metals, aluminum, I
believe, will develop from a joborder business to a mass produc¬

industry.
The
impact

of this
change¬
with its economies and ef¬

ficiencies, will, in turn, affect the

an

our

goods and serv¬

American birthright.

It

I

assure

can

you

that the

obsolete
of

is neither
used

thought concerning it.

This country,

since the turn of
the miracle
production occur again
and again in its basic industries—
in automobiles, steel, paper, and

the century, has seen
of

forth.
We

We

to

new

or

unusual. We

imbalance

between

are

sup¬

'An
the

are

no

address

by

Investment

Hollywood

longer

come

Beach,

to
Mr.

astonished.
the

accept
Reynolds

before

Bankers

Association,

Fla.,

4,

Dec.




1957.

be

not

needed for

least

at

We

have

our

true

economy goes

role in this

nation's

far beyond military

needs.
Production

has

jumped

from

160.000 tons of aluminum 20 years

marched

up

the

hill

in war,

and gone down the hill in
peace—accompanied by the direst
predictions as to our future.

tons in 1950; and
than double again to about

700,000

to

more

Past Prophecies

1,60G,000 tons in 1957.
This

spectacular

growth

has,

accompanied by
increasing
profits
and

moreover,

steadily

been

sales.

our

of

no

of

September, 1945, at the close
World
War
II, the
Surplus

Property Board reported to Con¬

with 45%. of the na¬
tion's low-cost capacity idle and
that,

I

quote—"We expect markets for
primary
metal
to
require five
years before the present private

capacity

would

be

necessary.

To

speak

over-supply,

of

tradiction

a

terms.

consider

critics
me,

in

a

What

liability

is,

our

to

unique asset.

This

market

duction

conditions,

time-table

try to sell aluminum, rather than

is

the
being

ad¬

justed to actual current consump¬
tion.
But
this
temporary
lull
should not distort the

The

future is

basic view.
of per¬

matter

a

foothills and then,
the
mountain

to

peaks beyond.

My own company's long-range
planning
department
has
sur¬
veyed
these foothills in a re¬
cently-completed
study
which
ahead

to

1975.

They based the study upon the
most

realistic

and

conservative

estimates; concerning themselves
only with the known uses of alu¬
minum and uses already in the
them to

giving

asked

We

stage.

only

consensus

a

advancing

eco¬

stable and growing econ¬
the absence of war; a rising

population;
in

crease

sumption.

and
a
steady
production and

in¬
con¬

,

an

market

These esti¬

analysis of
specialists with

the

opinions of experts
consuming industries.
In

tion

architecture

and

in

the

construc¬

for

example, the estimates
concerned with roofing, sid¬
ing, windows, doors, screens, awn¬
ing, store fronts, trim, curtain
walls and many other uses.
These

estimates

translated, on a
into the products

unmatched

This

resources.

an

unchallenged

the foreseeable future.

some

of its

more

copies of these books

published by the Bank of America:
of California, City of Riverside,

City of Long Beach, City of
San Diego,

own

agriculture, manufacturing,

potential of the State of

write for free

State

could be expected to penetrate in

economy

^ important political subdivisions,

City of San Francisco

City of Los Angeles.

DEPARTMENT

Mrntk of America
JAVLNGS ASSOCIATION

Underwriters and Distributors

by

multiple

a

strength from

California and

Specializing in General Obligations

omy;

the

commonly ac¬
industry and govern¬

a

of

comprehensive analysis of the

a

credit

•

cepted

ment;

assumed

were

then

tonnage basis,
we make—such

lay aside the crystal ball;
us

economic stability for

NATIONAL

study

conditions

were

diversification has created

Montgomery Street

Study Conclusions

our

natural and human

300

.

the periods covered.
mates combined the

diversification of

BOND

assemble

look up at the
look
higher

the

in

California's constantly

MUNICIPAL

We

Then working through our sales
division, we determined for each
major market how far aluminum

There

stand

derives its

and

in major in¬

use

decisions.

are
those who
present valley of
over-supply and see nothing but
gloom around them. I suggest we

spective.

California...truly

For

pro¬

.

caution—decide.

nomic

and

time

facts, add our knowledge and
experience and, with care and

Our

all

same

the

primary

with

course,

limitations of

the

yourselves

producers facing similar operating

development

supply compels the indus¬

in time

shortage. This pressure to sell,
accelerates the industry's
toward future markets.

Of

I

better

have

progress

or

over-production, in an industry
that is growing like ours is a con¬

case

these studies.

attempted to model
procedures upon the methods

you

the

appro¬

present, for the
of the conclu¬

study; and at the

We

expresses

it—as is

an

audience

realize

to

is

appreciate its value.

in turn,

looks

In

gress

have

of

ago

mass

so

would

that

ply and demand.

It will
present pat¬

our

deliver

pres¬

valley in our business aotivity

try as we know it today.
make

Therefore, the government plants

a

structure of the aluminum indus¬

terns

able

pro¬

that the present over-supply is merely temporary.

surprise to anyone that period."
The World War II government
that the
aluminum industry, in
turn, is on its way to industrial" plants, comprising 50% of U. S.
capacity, were put to use within a
maturity.
There are some who will doubt year. In three years the industry
was
again increasing its primary
my assumption.
Among them are
those who know, as we all do, capacity.
Despite prophecies such as this,
that today aluminum is in overwe have gone up the hill again in
supply. They will point to recent
peacetime, and have discovered
stretch-outs of expansion plans.
ent

tion

over,

as

s^uld not be
Reynolds, Jr.

for your serv¬
be

the Investment

many -

sions reached in

vestment

that

will

irrigation; pictures export possibilities; and

time,

know

tanks and other large structures;

of

industry
strongly in¬

years

cars,

our

this

ices

railroad

pipe-welding machine which permits accelerated pipe

duction for oil, gas, and

billion.

dicates

priate forum to

over

The

its

produc¬

a mass

Mr. Reynolds refers to prospects for rolled sheet for such

aluminum cans, ships,

describes automatic

re-

job order business to

a

first

tion

financial
for —and

•

This meeting of

Bankers Association

years

alone,

ahead.

years

Reynolds Metals head depicts aluminum industry

industry.

In the past

San Francisco 20, California

of STATE AND MUNICIPAL BONDS

of the State of California and its political subdivisions

Continued

on

page

economy

52

26

The Commercial and Financial Chronicle

(2658)

.

.

Thursday, December 19,1957

.

The Return ol Power to State Governments
By JOHN ii. STAMBAUGH*

Joint Federal-State Action

The

by the
President of the United States and
the Governors of the 48 States.
Committee

And

.

.

dented action undertaken by pioneering

.

tee

.

creating

fense, urban renewal and atomic

three

to

designate functions
which the States are ready and
willing to assume and finance that
are
now
performed or financed
wholly or in part by the Federal
•Government;
"One

—

recommend

"Two—to

and

eral

ments

State

to

Fed¬

adjust¬

revenue

enable
the
such functions;

required

States

the

to

assume

tain excise taxes, are

to

identify functions
and responsibilities likely to resquire State or Federal attention
in

the

the

future

level

eral

or Fed¬
both, that will be

or

effective action."

assure

Conference

The

recommend

to

of State effort,

effort,

needed to

and

Governors

of

readily accepted the President's
proposal. For years it had con¬
cerned
itself
with
problems of
Federal-State

program responsi¬
bilities, the division of tax revenue

between

sources

the

Federal

and

State

and
with
calling
for
—
Federal,
'State and local. The Conference,
accordingly, authorized its Chair¬
man, Governor William Stratton

Governments,
emerging
problems
governmental action

of

Illinois, to appoint

of governors to serve

representatives
,

President
State

oti

Committee

chosen

the

Joint

the

by

Federal-

Action Committee.

This

the

was

history that
action

a

with Federal

be

a

step

first

time

in

our

taken

to

the

reverse

growing trend toward reliance
the central
♦An

the

address

46th

on

authority for services
by Mr. Stambaugh before

Annual

Convention

of

the

Investment Bankers Association of Amer¬

ica, Hollywood Beach, Fla., Dec. 3,

1957,

and to releasing estate-gift and

energy,

the

towards the battle of baiting

a

The

of

initial

Agreement

trol

Joint

deliberations

of

the

Committee

number

developed
a
agreed positions with

of

to

respect

approach

and

pro¬

cedure:

The

and

local

decisions

of

these

programs

many

sible

is

desirable

of

Many

system
requires
strong, responsible State govern¬
ments. The degree to which the
States satisfy the needs of modern
society determines in large meas¬

as

necessarv.

of

State

local

and

governments; can be handled more
effectively and responsively; and

cer¬

vocational

for

the

should

states

and

finance

to

resources

can

obtain

these

the strength of the whole sys¬
tem. The Committee emphasized

strongly that the diversity of local
requires governmental
action

local

whenever

possible

the

level.

sized

that

not

mendations
of

all

were

financial

deliberations

mending

of

empha¬

its

recom¬

purely in the
interchange. Its

resulted

several

in

recom¬

means

of

strengthening State and local gov¬
ernment through the assumption
of functions proper to

that

its

their levels.

to

reduce

the

are

scope

not
or

effectiveness of the programs con¬
sidered

by it. Its work is not

exercise
ture

in

program

or

an

expendi¬

reduction.

The

was

only

Action

before
a

given

Committee

created to function
for

action"

as

rather

Commission

a

"task

than

a

Intergovernmental

on

Relations, and the many reports in

specific

by

areas

the

Council

of

The initial phase of this mission

limited

a

action

that

small

one:

be

and

Federal

to

certain

recommend

taken

number

functions
the

a

number of recommended actions.

There

is

evidence

of
tax

to

Government
more

responsibilities

continue to

shift

a

governmental
sources

out
to

of
the

clearly

that

emerging

attention

of

great

to

now

States

later

Adequate

older

these

into

State

local

and

governmental affairs, the Commit¬
tee in general agreed that: careful
selectivity is essential in consider¬
ing any future proposals for Fed¬

stimulative

grants
a

should

grants;

be

such

no

provided

clear-cut Federal interest exists:

be

included

in

such

grant legis¬
continuing op¬
erating
responsibilities
by
the
Federal
Government
in
spheres
traditionally State and local in
lation

to

prevent

The Committee also agreed that
of the
programs
must be

each

in

on

relation

its

to

merits

and

not

specific tax
in the overall
picture of functions and finances,
there should be a relationship be¬
any

However,

source.

tween functions to be assumed

the

States,

revenues

national
balance
as

&

Co.

and

The States

amount

be

of

by

released

tax

sheet

be

can

but

drawn:

functions

are

as¬

by States and localities,

revenues

nationally.

related

of

amount

be

can

a

tax

relinquished

voca-^

as

prac¬

economics,

distributive

full responsi¬

assume

tical

nurse

training

practicable and

no

as

soon

later

Governors
bodies

the

and

of

the

The

States

unlisted

NEW YORK




CHICAGO

the Federal grants.
The

States concerned

industry
for

the

with

fishery trades and industry
tional

voca¬

education

program

program.
This
authorized onlv last
President request the

was

The

year.

Congress to repeal as soon as prac¬
ticable the legislation
authorizing
Federal

grants

for

this

program.

The total amount involved in all
vocational

education

$41,000,000,"
The

'

grants

President

ask

Congress

000,000 is, authorized annually for
this purpose. And, that the Gov¬
ernors

the

request
to:

provide

assistance

facilities

for
as

strengthen

State

sucli

waste

treatment

be

necessary;

may

needed

as

legisla¬
financial

State water

pollution control programs
relate

to

both

dustrial

as

wastes;

and

improve

municipal capacity to raise funds
to finance

It

the

waste treatment works.

also

was

President

necessary

schedule

to
of

recommended
take

put

for

into

effect

State-local

Federal aid

and

Commodity
New

Teletype: NY 1-483

Exchange,
York

Inc.

Coffee

120

&

Cotton

York

Produce

Sugar

Exchange,

page

Exchange

Exchange

Inc.

Broadway

l-';84

1-485

New York
Telephone:

REctor

5

2-2300

'a

guide the

on

Exchange
York

as

qualifying

to

department

New

;

expendi¬

PUBLIC : UTILITY,

New

that

such /steps

tures to be made before

Stock

Exchange

they

municipal and in¬

MEMBERS

Stock

to

necessary action to discon¬
tinue construction grants for local
waste
treatment
facilities. $50,-

FOREIGN 5SECURITIES

York

is

rj

take

trading

New

this

full responsibility
financial support, of the
assume

Wertheim & Co.
American

de¬

velop necessary means for provid¬
ing the additional funds to replace

RAILROAD,
AND

the

legislative

several

Members New York Stbck
Exchange

MUNICIPAL

as

than

period presently authorized.

Continued

INDUSTRIAL,

in¬

trades.

terminate Federal grants for prac¬

■

•

soon

nurse
training
program.
The
President request the Congress to

by the
government. No specific

generally

Bear, Stearns

and

to

additional

sumed

as

These include training in

bility for financial support of the
more
recently developed practical

tures

scope.

considered

pro¬

velop necessary means for pro¬
viding the additional funds to re¬
place the Federal grants.

unless

and, built-in terminal dates should

of

programs

education

on.

Government

and

The Governors and the
legislative
bodies of the several States de¬

localities

and

Looking
to
the
future
and
recognizing that small stimulative
grants tend to inject'the Federal

will

be shared by Federal

problems.

problems
may
be
the best procedure for precluding
or
limiting Federal intervention
by

eral

State Governments and others.

States, and to define

consideration

the Committee is whether

implies, the Joint

name

group, at
the same time
recognizing the value of the many
major
studies
of
intergovern¬
mental relations that already have
been made. These are particularly
exemplified by the Report of the

is

to do, and
identify some of these in
its Report, as well as presenting

will

of

Action

study

clearly indicated

recommendations

intended

the

for

Force

Federal-State

force

The Committee further

area

at

Task
As

Committee has started

potential value in advance review

ure

needs

is

identify emerging problems
which are likely to require State
or
Federal
action, or combined
action, in the future. This the

pro¬

grams.

education

financial

the

tional

of the mission

part

-

support.
The
President request the Congress
to.
repeal the laws authorizing grants

to

it

•

agriculture, home

Another

ac¬

States assume full responsi¬

viding

trend.

as

pos¬

these programs can be
by the diversified ad¬

enriched

ministration
Federal

and

over

for

Government

bility for continuing the program^
of

to
our
people far beyond
the function can logically be assumed and State Governments. The pur¬
responsibilities originally intended completely at the State and local pose is to demonstrate that the
for
assumption by the Federal level and be carried on with even long-term drift of governmental
Government.
greater effectiveness than under- responsibility
to„ Washington
is
present arrangements. Local con¬ not inevitable.

Areas

Federal

and the States:

essential

as an

meetings made the fol¬

recommendations

by

dustrial

The Committee

President suggested

of

ticable.

The
—

unprece¬

far, to vocational education, civil de¬

so

optimistically viewed by Mr. Stambaugh

and

"Three

tion

Joint Federal State Action Commit¬

with

joint committee charged
responsibilities:

a

series

transfer certain Federal functions and taxes to State Governments. The

to

admittedly limited efforts confined,

task force for action—

a

Vice-Chancellor, Vanderbilt University

University official and Pres. Eisenhower's special consultant reviews

I suggest
that this conference join with
the
Federal
Administration
in
.

Action

Joint Federal-State Action
Committee as a result of its first

,

.

lowing

President Dwight

1957,

24,

-D. Eisenhower said:

for

The

Special Consultant to the President

Speaking before the Conference of
Governors
on
intergovernmental
relations
in
Williamsburg, Va.,
June

Recommendations

created

was

Cables: Wertma New York

55

Volume

186

Number 5700

.

.

The Commercial and Financial Chronicle

.

Speaking in Frankest Terms
In

view

which

of

the

Minister. of

a

is

Finance

is

in

session,

that

you

I

>

Speaking,candidly of:

of

a

recog-

'nition. of

the

r

surplus disposal policies is creating for Canada.
"a

this

to

much-sought metals.
been good to us.

Canadian

to

to-the serious harm U.S. trade and

directs attention

welcome op-

V

port unity of

develop

challenge

,

In contending America has

discussing before

Mr.jFleming reiterates the strong protest made at
sentatives of-both countries in

•

nomic ques-

in

•*

•ftions of

com¬
interest

mon

■'<
M

D.

Hon.

Fleming

compel

to

me

I

am

joying 'your hospitality.•
The Canadian

tolerance and*' enmity

:

known

Americans.

to

We

know the people

we

J,of the United States

on the whole
they know us. Prob¬
ably wherever a very large coun¬
try and a country of small popu¬
lation are immediate neighbors,

better than

the

smaller

would have

destiny]' good

will triumphed over these divisive

opportunity to make their country
consider that

this

Canada

denied
•

Canadians like to embrace every
better

forces. / Canada- owes

existence

and

as

its creation

nation

a

to

world

in

Canada

When

1763

from French to British rule
were

the

larger

estimated

that

much

known

It

news¬

than 25 times

to news from the

space

American

as

devote to

news

news¬

from Can¬

ada.

Perhaps, therefore,
be forgiven for speaking
about my

country.

the

As

Canada

ninety

world

is

a

into

came

being.

half

today

of

this

of

it

may

to

you

-

time,

nation.

But

the Dominion
It was then a

only four

prov¬

the

north

spans

continent

braces 10 provinces.
the

I

measures

ago

confederation

inces;

r

young

years

by
been

has

Canadian

more

United States
papers

be

country.

devote

papers
as

will

and

em¬

Its march to

west, to the north and last of

all to the east, with the accession
of Newfoundland in 1949, was not
achieved without the expenditure
of blood, toil, sweat and tears. It is
a

proud

vision
with

record

and

any

of statesmanship,

courage.

It

Two

and

great

races,

Anglo-Saxon

French, linked together their

loyalties and labours to build this
nation. Enemies of old, they have
achieved a common destiny on the
broad, fair soil of Canada and have
*An

the

address

46th

vestment

ica,

by

Annual
Bankers

Mr.

before

Fleming

Convention

of

Association

the

of

Hollywood Beach, Fla., Dec. 2,

In¬

in

Canada.

centuries

Two

later their descendants number al¬

most five million persons.

miracles

the

of

one

This is
modern

of

times. Under the guarantees given
first

Parliament
and now by the Canadian Con¬
stitution, their rights of language,
law, creed and culture have been
preserved in the fullest measure.

British

the

by

French

is

of the

one

two

official

languages of the Canadian Parlia¬
ment, of the Federal Courts and of
the

Legislature and Courts of the

Province of Quebec.

principal racial
strains has been mingled in more
With

recent

these

two

the

times

blood

of men

other lands. The Cana¬
dian family has been strengthened

from many

their inclusion; the

by

Canadian

culture has been enriched by

is

said

that

her

ica.

Sir

as

Robert

signing the treaty in the blood
sixty thousand young Canadians
who had given their lives in the
was

of

vA

the

world.

Canadians

There

tion

The

world's

is

duty

u

t

to

numbers

In

I6V2

soil is

our

Considering their relatively
population Canadians are
air outward-looking
people to a

nature's

degree not exceeded by any other
nation in this hemisphere.
The

been

are

a

young

some

ada's

know

nation

icy is built upon four bases, our
memberships in the Common¬
wealth of
tions

and

and

our

a

those

years ago

natural
filled

in

coal,

of

We

very

close, almost unique, relationship

of

are

energy:

a

major

world.

weary

you

with the utmost

you

Canadians

these

recognize

The

march

nationhood is

past fifteen years has risen
challenge of destiny and

has assumed the exactions as well

responsibilities of world
The generosity of the
United States in sustaining other
nations in these post-war years is
without
parallel
in history.
I
traversed free Europe in the criti¬
the

as

leadership.

have
mea¬

cal
left

no

What I saw theire
for doubt that Mar¬

1948.

year

room

shall Plan aid saved Western Eu¬
rope.
,

Canadians

ailies

supplier

and

NATO.

in

Americans

notable

Continued

on

page

their

assumption of

wartime

the

of nationhood
when in 1919

climax

its

full
record

march to expand¬

her physical

ing frontiers. Her
the attributes
reached

a

Prime

Minister, Sir
the Treaty,

Underwriters and Dealers

Robert Borden, signed
of Versailles on

esty
was

in

the

behalf of His Maj¬

name

of

Canada.

the first time that Canada

It
had

Entered

into

an

CORPORATE BONDS

international

1

■

1

STOCKS

AUTHORITY BONDS

'

>

TOLL ROAD AND OTHER REVENUE

BONDS

Clark, Dodge & Co.
ESTABLISHED

1845

Members New York Stock

61 WALL STREET,

Exchange

Eastman Dillon, Union Securities & Co.

NEW YORK

MEMBERS NEW-YORK STOCK EXCHANGE

LONDON
15
PHILADELPHIA

HARTFORD

•
•

SAN

BROAD STREET. NEW YORK 5, N. Y.

CHICAGO

CLEVELAND

MARINO

•

LOS ANGELES

•

READING

LAS VEGAS

•

/

ST. LOUIS

PITTSBURGH

•

EASTON

•
•

BALTIMORE
PATERSON

SOUTHERN PINES

•

BOSTON
SAN DIEGO
CARLISLE
•

•

Correspondents in
HOUSTON

DALLAS

NEW HAVEN

•

•

TORONTO

RICHMOND
ITHACA

are

Canadian forces

to

Canada

of
as

the

the

to

products and metals.

forest

Opportuni¬
given only to
the
best neigh¬

position of world leadership oc¬
cupied by the United States. " We'
view with admiration the, way in
which
the American
nation
in

uranium.

world

not

We

water power,
gas,

endanger¬

frankness.

appeared
to be gaps in Can¬

natural

oil,

can

are

are

the

speak to

geo¬

overflowing

without

Therefore^ I
with plati¬
tudes concering relations between
our two
countries, rather 1 shall

What

endowment

in

shall

today

In

who

bours

vast storehouse of

bounty.

sources

Nations, the United Na¬
NATO,

million.

we

each other in the most

terms

ties of this kind

by the discovery in recent
years of vast deposits of oil, nat¬
ural gas and iron ore. We possess
in abundance the five known

Our external pol¬

people.

.

rela¬

of mutual confidence.

or

war

blessings of the

and;; cordial

ing, not to say rupturing, good relations between us and our sense

sure

has not meant that we are an im¬
mature

candid

graphical extent we are the sec¬
ond largest country in the world.

small

we

speak to

post-war

Canadian population

The

recogni¬

given Canada great op¬
portunities. It has also brought
to her vast challenges.

that

these

in

of the

one

and the United States that

ization.

has

fact

during the

aid

1

u a

STATE, MUNICIPAL AND NEW HOUSING




the

and

tions which exist between Canada

strong, and solid.

COMMON AND PREFERRED

NEWARK

is

Ameri¬

and

themselves

positive

a

extraordinary

Indeed, like the United
States, Canada has heavily sup¬
plied mutual aid to our allies in
the North Atlantic Treaty Organ¬

historically she has had nothing to
down.

Amer¬

years.

States of America and the fact that

live

of

Our attachment to these four

lease-lend

of

part she
has played in the evolution of the
Commonwealth
of
Nations, her
close relationships with the United
her resources,

States

Withal
Canadians are a sturdy, self-re¬
liant people who cherish their in¬
dependence. . May I remind you
that these qualities of the Cana¬
dian people
are
strikingly evi¬
denced
by the fact that almost
alone among your allies in war
and peace we Canadians h a v e
never accepted any aid from the
United States, whether in the form

he remarked that he l'elt that he

tors,

United

the

bases

signed that historic docu¬
ment, his eyes filled with tears and-

Amer¬

1957.

other

neighbour

contributions.

as

ing in history.

there

sixty thousand French Col¬

onists

compares

record of nation-build¬

the

passed

better

country

it

right and

own

It

with

spirit of tolerance'and mutual re-speet 'a m o p J* men of different Great- War.
tongues, cdltufes and creeds. Unity,
From that point Canada has
and uniiormity' are not the same
gond forward to achieve an everthing, and Canadian unity is not increasing measure of
recognition
and never will be based upon uni¬
the eyes of the world. To this
formity.
" '•••'. /•>:}:'
• 1yl:.
end have contributed various fac¬

is
always
likely to know the larger country
than

name.

en¬

Nation

the

States

each

two

any

to

owe

It is

in her

treaty
own

much

so

United

each other better.

spending oniy this
with you in this ioveiy

day ■»
setting where

in

that

lieve
cans

Ottawa* after
one

Relations

however, for better un¬
derstanding between them/- X* be¬

to

return

S.
the

understand

than

nations

and support to the U.S.

I regret that those sai ie pres¬

a

this

of

still room,

Depicts

bright future for Canadian economic outlook; and pledges full friendship

a

and

probably

Canada, the Minister appeals for voluntary reversal of irritating and dam¬

and Canadi¬

sures

Turning to investments

aging policies conducted; particularly, by U.S. parent corporations.

to Americans

ans.

Canada

better

eco- ;.

you

Washington, D.C.

Canadians

Canada-U.

recent meeting of repre¬

a

has

is

resources

unborn.

special responsibility not to damage Canadian export opportunities abroad",

~

*

to

Nature

The opportunity

these

generation and will likewise be
a
challenge to generations yet

-

•"

I:'at-'

which

of finance

Minister

lead, zinc, asbestos,
titanium and other

copper,

uraniu m,

for improvement beyond the already good rela¬

;

-.

importaiice
tach

room

tions and mutual confidence between the U.S.A. and his country,

tion is intended as

blessed with tremendous resources
of

•

invita¬

your

Minister of Finance, Canada

-

,

assure

can

my

acceptance

Canada produces over 90% of the
world's supply of nickel. We are

'

subject, particularly while Parlia¬
ment

Understanding Friend

as an

By HONORABLE DONALD M. FLEMING*

to

pressures

27

(2659)

NORFOLK
SHAMOKIN

70

The Commercial and Financial Chronicle

Satellites
On

By GEORGE S.
Vice-President

—

Because

TRIMBLE, JR.*

Engineering:, The Martin Company

trate

is

the

cost

largest

Investment bankers

employer of
people in the
USA.

4,

On

one

or

has

hVft

S. Trimble,

G.

the

Jr.

nee

The

of

of'

piore
plore

the

time

about

minimum

the

on

the

and

way

isolated

thankful.

made

areas

not

oi
of

it

possible to

tne
the

eartn
earth

already

'

onlv
y

miles

ten

thick

controls
a

small

forward

if

even

you

with the distance
wrui tne aisiance

a

compare

man

di-

the

the

early

be classified

unmanned

at

vPRPnrph

and we
ana we

whUn

+hic

yvnue xnis

address

by

Annual

vestment

Bankers

ica, Hollywood,

Mr.

Trimble

Convention

of

Association

Fla.,

Dec.

5,

of

will
the

men

explore

and

nredirtinns

the

l^r predictions, ana

manv

any

action

inQphino Iacc thnn

terenntinental

tercontinental hallistie missile
ballistic missile.

■

rommereial

f

Perhaps you

nrndurt*

Similarly you can
. pmhl;' -hnnw

in

that

nur

little

_

ingly

we

that

to

make

best

oper¬

return

the

our

do

we

ones

will

best

pany

world's
of

to

seem¬

will

vehicles

as

the

com¬

produce

In

future.

I

shall

illustrate

this process with an example from

the past and then show you how
we

are

working

now

for profits

in the future.

Long Versed in Rocket Work
u

«.

It has been said that the

the

United

sians

in

States

lags

reason

the

Rus¬

rocketry is because of

ovnlnrntorv «
effort is

*

...

ica do not

seem

tention to
tional

entering earth's atmosphere
•

to pay much atlike this

reasons

af. ieast n0£

scale

...

integrated

on

required

to

na-

proceed

from with the exploration of

space. I
give you a much less abstract
reason, however. Wars have been
fought over the \ acquisition
of
strategically important real estate.
The moon is such a piece of land.
years

1951

extending

or

from

1945

This

thereabouts.

is

..

Martin

The

managed to retain a rocket
of significance through¬

pany

We cannot shelve it and wait to
see
what the competition will do
on next year's model.
Nor can we
conduct

market

surveys

to

see

what the customer will accept.

friends

at

Naval

the

Research

Laboratory, Milton Rosen.
quired

a

the

over

ten

period

of

Many of

our

year

Viking's active life.
men

We ac¬

great deal of experience

became trained in all

phases

ground had the best chance of
winning the battle.
Today, the
flying machine holds the high

f

ground.

White, Weld & Co.

Tomorrow,

the

nate

earth.

the

moon

nation

will domi¬

Here

is

a

Hallgarten & Co.

first

class

military reason for exploring and conquering space
^ ,
a
reason any of us can understand.

Established 1850

.

Street, New York 5, N. Y.

With all of this work to be done,
the opportunities for those indus¬

tries

which accept the challenge
certainly exciting to contem¬
You must be wondering
how
one
might identify those
companies most likely to succeed
are

plate.
BOSTON
CHICAGO

in this field and those which will

PHILADELPHIA

Exchange

fall

LOS ANGELES

many

Stock

by

the

wayside.

SAN FRANCISCO

NEW HAVEN

MINNEAPOLIS

There

are

Investment Securities

factors to be considered in

conducting such

Commodity Exchanges

analysis. I shall
mention only a few. From a tech¬
nical
standpoint, at least three
ingredients are required. First,
an

the company must be a

IIAGERSTOWN
WINCHESTER

WINTER PARK

leader in
technological. Knowledge
in almost every field of science is
required as well as experience in

things

converting this knowledge tb use¬
Second, the company
have
extensive knowledge
and practice in the specialty of
doing business with the govern¬
ment, since the project is much
too large to be undertaken any

ful devices.

New York

must

FOREIGN OFFICES
LONDON

•

ZURICH

.




CARACAS

not

Com¬

by, the military
holding the high

that controls the

and

to

program

We must constantly strive

true.

gone

commander

and other principal

a

hiatus in American Rocket Devel¬

,.nw

shall get a look at Tenzing to conquer Mount Ever- point of
probable success, we
snauest Unfortunately> we in Amcr- must incorporate it in the product.

Amer¬

1957.

Members New York Slock

the

performing machine

cir-

In

Broad

ef¬

customer

can

20

on

today's

the

advanced

lead

suited to

best

the

profit

of

on

recognition of Martin

!° chan-e °ur Product to obtain

.

as

unprofitable

forts

strictly

ation.

..

hence

efficiencies

operation

must embiace change in our opei-

Moon Key to Co"Q"

the

our

in the habit of consider¬

opment
see

and

similar

are

much

so

the

Tt
It

from this why it is so difficult for us to mix military and
can see

obtain

*

success

are

not

the best m the world. We cannot
afford to build a pretty good in-

many commercial pioaucts.

other uses I am sure you are all

anc|

Pr°§ressinS> u paia
tackle the problem of safely re-

before
the

if such

a

we

*

soon
soon,

—

46th

for

"

tempts at heavier-than-air flight.
Our historians may decide that
An

effort,

These aware ot.

m00n

nnr

to

year

entirely dif¬

an

The existence of sputniks makes improved performance as we out this period. It was a high
& Quite unnecessary for me to learn more from our research ef- altitude research rocket program,
cumnavigate the celestial body of develop a reason for the United
forts. Such a philosophy is for- called "Viking" sponsored by the
interprt and send back the desired
States to undertake this huge eign to the idea of mass produc- Navy. You can read about it in a
:nfnrma*:nn Vw television and ra*ask, but there has been a simple tion of a standardized machine. book called "The Viking Rocket
dio
broadcast. Reconnaissance one all along .
.
the same rea- As soon as an idea for improve- Story" written by one of our
i
ivnp7aiTheein verv son that compelled Hillary and ment has been developed to the
11-ipcp

History will tell us whether the
launching of Sputnik I was the
if it might better

uxxut

whatever,

reason

micrht mnlrP

infi this time the earth satellite has to be the best

eventually to Venus and Mars. In
the earlv stages of reconnaissance,

only in two dimensions.
Most Significant Event

with

more

land on the m0011>

Rlirfa(w. ana return to earth. Diirsurface, and return to earth. Diir-

useful machine for mapping, wea-

the
move

With

VPixlitV

a

exploration

.

.

hpfnmp

are

will become a reality. With might make our machine less than

Wl11 have developed into a very

unmanned pioncs io lcdxn
the environment really is.

it

will

we

as

move ioiwaict in tne cxpioiauujL
of space. First, we must send out
i
,
nrohes to
learn what

walk
want

can

in

en-

tomendSus

ahead

work

f

his

mntrhlline

There is a

.

is

ai\«

that they

design

flexibility.

ing but the balance and emphasis
are
profoundly different. We do

as good or better

our

metal

profit

you

than ours. This
places extreme emphasis on the
performance and suitability of our
products.
We cannot afford to

mnnn

nnH
with further work
unci, wnn luiu ex wuiiv,
four as he learns

nhrmt

virenmtt

mues tnicK, a small cti

.

mension

man

.■

_

even'in

,

,v,rxr«

depths ot the atmosphere. But the

he

ation
a

hence must

compromise

extreme

in

Rather,

tools and

on

know, next
use

true

case.

The factors that make

in heated competition with other
aircraft, missile and electronic
companies, our real competitor is
Russia. We cannot obtain samples
of his mnot acciimo Ihnt thoxr and
products to analyze
horifo
assume

often

so

performance.

of time we will learn how
to venture farther and farther
from earth, yet be assured of a
safe return. Then manned space
probe flights will be undertaken
and human reconnaissance of the

passage

in three di- moon

perhaps even in mm as nt mains

mans

atmosphere which

future
«

begin to move

irwncirmc
mensions

we

The
.

^ueTto manTmasferv ofTbZ
mastery oi tne
to

"

.

will

ex¬

tnat
that

explored.
•

accrues

„

this

has

cases

few have known

a

space

seems

of

we

need to

ferent

n

for years;
^at g Satellite to earth can be
t -n orhit and that it is a useful
thing to do. For this we, at Mar-

the most safety, but only

few

machine

travel

to

us

spending

enjoying

had

us.

what

amount

a

r„

airplane has made it much

easier for
earth

implications here for
lllliJXiCaUUll9|''UWc -tV*.

are
die

every one

f

o

travel

<mare

There
J-XXCXC

with manned vehicles. It
likely that the early vehiin accomplishment will have been cles will have wings and hence
more meaningful.
In either case, resemble a high speed airplane.
men stand at the edge of space They will have been launched by
i„;i.
r
4r\
nil
laro'p
T»r»r»lrf>t
With
today.
Sputnik I proved to all a very large rocket.
With tho
the
the first manned space trip to be
followed by a continuing growth

n

i

fractional

manufactur¬

industrial

processes

a

iTror eaw°e

f

havp

is

as

it

to concen¬

on

heavily

usual

all

things,

us

must concentrate

For

making and keeping a head start. Ex¬
presses confidence in U. S. A.'s ability to gain rocketry lead in recalling that
past experience shows those who are first are not always most successful.

I

created

of advanced technology and science

today's operational efficiencies as from

for

reason

we

likely to succeed in this field, and points out profits come not so much from

launched

another,

these

in detailed

areas

the

may

ernment

which,

of

too
cuts

ing

advised by Martin scientist-official of crucial differences

building missiles. Mr. Trimble outlines criteria to identify firms most

active in

the

Sputnik

are

governing investment decisions in plants

Oct.

1957

Russian gov¬

the

Thursday, December 19,1957

.

would be foolish for

the

flew

pelled heavier-than-air craft, thus
starting the industry which today

or

.

the Doorway to Space

...

1903 the Wright
first self-pro¬

17,

Dec.

brothers

in

.

(2660)

28

•

other
HONG KONG

way.

define,

Chicago

Third,

the company
long time ago
understand and solve

must have started
to

44 Wall Street

'

231 S. LaSaile Street

a

-

Scranton

First National Bank

Building

the crucial problems.

Real Competitor Is

Brussels

Russia

It is

important for you to real¬
ize, in making your analysis, that

«

a

business such

as

we

conduct

at

Martin differs in several profound
ways

for

from

the

American

accepted

pattern

industry. For ex¬
ample, although we are constantly

60

rue

Ravenstein

Geneva
8

rue

Petitot

London
Austin Friars, E. C. 2

Volume

186

Number

5700

.

.

.

The Commercial and Financial Chronicle

(2661)
»

f
•

of

rocket

made, and
created.

new

More

to

be

others

even

been

to

work

his

done, we were able to accept
the
challenge of Vanguard
on
July 29, 1955, when the President

formidable.
to

which

required,

an

assure

of

the

of

satellite

mum

permitting

cost,

ment

of

have

out

fects
.

develop¬

the

Similarly,
nental

background
Titan, the

.

just

.

as

we

giving

capability of

Viking helped put us
today.
There are

are

to

seemingly

so

business

our

of

today

to

give rise to questions of
sanity in the minds of some.
as

our

we

have

successfully evolved from a

man¬

quite

are

clear

to

As

seems

us.

try's leading missile company; so

It

shall

we

made

early

as

opinion
been
now

to know that

1947

satellite
two

of

time

RIAS, INC..

a

ago

we

efforts

search.

to

Dr.

established

scientific

basic

Trurnit,

as

a

sci¬

and

be

of

we

active in the
exploration and

very

space

flight, building the

advanced machines that are need¬
We believe

ed.

well

re¬

one

evolve

technology

manned space

wholly owned sub¬
RIAS confines

Hans

to

expect

sidiary of Martin.
its

to

In the immediate future

fields

construc¬

tion that much sooner.
Some

cantinue

advanced

ence.

before

years

started

had

we

major contributor in future fields

that in our
could
have

and

as

a

we

ufacturer of aircraft to this coun¬

first satellite studies

our

launched
if

you

to

with

this

do

of

we

for

shall

this.

we

At

continue

have prepared
the
to

same

time

prepare

a

It

and

as

encouragement

an

dertake

to

un¬

projects that were post¬
because
they
could
not

poned

financed

been

profitably

at

higher cost. Credit policy must
some one said, the

for

credit

authorities

the Same role
back

much

occupy

the "T" Quarter¬

as

running the option play: To

decide

in

whether
lateral

to

off.

that either

But
the

ball

assurance

no

should

of

the

work.

represent

best

judg¬

circumstances

the

that

prevail.
Of course, in order to

be really
effective, credit policy requires
the support of fiscal policy. It re¬
quires beyond that the coopera¬
tion
of management, labor,
and
individual

the

consumer.

The

re¬

cognizance of the fact that
upward price pressures are sub¬
siding. Last month the cost of liv¬
ing

index

failed

first time in well
the

term

level

out.

But

moment ago,

tionary
"

'

'

'

1

deed.

investors is

magnitude

are

prime interest. To this end

we

that

is

to

come.

Smith, Barney & Go.

up

To Admit Four Partners
Smith, Barney & Co., 20 Broad
St., New York City, members of
the New York Stock Exchange, on
Jan. 1 will admit William E. Fay,
Jr., Hugh Knowlton, Jr., Andrew
J.
Melton,
Jr.
and
Robert A.
Powers to partnership.
Mr. Fay

stimulated higher one.

has been associated with the firm
in the

Looking beyond this intermedi¬
ate

period, the prospect for long-.,
term growth is just as bright as it

has
I

International

the

Chicago office.

Mr. Melton

sales manager and Mr. Powers

is

is in the

syndicate department in

New York.

been. Several weeks ago

ever

attended

In¬

dustrial

Development Conference
Francisco.

San

ference

industrialists

and

tries

of

the

that

At

62

from
world.

free

I

had the time to tell you

the
was

made

Sparks & Go. to
Admit J. S. Wynn Jr.

coun¬

wish

I

about the

predictions of things to
were

J. W.

Con¬

bankers

500

some

were

there, to tell

you

PHILADELPHIA,

that

come

Sparks
Fund

about

described

world wide

the

as

Pa.

—

J.

Building, on Jan. 1 will ad¬

partner¬

ship.

the
For

I intimated

as

a

Carl M. Loeb,

Deficit

financing

of

quickly

could

any

Rhoades & Co.

Members "Hew Tork Stock Exchange, American Stuck
and principal Commodity Exchanges

permanently
42

NEW

STREET

WALL

Exchange

YORK 5,

N. Y.

revive

upward price pressures.

Stock, Bond and Commodity Brokers
Sees No Room for Pessimism

Underwriters and Distributors of

In

concluding I do not want to
you with a gloomy impres¬
sion. As a matter of fact, there are
still many factors of strength in
the economy. For example, there
is as yet no indication that the
leave

U. S. Governments

Federal

Agency Issues

has

consumer

in

vailed

Municipals

has

business

and

Industrials

last

pnd retail sales have
slightly below their all

year,

been only

time high. Even some of the over¬

Railroads

capacity in industry is not as seri¬

problem as appears on the
surface. Surveys indicate that in¬
a

ous

Equipment Trusts

dustry

Finance

it

Paper

a

whole

a

as

that

believes

90%

that centers around

range

Canadians

than
100%.
Furthermore, the prospective de-*
cline in capital goods outlays in

Preferred Stocks

manufacturing is not expected to
carry over to expenditures by the
utilities
and
the
oil companies.

capacity

rather

And

Executives

of

Financial

Institutions

invited to avail themselves of

aur

spending
for
commercial
building is expected to remain at
are

services.

York

New

Ithaca

the

about

same

level

the

for

as

of

state

past

year.

The

and

local

government- spending

pattern

Rcjjis Hotel, New York. City

Auburn

State:

Middletown

•

Llinira

•

Geneva

•

Syracuse

•

Utica

•

Hornell

•

•

Walertown

C O R RE S P O N D EN T S
Anderson

Belts,

Borland

Bocttcher

..Richmond, Charlottesville

Strudwick

Si

Chicago

Go.

Si

Co.

Si

.Denver,

..

Colorado Springs, Grand Junction,

Davenport, Chicago

Pueblo,

.Nashville, Knoxvillc, Jackson, Memphis,

J. C. Bradford Si Co

Clarksville, Atlanta

.Pittsburgh

Chaplin Si Co
E.

Clark

W.

....Philadelphia, Lancaster.

Co.

Si

A.

G. Edwards

Si

£>ons

J.ake Charles.

Elder

Co

SC

York, Gcr mailt own

Willimanlic, Norwich
St. Louis, Clayton, Belleville, Jacksonville,
Shrevcport, Springfield, Houston, Little Rock, Keokuk
I
.Chattanooga, Datton, Ga.
Hartford, Waterbury,

Cooley Si Co

operate more efficiently in

can

of

St.

circles.

Employment is
still close to the peak and the
level of unemployment is modest.
Personal income is running at a
rate of $17 billion above that of

Public Utilities

LONDON, ENGLAND

pre¬

that

certain

financial

Corporate and Municipal Securities

contaminated

been

pessimism

the

by

-

.

........

-.Chicago

8C Co
Waller C. Hardy 8C Co

Farwell, Chapman

Charleston, Parkcrsburg

Washington, D. C., Alexandria, Va.
Loewi it Co., Inc.
.Milwaukee. Appleton, Beaver Dam, Chippewa Jails,
Green Bay, Janetvitlc, La Crosse, Madison, New London,
Racine, Waukesha, Wausau, West Bend. Wisconsin Rapids
W. L. Lyons & Co
Louisville, Danville, Lexington
Mead, Miller 8C Co.
.'.Baltimore
Piper, Jaflray Si Hopwood
. . .
Minneapolis. St. Paul,
Johnston, Lemon &; Cri
.

.....

Great Falls. Billings.

Prescott
Russ Si

Si Co

.

.

Sutro

.San Antonio, ht. Worth

Company, Inc.

SC

Co.*

.

.

.

,

Rochester

Cleveland. Shaker Square, Columbus. Toledo, Canton

Sanders Si Company

*.

San Francisco.

,

».

.Dallas

.

Los Angeles, San Jose. Beverly Hills

also calls for substantial increases
in

Salomon Bros. & Hutzler

a

will

provide

takes

in

private

immediate

outlook

place

Exchange

NEW YORK 5, MY.

unquestionably
Boston

Philadelphia

San Francisco




Dallas

Cleveland

Chicago

West Palm Biach

is

cloudy, there is

no

pect that
now

h

some w

tainly

reasonable
we

Co.

.

.I.

we

bounds.

have needed

a

.Montreal, Canada
Toronto, Canada

...........

A.

Bromberg

.

De

.Sao Paulo, Brazil

.Montevideo, Uruguay

Invcrsiones S.

Caracas, Venezuela

A

Tokyo, Japan

Yainaichi Securities Co., Ltd.

t

to ex¬

reason

the adjustment

a

are

going through cannot be held

within

Si

T. A. Richardson & Co
Paulo

Mercantil

the

While

Greenshields,

Julio C. & Dietio Roldos

spending.
SIXTY WALL STREET

CORRE5PONDENTS

FORE ICS

at

partial offset to whatever

decline
Members New York Stock

These

1958.

least

Cer¬

breath¬

PRIYAT "E' \Y IRE

Providing immediate

access to

W.

Saving

Western

Co.,

&

mit John S. Wynn, Jr. to

potential that exists in what

daily engaged in providing markets in high

grade securities including the following:

thereby

and

strains, the
adjustment
will prove to have been all to the
good. Certainly it is far better to
have some adjustment now than
later, and for such adjustment to
proceed from the current level
rather than from an artificially

would be premature in¬

Meeting tlie specific objectives of institutional

prosperity,

tionary

process

to assume that infla¬

dangers are
us

pre¬

recent years, and in the
relieve some of the infla¬

during

•

behind

our

for

year.

rise

to

over a

a

it may

be that the
living index will continue

near

cost of

to

built

been

have

have

we

if

and

of

some

that

ments

I can find only a
optimism. But in

for

solid basis for the renewed

a

advance

in

in

takes

'

dented

lay

ahead
we
can
the maladjust¬

period

eliminate

to

or

alternative will

exercise

ment

the

There is

choice

the

circumstances

the

keep

this

basis

meantime

liminary job to be done—to cor¬
rect some of the maladjustments
that have crept into the economy
during three years of unprece¬

Prospective Fiscal Policies

cent reduction, in the discount rate

Institutional Markets

world, the frontiers that are open¬
ing up seem endless. Looking at

Cniieot Economic Situation and
ing spell for a long time,

not only here

but throughout the industrial free

the

in

the full potential

under way,

now

solid

What
an
easier money
can do, however, is create
favorable climate for financing.
can act as a stimulus to housing

Indeed,

inherent in the vast research that
is

23

profit.
policy

nuclear

as

electronics.

the longer run,

Continued from page

fields

new

and

energy

when we survey

race.

Van-

be flexible. As

however,

course,

and
building at our
Denver
plant, has many of its
roots in this early Viking effort.
interest

of, space exploration (and we
at Martin would have enjoyed be¬

first

tion of such

We

United

lead in rock¬
etry and all those things that it
makes possible. The Martin Com¬
pany intends to make major con¬
tributions to the winning of this

age

ing

the

that

States will gain the

our

on

confident

are

Although Sputnik I opened the

a

Company's Future Plans
Our

designing

may

start

head

a

population explosion and the pos¬
sibilities inherent in the combina¬

we

always to be most successful.

competition in times to come.

have

with¬

we

ence

syn¬

business of the future

some

of

us

example of the

one

more,

remote

only

of Viking.
Interconti¬

Missile

Ballistic

the

our

on

many

This task could

undertaken

been

of

is but

where

mini¬

components

new

life

things we at Martin are doing to¬
day that will have profound ef¬

absolutely necessary and in

time for the IGY.
not

This

accurate placing
in space, and all
a

and

food

how to

products, as yet undeby exploring the fore¬
fronts of knowledge in search for
new principles of science that will

finable,

assure

note that past experi¬

shows that to be first is not

guard),

future

our

thesizing food.

guidance

advanced

this had to be done at

when

cations

In two years we

system to

learn

But this problem must be
solved
to make space
travel a
practical thing.
I need hardly
point out other important appli¬

develop a new rocket
necessarily compli¬
the high performance

by

will

co-workers

things.

was

cated

dioxide, and sun¬
starch, sugar
Eventually he and

oxygen,

protein?

synthenize

attempt to launch an earth
satellite during the International
Geophysical year (which started
last July 1 and will end Dec. 31,
1958). The job to be accomplished
Were

into

plant convert

a

oxygen.
Three months ago, very
few people could understand Mar¬
tin
Company interest
in such

that the United States

would

was

does

carbon

light
and

*
the

investigating

How

.

water,

we

had

announced

.

.

\
of

r

members

staff,for two
"What Makes Grass Green."

years

we

«*, r"

"

.

has

Because of this

other

and

y* t

were

importantly,

now.

».

senior

uncommunicable

experience

«

the

learned things of such abstraction
as

«

were

inventions
techniques

work,

29

V"*

$ Y S T E M

Primary Markets through

Branch

Offices, Correspondents and their connections in over 100 Cities
throughout the United Stales and Canada

SO

The Commercial and Financial
Chronicle

(2062)

.

Thursday, December 19,1957

.

.

«

Report of IBA Municipal Securities Committee
Chairman
ol

William

M.

Adams,

submitted

those

Association

Text

Report,

of

including

Federal and state

of

Ap-

of

Although money has continued

.

tight supply thus farthroughwith low prices and
high yields on municipal bonds
(c o mpared
in

out the year

with
els

the
of

lev¬

a

vote

Committee

Education

on

A tremendous

by

states

agencies

for

in

construction

providing

month

period from Oct
1
1956
through Sept. 30, 1957, there were

ticularly
schools, water

aggregating $2 216 363 000 for the

and

sold

in

a

meiited

large volume
J;
municipal

other
and

for

record.

The

1957

will

volume

set

new

a

each

for

the accompanying

such

federal aid.

1957,

as

public5

from

accumulated
revenues

Furthermore, in
school

the

Wc

aggregated

tabu-

maiung

qiniMjon

,.osfq

bill

study of

nnhlir

of

Committee

has

worked

on

as

Securities

1934

to

Ex-

require

held

on

it.

originally reported

on

were

~
Committee

con-

an

ripmnn

on

Senate

■*

*

July

amendment

16

Banking
-

approved

to'exempt

trans

the sources of funds for such

cunties from the fee. S. 2520, with

con-

the

amendment

and

municipal

school

districts

tional

and

agencies

rollment

of

local

with

a

300,

over

educa-

Aug. 8 and is

exempting
bonds

state

from

the

passed the Senate
now

en-

the House Interstate and

which

ag-

Commerce

011

Foreign

Committee.

1954

grants, loans and

19531952

tion of public elementary and sec-

"First

10

$1,452,696,000
1.670,488,445
1,732,414,450
3,214,381,100
1,567,246,570
1,463,350,500

3.775,931,126
4,244.089,370
3,754,260,796
3.990,640,799
2,937,966,967

1955

credit assistance for the construc¬

RcvenneBonds

$4,119,303,000

1956_—.

con¬

Fed¬

a

amend

e^,^rSt

,

held

bond

would

wouid

"cost"

of

months.

Total

$5,571,999,000
5,446,419,571

5,976,503,820
6,968,641,896
5,557,887,369
4,401,317,467

bond

$1,035

to

poses

reduce

the

oi

the

and

recently been

HUTTON

im¬

unreasonable burden

an

on

required to

were

bonds
bonds

only
at

a

they

when

the

sell

price lower than their

acquisition

cost,
provided
that
who purchase the bonds
directly from the issuer on origi¬
dealers

nal

issuance

would

not

be

re¬

quired to amortize premium for a
period of 60 days following de¬

dealer's
tax

&

COMPANY

The facilities of

our

BOND
now

municipal and corporate

DEPARTMENT

available

THE

I. B. A.

RICHARD

would

WALTER

D.

BUECHLER,

dealer

DICK, JR.,

MAIN

OFFICE:

within 30 days after acquisition

not

&

New Orleans

YORK

(2) the bonds have

original issuance and sells the
within a period of 60 days
following delivery of the bonds
by the issuer. This suggestion will
be considered by the Committee
at its meeting at the Convention

or

call

date

more

maturity

a

than

5

from

years

The Municipal
mittee

of

the

the

posed

Securities

IBA

Com¬

actively

provision

require
dealers to amortize premiums on

tax-exempt

bonds

acquired

Committee

felt

that

gestion

premium

forth

between

holding

the
on

bonds

Congress as a method of clos¬
the "loophole" without im¬
posing on dealers the hardship
that would be imposed by section
3

House

Investment
Ways

and

Committee referred to

slightly
that they can
as

Municipal

mittee

a

study the bills which
permit investment com¬
pass tax-exempt interest
through to their shareholders in
"exempt-interest dividends." The
panies to

Continued

on

Industrial, Public Utility
and Railroad Securities

State, Municipal and Public Authority Bonds

F. S. Smithers & Go.
i

ESTABLISH K.I)

1X5"

MEMBERS

Exchange

*

*

American Slock Exchange

Pacific Coast Stock Exchange
f'jt

ts'jrfr.

Mi,i/Y

■/)rc/fi'(fye (jj/f'cr
6\iO

/i

page

Underwriters arid Distributors of

BROADWAY, NEW YORK 6, N. Y.

at

1
—

6Y>//

Jct/tn/ "

WALL

Means

Subcom¬

for

would

the

recommended

EXCHANGE

Com¬

panies
The'

disappears
while
re¬
ceiving tax-exempt interest on the
bonds, the IBA Municipal Secu¬
Committee

of H. R. 8381.

'(d)

back

premium

rities

sug¬

recommended

ing

themselves

the bonds

be

pres¬

bonds

less than 30 days so

this

whether

should

to

provisions of the law provide
loophole
whereunder
dealers
trade

determine

to

op¬

to

COMPANY

STOCK

a

be

bonds

the date of acquisition.

Neiv York Stock

/!/</!

amor¬

premium

profit,1 and

a

on

or

Throughout the Nation
61

would

atA

dealer

to

Atlanta

KINGSTON, JR.,

NEW

sells

a

the bonds directly from the issuer

pre¬
tax-exempt bonds if
bonds
are
disposed of

on

the

Kansas City

HUTTON

MEMBERS

hp

be

miums

New York

LATSHAW,

34 Offices

proposal,
required
premium on any
not

bonds

Present provisions of law do not

CONVENTION:

K.

P.

tize

through all offices

JOHN
JACKSON

this

would

pur-

require dealers to amortize

report "loss"

J/"'

suggested

without

required to
amortize premium on bonds sold
at a profit or loss if he purchases

after

'

reaches

amortize premium on tax-exempt

attrib-

there

and

IL



bill

the

eliminated

posing

be 52 of taxable gain).

a

'

Finance

Senate

that the "loophole" would be com¬

(of the

be

for

may

F.

has

Under

mium

ent

E.

It

example,

the

$36 premium $1

its

year.

the Senate.

pletely

7, 1956. After it became
apparent that the House Ways and

AT

next

hearing by the
Committee when

under
this bill, if a dealer purchased for
$1,036 a $1,000 bond maturing in

Means

are

action

retains

Calendar for

,

.

(For

and

considered

it

but

the House

dealers if dealers

deductible.

states

The
Municipal Securities Committee
has requested an opportunity for a

rsiov. j,

•

increase

an

not

was

House,

on

further

1956. but only with respect to ob^at,,?»sr, acquired after such
tc; The amortization require™ent, wou'd apply regardless of

J>ow lone'be bonds wereheldI

8381

the

by

T

Nov

R.

status

°

after Nov.

F.

H.

.

Xe yea?J ending'after
J ?
ending...atter

cause

financing costs for

municipalities.

f
premiums on all.Daxexempt bonds held by them and

all

E.

in

would

it

cause

Section 3 of this

amortize"

pending before

pupil

General Obligations

Con¬
1957*___—

bill, to authorize

reported

to

"th?!

amendments.

(1)

struction

program of

8381

amendment 10 exempt trans- *00 picmium *1 wouia oe auiiD
a
d municiDai
utable to that 10-day period), so livery of the bonds by the issuer.
".
V
P
that amortization of $1
of
nre-

issues.

The Federal aid for school

Committee

J e hhernal Revenue Code of 1954
to correct unintended benefits and

he

unfair

actions in state

Fonnaires in October to all public proposed fee,

struction

Means

I'av0iahly H.R.

which

contains

it

because

provisions and (2),
urge
state
and
municipal
officials to
request Representa¬
tives to vote against the bill be¬

frlbuta^lTt^'tL period duiing
trioutaDic 10 me period'Zring

The

adopted.,
members

also

2ays l°i' 51,037, the dealer would

bonds.

snrmnnHzes^omr^nf the^rimdnal

(a) Federal Aid for School

8331

On July 9, 1957, the House Ways

f.

not

was

Newsletter

and retroactive

** would have applied to one year and sold the bond in 10

this year, legisla- struction. To obtain information
Uve, legal, mechanical and plan- for dljs
study, we sent out ques-

Federal Legislation

on

pal

many problems

I

Amortization of Premium

and

IBA

an

urged, if they disapprove of
the
proposed
amortization
re-'
quirement, to (1) urge their Rep-,
resentatives to vote against H. R..

transactions in state and munici-

tary and secondary schools and oL

eral

amend

stiuction costs ot puDiie eiemcn-

lation

The

would

the

hearings

of

$279 739 000

a

nr

no

and^secorKiary

elementary

a

Act

The

greater than the total in any one
of the 12 preceding months.

of

214 of

and

bonds

the\'onstruction

sold to finance

the past fi\e calendar years is also
in

additional funds

sources

1954, and it is possible that schools
for

shown

by

October

the first 10 months of this year is
close to the volume of the record

volume

of public

building funds, current

William M. Adams

financing. The

year of

bonds

school

of

elementary
secondary schools
This
amount will of course be supple-

o

volume

issues

and

facilities, has
resulted

2,886

'construction

sewerage

which

In

Tax-Excijnpt Bonds Ilekl by

•

broker - dealer registered
with the SEC to pay a fee in an
amount equal to 5c per $1,000 of
the aggregate dollar amount of
the price of securities sold as a
broker-dealer, otherwise than ona
national securities exchange,
was
reported favorably - to the
Senate on July 11 by the Senate
Banking and Currency Committee
as a new bill. This was an unUsual procedure because no previously introduced bill on the subtect was before the Committee

During the 12-

of

public fa¬
cilities, par¬

2520,

recommendation

areas.

every

educational

rapidly

needed classrooms

«»

tratym Fees

Section

and

job is being done
local

and

i

be

turity of five years or less with¬
out
amortizing
premium.
This

Dealers

r»

S.

(c)

2.000

over

(b> federal Broker-Dealer Resw-

change

Committee

questionnaires,

/m

testified

against the
hearings before the House

bjjj a^

12,000

and we have received
replies.

Municipal

Labor

prior
1956), the

demand

IBA

Securities Committee opposed this
bill
and
the
chairman of the

recent

years

to

The

208-202.

would

were

legislation, legal, and mechanical and planning

ondary schools, was defeated in gregated
the House on July 25 by

,

to

in

America.

vcndices. follows:

Numerous activities of interest

"loophole"

largely, if not entirely, closed by
cutting from 30 days to 10 days
the
period which
dealers may
hold tax-exempt bonds with a ma¬

municipal securities dealt with by the Committee includes study
being made of school construction costs and source of funds, and problems inl

Annual Convention of the Invest¬

Bankers

basis of

on

$7 billion record high achieved in 1954,

according to Municipal Securities Report.

registration fees, tax-exempt pre¬
mium's amortization, and metro¬
politan area and state legislation
problems, among others, to 46th
ment

borrowing for public facilities in 1957 promises,

first ten months of this year, to exceed

municipal

encouraging

covering

financing prospects, broker-dealer

the

that

Local government

Co., Detroit,
his committee's report

jdoswoi hi 6c

o.uu.,,

STREET

New York 5

RUSS BUILDING
San Francisco 4

fJ/reoYr
1857—One Hundredth

Anniversary—1957

44

Volume

186

Number 5700

.

.

The Commercial and Financial Chronicle

.

(2663)

31

Report of IBA Industrial Securities Committee
Equity financing's recent prom¬
inence, and reasons therefor, are
analyzed in report presented by

The resurgence of

Industrial Securities Committee at

importance of convertible financing

the

46th

the

Annual

Investment

tion

of

tance
Charts

the

Equity

two

and

Financing
years

than

in

the

five

clusive.

II

show

relative

«

when

the

size

It

is

differ¬

of

convertible
with

se¬

com¬

entirely possible

that not all of these issues will be

This

converted, but the charts indicate
the potential magnitude
of this

s-

certain

factor.

Industrial

11199955404678—

This would

debt, the
stock

common

combined

are

stock.

mon

in¬

di

the

curities

years

report
cusses

in

and

financing

-

1950-1954

convertible;;financing, Dow-Jones

I

preferred stock and

30, 1957, U. S. indus¬
trial corporations sold more com¬
stock

of

ence

one-half

ended June

mon

versus

City.

of

the

on

used
Reasons

to obtain

Edward

Glassmeyer

the

relative

portant,

as

increased

to

seem

costs

Average.

indicate
not

are

that

banker.

of

porations ,';to

unim¬

equity financing
greatly whenever

market has reflected

has
the

receptivity
to it. Historically,
propitious times
"for the raising of equity capital
are relatively few and, as a consequence,
the volume of equity
financing is high in periods of
favorable markets.
a

or

rise

is
dollar

Long-terra
and

The

substantial
Industrial

of

budgeting

forecasts

are

of

industrial

an

cide

how

of

financing.
financial

methods used by the

fi¬

amount

equity
financing
has
substantially in recent

capital

sales

equity

much

planning
based on

usually the
management
to

company

de¬

additional

capital
is needed. Then the chief problem

increased

both
in dollar amount and in percent¬ is to determine which of the many
available methods should be used
age of total financing, as shown
in obtaining the money. There are
by Table I.
Some of this dollar
increase is of course due to the many factors involved in this de¬

fact

that

the

that
in

of

Although
often

From

recent

to

stock

studies

make
.

more

a

feature
bond

conversion features

cluded

on

verted

in¬

the assumption that the

security will in fact be
into

stock

common

as

stock
tive

con¬

be

to

too

optimistic,

cost point of view, bor¬

yields
cost

are

of

similar, the effec¬
is considerably

debt

less.

the

market rises. This assumption may
prove

a

ing) is only about half of the in¬
terest
rate.
Therefore, even in
periods when interest rates and

that

are

owner¬

poses, and this means that the net
cost of borrowing (less tax sav¬

or

attractive,

shown

have

or

Interest is deductible for tax pur¬

securities.

the convertible
used

debt

a

rowing
almost
always
appears
cheaper than issuing stock, prin¬
cipally because of our tax laws.

these

Even

years.

use

ship type security.

faster rate than the

a

convertible

preferred

senior

whether to

conservative,
since
not reflect the increased

they do

many

fi¬

are

volume

is

of

amount

cision, but the central problem is

increased, but it is
equity portion has

recent

figures

years,

the

increased at
total

total

has

nancing
clear

dividends

stock.

on

Also

principal must ultimately

corresponding sub¬

a

stock

common

nent data for each issue.

nancing?

of

stantial increase in the volume

through rights or for cash during
the period from Jan. 1, 1956 to
Nov. 15, 1957, together with perti¬
important

a.

Dow-Jones

Average and

more

How

the

in

Under

these

conditions

not introduce

not carry

The

this risk.

greater

favorable

that

so

future debt

(2) Other corporations have at¬
Consequently, the ratio of
capital tempted in recent years to remedy
a lopsided capital structure result¬
impor¬
tant concern of the management. ing from the use of debt financing
This concern has a bearing on the in, the past when' interest rates
stress.

debt to equity in the firm's
structure is an extremely

decision between debt and equity

low

were

and

the

tax

the

The increase in

berre-

Securities Offered

Debt

Total

$6,576,824
1

be

/
/

.

noted

und£rmritin£

/

Check List
Our

experience in assisting
issuers may he helpful to
you. You are invited to
write

or

call

discuss your
one

of

our

at our

offices

V

to

/

Preferred

Securities

Common

Stock

$5,036,308

If

Stock

$778,557

$761,959

76.58%

11.58%

11.84%

$5,972,776
*
84.39%

$491,535

$613,509

6.94%

8.67%

$6,051,550

$4,890,499

$424,662

80.81%

17.02%

$736,389
12.17%

seldom.

100.0%

$6,361,043

$4,919,567

$630,822

$810,654

Methods of Raising- Equity Capital

100.0%

77.34%

9.92%

12.74%

$7,741,099

$5,690,949

$837,656

$1,212,494

73.52%

10.82%

15.66%

$7,649,363

$564,498

$1,368,551

79.83%

5.89%

100.0%

$9,582,412
100.0%

;

$8,897,996

*

-

■

$7,083,419,

•

$488,564-

14.28%

79.61%

5.49%

$7,487,583

$815,908
8.57%

12.74%

$10,240,155

$7,419,869

$635,058

$2,185,228

100.0%

72.46%

6.20%

$8,002,100

$635,527

100.0%

73.15%

5.81%

$234,701

SOURCE:

Securities

outside

issue

Continued

Exchange Commission, Statistical Bulletin.

on

UNDERWRITERS

BROKERS

Established

1868

and

distribution

Spencer Trask &

plans with

BROAD

Co.

STREET, NEW YORK 4, N. Y.

partners.

Members
New York Stock

Exchange

American Stock Exchange

Kidder, Peabody & Co.
FOUNDED

17 Wall
Bostox

Chicago

1865

ALBANY

and tAmerican Stock Exchanges

Street, New York 5, N. Y.
Philadelphia




Los Axgeles

Sax Fraxcisco

page

7Z
T

25

JMeinbers t{ew York

sources.

variety of methods for

these sources, including
of (1) preferred stock,
(2) convertible preferred stock,
(3) common stock "rights" offer¬
ings, and (4) common stock cash

21.80%

and

a

tapping

the

$1,504,624

3.40%

from

obtained

21.04%

$5,162,440
74.80%

100.0%

At

internal

this

There are

$2,301,091

$6,901,765

generated

not sufficient to meet

21.34%

$10,938,718

are

times, how¬
generation ia
capital de¬
mands, and equity funds must bo
ever,

$1,212,677

78.69%

-

business

for

allowances.

tion

14.90%

$9,516,168
100.0%

large proportion of the equity

internally through the retention
of earnings and through deprecia¬

$1,326,013

100.0%

(1st 6 mos.)—

A

funds

staff

public offerings and pri¬
placements

the

100.0%

Specialized investigating

vate

of

100.0%

Experience in formulating financing plans

Knowledge of all types of

/

of-

$7,077,820

leading under¬

Coverage

both

considerations

financing

National

in

capital structure indicate the de¬
sirability of additional equity, the
step should be taken when prac¬
ticable rather than waiting for the
market to go higher. Equity should
be secured when the time is ripe,
since such times occur only too

writing firms in volume
of

little

a

that

cases

market.

t'ijr the Public for Cash
*

1953—

1957

should

than

\

corporations
usually do not try to outguess the

($oooy\

1952____
'

It

I

DEALERS
Your

advantage

situation which

a

more

uncomfortable.

these

1—

,

order to correct

had made them

of debt in two ways:

TABLE

New

A

equity financing

in the past few years has reflected
this concern with the proportion

one

is not the case, however, as Chart
effected, a strong case can be III demonstrates. The amount of
including convertible is¬ financing with equity varies a
sues
as
an
important means Of great deal and apparently follows
raising equity capital.
very closely the ups and
downs
As an indication of the impor- of the market as measured by the

One of the

unbal¬

an

proportion of
debt in the capital structure of a financing can be undertaken with¬
out introducing a dangerous de¬
corporation, the greater is the risk
of financial difficulties in times of gree of risk.

and might expect that equity financing
would always be minimized. This

made for

almost

cushion of equity when conditions
are

the

conversion may never be effected,
but to the extent that conversions
are

is

of bankruptcy. Common stock anced degree of risk. Therefore,
equity, on the other hand, pro¬ wise management
suggests
the
vides permanent capital and does
possibility of developing a larger

obtain % permanent ■;

witnessed

have

we

stock issues of $5,000,000
which
were
offered

common

of

the investment capital when markets are favor¬
'.
able. Within the past several years

Ui The Appendix attached hereto
includes a listing of all industrial

debt

apparently
cheaper
form of financing and more read¬
ily obtainable, corporations can
get money advantageously through
debt almost any time, provided

ger

emphasis on equity fi- paid.
If debt obligations caiVnot
nancing reflects the desire of cor^he met, the
corporation is in dan-

con-

tribution
;

»

...

,

Use

Recent

business,

and

Wide

Equity Financing

/;

for

for

own¬

ership funds

Since

an

whenever new capital is to be ob- an important consideration. These
fixed, un¬ tained, since new financing enables corporations have taken advantage
avoidable payment of interest, as
the management to alter the rela¬ of the favorable stock market con¬
opposed to the voluntary payment tive size of the two
components. ditions in the past few years in

tion finance.

phasis

methods

greater flexibility for

future.

always

rights offering methods.

Regardless of whether any
portion of convertible financing is
this recent
Included in the concept of equity ;
Why do some corporations preupsurge in
there seems to be little question
fer to issue common stock?
The
equity financ¬
the importance of the role .of use
of debt naturally introduces a
ing, with parin recent corporaequity capital
risk.
Debt involves a
t i c u1 a r em¬
behind

factors

the

The unimportance of preferred

financing is shown, prior to discussion of relative merits and

considerations involved in cash

Text of the Report follows:

In

IBA.

selves with

they do

stock in recent

Glass-

of Blyth & Co., Inc., New

Amount

v

not

two of several topics stressed in Indus¬

are

trial Securities Committee report to

Committee

The

Edward

was

of

Associa¬

Bankers

America.

Chairman
meyer,

York

Convention

(1) Many corporations, although
unhappy with their existing
ratios, desired to provide them¬

equity financing relative to total financing and the growing

NASHVILLE

BOSTON

CHICAGO
SCHENECTADY

GLENS FALLS
WORCESTER

32

The Commercial and Financial Chronicle

(2664)

.

.

Thursday, December 19,1957

.

Report of IB A Foreign Investment Committee
The

Foreign

mittee

of

the

Investment

of

Com¬

Readiness of

IBA, Chairmanned

by Joseph T. Johnson, of Milwau¬
kee

Company, Milwaukee, in

and

pre¬

senting its report at the 46th An¬
nual Convention of the Investment
Bankers

private

failings of

wait

to

ors

no

of America,
foreign invest¬

longer in showing

asserts

the foresight, courage and unself¬
ishness required to keep the Free
World within the orbit of the U. S.

private and public foreign investment policies

our

studied by IBA Foreign Investment Committee.

recalling utterances made five

son,

gency

we

rning to participate in economic growth

areas yei

tion

interre¬

are

years

still attempting to settle

are

operations and

are

still

when he

ago

was

long-term crisis with the

a

gency

,

cizes much that remains to be cbne

During this past year your For¬
eign Investment Committee has
sought to accomplish two things: except in
the context of these
first, to establish contact with broader issues which I have just
governmental
enumerated.
and
private
This Committee
considered that

organizations
already active

it

who might help us to un¬
derstand the growing world and

in¬

vestments

that

its needs.

so

viewed

might

we

inter¬

and in

other countries,

Government

U. S.

concerned with foreign trade and

industry
partici¬
pate in this
work,
and
might thus
provide interour

investment,

has to

and

individual

such

authoritative sources as Eugene R.
Black of the World Bank and Rob¬
ert

of

Garner

the

International

Finance Corporation.
to

IBA

Joseph

T.

Johnson

members with

imormation. Beyond
this practical objective, however,

necessary

Committee

we

included private business¬

officials of the

opportunities

the

Those whom

here

men

discover what

ested

part of its job to interview

anyone

in the field of

foreign

was

has

attempted, in

the second place, to gain a broad

understanding - of the entire for¬

Our Report

represents the information
thus gathered by the Committee,
and its collective
judgment, on
three related topics: The expan¬
sion of world industry; the re¬
you

spective roles played by govern¬
ment and private capital since the
War in the financing of this indus¬

eign investment problem: its im¬
trial growth; finally, the reasons
pact not only upon the individual
industry which our own group which suggest that private indus¬
represents but also
areas
a

as

our

whole,

on

on

such wider

national economy as

the government of the

United States, and,

indeed,

on

the

try, especially

our own

investment

banking industry, should and
must

assume

a

greater

even

responsi¬

bility for, and share in, this

For your Committee is convinced

pansion—if the world of the fu¬

more

immediate and prac¬

tical aspects of the
ment

question

stood

or

even

foreign invest¬

carmot

be

under¬

properly discussed

ture is to

of free

develop in that tradition

enterprise and independ¬

action

ent

ex¬

which

Americans and

we

cherish

as

World wide

world

has

witnessed

during the
past 12 years is neither a mere
postwar "catching up," nor is it
just another "boom."
The sober
truth is that we are squarely in

same emer¬

the

middle

of

economic

an

and

technological development which
(barring another world war and
taking into account such tempo¬
periods of adjustment as the
is now experiencing) is
good for an indefinite period. We
may
anticipate a lengthy period
that may well surpass whole cen¬
rary

economy

turies

of

man's

And

progress.

clearly

earlier

material

must recognize

we

the expansion of
is truly a "world"
growth: increased productivity, a
mass
consumer
market, and the
that

which I speak

material benefits for
tion

which

nomic

result

whole

a

from

development

such

is

eco¬

longer

no

the prerogative of the Ruhr

plex, the pound-sterling
hard-dollar
least

to

outside
of

countries.
all

the

those

na¬

com¬

the

area,

It extends
nations

still

tant, its quickening pulse
such

in

pressed

vast

areas

and

can

industrialists.

of the earth

as

Asia,

cific—all of these, I need scarcely
remind you, countries and peoples
that

litical

stability

on

institutions

tradition

the high seas

founded

po¬

on

of law, and sound

a

world is

now

hold

crises

busi¬

out."

course,

health
could

of

as

years

was my
meaning
that to regard the

worldwide

economic

temporary crisis that

a

be

requiring

It

treated

by

massive

but

temporary
ment

injections of govern¬
funds into the starved econo¬

mies of nations politically friendly
to
us
was
to
apply emergency
to

measures

I

take

the

chronic disease; and

a

urged that

our

lead

imbalance

in

industry should
rectifying this

between

public
and
Today I must as¬

private effort.

disaster in turn invites the malign

crisis by the same emergency op¬

intervention

erations, so that we seem no closer
to
real, long-term solutions.
If
this assertion is true,
it is not
reassuring.

munism,
ment to

of

watchful

a

prepared

at

Com¬

every

mo¬

the foundering

rescue

ship
its own terms and
advantage of its own world
policy. To offset this danger of
the enstranglement of developing
free countries by the Soviet octo¬
pus there stands, as modern rep¬

—naturally,

on

sert that

we

attempting

still,

are

to

settle

nation,
long-term

as a
a

to the

resentative of

our

stitutions, the

power of

States.

This

historic free in¬

the United

"Dollar Diplomacy"

Spurred by the pressures of the
colcl

the

war,

tions

the

of

the

motivated, too, by

ours,
the
has spent

tunity which is at once a tremen¬
responsibility; and both op-

War II.

eign

ideal

benefits

economic

aid

nortunity and responsibility are
danger of being lost by default.

have

of Government and

Private

Capital

ernment and

divided
for

our

U.

S. private

national

capital

which

are

since

World

Inevitably, of

political considerations
outweighed economic

course,

often

judgment in the administration of
this program. Aid to one country
has

Turning now to the second
theme, "How have the U. S. Gov¬

na¬

enjoy

(This figure does not in¬

clude military aid.)

Role

all

should

American Government
over $40 billion in for¬

dous

in

that

world

material

political and
military but above all economic,
is thus faced with a great oppor¬
power,

and

American

too

often

had

to

be

balanced

by like aid to another, so that fi¬
nally the conviction has been born
that all countries friendly to the
U.

S.

responsibility

financing the industrial growth

have

title

to

financial

aid

'

Continued

on

page

60

its

own

¥

camp.

the huge popula¬

not

or

do¬

striving desperately

within

Whether

or

short-term crises that per¬
correction
and

long yearned for their
place in the sun of eco¬

nomic prosperity, and that the free

crises—

techniques.
Thus they are
prone to make mistakes; mistakes
produce economic disaster; and
ness

have

proper

to

own

of industrial expansion: fixed

be

long-de¬

Africa, and the lands of the Pa¬
as

our

insured

have

of

emer¬

immediate

then, of
problem

lack, in most cases,

which

succession

a

have

we

by either foreign
developments, and

to work

domination

economic

the Iron Curtain; more impor¬

felt

anchors

years

perpetual state of

long-term

prosperity has
brought to the United States; but
two

20

.

—

tween

economic

these countries

five

in the
confusion and frustration many of
us
have failed to distinguish be¬

lined, want, first and foremost, to
achieve
the
standard
of living
which

for

.

mestic

despite existing difficulties.

Growth is the keynote of the
present world economy. The un¬
precedented expansion of indus¬
trial
potential which the free

at

security of the entire free world.
that the

Growth

When,

President, I suggested

a

induced

I£A President,

closer to real, long-term solutions. Although

no

world?"

your

".

mit

the Report follows:

free

as

that

Chairman John¬

praising extent of private investment, the Report nevertheless bluntly criti¬
Te.rt of

the

years ago, I addressed this conven¬

been in

lated topics

Association

adjured

underdeveloped

tions of Asia, Africa, and the Far
East are to follow China along the
road to

Communism, or are to be
incorporated, with all their vast

Underwriters and

DISCOUNT

resources, into our free world—
this question, so fateful for the

CORPORATION

history of the world, will be de¬

distributors of

cided

in

great

part

by

whether

these peoples, too, can enjoy the
benefits which a productive econ¬

Corporate and

has

omy

in

men

Municipal Securities

brought

the

Consider
stantiate

OF

of

States.

facts

the

this

millions

to

United

which

statement

sub¬

NTfW

about

world economic growth. Manufac¬

turing
has

reached

growth

the

the

&

Dominick

risen
and

6%,

Exchanges

in

the

I

Canadian affiliate

.

.

.

trade, has

past ten years;
Dealers In

tripled. India is en¬
huge expansion of its
respectable steel output;

United States Government Securities

a

means

for creat¬

ing cheap electrical power; Africa
Turkey are turning to west¬
ern technology to mechanize their
ancient farming
techniques; on
the American continent itself, the
U. S. is being outstripped in rate
of
industrial
expansion by our
good neighbor, Canada, and is be¬
and

ing

Dominic^ Corporation

S.

than

gaged in

Egypt seeks the

NEW YORK 5

U.

of

than
World

whereas the U. S. rate of in¬

already
14 WALL STREET

rate

more

rate.

prewar

challenged

in

this

area

Bankers Acceptances

by

Mexico and South America, whose
natural
resources
are
still
com¬

Fifty-Eight Pine Street

paratively untapped.
-

of Canada, Montreal




YORK

world

crease
during this period was a
healthy 50%, trade in Western
Europe and in the Far East has

more

Stock

85%

free

annual

an

about

trade, including

Members New York, American &
Toronto

of

double

Dominick

in

output

Note of Caution
This

optimistic

picture

however, to be shaded with

needs,
some

lines of somber warning.
Many of
the countries now seething with

v,

the industrial ferment I have out-

|

New YORK 5, N.

Y.

Volume

Number

186

5700

.

.

The Commercial and Financial Chronicle

.

(2665)

33

Report of IB A State Legislation Committee
1

Chairman

Blunt

Ellis

submitted

the
to

a

State-

the

Gilbert H. Osgood of
&

Legislation

Forty-Six

Committee
Con¬

the appendices

the Report

Commissioners

of

follows:

E

I '-/V..

: :

:

Securities

State

Appendix

:V

sub¬

''

The outstanding Legislative ac¬

tions in this field were the adop¬
tion of

com-

.pletenevv.se-curiiies acts in

-

cKaiisas j i\ n d
The

new

^Kansas
>

curities Act

is

:,pa r t on

Modified

the
Uni-

;tor mStat

e

Securities Act,
and it makes

desir¬
able improvemany

Gilbert

H.

Osgood

ments

the
Kansas Securities Act.

tion of the

result

of

Beecroft

new

over

previous

The adop¬

Kansas Act is the

good work by Harry
(Beecroft, Cole & Co.,

issued

relying

by

preme

was

Court

the Connecticut Su¬
of Errors in May.

The Court there concluded that

proposed

on an exemp¬

contract

Digest publication of

and that

"variable
was
a

not

now

an

a

endowment"
"endowment"

proposed "variable

nuity" contract

not

was

an¬

"an¬

an

nuity" within the generally used
and understood meaning of those
terms.
Specifically,
the
Court

legislative proposals which includes main¬

taining close working relationship with state securities commissioners.

stated:
"When the legislature used the

word 'endowment' in the defend-

.

tion

with

the

Securities

Kansas

Commissioner.

commend

We

Harry

Beecroft

and

worth

for

outstanding

the

in insurance

Group. They
Charles

are:

strained

C.

Pierce, Chairman,
Rauscher, Pierce & Co., Inc.,

explicit

Dallas.

exempt

Carl Houseper¬

hold

to

that

the

impelling

and

broad,

language

of

of the McCarran Act makes them

from

tate the conduct of

curities

The

(1)

legitimate

new

"The

Federal

Securities

Texas

der
the

Edward

Act

(administered un¬
Secretary of. State) and

the

Texas

The SEC and the NASD

E. Hess, Fridley, Hess
Frederking, Houston.

Act

Securities

Insurance

Rotan,

Rotan,

Co., Houston.

&

intervened in the

&

W.

Allen Taylor, E. F. Ilutton &
Co., Dallas.
•
'•

*

.

Act

(previously administered

der

the

into

one

Insurance
Act

securities
creates

(of

un¬

Department)

Charles

D.
Kirkham, Merrill
Lynch, Pierce, Fenner & Beane,

administered

by a
and
(2)

commissioner

Dallas.

Bills

"Texas Securities Board"

a

three

citizens

the Governor)

appointed

which in turn

by

V

to

have

if

Even

provide

'

,

complete
pass.

the

agencies

from

regulatory jurisdiction

insurance

expressly

and

companies

variable

to

of the

whether

annuities"

"insurance"

within

McCarran

It

able

securities

commissioners

of

.

—

pany

meaning

Act.

the

hard

.

cluded

basically

the

points the securities commission¬
their

assumed that if did

its

so

intend¬

that

not

was

the

-

Court

the

defendant

empowered

proposed

dowment"

"vari¬

,

the

con¬
com¬

under

charter of Connecticut law to

issue

appears
a

r

-

.

Aecordingly,

a ques¬

are

that the basic feature of

for

be

ing that annuity payments should

over'

so-called

ida, Kansas and Utah authorized

commend

(ex-

insur—

business, there is still
as

ex-,

policy to be issued under the
annuity option would provide for
the payment, not of a fixed amount
of
money, but of an uncertain
sum, which is quite different from
the
legal concept of the word
'annuity.' Here again, the legis¬
lature employed a term generally
used and understood, and it must

excepted)

Amendments this year in Flor¬

We

decision

McCarran Act

Federal

ap¬

er.

(which
plain¬

those

tion
new

securities acts in Washington and

Wyoming failed to

all

a

cept

ahce

:•

;•

eludes

appealed
the

as

.

The

to the Court of Appeals.

tiff)

Mosle

/

case

proposed policy includes
'variable annuity option.'

a

Pancoast, San Antonio.

Wilbur

combines the previous Texas

Securities

&

se¬

business.

parlance as involving
undertaking to make payment
a specified sum of
money" •

an

regulation
formance in
obtaining adoption
pro¬
Edward II. Austin, Austin, Hart, unless and until Congress
of an up-to-date securities act invides otherwise.
The arguments
Parvin, San Antonio;
:
' 1
Kansas which will provide better
which
plaintiffs" advance
here
Ilal H. Dewar, Dewar, Robertson
protection to investors and facili¬
should be made to the Congress."

Se-

•based in large

Another important decision with

respect to variable annuities

being drafted by National Conference of

be undertaken for important state

securities

/'

ib A

Uniform State Laws; position of firms

exemptions under state "blue sky" laws; and preliminary work should

stance of the amendments to state

sin.

on

,

acts adopted this year
by the following: Arkansas; Cal¬
ifornia; Colorado; Florida; Geor¬
gia; Idaho; Iowa; Kansas; Minne¬
sota;
Missouri;
Montana;
Ne¬
braska;
New
Mexico;
Oregon;
Tennessee; Texas; Utah; Wiscon¬

surance, but investment in a di¬
versified fund of common stocks.

annuities;,

tax considerations that

tion for unsolicited agency transactions, and issuance of

■

Acts

contains the

A

■/

dealing with gifts to minors and

different law than that of

vention, held at Hollywood, Fla.
The text and

current status of variable

on

should be noted; adoption of model Fiduciaries' Securities Transfer Act and

Asso¬

Annual

of state laws

extent

of

report

Bankers

Investment

ciation's

State Legislative Committee reports

Simmons, Chicago,
summary

contract

"variable
which

Continued

annuity" contract is not in-

on

en¬

would

63

page

those states to
work

and

success

in

obtaining

cants

require that appli¬
registration as dealers

for

salesmen pass a written exam¬

or

ination,

and

Georgia

authorized

amendment

an

the

in

Commis¬

sioner

Underwriters

—

for

Distributors

to require that applicants
registration as salesmen pass

written

a

examination.

ALL MARKETS ON ONE CALL

The procedure in the new Uni¬

Dealers

form

Securities

Act

to

provide a
special state registration proced¬
ure, described as "registration by
coordination," for securities which
are
being registered under the

PUBLIC UTILITY, RAILROAD

INDUSTRIAL and MUNICIPAL

Federal Securities Act of 1933

included

in

amendments

Complete Brokerage Service

was

adopted

for

this year in the Securities Acts of

SECURITIES

Colorado,

Kansas,

Mexico

New

and Texas.

Dealers, Brokers and Dealer Banks

II

"Variable
On Sept. 3,

^

Annuities"

1957, Judge Wilkin,

Public

in the U. S. District Court for the

W. C.

Langley & Co.

District
the

Members New York Stock Exchange

115

Columbia

NASD

against

dismissed

the

The

Syracuse

substance

given in
"The

the

of

facts

variable
the

seems

annuity

purpose

and in-

defendants

and

plan of the Investment Com-

RAILROAD

AND

"ft

for

Municipal, State and Revenue Bonds

within

the

terms

-J(

the

so

hold if it

clear

and

were

the

fact

that

the

explicit

defendants

are

★

surance

trict

Listed and Unlisted
"ft

Preferred and Common Stocks

★

departments of this Dis¬
the States where they

NEW

YORK

AMERICAN STOCK

STOCK

regulatory jurisdiction over
companies and in¬
surance
business
except
such
agencies as it then excepted or
might in the future except. SEC
has not been made an exception."

EXCHANGE

insurance

"In

EXCHANGE (ASSOCIATE)

view

defendants
ae

WALL STREET,

TELEPHONE HANOVSS 2-9500




NEW YORK S, N. Y.
TELETYPE N. Y. 1-344

as

of

insurance

District

of

the

have

that

fact

been

the

questioned

companies

by

the

Columbia- and

their

have

been

contracts

Established

1892

MEMBERS

NEW

YORK

AMERICAN

115

Broadway, New York 6

STOCK

STOCK

•

EXCHANGE
EXCHANGE

Telephone REctor 2-2820

chartered'

)

approved by the Insurance Super-

*
*

★

MABON & CO.

.

from

MEMBERS

★

.

.

*

.

and

.

Laurence M. Marks 8e Co.

*

★

,

operate.
."
"When, however, the Congress
passed the McCarren Act
.rit
excluded
all
Federal
agencies
all

★

"fC

licensed and regulated by the in-

SECURITIES

*

.

language of the McCarren Act and

MUNICIPAL

'i

.

This Court would feel

Act.

constrained to
not

:

*

★

★

Act, and

the

PUBLIC UTILITY,

★

to

con-

tendment of the Securities

pany

*
.

is

logic of the law applied to

the

within

tract

decision

the

r

brief quotation from it:

a

established

bring

INDUSTRIAL.

*

Convertible and Foreign Bonds

Variable

Annuity Life Insurance Company
of America and the Equity An¬
nuity Life Insurance Company.

Tel. BArclay 7-8800
Boston

Utility, Railroad, Industrial,

brought by the SEC and

case

the

New York 6, N. Y.

Broadway

of

Bell

System Teletype NY 1-2152

34

The Commercial and Financial Chronicle

(2666)

.

.

Thursday, December 19,1957

.

(

facing

job

Prodigious
bankers

ment

well

as

invest¬

Public Utility Securities Committee

covering the utility se¬
Chair¬

tee report

curities field presented by

Dillon, Union Securities & Co., at
46th

the

Investment

the
tion

of

Convention

Annual

$5.3 billion for 1958 to

of

Bankers Associa¬

in

America,

change by

Hollywood.

some

Iowa Supreme Court, and

economy.

bringing the present total to over
$30 million. Construction expendi¬

Nevertheless
we

continue to

be

most

mission showed

the

11.6

Young

large scale

ternity will remain unabated.
Inasmuch as prophecy for the
future should be based

up

past,

on

reflec¬

append

we

to

report brief tables that point
the picture of continuous ex¬

pansion in the utility industry. In
each of the three divisions, vast
investments in facilities have been
made

over

the

decade

past

amounting to a total in excess of
$48 billion—$25 billion for electric

$10 billion for

power,

mission

billion
rate

and
for

gas

distribution

telephones.

accelerates

each

trans¬

and

$13

Still

the

year.

In electric power,

installed gen¬
erating capacity at Aug. 31, 1957
was reported at
125,754,000 kilo¬
watts,

an

year ago

increase of 6.6%

over

a

while output in the latest

12 months

to

an

increase

of

Growth

gained

some

5.9%

over

Indicators

population. From

the century,

in

$2,431 million in

since

recorded

reached

of

will

exceed

our

population

1956

over

annual increase of 7%

90%.

and for the

During

last year,
new investment made in telephone
plant amounted to $2,038 million
and at Dec.

billion

The

128.3

of

by the

and

3.5

million

1.6

>

2.9

this

late

is

or

1960's
In

present

billion.

now

in

or

it

upwards

amount

million

1.6

average

this

.

National

i

at

rate

a

Product

of

about

,

.<

and

in

nearly

double

to

million

27

the

a

should

year

billion

spurt

to

and " distribution

facilities

for

•

1958A to

something

months

of

look

into

the

for

that

The

upon a

industrial
F

R

B

because

projection is made for
production
with
the

future

index
of

cumstances

at

232

changing
and

in

1970, but

labor

further

cir¬

automa¬

a

their

their

have

to

be

new

ence

securities

of

The

fact

had

that
to

ago

is

new

The

maintenance

mosphere
to

to

Costs

utility

well

too

record

relative yields

SERVICING

of

BROKERS AND DEALERS

31,

using
Trust
and

3

1957

data
Co.

for

cost

nies

Oct.

dwell

reported
stock

correspond

by

cf

of

such

intimate

bankers

rates

lishing

have

have

higher
higher
compa¬

public

to

as

commis¬

utility

sent

Earlier
of the
a

this

year

"Wall

to

the various regulatory bodies and
the answers for the most part were

Irving

reassuring to

the

1,

Commissions

would

2

effect

Continued

approximately

that

be
on

the

sympa-

page

Underwriters and Distributors

Corporate and Municipal Securities
♦

Specialists in

Members

New

Members

American

20 BROAD STREET

York

Stock

Rights and "Whp Issued" Securities
♦

Exchange

Stock

Exchange

J)ONNELL 8c CO.
Established 1905

NEW YORK 5, N. Y.
Members

Telephone HAnover 2-5000




New York Stock Exchange

Teletype NY 1-1110 & NY 1-1111

120

—

American Stock Exchange

Broadway, New York 5, N. Y.

Telephone: REctor 2-7800— Teletype: NY 1-3489
NEW

YORK

—

a

Street

questionnaire

SINCE 1878

ASIEL & CO.

as

expressed

meant

worried

have

rates.

Journal"

1956,

groups

well

as

capital for utility

and

at¬

an

concern

managements.

staff member

of

as

31,

investment

sions would give proper weight to
the higher cost of money in estab¬

purposes
of
show
below-

securities

and

The

to

of

investors

whether

different types

on

utility

public

Oct.

known
do

we

encour¬

the exist¬

on

about the fact that

interest

utility companies
much more for

is

investment

Some

pay

However,

upon.

be

must

cooperation of
regulatory authorities in permit¬
ting an adequate rate of earnings.

their money this year than a year

the

to

the

and

concern

have

able

be

to

favorable

a

climate

money.

Financing

are

aged. This depends

billion would

$45

year

utilities

depreciation in retained earnings.
of

given

obligations
to
the
public the free flow of funds into

billion of'which $25 billion might
be expected to be available from
balance

a

owned

construction program of about $70

The

temporary financing

fulfill

Electric

and 1970 with

of

the cost will aver¬
period of time.
;
We have regularly stressed in
these reports that if the privately

portion
of
the
companies
were
faced

now

com¬

age out over a

investor-owned
electric
between

year.

same

Pennsylvania

some

interest fates may be high or low
in

taken •-by

the

While

have to raise money annually, or
almost annually, and that while

by 1970. The de¬
capital by this industry
will certainly burgeon in the years

was

the money; raised in
otherwise have been

utility industry has been
whatever the; going rate
for money might be on the theory
that these companies ,are going to

Association. He estimated that the

present.

interest

higher plane

pay

mand for
•

that

a

the

$11

over

before

industry

nine

on

1956.

use

to

billion annually

now

a level of $671. ahead!
1
62% higher in 1970 than
Another

or

of

in

in

will

residential customer could
multiply his present con¬
sumption
four-fold
and
should
produce $11.5 billion in revenue

division of the utility

;

than at times in the past we feel
that the preponderant sentiment

pyramid
from
the, $4.6
billion
scheduled for 1957 and $5.3 billion

2.5%

double

be

might

more

"transmission

necessary

easily

one

5.22

'

panies have been inclined to make

kilowatts.

average

immediate future. Discussing only

5.72

obvious

some

raised

this

counted for about $140 million of

even

,

many companies
proceeded with financing

1957

1957

the President of
Pennsylvania Power & Light Co.
at a presentation earlier this year

enormous

4.93

heretofore

and

16.4

or

With consumers' dis¬
posable income boding to increase
60% to $474 billion in 1970, the

pect

4.86%

5.45

first

became

than

Financing this development along
with

each

starts

1957

close

at

of; 26%

*y

at

previous period of
expansion, we must ex¬
further growth in the

5.41%

as

rates would

pro¬

million kilowatts
in 1958. By 1970 the annual addi¬
tion to capacity is expected to be

and then

year.

Gross

the

an

amount,

a

households will increase 34%- and
home building to keep pace must

gaining

times

$1,350 million of capital in
1956. General Telephone System,
largest of more than 4,000 inde¬
pendent telephone enterprises, ac¬

imposed

the

year

,

1970

predicted
total

a

1956. Between

about

money.

4.69

accompanying this report, can be
traced
in part to
reluctance of
utility companies to sell bonds in
the latter part of 1956 when inter¬
est rates were firming and
many

are

this rate and reach

Notwithstanding the fact that
these new highs have been super¬

5.29

compared with last
year, shown in an appended table

year. In order to handle
increase, expansion of net
installed
generating capacity- is
planned at 8.5 million kifowatts

million

million

million.

31,1956 stood at $19,880
million. American Telephone and
Telegraph and subsidiaries raised

new

4.42%
4.46

big increase in bond financ¬

ing in

632

kilowatt

with

compared

as

three

such

an¬

beginning;, of
have
already

we

year,

212.7

to

the

rate

a

Similarly the telephone industry
revealed
further
growth.
Tele¬
phones in service at the end of
51,344,000 for the Bell
System and 9,112,000 for inde¬
pendent companies, reflecting an

353.4

at

trillion kilowatt hours

average

an

increment

1954.

were

292

to

is the certain growth inr duced last

economy

as

1955 and

4.97%
5.04

in all, this prognosis is for
such "a
industry-wide production of managements felt that
trend might be temporary.; When
energy
in
1970
of
1.7

an

The mainstay for our expanding

nual

compared with $1,413 mil¬

of

sales

hours

'

electric

12 months

the

4.06

*Yields to Maturity.

in¬

All

sum¬

marize them here.

30, 1957 were at $3.85

record

over

decade,

should

we

hours

1956" and

lion

H.

Harold

financing. We do not doubt, there¬
fore, that the challenge to the
utilities, the regulatory authorities
and the investment banking fra¬

the

perhaps

dustry,

by

to

growth of suburban communities,

sales of

as

3.76

4.63

_________

Com. Stocks

commercial and all other sales

the utility in¬

well

as

present

31,'57 Oct. 31,'56
3.66% '

4.40

Group I____
Group II___
Group III__

billion for 1970. Likewise with the

forecast

bankers

Oct.

A__

Pfd. Stocks

power

destined

kilowatt

by the
year 1970. As these indicate the
prodigious job facing investment

lion

in

of

comparison with $1.6
$1.3 billion in

from

crease

billion

is

the

4.30%

A

un-

tion, demand for electric
manufacturers

for

Double

Group I____
Group II_
Group III

demand for electric energy

preceding similar
period. Financing for the calendar
year 1956 amounted to $1,583 mil¬

be

tions

in

Revenues for the

billion

the recurring need for

our

1957

1955.

near

will

trans¬

expected to reach $2.13 billion

ended June

longer

respite

there

and

further rise and

are

billion in

terms and that

no

a

for

pattern of
growth in the
public utility
industry
will
persist over
and the

distribution

for

tures

con¬

fident that the

both

notes several

grouping

Triple A___

favorable situations.

Report follows:

Perplexed by spinning satellites
and wondering what the effect of
the previous similar period. New but illustrative of all, "Electrical
counter strategy may be,- we lack
money
raised in the first nine World" in its September 2nd issue,
the prescience to guess the im¬
months of 1957 surpassed all pre¬ presented a forecast for the next
mediate overdozen
vious efforts at $1,985 million.
years
and
assembled
a
a 11
direction
The gas industry added another number of projections upon which
of the Ameri¬
to base
its anticipations, of the
800,000
customers
in the year
can

energy

regulatory bodies allowing higher rates of return and affirma¬

tion of "fair value" decision by

Florida.
Text of the

*Bonds

offers the prognosis that electric

$11 billion annually by 1970. Finds reassuring the

over

quality

bonds:

financing, for example, will pyramid from $4.6 billion scheduled in 1957 and

Harold H. Young, of Eastman

man

the

to

Confident the utility industry is headed for continued accelerated growth, the

utility

as

industry is depicted in a commit¬

DETROIT

—

CHICAGO

76

Volume 186

Number 5700

.

.

.

The Commercial and Financial
Chronicle

(2667)

Report of IB A Canadian Committee
Temporary slow down

in metals, forest

products, and capital spending is

dicted in Canadian Securities
Committee report which
less favorable 1958
year than 1957 does not deter
tions of Gross National Product
three times
natural

hydroelectric and uranium

gas,

are

optimistic long-run expecta¬
higher than 1955. Outlays for
believed unaffected by overall

trend, but report reveals American tariffs' threat
'•■-'■"v.

vs';::-

-

>.

pre¬

holds, however, that

to

Canadian lead, zinc, and

.trade in general.

•

■

•
■

Securities
State, Municipal

and

Revenue

Bonds

Municipal Department

qAllen

&

Company

Established 1922

C. J. DEVINE &CO.
4ft Wall
OiicofO

•

Street, New York 5
loiton

Cleveland

•

-

Philadelphia

Cincinnati




*

HAnover 2-2727

-

-

•

Wotfiington

Sf. Louie

'

•

*

•

NEW YORK 4, N. Y.
,

Pittiburgh

Son Franeiteo

35

36

The Commercial and Financial Chronicle

(2668)

''-V"

us,

that

we

*♦

IBA's committee experts
ket and

bonds review Federal securities

government

on

point out that in 1958 the Treasury's refunding

that the Treasury

monetary policy and avoid further
inflation.
The Chairman of the

will total $48

program

$1,750 million of a redeemable
note, and established a common
coupon rate —4%—for all three

in past

of First Boston

issues

decade, and introduction of 4% rate and concept of

new

redeemable note.

a

Convention,

Annual

The Report

reads

as

follows:

high-grade markets fluctuated
widely throughout the year.
In
the government market, the yields
on
90-day Treasury bills ranged
from a low of 2.89% to a high of

mild pessimism of recent
Throughout the year, how¬
ever, the corporate and municipal
markets have been under heavy
the

to

weeks.

to provide funds to in¬
During
1957
the volume
of crease
plant capacity, build roads, 3.66%; the long-term 3% bonds
Treasury financing of marketable
schools, and other public facilities declined almost 9 points from the
securities exceeded that of any of
demanded by our enlarged econ¬ high of the year before making
the past ten years. Excluding the
In other
omy.
The savings of the country, any sizable recovery.
weekly roll¬
though increased during the year, sectors of the bond market, the
over
of bills,
never seemed to catch up with the
story is almost the same—yields
the Treasury
demand for their use. Federal Re¬ increased until the 5% coupon was
marketing op¬
serve
credit policy during most common for the new issues of
pressure

in 2*2 years. All issues were heav¬
ily ever-subscribed and prices in
the
short-term
market
quickly

erations

taled
than

to¬

more

$65

Of

were

ties
year,

tent

-

new

Reserve

discount

rate

past

from

years

concern

of
Emil J. Pattberg*

over

$1 billion of

over

Unlike

the

investors' dollars.

Recent

restraint

trict

of

action of the bond market in 1957
in any short paragraph. However,
it can be said that there were very
few dull moments. Business sen¬

has

an,

until

important

the direction of bond

prices, fluctuated widely from

that

looked

investors

were

also

part of the corporate

the

borrowed

reserves

Federal

Reserve

the circumstances, this was a

that

of

some

the

tween

rec¬

Aug.

steam

1

and Oct.

Under
most

1.

undertaking,

formidable

even

The effect of the Federal Reserve

though about $15 billion of the
maturing debt was held by the
Federal Reserve System and Gov¬
ernment trust accounts. All parts
of the
investment market were

action

congested.

out of the boom and that the

had subsided to a manageable
<date, at least for the time being.

omy

to

dramatically lift the

level of bond

prices and lower the

was

securities.

the

Even
market,

Treasury
reliable

yields of all high-grade fixed in¬
come

that

raised

higher.

the reduction in the discount rate
and a perceptible slackening in

of

the

but

subject

to

means

borrowing,

was

-

short-term

until

for

then

a

emergency

giving

signs*of

for

credit.

The

Treasury's offering—straight ma¬
turities of five-year 3%% notes

concept

redeemable note due in four

a

years

demands

new

Besides setting the 4% rate, the

introduced

cash

marketable

Option to Holders

Treasury

(ad¬

Treasury again
through offerings of
securities, but the
market atmosphere had changed
drastically since September with

available in the Govern¬
market, and the after-tax
equivalent yields of some of the
discount securities outstanding
ment

even

an

Last month the

ready

were

the threat of

Impact of Credit Ease

al¬

were

more

as

ditional supply was removed.

and

17-year 3%%

bonds

—

were

redemption

heavily over-subscribed, inducing
the Treasury to make preferential
allotments to savings-type inves¬
ment, offering investors protection tor categories. These issues have
against the changing interest commanded premiums in the sec¬
structure, turned out to be a suc¬ ondary market
ranging up to 2Vz
cess
in the refunding and was
points. The $10 billion certificates
used advantageously later in the due Dec.
1, 1957, of which about $8
year in a borrowing operation for
billion were held by Federal Re¬
at the holder's option in two years.
The idea of a convertible instru¬

cash.

serve

The

big

refunding of¬

summer

and

a

one-vear

More

exchange.

accounts,

were

3%%

one-year

ing to less than $150 million.

billion

$2J2

Why Government Borrowing?

of

Perhaps

explanation should
reasons why the
Treasury needs to borrow large
sums
of
money in
a
period in
which the Government is operat¬
ing with a budget surplus. The

notes, quickly nick¬

More than $10

be made

Almost

billion

billion

$8

of

cer¬

chief

some

to the

as

reasons

are

related

the

to

timing of tax collections, the turnins of savings bonds for redemp¬
tion, and the fact that maturing

tificates represented exchanges by
the Federal Reserve System and
Government trust accounts.

marketable debt is

In the last half of the year the

Treasury sold

a

certificate, with attrition amount¬

note is¬

the conversion into the short

the

into

4% certificate be¬

than

certificate.

and Treasury

refunded

fered holders of maturing securi¬
ties a four-month 3%% certificate

went into the one-year certificate,
and slightly less in the four-month

the

for

authorities

reason was

or

July made plans
refunding of nearly $24
billion of securities maturing be¬
the Treasury last

of

point
nearer parity with the banks' ex¬
cess reserves. It was apparent that
a

improved

named "2 by 4s" was taken on the

was

banks

to

One

4%

the four-year

member

recede

of

with this background that

It

to 3%,

abruptly from 3M>%

and let

yields

sue.

4% Coupon Required

discount

the

get the job done, the Treas¬
had to designate a 4% interest
coupon for the first time since the

sides the redeemable 4%

financing pattern.

inflationary pressures of our econ¬

It is difficult to summarize the

addition

thus became

Reserve

reduced

reduced

Banks

rate

was

which

not

was

demand

the

country

asking for protection against the
possibility of their investment be¬
ing refunded at an early date.
Higher call premiums and nonrefundability provisions for five, ten,
and even longer periods of years

Cutback

Federal

out

of the

last month when the Reserve Dis¬

ognized

Few Dull Moments

Rate

of

force

The

a

serve

In

to

I

bonds.

ration

to

unquenchable.

rise in the cost

the

and the symptoms
in evidence.

living

boom still

on

savings

to

was

3%

called

Investors were

borrowings.

thus

available

V/2%, reflecting Central Bank

operations, most of the fi¬
nancing this year had to be car¬
ried out in a booming atmosphere
of widespread credit demands, a
restrictive credit policy by the
Federal Reserve System,
and a
market which reflected in yields
the keen competition of private
industry and public bodies for the

on

a

a

term

influence

to

increased for the seventh time in

1954

timent,

always
substantial ex¬

by borrowings from the Re¬
System. In August, the Fed¬

eral

the

including

longer

highest-grade corporate securities.
Prices of new tax exempt issues
also reflected the heavy weight of

Un¬

almost

were

out-balanced

sold

beyond

restrictive.

was

serve

this

maturi¬

with

banks

cial

amount, more
than$103/2 bil¬
lion

year

pledged reserves of the commer¬

bil¬

lion, or some
$3 billion
greater than
the previous
record year of
1954.

the

of

To

ury

Fall of 1933.

comprising the package. The

note

was due in five years,
redeemable at the holders option

billion in 1957, highest

York City,

46th

ten-month certificates

of

million

will attempt to continue to improve maturity composition

of the Federal debt. Notes formidable financing of $65

Committee, Emil J. Pattberg, Jr.,

tion's

'

placed major reliance on other
maturity areas and offered $500
million
of
12-year bonds, $750

mar¬

billion, excluding regular bills and tax anticipation issues. Expresses the hope

will be able to retain

Hollywood, Fla., Dec. 1-6.

Thursday, December 19,1957

.

.

and

good debt management, fiscal and

Corporation, New
delivered the report at
the Investment Bankers Associa¬

.

..

past

financing

growing problems now facing

of

*

ury

and expected
by IBA Gov¬
ernment
Securities
Committee
concludes with the hope, in view
of

Review

Federal

"

in

never

refunded

full; the Treasury always has

than $10 bil¬
lion
of securities
for cash, not
counting the weekly turnover of

to pay off some in cash.

Treasury

of the calendar year.

$4%

more

bills.

billion

discount

Of

was

bills

April of next

this

in

the

in

due

amount,

form

March

of

and

The sales of

year.

In respect to taxes, most collec¬
come in during the first half

tions

The Treas¬
ury's practice, therefore, has been
borrow in

to

the Fall and

repay

Service

*

exhaustion.

yields in all of the

Basic analysis

amounted to

If the Government's cash

offerings.

and

the debt in the Spring.
The cash attrition on refunding

had lost its absorptiveness because
of the congestive effect of repeated

Prices

these

vealed that the short-term market

booming optimism earlier this year

retirement of debt thus turned in

special bills and the subse¬
quent secondary market action re¬

The

Market facilities

•

In

operations

Financing

has

August the sale of bills due

f-

Singer, Bean & Mackie, inc.

going market yield of 4.30%
the wake

of the

ap¬

demand debt.

sale.

■'

the

1953 there

At the

were

beginning of

outstanding $31V2

more

in cash,

billion of savings type securities,

short-term

market

excluding the Series A, E and H

$3V2 billion

with

Continued

clearly in over-supply, the Treas¬

on

vaqe

"

NEW YORK 5, N. Y.

Established/1928
We

HAnover 2-0270

"

ing retirement of nonmarketable

a

and

1

redemption, the Treasury
course but to go to

other

The third reason is the continu¬

to raise

•

no

the market and borrow.

Faced in September with the need

.

Offer

a

NY 1-1825 & 1-4844

comprehensive investment
AND

dealer service

FIRM TRADING MARKETS

in

all

classes

HI OVER 360 STOCKS

of bonds and

stocks

including

public utility—railroad—industrial
foreign issues
*

Direct Wires to

We

*

are

Particularly Adapted to Service Firms
With Retail Distribution

Evans MacCormack & Co.

Burton J. Vincent & Co.

Los Angeles

Chicago

Reynolds & Co.

Dallas Rupe & Son, Inc.

Philadelphia

Dallas




1957

in April, 1958 incurred an average

pearing in

■

year

than $3 billion.

cost to the Treasury of 4.17%, with

t

40 EXCHANGE PLACE

more

surplus
is not large enough to finance the
for cash

August

during the

Your

P.

F.
120

Inquiries Solicited

FOX &

CO., INC.

BROADWAY, NEW YORK 5, N. Y.

Telephone

REctor 2-7760

'

Teletypes

NY 1-944 &

NY 1-945

77

Volume

186

Number 5700

.

.

.

The Commercial and Financial Chronicle

37

(2669)

Report of IBA Nuclear Industry Committee
<

A report

the "Present Status

on

of

the Peacetime Applications ol'
Atomic Energy" was submitted on
behalf of the Nuclear
Industry

Committee

to

,

Convention
Bankers

the

46th

the

of

radioactive isotopes will

Annual

of

the increasingly important economic role

on

America

of usable energy.

source

by Chairman Dr. Paul F. Genachte,

play, and the

who

is
Director of The Chase
Manhattan Bank's Atomic Energy
Division.
- '■>,
;
;

Report

financing requirements for the in¬

vast

covers

feed material plants, manufacture and

'

as

a

new

chemical reprocessing of spent nuclear fuels and "waste"
disposal, and

The

public

metals.

utilities, coal, petroleum, automo¬
tive, and steel—are readily iden-

energy

T

tified

industries

as

separate component parts

as

of

(f) New metals.

economic
t

s

plays
the

various

of

a

inert

medical

nc

sources

of energy

coal

such

or

time

em-

brace, all

•

activities

of

The

earlier

forms

and in the

same

of

particulai

phase

into

two

Radioactive

energy,

stable

knew

we

isotopes

of

of

of

ofi
1946,

atomic

of

y 1111

the

of

use

cyclotrons

this

AEC

—

elements

the last

ten

of

period.

among

dioisotopes regain
after

a

more

a
less

or

half-life.

their

doing,

they emit alpha and beta particles

said:

and gamma rays

the

tected by

which

their effect

can

on

provides

wTh^remphajSeasingly jmportant

mounting

^he years

Yet,

what

makes

atomic

representing many times
"
perhaps 20 to 50 times — the

energy,

combined

To

gas.

coal, oil

be put to
of

source

known

energy reserves

in

exist

to

energy

and

substantial

investment
-X

quired
,

.

return

in

the

natural

program.

iw~the
„

.

.

-

1

the

whole

0f

.

be de-

materials,

"can
coin

only

of

be

mechani-

by

■

thorium ores;

iso-

thorium
the

ores

present proven domestic
'
'
amount to about 70 milaveraging
around
5
pounds of uranium oxide—U808—
Our

,

tons

ton, thus containing 175,000
of uranium oxide.
At the
anticipated 1959 production rate,

known reserves
supply. While

presently

our
cover

ten-year

a

Vsaffitory^'is

thU

parable

to

our

in fields such

position
petroleum and

reserves
as

without

further

.

(c) The construction and

small and thus companies work-

tion

of

toPeS bave. not been hindered by oxides
lack of
investment funds.,

metal

feed

material

...

published an estimate of prove
Canadian ore reserves oL225 m -

-

opera-.
_

plants

are transformed either into nomic 'ore in
md
or,

in the

case

of uranium,

.*

• -

-

the ^Northern and

Continued

dignity

and

&

Co.

Wires to:

Private

We Make Markets

Glore, Forgan & Co.

Chicago

J. N. Russell & Co.

Cleveland

Dallas Union Securities Company

Securities

Baker, Simonds & Co.

Detroit--

Ring and Company

Rapids
Coburn

Hartford

and Middlebrook Inc.

Houston-Underwood, Neuhaus & Co.
Los

Angeles

Harbison & Henderson

Philadelphia

,-H. A. Riecke & Co. Inc.
Arthurs, Lestrange & Co.

Pittsburgh

-

Inquiries Invited

Fusz-Schmelzle & Co.

San Francisco

Walter C. Gorey Co.

A. M. Law & Co.

Spartanburg

INSURANCE STOCKS

CORPORATE & MUNICIPAL BONDS

Troster, Singer & Co.

Oldest Specialists (with Predecessor Firm) in Insurance

Institutions

since

1927.

N
I

WILLIAM

t.:i

"IN THE HEART OF




TRINITY

PLACE

Dealers Association
NEW

YORK

6, N. Y.

STREET, NEW YORK 38, N. Y.

Telephone BEekman 3-0626

:

Members: New York Security

74
110

on page

SPEED-DEPENDABILITY

Exchange

Underwriters and Dealers in

and

•

T'

Mining & Refining Ltd. of Canada

St. Louis

•:

aggres-

;

A few months ago, the Eldorado

pounds of uranium. ^lde' *h^
containing some 237,000 tons of
uranium oxide.
More recently,

■

.

topes is in all instances relatively

•

ll0n tons averaging aiound 2.1

uranium
,

Banks, Brokers & Dealers

Dealers

of

and

of

oxideg;

to

i

end

for the extraction of

Milling

(b)

™

re~
,

these

in

nuciear energy production are:
1
(a)
Mining of uranium and

'

Shelby Cullom Davis

•

the

rate of 8 million tons

reserves

lion

position

^

involved

in

measured

human

happiness."

York Stock

year.

per

Grand

Serving

per

tons

activities

Over the Counter

Stocks.

ore

per year.

new

Dallas

111

of

Broadly speaking, the various sive exploration work.

industrial

in

Members New

t/a

1958

con-

£

total

..

tons

double

probably

be

or

indeed very great.

atomic

.

a

atomic energy development are others, we could not maintain this

x,

-——

use

in the United
production of some

industry

million

3

must

where capital requirements are
nominal, capital requirements for

very

Thrwomfoi
The capital

nrnuram

.

on

sizable

States with

this

cal energy or may be used as heat,
all different forms of energy. Un-

1 COnproportions
a

mining has become a

Uranium

use,

verted into electrical

...

to g[ve us

-•

additional

on*.a

accelerated

so

over

a

amount to $400

savings of.$200 million per year:
:very^ conservative basis.!
^nd we should add to those figUres, the savings in human suffering which> as Dr> Wiuard p.
Libby, Commissioner of the AEC,

Ra-

stable form

In

of

which almost
half is hi oil well stimulation appiications. It has been estimated
^hat ^he usc 0f radioisotopes in

decay process expressed in terms
of

aspect

miiRon per yeai*,,of

bombardment of
m
fissiqn.

second

in the Canadian Geological Survey
°f the end of 195(i- ing in the field of radioactive iso-- which the uranium and thorium reports indicated reserves of eco-

as

ln4. re* agriculture

If.

more nearly

atomic arma-

pay for

Ores

Energy

80 vitally important is
that it is a new source of usable

y

,

,

onprffv

1

separation of the fission products

emitted

v"

the

of

economically and otherwise

j

In other words, isotopes alone

energy

"probable high,"

-^active are obtained either by the
isotopes produced in reactois

neutrons

We cei-

savjngs described above.

ae-

^^^"tL^^nrhh'ahle^'ioW^

102

these

being man-made. Radio-

orf

was

industrial users to estirnatethe|nnual savings brought
ahout through the use of radio-

other

radioactive isotopes of

1,000

World could

in

about one-third

ha^c^mdimerf^ifiriniiv tnmA isot°Pes
elements

1957,

May

A survey was conducted by the

through

and

this,

of

..fUVCI'L

,

of the nuclear reactor and

to

92

natural elements. With the advent

ct
di
j
,„lulalc,uutms
llLS-

by

is

the

j

ijbbv th-TK

F!r?m AVSU5 ' !
y-have
shipments ot tinue

counted for in the last 12 months

270

the

$30 million.

Source

~that radioactive isotopes will Ore production in the U. S will

organizations naa oeen ment out of the $5 billion annual

*

radioisotopes in tne United states
reached close to
270,000 curies;

some

81

ESI

f^e^cln^e to i,/uu weic Induscio^e kflTOo'were6 inaus

Isotopes

advent

hv

tnese,

of

the

£ ettol
in excess ol

field.

Mining of Uranium and Thorium

Capital Required for

^ end of June, about ment and atomic pmyer develop-

jVi*.

.»

energy as a new source of energy.

Before

are

issued licenses to possess and use

fields; first, raisotones: second
isotopes; second, ntomic
atomic

dioactive

will cover the main
atomic energy in the

aspects of

tomic energy

°ized

^

Broadly speaking, however, the
peaceful uses of the atom can be
divided

This

.

'S and^edtetributioti
atomic

the

New

It

energy program.

canization without sulfur, and the topes will offset all atomic energy
like*
costs. This would mean the AmerAbout 100 private firms are en- ican peopie and ^ Western

indus-

way every

aro

Witnhv <?ii ! p

impinged
industries,

different

many

of this report

n

beneficiation and refinery three,, meaning sometime in i960
batteries where tiny amounts
\
through the use of iro
of power are needed, heatless vulsavings imougn tne use ot iso-

energy have in the past
upon

entire atomic

we"

and will color the entire economic

spectrum.

therapy,

and

stud'evindustrial ladiogiaphy, oil five years—probably

the

nation

a

diagnosis

^^^to whfch^ they
au^tlial uses to wnicn tney
{£«

pe-

troleum, will

industrial

which

response

Extensive

agriculture, physical and chemical is estimated that in tour or five
research and the sterilization and years, all such savings will have
preservation ok food. Theie aie increased to a yeaily figure ot

casewith other

ill

by private industry's

dominant governmental control both here and abroad.

New uses *or these isotopes are
All these facts clearly define
founcl almost each week in medi- the positive and immediate benecal ancl biological research, in fits which are derived from the

na-

has been the

as

these various

international

Atomic

ener^v

basic

remove

and milling,

domestic production is

our

closely integrated with worldwide
production,
our" comments
on
phases of the atomic
energy field will deal with the
situation at home.
The last part

Sees the

energy sources.

well-

a

tion

Dr. Paul F. Genachte

projects; and is encouraged

should

each

industrial

life

predicted heretofore, the date when atomic

will become competitive with conventional

ructure,

since

as

Excepting mining

.

where

date pushed back to 1965-67; notes sizable increases in estimated costs of the

nation's

a

Doubts 1962 will be,

disposal;'

new
;

basic

—

separation of it

subsequent

uranium-238;
(d).The manufacture and use of
nuclear reactors;
(e)
Chemical reprocessing of
spent nuclear fuels and "waste"

of reactors and their components,

The text of the Report
follows:

hexafluoride

uranium,

and

construction and operation of

ores,

use

compound of ura¬

gaseous

—

into the two basic isotopes of nat¬
ural
uranium, i e., uranium-235

the developmental and financing high¬

lights in mining and milling of uranium

.

a

nium
with

dustrial domestic and international possibilities of atomic
energy

Investment

Association

into

Team of nuclear experts report

Teletype NY 1-384

THE INSURANCE

DISTRICT"

Telephone HAnover 2-2400

Teletype NY 1-376; 377; 378

56

$8

(2670)

The Commercial and Financial Chronicle

.

.

.

Thursday, December 19,1957

Report of IBA Railroad Securities Committee
Salim L. Lewis, of Bear, Steams
& Co.,

(1) How* the railroads may help

Pessimistic about the outlook for the railroad industry unless carriers

New York City, in submit¬

ting Railroad Securities Commit¬

mitted

tee

report to Investment Bankers
Association, at its 46th Annual
Convention, Hollywood, Fla., Dec.
1-6, 1957, pointed out debit and
credit side of rail operations to¬

themselves;

are per¬

(2) Changes in ICC policy under

discontinue unprofitable passenger operations and to raise rates, IBA

to

railroad report

rail securities

avers

in

are

time since the 1930's.

any

railroad

ing at hands of investors.
_

Text of the

,

,

'

securities today is

railroad

in

probably at its lowest ebb since
1930s. This

the

is

reflection not

a

only

b

the

of

current

of

trend

business
also

t

u

dertaken, other than the sale by
the Baltimore & Ohio of the West-

a

realization
that

although

the

basic

Maryland

1982

Report follows:

Psychologically, investor interest

RAILROAD SECURITIES

ern

„

that

Debenture

it had

First Pre-

ferred Stock. Only the two maturirig bond issues were refinanced;
$8,125,000
First

Indiana

Belt

bonds in June and $6,000,-

Toledo

Terminal

Bonds

gage

Harbor

Mortgage Bonds with 5%%

coupon

000

October.

with

First

4%%

Interest costs

ment obligations

the

Mort-

bonds

in

equip-

on

sharply dur-

rose

industry have
been

p u

ber.

licized

year

the
-

of

railroad

-

■

-

after

b-

yea r,

of

the

problems

still

most

exist—and, if
anything, are

Salim Lewis

perhaps
critical

today

than

in

more

as

The upward trend of interest
rates was also reflected in sharply
higher returns available on out-

credit

few

is at such
roads

a

cannot

low level

that

neces-

additions and betterments to
roadway and structures and,

deficit

passenger

1957

the

larger.

large

purchase

of

be apparent

of

5!

financing the

create

icla+i'

tho

the r*ncfc thoi'<sr»r
costs thereof.
great strides made
VAJV.

/o

in the

electronics and mechanization inhave

opened

up

wide

a

field of improvement to the rail-

roads, yet restricted credit and
inadequate earnings limit severely
the railroad
ability to undertake
any

but

the

most

essential

im-

provemerits.
The

the

railroads'

continuing need

equipment has coincided with
huge demand for funds from

general industry to finance their
expansion programs.
vednp has had a

choice

of

vehirlP

Thus, the invavint

To,

tho

,

..

able funds

avai

and

has

able to be quite selective.

other
no

than

new
cw

equipment

^

pacing

•

ox

an

nn

wii

uu

government agency with

a

been

su<^

of

with

rn»r>r>tr>d

vnml

POSlllOn

XlOm

popUldllOn

fkn

orir?

hnHv*

n,.nnnM,c

a

long-term lease

ar-

agency's operating costs, borrowing costs, and a sum sufficient
to amortize the actual cost of the
equipment over its economic life,
The low level of railroad credit
is

a

reflection of many factors. The

constant inflation

in

pn<?t«

oontin

Lon"dru iniwion in costs eontin-.
revenue increases from higher
a"d the savings from im-

™'e®

In 1957,

^

financing

' n?°0
stnctive

monev financing
money financing was un-

are
r»n

T

,,1,%'

f>0*

m3„v

fWnih J

a*® J™

the'

1956

ber,
12

cl,, 5 Sri f !Lr) l ,251"
^ shoul.d notthat forcedrpmiirpd
be
to continue
service
A?. \i

The

cents

calls

arP

which

lifted

in May,
November,

in

for

cost

1957

justment in May of 1958 and

profit

squeeze

railroads

to

another petition to the

i„«T,r,QC,0£,

vofhwf

UJLicaocs

lauiLi

increases

Study

rather fhan
than

to

fh/i

the
uic

ifiaii

ask

for

additional

the

cost

approval
when

the

of

filed,

a

of

E. Frederic Uhrbrock

Bear, Stearns & Co., New York

■

Shields &

Company to

Admit Hansel, Green
Shields & Company, 44 Wall St.,
New

York

City, members of the

known

present

should

be

in¬
'

living

amount,
request,

forthcom-

absorb

to

the

higher wage

approves

reduce

costs

Meanwhile,

crease.

wherever

rate

a

the

in¬

deterio-

'

^Douglas R. Hansel

rating position of the industry has
induced Senator Magnuson, Chair-

looking

now

to

The merger of the Louis-

New

York

Stock

Exchange,

Jan. 1 will admit Douglas R.

of

man

the

Senate

Commerce

_

sel and Edward E. Green to part¬

nership.;

Mr.

Hansel

is

manager

of the firm's dealer relations

partment.

Mr., Green

has

The

Nashville,

St. Louis Ry..

&

nooga

summatcd.

topics:

been associated
some

with the firm for

time.

Chatta¬
con-;

was'

The Erie RR. and the

Delaware, Lackawanna & Western

UNDERWRITERS,BROKERS

and

DEALERS

RR. have succeeded in consolida¬
tion of some facilities, with more
in prospect and ultimate consoli¬
dation of both roads and the Dela¬
ware

distributing

&

Hudson

if the current

Co: a possibility
study supports the

The Great Northern
Ry.,
The Northern Pacific Ry., and the

move.

CORPORATE

and

MUNICIPAL SECURITIES

GRANBERY, MARACHE & CO.
Members

Chicago, Burlington & Quincy RR.
study has progressed sub¬

merger

stantially.
since

Missouri

Pacific

New

York

and Other

RR.

Stock

Exchange

Exchanges

and

Texas Pacific Ry. have merger
possibilities under investigation.
The most dramatic announce¬
ment on the
merger theme was

1886

that of the joint study by the New
York Central RR. and the Penn¬

sylvania RR. to investigate the
possible benefits of coordination
of facilities or perhaps ultimate

W. E. HUTTON & CO.

union.

Members Neiv York Slock
Exchange
and other

leading exchanges

NEW YORK

CINCINNATI

Burlington, Vt.

Columbus, O.

Hartford, Conn.
«

Lexington, Ky.




Boston

Dayton, O.
Le wist on, Me.

Biddeford,Me.

Portland, Me.

Corporate and

&

St.

Paul

&

Pacific

Municipal Securities

terminated last year, the
Chicago & North Western has con¬

tracted, subject to Interstate
.Commission

acquire

Easton.Pa.

discussions

Chicago & North
system- and the Chicago,

were

merce

Baltimore

merger

Underwriters and Distributors of

the

Milwaukee
RR.

Philadelphia

While

between
Western

control

Com¬

approval,

to

the

Litchfield

& Madison RR. The St.

Louis, San

Francisco

Ry.

of

has

increased

controlling investment in

its

the Cen¬

tral of Georgia
Ry. and is waiting

results

of

appeal from

the Inter¬

state Commerce Commission's de¬

cision

authorizing control thereof.

de^
also

_

ville & Nashville RR. and its sub¬

sidiary,

on

Han¬

-

more

study.

V

Co.,
•

ing fairly PromPtly- However, it

.

barriers to

&
: !

blanket
DiauACt

rf' comneUng "onre™ur;<;rative.. duplicate facili- Sub-committee,- to schedule hearoi competing ties. Various railroad consolida^ransp°rtation and re- tions are under concentrated ings Jan* 13> 1358 to ^xPlain three
are

'

-

Klanlrof

when

Commission

=^t"idV
suosiay

regulation

York

percentage increases requested in
recent years. Since the ICC in its
Aug. 6 decision invited the rail-

have

management is enaeav

more

-

lurdlcr rate increases- The peti-

cooperative effort
with competing roads to eliminate

and

v

tiOU, which is expected to be filed
shortly, will provide for selective

Railroad management is endeav-

to

v

!.

:

L. F. Rothschild

costs without any offset until the

onng

Merle-Smith,

Eugene Treuhold
New

•

'

should be noted that the railroads

Consolidations Under
;

•

'

Ross

ICC for

u„„ax:a fx-

nnnority.

f

-

New York

has

prepare

benefit ot a small

»'

5?

Dick &

0ther 7 cents in November of 1958.
the

-

-

;

York

Alfred J.

an-

severe

Hutzler,

Smith, Barney & Co., New York

New

ad-

caused

&

1957;

of living

a

Salomon: Bros.

Goldman, Sachs & Co.

poor

cents

3

increases became

n

y

agreement

1956;

anc|

^ irnvfni nulnn
w/

.

level:

:

;

Gustave L. Levy

jncreases in wages stemming from

creases

L!0_,

1956

showing again is due in part to
the lag in freight rate increases,
fhc lag in traffic and the sharp

roads

?.GS !° absor? much' ^ not all'1 oi possible and is

the

uncier

fnr

riZ+\

the railroads would obtain equip-

ment under

(X)0

a

.'•••'

'

Walter F. Hahn
,•

wages 12 cents an hour in Novem¬

glOUpb,

nnlitip

Z '

sca-

the

™

$500,000,000 capital with authority to borrow up to four times its
capital. It was contemplated that

rangement with annual payments
to the agency high enough to cover

iniic

usual

total of about $750.000,approximately $125,000,000

point to

costly

services

ctroni

the

on

nnniinnfinnV

a

the

for capital funds for both
roadway
and

vjjl

AIA

The

dustries

i-icauuii

show

tential 1957 net income from early
Immediate prospects

+h««,',KH

elimination

i/iic.

to

.

Carson

New York 'w : "y

forecasts

anf^'nh°nrnThe

therefore, "iuoi use retained earnniviv.iv/n., must uciv, 1 '-Lcii.iiv^u
ings and depreciation accruals to

as

no

would greatly strengthen

svr.t

loadings

Pressprich & Co.,
York

James H.

10%

has necessitated
sharp downward revisions of po-

^ilroads financially and per-

fhoir >-.1

R. W.
New

13% behind.'The failure of

as

carloads

that elimina-

increasingly larger

loading!Almost

soiial Fall pattern

occurs

and

1956 level,

,

be

public
burden

a

wasteful

such

scrvices

and

the

behind'.the

behind and November

far

service,

which

of

which

5.1%

with October

interstate and intrastate traffic. It
should

equipment

new

the prospective

portion

services

on

tion

The rising cost of

well

the losses from passenger

of Nov.

to 5.36%.

condi-

$697,000,000.

may

Charles L. Bergmann

i^avotabHer.:CUni'ul2i-

been

were

It should be apparent that

opment of the Symes proposal for
the creation of an v;viui|jiiiciib fiequipment J.inancing agency. Bills were introrlnr'f»a
in
Aurt
duced in Pnntfroco on Aug. QA tr»
Congress
30 to

nav

was

deficit

/
Bear, Stearns & Co., New York

tive loadings through Nov. 16.1957

icap applies to freight as well as
passenger service, with the latter
most critical, in that the passenger
service deficit absorbs about forty
per cent
(40%) of the earnings
from freight service. In 1956 the

as

rose to 4.41%
The Baa group rose

has"

>

.

Salim L. Lewis, Chairman

ran

1956 level
through April, the trend "siricd then

inability that rests largely
regulatory authorities,
both state and Federal. This hand-

In

railroad carloadings

slightly above.the

the

amount thereof led to the devel-

ij
pay

changing

COMMITTEE

Unfavorable;

Carloadings

•

While

an

with

sary

crtin-

to

a

railroad

finance

tions,

itself

longer patronizes, is

epd of 1956

previous

exceptions,

adjust

the

from 4.58%

•<.

i ;■ •

Basically, one of the greatest
weaknesses in the railroad picture
is the inability of the industry to

Moody's average
of AA bonds which stood at 3.94%.
1.

railroads'
,

at

The Symes Proposal

With

the

standing bonds.

years.

most

year,

in

Carriers in Strait Jacket

con-

nectien with the retirement of the
Western Maryland 7%

improvement
position.

5Vz%,

received in

exemplified by
Norfolk & Western's 3.74% cost
in April and 4.55% cost in Octo-

problems

sound

a

industry.

Respectfully submitted,

,

day and adverse phychological re¬

ception rail securities are receiv-

.

(3) New laws to insure

disfavor today than at

more

existing law; and

NEW

YORK

PHILADELPHIA

Volume

186

Number 5700

.

.

The Commercial and Financial Chronicle

.

(2671)

Z9

Report of IBA Oil and Natural Gas Securities Committee
The current oil and natural gas
economic picture, in terms of for¬
eign oil and import problems, Ca¬

nadian

Though petroleum demand in 1958,
mand for natural gas will

developments, " offshore

drilling success, natural gas rate
problems, and surplus refining
stocks, is drawn for benefit of
Investment
at

Bankers
Annual

Committee favors

Association
Convention

their 46th

tor

interest in

tee, Chaired by William C. Jack¬

Jr.,

First

Southwest

of Harris-O'Hara Bill in 1958

passage

sees

thing in

squeeze.

another,

present oil

import plan

The

-

stimulate inves¬

economic

For
and

Western

nations should be

future

some

new

economic

between

couraged, and it would
time

large

en¬

that

seem

scale

to Middle East oil reserves
the part of this
country will be

access

outlook; and

gas

bonds

Hemisphere

virtually imperative.

These

gen¬

eralizations do not point the
way
to a solution of the
imports

assist to industry survival.

as an

stronger

political

on

Com¬

pany, Dallas, who is newly elected
President of the IBA.
-

one

within

discovery of such
highly desirable.

is

reserves

finds offshore drilling challenges record of

gas reserves;

Western Hemisphere region; examines Canadian oil

any

to

the

reason

at
more

by Oil and Natural Gas Commit¬
son,

and that is cost-price

group,

but

reserves,

parallel 1957, and high de¬

may

continue, both diverging trends share

according to IBA oil-gas

common,

best,

at

prob¬
but they do point out one
fundamental conclusion.
In
the

lem,
C. Pharr Duson

The Report includes the follow¬

ing comment:

Rotan, Mosle & Co., Houston

Preface

Your

Oil

output.

and

G.

;v

"

Natural

Gas

L.

current

in
t

problems

the

r

Dillon, Union
ties & Co., New York

notes.

We

.

.

the section

"Atomic

Riter &
on

been

Joseph A. Thomas

changes in
previous: con,;,
elusions
that
atomic energy represents no threat
to the industry.
"Shale Oil" has
also
been
omitted,
no
progress
having been made on its economic

Lehman

no

deals with Petroleum

represents

concise;

and

ment of this subject.
,

,

one

AND

imports and

ex¬

What

interest

prosperity,

as

These two provisions then
recognize the desirability of
stronger commercial ties between

est

of

political

the

free

serves.

the

countries

of

the

Western

Hemisphere, but, at the same, do
not specifically favor any foreign
oil producing

country. To do that
would be politically undesirable.
A

ture
over

particularly important fea¬
of the plan is that it "bends
backwards" to keep the gov¬
a minimum. This

ernment's role at
effort is

part, by
dustry.

appreciated, for the most
all segments of the in¬

Briefly, the

achieve

control

need

there
to

The Suez closure last winter in¬

terrupted the flow of imports only
temporarily. By April of this year
crude
the

oil

imports,

Texas

totaled

as

Railroad

reported to

Commission,

840 thousand

over

barrels

as

violation

a

tion.

was

much

whether

of

oil

anti-trust

Previous

specu¬

the

in¬

"-restriction by quota were revived.
Certain importers indicated that

they believed the restrictions ap¬
plied to them were excessive in
view

of

their

ing the test

self-restraint

dur¬

and that they

years,

would request a

hearing for their
daily, as compared with 760 thou¬ cases.
However, it now appears
sand barrels daily brought in dur¬
as though the imports-control pro¬
ing April, 1956. Furthermore, re¬
ports filed with the Office of De¬
fense

Winnipeg

Mobilization

showed

,

that

crude oil imports programmed for
the second half of this year would

Bayard Dominick

aggregate

.

-

1,261,000. barrels

17.4%

or

of

estimated

daily,

domestic

will

gram

»

receive

the

if necessary.

government has given the indus¬

try

an

opportunity to prevent such

measures.

mises

good

a

opportu¬

establishing those

which

survival

»f

compro¬

essential

are

the

industry

to
on

n

Recent

Developments

in

Canada

sjt

Future Oil

projections of future energy
But, out of the body of

zations
is

the
next
well; and

Western Canada's crude oil pro¬
duction

capacity

is

now

data, several generali¬
For one thing, it

appear.

becoming

half

of

1957.

the other

assisted

Actual production^
hand, averaged only

Canal

materially

situation

by

and

the

the

the

Let

With the decline in tanker rates

following
Suez

the

re-opening

Continued

on

page

Investment Bonds and Stocks

that

industry

will
continue
to
operate under the provisions of
the plan as long as requested to
do

so.
Then, our concern is with
the features of the plan as influ¬

enced

Underwriters and Distributors

by current and future

"ditions
leum

of

within

Aids

Canadian

Essentially, the
restriction

INDUSTRIAL CORPORATIONS
PUBLIC UTILITIES
INSURANCE

RAILROADS

•

COMPANIES

•

BANKS

MUTUAL

FUNDS

v

STATES

•

MUNICIPALITIES

•

AUTHORITIES

THE CANADIAN GOVERNMENT

MUNICIPALITIES

•

in

of

the
by

absorbed

East

Coast

im¬

of total crude oil

1956,

im¬

requested to
hold their imports to 90% of their
were

for the three years 1954Imports into the West Coast

average

1956.

k

PROVINCES

for 60%

ports

is

now

Crude

The seven, who account¬

porters.
ed

con-

petro¬

burden

established

seven

.

world

industry.

Capital Issues

and Dealers in the Securities of

the

exempt for the time being.
The restrictions apply only to im¬
porting areas of the United States,

Securities of the

United States Government

and its Instrumentalities

are

State, Municipal, Revenue and Housing Securities

not to

FOREIGN

Our Facilities

INSTITUTIONS

•

specific foreign oil produc¬
tion.
These
few
provisions are
simple, but they reflect broad and
varied concepts.

GOVERNMENTS

are

Available

BANKS

•

Bonds, Preferred and Common Stocks of Industrial,,
Public Utility and Railroad Corporations

The plan excludes West Coast
imports on the grounds that the

K

to

CORPORATIONS

INDIVIDUALS

•

•

>

DEALERS

area

is in itself deficient of crude

oil.

PENSION FUNDS

From

view,

a

practical

however,

it

is

that the bulk of these

point

significant
imports are

Canadian

Harriman

Ripley & Co.

Incorporated

63 Wall

hardship
tion.

Street, New York 5, N. Y.

for

•

PHILADELPHIA
•

DETROIT

•

•

Another

CHICAGO
READING

London Correspondent: PHILIP HILL, HIGGINSON & CO., LIMITED




ates

a

strategic

exemption
CLEVELAND

Canadian oil produc¬

on

This is

sons.

BOSTON

crude.
Thus, while not
Canadian
crude
by
the plan in fact works little

accepting
name,

in

a

provision

of products

.

.

.

manner.

.

Bankers'

Acceptances

Securities of the International Bank for

Reconstruction and Development
Canadian Bonds

•

Foreign Dollar Bonds

the

.

Underwriter

Distributor

•

•

Dealer

oper¬

.

A

sig¬

nificant portion of Venezuela's

'Hiprts to the United
residual fuel

Casualty, Fire and Life Insurance Company Stocks

desired effect, both
and economic rea¬

similar

the form of

Bank Stocks

of

States

is

ex-

in

products, particularly
oils. Again for stra¬

New York
Philadelphia

Boston

Pittsburgh

Cleveland

of

the

Canal, the demand for Cana-

necessary

us assume

Suea

average

production for the period rose to
some 520,000 barrels
daily.

increasingly expen¬
sive to enlarge our domestic oil

ducers have expressed satisfaction

the

on

order of 950,000 barrels daily, with
close to 200,000 barrels daily hav¬
ing been added during the first

470,000 barrels daily in 1956. Out¬
put in the first half of 1957 was

Requirements

sources.

statistical

potential;
wildcat

natural gas.

:!<

Projections of future energy re¬
quirements are only estimates, as
are

production
successful

compliance.
For the most part
both importers and domestic pro¬
with the plan.

tha
any

basis worthy of the favorable at¬
tention of the investor of the fu¬
ture.

on
sjs

legisla¬

arguments against

offer

try's thinking is centered at the
present time on three things: the
finding of a market for the steadi¬
ly and rapidly rising crude oil

industry
nor
the
government
wants. By spelling out that which
is required, and then leaving it up
to the importers to
comply, the

imports-con¬

to

and for

carefully worked

many-

the

seems

nity for working out differences

are more

out.

That is the step which neither the

of

of

of

visions

enforce the formula

an¬

objectives

world, the various seg¬
the oil industry must
cooperate fully. On the face of it,
the
new
imports
control
plan
ments

The Canadian petroleum indus¬

is

Immediately following the

long range

in the inter¬

pro¬

to

the

as

"voluntary"—but the

know

of

own

well

is still

serve

solution

a

their

plan

to

imports problem.

of

the

new

...

plan will

we

the

well

sided

the

dustry would unanimously com¬
ply. Some described the plan as

.

Baker

i

of

trol plan,

first

James Richardson & Sons

New York

committee

the

lation

period, and* have changed
little during the past
year, other
than in their intensity. ' .V.
'

GAS

Dominick & Dominick

for

nouncement

year ago

war

William C. Jackson, Jr., Chairman
First Southwest Co., Dallas

D.

that

of

basis

and

recom¬

have existed throughout the post¬

SECURITIES COMMITTEE

Ralph

The

The basic factors of this situation

^

NATURAL

the

imports

situation

facts.

ably outlined the cir¬
cumstances of the import problem.

Respectfully submitted,

OIL

on

treat¬

authoritative

desirable to encourage the devel¬
opment
of
Venezuela's
oil
re¬

Furthermore, it is generally
conceded
that
the
President,
under the authority of legislation
adopted in 1955, has the power to

ports presented to this convention

section

the

the

the

oil

is

plan.
Therefore, whether to restrict im¬
ports or not is no longer the ques¬

;

Brothers, New York

The report

Accounting,

possibly

a

investigate

conditions

Foreign Oil and Import Problems

oil from shale.

and

se¬

the Presi¬
special Cabinet

crude

on

determine

how

problems, and oil from Gilsonite
giving evidence of overshadowing
Interest"

national

our

importscontrol plan announced in July.
As of now, the oil industry of this
country is operating under the

,

"Special

appointed

were

The Illinois

W. C. Jackson, Jin

Our

reports

it

reasons

tion.

there

have',

the

tegic and economic

Subsequently,

mendations

,

.

Co., New York

Company
Incorporated, Chicago

Threat,"

ergy

to

Paul A. Sellers

En¬

-

since

dent

Committee

Allen J. Nix

of

President Eisenhower that he be¬
lieved the level of crude oil im¬

curity.

Smith, Barney & Co., New York

omitted

basis

ports endangered

Edmond N. Morse

key¬

.

have

Securi¬

New York

accuracy

the

the

filed with his office, Gordon
Gray,
Director of the ODM, reported to

Kidder, Peabody & Co.

Brevity

and
are

On

Frederick L. Moore

indus-

y.

duction.

Emery Katzenbach, II

Eastman

..

developments
and

Laboussie,

Joseph II. King

present-

ing

Weil,

White, Weld & Co., New York

years

ago,

higher than the 1956 level of im¬

Friedrichs & Co., New Orleans

Committee has, this year,
attempted a further refinement of
the format
adopted three

substantially

was

ports, which for the
full year
averaged 11^8% of domestic pro¬

Shelby Friedrichs

Howard,

Se¬

curities

This

Chicago

San Francisco

82

40

The Commercial and Financial Chronicle

(2672)

.

Thursday, December 19, 1957

.

.

Report of IBA Federal Taxation Committee
Investment

meeting

bankers,

ployed

Rejecting suggestions that

for their 46th Annual Convention

post-Sputnik spurt to

a

defense

our

has

program

but

at

Hollywood, Fla., Dec. 1-6, 1957,
told
by Walter Maynard,
Partner of Shearson, Hammill &
Co., New York City, on behalf of

made tax reform

were

IBA's Federal Taxation

justifying

ment

Commit¬

rapidly

tee that, despite the space satellite

threat, this is the time to institute

taxes

lowering of individual and corporate income

a

argu¬

in

Text o/

the Report follows:

as

brackets

would,

discussion

A

this moment

of

has

tax

reform

billion dollars with the dropping of

quarter of a

at

possibility of

a

Maintains substantial

maximum.

tax

laws

1954.

the

era

1

gen¬

prospecti

eduction

/antage

in

armament

-he.

that

of

a

■isax
Walter

students

our

extent

than

to

are

our economic develop¬
ment, and that the state of indus¬

trial activity in this
rapidly approaching

a

which

of

in

the

1949

stimulus

is
at

country

point

reduced

badly needed—as it
and

potent

of

economic

us,

laws—and

that

we

this

use

agree that a reduction
rate wou d both produce

the

revenues for the Treasury
and free for venturesome use treinendous amounts ot capital now

more

locked

However,
we
are
also
aware
that
because
of the tremendous disparity between the top effective
rate ol
the capital gains tax:
(25%) and the top rate of the
personal income tax (91%), we
by the tax.

up

t realistically hope for

can

sive

was

1954.

tax

rnu

.

X

reform

,.f.

V

•

*

r

t'w

part of the personal
rate

nties industry is
tax.

In

our

in-

facts,

first

fully

not

taxes

in

that

the

tax-

definitely avoid

option, inincurring liabil¬

Our Industry Is One of Small

the

rate

of

the

tax

Business

reduced

To

bp£?in

with

solicitude

American

Midwest Stock

Stock

Exchange

Exchange

on

sidered

that

of

RAILROAD

total

con-

capital

in

to

be

the

on

order

giant

for

as,

tax

Telephone:

Teletype:

HAnover 2-7900

NY 1-911

over

pursued since
money

be

more

be

3955.

taken

reduce

concern

While

which

taxes.

authorities

to

be

on

such

viduals

total

all kinds

indi-

$20,000 per year, the

over

additional

be

only

government

government's

wouId
+orts

be

nf

onl

Tbe

hiilinn

n

01 a

s

n

exceed

devote

!

,,

'

,

dollar's

instead of going on up to
revenue ,oss would only

about
t

S80
rale

mil|ion
ot.

tax

the

that

create

it

,

tax

becomes

^

.

of

fact,

the

in

an

stimulat¬
would

taxes

additional

than

to

dollar

of

™j°me^ti

I{

a

oF 7h

made

were

-

the

_

$28.6

in

£-

bo(h

\ssodat

s

advocate

personal

a

and

and
AMERICAN

Company
STOCK

of

taxes

corporate

billion of the $34 billion it collects income taxes to a maximum level
today, and this computation takes 0f 50%. This reduction in the
no accoun^
the almost incon- maximum rate should be accom-

pUshed 35 rapWly
That

particular

(urned

*he
could
part
(he

i0

(be

'""st
of

these

nature

of

P°SSible> 3"d

be

that

scribed schedule of tax reductions

A substantial

extending over a period of years
assure that increased tax

re-

taxpayer would

dollars

dynamic

be imagined.

38

'" accordance with a prescribed
schedule. The purpose of a pre-

billion

$5.5

dollars

in

would,

things> not be

Continued

v

em-

;

on

pctge

15 BROAD

STREET, NEW YORK 5, N. Y.

CABLE: COBURNHAM

in

the

in

It is

DICK & MERLE-SMITH
Underwriters & Distributors

&

State

►

Municipal

Bonds

Bonds & Stocks

Corporate

Continuing the security business of
Roosevelt & Son founded 1797

48 Wall

Street, New York 5, N. Y.

Jirst ofJVJtchigan Corporation
Underwriters and Distributors

STATE,

MUNICIPAL

remembered

1920's taxes

almost

every

business

Let




us

were

year,

and

re¬

.

and

•

Dl 4-1400
NY

1-2262

would

be

we

the

cussion,

turn
the

personal

would

starting

of

like

that
a

CORPORATE

SECURITIES

I-

the

single action which

now

sideration

EXCHANGES

TELETYPE

78

r

would

the government could take to
help
the small businessman.

in

on

reduction

be

amount

actual

lower

new

most effective

AND

to

many
if
tax

reduced

business

kept in effect.
that

general

YORK

more

be

every year Treasury receipts
rose.
A stimulation of this kind to

NEW

for

rates

avoiding^
avumuig a

to

in

MEMBERS

tax

posi-

businessmen

time

worth
an

When

received by the Treasury

the

duced

Burnham

air-

sunny

income

|he

the

50%

'for

their

earning

be

is

factor

50%

worthwhile

yeai.

75%

to

the like

and

second

If the top tax bracket were set
91%

trips

avoidance

tax

vpar

,:)U110n doiiais a

busi-

of

owned

"v*andcoSinginrenUves

three-quar-

dnUare

cost

air-conditioned

corporate

rates exceeding

loss

revenue

about

the

seasonal

Florida

approximately $34 billion a
from all personal income
(axes. If the top 'individual tax
bracket were stopped at 50% instead of climbing on up to 91%,
year

Uncle Sam bears

of

entertainins

p]anes,

rjves

the

in that

half

Cadillacs

$1.9
de-

now

big

ness

the

to

revenue

would

government

Million—the

of

easier

be larger than would have been
received if the old rates had been

foreign Securities

tax

actually

been

would

that

manner,

that

from

In

believe

were

money

public Utility

50%

exceed

The

income

be helpful, it should
that no
action

may

intelligent
ing effect

industrial, railroad

that

stimulating to business than

rates

in

which

is

remembered

could

to

these

factors

connection.

the trend of business in gen¬

eral, in which small business plays
so
large a part, the monetary
authorities have recently started
a
program of easing the policies

and Dealers

this

structure.

Presumably because of

of credit restraint that have

Underwriters, Brokers

of

inter-related

in

the

Our industry, like others
businesses has

ing capital presented by our puni¬
tive progressive personal income

BROADWAY, NEW YORK 4, N. Y.

other

tend to subsidize extravagances of

incomes

net

composed of small

been hit hard by the cost squeeze
and by the obstacle to accumulat¬

SECURITIES

saving, would

comparatively
higher revenues.
a

example,

Sears Roebuck, which has capital
of
$2
billion
and
220,000
em¬

ployees.

the

incen¬

of

This compares with such

single

of

num¬

employees is not far from

100,000.
a

the

million, and the total

ber

PUBLIC UTILITY

connection,

up of
4,500 firms, a high propor¬
organized as partnerships, is

$800

MUNICIPAL

this

industry, which is made

some

estimated

INDUSTRIAL

In

This is made clear when it is

tion

Brokers in

svmnathv

being exall sides for the small

result

a

increased

increased

out

rates

now

m'iiidustry1 of smal^busine^ses!

is

our

Exchange

much

is

as

of

fiscate—all

_

ity for it. We would much like to

the
rate

appreciated, is that if the Treasury were to tax at i0h%—con-

by .TOtiomi for reform of the 20%
thc lowest bracket
capital gains tax.
Treasury would still collect

other

MEMBERS

and

these

of

Facts

all

payer can, at his own

Vilas & Hickey

26

Few Basic

tion m the personal income tax
will first be reviewed, followed

businessman.

I

One

cnhsfanfioiiv

struct^

of the arguments lor reduc-

some

A

dustry we are fully aware that
the capital gains tax differs from

see

Stock

income

reduced. Therefoie in this report

pressed

York

ic

cfr,,n+.irt>

The traditional area of tax in- tax rate

and

New

sig-

a

in

lowest

Subsidy for Extravagance

many

nificant reduction m the capital
gams tax rate until the progres-

a

before

ever

harmful to

is

politically
of one of

and

tional

convinced that the steep progres¬
sion in the personal income tax is

taxes

and

in

know,

we

understanding to impress upon
our
legislators the need for ra-

Maynaru

impact
present tax laws

greater

authorities

is important that each
and, to the maximum
rxtent possible, every voter, unlerstand the basic workings of the
of

year,

of the

unwise

most

>ne

reduction

tax

next

many

forces, it

political
parties would
see

because

the issue of tax

use

manipulation

nspired

ex-

both

to

the part of

wide-

purely for political adwithout regard to con-

counter

;o

pend itures,

like

a

jiderations of tax reform. In older

v e

increases

on

loliticians to

and

s

and

stand

usual, there will be

spread effort

reason

m

tax

is
As

that

are

aits

actually result in

Two

that, despite
budget prob1e

likely,

tives

its eventual abolition.

urges

here

the

short time in

in

This

for

and

revenues,

of

The

manner.

the

above

at

combination

tax brackets to 50%

upper

capital gains reduction would increase

being

more fruitful than at any
time since the last revision in the

loss of about three-

revenue

much

worst, cause only
minor reductions in revenue and,
more

than compensate for

and

out

substantial

very

"positively harmful"; the downward business trend would be arrested
more

consumption,

venturesome

a

facts that stand

tax rates

urgent tax reforms.

and the results would

current
be saved,

these savings would be employed

Taxation Committee report advances

possible. The Committee contends present income and capital gains

as

are

dead issue, IBA

a

for

would

to

some

kind

of

income
to

see,

aspect

con¬

Members

NEW YORK

Detroit

and

Midwest

Stock

DETROIT

CHICAGO

reform

tax

that

Columbus—Battle Creek—Flint—Grand Rapids

but before

of

Exchanges

this

Lansing—Saginaw—Bay City

dis¬

few basic facts will be

helpful in giving perspective.

Volume

Number 5700

186

.

.

The Commercial and Financial Chronicle

.

(2673)

41

Report of IBA Investment Company Committee
Curtis,

The
pany

cial

growth of investment com-,
business into a major finan¬
institution
and
factors

Chairman Charles F.
with sales of shares

and with record number of

.

delivered by
e

of

stment

o m

reaching

p a n y

a new

high and redemptions less than 1956;

monthly accumulation plans. Supports

proposed legislation to exempt from taxation dividends of investment

com¬

Chairman

members

threat

of

Jr.,

:

:

.

.fr^Jn®/?stAon>
to the 4bth An-

1956.

,

The Committee expects that in¬

'".f

.

establishing such, funds if the

urged
enactment
as:> a possible
partial solution to their financing
problems.
•
-

presented by the variable annuity, in attempting to circum-

federal and state insurance and securities laws.

vent

•

Eaton,

Eaton & How- I

company

expressed* interest

legislation is enacted; many
state and local fiscal officers have

Charles. F.
•

,

needed

panies with bulk of their holdings in tax-exempt securities. Alerts fellow-IBA
to

Reve¬

hearings early

investment

have

sponsors

in

Internal

on

for

v

.

Several

enactment

Commit tee

T

Taxation

in 1958.

'

C

referred to the Mills

were

Subcommittee
nue

affecting this activity are brought
■
out in a report
Tnv

Eaton, Jr. notes impressive growth of funds in 1957

«?

dustry representatives \viH support

More than 425,000 net new
will

accounts

have

been

nual

conycnindividual and institutional m- ineius aiiecung. me industry .ana irom xransier tax on transfers in^i.0p oi tny vestprs, bringing the total numbeiv its relationship to the IB A. Meet- volved in the technical process of

An
tianKers.Asso-

of

ciation
Chas.

f,

T

mittee
,1S

responsibility is facilitated through

ac-

comp^ed of mnderwiit^swiation
have

who

Those

Shares

orf the Committee! this

underwriter,, to

dealer,

to

*;V.

pur-

wr

year

investment

Association of Securities Dealers pany shareholder.

.

,

Jes ^^cqmrelun-

ts of common, stocks, it

The an all-inclusive not purport
following noes

to be

vestment company shares - -

summary

of

Shares of open-end investment
companies,
though they
even

rep¬

resent in most cases

' Municipal Bond Funds
For three years President Eisen-

;

mlttees.

ta toe
distribution of securities offer the
into

v

,

and their various operating com-

retail

membSI enS

*

^

National Association of In- onerous inequities this bill would 7
7^ se*®c^1°'[1 to issues^traded
vestment Companies, the National impose on the investment com-5? securitiesexchanges.
the

Nearly all

COirmanies

t

5!9.ta permit fidua-

dustry organizations and through try will urge recognition by:thev"2£?
close liaison and cooperation with Senate Finance Committee of-'the"

dual interest in the activities of

a

v

„^hen.Ne®J°rlrStat?lr?.,?se?

pians_?22,000-for participation of Committee mem- chaser.
,
'
regular monthly purchase of mu- bers in the activities of other in- It is anticipated that the indus-

,

rtUfVSoa'nffnv^tment cS
served

of

cumuUtlon

rica.

members representing

mm

number

record

a

tual fund shares will have been
.n
'opened, and more than' 635,000
Investment Company Complans will be on the books,
as
selected by the Presi-:
Most IBA members have at least

Your

Congress

of accounts to more than; three :ing this evet-widening Committee issuing shares from the fund, to New York Prudent. Man. Law

inllmrx'

Rpnnrt

tho

-x.

mflo

cent

A me

F. Eaton, Jr.

85th

eligible securities,

portfolio of

a

were

fied since such shares

disquali¬

are

^

howeiy in his Economic Report,

techni-

Jth£ public; and nearly all IBA mem- developments in 1957, but seeks to has urged Congress to enact legis- cauy regarded as unlisted issues,
mis
bei>s perform services for invest- highlight matters which the Com- lation permitting investment comThis makes itimpossible-for the
ment
companies
in
connection mittee considers of particular in- panies with the bulk of their New York trustee, in the absence
Open-end investment companies with the operation of their port- terest and concern to most IBA assets invested in tax-exempt se- of authoritv in the trust instrucurities to pass through to their
•
—an
innovation only three and folios
investment company port- members.
+n
1
«

die

named

report.

at

end

tne

*

"

nf

oi

'

.

.

have
become an institution, a $10
lion industry with a growth
tern
that augurs
well for
one-half

decades

now

ago

bil-

f0ij0S

not static, but constantly

are

shareholders

n

the

tax-exempt

adjusted

_

•

,

as

pat- cieavor to
IBA responsive

..

.

c

.

,

,

men*» *° *a^e advantage of the
such professional management and dina-

w
ture
income received on
managements
enlederal and State Legislation
securities. Purpose of such legistheir portfolios
to their policies and
:^tion would. be to broaden the
legislative
and
tax market for issues of state ana
members.
objectives. In 1957, for example, significant
affecting
investment local governments.
investment companies will have proposals
Revised bills (HR 8810, 8311 and
purchased for portfolio, securities companies and their shareholders
Investment Companies in 1957
valued at about $2.3 billion; sales than in any year since 1939. ^Of 1812)
introduced^ in the closing
This growth has been impressive
portfolio^wilTtolal approxi- ^articular importance are the fol- days of the 1957 Congress by Rep
in 1957. By Dec. 31, investors will
^
(
.
resentatives Cooper, Reed and
mately $1 4 biUion. A11 but a small lowing
have purchased $1.4 billion of new
portion of this volume will have prollosed Revision of the Invest.

keep

versification available throughin-

ygstment
many

company

shares.

In

instances, particularly where

.

inadvertent discrimination works

s"

-*

mutual fund shares, a record high, value of

small amounts are involved, this

shares turned in for re-

transacted

organized

on

,

Continued

on page

frol>osed Company ot lIie Invest
ment Kevlslon Act of 1940

se-

been transacted on organized se
iti the Over-

Following consultation with the

demption will total less than $420 curities exchanges or
billion, lower than the figure for the-Counter Market.

Association

National

of.

Invest¬

Underwriters, Distributors and Dealers

ment

Companies (NAIC) and other
groups, the SEC pro¬
posed to Congress several amend¬
interested

and

WALL

52

of the pro¬
posed amendments are technical
in nature, having little serious im¬
pact on the business. However, it
is probable that the business wiU
repeat in legislative hearings the
objections previously submitted to
the SEC with respect to two spe¬

Stieglitz

&

Halle

in

(HR 9329

ments to this basic law.

STREET

NEW YORK 5, N. Y.

S.

cifics

2796.)

Many

Commission's

the

of

Corporate and Municipal Securities

HIRSCH

pro¬

posals:
(1)

NEW

EXCHANGE

STOCK

YORK

HANOVER

NEW

YORK

CHICAGO

COMMODITY

BRANCH

OF TRADE

N.

N.

25 BROAD

STREET, NEW YORK 4, N. Y.

Y."

to be
with shareholder
opposed because the

Telephone: HAnover 2-0600

approval, is

Teletype: N.Y. 1-210

MIAMI BEACH

BALTIMORE

WASHINGTON

proposal, as worded, could unduly
hamper the -proper exercise of
management discretion and

J.

"i

only

changed

OFFICE

NEWARK.

INC.

EXCHANGE.

a

of fundamental policy,

ADDRESS

"PEACEABLE.

EXCHANGE

COTTON

BOARD

CABLE

EXCHANGE

that

and characteristics" be made mat¬

2-9050

ters
STOCK

AMERICAN

recommendation

A

CO.

8c

York Stock Exchange and Other Exchanges

New

company's "investment objectives

TELEPHONE

MEMBERS

Members

AMSTERDAM

GENEVA

LONDON

PALM BEACH

Correspondents: HAVANA, CUBA

(2)

,

proposal to limit even
provision governing

A

further

the

the

cause

regulations
limit the
tors

I'AialilixIieil

Direct Wire Service: NewYorJc, Washington,

present law and other
already too severely
from which direc¬

areas

UNDERWRITERS and DISTRIBUTORS

be selected.

may

Transfer

and

Issues Taxes

Industrial, Public Utility and

7125)
The "Excise Tax
Technical Changes Act" as pres¬
(HR

h. hentz & co.

Railroad Securities,

ently written would have a most

investment com¬
panies and their shareholders. The
bill was passed by the House of
Representatives in June and re¬

serious impact on
Members

New

leading

York Stock Exchange

stock and commodity

and other

exchanges

Main Office
72

WALL ST., N. Y. C.,
New

Sherry

ferred to the Senate Finance Com¬

B0 9-8420

York City Branches

Netherland Hotel (PL 1-2220) &

1430 Broadway (PE 6-5715)

0ETR0IT

PITTSBURGH
PARIS,

MIAMI BEACH

CORAL GABLES HOLLYWOOD, FLA.
AMSTERDAM, HOLLAND

GENEVA. SWITZERLAND

BEVERLY HILLS. CAL.

FRANCE

BUENOS AIRES, ARGENTINA

Bank and Insurance Stocks

Municipal Bonds
Unlisted Securities

mittee, which will probably hold
hearirrgs early in 1958.
investment

The
ness

CHICAGO

Baltimore.Miami Beach, Palm-Beach

eligibility for investment company
boards of directors is opposed be¬

an

company

busi¬
of

maintains that imposition

issue tax

on

Laird, Bissell & Meeds

investment com¬

shares, which represent an
interest in a portfolio of securities
on
which issue and transfer tax
pany

MEMBERS

NEW

120

been paid, represents
taxation, in effect, of the

YORK

AND

AMERICAN

STOCK EXCHANGES

BROADWAY, NEW YORK 5, N. Y.

has already

double

investment

Underwriters and
of Corporate




Distributors

Securities

company

applying
dividends
ment

of

income

to

invest¬

shareholders, the
contended that its
be
exempt from

company

industry
shares

taxation

distributed

to

has

should

Telephone BArclay 7-3500

Bell Teletype NY 1-1248-49

investor.

Consistent with the conduit theory

DuPont
44

Bldg., Wilmington, Del.

Whitney Ave., New Haven, Conn.

Phila. Natl Bank Bldg., Phila., Pa.
160 W. Broadway, Salem, N. J.

Zurich, Switzerland

62

42

The Commercial and Financial Chronicle

(2674)

.

.

Thursday, December 19,1957

.

In Attendance at IBA Convention
Allen

Distributors

ROBERT
Winston

Rowles,

H.

Inc.,

Group,

New

York

BANCROFT,

ALDRICH. GEORGE P.#
The Parker Corporation,

E.

Harry Downs & Co.,

The

Leary & Co.,

ALLEMAN, F. MONROE

BAXTER, Jr., CHARLES M.
Baxter

Wheeler & Alleman, Orlando

Leedy,

Blyth & Co., Detroit

A.

C.

C.

Co., Montreal

ALMON, TAYLOR B.
Rauscher, Pierce & Co., Dallas
ALTGELT, Jr., E. J.*
Harris Trust & Savings Bank, New York

BEDE, ALAN II.
Julien Collins & Company,

Dow Jones & Co.,

&

New

Co.,

York

EDWARD C.
Anderson & Strudwick, Richmond

ANDERSON,
ANDERSON,
Anderson

"

ANDERSON, HERBERT It.
Distributors

Group,

Inc.. New York

ANDERSON, Jr., WILLIAM J.

Equitable

Corporation,

Securities

Co.,

Miami

&

Delaware

A.

PHILIP

Putnam

<fe

BLACKFORD,

Charlotte

A.

M.

BLAIR,
Allan

Beach

BLAKE,
Eaton

Law

Jr.,
&

HENRY J.
Spartanburg

Co,,

S.

Blair

&

Co.,

Chicago

CARL

Laurence M.

ROBERT B.

National

Chicago

City Bank, Cleveland

BQEIIMLER, ERWIN

investment

D.

W.

Bankers Association,

Boenning & Co.,

Hutzler, Chicago

Philadelphia

York

A.

Blair &

&

York

WILLIAM

Bankers

Trust

New

World-Telegram

York

Complete Underwriting and Distribution Facilities for

New York

& Sun,

GEORGE

BUNN, JOHN W.
Stifel. Nicolaus

St.

Co.,

Louis

BURNS.

Secondaries

Registered Offerings

Special Offerings

EDWARD

Nashville

Blyth &

New

BUSH,

Co.,

'Allen

F,

New

EDWARD

Natl.

ROLLIN

Companies,

.

NEW YORK

PHILADELPHIA

CHICAGO

PROVIDENCE

DETROIT

PORTLAND

CLEVELAND

BANGOR

PEORIA

E.

CHARLOTTE

WORCESTER

MEMPHIS

DALLAS

New

Co..

&

York

Goldman,
First of

&

JOHN

Sachs

New

Edward

Co.,

New

York

Coughlin

W.

New York

Co.,

Michigan Corporation, New York

CALVERT

GORDON

Investment

L.

Bankers

For

Banks, Brokers and Dealers

CAKBERRY,
Wall

&

CHARLES

Higginson

F.

Co., Toronto

Journal,

ALFRED

Stone

Chase

Chicago

W.

French

New

York

York

New

CREELY",
New

New

Fahey, Clark & Co., Cleveland

York

DON A.*
Barcus, Kindred & Co., Chicago

Bonham,

&

JACK

New

&

Montgomery
Cleveland

Co.,

BAYARD
&

Dominick, New York

ERNEST

O.

Lynch, Pittsburgh

LESLIE

GEORGE

&

York

Chicago

York

New

Co.,

Kees,

&

Co..

V

'

York

New

DUSON,

Louis

C.

EARLE.

&

Co.,

PHARR

Mosle

&

Houston

Co.,

HENRY
of

EASTER,

Michigan

Corporation,

J.

New York

EATON,

JOSEPH

Eaton

New

EBBITT,

E.
Boston

Howard.

&

York

KENNETH C.

Shelby Cullom Davis &
EBERSTADT.

Atlanta

F.

J.*

EDWARDS,
R.

BENJAMIN

EGAN,

J.

First

Co., New

WORTH

&

JOHN

Edwards,

Co.,

New

York

H.
Inc.,

Oklahoma

California

Co.,

San

Continued

Francisco

on

LONDON:, NORTHGATE HOUSE,
20-24 MOOREGATE,

CO.

Direcf Wires to Our 30 Branch Offices

LONDON, E. C. 2,

Private Teletype, to London, England




&

Established 1891

1-2525

115

Broadway, New York 6

City

JOHN F.

.

GOODBODY

4-5300

York

ANDREW

Eberstadt

Members New York Stock Exchange

TELETYPE NY

Detroit

W.

CHARLES

Blyth & Co., San Francisco
EATON, Jr., CHARLES F.
Eaton &' Howard, Boston

York

STATE, MUNICIPAL AND REVENUE BONDS

BROADWAY

V"

York

New

*

120

%

,

l4->

Orleans

New

UNDERWRITERS AND DISTRIBUTORS

I NEW YORK 5, N. Y.

1.

JACKSON

&

Devine

J.

CROSS, CALVIN M.*
Hallgarten & Co., New York

i

Sc

J.

SECURITIES

MODEL, ROLAND & STONE

Hibbs

SYDNEY

DUFFY,

First

Manhattan Bank,

York

O.*

Stiver

Washington Street,

Rotan.

St.

Reynolds Metals Company, Richmond

CARLSON,

Corp.,

DUNN, STEWART A.*

J.*

& Co.,
H.*

WALTER

CRISSMAN,

Kansas Citv
♦

Leonard &

W.

Goldman, Sachs & Co., St. Louis

York

Co.,

Securities

Doe

Aloore,

C.

Co.,

Crawford,

Charlotte

Co.,

WELDON*

Jr.,

DUCOURNAU,

Craigie & Co., Richmond
&

\

Atlanta

Co.,
&

Cole <&

Wertheim

Denver

New

j

A.

Dubois, allen c.

CRAWFORD, Jr., ALLEN*

A.

Corporation,

CARLETON, WALTER B.*

FOREIGN

Chicago

CRAIGIE, WALTER W.*

PATRICK

Street

Co.,

New York

JACK*

DKOBXIS,

J.

&

&

Dickson

Blyth

WALTER
& Co.,

'

\

York

New

DRISCOLL, KOBERT S.
Lord, Abbett & Co.. New

DALTON

&

Hayden,

CAMPBELL, IRVING II.*

Lee

COYLE,

The

Bell, Gouinlock

J.

Hutton

S.

American
.DOE.

30

City Bank,

CRAFT, ROBERT

Association,

Washington

CAPEK,

COUIG,
Hirsch

DAVID II.*

Co.,

Foiger, Nolan, Fleming-W. B.
Co.. Washington
Chicago

York

Co.,

EDWARD

COUGHLIN,

5

&

JACKSON

F.

Ducournau

Jones

&

WILLIAM

DOUGLAS,

V.*

Trask & Co.,

D.

Crouter

W.

JOHN

Trask

DORBRITZ,

York

New

HAROLD H.

COSTIGAN,

York

Spencer

Do.ninick

York

&

Corp.,

SEEDING. EDWARD B.

DOMINION,

COOPER, WALTER W.
F. S. Smithers <fc Co.,

M.

&

National

COOK,

DE

DOERGE,

Montgomery

Stetson;

New

Ingen

Share
G.*

York

New

Sellers,

Pomeroy,

IIALSEY A.

Spencer

Co.,

Henry Herrman

CALLAWAY,

Van

J.

First

WILLIAM

CALLAGIIAN,
ROCKFORD

<fc

COOK.

Hutton

Jr.,

Co.,

<fc

Townsend,

Beecroft,

JAMES F.
&

f

York

DIXON, JOSEPH W.

City Bank. New York

Phelps, Fenn &

CAIIN,

York

C.

BYRNE, WILLIAM D *

W.
BOSTON

New

CONWAY, POWHATTAN M.
The Bankers Bond Co., Louisville

Phelps,, Fenn & Co., New York
CAFONE, THOMAS C.

Established 1888

B.

Montreal

New

II.

Bond

MILIIAUD,

E.

A.

New

Co.,

Co.,

DICKSON, R. STUART

MERRITT

CODON, RAYMOND

BYRNE, EDMUND C.*

HORNBLOWER & WEEKS

«te

&

fo

WILLARD

Saunders,

Co.,

Freeman

York

B *

York

First National

&

COLTIIUP,

Investment

Assn.

Hutton

C

II.*

RICHARD

De Haven

DICK,

K.

ANTHONY

Cohu

v

York

MARQUETTE

DILLAKD,

Co.,

Agee & Leach,
H. WALLACE*

Winslow.

New

Bateman, Eichler & Co., Los Angeles
DeHAVEN, WALTER T.

R.

COLLINS, JULIEN H.*
Julien Colhiia lis company,

II

Eberstadt & Co., New York

BURR.

Louis

Association,

Ripley

COLEMAN,

F.

BURNS, III, JAMES

St.

Sterne,

Harris, Upham <fe Co., New York
BURNS,
F.

Private Placements

JAMES

Jr.,

Co.,

Thomson

Smithers

S.

Chicago

B.

&

Reynolds ^ Co., New York

Sons,

DOROTHY

MORTIMER

Exchange,

REGINALD

DEVLIN.

York

COHU,

BURK1IOLDER, II. FRANK
Equitable Securities Corp.,

York

COGGESIIAI.L, GEORGE K.

COHEN,
&

E.

Upham

DeBOI-T,

dc

Fidelity-Philadelphia Trust Company,
Philadelphia

New

Baltimore

George W. Davis,

CULLOM

The Chase Manhattan Bank,

New

Bankers

Schoellkopf,

M.

The Martin Company,

<fc

Mrs.

Stock

Bodine,

Chicago

MORTON

MISS

COCULO, T.

C.

Company,

"

'■

W.*

Co.,

Edwards

G.

CLOUTIER,

Harriman

BUNCE, HAROLD

BUNKER,

A.

&

W.*

HOWARD

DcGROTT,

Washington
CLUETT, W. SCOTT

Co., New York

BULLOCK,

Ames

Investment

K.

Co., New
EDWIN A.

BUELTMAN,

E.

&

Indianapolis
Indianapolis

Cleveland

Bank,

Norfolk,

of

NANCY

JAMES

BARY,
F.

H.

National

CALVIN

Cleveland

Corp.,

Corporation

SHELBY

Nesbitt,

JAMES

F.*

Cleveland

Mr.

DEAN,
de

Lane, Space & Co., Atlanta

CLIFFORD,

BUCK, RICHARD A.*
Pal nam Funu Distributors, Boston
RICHARD

Co.,

Clayton Securities Corporation, Boston
CLEARIHUE, LLOYD

Smith, Barney '& Co., New York
BRYCE, T. JERROLl)
Clark, Dodge & Co., New York

Hutton

CLARKE,

Louis

Angeles

Skaggs & Co., Sa» Francisco

Midwest

HARRISON*

CLAYTON,

Cleveland

St.

Los

Shelby Cullom Davis & Co., New York
DAY,

CLARK, WILLIAM

American

E.

BRYAN, JOHN F.

F.

With

Kirkpatriek,

Co.,

Co.,

San Francisco

F.

Turben &

Co.,

WILLIAM

&

GEORGE

Davis,

Municipal Finance Officers Association,
Chicago

Johnson,

Trust

POWELL

DAVIS, MISS

DAVIS,

Trust

i

York

Norfolk

Harris,
&

JOSEPH

CLARKE,

Francisco

San

GERALD F.*

G.

DAVIS,

C.

Bank

E.

CLARENCE
First

DEAN,

JOHN

Merrill,

K.*

America,

The

II.*

Chicago Tribune, Chicago
CLARK, WILLIAM II.

F.

Co., New

ALAN

of

New York

Brush, Slocumb & Co., San Francisco

E.

BOENNING, HENRY I).
♦Denotes Mr, and Mrs.

Bank

BUKCHLER,

Washington

White, Weld & Co., New York

&;

MURRAY

DAVIS,

Co., Boston

&
&

New

Deposit &

Ryons & Co.,

Investment

W.

Landstrect

CLARK,

*

HARRY*

BROWNE,

HAROLD

Corp.,

MARK*

Lester,

Winston-Salem

York

Marks & Co.,

Childs &

F.

Wainwright

CLARK,

Ltd.,

Nicolaus

DAVIS,

Anthony & R. L. Day, Boston

Wachovia

Co., New
C.

Salomon Bros.

C.

York

New

AUSTIN*

Witter &

Dean

ROBERT E.

Nashville

Co..

Bullock,

DAVIDS,

JOHN J *
Pressprich <fc Co., New York

C.

Boston

Research

York

Stifel.

FORRESTER A.

Clark,

&

.Baltimore

Cleveland

Jr.,

W.

CLARK,

York

New

J,

Cleveland Plain Dealer,

Boston

H.

Hartford
E.

FRANK

BRYAN, JOHN

JOHN L.
& Howard,

BLEIBERG, ROBERT M.*
Barron's Weekly, New York
BLYTH,

Co.,

Dickson

BRUSH,

ALLAN*

R.

ROBERT

BROWN,

York

CLAPP,
CI ARK,

Securities

Mercantile-Safe

Exchange Firms, New York
CIIISHOLM, FRANK A.
Varnedoe, Chisholm & Co., Savannah

Tucker,

York

Ltd., New

Guaranty Trust Company,

BROWN,

Co., Los Angeles

G. Becker & Co.,

Philadelphia

Chicago

Co.,

M.

R.

Corporation,
WILLIAM J.

Calvin

Company, Chicago

CLAFLIN, III, WILLIAM

R.

»

DALY, II, OWEN*

W.*

MICHAEL

Jr.,

Chicago
S.

DALENZ, JOHN McG.

Dillon, Read & Co., New York
CIIRISTOPHEL, ARTHUR A.
/
Reinholdt <& Gardner, St. Louis

York

New

York

Co.,

WINTHKOP

Parker

Natl.

Assn. Stock

CHRISTIE,

W.

Co.,

&

Bullock.

BLACK, Jr., EUGENE R.*
Lazard Freres & Co., New

BAIltl), ANDREW M.*
BAKER,

Calvin

BROWN,
Inc.,

York

New

BROOKS, JOHN II.*

BROWN,

II.

FRANK T.*
Distributors,

The

Angeles

Barney & Co., New York

DACEY,

Boston

Co.,

Los
J.

Minneapolis

<fe

DARMSTATTER.

&

R.

Co..

CUTLER,

C.

It.

Reid

Co.,

S.

Becker

G.

New

Company,

CHARTERS,

BRITTEN, WILSON A.

BINGHAM, CURTIS II.*
Bingham, Walter & Hurry, Los Angeles

AYRES, Jr., ROBERT M.
Russ & Co., San Antonio
BABICH, LEO B.*
Hill Richards

Jr.,

GERALD

ROBERT

Nuveen

York

Pollock & Co., New

&

ALVIN

Lord, Abbott & Co., New York
BETZ.

ATWILL, Jr., WILLIAM
Atwill

John

R.

San Francisco

Co.,

Moseley &

Pittsburgh

ARTHURS, ADDISON W.*
Arthurs, Lestrange & Co.,
II. ALBERT
ATKINS, J. MURREY*
R. S. Dickson & Co.,

S.

BROPIIY,

i

D.

Channer Securities
Fulton

J.

Smith,

Atlanta

FREDERICK

CHAPMAN,

B.
Atlanta

1

Forgan &

York

New

TODD*

C.

Keystone

DONALD*

Glore,

BROOME.

II.

A.

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

Cutter, Bennett & Co., New York
BENTLEY, KEITH M.
Dawson, Hannaford. Inc., New York
BERGMANN, CHARLES L.

'

ASCHER,

E.

BREEN,

BIlINKER,

BEltNDT,

Philadelphia

Harriman Ripley & Co.,

ARNOLD, II. WILSON"
Arnold & Crane, New Orleans

IIUGn

Co.,

&

ARTHUR VV.

CURVIN,

Corp.,

CASEY, JAMES D.

New York

DONALD

BREWSTER,

Sutro A: Co.,

E.

A.

Sweney, Cartwright & Co., Columbus

York

New

McCourtney-Breckenridge & Co., St. Louis

BERL, WARREN

ARNOLD, EUGENE

McKinnon,

BltECKENKIDGE, IHJNTER*

R. W. Pressprich & Co., New York
BERQUIST, P. A.
First National Bank, Chicago

AEM1TAGE, ALBERT T.*
Coffin & Burr, Boston

Wm.

,

•'*

Nashville

ANGLIN, THOMAS Li*
Mack all <fc Coe, Washington

<fc

CART WRIGHT,

Abbett & Co.,

BELL, GEORGE DeB.
Drexel <te Co., Philadelphia

Richmond

FRANK

Securities

Jr.,

Courts

Hutzler, New York

CIIANNER,

BENNETT, FRANK S.

GEORGE W.
&■ Strudwick,

CARTER,

&

F. S. Moseley & Co., New York
BRAUNS, kOBERT A. W.

Lord.

CURTIN,
CURTIS,

Allyn & Co., New
GATE, Jr.. IIENRY F.*

BRAYSHAW,

Chicago

Cole & Co., Topeka
BEIL, Jr., FREDERIC C.*
Beil
Hough, St. Petersburg
BE1NIIORN, Jr., WILLIAM A.
Russ <fc Co., San Antonio

New York

&

Inc.,

IE*

&

Peabody <fc Co., New York

Kalman

Jr.,

Equitable

Boston

Howard,

McDonnell & Co.,

York

Bcecrolt,

ANDERS, CURTIS L.
Blair

Chronicle,

BEECROFT, HARRY

CARTER,

York

New

Weedon

Kidder,

j

Carrison, Wulbern,

Crouter

II.*

CUNNINGHAM, FRANCIS

Jacksonville

Bros.

Townsend,

WARREN

Crowell,

York

New

GEORGE*

CARSON, JAMES

D.

Co..

Co.,

&

II.

&

Philadelphia

CROWELL,

Co.,

BRADY, NICHOLAS F.
Dillon, Read & Co., New York
BRAUN, Jr., FREDERICK C.

Chicago

BECK, EDWIN L.
Commercial & Financial

ANASTASIA, ALBERT A.

Pierce,

York

K. WHITNEY

<fc

Thomson

ALLYN, JOHN W.
A. C. Allyn & Co., Chicago

New

ELWOOD

Childs <fc

Eaton

L.¬

Beaubien &

G.

F.

BRADLEY,

BEAUBIEN, ANDREW S.
L.

New

& Trust Co.,

Deposit

BRADY, EUGENE

Cleveland

Sanders i*c Co.,

Vance,

Allen & Co., Chicago
ARTHUR C.
Allyn & Co., Chicago

Bank,

Manhattan

Salomon

BOYNTON,

New York

Cleveland

Co.,

BAXTER, MARK

Ray

Co.,

&

DANA F.*
Miller
Co.,

Hayden,

ALLEN, E. RAY
E.

&

BAXTER,

ALLEN, ALONZO C.

ALLYN,

Hutton

Haupt

GARRISON,

Baltimore

BASSETT, EARL K.
E.

Ira

W

MEREDITH*

C.

Mercantile-Safe

Shreveport

ALEXISSOX, GUSTAVE A.
Granbery, Marache & Co., New York

W.

Bank,

■

Chase

BOYCE,

WILLIAM R.

Barrow,

&

Nuveen

GORDON

Dellaven

Bodine,

Chicago
CARIIINGTON, Jr., WILLIAM G.*

BOWMAN, FRANCIS B.

New York

BARROW,

Dallas

Company,

CROUTER,

C.

FRANK

John

Development

Juan

CARR,

Columbus

Company,
BO WEN, FRANCIS*
San

Toledo

CROSSLEY, E. LYNN*
Municipal Finance Officers Assn., Dallas

McDougal & Condon, Chicago

Ohio

Government

M.

HARRINGTON, CHARLES S.

NORMAN J.
James Richardson & Sons, Winnipeg

ALEXANDER,

ALEXANDER, TED R.
Texas Bank & Trust

New York

Harris & Co.,

Stranahan,

Boston

The

B.

Morgan Stanley <te Co.,

CARPENTER, EDWARD

York

BOLES, EWING T.*

Houston

Co.,

<fc

CARLSON, J. HOWARD
Carl M. Loeb, Rhoades & Co., New York
E.*

Jr., II. LAWRENCE*
Dillon, Union Securities & Co.,

Eastman
New

II.

BALDWIN, ROBERT

L.

JOHN

AIIBE,

Winnipeg

Richardson & Sons,

BAKER,

ADAMS, WILLIAM M.*
Braun, Bosworth & Co., Detroit

BOGERT,

RALPH D.

James

New York

Co.,

&

BAKER,

S.¬

JAMES

ABKAMS,

One North LaSalie Street, Chicago

2

page

79

Volume

186

Number 5700

.

.

.

The Commercial and Financial Chronicle

(2675)

Expert committee

air industry financing castigates CAB rate regulation in

on

charging "airlines lack the earning
public adequately and to finance

FOREWORD *

capital than at
■f Virtually

at

the Investment Bankers
Association
!

has

either

Finds

our

14%

the

a

time when U. S. S. R. endangers our

un-

to

program

increase

operating

operating income.-

net

Today

aircraft industry ham¬

the

major

coverage

terest

Recommends threefold

in

working

a

60%

ex¬

decline
.

•

-

the

strongest of
projects
bare

lines

of

loss

in

of

one

actual

security.

in

resulted

in

more

U. S. aviation superiority.

ensure

passenger miles increased
the year before, but a

over

20%

penses

jet equipment that will require

new

time in airline history."

any

serve

revenue

strung by arbitrary cutbacks and airlines jeopardized by outmoded regulation

member

every

and financial strength to

power

43

dividends

after

in

payment

1958,
capital

and

1957,
of

in¬

negative
position by the
a

of 1959. Another
major, with
$1.3 million net loss in 1956 and

end

derwritten aviation securi¬

a

ties or has clients who are
stockholders' in

the

indus-'

1^£ry;ffieM
j^lotion1 SechtrMes Com¬
mittee Has

ventionj at Hollywood, Fla., that
the Committee is seriously;con-

participated di¬

rectly in financing of the
I",-''/'j

a

I

' ''

..

speak from professional

perience.

■

'

*

.

;

It

is

the

Committee

that

tive results
t

]

opinion of the

can

construc¬

from

come

'its

will

views

capital... funds

and

to total revenues) averaged 96.3%

the ratios of five other regulated

ica's air defense.

our
e

n

c*

i

The

ni

■

o-nn«

c

Domestic

t

been

in

i

a r

to

an

Investment

or

Problems

.T

.

,

,

investment

.

,

.

bankers'

viewpoint the domestic tmnKmr-

ahead of

en'rerprise

of

the

aviation

;

termed iate
range

especially appropriate

\for the financial

commun¬

ity to make known, and to
support, its views.

Command

to

allow

passenger

our

of

wages,

the

Aviation

rail

and

stock

*All

based

1957.

sources

valuations

in

this

report

market close, Oct. 29,
figures are from published

upon

Other

believed

reliable

checked

and

by independent authority but not guar¬
anteed

by

the IB A

or

this

Committee.

determines
costs
and
Average air passenger

and

bus

fares

have

risen

Confronting

-j>he

Industry.-

railroads

further

a

increase.

.

airlines

are

subject

%,;•

_.

.

Aeronautics

on

earning

power

and
:

fi-

——

a

on

DEALERS

sale

a

'

of

aircraft

in

the

j

market

are

and

increasing
competition,
encour¬
aged both by regulatory authority
and by industry pressures. Airline
facilities are also subject to the
competition
common

of

all

competition by increasing

certification of carriers

over

tical

th^re

! are
,

RENO

BOULDER

SAN DIEGO

IDAHO FALLS

BEVERLY HILLS




P0CATELL0

RIVERSIDE

OGD'EM

LONG BEACH

routes.

I markets

Principal Exchanges
•

LOS ANGELES

PR0V0

MISSOULA

TUCSON

BUTTE

f)>

Telephone DIgby 9-0777

Cable Address:
EMANSTOCK

10 Avenue de la

Gare, Lausanne, Switzerland

i

UNDERWRITERS

Corporate and

DISTRIBUTORS

Municipal Securities

and

Service to

Unlisted Trading

Department...

Dealers

substantially more airline routes
serving the 25 major passenger

;

York Stock Exchange

SPOKANE

Teletype: NY 1-1973

&

other

carrier transport.

policy has been to intensify

I

•

Broadway

New York 5f N. Y.

subject to

secure

/

1915

SALT LAKE CITY

120

in
captive or

airlire

J. A. HOGLE & CO.

DENVER •

CORPORATE, MUNICIPAL & FOREIGN SECURITIES

It has

a

CAB

•

UNDERWRITERS - BROKERS - DEALERS

deter-

The airlines lack

direct

NEW YORK

Commodity Exchange, Inc.

„

forms of

and Other

American Stock Exchange

Midwest Stock Exchange

seven-year

years.

:

„

MEMBERS
New York Stock Exchange

•

i

Members of New

1929

residual,

y.

ESTABLISHED

ESTABLISHED

the

life with a 25%*
derived from historical
experience, when, in fact, the bulk
of
present operating equipment
may be rendered obsolete by jet
competition within the next four
on

•

Emanuel, Deetjen & Co.

argued that depreciation of
airline equipment should be based

;

UNDERWRITERS

.

Poors industrials at 12.1
Continued on page 54

also

/

-———

r————-—

,

included

mination of fair earnings.

the

,

depreciated assets and has even
fluctuating capital gains

■

Board rate regulation, the a Wines

•

to

"arr°w basis of rate Of return on

Civil

J™; stocks^g^ter «%.

the

effect

fares should be determined

;
of

^ l^hLm grotTh.

durine

revenues

from

...

two different sets of financial and

..

IJ00 57 nigns,
investors have down valued air-

he-

.

hind

20%
.

governmental problems. Under the
.

stock index has .de...

10/0

indus-

35%

type of rate regulation, in

narrow

lack

BROKERS

an

11%
and
18%
respectively since 1948.
The ICC has
judged even these increases inadequate
and recently
granted

&

restrictions

500 industrial

Thus,

operating profits lagged 35% be- clmed
laeepd

gasoline, repairs, deprecia-

placing a restrictive ceiling
the aircraft manufacturers, both upon earnings derived from sound
fundamentally
different; compo- management. The CAB staff has
nents of the aviation industry, face taken the position that passenger

.

times.

as
recently as 1951,
today they sell at a significant
discount. While Standard & Poor's

accelerated in recent months. Dur- ar(* &

'

average

The domestic trunk airlines and

are

but. 1.6

nrofift?

tion, and equipment costs all have
In
contrast, intercity

major future source

Basic., Problem

The

gains

increased.

fare

INVESTMENT BANKERS

such

airline stocks sold at
50% premium above

value

are

fares remain at 1942 levels, while

.

Eastern

ASSOCIATION OF AMERICA

profits, inelusive
of
non-recurring- gains,
rose
only 1.0 times, exclusive of

average

subject to CAB ing the first five months of 1957,
utility-type
regulation
of
fares
and of operations plus the added

revenues.

manufacturing employer to decline into a depressed
industry.
-

COMMITTEE

The airlines

economy

largest

our

net

Whereas

book

government ceiling is imposed on
a free competitive

our

transportation

But

air-

about

earnings while

major deterrent to aggression, we
eannot yield air superiority and
still ensure world peace. Nor can
of

SECURITIES

security. With
Strategic Air
destroy Russia, the

the capacity of

trunk

increased

hazard of enforced competition. A

we

national

preserve

we

AVIATION

missiles,

cannot fur- ;
ther lag and

Donald N. McDonnell

trends in world events, it is
now

affect their financial future.

interConti-

of

industry. In view of recent
'

Ap-

This downward earnings trend has While investors capitalize Stand-

ta
development

has

times.

tine

tne

domestic

,

the

of

_

From

an

2V2

Airlines

ap¬

nental and in-

that

'

Community

_

:

the

lines'\ revenues

Banking Viewpoint
Historical

A.

an

parently equal

major

Washington

Investment

period,
Airlines-

American free

voice

B

with revenues. During the 1950-56

Soviet to1 i t

a

economy

representatives in Congress.

the

thah1 Payers;

higher

A

i

Trunk

Problems from

growth. With

distribute

\urge them to petition their

past

significantly

-

III

domestic

c o n o m

the

the

is

is

defense, and

copies to their clients and

In

i

This

national survival, our military

our

with

concur

the

necessary to fftheir crucial role in Amer-

industries—water, electric, natural
praisal of tlie Airlines
n,
.
.
Therefore, both as bankers who £as> telephone, and railroadabsolutely vital to the futuie of
The result of the above prob]iaye fjnanced the growth of ayia- -which ranged
during the same
America.
linri
rl
fi
rlrt/l
flH f VAVVi
f
flH j\Cf/
tion and V>
as
citizens dedicated to period from 71.0% to 90.3%.
:
lems has been a decline in the
the national welfare, we believe.
The airlines have suffered a market value and price-earnings
it in the public interest to
present'declining earnings trend duiing rafie of airline stocks,; indicating
The Aviation Industry in
2 constructive suggestions concern-;.their period of greatest growth;■■the.investing public's disfavorand
America
ing the airlines' and aircraft man- in contrast to the; normal' indus- unwillingness to accpet their flucUpoil'its wellbeirig may depend ufacturers' separate problems,
trial
pattern of rising earningstuating
return and high-risk,
aviation:industry today

this report if Association:members mho

obtain

long-term credits
nance

'.

V*

F'^I'M
'

to

the air

would be the first U. S. trunkline
driven back to the discontinued
l?°bcy
subsidy by tne tax-

...

-

.,

policy, the aircraft; manufacturers ating ratio (ratio of total operating
may find it increasingly; difficult' expenses,1 depreciation, and taxes

'The text of the Report follows:
The

ex¬

v

„

state of

industry and defense; ^

"to "■

*

about the

cerned

but

in

either
one

I senger

Todav

the
bus

result,
load

U.
or

S.
rail

the

iden-^re

through

our:

Syndicate Department...

there

than

routes.: As

airlines'

pas-

factor'

(percentage
rof available seat-miles occupied)
t has* decline sharply from 69:6%
: in 1951" to 62.5% in the; 12 months
ended JUne 30, 1957, thereby rais¬
ing costs per unit revenue.
The- airlines suffer from

a

high

NEW YORK

LEE HIGGINSON

CORPORATION
Investment Banking Service

Since 1848

BOSTON

CHICAGO

MEMBERS
New York, Boston

and Midwest Stock Exchanges

American Stock Exchange

(Associate)

44

The Commercial and Financial Chronicle

(2676)

Continued from page

housing

30

cilities

annually

by the ranking
Republican mem¬
of the Committee (H. R. 8810
introduced

bers

and

and H. R. 8811)
pass

would permit the

through of the tax exemption

by
regulated
investment com¬
panies whose income is at least
95% from tax-exempt bonds; but

July 15

H. R. 8702, introduced on

by Representative Curtis, would
permit any investment company
holding tax-exempt bonds to pass
the tax-exempt interest through
to shareholders in "exempt-inter¬
est dividends" if the investment

persistent unemployment and un¬
deremployment in certain eco¬
nomically depressed areas;" but
neither of the bills was reported
by the Committee.
taken

A

in

in

bills

summary

proposed

grams

No action was

similar

on

House.

the

of the pro¬

bills is

these

contained in Appendix A.

.

90%

of

gross

income from

divi¬

for less than 3 months).

amend and revise the
governing financial insti¬
tutions and credit (including the
National Bank Act, the Federal
S. 1451, to

statutes

Banking
and
Currency
Committee, but it was not re¬

House

ported by the Committee.

(h) Tax Exemption of Housing
Authority Bonds

(e) Bank Underwriting of Reve¬
nue

No action
to

was

taken

the bills

on

authorize banks to underwrite

revenue

No

Bonds

bonds.

action

tee

on

taken

was

House Ways and

by

the

Means Commit¬

7000

H.R.

which

would

amend the Internal Revenue Code

to deny tax

(f) Federal Financial Aid to Eco¬

exemption to housing
authority bonds.

nomically Depressed Areas
A

subcommittee

Committee

the

of

Senate

Banking and Cur¬
rency held hearings in March and
April on a bill "to assist areas
to
develop and maintain stable
and diversified economies by a
progrm of financial and technical
assistance" and on a bill "to alle¬

(i) Federal College Housing Loan
Program

on

viate conditions of substantial and

RIPP &

The

Federal

College Housing
authorizes the Ad¬
of the Housing and

Loan Program

ministrator
Home
loans
years

to

Finance
with

Agency

maturities

to
up

make
to 50

to "educational institutions"

finance

construction

the

for¬

a

gations of the U. S. then forming
a part of the public debt as com¬
puted at the end of the/iscal year
next preceding the issuance and
adjusted to the nearest Vs of 1%,
plus lA of 1%), if such loans are
available

not

upon

of

CO., INC

from

For the

favorable.

as

other

sources

terms and conditions equally
fiscal

year

beginning July 1, 1957, the inter¬
est rate under this program has
3%

(if such

available

meets the income test of
regulated investment companies posit Insurance Act) passed the
Senate
with
amendments
on
prescribed in Section 851(b) of
Extensive hearings
the Internal Revenue Code (i. e., March 21.
held
on
the bill by
the
all corporations deriving at least were
dends, interest, and gains from the
sale of securities, if less than 30%
is from the sale of securities held

under

de¬

specified in the statute (not
2%%
or (b) the average annual interest
rate on all interest-bearing obli¬

been

(g) Financial Institutions Act

Reserve Act and the Federal De¬

company

rate

than the higher of (a)

more

Securities Committee
Democrat

interest

an

mula

Report of IBA Municipal
bills

other educational fa¬

or

at

termined

that

from

rate)

loans

other

when

—

not

are

sources

the

at

Federal

Government's full faith and credit

obligations of a comparable ma¬
turity were selling to yield higher
than

sale

of

administration's

housing
program proposed to amend the
College Housing Loan Program
(1) to provide a new formula for
determining quarterly the interest
rate
at
which
Federal
college

the

or

bid

form

on

state

or

municipal bonds should ex¬
pressly provide that the issuer
would furnish to the purchaser a
certificate

stating that

no

litiga¬

.

Thursday, December 19,1957

.

that

litigation is pending,

no

of

the

bonds

municipal
and public revenue bonds

40 Wall Street

New York

Telephone: HAnover 2-5252

5, N. Y.

Teletype: NY 1-2030

or

the

means

While this resolution did not go

quite

as

far

as

the recommenda¬

tion in the report by the IBA Spe¬
cial Committee, adoption of the

resolution by the Municipal Law
Section
of
the
American
Bar
Association

edge

lish

of

the

threatened

signers

affecting

the

thereof,
validity

of the bonds.

The

will go far to estab¬
practice to provide the
desired type of non-litigation cer¬
the

tificate.

Municipal Law Section of

We wish

the American Bar Association, at

ciation

its

these

the

meeting

on

following

July

adopted
resolution on this
13,

subject:
State and Municipal
customarily offered for
public sale subject to the opinion
as
to validity of the Bonds ren¬
are

by an

attorney, commonly

Bond Attorney, and
"Whereas the Bond Attorney is

called

to express our appre¬
their cooperation
in

joint meetings particularly
following:

to the

From

"Whereas

Bonds

for

a

usually selected by the issuer of
the Bonds, and

the M. F. O. A.: George
Shaw, President, (Director of
Finance, Miami, Florida); Lynn
Crossley, Chairman Liaison Com¬

N.

mittee (City Auditor,

Dallas, Tex¬
as); Joseph Clark, Executive Di¬
'

rector.

Municipal

Law

Section

American Bar Association:

educational

students

or

a

facilities

faculty of

educational
for

''Whereat; the purchaser of the
bonds, being required to accept
the
opinion of such Bond At¬

institution

for

&

Co.

STATE AND MUNICIPAL BONDS

public

any

qualifying

loan under the program.
II

Liaison

successful

a

throughout the nation!
Sal l River Project

(Arizona), Jersey City,
Washingt on Suburban Sanitary Dis¬
trict, Regional Planning Commission of
Cuyahoga County (Cleveland), the City of
Houston and the City of Tacoma...
all use our uniquely complete
financial consulting services.
,

For almost

a

quarter century we have provided
governmental units with experienced counsel

in

financing, revenue financing, reorgani¬
existing debt structure, over-all financial
planning and financial public relations.

new

zation of

To learn

more about our services and how
link municipality with underwriter
and investor we invite your inquiry.

we
.

.

of

Consultants

70 Pine Street




on

•

Municipal Finance
New York 5, N. Y.

the

Over

a

Half Century of

the American Bar Association.

sirable in the work of the Liaison
Committee.
eral

Liaison

Accordingly,

a

Gen¬

Subcommittee

AS TRANSFER AGENT
in

NEW

YORK, N. Y. and JERSEY CITY, N. j.
4

was

appointed under the Chairman¬
ship of Walter Craigie (F. W.
Craigie & Co., Richmond), and a

We

afford

economies

year

was

made

some

of

the

principal

or¬

ganizations concerned with mu¬
nicipal finance when, during the
meeting of the Municipal Law
Section of the American Bar As¬

sociation in New York

July 12,
was for the first time a joint
meeting of the Liaison Commit¬
tees
of
the
Municipal Finance
Officers Association, the Munici¬
pal Law Section of the ABA, the
Municipal Forum of New York
on

•

advantages to

this

in effecting cooperation be¬

tween

other

and their stockholders.

committee is in Appendix B.
progress

and

underwriters, distributors, corporations

list of the members of this Sub¬

Great

Efficient and Economical Service

Municipal Law Section

However, it became apparent this
year that cooperation with several
other organizations was also de¬

there

WAINWRIGHT & RAMSEY Inc.

Subcommittees

For several years we have had
Liaison Subcommittee to work

with

municipalities

of

George

F. B. Appel,
Chairman (Townsend, Elliott & Munson, Philadel¬
phia, Pa.); Robie Mitchell, Chair¬
man
Liaison
Committee
housing loans will be made if they
(Mit¬
torney, should be protected, so far
are
not
available
from
other
chell, Pershing, Shetterly & Mit¬
as practicable, by the standards of
sources at that rate, and the pro¬
practice in the rendering of such chell, New York); David M. Wood,
Previous Chairman Liaison Com¬
posed formula would fix the in¬ opinion, and
mittee (Wood, King & Dawson,
terest rate for the quarter begin¬
"Whereas the Section of Munic¬
William Tempest,
ning Oct. 1, 1957, at 3%%; and ipal Law has been requested to New York);
(2)
to increase the authorized aid in the establishment of such Secretary.
funds for such loans by $150,000,Municipal Forum of New York:
standards,
000.
This proposal was included
de
Bary,
Chairman
"Therefore, be it resolved by Marquette
in a bill favorably reported by the Section of
Municipal Law of Liaison Committee (F. S. Smithers
the House Banking and Currency the
American
Bar
Association, & Co., New York).
Committee thhs year, but the bill that all Bond Attornevs
are urged
To further the cooperation be¬
was
not adopted.
to conform to the following prac¬ tween these
organizations through
tices and definitions:
The Housing Act of 1957 in¬
joint meetings of their Liaison
creases from $750,000,000 to $925,(1) An unqualified opinion ap¬ Committees the Chairman of the
000,000 the funds authorized for proving an issue of public securi¬ Liaison Committee of each of the
loans under the Federal college ties means an opinion which con¬ Associations referred to above was
housing program.
The Act also tains no reference to any litigation, invited to attend this Convention
amended the definition of "educa¬ or threat of litigation, or
proceed¬ and there will be a joint meeting
tional institution" lor which Fed¬ ing involving the validity of the of
these
representatives during
eral loans may be made under the Bonds, or the means provided for the Convention.
their payment.
program to authorize loans to (1)
In order to lacintate closer co¬
any
educational institution be¬
(2) The Bond Attorney at the operation
with
the
American
yond the level of high school (no time of delivery of the Bonds, Bridge, Tunnel and Turnpike As¬
part of the net earnings of which should obtain from the issuer, and sociation, whose members have
inures to the benefit of any pri¬ make available to the
purchaser many problems of mutual inter¬
vate
shareholder
or
individual) of the Bonds, a certificate stating est with our industry, a special
the courses of which are designed
to train persons to carry on the
vocation of clergyman of a reli¬
gious denomination, (2) any hos¬
pital operating a school of nursing
beyond the level of high school
approved by the appropriate State!
authority, or any hospital ap¬
I N C O R P OR A T E D
proved for internships by recog¬
nized authority, if such hospital
is either a public hospital or a
Suite 3811, 20 Exchange Place, New York 5, N. Y.
private hospital, no part of the
net earnings of which inures to
HAnover 2-5620
the benefit of any private share¬
holder or individual, and (3) any
agency, public authority or other
Underwriters — Dealers
instrumentality of any State es¬
tablishment for the purpose of
providing or financing housing or

other

serving

pro-

vided for their payment."

W. H. Morton

state

or

(to the knowledge of the signer)
threatened involving the validity

tion is pending or, to the knowl¬

dered

3%%.

The

and the Municipal Securities
Committee of the IBA. The prin¬
cipal subject of discussion at tnis
joint meeting was
the
recom¬
mendation by a special IBA com¬
^
mittee last year that the notice

.

Write for our

and State

free booklet setting forth the Current Federal,

Stock

Original Issue and Transfer Tax Rates.

REGISTRAR and TRANSFER COMPANY
50 CHURCH STREET

New York 7,

N. Y.

BEekman 3-2170

Established

15 EXCHANGE PUCE

is»9

Jersey City 2, N. J.
HEnderson 4-8525

Volume

136

* Number

5700

Liaison

Subcommitteee

pointed

under

of

Walter

.

.

was

.

The Commercial and

Chairmanship
(Drexel & Co.,

Steel

York) and

bers

of

cluded

a list of the mem¬
this Subcommittee is in¬

in

Appendix B.

of this Subcommittee

Members

participated

in panel discussions at the work¬

shop meeting of the ABT & TA in

Washington in June and at the
Meeting of that Associatioh in Chicago in October.

Annual

iVr'vxVHI

J-

;

Legal Opinions

Recently

that

printed
bonds.

of the outstanding

one

on

proposed

the Pacific Coast has

legal

opinions

A copy of a memorandum

prepared by the law firm regard¬
ing this proposal
was
sent
to
members

of

this

Committee

and

increasing
in
recent

an

concern

so-called

"metropoli¬

problems,,

particularly

determination, of

respect to

(1) the appropriate governmental
unit

and

the

Committee

Municipal

with

quest for their comments

gestions.

re¬

a

or

A special informal

com¬

&

Co., New York) was appointed
study the draft and to submit

to

their

and

comments

and

nancing the
the

(3) the means of fi¬

services provided in

The

IB A

is

participating

in

In

a

"Continuing National Conference
Metropolitan Problems" which

Revenue

Bonds

Under

have

we

referred

to

designed to serve as a cooperat¬
ing agency for groups and organ¬

including the

Municipal

reso¬

ture Ervin L. Peterson.
Under

izations concerned with metropol¬

Officers Association and the

itan

cooperate in such research and to

used

where

not

be

the

legal opinion is
too long to be printed on the back
of the bond, as is frequently the
in

case

the

bond

revenue

issues.

problems;

to

and

encourage

ican Bar

John

the

adverse

effects

and other

to be leased to

meetings

as may

construction

further

On

of

industrial

plants

private industry.

April 5,

1957, the Supreme

objectives of the Conference.

to

We

request that members send to

Court of Nebraska in State

the proposal but most municipal
bond dealers have evidenced en¬

the

Municipal Director for

Beck

have

substantial

been

thusiasm

raised

over

objections

with respect

the

possibility, and

the proposal will be given further

consideration

the

the meeting
of
during this Con¬

at

Committee

print legal opinions

of

it

bonds,

that

has

of

copy

tory.

The

believe

of

a

does

who

this

be

of

this

conditions

would

that

not

or

Subcommittee

pendix B.
committee

is

in

state

a

the

reveal

offering
material

covenants that

were

recited in the legal opinion.

the

of

Governors

Model

adopted

pared for the National Municipal
sponsor

copy

of the draft

was

there

with

the

be

three

"(1)

to

shall

in aid

of

II,

are

Glendinning & Co., Vice-Presi¬
dent; Robert T. Arnold of The
Boston Corporation. Secre¬

tary; and Raymond H. Welsh of
Kidder, Peabody & Co., Treasurer.

additional
on
request

The

and

the

to

IBA

Statistical

Program

there

is

Re¬

is

published

Continuecl

or

on

of

year:

Mr. Hiestand

of The First Boston

Kidder, Peabody & Co.
The annual

quar-

sociation

meeting of the As¬
followed by dinner

was

and the annual Christmas

46

page

one

Corporation and F. Stanton Moyer

1956, about which infor¬

Bulletin

elected to

Wesley Welsh, II; Sidney

C.

Rubin Hardy

mation is available and the Statis¬

tical

were

Scott, Jr. of Smith, Barney & Co.;

being

detailed record of all state
municipal bonds issued since

1,

for

serve

and

a

July

following

the Association's Executive Board

IBA.
IX

Under

Harry K. Hiestand

Robt.

First

Municipal Research
search

C.

were:

year

Digest of Exemptions Under
State
Blue
Sky Laws for
(1)
State
and
Municipal
Securities
and (2) Sales to Institutional Buy¬
ers was recently mailed to all IBA
and
available

o r

^ensuing

Wesley Welsh,

A

firms,

f

serve

the

f-

e r o

elected

Party.

Relations

which

sent to

States

are

performed

wholly

or

American

Stock

v.

Exchange

functions

are
ready and
and finance that

assume

now

Members

responsibilities:

willing to

all members of the Municipal Di-

Members New York Stock Exchange

Joint

a

Committee

Action

designate

the

Bacon, Stevenson & Co.

resolution

a

established

basic

to

Model Law when it is in final form.
A

10 t h

Securities Acts

member

Drexel

ficers

Exemptions Under State

kept

of

Co., whose
expired.

term

VIII

Conference in June, P resident
Eisenhower
proposed
and
the

Federal-State

will

&
a

address to the Governor's

an

that

which

is

VII

Intergovernmental

Revenue Bond Law has been pre¬

League

provides

state

individual, association

any

D

mittee in Chicago on Oct. 3 and 4.

copies

or con¬

loaned

or

Remer, a part¬

corporation.

Model Revenue Bond Loan
a

given

Appendix

as

suc¬

ceeds John H.

Com¬

the

of

Wig

Ap¬

The report of the Sub¬
is in Appendix C.

preliminary draft of

which

of the

credit

be

never

In

A

acquisition

constitution

that

de¬

claim
did

Met¬

not

practice because, if each
purchaser did not receive a copy
of the legal opinion, dealers might
be subjected to suits by purchas¬
circular

on

appointed under the Chairman¬
ship
of Mr. John Linen
(The
Chase
Manhattan
Bank,
New
York) and a list of the members

sirable

ers

Subcommittee

work

the

at

Hiestand

partici¬

of the summary of a meeting
the Federal-State Action Com¬

from the

The Supreme Court held that the
law violated a provision of the

ropolitan Area Problems has been

Committee

that

IBA

the back

substitute

a

as

a^

An

held

copy

un¬

struction of industrial buildings to
be leased to private companies.

areas.

suggested

on

been

for delivery
legal opinion to
each purchaser, bonds might carry
a
statement that a legal opinion
regarding the bonds has been de¬
posited with an indicated deposi¬
of

other

Federal

an¬

Club here. Mr.

ner

adopted in 1953 authorizing mu¬
nicipalities to issue revenue bonds
to finance the

the

Enclosed

law

Nebraska

a

rel.

ex

City of York declared

v.

constitutional

reports re¬
garding metropolitan area studies
in their respective areas, so that
this information will be readily
available when it may be useful

In connection with the proposal
to

a cen¬

tral file copies of any

in

vention,

of

using municipal credit to finance

the

Several

in

Association, pointing out

possible

the

the In¬

of

President

meeting

Mask and

Stambaugh,
Special
Consultant to the President, was
designated to serve as Executive
for

ual

il

H.

Mu¬

and
cooperate
in the
preparation of such publications
and to hold such national, regional
prepare

phia at the

'

Commerce

Walter Williams.

nicipal Law Section of the Amer¬

proposal

could

Secretary of

elected

was

vestment Association of Philadel¬

Secretary of Agricul¬

Finance

to members oif all group municipal
committees
for
comment.
The

procedure

PHILADELPHIA, Pa. — Harry
K. Hiestand of Reynolds & Co.

mittee.

lutions adopted by various organ¬
izations in addition to the IBA,

is

General

Secretary of the Interior

Assistant

previous reports of the Com¬

mittee

on

Phila. Inv. Assn.

Hatfield Chilson.

pation

Industrial

con¬

Elects New Officers

Assistant Attorney
Percy W, Morton.

Director

area.

as

MUNICIPAL BONDS

financed

or

in part by the Federal

Government;
"(2) to recommend the Federal
revenue adjustments re¬
quired to enable the States to as¬
sume such functions; and
"(3) to identify functions and
responsibilities likely to require

SPECIALIZING IN ODD LOTS

State

Federal

or

attention

in

39

v

and State

MUNICIPAL BONDS

Broadway, New York 6, N. Y.
Telephone Dlgby 4-4100

the

future and to recommend the level

of State effort,

both,

or

assure

BROADWAY NEWYDAK OtN.Y.

.

or

will

Federal effort,
be needed to

Dealer« and Brokers in

effective action."

Pursuant

LEBEINTHAL& CO.
135

that
to

the

resolution

Railroad, Public Utility & Industrial

ipittee of the Governors' Confer¬
appointed the following Gov¬
ernors
as
Special Committee ; to

Bonds & Stocks

ence

serve

V

the Joint Committee.

on

R.

McKeldin,

r

1

■

Over-the-counter Trading Dept.

Lane Dwinell, New Hampshire,
Chairman.
Theodore

.

the

Chairman of the Executive Com-

REctor 2*1737

'
> »/.

,

/

D. Howard Brown

MacKain

Frank

Mary¬

land.
Victor

E.

Anderson,

Nebraska.

Ingalls & Snyder

Robert E. Smiley, Idaho.
Price

Daniel, Texas.
James P. Coleman, Mississippi.

Specialists in

Members

Neio

York

Stock

M.

Leader,

'

Foreign Securities

1

Pennsyl¬

COrtlandt 7-6800

,

NEW YORK 5, N. Y.

100 BROADWAY

vania.

,

Exchange

Members American Stock Exchange

Dennis J. Robert, Rhode Island.

George

—

Bell System Teletype

NY 1-1459

George Docking, Kansas.
Widiam
G.
Stratton,
Illinois,
ex officio.
President Eisenhower appointed
the

following Federal officials to

constitute

the

Federal

member¬

UNDERWRITERS
'

.

-

1

'

'

DEALERS

DISTRIBUTORS
'

'

■

•

'

'

.

«r

.

'

ship of the Joint Committee:

Secretary of the Treasury An¬
derson.

Corporate and Municipal

Secretary of Labor Mitchell.
Secretary of Health, Education

Securities

and Welfare Folsom.

andtJi £jfi/eicA'wcd&i
INVESTMENT

the

Bureau

of

the

sistant to the President.

Established

1919

John

Street, New York 4, N. Y.

Telephone

Teletype

WHitehall 3-9200

NY 1-515

S.

Bragdon,

Special

R. S. Dickson

& Company

INCORPORATED

As¬

Members Midwest Stock Exchange

sistant to the President.
Howard
to




of

Meyer Kestnbaum, Special As¬

SECURITIES

Associate Members American Stock Exchange

30 Broad

Director

Budget Brundage.

&nc.

Pyle, Deputy Assistant

the President for Intergovern¬

mental Relations.
The

45

Federal Civil Defense Adminis¬

as

area

serve

trator Leo A. Hoegh.

suggestions,

certain/services, and a list of the members of this
transportation,
water,
special committee is included in
sewers, schools and police and
Appendix B. The suggestions of
fire protection, (2) the division of
this special committee have been
political authority among the var¬ submitted to the National Munic¬
ious
governmental units within
ipal League.

designated to

were

sultants to the Committee:

sug¬

mittee under the Chairmanship of
Mr. Orlando Brewer (Phelps, Fenn

furnish

to

such

be

the back of municipal

on

and

over

area"

tan

with

been

has

interest
years

the

law firms

Securities

Metropolitan Area Problems
There

(2677)

vision Council

IV

ap¬

the

New

Financial Chronicle

CHARLOTTE
Atlanta

Greenville

CHICAGO

NEW YORK

Asheville

Direct Wire to

following members of other
and agencies

Federal departments

\

Raleigh

all Offices

Richmond

'

The Commercial and Financial Chronicle

(2678)

gG

William J. Wallace

45

Continued from page

"A

proposed
The

Act."

be authorized to

Henry Grady Wells, Jr.
Andrews & Wells, Inc.

Report of IBA Municipal

"A Study of Municipal
Bond Sales Postponed During the
Last Nine Months"; Issue No. 4 in

First

"Seasonal

discussed

1957,
in

Municipal

Bond

Sales"; and Issue No. 5 in October,

-

Bosworth,

Report

W.

Committee 1957

Summary of Proposed Proi/ram for Federal Aid to Eco-

Godbold, Jr.

1957, discussed "Some Character¬

.nomically

Demosev-Tegeler & Co.,
St. Louis

x

*

J.

lieved to be of interest to persons

engaged in the municipal securi¬
ties business and Appendix F con¬
court

decisions
to

of

some

believed

to

recent
be

of

engaged
in
the municipal securities business.
persons

Respectfully submitted,
MUNICIPAL SECURITIES

Chairman

Braun, Bos worth & Co., Inc.
Detroit

stable

Co., Inc.

by

Bank

of

and

Seattle, Seattle
W.

he

in

Pressprich & Co.

William

The

Citizens

National

and

Southern

Bank, Atlanta

Willard S. Boothby, Jr.
Eastman
ties

&

Dillon, Union Securi¬

Co., Philadelphia

C. Legg & Co., Baltimore

John Nuveen &

Co., Chicago

Clark,

Landstreet

Kirk-

&

patrick, Inc., Nashville

The Bankers Bond

Co., Inc

Louisville

The J. K. Mullen Investment Co.

Denver

Winthrop S. Curvin
Smith, Barney & Co., New York
Lester II. Empey

American Trust Company
San Francisco

Stroud

&

Company, Inc.

Delmont K. Pfcffer

Philadelphia

City National Bank and Trust
Company, Kansas City

purchasing

evi¬

in

the

purchase

financing

Alex. Brown &

or

usage, for the con¬

new

factory buildings,
or

unoccupied factory buildings, or
for the alteration, conversion, or
enlargement of any existing
buildings for industrial use. No

Co., New York

such assistance could be extended

Sons, Baltimore

unless it is not otherwise available

from

Moore, Leonard & Lynch
Pittsburgh

such

on

Bank

private
lenders
or
other
agencies on reasonable

terms, and the assistance would be

terms

conditions

and

as

the Secretary determines. The as¬
sistance on any project could not

Lockett Shelton

Republic National
Dallas, Dallas

35%

exceed

of

to

the

one

aggregate cost
and

loans

and

of

ticipations

The Marine Trust Company of
^Western New York, New York

of the

applicant

amount

Fred D. Stone, Jr.

No

the

total

loan

would

would

be

at

reasonable

75%

loans

would

authorize

"to

program

conditions

of

much

more

alleviate
and

substantial

persistent unemployment and un¬

Company

deremployment

Texas, Dallas

nomically

of

aggregate
The interest

would

be

Administrator

at

certain

in

depressed

on

loan

of

cost
on

such

equal

obtained

would

the

Treasury

be determined

retary,
the

of

taking

current

by the Sec¬
consideration

into

rate

average

standing marketable obligations of
the U. S.

preceding month).

The Adminis¬

eco¬

areas" in a

ical

to

grants

any

subdivision

or

public organization

or

any
redevelopment
for the construction, expan¬

sion

improvement

or

public

of

facilities. The bill would authorize

$100,000,000 for loans for projects
industrial
redevelopment
areas:
$100,000,000 for loans for
projects within rural redevelop¬
ment areas: $75,000,000 for loans
for .public facilities; and $50,000,000 for grants for public facilities.

within

Subcommittee

A

Committee

bills

been

present time.
APPENDIX

Report

of

Municipal

Liaison

B

Securities

1957

Subcommittee

.

W.

F. W.

Craigie,

Company, San

Francisco

S.

contributions

its

to

many

considerably.
Increasingly,

a

catalyst is needed

to

"accelerate the

desired reaction" between the
company
users of its
products
between
.

financial community

A

•

•

.

number
a

nuhliV

of

potent

relations

poten¬

company

.

between

company

of people affected (unawaredly

by the industry's

found

•

and

or

and

and

many

otherwise)

Phelps, Fenn & Co., New York
Winthrop Curvin

Smith, Barney & Co., New York
William F. Morgan

Blyth & Co., New York
George Ragsdale
Lehman Brothers,

New York

APPENDIX

C

Report of Subcommittee on
Metropolitan Area Problems

(1957)

Probably
field

no one
local and

of

subject in the
state

govern¬

ment

rivals, in the attention and
serious study it receives today,
the question of Metropolitan Area
Problems.
Civic
organizations,
both

national

and

sectional,

commissions

local

as

derstanding of the significance of
these
studies
and
the
essential
to find

constructive and

solutions,

ceptable

extent of this
organizations and

the

by
The

in

exploratory

these

and

numerous

the

own

Pressprich & Co.

sons.

York

local

of

ber

highly
Company

ence

in

organizations

the

operations
that

Bosworth, Sullivan & Co.
Denver

to

have

this

however,

theory .and

of

local

as

a

BROKERS

IN

MUNICIPAL

done

Like

to

know what

for
to.

practical

attention

problem

BONDS

FOR

w e

•

Public Relations




•

131 Cedar

AND

DEALER

BANKS

can

EXCLUSIVELY

do

Write Mr. Joseph

Fitzgibbon.

ALBERT FRANK-GUENTHER LAW, INC.
Advertising

DEALERS

have

companies?

know what

for you?

A.

these

we

Street, Neiv York 6, N. Y.

PHILADELPHIA
BOSTON
CHICAGO
SAN FRANCISCO

LOS ANGELES

J. J.
DIGBY 4-9440

are

experi¬

government,

giving

been

subject

rea¬

a num¬

that

with

competent,

Chicago
Youmans

natural

for

areas,

There are,

skill in

Like

studies

impressive.

Many are interested primarily in
problems that exist in their

Bank

They have found
of

ac¬

greatly

are

Law, Inc.
at AF-GL riot only a consummate
public relations techniques, hut also a wealth
experience in specific industries.

are

,

progress.

America's leading companies have
catalyst to achieve these ends in the
services' of Albert Frank-Guenther

as
or

academic interests,
actively participating.

ing

Manhattan

The Northern Trust

Paul

Model

on

Orlando S. Brewer, Chairman

are

Pat G. Morris

tial

groups

New

Committee

interest.

Cushman McGee
W.

Jr.

responsible groups actively shar¬

Linen

Chase

Schanck,

Revenue Bond Law

heartened

New York

R.

Special

need

Trust

R.

Bacon, Whipple & Co., Chicago

Thpse who have any proper un¬

Craigie & Co., Richmond

American

The

complexity, the
company's policies
publics has grown

A. E. Ames & Co., Toronto, Can.
Francis

Chairman

Lester Empey

John

and

C. G. Fullerton

groups and

of

Company,
Philadelphia

As industries have
grown in size and
of relating an individual

Singer, Deane & Scribner

well

Municipal Securities Committee
Walter

S. Clark

Pittsburgh

April 8-15,
have

Brewer

Charles N. Fisher

Senate

bv the Subcommittee at

reported
the

the

of

none

on

S.

Fahey, Clark & Co., Cleveland

Banking and Cur¬

on

March 6-14 and

but

the

Stroud &

task

John

held hearings on these bills

rency
on

of

-% ■;

Bank

Phelps, Fenn & Co., New York

association

representing
area

Manhattan

York

Orlando

state polit¬
private
or

Russell Ergood

NEEDED:

New

trator would also be authorized to
make

Chase

The

of the last day of the

as

Municipal

John S. Linen, Chairman

out¬

on

•

Metropolitan

on

Securities Committee

Treas¬

ury, plus one-half of 1% (the rate
of interest on funds obtained from

Secretary

.

Brothers, New York

Area Problems

paid by the

from the Secretary of the

the

Lehman

Subcommittee

excess

rate

a

funds

on

pro¬

no

the

to the rate of interest

to

Senate

Co., Portland

Securities Committee

Frank E. Morse

be

and

Committee

a

with i

Turnpike Association Municipal

requested

amount in

an

the project.

bill, sponsored in the
by 19 Senators (S. 964),

liberal

Liaison

.au¬

available

terms

could be for
of

could

the funds

otherwise

not

are

Another

Van Boskirk

for

Bridge, Tunnel and

ma¬

be

any

limited

American

.

unless

par¬

outstanding

time

America, Washington, D. C.

Subcommittee

exist.

to

loans with

assistance

such

vided

$50,000,000.

Franklin Stockbridge

Eugene D. Vinyard
Central Investment

conditions

ne

40 years (1) to assist Walter H. Steel, Chairman
the purchase or de¬ *\Drexel & Co., New York.
velopment of land for industrial George J. Gruner
usage within
the redevelopment
John Nuveen & Co., New York
area
and
the
construction,, re¬
C. Cheever Ilardwick
habilitation, or alteration of in¬
Smith, Barney & Co., New York
dustrial or commercial plants, or
other manufacturing, commercial, Wilbur M. Merritt
or .processing
The First Boston Corp.
facilities, and the
New York
purchase of machinery or. equip¬
ment and (2) to assist in financing William F.
Morgan
the
construction,
expansion
or
Blyth & Co., New
York
improvement of public facilities.

Federal

Bacon, Whipple & Co., Chicago

and

aid

for rehabilitation of abandoned

J. Creigliton Riepe

of

for

to

years

struction of

V

ltichard N. Rand

Atkinson

F. D. Farrell

by

for industrial

of

Marsom B. Pratt

R.

of

Secretary
assistance

development of land and facilities

National

City Bank
New York, New York

Don

The

preceding

project for

any

Security-First National Bank of
Los Angeles, Los Angeles

Russell M. Ergood, Jr.

the

financial

areas

ing 25

Francis R. Schanck, Jr.

Byrd P. Crist

of

each

dences of indebtedness and making
loans with maturities not exceed¬

Francis L. Satler

Powhatan M. Conway

of

years.

such

Paine, Webber, Jackson & Cur¬
tis, Detroit

&

adjusted seasonally and (B)

provide

Chicago

Rand

Harold W. Clark

unemployment if
unemployment rate

(A) is currently 8% or

Commerce would be authorized to

Murray, Jr.

Estabrook & Co., Boston

Frank C. Carr

proposed
of
1957."

of substantial

area

an

the

area

two

The Illinois Company Inc.

First

finds
an

portion

Milo O. Osborn

James S. Burr, Jr.

a

Act

and

has been at least 8% for the major

Morgan, Jr.

N.

financial

persistent

more,

New York
U. Gerard

of

Assistance

existence of

National

Cushman McGce

R.

and maintain
diversified economies

Secretary of Labor to certify the

Willard Maxwell
Pacific

assist

This program would authorize the

Chicago
The

"to

Ad¬

develop

and

"Area

The Northern Trust Company

other

the

program

technical assistance" in

John M. Maxwell

Areas.
and

embody

program

a

5500

R.

bills

to

areas

&

Depressed

H.

ministration's

Minneapolis

John

COMMITTEE
William M. Adams,

M. Dain

1438,

identical

William J. Lau

Decisions

Appendix E contains a sum¬
mary
of some state legislation
adopted this year which is be¬

summaries

.

White, Weld & Co., New York

State Legislation and Court

tains

S.

-

Lloyd B. Ilatchcr

'

of Municipal Securities

Ginther

Ginther & Co., Cleveland
Earl

Co., Inc.

APPENDIX A

istics of Revenue

Bonds").

Sullivan &

of

turities up to
in financing

Denver

Bankers Trust Co., New York
D.

of

Bank

Paul E. Youmans

Folger, Nolan, FlemingW. B. Hibbs & Co., Inc.
Washington

Nelson

certain

thorized to make

National

Investment Bankers Association

designate "indus¬
areas" and

,'lne Administrator
The

W. Neal Fulkerson, Jr.

interest

Thursday, December 19,1957

.

redevelopment

finds

George B. Wcndt

Arthur S. Friend

discussed

'

Chicago, Chicago

(Issue No. 2 in January,
discussed "The Size Char¬
acteristics of Municipal Bond Is¬
sues." Issue No. 3 in April, 1957,
1957,

July,

.

Gordon L. Calvert

would

^'rural redevelopment areas" if

New York

Securities Committee
terly

trial

Development

rca

Administrator

Mellon National Bank & Trust

Company, Pittsburgh

Patterns

.

.

KENNY CD.
NY 1-3082

of

.Volume

186

national
years

importance

for

.

.

The Commercial and Financial Chronicle

.

several

past.

The
be

Number 5700

question

asked

why

reasonably
investment

may
we

bankers should

as

lation of local

these

better
.

government, when

qualified

.

organiza-

are

giving good attention to
matter.
While the form of

the

go vera mental

.operative

structure

efforts

political
are

and

and

the

on

co-

of

part

subdivisional

units

first

steps, it soon
that equally important is the question of financ¬
ing the undertakings proposed.
necessary

-becomes

clear

The financing problem
can, in
fact, be the most vexing and challenging of all the complex matters

to

be

resolved.

After

securing

agreement on the boundaries,

to

purposes

be

governmental

to

necessary
and

served

the

and

the

it
is
adequate tax

processes,
assure

revenue

borrowing

sources,

authority and capacity and sound
engineering studies if a satisfactory basis for financing is to be
established.
To gain the objectives just men¬
tioned may involve major structural

changes in government ineluding state and local legislation
and

constitutional

changes.
changes in turn will usually
require extensive negotiations as
well as a varying degree of edu¬
even

Such

cation

of

voters

if

be

the

legislators and

suitable

Foundation, the Rockefeller
Brothers Fund, and The Edgar
Stern Family

ourselves

concern

regarding the form and adminis-

sons

assisting in this field include the
Ford

authority

to

metropolitan

lems,

it

units

of

in

is

is

prob¬

for

necessary

some

sacrifice

to

government

autonomy by dele¬
gating authority to another gov¬
ernmental
agency.
When
too
many individual and independent
agencies are involved, it makes
progress towards the development
of a long-range economic program
most

difficult

Resistance
both

and

is

discouraging.

encountered

officials
units

mental

local

of

from

govern¬

voters

and

who

are

frequently inadequately informed
or
suspicious that any new pro¬
threatens

gram

higher tax bur¬

a

den.

Because

acceptable financing
background is es¬

an

structure

and

sential

the

to

ultimate

problems are
*7_ ,
by various uni¬

area
,

,

.

under

_

,

direction

the

growing problems.
understand

why

and

the

the

when

cult

questions

supply,

One

solutions

it

is

water

The

ronto

the

the

on a

of

success

issue such

bonds, and to set

uniform assessment rate to serve
as
the basis of taxation for both
a

metropolitan and local purposes).
Many important functions are re¬

served to the local municipalities
in
in

whole

the

continued

following 12 sub¬

City

area

separate

(2)

existence

of Toronto and
municipalities,
-----

undertake

which

and

the
all
--

functions

the
of

12
of
-

not

assigned to the metropolitan unit.
The authority of the Municipal¬

Metropolitan
Toronto,
are
specifically
enumerated in the legislative act,
relate to water supply, sewage dis¬
posal, arterial highways, certain
health and welfare services, hous¬
ity

of

whose

Village of Long Branch
Town of New Toronto

powers

ing and redevelopment, metropoli¬

Township of North York
Township of Scarborough
Village of Swansea

the

federation,

The taxing powers

of the Met¬

ropolitan Council are limited to
levies against the area municipali-

ties and apportioned

among

erty

in

each

bears to

erty

municipality

area

the whole taxable prop¬

in

the

sessment

metropolitan

eth£iSf L 55^
rolls. This taxing

area.

power

required
a
uniform
assessment
throughput the area and the Act
set up a

single assessment depart¬
metropolitan area.

ment for the

Town of Weston

Courthouse and

Township of York

7

All
debenture
borrowing
by
municipalities in the metropolitan
area is done by the metropolitan

nancing

corporation.

These

within

municipalities

an area

tan

parks and over-all planning
(also to provide and manage a

funds to be allotted for school sites
miles and construction, to review bond

are.

of 240 square

jail, to aid in fi¬
education, to determine

all

The separate munic-

ipalities within the metropolitan
Continued

on page

few metro¬

included below.
These do not cover all situations
politan

areas

are

that might be
but

properly mentioned,
illustrative of the
that is being made in

they

are

progress

various
States

sections

the

of

United

Canada.

and

7

,

Seattle

Metropolitan

,

Metropolitan

Area

Council

Act

adopted in the State of Wash¬

was

cities
and counties to act jointly to meet
common
problems in order that
the proper growth and develop¬
ment
of
the
metropolitan areas
of the state may be assured and
in

ington

and

health

the

"to

1957

enable

may

be

This Act authorizes the

secured."

of metropolitan
corporations which

creation

pal

the

of

welfare

therein

residing

people

authorized,

munici¬
be

may

in the manner pro¬
Act, to perform func¬
dis-

vided in the

of metropolitan sewage

tions

posal, water supply, public trans-

portation, garbage disposal, parks
and parkwavs and comprehensive 7
planning.
All functions of local
government which are not author-,
ized to be performed by a metropolitan corporation as provided,
_

continue

to

in

this

in

the

early

planning states.

People qualified
advise in this specialized field
should be consulted in an active
manner. In many cases ihey might
well

asked

be

to

serve

as

mem-

'

bers of

the

planning

committee.

of

Members

the

in-

understanding

as well as
prejudices, and the
financial
markets,
have
unusual
qualifications
to
render a valued public service if

of

uoon
,

are

however,

m

...

few

a

that

forefront

been

problems

plaguing

^

metropolitan
active

tive solutions
While the

seeking

on

have

construc¬

national basis.

a

names

all

means

which

areas

in

the

in

early the

listed

inclusive,

a

by no

special mention:
ACTION

(American Committee

to Improve our

Neighborhoods)

.

to

bonds
to

have

from

of

useful

public

-

many

spirited

cases

the

better

substantial

lems

involved.

studies
of

these

greatly

and

the

The

in

prob¬

research

practical

knowledge
has aided
advancing the work

accomplishments
of
local
groups with which they have cooperated.
The foundations
that
been

most

conspicuous




in

In 1956

a

Advisory
pointed
and

mended

nicipal

area

in

Local fa¬
to

be

fi¬

Board

was

of

King

with

^andicf(9ress, /nc.

SS,&c

County

to

NY 1-3167

71 CLINT0H ST.,

NEWARK, H. J.

3-4994

1923

recom-

Metropolitan Council
Seattle metropolitan

power

Established

HEW YORK

WOrth 4-2900

MArket

This Commitee in

Aug. 8, 1957,

a
metropolitan mucorporation
be
formed

the

22 THAMES ST.,

ap¬

that

the

for

printing job demands speed, economy,

complete accuracy, you can't beat

Metropolitan Problems

by the Mayor of Seattle

the

under

area.

continue

Committee

report on

Act

counties

and

a

Pandick Press!
They always make it possible to meet deadlines that
put us days ... and dollars ahead!"
and

local basis.

a

commissioners.
a

"When

producing

as

metropolitan
on

progress

held

election

an

cities

nanced

and

have

the

foundations

organizations

in

at

would

understanding

|

the

Non-revenue

cilities

whose generous grants have made

possible

of

support

financial

but

planning, would
financed by pro-rata payments

be

the

carry

council only !
metropolitan
approved such bonds

voters

levies

Fortunately

had

to

purposes,

metropolitan

a

the

functions, such

profit

funds

general obligation bonds may be
issued and taxes may be levied

thereon.

-

general obligation

or

provide

authorized

its

out

National Planning Association
non

;

be authorized to issue rev¬

bonds

or

these
organizations have in

con-

operate

corporation

A metropolitan
would

area

National Municipal League

and

construct

their own local {acilitieS-

by

Administra¬

j'

cities,

local
would

districts

and

tjnue

Institute

Public

while

involved,

towns

if

of

>

area. A metropolitan corporation
would perform only the metropolitan phases of the particular func-

Government Affairs Foundation

tion

func-

would be performed by the
metropolitan corporation for their
tions

enue
are

few deserve

metropolitan

permissible

organizations,, tion

have

recognizing

developing
been

body of a metropolitan corporation would be a "metropolitan ,
council," which would be com- j
posed
of representatives
from j
cities and counties in the metro-

financial

and

conditions

There

be,

area.
The people of a
metropolitan area would deter- ;
investor mine for themselves which of the, .

of

requirements,
demands

called

shall

banking fraternity with1 politan

vestment

their

working

or

Act

the

perform ini-

the

municipalities in the propor¬
tion that the whole taxable prop¬
area

performed by the counties, cities
and
special districts within the,
metropolitan area. The legislative -

recognize

•to

•

the

Town of Mimico

the whole program, it is desirable

<

and

1953 provided
the City of To¬

Town of Leaside
.

to

;

Municipality of Metropoli¬

Village of Forest Hill

subjects

Brief comments

to

Township of East York
Township of Etobicoke

are

requiring
attention, but they are sufficient
to
present a real challenge to
those
interested
in
improving
municipal government.
all of

Metropolitan Area

urban municipalities:

dis-

These

crime and civil defense.
not

proposals of member municipalities
and

ropolitan in nature and essential

suburban

protection,

standards, fire

plan are(l)

area-wide unit of government
government,

the

posal, slum clearance and housing, parking facilities, parks, playgrounds and recreational facilities,
health

11, 1958.

for federation of

diffi-

and waste

sewage

use,

March

tan Toronto Act of

transportation systems and facilities and related traffic problems, ?
land

on

Toronto

pollution,

air

the Toronto federation

47

to perform functions that are met¬

include water

and

The two basic elements of

an

of

that

realized

involved

1946).

election

research

are

population of approxi¬

mately 1,500,000 (compared with
a
population of about 981,000 in

politan corporation at
uolitan cornoration at. the general

better

can

need for

and have a

adopted calling for an election on the establishment of the Municithe .formation of such as metro- pality of Metropolitan Toronto as
an area-wide unit

faculty members who have recogiUzeu
tne
significance of these

The

area-wide

..

conducted

versities

to

their

part

,

being

resolutions' be

necessary

should be noted also that im—

portant research studies in regard

secured.

with

tially the functions of metropolitan sewage disposal,J transportation and comprehensive planning,
The Committee recommended that

the

As is true usually in dealing ef¬

fectively

Fund.

(2679)

Annual Reports
Cases & Briefs

Prospectuses

Brochures

Leaflets

LEADERS

IN

•

Price Lists

FINANCIAL

Registration Statements
Catalogues

PRINTING

•

Dividend Enclosures
Direct Mail Literature.

SINCE 1S23

48

48

The Commercial and Financial Chronicle

(2680)

Continued from page

respective communities. The

these

47

difficulties of working out agree¬

ably be

might

bankers

In¬

get plenty

can

of mental exercise
the

conceiv¬

monumental task.

a

vestment

Securities Committee

municipal

the

of

concerned

bodies

Repoit of 1BA Municipal

all

with

ments

by figuring out

possible plan for financ¬

best

Metropolitan
sion

Services

established.

was

vately-financed
analysis
lems
first
the

in

Greater

reports
end

of

sional

is

vestigate

pri¬
research
a

thorough

a

governmental

of

in

1957

prob¬

Cleveland.

due

are

and

Thursday, December 19,1957

.

.

Commis¬

It

citizens

engaged

agency

.

Its

before

out

its timetable

committee

their

issue

longer

no

area

borrowed exclusively for

of

poses

issued

the

area,

the

pur¬

municipality

single

a

the

within

is

Even where money

debentures.

debentures

of the loan may have
levied only against the mu¬

payment

the

money

the

whom

for

nicipality
was

metro¬

borrowed.

direct

The

debt

of

corporation

politan

$260,-

capital pro¬
gram involving $750,000,000 was
planned to provide the area with
services it needed, and in 1956 the
program was revised to include
A

10-year

list of works

an

additional

of

$250,000,000 to be undertaken
circumstances and conditions

as

reserve

September

conference
tan area

to

this year a
metropoli¬

of

dfecuss

problems

Governor

of

Rhode

guest

a

as

was

Island

and

was

about

60

people participated

in the three
Such
a
meeting

day

meeting.
emphasis to the serious at¬

tention which

is

today being ac¬
corded
this general
topic.
The
conference was judged to be of
great
meet

value

the

plan is to
again from time to time to

discuss

and

common

problems.

and

overlapping
the

At later meetings

Governors

Maryland

of

Delaware

will be

invited

and

to

at¬

tend.

The
the

the

on

of

the

its

District

with

and

available
ated

facilities

their

has

lor

use

cre¬

problems of the

of the

some

most

pressing problem in
York City area is the

New

question of

transit.

mass

It

was

recognized that government must
be prepared to meet the need for
mass transportation service where
private enterprise cannot do so.

commuting railroads, but with the
growth confidently predicted for
the suburban areas in the next
decade, all of these facilities will
be
unable to handle acceptably
excellent

An

this whole

study

survey

of

subject has been made

by the Metropolitan Rapid Transit
of

tion

Arthur

W.

It

Page.

is

shocking to realize, however, that
deal acceptably

to

fic

with the traf¬
anticipated from New

flow

Jersey alone, the cost is estimated
at close to $350 million with the
cost

the

of

any

This

does

not

contemplate

relief in the

way

of additional

facilities
chester

forward

As

excellent report

with any

be

also

must

survey

was

study

an

prepared by

William Miller, Government Con¬
sultant of

Princeton, N. J., on the
financing of this proposal. With
the change that has occurred in
market

rates

is difficult to

ing

,how this financ¬
done at any accept¬

be

can

able rate

see

on

revenue

a

basis. The

volved, obviously, are water sup¬

ply

and water and air pollution,
disposal, traffic and park¬

ing problems, parks, playgrounds,
facilities,
housing,

of

recreational

Much could be said

etc.

York

vately

having

been

be

that

posed

this

annual

an

deficit of $12 million.

several

pri¬

organizations
these

of

aware

with

and

Association

Plan

the

serving
since

in

area

1929.

has

this matter
there
is

It is

pro¬

Counties

Orange and

on

the

other

side of the Hudson in New York
This
of

a

would

be

general

in

the

na¬

obligation

the

It

at

voters

The

consti¬

the

is

de¬

adoption

of

1958

functions

to

adopted

by

was

the

General

the

election.

recent

Assembly

placed

ballot for the fall election
constitutional

a

ment

that

group

of

would

cities

amend¬

authorize

form

to

a

a

"fed¬

eration" to perform common serv¬
In Greater

Cleveland, the voters
Cuyahoga
County
approved

of

study

being prepared under the title
of "New York Metropolitan Re¬

gional Study."

This is

being fi¬
nanced by the Rockefeller Broth¬

the

transfer

Cleveland

of

City

Hospital to the County. The trans¬
was based on the theory that
City Hospital is really a metropol¬

most

been

has

helpful.

The
Citizens
Budget
Commission, the National Munic¬
ipal
League
and
the
Citizens

Union have also made useful

con¬

Metropolitan

Area

County,

Ohio,
in
which Cleveland is the major city,
has a population presently esti¬
at

is

area

tions

a

1,600,000,

Though its
modest 458 square miles,
and

taxing

exercised

are

and

func¬
over¬

villages, 32 school districts, three
townships,

and

various

library-

Much

progress has been made
solving major metropoli¬
problems in
Greater
Cleveland and Ohio during the

toward
tan

area

last

year.

Two

on

ago,

the

Cleveland

should

be

Chicago Metropolitan Area

trates
ities

impressively the complex¬
in our larger metropolitan

centers.

There

are

over

900

tax-

paying subdivisions in the metro¬
The

area.

their

To add to the

also

several

the

in

some

confusion, there

are

such

authorities,

Transit and

The

limits

poorly defined, as are
duties, and responsibilities.
are

as

Port Authorities.

conflicting duties and ambi¬

tions

produce a great need for
comprehensive planning and effi¬

the

which

encouraging to know that
in
,spite
of
the
overwhelming
number
of
conflicting
interests
and
problems to be dealt with,
progress is being made by a com¬
petent planning commission and
that good coordination with vari¬

agencies is in evidence. Popu¬
lar understanding and voter and
ous

political

if

ments

support will be neces¬
constructive accomplish¬

are

to

to be realized. In addi¬

the

Chicago

should be mentioned

are

the Chi¬

Regional Planning Associa¬
tion, the Metropolitan Transpor¬
tation Planning Commission and
Northeastern
Illinois
Metropoli¬

tan

Planning Commission.

Washington, D. C. Metropolitan
Area

House.. Concurrent

172,

adopted

year,

f

prob¬

lems, and (c) how the resolution
of such problems is affecting the
affairs
bia.

of

the

District

of

Colum¬

The

joint committee shall re¬
port its findings, together with its
recommendations
lation

it

as

for

such legis¬
advisable, to

deems

the Senate and the House of Rep¬
resentatives at the earliest prac¬
ticable

Jan.

date, but
1959.

31,

later

not

than

A

new
organization, known as
Washington Metropolitan Re¬
gional Conference, composed of

the

governing officials has been
organized for the purpose of seek¬
ing

agreement

bodies in

politan

among governing
Washington Metro¬

the

Area

on
ways
they can
together to solve mutual
problems. The Conference has no

work

authority

but

cooperative

relv

must

actions

of

the

on

the

local

governing bodies participating in
the Conference.

At

area-wide

seek

recent meet¬

a

established

Resolution

this
joint Congres¬
Congress

by
a

agreement

taxicab

standard

fares

in

carried from
jurisdiction to another,
(2)
that
Montgomery
County
(Maryland) and Fairfax County
(Virginia) regulate new develop¬
area

one

ment

such

in

a

effluent

that

manner

stretch

mile

will

which

is

the

source

water

of

supply for some of the
area
and (3) to authorize studies
in the health and welfare fields,
the possibility
hospital plan.

Pittsburgh-Allegheny

Metropolitan

County

Area

of

Commission

County"

authorized in

was

t

a

14

obtained

members

funds
and

have

grant

as

Inc.,

involved

Western

Division,

Commission's research

the

Commission's approach

staff. The

comprehensive study of
governmental opera¬
tions
throughout
Allegheny
County with the aim of determin¬
ing (1) those functions which can
be satisfactorily administered by
existing governmental units and
which need no change in assign¬

the

ment,
the

a

various

those functions where

(2)

responsible governmental units

because

of

size

or

the

nature

Underwriters

★

•juteher

&

Sherrerd

1SOO

N».v Yo:'r 5*^




.

.

.

Pria.-Bdta. S'od

Teletype: PH-4

.

,

.

.

•

New York BArday 7-464!

Anencan Stock E,change lA:coc

)

.

.

.

Boston Stod' Exchange (Aidoc )

SOUTH

BROAD

PHILADELPHIA
N. Y. Phones
REctor 2-1695

Exchange

★

Members Philadelphia-Baltimore Stock

WALNUT ST., PHILADELPHIA 2, PA.

PEnnypacker 5-2700
Merrbers

★

SCHMIDT, POOLE, ROBERTS & PARKE
123

HAnover 2-4556

Teletype
PH

of

arrangements were made to
the Pennsylvania Economy

League,
act

a

Buhl Foundation

the

from

High Grade Corporate Bonds and Stocks
Established 1910

bill

passed by the Pennsylvania Legis¬
lature in 1951. The Commission of

Municipal Bonds

CORPORATE AND MUNICIPAL SECURITIES

an

Metropolitan
Allegheny

"The

of

Creation
c+„riv

of

Pennsylvania and General Market

1

no

be

dumped
into the Potomac River in the 30
sewage

Trading Markets

.

Dealers in

on

cases

where passengers are

Retail Distributors

.

and

charged with

are

of resolving such

duty

is

cago

1

success

handled

are

instrumentalities of the gov¬

ernment

area-wide

It

Transit Au¬
thority and the Chicago Port Au¬
thority, other agencies which

Distributors,

how

by the various agencies

including

administration.

cient

tion

Underwriters,

and

(b)

degree of

problems

and

Columbia
area,

in November the Conference
approved recommendations (1) to

The Greater Chicago area illus¬

sary

years

complete

a

ing

cases

Cuyahoga

and

supported

and

by the
voters and taxpayers of the entire
county.

politan

this field.

tributions in

institution

managed

The Institute of Public

Fund.

Administration

examine, in¬

local

ices.

itan

extensive

an

is

boards.

be in New Jersey and

the

of

metropolitan

on

organization

ing counties,
Rockland

county

fer

lapped by the County, a Metro¬
politan Park District, 21 cities, 37

10 of which would

the

the

amendment

facilitate

county.

promise of better cooperation be¬
tween the neighboring states than
was true previously.
Through this

apportioned
among the benefiting municipal¬
ities including New York City and
the communities in 12 neighbor¬

be

of

the

been

Recently

Ohio

on

constitutional

a

revising

The

to

the

county charters and the trans¬

fer

most

have
been
con¬
helpfully
in
dealing
them.
The
Regional

problems
tributing

governmental

will

been

has

supported

have

that

City

in

fortunate

every

individual subjects.

of these

one

on

of

placed

provisions

tution.

signed

service

there

amendment

sewage

mated

in

that

assumes

session

Assembly

charter

providing
for the cost of operation and debt

study

last

ballot lor this fall

Cleveland

prejudice on transit securities, it

The

General

plague New York as is true
of other metropolitan areas.
In¬
that

investor

the

and

attempt will be made to deal
all of the other
problems

No

with

ers

part of the

a

ture

practically all

planning

West¬

and

included.

ing

as

Nassau

for

Counties which

what

resolved

New

Commission under the able direc¬

State.

acute

facilities.

the mass transit load.

This situation is gradually becom¬
more

such

work

by the end of 1958.

of

metropolitan

calls lor completion of its research

cum-

improved

greatly

lion.

sponsored
by the Governors of New York,
Connecticut, Massachusetts, New
Jersey,
Pennsylvania
and
the
Mayor of New York City.
The

lends

money

loop project
and incidental items at $400 mil¬

New York Metropolitan Area

there

with

overall

permit.

In

losing

muting service provided. The in¬
creased use of the private auto¬
nomic and inter-city bus service

from

raised

the market since 1954 totals

000,000.

.

be

obligations of the met¬

are

ropolitan corporation and all the
area municipalities, although the
whole of the taxes imposed for
been

to

own

railroads claim

the commuting

to

maxe

study of any and all matters per¬
taining to (a) the problems cre¬
ated by the growth and
expansion

ing tnese vitally needed improved
of

ana

538

Exchange

STREET

(9),

PA.
Phila. Phone
Klngsley 5-0650

of

Volume

136

The Commercial and Financial Chronicle

Number 5700

their

requirements cannot ade¬
quately
provide
the
complete
services required

in the area and
can
be better
through cooperative
efforts with other municipalities

which,

therefore,

carried

or

out

(3) those functions
County-wide in nature

merger and

which

are

and should

be administered

on

a

County-wide basis.
As

result

a

Commission

in

released

1955

in

of

its

of

detailed

a

the

study,

report
that

concluded

the

existing govern¬
mental problems could be effect
lively approached if the existing
County Government was molded
into a form capable of performing
many

necessary

This,

area

the Commission

done

be

-wide services.

felt, could
eliminating the

without

individual local municipal govern¬
ments of the County if the County
could

obtain

larger

degree of
home rule. A constitutional
a

amendment

granting the County
to institute ah urban

authority
home

rule

charter

recommended
<

by the Commission.

The reconstituted

ernment

therefore

was

County Gov¬
Com¬

envisioned by the

mission would have basic author¬

ity

over public health, libraries,
county highways, regulation
of
traffic, disposal of refuse, purchas¬
ing, planning, regulation of
plumbing practices, roadside zon¬
ing, air pollution, property assess¬

ment and tax collection.

In

addi¬

tion, it would have regulatory
authority over local subdivision
regulation, building practices and
sewage collection and disposal as
well as discretionary authority to

establish at a future date an inte¬
grated water supply and distribu¬
system. The administrative

tion

activities

of the reorganized
County Government would be as¬
signed to a chief executive or ad¬

ministrative officer and the legis¬
lative activities would be concen¬
trated

in

separate body elected
for that purpose which should be
a

sufficient in

number to represent

adequately
County.
While

the

people

the

of

coordinates the

development Lyle F.Wilson
Pacific Northwest Co.
comprehensive unified plan
>
Seattle '
program for the region as a
a::';
whole and provides civic leader¬
: ;— •
.
APPENDIX D ^
ship to carry it forward. One of
1 Summary of Chicago Meet¬
its major objectives is to secure |
ing of the Jomt Federal-State "
and obtain broad public support
Action ' Committee
Oct.
3-4,
and
community action for the
'1957plans
and
recommendations
it
The Joint Federal-State Action
proposes.
Public
information
media
in
the
Pittsburgh area- Committee met in Chicago, Oct. 3
and 4, 1957, and transacted the
newspapers, radio and television
stations
have kept the public following business:
fully informed and have given
(1) The Committee agreed that
vital support to the program.
(a) the States should assume full
and
of

of

the

and

others

urban
redevelop¬
renewal,
increased

and

ment

educational

and

more

resources,

that

proposal

staffs

as

agree

Due to

a

school
to the

number of coui-

plexities involved in such a trans¬
fer, the staffs were directed to
re-examine this proposal and to
prepare another proposal for later
consideration by the ^Committee.

not
was

be

impaired in the shift.

It

agreed to work out the de¬

tails of the shift to full State

.

The

fourth.

Conference

also

receives

grants for specific plan¬
ning studies and projects from
individuals, foundations and trusts,

interests

corporate

and

other

Respectfully submitted,
SUBCOMMITTEE

ON

METROPOLITAN AREA
PROBLEMS
S. Linen,

The

Chase

Chairman

Manhattan

Recognition must also be given
New York
to the work of the "Allegheny Con¬
ference on Community Develop¬ Orlando S. Brewer
ment" in metropolitan area plan¬
Phelps, Fenn & Co.
ning and action in the PittsburghNew York
Allegheny
County
metropolitan

Bank,

support was premised on the
development of a practicable plan
to

effect the transition.

taxes

local

for

(8) The
establish

were
especially
absorption.

Committee

Established

in

1943

and

of

changing

tax credit

and ^increasing

in

the

Federal

by the State in 1944, the
Conference is a non-profit, pri¬
vately-financed citizens' organiza¬
tion
concerned
with
research,
planning and action. The Confer¬
ence

has

Created

no

port additional responsibilities
that.they might assume.-The tech-.
nical committee Was also directed
to study a possible reduction in
the Federal tobacco tax as a means
of adding to State' tax- revenues in
order to finance additional func¬
tions that the' States might take
from the Federal Govern¬

over

i1

ment in the future.

as

authority to legislate.
the over-all

civic

1

would

under

assume

the

agree¬

The Committee agreed to a ments set forth in Paragraphs 1,
clarification and definition of Fed- 2, and 3.
Subsequent agreement
eral-State-local financial respon¬ to additional financial responsi¬
bilities by the States would call
sibility for the repair and restora¬
tion of public facilities damaged for possible increases in the tax
by natural disasters: this to be credit proposal.
(7) Speaking for the Federal
accomplished by a schedule of
minimum amounts of funds to be group, tue becretary of the Treas¬
spent or authorized by State-local ury indicated a willingness to pro¬
sources before Federal aid would
pose to the President that he re¬
be authorized. The Committee re¬ quest
Congress to relinquish a
quested the staffs to revise the number of miscellaneous excises
suggested schedules presented at m return for State-local assump¬

ment in the

expansion of the use

of atomic energy.

(10) The staffs submitted
tative outline of
The

Committee

comments

15,

agreed

ceived.

(11)
Daniel,

behalf of Governor
there were submitted a

On

Continued

on

sources

the

on

a

Drexel & Co.

A. E. Ames & Co.

Established 1838

\

Francis R. Schanck, Jr.

non-partisan basis,
plans, stimulates

Bacon, Whipple & Co.
Chicago

Conference

Underwriters and Distributors

*

'

'

'

'

'

'

'

'

■
•
.

J. W. SPARKS 8c CO.
ESTABLISHED

YORK

STOCK

EXCHANGE
AMERICAN

State, Municipal and Revenue Obligations

PHILA.-BALTIMORE
STOCK

Industrial and Railroad Securities

1900

MEMBERS
NEW

Public Utility,

STOCK

EXCHANGE

EXCHANGE

Brokers in

LISTED and UNLISTED SECURITIES

Members
New York Stock

Exchange

Dealers in

American Stock

STATE, MUNICIPAL and REVENUE BONDS

Exchange (Assoc.)

Philadelphia-Baltimore Stock Exchange
DIRECT
AT.

120

WORTH

5.

N.

T.

TO

NEW

YORK

TELETYPE—PH

622

2io Western Savings

Broadway

New York

a

WIRE

Y.

4-022O




broad

a

Chestnut

philadelphia

klngsley

7,

bldg.

Philadelphia 1

New York

1500 Walnut St.

SO Wall Street

5

Sts.

pa.

6-4040

fund

file

instructed the staffs to
draft of tne initial report
light of the comments re¬

Cleveland

-

to

a

the

Charles N. Fisher

Toronto

ten¬

this outline by Oct.

or¬

ganization
for
Pittsburgh
and
Allegheny County to marshall the
community's full energies and re¬

a

initial report.

and

write
in

on

an

Fahey, Clark & Co.

C. G. Fnllerton

-

(9) The Committee had before
were directed to
re-examine this it staff papers on a number of
problem in wider scope and to emerging problems. In discussing
prepare new proposals for • con¬ the
procedure
for
considering
sideration by the Committee.
these problems, it was* generally
(6) The Committee agreed; to agreed these emerging areas would
request the President to propose be an important, continuing inter¬
to Congress that 40% of the pres¬ est of the Committee; It was felt
ent Federal local telephone tax that these were areas where con¬
be credited against the payment sidered action by the States and
of State taxes on local telephone the
Federal
Government
could
service,
thereby
providing the minimize the need for Federal in¬
States with additional tax sources tervention, as well as afford an
to
finance
the
responsibilities opportunity for identifying the
agreed to above, if they wish to relative
responsibilities of the
take advantage of the credit pro¬ various levels of Government.
vision. Full use of this authority
The Committee gave attention
would provide $150 million to the to two of the emerging areas,
States.'
namely, (1) the field -of low-rent
Under the proposal as accepted, housing and urban renewal, and
the tax credit would continue for (2) the peacetime uses of atomic
five years, after which time the energy. The joint staffs were di¬
present Federal tax would be re¬ rected to prepare position papers
duced 40%, leaving it to the States dealing with increased State par¬
to continue or abandon the tele¬ ticipation in
the administration
phone taxes imposed by them and financing of public housing
under the tax credit arrangement. and urban renewal:
They were
This tax credit proposal was ad¬ also directed to prepare a position
vanced as a means of offering the paper suggesting means of resolv¬
State tax revenues in reasonable ing areas of conflict between the
relation to the added costs they States and the Federal Govern¬

(3)

Singer, Deane & Scribner
Pittsburgh

the

estate

tax in order that the States might,
obtain larger tax revenues to sup¬

John S. Clark

chartered

to

the staffs to study the feasibility

,

area.

agreed

technical committee of

a

.

re¬

cial

these

suited

submitted by

to shift Jhe full finan¬

cial responsibility for the
lunch and milk programs
States.

-

.

John

offing.

.

housing, greater recrea¬ sponsibility in an orderly and
tional opportunities, ample park¬ practicable manner.
ing
facilities,
improved
mass
The
Committee : directed
the
transportation, adequate airports, staffs to re-examine the feasibility
economic growth and expansion, of
turning over to State auspices
expanded
health
and
welfare the full financial responsibility
facilities,
agricultural > develop¬ for the newer vocational educa¬
ment and enriched cultural oppor¬ tion
programs
in the fields of
tunities.
v
:
practical nursing and the fisheries
The
operating budget of the trade and industry, and to pre¬
Conference is
provided through pare reports thereon for the next
the Pittsburgh Civic-Business meeting of the Committee.
Council,
which
is
the
central
(2) The Committee agreed that
fund-raising
and
coordinating the financing of municipal waste
agency
for the Better Business treatment
plants is a State-local
Bureau, the Chamber of Com¬ responsibility and that Federal
merce
of Pittsburgh, the Pitts¬
grants for the construction of such
burgh Convention Bureau and the plants should cease.. State action
Allegheny Conference. This Coun¬ to assist localities
by loans, grants,
cil
raises
annually through tax and
bonding liberalization,
solicitations from the Pittsburgh
was agreed upon, depending upon
business community approxi¬
the
nature of the financial re¬
mately
$450,000, of which the
quirements in the various States.
Conference budget is about oneThe withdrawal of Federal finan¬

the

in

the

better

functional
are

the

,

transfers recommended have been
effected

Committee.

(4) The Committee did not
on

.♦

sources.

some

of the

In broad terms, the Community responsibility for the older voca¬
(5) The Committee did pot agree
Improvement Development Pro¬ tional education programs,: and to
the proposal as submitted by
the
Federal r Government
gram
spearheaded by the Alle¬ "(b)
the staffs to increase to 50% the
gheny Conference on Community should abandon its present grants State
share of the costs of supple¬
program,
currently
Development
eovers
the major for this
mentary
old
age
assistance to
elements
to
of
cleaner
$37
million.
In
air, clean amounting
OASI beneficiaries and to reduce
rivers and streams, conservation stressing the importance of this
the Federal shaire from 80% to
of
resources,
flood
prevention, program, the Governors made the
50% (on the first $30). The staffs
highway improvements, point re¬ point that its effectiveness would

necessary constitu¬
amendment has not been

tional

meeting and to come up with tion of additional program respon¬
proposed
schedule
for sibilities from the Federal Gov¬
consideration at the next meeting ernment.- It was generally
agreed
another

—

development,

49

the

a

and

the

adopted

(2681)

page

50

50

The Commercial and Financial Chronicle

(2G82)

.

Thursday, December 19,1957

.

.

N

Continued from page

49

MISSOURI

H

Bill

House

to any local district, city, county,
etc. for water development pur¬

stating the general position of the
on Federal-State gov¬
These were
ernmental relations.

accordance

offered

for

consideration

Committee at

an

Water Plan and if the District Se¬

financing is not otherwise avail¬
The law provides for legis¬
lative approval of each proposed

able.

Nov.

and

14

tentatively for
to be held in

set
15,

was

qualifying project.

"All such bonds shall

by the
the

town

APPENDIX E

appendix contains sum¬
maries of some state legisla¬
tion adopted in 1957 which is
believed to be of interest to
persons engaged in the mu¬
nicipal securities business. Y
This

School

State

of

Law

Bill

153, providing the
Building Aid Bond

728

permits the fi¬
nancing of school building by
lease-purchase, requires a twothirds
trict

favorable

of

vote

the

dis¬

electors, and provides that
the unpaid lease rentals

60%

the

as

bonded debt

bonds heretofore

Bill

Senate

988,

providing

authorizes

1958,

the

issuance

the
of

of

hereafter

or

au¬

state.

Bonds

amount
not

that

more

mated

are

may

than

taxes

to

be

held

limited

to

that

clue

to

state

to

lend

city and

financial

that

the charter

sion.

municipality may be op¬
erating makes no provision for the
office of mayor, such bonds shall
be signed by the presiding officer
of the governing body of such mu¬
nicipality. In the event that the

bonds

shall

be

attested

if so authorized by the gov¬
erning body of such unit, bear or
may,

executed

be

with

facsimile

the

signature of any official author¬
ized by such law to sign or to
execute

such

provided,
shall

be
one

is

also

such

or

coupons;

official of such unit.

provided that in
shall

law

sealing
the

bonds

that each such bond
manually signed by at

of

any

official

such unit

or

case

It

any

provide for the
such bonds with
corporate seal of

or

of its

in

an

Chapter
Acts

728

1957

of

of

Massachusetts

provides

of the Massachusetts

be

that

Turnpike

can

assistance

°vfrv 15

miles for

passenger

cars).

charged
duty of reviewing Title
Municipalities and Counties,

of the Revised

the

light

Statutes of 1937 in

the

of

statutes

subse¬

quently enacted and of reporting
to the Legislature the text of rec¬

detailed

a

memoran¬

recommending that

numerous

changes be made in the
bill

A

bill if it

adopted.

were

posing

in

the

Legislature

pro¬

constitutional amendment

a

to
provide for the issuance' of
$500,000,000 New York City School

Bonds

debt

in

of

excess

limit,

the

normal

defeated.

was

...

TEXAS

Senate Bill 131 contains the fol¬

lowing requirements regarding
publication of annual financial
statements

of

certain

municipali¬

ties:
"The

governing body of each
district, junior college dis¬
trict, road district, soil conserva¬

school

tion district, water improvement
district, water control and improv- "
ment

district, fresh water supply
district, drainage district, navigation district, river authority, con¬
servation and reclamation

district,
other kind of district or¬
"conflicting and overlapping pro-* ganized under Section 52 of Arti¬
ommended revision to the end that

or

visions

cle III

shall

reconciled

be

and

confusing and redundant expres¬
sions
therein may, be; excised

by

any

Section 59 of Article XVI

or

of the Constitution of Texas, shall

to <be

cause

prepared

an

annual

the officer designated by the char¬
ter as the custodian of the seal of

therefrom

the

sible

with

of

total receipts of each fund subject
to its orders during the fiscal year,

basic

Policy and statutory provi¬

itemized according to source, such

shall

municipality.

Provided, how¬
that whenever one thousand

ever,

be

bonds

that

and

be made

said

statutes

unifqrm

as

to

respect

as

pos¬

matters

sions."

date, the ordinance

same

executed

to be executed

are

Chapter 183. to be known as the
"Municipal
Utilities
Authorities
Law" permit* the creation by one
or more municipalities of revenue-

by the facsimile sig¬

financial

statement-showing

the

as
taxes, assessments, service
charges, grant of state money,
gifts, or any other general source

from

which

such

rived:
ments

of

funds

showing

de¬

are

disburse¬

total

nature of the mayer,

supported

mayor,

with powers to engage in the con¬

according

struction, financing and operation
of works for supply of water and

expenditure; and showing the bal¬

disposal of

close

or

if there be a
by the facsimile signa¬

ture of the presiding officer of the

governing body of the municipal¬
ity, if there be no mayor."

tion

of

4

act

an

authorizing

its.
cal

less

than

crued
to

public
its

or

face

interest from

date

of

and

date

delivery."

of

sale

of
in

state

bonds

excess

of

possible

earlier

Missouri

state

at

a

this

the

coupon

therefor

exorbitant and that the

or

is

not

improvement

sell

notwithstanding the standard 7%

under

the

be

may

4% debt limit.

authorized

The Local Gov¬

gible"

year."

Bill

House

unrea¬

im¬

of

bonds

be

to

to

year

to some newspaper in
each county in which the district

of the fiscal

amount

was

3%, it

pre¬

within two months after the close

that the

financing thereof will not mate¬
rially impair the credit of the mu¬
nicipality or county or reduce its
abilities to pay its debts, bonds or
notes for the financing of such

Missouri Constitution prohibits the

rate

The

year.

officer of such governing
body shall submit such financial

or
any part thereof is located, and
the
publication
shall
be
made

that

Board

sonable

ac¬

issue

Since

of the fiscal

an

Government

expended

private sale at
value

the

of

in each fund at the

improvement is in the public in¬

issued under this act shall be
at

itemized

nature

terest and

and sale of $75,000,000
building bonds by striking
provision "that no bond is¬

sold

hand

on

funds,

the

statements

an
emergency exception
regular statutory debt lim¬
Upon finding by the State Lo¬

to the

issuance

a

sewage.

ance

such

to

siding

of state
out

constituted

counties

the

sue

authorities

Chapter 130, effective Aug. 15.
1957, granted to municipalities and

House Bill No. 1 adopted by the
first extraqrdinary session of the
Missouri Legislature amends Sec¬

cities

authorizes "eli¬

221
to

contract

the

with

Trinity River Authority of Texas
for the transportation and disposal
of sewerage.
"Eligible" cities are
defined as those situated wholly
or
partly within the boundaries
of the Authority.
"Payments by
such City to the Antb0ri.tv shall
from

made

be

Citv's

the

water¬

ernment Board, together with the
Commissioner of Education, hik?

works system or its sanitary sewer

prevision previously in effect, that
bonds

administered

its

since

sewer

users

are

the

40,

pursuant to which such bonds are
issued may direct that such bonds

local law and any
attached thereto

or

coupons

This Commission is

with

under

a

eral, special
interest

apply for a refund of the Sl-j-eentper-gallon state gasoline tax based
not otherwise encumbered.
on
usage of the Turnpike
(this
Senate Bill 2174, providing refund assumes
gas consumption
"State
Financial
Assistance
for of from one gallon ever}' five miles
Local
Projects,"
authorizes
the for heavy trucks to one gallon
or

effective

shall

of the

be serviced by
of the esti¬
are

bond

as

25%

paid by the county

each

and

more

governing body
or any official thereof, a facsimile
November, 1958.
of such seal may be imprinted on
Senate Bill 1337, providing the the bonds if so authorized
by the
Street and Road Bond Act of 1957,
governing body of such unit, and
permits counties and cities to sell it shall not be necessary in such
bonds, not to exceed ten years in cases to impress such seal physi¬
maturity, in anticipation of and cally upon such bonds.
secured by a portion of the high¬
MASSACHUSETTS
way users'
taxes due from the
referendum

a

Chapter 231 of the Laws of 1956,
Feb. 21, 1957, provided
for the creation of a County and
Municipal Law Revision Commis¬

case

or

$50,000,000 of State of California
bonds for pert purposes, subject
to

-•

the

as

to be issued by any unit
under the provisions of any gen¬
thorized

least

for debt limit purposes.

Sa?i Francisco Port Bond Law

event

such

Chapter 57-763, Laws of Florida.
Acts of 1957, provides that any

of

shall be considered

village,

or

sion of Local Government.

of

impressed thereon, the cor¬
porate seal of the municipality. In
which

FLORIDA

authorizes the sale
of $100,000,000 of state bonds for
school building aid as approved
by the voters in the November,
1956, general election.
Bill

trustees

of

graphed signatures only (without
a requirement that any of the sig¬
natures be manually subscribed)
charter under which a municipal¬
and (2) issuance of bonds in de-'
ity may be operating makes no
nominations of $5,000.
provision for the office of clerk,

1957,

Senate

signed

have

Assembly Bill 917 amends the
Code, the Water Code,
Health and Safety Code and
the
Los
Angeles County Flood
Control Act to permit (1) the is¬
suance of bonds signed by litho¬

CALIFORNIA
Senate

board

of the clerk,

the

State Legislation

be

be, attested by the signature

may

Education

Washington, D. C.

the

dum

school

10, 11 and 12 permit the res¬
ervation of a privilege of redemp¬
tion at a scale of prices exceeding
par in bonds of school districts,
municipalities and counties, sub¬
ject to approval of the redemption
premium scales by the State Divi¬

of the city, or chair¬

mayor

of

to "enable

ters

bonds in certain cases).

man

designed

districts to finance school projects
at improved interest rates. Chap¬

relating to the execution of bonds
issued by cities, towns and villages
(authorizing the use of facsimile
signatures in the execution of such

California

the

curities Commission certifies that

the
appropriate time.
by

(12) The above items concluded
the work of the meeting. The next
meeting

local program is in
with

Resolution

Commission to study legis¬

a

lation

following provisions

the

includes

proposed position on aid to educa¬
tion
and a
proposed resolution

if the

ated

Section 95.155 which

a new

Concurrent

No. 2, effective Jan. 25, 1957, cre¬

Missouri
Section

95.155 of the Missouri Statutes and

enacted

Securities Committee
poses

Senate

submitted

JERSEY

NEW

*

adopted at the

general session of the
Legislature, repealed

Report of ISA Munic'pal

Committee

361

issued

under the

authoriz¬

ing act could not be sold

at

less

permits

or

both

of

combined

water

system,

as

systems or of
and sanitary

prescribe in the

between

such

and

Citv

the Authority, and shall

the

sale

of

bonds

under

the

than

par

NEW YORK

authorizing act at less
price.

a

system

contract

quirements of school districts.-

than their face value. The amend¬
ment

a
similar program
1946 for meeting urgent re¬

an

The

Legislature approved the
authorization, subject to approval
at the general election in Novem¬
ber, of $250 000.000 of bonds for
the

construction

New

York

of

State

^authorization

facilities

University.

for

The

approved at the

was

election in No'vomhpr.
A

bill to establish

New York

a

operating

tem

or

constitute
of the sys¬

expense

whose

svstems

Bill

House

city to

386

acauire,

authorizes

tran<=nnrta+ieti

svstems and to issue revenue bonds
therefor

uoon >

ordinance' of

referendum js provided
tion of

School

bv

Bonds,

.

the

the

Governor's

Marketing

the

The

imon

of the niTpRR^d ve+ers.

effective

rate

of

interest on

adopted. (revenue bonds shall not pvpeed
6%: the bonds are to be secured

not

was

of

-

governing bodv after pubh^Uon
of notice of intention. A right of

recommended
on

any

evtend

improve,

street

operate

and

State School Financing Authority,

Committee

revenues

thus pledged."

are

The Mooicinal Securities Commit¬

Dealers

tee

in

of the tra New Vork Group,

-without

taking

a

r>orttior»

-'•ovnon+jjP r>ror»Ocition of the
•

fphiichment

of

such

an

net svstem

bv

revenues

and

es-

authority,

gage

on

the svcfoin vd+U

franchise

in event of

a

9^-vear

default.!^

•

.

0

.

Municipal Bonds

UNDERWRITERS

Third Largest




BROKERS

DISTRIBUTORS

Effective Distribution

THE PHILADELPHIA NATIONAL BANK

in

the Nation's

Trading Area

Newburger

&

Company

Members:

New York Stock Exchange

•

American Stock Exchange

Philadelphia-Baltimore Stock Exchange

1401

Walnut Street, Philadelphia 2, Pa.

New York City

may

the :be additionally secured Bv a mort¬

on

Lebanon

•

LOcust 8-1500

Atlantic City

Vineland

•_

>

Volume 186

H.J.R.

3

Number 5700

proposed

.

.

.

The Commercial and Financial Chronicle

APPENDIX F

constitu¬

a

tional amendment creating a Texas

Water

Development Board and
authorizing issuance; of $200,000,-

maries

decisions

which

tional amendment

to

interest

adopted at
Some
of the principal provisions added
to

Article

of

was

Nov. 5, 1957;

on

of

the

of

of Texas

Dollars

in

One

pro-

13 mills

the assessed

on

valuation,

are

to
cdmw

otiao

a

than

i

-

j

,

vatorem taxes

,

-

,

'evocably prescribed in Section

—;

„

pledged for the rental payments,

of Trinidad v. Haxbytaxpayers- sought to enjoin the iswenues by the
nuance
of bonds-by the City of

21, Article X
Michigan Constitution

of the

City

Trinidad

ity to provide for, issue and sell
general. obligation bonds of the
exceed

the

where

the tax "levy for any year'for the
payment of such bonds exceeds

COLORADO
In

ment Board shall have the author¬

to

the city water system,

•

■■

,

issued prior to July 1; 1962

51

Constitution

(1) "The Texas Water Develop¬

State

be

-r

curities business.

by a new Section 49-C
the following:
-v :■>..:

are

be derived from charges made for

doctrine the use of the building after oper-|
,for by Trimdad would atmg costs, the net revenues of
.applicable.
lPe<i

recent

some

of

be

from the operation of the hospital,
contended

engaged in the municipal se¬

Texas

III

;

This appendix contains sum-

•

000 of Texas Water Development
Bonds.
The
proposed
constitu¬
the election

•

-

f'oiirt Decisions
Court neekinns

(2683)

for

thp

rnnstrimtion

nf

a

city." The city had the
privilege of by paying whatever
terminating the lease
agreement

f
016311111^ ot the constitutional pio-

years from

date of issuance

and.

permitted school districts to issue
ok

amount not

an

Hundred

Million

($100,000,000).«,-The Leg¬

islature of Texas, upon two-thirds

(%) vote of the elected members
of each

in

amount not

an

revenue/of the hospital (after rea-

House, may authorize the
to issue additional bonds

Board

sonable

of maintenance

expenses

and

exceeding One
($100,-

operation) and such part
cigarette taxes, parking meter
and unpledged revenues of

Hundred

Million -Dollars

its

000,000).

,The

y<mFJA'JS&rSZ,

**3

^
i^rnXd t lh I
flection was not. limited to elec- constitutional amendment. Thebe demanded by the in- tors who had paid a property tax Supreme Court of Michigan sua-.habitants of a city and;that the within the preceding year.
•
.ggSd thevalMity of th! court!-:

y..

,

,

.ees

herein

bonds. authorized i
permitted to be author¬

or

;

.SSftJ?8

?r!Tow°Ult °/S°i°lHClt
Ocril0,_1957,^concluded that

dn

amendment after dispos-[

n,.t

qn

ing 0j!

the three

questions

that,

ized

by the Legislature shall be
called 'Texas Water Development
Bonds'." ."
•

•,-■/

v;;'.-v-'

r

M2) <-All moneys received from
the

sale

of State

bonds

shall

be'

deposited in a fund hereby created
in the State Treasury to be known
as the Texas Water Development
Fund 4o bo administered
(with¬
out further appropriation) by the

oj

suonce
:

Texas Water Development Board
in such manner as prescribed by

law."

lite

uuspuui

rtiiu

ixie

is-

of the bonds shall be paid
the
the- revenues

ivelv
from
exclusively w from

Iweid sharinnycosri' o'r

Legislature may prescribe, to the
various political subdivisions or
bodies politic and corporate of the
State of Texas including river au¬

"debt"

thorities, conservation

sessed valuation of

mation districts and
ated

organized

or

be created

and

wx

rleht«
debts

recla¬

districts

in
in

the
r.ne
Mic

int
in

cre¬

authorized

or

the

of

city within
the
meaning of a state constitutional
provision
municipal
prohibiting

organized under
Article XVI, Section 59 or Article
III, Section 52, of this Constitu¬
tion, interstate compact commis¬

„

of
01

pvpp«
excess

3^
6/c

of
ot

the
tne

asas

property with-

the

tor

me

piamuiis,

of the

issuance

cujuijuufe,

bonds

the

on

corpora¬

tions. in the conservation and de¬
velopment of the water resources
State,

storing

tutional

its storm and flood waters and the

streams,

and

for aB useful and lawful purposes

the acauisition, improvement,
extension, or construction of dams,

by

reservoirs and other water storage

projects,

including any system
necessary for the transportation
of water from storage to points of
facilities

for

which

House

or

for

bling legislation for the
of the

Board,

Texas

to

above)

was

amendment to

city

attempt

revenues

for

n

On
■-

rnmrrm-

SS

anon

wnicn was to

eon in
equip

Citv
<..11}

the
tne

oe

Citv
uity

an instru-

of
01

a
a

In

Public
pupuc
o*
o.

1956,

ordinance which

il'-l

,,r-

the

'•

■

of

Supreme

aupitme
? I

kSionl?

-nrf^mZamendment
ini

the

adopted
auopicu

provided for

available to defray

"

year

the rental

thereafter
money

to

i

ex rel.
deelnrerl

a1ecla.iea;

,

law

a

?nfntnfe\hVSZiXZor

^nornl

this

to

the

be
^.7

^enciai, tnis amenament to tne The

Constitution
q+n|0 4n

mSa aS

(1)

\^UG
™

00,000,000

,m

authorized

+o

maximum

a

of

e up to a maximuiii oi
principal

amount

general obligation bonds

&^nerf

the.lnw

oon^uuuu pouus,

if

of

neces-

necc.^

fo provide funds from which
|oang couId be made to school dis.
sary

school district issuing bonds with

maturities

of

25

years

or

leased to i:
private companies,
; ;
rrlr 1
supreme Court held that the

A

vininfpri

n

nrnvisinn

fW

thp

mat 1

,

prprlH

c

of

V

inHiviJiml

f

Znoraf
p

,

c|.f+0
i

+hr

•

creation

.

..

.

effective

and

adopted

as

an

the Constitution.

operation

the

a

more

the point un¬
absent, any
1o build the
proposed hospital, if the bond* »n
ouestion were pavatde exclusivelv

der

discussion,

ouestion, of

out of net revenues to be

UNDERWRITERS

STROUD & COMPANY

and

INCORPORATED

power

V

PHILADELPHIA

derived

Underwriters & Distributors

AND DEALERS'

Industrial, Public Utility, Railroad and Real Estate Securities

State, Municipal and

Authority Bonds

TRADING DEPARTMENT

UNLISTED

Equipment Trust Certificates
Public
Established

Bioren

1865

6-

Utility, Railroad and Industrial Securities
Philadelphia Bank Stocks.

Co.

MFMBFRS

New

York

Slock

Exchange

American Stock Exchange
Philadelphia-Baltimore Stock Exchange

1508

Walnut

Street

Philadelphia 2, Pa.

PEnnypacker 5-9400




120
New

Broadway

York 5, N. Y.

WHitehall

3-0590

NEW YORK

PITTSBURGH

ALLENT0WN

,

.

statement of controlling
Continued on page 52

of a

"Limited solely to

^

..

"to be most persuasive reasoning

light facility cannot possibly
as a product or by¬

product of
hospital.

nr

The Court stated that: it deemed

considered

be

-i

aid

association or

on

1

ch-ill

in

assoeiatinn

produces the revenue thus
impounded.
Revenue obtained
parking me¬
ters and the operation of a power

and

the

•

be glven or loaned

never

from cigarette taxes,

.

of

VA01at^ f. P10^1.81,011 01

state Constitution which provides

which

ena¬

Supreme

State

nu-

ar,<*

years,

each

the

l2r ®upieme.

in

Nebraska

£or

for

1957

5

^opted in 1953 authorizing

$27,500

of
The hospital
oroject
disconnected
from and unrelated to the activity
hospital.
is wholly

April

\Z. F7 7
unconstitutional
unconstl

of bonds issued for the purpose
a

not

was

of Ariicle X of
Con™neiitiition
which
annroverl
at
? "nance tne acquisition 01 conJBtutl0n;.wmcA1 was aopiovea at strUction of industrial buildings to
was

Durango
nmiango

Durango
J'Uidiigo

1957

^ Michigan

community
community

February,

Council
tnuncu

28

ana

*

'

Qn

dlhf wMuV

land and erect thereon

acquire

and
aim

an

of
01

L
V

-

1955,

as

men tali tv
remain,y

June
,

nest inn-

NEBRASKA

Court of Nebraska

wiciiioan

n

SeetionV

4Iiah

T\A+

MICHIGAN
r

pay-

communitv Building Asso-

tax,

tnereoy

meters, and if not then

general funds."

!,0;lprof» CZra^ C0rp°ra;i0,n
formed
the "Durango, Col-

Vvas

or;u)o

P

aorogaiea

building

operate only if TI.J.R. 3 (referred
to

eitv

InCLber°

i

single

a

pilbiished in full prior to the elee^jon along with the provisions of

.

Wafer Development

become

now

the

cigarette

as

<» one ballot, or (c) another Sec-

sufficient, to reach into the city's

prohibiting
rental

ow

from

revenues

amVl

marking

enforcement ox. me ordinance
lw

rental, the
water system,

ordinance

tor

v,,iiftu.vU

if .necessary for the payment

nnvTvinrt

the city declared
ooconsli-Utional and void and to

provided

j

the

fbe

an

of

an injunction
flt
f th

...

to the electors

,he leasing of the Community triets for the purpose of paying
citv
and to nlace those revenues Building by the city under a rental bonded" indebtedness; (2) required
in a' special fund for thV payment bf $27,000 for the first year and State loans to be made to any

of
-

contained

161

arc

an

of Durango

obtain

discuss

to

,

anv o^e or more

Bill

ordinance

1o

^

„f the

pur-

suHh purposes or methods."
t

In Deri et ill. v. City

hivilding.
case

is made to impound

transporting

wat.fr therefrom to wholesale

CbpcArs.

Court

The

limit.

-In the instant

treatment and/or distribution, in¬

cluding

debt

stated:

including the con¬
and preservation of

waters-of its rivers

"debt of the city"

of

the^ plaintiffs sought rio have

ground that issumico of the bonds
a

"-T

2*j3rt*S" XSlSSl^SfJ^

the

use

a
meni

would create

party and munieioal

this

^^evideiiced^y

nity building

within the meaning of the consti¬

trol,

"A'-u

meaning thereof."

merits

T£c ?TiSmC«Ft

or

is

of

A

w-j,

which

eifv
cxiy.
city.

sions to which the State of Texas
a

~~ —

fund

•

to

—

~

■

■

); (3) "Such
only for the

.

f revenues of the city, then Court also stated: »
Special iuntraocirme is
siwviai. fund , doctrine • is ap"There is no reas
reason

ex-'

penses be paid out of or to the
shall be used i •renornl funds or tax levies of the
purpose of aiding or- city, either directly or indirectly.
The taxpayers claimed that the
making , funds available under
such terms and conditions as the
proposed
bond
issue
created
a
-

—-

a,

l!lt;

LANCASTER

ATLANTIC CITY

52

The Commercial and Financial Chronicle

(2684)

Continued from

be benefited by the location

may

pa&e 51

It may
produce employment for citizens
of the community. It may tend to
balance a locally restricted econ-,
omy.
But general benefit to the
economy of a community does not
justify the use of public funds of
tThe city unless it be for a public
as
distinguished from a private
purpose.
This is simply a case
where the city is attempting to
use the powers, credits, and public
moneys
of the city to purchase
of the company in the city.

Report of IBA Municipal
Securities Committee
be
named
principle" the following statement ments which could
without end, may be of material
by the Supreme Court of Florida
benefit to the growth, progress,
in its decision in State v. Town of
development and prosperity of a
North Miami:
:
"This Court has approved spe¬ municipality. But these considera¬
tions do not make the acquisition
cial acts of the
legislature au¬ of land and the erection of build¬
thorizing
advertising
programs,
purposes, a mu¬
the acquisition of land, for golf ings, lor such
nicipal purpose. . . . Our organic
courses, parks,
playgrounds and
law prohibits the expenditure of
recreational and hospital centers.
The court has also approved spe¬ public money for a private pur¬
cial acts authorizing the construc¬ pose. It does not matter whether
the money is derived by ad val¬
tion of buildings which served a
orem taxes, by gift, or otherwise.
public purpose and many other
It is public money and under our
acts
authorizing
counties and
organic law public money cannot
municipalities to acquire prop¬
be appropriated for a private pur¬
erty and make improvements to
pose or used for the purpose of
public property which served a
acquiring property for the benefit
public purpose.! In none of the
of a private concern. It does not
cases decided-by this Court since

land and erect industrial buildings

for

thereon

the

of

use

income funds would

mately $1,500,000
the

U.

S.

gain approxi¬
to

be

Such

proposed

Supreme

Dakota

the

Court

June

on

the writ of

defendants

with

the

of

South

25, 1957, granted

prohibition, preventing
from

proceeding
plan cf rein¬

proposed

vestment, after concluding:
"We

furthermore, cannot

conclusion that the

private gain. It serves no public
municipal purpose.
The Act

purports to grant powers to cities
are
beyond the authority

of the

NEW JERSEY

town,

Township of Middle-

v.

the

al,

et

Supreme

Court

of New Jersey on March 11,

held that

shall
Such

1957,

as
ingot, plate, sheet, wire, rod,
cable, extrusions, foil and fabri¬
parts.

cated
A

few

derived

the

of

from

market

our

the petition of a tax¬

on

estimates

study

payer

Schelle

In

Foss

et

al, Gov¬
ernor of the State of South Dakota,
et al, the plaintiff sought a writ
cf prohibition preventing the de¬
fendants

v.

from

proceeding with a
proposed plan involving the sale

•

of aluminum

use

in trans¬

will

climb—from 400,000 tons in 1955 to 3,000,000 tons
portation

in

This

1975.

will

seven-fold

make

single

largest

increase

transportation
market

the

alu¬

for

minum.
architecture

20 years

South Dakota provided that:

of

"The

of the permanent

moneys

school and other educational funds

REGINALD R. CHURCH

WILLIAM S. McKELVY

E. PAUL TUNNELL (LIMITED)

shall be invested by the Commis¬
sioner of School and Public Lands

only in bonds of the United States,
securities guaranteed by the
United States, bonds of the State
of South Dakota, or in bonds of
any school corporation, organized
county, or incorporated city with¬

PITTSBURGH STOCK EXCHANGE

(ASSOCIATE)

PITTSBURGH 19, PA.

•

Bell

in the State

at

Teletype PG 587

such

of South Dakota and

invested

were

ment Bonds.
,

had

able

S.

there

obtain

than

money
at lower

the

sions.

numerous

local

to

In

from

to

po¬

they

3%

re¬

loans; but
the past year, with tight
and higher interest rates,

were

loans

because

school fund

on

demands for

political

order

the

it

to

school

be

never

language

degrees

of

—

Ohio

—

divisions, it

West Virginia

at

&

Company

Iforfc Stock Exchange

American

■

Stock

FIRST

r

Exchange

Pittsburgh
*

Wheeling

Stock

Stock

Exchange

Exchange

NATIONAL BANK BUILDING, PITTSBURGH 22, PA.

Telephone COurt 1-7300
Teletypes pG 566 (Corporate) j; PG 570 (Municipal)
Private Wire to Clark, Dodge & Co., New York
City

Branches:' Wheeling, W. Va.; Butler, Pa.;




at

2Yz%

version

(

(Associate)

regular

in each of the

markets

peacetime

we

Military markets are also ex¬
panding. Years ago it was prin¬
cipally military aircraft. Today,
with the emphasis on missiles and
the
necessity for rapid, global
movement

and

of entire

airborne

light metal has
wider applications.

visions,

our

division

airborne

The

will require vast amounts

minum—far

more

used

in

sonic

aircraft

the

than

missiles

di¬
new

alone

of alu¬

has been

and

super¬

have

today.
experience that
has proven its ability
we

We know frbm

aluminum
to

hold the major markets it has
in the past.
We believe

entered

from

this projection,

markets

known

the

of

70 to

values.
It defines

our present sales goals
objectives.

and sales

It

gives us a pre-view of the
production facilities we will need,
to
maintain
and
improve
our
competitive position in the years
ahead.
It

points to

need

for

our

ever-expanding

materials

raw

such

90

As

to

come

we

you

again

that

of

discount

and

2%%.

the

the

would

U.

sale
S.

It

and

Bonds

deplete the

was
con¬

at

of the

surely

we

enable

us

will—this
to

study

blueprint

a

opment
been

have

I

speaking of ex¬
markets,
that
quickly absorb the socalled over-supply of aluminum
today; require doubling our pro¬
duction by 1965; and re-doubling
it again 10 years later.
panding

known

should

Although this represents a tre¬
expansion by
today's

mendous

standards, in terms of the indus¬
try's potential, these are but foot¬
hills along our future path.
Now

I

am

markets

the

going to go beyond
which our long-

on

planning is based
planners fear to
point out the mountain
peaks which I personally feel are
on this
industry's horizon.

that in the

sharp competition of steel versus
copper, versus aluminum, versus
plastics,
versus
glass,
versus
wood, our versatile ' metal will
continue to penetrate deeper into

walk where

—to

tread—to

New

New

Techniques

and
new
manufacturing practices will, I
believe, transform this industry
from
a
job-order basis to fullfledged mass production.
technologies

Fifty thousand pounds was a
big order in this industry 10
years ago. Five years ago, 500,000
pounds was large. Today, a big
order
is
over
2,000,000 pounds.
Thus we are approaching a level
of business which begins to justify
mass manufacturing techniques.
The

challenge of mass produc¬
always been with us.
But until today we have lacked
the metal to take advantage of
the tremendous opportunities it
tion

has

offers
of

us.

our

I believe

metal

was

an
a

abundance
first

THOMAS & COMPANY
ALCOA

BUILDING

PITTSBURGH

19,

PA.

per¬

depletion in the

permanent school fund would be

completely restored in
or

after

the

six years

during

the

a

matter of

and that there¬

normal

life

of

reinvestment, the interest and

will
well-

balanced plan of corporate devel¬

a

discount; but the defendants

estimated that the

for

additional expansion capital—and

the

on

as

bauxite, fluorspar and petroleum
coke; as well as additional sources
of power—water,
gas,
oil, coal
and even atomic energy, when it
becomes cheap enough.

money

$13,000,000

ex¬

range corporate

.

goes,

the

manent school funds to the extent

five

Johnstown, Pa.

of

approximately

conceded

MEMBERS
New

/

panding economy.
Although the study is designed
to serve as a road to travel along
—with proper attention to caution
signals—it has many immediate

available

worth of U. S. Government Bonds
in the school fund
bearing inter¬
est

Established 1891

.

diminish¬

proposed to sell

was

discount

a

dollar

A. E. Masten

.

sanction

for 3% loans to local political sub¬

Pennsylvania

.

diminished.

does not

periods

or

.

subdivi¬

make

fund

so

have studies.

the

as

Govern¬

investors

rates

quired
during
money

Bank Stocks

U.

later.

And

In recent years few

private

interest

Corporate and Municipal Securities

in

subdivisions

been

from

DEALERS

interest

loans had been made to local
litical

DISTRIBUTORS

of

rates

Legislature shall, from time to
time, determine."
Over $30,000,000 of the funds

Pershing & Co. Wire System

UNDERWRITERS

construc¬

—

DAVID W. HUNTER

UNION TRUST BUILDING

and

longing to the permanent school
tion a four-fold increase is in¬
funds, which totaled in the aggre¬
dicated
from
around
a
half
gate over $34,000,000.
Section II
million tons now, to 2,000,000 tons
of Article VIII of the Constitution

G. PEARSON RHODES, JR.
GELSTON B. MORRIS, JR.

Telephone—GRant 1-8700

the

Aluminum's New Era

Legislature to confer."

In Switz

WILSON A. SCOTT

AMERICAN STOCK EXCHANGE

an

of

Continued from page 25

which

Company

•

diminishment

ing to the permanent school funds ment."

In

NEW YORK STOCK EXCHANGE

power.

constitute

.

escape

sale of invested securities belong¬

uncon¬

of

principal of the funds contrary to
the provisions of our Constitution
that such money 'shall be and re¬
main a perpetual fund.
The
principal shall forever remain in¬
violate, and may be increased, but

voluntary

and reinvestment of securities be¬

FRANK II. HUNTER

would

an

or

of

WILLIAM M. McKELVY

sales

unlawful

The

The

§

assumption

private

a

corporation for private profit and

Underwriters, Brokers and Distributors

AcKelvy

discount would be

a

stitutional

may in¬
dicate why the aluminum indus¬
of a municipality, the local
try does - not have a long-term
matter what
such undertakings assessing officials may be ordered
the adoption of our present Con¬
problem of over-supply or over¬
may be called or how worthwhile to carry out a reassessment of all
stitution have we approved any
production.
they may appear to be at the pass¬ taxable property in the munici¬
Our story is based upon
special legislative acts which
the
moment. The financing
of pality at the standard of "true
authorized any of the political ing
generally accepted view that the
value" directed by statute.
The
ubdivisions or governmental units private enterprises by means of
economy will double by 1975.
In
Court concluded that a reassess¬
the same period, we confidently
of the State to acquire property public funds is entirely foreign
to a proper concept of our con¬ ment of all properties in the town
and erect buildings thereon for
expect the use of aluminum to
stitutional system. Experience has on the basis of
100%
of "true
show a five-lold increase—from
the exclusive use
of a private
was
the
shown
that such
encroachments value"
only
practical
2,000,000 to 10,000,000 tons.
orporation for private gain and
will lead inevitably to the ulti¬ means to arrive at the equality of
In
terms of a few particular
rofit."
mate destruction of the private treatment and burden which is
markets we find that ehe elec¬
"Every new business, manufac¬
announced as the guiding prin¬
enterprise system."
trical industry used one-quarter
turing plant, or industrial plant
The Supreme Court of Nebraska ciple of taxation. The Court post¬ of a million tons of aluminum in
which may be established in a
poned the effective1 date of the 1955.
further stated:
municipality will be of some ben¬
order so as to apply first to the
Our study indicates a consump¬
"The purpose of the statute, and
efit to the municipality.
A new
tax year 1959 "to afford the Legis¬
tion of over 1,000,000 tons by 1975
the contract in the present case
lature the opportunity to take such
supermarket, a new department
—at
least
a
four-fold
increase
springing therefrom, is to assist measures and
provide for such
tore, a new meat market, a steel a
brought about by the expanding
private corporation that is en¬
administrative procedures as its
lill, a crate manufacturing plant, gaged in an enterprise for profit.
power needs of the United States;
own inquiry may prove to be es¬
increased
mechanization
in
our
a
pulp mill, or other establish¬ It is true, of course, that the city sential to the
public interest, and homes and in our
industries; and
to allow the Township time needed
a
further penetration of alumi¬
for the fulfillment of the project."
num
into products now made of
competing materials.
SOUTH DAKOTA

Corporate and Municipal Securities

at

Thursday, December 19,1957

on

sold.

the

.

.

the rate

over

Bonds

.

Municipal and Corporate
Securities

pre-

1

Volume 186

Number 5700

requisite for the
ahead.,;
The
in

expanding

the

dustry.
For many years it has
been working successfully in the
production and marketing of Rey¬

'

■

...

The Commercial and Financial Chronicle

.

.

that lies

new era

.

.

of aluminum

use

automobile

nolds Wrap.
As you know,

industry is a
of how
metal

classic

example
availability is bringing about mass
production techniques, and
the

aluminum industrial revolution 1

try

to

1950

delivered metal

we

automobile

pig

try's

molten metal

substantial

in

the

^

tonnage

of

woman

States

we

from

where

under

now

the St. Lawrence

the

the

future

the

for pistons,

leading
car
manufacturer
is
using
1,600 individual aluminum parts in
models

a

its

of

advantages of the metal it¬

lightness, strength, work¬
ability, freedom from rust, resist¬
corrosion.
has

War II the
risen

use

to

time

will

be

far

be

cannot

when

off

.

General

Vice-President of

Motors

General

and

can

manufacturing
cate

I

year—and
that

the

rate

We

tion

these

new

needed.

sound.

,

mountain

both

,

necessary

aware

of

the

000.

im¬

Wyoming.
serves

are

building

step.

dance

of

"We

re¬

We

ing

development of atomic energy to

When

one

we

tion

began to produce pri¬

A

aluminum in 1941, there was

other producer in

assure

giartt

for¬

abun-r

an

customers

our

of

supply

in

metal

develop¬

and bigger, markets.
I

saying

am

break-throughs

This too may come about.

mary

next

have

materials.

aggressively

are

new

What

apply it to our primary produc¬
tion.

can

challenge

new era

to
us

this

is

mass

is the world market for

at every

turn.

for aluminum lies just

aheaci.

the United

Rambo, Close & Kerner
Incorporated

Corporate Bonds and Stocks

Authority Boqds

Municipal Bonds

1518 Locust

St., Philadelphia 2, Pa.

is presently

means

insignificant

is

sumption

that aluminum

Call JANNEY,

rest of the world.

To

challenge
mendous opportunity.
aluminum

has

in

be

Bank and Insurance Stocks

a

tre¬

and

become

basic metal in our economy,
ond only to steel, I

the

this is

us

tremendous

DULLES & BATTLES for—

con¬

active

believe it

Pennsylvania Tax Free

trading

a

sec¬

markets

can

Utilities

Industrials

key material for improving

a

In

been

Common and Preferred Shares

City-County-State-Authority lssues^;%--.%%:7«;
Direct

over-populated

and

under¬

New York

nourished areas, aluminum irriga¬

tion.

and

fuel

to

and

JANNEY, DULLES & BATTLES, INC.

Telephone

Members New York Stock Exchange
Philadelphia-Baltimore Stock Exchange

can

Bell

Teletype System

PHILADELPHIA

PH 80

This
above

is

another

the

mountain

foothills

of

Pittsburgh

peak

our

.

LOcust

8-3400

Easton

Lancaster^

Bethlehem

Philadelphia Telephone

por-

Johnstown

Sunbury

jectipns.'" It awaits only adequate
production
facilities,
assemblyline methods, and the necessary
international financing, to bring

extrusions

transport liquid

Camden, New Jersey

the abundance of the minerals we

our

ex¬

and

for

large

tanks

natural gas

Since 1890—Underwriters,

Distributors, Dealers, Brokers

it about.
We
are

in

the

aware

know

need.

that

aluminum

of
our

The

our

industry

future.

greatest

world

is

We

asset

richer

is
r

■

i/l'

in

aluminum than in any other basic

at very low temperatures.
Within

to

new

the

past

few

months

S£)C'

ANO, UNDERWRITERS

DEALERS

metal.

''

'

■

Oblfgptiofis of th* '

COMMONWEALTH 'Or

,

•7';. *7%% a?,'' '•> 7%

Corporate & Municipal Issues

CITY Of

•

;

PENNSYLVANIA

and its Political Subdivisions

Distributors, Dealers, Underwriters

;

Sp^oUiil*.ih;?77 % A 7

PHILADELPHIA BONDS 7;

:

/

PENNSYLVANIA SCHOOL AUTHORITIES

DeHaven
V

;

;• ESTABLISHED 1874
'

■

-

1

"

t

s

•

,

SCHAFFER, NECKIR& CO.

.

MEMBERS

YORK. STOCK EXCHANGE.

.

.1

'

Pottatrd Bldg.,

: AMERICAN STOQK EXCHANGE "

PHILADELPHIA-BALTIMORE STOCK EXCHANGE

'

.

TITLE BUILDING




WILKES-BARRE, PA.

•

PtiilattelphTu Z
Tatefypa PH 864

*

from NEW

PHILADELPHIA 2

(ram
NEW YORK

T4646

I

.-7:*
/

LAND

J

Townsend, Crouter & Bodine

&
•
,

NEW

Y

TURNfIKE,, WATER; AND ;SEWER ISSUES

•

•

New York

Trading Wire to A. M. Kidder & Co.,

DIgby 4-9694

greatly increase
stabilize agriculture produc¬
pipe

and

to

production
this in¬

mass

—

produc¬

.

Actually* the
technique is not

<

industry is

whatever form they need.

awaiting the economical

are

its

We

raw

ample

an

oil, and are con¬

additional fields.

seeking

stantly
We

We

of gas and

aluminum

for

ward

and in

7

.

prepared

has large re¬

company

of coal in Kentucky

;

Now the

peak

expanding demand
pipe in oil, gas and ir¬
we
have developed an
automatic
pipe-welding machine
that permits miles of pipe to be
laid at amazing rates of speed.
We are selling aluminum plate

These contracts
the

minum
mill
products; such as
sheet, foil, < extrusions and forgings.
Now there are 200 such
companies.
A decade ago about 4,500 man¬
ufacturing plants were using alu¬
minum.
Now there are over 25,-

scant attention

consumption

This

tion

for

facilities.

that

Our

serves

Russia and five other countries.

Pipe

rigation

primary produc¬

more

was

helped

you

also

handful

a

making alu¬

were

,

To meet the

aluminum

the

established the fact

pansion

high

that

to

because

felt

was

re¬

drilling areas.
Last Week a major oil company
adopted aluminum pipe as stand¬
ard for these, requirements.

Many of you are aware of an¬
other advantage of these molten

finance

minum

water

celerated.''

contracts

try.

concentrated in the United States,

promoting and selling pipe to the
oil
industry
to
carry
surface

in

industry not only will be main¬
tained but will probably be ac¬

industry,

have

For the past year we have

auminum usage by the automotive

metal

are

fabricators

sulates.

indi¬

increase

of

now

of

portance of power to our indus¬

a

Aluminum

quote:—"New

techniques

other

Before World War II

reserves.

We

By the middle of next
there will be six.

year

metal's industrial

received

Since

contracts

and with

Manager of Chevrolet said earlier
this

ore

major f6od man'-' living standards in under-devel¬
oped countries. ;
;
\.
In almost every phase of the oil
7 For example, in tropical areas,
industry—exploration, production, aluminum sheet is particularly
transportation and marketing—we useful in housing, because it is
see
tremite-proof, rust-proof and in¬
break-throughs.

/-/.vV'/"*

...

until

.

our

ufacturer.

"

Edward Cole,

,

markets.

pany

'

lines..

that has

cently been signed by aluminum
producers with a large oil com¬

for cars
assembly

components
running - off

Another

or¬

manufactured

are

Two

Certainly, at this rate of growth,
aluminum

being
-

mass

pounds per car, with as much
pounds in a single model.

the

individualized

of

already moving toward
break-throughs in many of these

of

two

from

our

a

now

We

200

as

was

other

products is less than 40
pounds per house. The potential
is
indicated
by
the
successful
marketing in Detroit of Moderatepriced
homes
containing
1,500
pounds of aluminum each.

self—its

45

the

moving
industry

are

in

for

and "new

applications
in our products. It's apparent that
over the past few years our two
companies have worked very well
together in developing new ap¬
plications and in solviing design
problems in a most imaginative
way."
Each of the
developments in
transportation, in packaging, in
the oil industry, in building and
construction,
brings us to the

Cans

we

aluminum

of

materials

these

.v'/;

World

it,

continent of the
world for additional supplies of
bauxite—and finding them.
As a
result,
the
industry
now
has
larger ore reserves against its fu¬
ture requirements than ever be¬
fore.
The development
of new
processes to make aluminum from
clay is creating a second-line of
every

.

•Thus
every
new
application
has led to a better understanding

Since

stitution

States.

searching far and

now

53

.

and

cars

trucks.

aluminum

to

of aluminum has almost

use

tripled, largely through the sub¬

are
on

At that stage in the industry's' alumimim.> The
industry's pre¬
development entire plants would occupation
with
our
domestic'
be
devoted
to
rolled
sheet
for market * is understandable,
since
such items as aluminum cans.
we produce almost half and con¬
Other mills will be producing sume about half, of the world's
extra-wide sheet and plate; which aluminum.
can
be welded
economically to
Overseas Prospects
make ships, barges, railroad cars,
tanks and other large structures.
Our overseas opportunity lies
Pipe for irrigatipn and the oil in the immense, gap between for¬
industry will be mass produced eign and American consumption.
in
For
still
other
example,
in the United
single - purpose
States, average per capita con¬
plants.
In
building and construction sumption of aluminum is about ;
25 pounds.
there is an opportunity today for
The second ranking
the mass production of aluminum country — Great Britain — con¬
sumes around 16 pounds per per¬
products now being used.
%
For example, in the residential son.
'
:
V.'.'":' r
About 88% of the world's alu¬
field,
current
consumption
of

has
industry

auto
use

point where today

to

"our

United

What

_

of

aluminum

years,

in

from it occasional

ance

effort.

new era

there.

significance, of
to

contracts

of the

see
a

thousands
ders

1958

a

plant such as our huge
near Chicago would be
turning out a standardized, mass1 threshold of
tonnage product, instead of the revolution.

tomers.

the

this

tne

attest

metal

progress

appliances and electrical goods
quote the President of a world¬
wide company in these fields:—
"In the last six years," he stated,

sheet mill

industry? "
In themselves, they represent a
mass
production technique — the
continuous delivery of a single
aluminum product, on a 'roundthe-clock basis, 365 days a year,
to a production-line industry.
-Secondly, they guarantee
an
adequate supply of aluminum to
one
of our industry's
best cus¬

a

I

As

our

to

in

cannot

Aluminum

new

a

building

were

plant

on

is

the

of

success

.

Seaway.

Over

was

similar; true for foil can be true for
aluminum products. ;
with Ford,
u

this year, we made
of the same

reduction

advanced

It

corrosion
our

We

wide

I

wider de¬

a

agreement

construction

these

a

of

in

the American

metal.

child

or

who

toward

early

What

reasons:

opportunity to sell

the

the

Venezuela, where
resistant qualities

have proved its value.
To show aluminum's

product that could be mass
produced with all the assemblyline advantages of mass produc¬
tion.
There
is
hardly a
man,

kind with Chevrolet at our.new¬
est

for

mand

Alabama.

another

installed

indus¬

they agreed to take

primary plant
And

an

supplied aluminum

company

These huge structures are being
in
Lake
Maracaibo,

com¬

business

good

public; thus creating

indus¬

;

signed

contract

under which

sale

first

aluminum

history.
1955, we

In

in

finished

the

was

molten

own

foil

two

aluminum itself to

They remelted
parts.
That year our company worked
out
a
system of delivering the
metal in molten form directly to
a
General
Motors
die-casting
plant adjacent to our smelter.
-This

for

it gave-us

in

manufacturers

cast it into

our

the

pioneering in the field.
stressed this application of

aluminum

ingot form.

or

and

s

We

this

components for the first oil drill¬
ing platforms weighing 40 tons
each.

and has done much of the

speak of.
Before

in

began

pany

(2685)

YORK-phona Entafprise 6289

PITTSBURGH—phone Zenith 0821
I\

STAMFORD, CONN.
-r—r

«'

I

The Commercial and Financial Chronicle

stock

43

Continued from page

Securities

Report of IBA Aviation
Committee

in

In

airline
lower 0.4 (imes.

earnings, they value

times

earnings at a

Problems of

the Airlines

the
airlines today face what can only
be termed a "jet revolution," an
On

of

top

past

problems

alteration of the entire face of the

At

industry.
did

new

time in the past

no

equipment have the ca¬

to render obsolete in one
majority of equip¬

pacity

stroke the vast

previously operated.
Yet,
of the unique benefits of

ment

because

and pure jet transporta¬
tion—in speed, comfort, and reve¬
nue
generation—the airlines are
planning to virtually eliminate the
?iston-powered fleet from major

ietprop

*outes within the

\fo

next few years.

single airline can afford not
convert if it is to survive the

jet-propelled
The

competition

its

of

involve

jet airliner will

a

in speed from a present 350
niles per hour to 600 miles per
urnp

compressing into one step an
thsolute gain greater than all ad¬
lour,

in the last 20 years.

vances

nvolve

an

increase

in

It will

revenue

generation, with a single large
et
possessing the same annual
rans-Atlantic carrying capacity
is a large ocean liner.
It wall in¬
volve a jump in costs, from the
>125,000 price of a DC-3, past the
»-1.8 million price of a DC-7, to
;4-$6 million for various versions
)f the new large jet transports,
rhe

jet

airliner will require

an

additional

major investment in
lew
airport facilities, passenger
landling facilities, air traffic con-

rol,*and mechanical maintenance
the

afety

airlines

their

to

are

public

fulfill

service

irop

limited

at

airlines' total

program

lias

cre¬

supply of investment

induced

allocate

to

scarce

program

application

of historical concepts
practices, the authority may
unwittingly cripple the very in¬
dustry it is charged by law with
encouraging and developing.
As

We feel that the investigatory ap-

and

proach

but

indication

one

this

of

trend,

the CAB staff announced its latest

general rate in¬
with the amazing statement

opposition to
crease

"the

that

any

current

than

in the amounts needed rather
to others.
This free choice

equipment.
This
amount is double the aggregate
net worth of the airlines as of last
December and is 27 times their

will

be

penses

proift for 1955. An estimated
additional
$l-$2
billion invest¬

the airlines

worth

of

new

net

ment

in

jet

eauipment

will

be

made before 1967.

As of last June, the airlines re¬

ported that some $600 million, or
30% of the $2 billion initial com¬

remained to be raised.
$163 million had ac¬

mitment,

At that time

tually been paid, $766 million was

omy

made

only if the rate of

real

for

adequate

the

very

sources

for

the

lacking

ings

proceeds

and

from

sale

of

Retained earnings aver¬

aircraft.

million in the 1950-56
period but have been in a declin¬
ing trend. Optimistically assum¬
ing a $25 million yearly retention,
$30

aged

reduce

would

this

needed

the

amount

only
$100
million.
Again optimistically assuming sale
of
piston aircraft at two-thirds
original cost, or $127 million, this
still
would
generate
internally
only $227 million of the $600 mil¬
lion needed. Thus, a $373 million
deficiency would remain after full
accounting for advance payments,
depreciation, loans, retained earn¬
ings, and sale of aircraft through
by

1960.

D. The Requirement for Increased
Airline

The

Equity Financing

airlines, with $460 million

common

stock at market value

the

for

To

achieve

this

must

necessary

end,

on

ability of the industry. That such
confidence can be generated for
an

industry subject to government

vestor support.
what

And
tive?
that

is

the

real

The alternative

America,

writh

richest economy, can

air

second-rate

alterna¬

is to admit

the world's
afford but a

transport system.

The alternative is to

lines the financial

deny the air¬

strength where¬

fulfill the public
service function charged them by
Congress.
The alternative is to
by they alone

the

reverse

can

course

of

progress,

domestic trunk lines
self-supporting inde¬
pendence to a socialized status in
which
non-user
taxpayers must
subsidize air transport users. The

forcing the
back

from

alternative
fense

is

budget

ernment

to

drive

higher

finances

a

our

is ulti¬
mately
an
investment
problem
governed by free investment de¬

transport fleet when present plans
to rely on the airlines' jet

are

airline

the

problem

cisions and not by government de¬

then there must be a change
CAB
regulatory
philosophy.

cree,

in

The

narrow

turn

be

on

concept of rate of re¬

depreciated assets should

replaced with

a

of adequate

ophy

broad philos¬

investment

re¬

including
a
conservative
operating ratio, both of which will
certainly require i general pas¬
senger
fare increase.
Adequacy
turn,

in the final analysis should be

de¬

termined bv the capital needs and

by

the

earnings

to

necessary

investment

tract

these needs.

funds

at¬

fulfill

to

Here the CAB might

well consider the "prudent invest¬

ment"

principle of Justice Branthat "the thing devoted by
to the public use is
specific property
but cap¬

deis,
the

investor

not

.

ital

embarked

Upon capital

so

utility

an

the

.

enterprise.

invested the Fed¬

Constitution

eral
the

in

.

guarantees

opportunity to

to

earn

fair return."
In

de¬

as the gov¬
military jet

view

of

the

magnitude

and

critical nature of the above prob¬
lems

defying piecemeal solutions,
also

we

recommend

that

the

President of the United States ap¬

facilities, available in emergency point at once an individual of the
on
48 hours notice through the highest
qualifications to under¬
Civil Reserve Air Fleet.
In essence,

take

the CAB and its staff
outstanding, may be forced to sell have not adjusted to or grown
roughly $375 million additional with the dynamics of the airline

analysis,

the 7 views

Civil

a

complete

Aeronautics

procedures

under

review7

of

the

-

■

'

weighing.'

Congres- '•

of

of the

regula-

•

tory authority, of the general pub-

lic, and

and financial

of industry

leaders

concerned.

j

XV
The

Manufacturers'

Aircraft

Problems

from

Invest¬

an

Banking

Viewpoint

A. Historical Problems of the Air¬

craft Industry
Like

If

'

of1

instead

urge

lines

an

total

and

committees,

sional

tory Philosophy for the Air¬

\

- '

action.' 1

implications

warranted

equally

capital

Adequate Itegula-

E. Needed: An

concrete

a

constructive

constructive

a

costs of the carriers."

be allowed, not

Congress

with

ment

adequate rate of return
investment, but a suffi¬
ciently low operating ratio to pro¬
vide earnings stability and growth
and to give the investor a sense
of confidence in the future profit¬
only

to

for

wrongdoing U not in this instance

risks involved.

depreciation regulation, is proven by the rec¬
$472 million ord of our public utilities whose
from bank and insurance loans not
growth in earnings along with
yet taken down. The only other revenues has merited strong in¬
internal

also

but

and

at all

'

is

return

expected
from
through 1960, and

in

jet and jet-

for

The investing public must

funds.

be

bidding

dent

general fare
level will provide sufficient reve¬
nue
not only
for operating ex¬

of

conversion

than

industries

industry and the expansion of the
Through rigid

funds to this segment of our econ¬

func-

ion.
The

greater

$600 million were retained earn¬

carriers.

ellow

f

Thursday, December 19,1957

.

national economy.

history. As of June
1957, the industry had committed
itself for
more
than $2 billion
in

time

any

C. Future Expansion

capital

ditional

loan

financing, the airlines will be
forced to compete with all alter¬
native forms of investments, and
with the profit records of all al¬
ternative

intensity of need for ad¬

an

additional

fairly short span of
undertaking such mas¬
a

sive

the
ated

seek

to

or

credit
time.

o

V:

(2600)

31

the

the aircraft ; '
series of

airlines,
face

manufacturers

a

directly:'

historical problems which

their financial

affect

status.

rJ

The aircraft industry is

today a; V
regulated industry—regulated by;
the level of defense expenditure..1
In recent years some 85-90% of
total aircraft sales have been mil-:

itary. As a result, the bulk of the
industry
is
subject to
governlimits

mental
on

on

or

expenses

profits, but not
losses. Aircraft

contractors face the added

of renegotiation
of

:
:>j

hazard = '

and forced refund
to four years after

earnings up
completion of contracts.

'

remains
expansion and *
contraction as a result of changes"
in world events, in defense strat-*
egy, in domestic politics, and in"aircraft

The

subject

industry

violent

to

administrative decree. A combina¬
factors shot govern¬

these

tion of

$587
to $12.8 billion
in 1944, down to $593 million in
1947, up to $9.2 billion in 1954, and
down to about $7.8 billion currently. The threat to our national
security implicit in such fluctua¬
tions
has been dramatically re¬
vealed in our missile program. As
aircraft spending from

ment

million in 1941

up

\

rocket expert

Werner von Braum
recently noted, the "main reason"
the U. S. may require "well over

years" to catch up with Soviet
rocketry is that we "had no ballis¬

five

Act

and

CAB

tic

the

Act,

with

tioning

the aim of presenting to the Presi¬

missile

The

program worth men¬
between 1945 and 1951.".
aircraft industry requires
advance

massive

in

investment

plant, research, and prototype de¬

velopment often witnout forward
funds

commitment of government

and without security as to

volume
profitability of resulting pro¬
duction./The history of our de¬
fense policy is shot full of heavy
industry outlays and equally heavy
and

losses

curtailed projects.

on

.

•*

The aircraft industry is charac¬
terized

by

lack

of

unique combination

a

oflmass production bene¬

fits, fluctuating volume of output,

for

necessity

yet

rapid

working

capital turnover. Modern military
aircraft are essentially long-term

products produced with a,

custom

high component of technical
craftsmanship. Yet these complex

NATIONAL,

BANK

AND

TRUST

COMPANY

OF

CHICAGO

products were the basis for a
ninefold turnover of Lie industry's
1956.

As

over,

SALLE, JACKSON, CLARK AND QUINCY STREETS

result

in

turn¬

rapid

industry is subject

unpredictable

an

obsolescence
dustries

operations.

profitable

on

aircraft

The
to

a

sudden change in out¬
in cash receipts has a major

or

impact




of

any

put

U. S.

capital

working

million

$620

LA

of

and rapid
Few in¬

product.

America

in

.

must

absorb

the extended risk in creating rev¬

Government, State and

olutionary
of

tiers

Municipal Securities
Continental

Illinois

National Bank
AND

Trust Company

2-9000

CG 1431

fron¬
real

at

their eventual
value of supersession.
The history of waste and loss
resulting from fluctuations in air¬
craft employment shows the ne¬
cessity
of
maintaining
aircraft
production teams intact, regard¬
less

of

With

as

shifts

national

to

in

defense

survival

policy.

today de¬

pendent upon achievements in air
technology, America cannot afford
to

STATE

the

without

concepts
science

knowledge

disrupt

ment

and

these unique manage¬
organizations

scientific

by cutbacks such as the present
proposed 110,000-man reduction in
force.

The aircraft manufacturers

have

experienced extreme difficulty in

achieving
and remain

sound

diversification,

dependent today on a

'

.Volume 186

/

Single

s'

chaser.

Number 5700

product

major

.

and

The Commercial and Financial

.

.

civilian fields

to enter diversified

substantial

Immediate

In

The Return of Power to State

Governments

recent

the

months,

the

ability to preserve peace through

:

aircraft

air superiority.
A

>

industry has suffered from

a com- •

listed

1956

million

$350

pounding of historic problems, all
relating to extreme fluctuations
in defense policy. In a sudden and
unforewarned economy drive beginning this summer, the industry
suffered

for

stretch-out of contracts

a

least

at

missiles,

two

and

910,000
other

As

800,000.

to

skills

lost

were

a

a result,
and their

resigned

personnel

key

million

$290

projected cut in employment from
vital

by 12

airframe manufacturers and some

four

contracts for

of

and

aircraft,

military

10

cancellation
aircraft

worth of capital investment

to

seek out more stable but less crit¬

principal

by

power

of

overtime

all

the-indus¬

in

stresses

Further

*

try will be introduced by the shift
towards missile and away from

•

purchases, from $4

aircraft

nual

$2 billion; a 40% de¬
cline in jet engine deliveries, from
billion

/

to

'

j.

'v'-v:.;"

.

imposed
monthly conpayments from October to

Air

suddenly

Force

reduced ceilings on
w

tract
June

The effect was to re*

1958.

monthly payments to the air¬

diice

approximately $100
the $880 million

craft industry

beneath

million

speed and arbi¬
the cut-back in

prior rate. The
trary nature of
had

what

considered

been

a

firm

government commitment left air¬
their own

craft manufacturers, in

"undermined ... shaken
very much concerned."

words,
...

justified

the
have
borrow and finance out of re¬

Concern

was

by

fact that the industry might
to

earnings an estimated $1
additional funds to absorb
between expedi-

duced
billion

difference

the

the

and

ceilings

tures

cost

of

maintaining production.
The al¬
ternative would be to reduce rates

defense
weapons, drive costs per unit out¬
put upwards, and incur additional
production

of

vital

on

financing.

needs for

In the wake

industry

protests

and in sudden awareness

that our

widespread

of

rocketry

lagging behind the

was

Russians, the Defense Department

rescinded rigid ceilings
in favor of expenditure targets.
recently

Appraisal

Market

Investment

C.

of the Aircraft Manufacturers
to

Due

De¬

manufacturers'

aircraft

judged

problems,
has

community

investment

the

shifts in

industry

historic

to

as

the above

Department policy as much

fense

inadequate for the risks
involved.
The security markets

stability

have reflected
ion by

this adverse decis¬

allowing aircraft manufac¬

turers' stocks to fall 46%- beneath

highs,

capitalizes aircraft manufacturers'
earningsNat a low 6.7 times in eon\ trast
with
its valuation of the
Standard &
Poor industrials at

the aircraft in.'dustry's credit rating has fallen
even lower with heightened cred¬
itor feas of military procurement
,

12.1

And

times.

problem
a

Aircraft
free

Manufacturers

competition

market

investment

has

aircraft

manufacturers

priority

for

ment,

the

new

need

the

reduced
to a low

capital

for

in

such

invest¬
invest¬

ment in terms of national survival




those

as

on

concluded that in order to finance

for the richer

states. This should eliminate over

60% of the

case

Other

v

load.

.,

Functions

provide

free

transportation

and

the functions presently agreed
as

proper

for transfer

a

on

credit be

free textbooks to children attend¬

given by the Federal Government
is our up to 40% of the 10% ad valorem
actions tax on local telephone calls. This
are
justified as contributions to would raise for the States ap¬
the individual child rather than to proximately $150,000,000 at present
the school

itself.

I believe

we can

rate

the

collection.

of

The

■

Federal

>

representatives

Committee

Joint

that

as

functions

pointed

the

States,

were

on

out

assumed by

the executive

branch

of the Federal Government would

be willing and eager

to discuss the
amount of
finance State
administration of such functions,,

relinquishment of
tax
necessary
to

any

plexities than could be contended
with

at

Emerging Problems Discussed

this

the

/

'

In its

meetings, the Joint Com¬

mittee also discussed
list of emerging
refer

to

a

substantial

problems. Here I
obviously at a

activities

development

Stage

of

must

soon

be

where

it

be decided the parts to

by the Federal, State;
and local governments. These in¬
cluded the problems of juvenile

played

delinquency, the growth of munic¬
ipalities and urban renewal, State
responsibility
for
health
and

Continued

Defense Depart¬

procurement policy that will
afford the aircraft manufacturers

ment

INVESTMENT

allowing them

adequate stability,
to

SECURITIES

successfully compete in the free

capital markets for additional in¬
vestment in their high risk indus¬
In this sense, adequacy must

try.

by

determined—not

be

formula,

trary

or

bv

tive decree—but by a

stability
the

factor

aviation

view

In

that

an

arbi¬

administra¬
growth and
will attract

capital

required

American

to
ensure
superiority.

the overriding

of

stra¬

United States Government Issues

tegic and political factors affect¬
ing the aircraft industry, we as
bankers

investment

not

do

pre¬

to pass final judgment on
the basis of our financial analysis

sume

one

strength

financial

But

alone.

is

prerequisite if the industry is

to thrive

the future.

in

this

achieve

To

end,

urge

we

Secretary of Defense McElroy and

committee
once to
negotiate mutually workable solu¬
a

to

permanent
sit

industry

at

together

down

tions to the host of industry

prob¬

lems—problems including delayed

procurement fluc¬
terminations,
mandatory subcontracts, and non¬
renegotiations,

tuations,

program

reimbursed design changes, among

others.

many

Only through such government-

teamwork, within the
of our dynamic free

industry

framework

enterprise system, will the air¬
industry have the stability

craft
and
can

strength to preserve Ameri¬
security in the crucial days

ahead.

Respectfully submitted,

AVIATION SECURITIES \

,

COMMITTEE
Donald N.

McDonnell, Chairman

Blyth & Co., Inc., New York
Richard W. Courts

Courts

&

Walter M.

Co., Atlanta

Giblin

r

Hornblower & Weeks
New York

..

;
.

,

William Barclay Harding

Smith, Barney & Co., New York
H.

Lehman

D. Future Expansion Problems of
the

with

limitations

is in large measure a
problem.
The solution
Congressional appropria¬

tion policy and a

Herman

fluctuations.

While

States

.

financial

Vhile

the
Standard & Poor's 500 industrials
declined but 18%,
The market
1956-57

their

the

State and local management than
particular stage of for Washington control. However,
the political facts of life are that
Committee's activities, if we
were to
present to the President there are too many people in¬
an initial program for action and
volved, too many pressure groups
salaries, < and generated $5.6 bil¬ in time for consideration by the concerned to risk head-on assault
in this area without careful con¬
lion >• in net sales.
Certainly the coming session of the Congress.
financing of this major and crit¬
The barrier to obtaining agree¬ sideration and public understand¬
ical industry should not be added ment on the school lunch
ing that it is not intended to
program
to our already heavy tax burden. was due to the observation that deprive the aged of this assistance
but
rather to
transfer the re¬
many of the States had constitu¬
E. Needed: Aii Enlightened and
tional
limitations
to
granting sponsibility for its administration.
Stable Congressional ApproThe Committee also discussed
funds
to
private and parochial
priation Policy and Defense
schools. Subsequent examination tax sources that could be released
Department Procurement
of this problem indicates that this by the Federal Government and
Policy \
.*'■
1 ^,v
is not as serious a barrier as im¬ become available as revenue for

lies in

to all the foregong,

addition

In

/

the

5

■.

,

to $3,000,000

of

in 1 The air craft manufacturers'

missiles, from $500 million to $2.8
billion.

grants

*

$1.5 billion to $900 million; a 100%
increase in electronics orders to

$1.3 billion; and a 460% jump

such

deposit boxes, pool

"

production. / Air Force
procurement projections from 1956
to 1961 show a 50% drop in an¬
airframe

/

levies

of

;

pay,,

Taxes

ing private schools.
It
understanding that these

its

argue here that a free lunch is
Many
other
functions
were
in the - face of declining
identified as proper for considera¬ just as personalized as a free text¬
credit
ratings, fluctuating earn-,
book or ride.
tion by the Committee. These in¬
ings, and generalinvestor dis¬ cluded
With
regard to supplemental
supplemental old age as¬
favor.
sistance and Federal cash grants old age assistance, I would suggest
What is the real alternative to
to
the
school
lunch
and \ milk that the vast majority of people
a strong?and stable aircraft indus¬
programs. After careful discussion, present, including myself, can be
try?
It is a socialized industry, it was decided that companion to persuaded that a welfare program
financed by the taxpayer,
con¬ these functions were more com¬ of this type is more proper for

missile

ballistic

of

constitutional

uates

in

dustry

The elimination
except on. trolled by the bureaucracy, inimproduction, yres- icable to our way of life. Ameri¬
stricted* even
vital military re¬ can free:.enterprise in 1956 had
invested
search
and
$2.2 billion in aircraft
development
to
a
routine 40-hour week.
manufacturing, paid $1.9 billion in

ical occupations.

Many

were

tables,
amusements, gaming
devices,
bowling alleys, etc. It was finally

such

plant producers over the next five
years. •These and ever-increasing
funds must be obtained by the in¬

some

plied.

newly

the estate and

gift
the tobacco tax, the tax on
local telephone calls, and a collec¬

safety

assistance.
This schedule starts at $250,000 for
the lesser income states and grad¬

tion

in

"

■

Federal Civil Defense Administra¬

subcommittee

55

tax,

tion

,,

Congressional

these

responsibilities.

discussed

in

systems,

to finance

assumed

-

of

Problems

the States

26

chemical and
nuclear
powered aircraft — in
large
parts
depends America's

:

Manufacturers

Aviation

v

'

page

Upon

history.

tronics

-

from

this industry's
future investment—in rocket pro¬
duction and testing facilities, in
advance
metallurgy
and .elec¬
in

losses.
:•

B.

with

abandoned

generally

were

Continued

at any time

be greater than

may

pur¬

the industry in
the wake of World War II cut-offs
Efforts by

(2687)

Chronicle

Kahn

Brothers, New York

NATIONAL

BANK

Hugh Knowlton

Kuhn, Loeb & Co., New York
Richard W. Millar

William

R.

Staats

&

Co.

Los Angeles

James P. Mitchell
The Chase Manhattan
New York

Bank

OF

CHICAGO

on

page

56

The Commercial and Financial Chronicle
56

Continued from page

enemies in

55

there

Eisenhower indicated

To State Governments
water

of

resources,

was

taken in two

of these areas; urban
atomic energy.

renewal and

Limited action

justified it' we turn back to

the States
agencies to
concerned with the problems
urban renewal and municipal

It

that

agreed

was

be

function
presently performed by the Fed¬
only

States

the

growth and that these agencies as¬
sume
responsibility for planning

single tax

eral Government and a

.

Thursday, December 19,1957

.

develop a technique which in source now collected by Washturns back
the clock of ington. Indeed it would be suchistory, unscrambles the eggs and cessful if we halt a trend.
reverses
the insidious trend toI urge all of you who believe m
ward centralized authority which our basic concept of government
everything in your power
support the President in this
do

only lead to one ultimate con¬
clusion—a national welfare state

to

controlled by a few and ripe for
the plucking
by our ideological

historical

to

effort

to

our

preserve

way.

Continued from page

also

was

the

that

agreed

area

^

oo/w.nn

—

*

.

.

.

suggest to this audience that many

IV,

iJ rflJnniinTntS'

rather

the

of

mem-

bershiD of

Co^e

Action

area

arrived ftbv the
th^Joint ^deral-State

agreement

the greatest uranium deposits in
lhe Free World, with some 1 bil-

lion tons of ore containing some
370,000 tons of uranium, oxide. At
the Projected rate of production,

(f.OOO tons a year), this will cover

Many

?? y^lsA

that to date the activity of

argue

Federal-State

Joint

the

small

is

Committee

minutia

has not resulted in

a

Action

because

it

massive, all-

out effort to transfer to the States
the functions which

theirs under

our

properly

are

traditional Fed-

eral system. Many will insist that

the entire
should

of public assistance
and that this

area

While the Free World is well
supplied with uranium within the
SC°PJ °f the 5 to 10 year atomic
factor programs at home and
abroad, the worldwide search for
uranium ores must continue. Certainly this is true m the United
States.
There

included

be

is

short-cut

no

method

is the

opportunity for the Federal to discovering uranium ores. As
to
divest
itself
of geologists
put
it:
uranium
is
$5,500,000,000
in where you find it. Most .uranium
domestic
grant-in-aid programs, mines needed financing even beOn
other
the
hand, there are fore their exploration and drilling
many people who will rise up in programs had been completed. In
opposition to what we have al- fact, most mines required financready accomplished. These include ing just to get started.
This of
the professional organizations en- course called for venture or —■
risk
Government

approximately

-

gaged

in

the

programs

have

industry.
It ; seems,
however, that for some time the
petroleum
uranium

.

industry

continue

will

the

on

financed

be

to

whole

through equity or other
long-term investment.

mostly

forms of

....

In the very same way that the
States Government mar¬

United

has

ket

been

main factor in

the

of the uranium
industry in the Free World, the

the

development

U.

S.

the
The

has also

Government

main

customer

thorium

for

modest.

Thorium

tained

the

AEC

have

are

the worthiest of

ponents and expert lobbyists who
will

use

the

Congress from

these

every resource

implementing

recommendations.

However,
agree

to prevent

that

Stanrps it
stances it

limited

ic
is

I

am

under

sure

these

will

circum-

imnnrtnnt
important tn provide
to

demonstration

that

we

it

because
assess

ground
doubt
bodies

you

in 1956; the actual rate
production now is in excess

is

the

pool

be

reasonably

value

that
can

can

of

of oil.
when

done

easy

an

to

under-

There

is

uranium

be assessed with

has

been

tons

of

thorium

has

metal

been

largely fulfilled and no further
purchase program for thorium is
at present contemplated. The AEC
price for thorium as metal is $43
per kilogram as against $40 per
kilogram
for
normal
uranium
metal.
R

The

USAEC

has

invited

pro-

posals for industrial participation

no

many

phases of atomic

policy

as

is

now

production

has been a major
developing a private uranium
milling industry in the United
States and abroad.
14

widely

done

loans

in

the

This
factor

in

ore-

may be P°sslWe to finance

energy

couragement to get started.

rea-

a

uranium

mills

There
in

mills

for

at

a

are now

total ea-

ore per

end

of

market

a

for

for a definite num¬
This period, gener¬

product, has made it desir¬
possible for uranium mill

companies to avail themselves of
short-term financing from banks
and other lending institutions. The
need
for
equity financing was
considerably reduced in the case
of the

milling, unlike the mining.

The

Free

World

1957 is expected to

production

in

be about 21,000

tons of U.-Os. The forecast lor 1959
and the years

immediately follow¬

ing is in excess of 40,000 tons.
This includes 15,000 tons or more
in

the

United

for

same

from

States,

about

the

Canada, 6,000 tons from

Africa

South

other

and

the

parts

of

remainder

the

Free

World.
this

In

there

country,

is

no

guarantee that the AEC will con¬
tinue
its uranium
ore
procure¬
ment

program

after

March

31,

1962, but the Commission calls for
payment of $8.00 per pound of
uranium oxide delivered by the
mills after March 31, 1962 until

The domestic ura¬
nium metal procurement program,
while thus providing a guaranteed
31, 1966.

market for

uranium

concentrates

produced by domestic mills from
domestic ores, does impose a lim¬

from any one

mining property
mining operation.

or

are

milling contracts in Canada
with the Eldorado Mining &

Refining Ltd. acting on behalf of
the

of these

involving 8

were

Canadian

Government.

Most

contracts expire on Mar.

for

United Kingdom

Canada

ap-;

purchase

to

quantity of

United

States

a

uranium,

and

agreed that the U. K. require-i
would be supplied from production contracts already en¬
tered into by Eldorado.
The Ca¬
nadian Government has

not

com-,

mitted itself beyond the expiration
of the present contracts. However,

will

it
its

doubt

no

surplus

seek

to

exportStates

United

the

to

and

Europe.
In order to match
production with present custom-,"
ers' requirements in Canada, no
uranium

production contracts
negotiated
beyond
applications were re¬

been

have

those whose
ceived

prior to March 31, 1956.

Regarding South Africa, their'
low-grade of ore and the large'
capital cost would have caused an
excessive amortization charge for'
a
pound of uranium oxide on a
five-year basis. This fact, together

with the

need

only major
the

of

uranium

sured

time,

underlies

have

We

ore

known at

source

new

South African

nium

long-term as-;
from the-

a

supply

the

ten-year

milling contracts.
far discussed

so

and

reserves

ura¬

milling

capacity and production. We must
take

now

a

look at the demand for

uranium in the Free World. Under

the

most

optimistic development
peacetime applications or

the

of

atomic energy, it is
that
consumption

almost certain
in
the Free
will not exceed 20,000 tons

World

oxide

of uranium

a

in

year

1965

and may reach

40,000 tons in 1970.
why the AEC
has recently made it known that
with respect to new proposals be¬
This

is

tween

the

now

reason

and 1962 for additional

mill construction

or expansion, the
objective of the Commission will
be to limit production to the ap¬
proximate level which will be

reached

as

result

a

commitments.

If

of

existing
contracts

new

considered, preference will be
given to providing a limited mar¬
ket for areas having no present
are

milling facilities. As for foreign
purchases, no new commitments
have been made for several years.
the

On

contrary,

indicated

as

above, foreign commitments have
reduced

been

by releasing to the
Kingdom material which

United
was

under contract to the United

States.
do

We

as

believe

not

that

there

for concern. When
energy becomes competi¬

reason

any

atomic

in

its

the

use

United

increases

States
and

and

as

the

technology improves throughout
the Free World, a time will be

probably

reached,

around

1965,

when there will be a snowballing

effect in the consumption of ura¬
1962, with a few running to
nium.
But since it takes years
31, 1963. All Canadian urato discover uranium orebodies and
lium
production,
excepting
of
build mills, it is imperative that
ourse the domestic requirements

31,

Mar.

>f

Canada,

which

still

are

very

all

the

mills

which

have

U. S. Government

State and Municipal Bonds

U.S. GOVERNMENT

STATE and
MUNICIPAL

Investment Division

BONDS

American National Bank
and Trust
LA SALLE

AT

NORTH E R N/TRUST

Company of Chicago

WASHINGTON

•

FRANKLIN

(^iymftcMvBANK

2-9200

Financial 6-5500
MEMBER




FEDERAL DEPOSIT INSURANCE

CORPORATION

•

BELL SYSTEM TELETYPE CG 368 CHICAGO

NEW YORK REPRESENTATIVES Broad

;

Canada

ments

tive

All

tne

substantial

itation, at the Commission's op¬
tion, of 500 tons of U*Os per year is

Contracts
ne-

mills, thus assuring pri¬

able and

is close to $65 million.

mills

output

ally five years, together with the
guaranteed price (which however
varies from mill to mill) for the

day. The investment in these mills
more

given

a

their product
ber of years.

operation in
a

in operation.

are

investors

Dec.

Milling

|nuchexploration work and drill- pacity of 10,000 tons of
through

By the end
approxi¬

tons per year.

vate

ob¬

by-product of thorium
salts supplied by the companies
which
process
monazite sands.
Through these purchases, we have
today in the United States not
only covered the thorium needs
of our programs, but we also have
a stockpile against possible future
needs. Our stockpile goal of 2,500
as a

sonable degree of accuracy after the United States with
mmes

of
of

1958, the rate should

been

of

requirements

however

been

thorium.

for

oil

This

6,(KM)

tons

with the

Farmers Union.

It is customary for banks
make production loans in the

industry.

oxide

guaranteed price were signed by
the Atomoc Energy Commission

in

these
political op-

to

In all these cases, purchase con¬

where private industry needs en-

you

amounted

concentrates

tracts

to

assure

total

"

identified, the CIO-AFL and the
I

uranium

of

Production

all

capital.

we

invest¬

billion.

$1

8,000

37

of some 320 million tons coni—
States should join with the Fed- taining 380,000 tons of uranium
eral Government in training per- oxide.
This indicates that the
sonnel to inspect and control the proven uranium reserves in Canuses of atomic energy as they conada are more substantial than
cern the health and safety of the
ours. Their uranium reserves will
people.' State responsibility for support their presently planned
workmen's compensation certainly production
rates lor 20 or 30
justifies the States' desire to par- years.- ' * ?
"
>
i.
ticipate in this activity.
The South Africai#? uraniumT
bearing gold reefs are also among
It

$120

of

excess

combined

The

14,000 tons of uranium oxide
per year, soon thereafter to reach
a
slightly higher amount after

of the Blind River

Belts

in

cost

a

ore per

mate

Report oi IB A Nuclear
Industry Committee
Central

18,000 tons of

ment in mines and mills may

of

$30,000,000 annually and are

„

the total milling ca¬
operating and projected,

at

When

proached
the

told,

pacity,

will Exceed

day

of urban renewal and low
rent
housing. - These
planning
grants are presently given by the
Federal Government amounting to
repaid out of the capital structures
of approved projects.

All

area

Mexico.

New

million.

poses

some

in

modest, has been developed
delivery to the United States.

capacity of 8,000 tons per

These include 4 mills in the

uranium-rich Ambrosia Lake

fact

municipalities for pur¬

grants to

total

a

day.

one

-

of

gotiated in
1956 and
1957 for
completion this year or next with

can

can

should create planning

that this exercise
engaged in would be

now

are

we

most

conservation

retreat.

no

at Williamsburg

The Return of Power

safety standards in the uses of
atomic energy, and better use and

which

the battle from

be

can

President

a

.

(2688)

Street'Digby 4-7400*Bell System Teletype NY 1-853

been

Volume 186

Number 5700

.

.

The Commercial and Financial Chronicle

.

(2689)
contracted for in this country and

the Allied Chemical & Dye Corporation had been selected as a
basis for negotiations of a contract
for supplying 5,000 tons of uranium oxide (U,O0 equivalent per
year as highly purified uranium
hexafluoride. This company apparently will be able to finance

other parts of the Free World continue to operate under profitable

conditions.
with

It is too early to know

certainty

governments

what

the

do

may

various

the

at

ex-

piration of the present contracts,
but all indications

governments
for

mum

will

few

a

tune

as

with

stockpile

;the .demand

catches

it is

duction of

United States

kind

most

uranium

term

as

expand

namic

ore

concentrate, it

feed

of

encouragement
mining

to

basic

P

:

•"

/

in

short-

a

,

Materials

Feed

uranium

diffusion
mtiusion

oacpnu<?
gaseous

aspects

-

about <10%

of

;;V'produced"in

ts.;*.

hands

of

private

now

various feed materials
exist

the

the U.

in

Atomic

S.

is
is

the

all

Energy

The

to

concentrates

either

the

St.

in

uu

owned

a

sion

>•:

the

;

and

Senate

on

or

118iiee

Some'of

the

then reduced to
and

"

tors

a

salt

some

mion

for eloctricM

bf
or

(propulsion)
This phase also in-

users

of

source

the

natural uranium

high temperature procToday,
the
emphasis
is

to Driwfe

of

and

iSustev Se

increasing

become

may

equally

interest
as

im-

portant.

(1) Manufacturing Companies:

by the Atomic Energy
Commission
and
operated
by

jn^0

Union Carbide and Goodyear.

These include

In

these gaseous diffusion plants, the
valuable fissionable uranium-235
fissionable

uranium-238

non-

as

ura-

nium hexafluorides.
As a further step to increase the
participation of private industry
in developing atomic energy, in
1955

Commission

the

requested

proposals from qualified firms for
processing uranium ore concentates

into

either

hexafluoride

begin
were

1956,
that

April

1,

Seven

the

Westinghouse, Generaj
Electric, Combustion Engineering, Babcock &; Wilcox, North
American Aviation, and Martin,
This new activity calls for new
capital
expenditures
but,
as
a
rule, these have been covered as
a part of the overall capital re¬
quirements of that particular industry -in its normal expansion

to

deliveries

1959.

not

pvpS iS

to

thon

SiEi +1?

tn

dismantled

ot

progress

gram points towards

a

total elec-

signed
28

It

the nation will

be

largely

(1)

Last

Controversy

of this year at
Shippingport, Pennsylvania. This
reactor comes under the Govern-

meht's experimental program. The
Uuquesno Light Company is
building the non-nuclear portion
1—*

—

„„„„

This law

re-

roadhlork

excess

in

™

of 60 000 kilowatts

J.

Kiiowaus.

The Experimental
„

Boiling Water

.

Reactor

Argonne

at

Laboratory,

which

National

also

comes

a

To

Congress:

elusively for production

construction

commence

15,000 electrical kilowatt

ex-

tricity,

alld is supplying

nther

L

IT

kilowatts

Laboratory.

as

fuel;

Still

To proceed with sufficient

under

the

Government's

design work and engineering and experimental program, the sodium
development work of

a

large-scale reactor

built by Atomics Inter-

1Pe,?t flve single or dual purpose reactor for national,
°nnJa*®*;; S"*Thf^wa^ the Production of special nuclear American

*2^™ fn

5,000

nium

$400 mlI1}orP overri

f,

bids

materials. (A dual

S

act'ivi--

purpose reactor

produces Plutonium
r

and

electric

a

Division

of

North

Inc.,

Aviation,

began

operating at Santa Susana, Cali-

fornte last April. The
nnvrha«Ari

nn

heat is being
Pv,i0v;m0r,+oi

in

oJrsv a? p(?wer^^
^
^ ,P
^a
S jiip nfwi LrJ
(3) To proceed with design, de- basis by Southern California EdiJ™; 1JJJ.®*
® oritL nqst ihIt velopment and engineering work son to supply 6,500 kilowatts of
atomic

this country

r0nt

„

power was needed if

was

.to

retain

on a

its

large-scale natural

P°wer

reactor

uranium electricity from

prototype

to

Thlf^oncernh^ad also* beeri shared °f the graPhite-moderated»
™^ ^^2+ **^nrivateTJustiw cooled type.^1
^The two-year-long controversy
(4) T° contract directly
in

Washington

the

over

the

kind

of

manufacturers

be

United

States

was

through

a

resolved
series

actors

of

to

Chugach,

compromises, reached in the clos-

Electric

be

Elk

a

generator

to .the Government,

with

As of the end of June, seven
proposals had been accepted by

construe-

the AEC under the invitation is-

power reoperated
by the

sued by the Commission for public

for

the

River,

Co-operatives

Wolverine
and

and Pr 1 v a t e organizations to
participate in its Power Demon-

the

Continued

cm

page

UNDERWRITERS

AND

DISTRIBUTORS

OF

Besides, it is also standard procedure in reactor construction, as with conventional plants,
to have the utility or the user of
the reactor make periodic prog-

PUBLIC

UTILITY,

INDUSTRIAL AND

MUNICIPAL

SINCE

1 912

INCORPORATED

Established 1893

jl. CAI/un and

;

Corporate and Municipal Bonds

CC

incorporated

Commercial Paper

Trading Department
•

••'

Members

Stock "Exchange

Midwest Stock

-

Exchange

-

American

Pacific

Stock

Exchange
Exchange

Coast Stock

CHICAGO
120 So. LaSalle St.

60

Chicago 3
Telephone:

CG

Telephone:

1089

San Francisco




NEWYORKSTOCKEXCHANGE

New York 4

FRanklin 2-6100

Teletype:

Broadway

WHitehall 3-2800

Teletype:
and

Other

Cities

NY

NEW
MIDWEST

in-

company at no cost

gas"

power program we need in tion of the four small

temporarily

stalled by the

.

program.

Stocks

elec-

°f electricity to the Argonne

and wbich would have authorized
and directed the AEC to spend

power reactor construction

of

dedicated last January

was

perimental reactor utilizing pluto-

Senator

year,

A. G. Becker & Co.

York

in.

com-

Pleted by the end

SECURITIES

New

1%

First Plant By 1958
The «Wt large nuclear plant

reactors.

November,
Commission announced
proposal received from

Unlisted

the

on

trical capacity of close to
million kilowatts by 1962-63.

+i

.

a™

dovolnnm™*

Civilian Power Reactor Program
has been made this year. The pro-

-

has been directed by

a

1S.a
s?h .a
considered in this

There has been no specific financing of industrial facili¬
ties
for • the
manufacture '
of

submitted and in

the

the manufacture of reactors,

or

tetrafluoride

with

the

new law also Creates a statutory
reactor safeguards committee and

capital+1 is the

Legislative
Users:

ufifteTstates ha^gone atomic

owned

isotope is separated from the

•

imnortanf

an

hv(2)

more

S^relctom

dontl

mwn

financing.

reactors,

of heat for indus-

becoming

is

goes

2,Toevf'

Ja?!PP:i?

(2)

and

esses.

to the gaseous diffusion plant at .Oak Ridge, Ten-

are

the

as

trial

hydro-

reen

-

was

Au<*

it

9

moves an important loaaoioci^in
the progress of atomic energy.The

AnnfKoV

plants is also

;

User

JT1?12ly

salt;'^

and
on

.1T

movp~

•

the

t?ether industries that use reacships or •b7^^rth.!?CniCrLr

uranium

to

then

of

iiYthese diffu-'

energy

heat.

for

eludes

yellow
oxide
is
into
orange
oxide

and

-

com-

Aug. 8

on

session of Congress.

^12 5Another
^
n-/ar --mcS

phase of the business in-

mechanical

reduced

Aug. 9

-

and

Substantial

of

project

May

on

^

c^1'1^ market and the

estnnated future market for the

VNuclear Reactors

-

This

whether they be

U02;

-

each

Introduced

President
-

but

purposes

thnv

as

and

oi.

nr)d't h p?r1 Le mrfn

Ohio, feed
plant, operated by the
National Lead Company. In these

then

the private insurance

for

fhe House

D

materials

dioxide

from

^

lone

so

tw*.

rPaS'
SI

th«*

ic

reason-

available

passe(j

^iwnv»s nn^,iPfs

amount

akjy

on

by

pany or to the Fernald,

UO.i,

mini™

deemed by the AEC to be

panies.

elude

The Elec-

amount

n^^ntfS bomoDerateddw
Se ^Malhnck^

transformed

The

ak'ove ^

an(j

over

hv

research

vears

An

rniL

owned

be

ment for
for

third-party liability insurance

«,u«

poor
enor-

plants,

materials

KS' called
often

more

to

are

Ohio

second

in^new

ouinuC1

energy consumed

delivered

are

01

substantial

very

by

operated
;
J

Louis

much

Piaua

over

Commission,

although they are
private companies.

United Stntes

cial pioblems have a specific chaiacter and they have to be met on

electricity

the nation.

that

appears

of

the operator

fission.
.1,
.For these companies, the fihah-

tric Energy,' Inc. and

plants that

are

over

prn pi a n ies have their origins
• -rooted m the discovery of nuclear

•«,««*

plants

now

have

than it has had in the
past
the nation's reactor develoD-

City

so-called

requires that its reports be made under the Government's experiCoiP.,'both^of rvhich are :.
® j ^ be raised T?he PubIic- ^ '
the
mental program, and which is the
—.urne
made-up of a number ot private'•
The
AEG
it*
'
the utility companies, are'supplying a -~)ie hl less yapid obsoIescence
The AEC, over its ohWHons. fivrf civilian reactor designed exobjections, first
^iore ov- less, l. a-P*^ 0j?s°Jescence
new industrial

industry,:,

,

user

specific manufacturing
in the field of atomic

Hooic

*»»»*

will

peace

power

defi- ;,.c

mous.These three plants consume

-

Plants

is

ores

Congress

fi-

of

a

ment program.

Whereas the mining and milling; Electric
of

however, and it

large

very

the reactor.

..-iu

w

•

^

a

burden

than

Congress passed the Andersoncome
Pl.ice Indemnification'Bill which
years, particular y since the .en,pr0vides for $500 million of Govactment oi the Atomic Energy Act ernment
indemnification to reot
1954.
These
companies- are
actor builders and operators for
concerned primarily with one or
each atomic reactor
project in the
s e v e r a 1

electricity consumption of the AEC

ura-

industry*

the

armistice

an

smaller companies have
into being in the last tew

diffusion plants since they
i—m

—• — —-

our

since

like

Many

materials plants and for the

gaseous

part of our Government
fore 1962 to give possibly needed

,

lending

ing days of the 1957 Congressional
session. The picture looks more

work

nancing is thus shifted to the

from banks or
institutions. Here

the at a guaianteed

a

exploration
require

may

:

financing

other

and -South. Africa,
continue to pursue a dy-

we

mum

mills—i. e.,

manufac-

again we are dealing with a pur- energy such as fuel elements inchase contract for a given output- strumentation, shielding, etc. Such

pro-

Canada

This

extent

would

financing used

the

construction

nancing problems to

to

serves

that

oi

to

the

This method helps the
manufacturer solve his own fi-

whole(because nite number of years. ^
t ,s
relatively low; ratio of re-There was of course no problem
production, as compared of private financing for the other

of bur

with

to

uranium

VP8}'

tt

same

longer in the interest of

no

Government

our

they

as

advances.

have. entered intoUhe

a

com-

a

market.

uranium

contract,

While

government-controlled to
mercial

doubt

no

un-

transition trom

a

the

reived

up

There will

payments

turers

the plant with its own resources.
But had" some other bidders re-

ura-

until such

years

production

doubtedly be

that these

are

ress

57

STOCK

YORK

EXCHANGE

1-3433

AMERICAN STOCK

EXCHANGE
(ASSOCIATE)

BOSTON

58

"
'
t

58

The Commercial and Financial Chronicle

(2690)

Continued,

from

page

kilowatts. If the research work

57

the

West

factorily,

Report of IB A Nuclear
r
Industry Committee

panded

to 200,000 kilowatts.
Isotopes Products Inc. of Buffalo,
New
York, with
several other
corporations announced plans to
build a boiling water reactor for
dual production of Cobalt 60 and
process
steam, the steam to be
supplied to a pulp and paper mill.
The organizations and reactors

Reactor

in

third

nounced last year

the first of these two reactors.

indicated

As

sions

in

earlier

discus¬

"users," as a result of
Congressional meetings
on atomic energy, it was decided
that the AEC would be required
to
contract
directly
with
the
manufacturing companies for the
on

the

There

reactors

construction

Power

District

must

dynamic

a

in which
private industry has taken its fair
share.

This

all

is

the

more

re¬

markable in view of the fact that
atomic energy is certainly not yet

the completion date

is June 30, 1963.
On April 30,

"Duquesne Formula"

Florida

Monroe,

Yankee

Development Co.

Mich.>

Atomic

PRDC

Pressurized

Co.

Westlnghouse

(Rowe, Mass.)
Consumers

water

Public

Power

District

Sodium

(Beatrice, Neb.;
Cooperative Power
(Elk River, Minn.)

Wolverine

Electric

Nuclear

City

of

134.000

graph¬
Atomics

AMF

Eoiling water

Cooperative

Aqueous

International—

Inc.

Atomics,

75,000

Inc._

22.000

Corp.-

10,000

homo¬
Foster

geneous

Wheeler

and

Development
Corp.
(Anchorage. Alaska;

Piqua,

Electric

_

Ass'n.

(Hershcy, Mich.)
Chugach Electric Ass'n.
America

1 100.000

—_

Corp.

ite

Rural

(Elec. Kws.)

F:*n. breeder

•

.

Electric

Power

Contractor

Inc.

of

Nuclear

Sodium, heavy
water

Chio

Development

Corp. of America——

Organic mod¬

Atomics

10.000

International—

12,500

erated

II
Principal

indicates

of this

All

In such cases,

of

<

Reactor

TABLE

by June 30, 1962, except for re¬
actors using a fluid-fuel system.

Nebraska.

I
Principal

Power

projects an¬
are set forth in

and diversified program,

that plant

completed

be

Thursday, December 19,1957

.

Type—

•

independent

power

deadline for submis¬

was no

the

.

TABLE
Orgarwzation—Plant Loration

Table II.

construct
and
plants.

design,
nuclear

sion of bids other than

Piqua, Ohio and also for the Con¬
Public

January,

develop,
operate

planned for Chugach, Elk River,
Wolverine Cooperative,
City of
sumers

the AEC
ex¬
its Powers Demonstration
Program® by issuing a
invitation for proposals to

Last

Joint

construction of

the

reactor of up

Reactor

Table I.

the

*62

preparation of plans for the con¬
struction
and
operation
of
a

Program. These Cooperative reactor. The AEC has
proposals, showing the contractors extended a general invitation to
at
the
time, are described in U. S. firms to submit proposals on
stration

before

well

undertake

on

develops
satis¬
Penn
hopes -to

prototype

.

competitive with energy produced
conventional plants.

in

Nuclear

Organization—Plant
Consolidated

Edison

(Indian Point,

N. Y.

Commonwealth

Joliet,

of

N.

Co.

and

Pacific

Power &■ Light
Pennsylvaniat

England

Electric

General Electric

___

General Electric

Gas

(Pieasanton, Calif.)

Pennsylvania
(Eastern

*275.000

(near

Boiling water,
Co.

(Elec. Kws.)

Babcock & Wilcox—

water

Co.

Power

Contractor

Type-

Pressurized

i

Edison

Electric

Electric

New

.,

Y.

111.)

General
&

Location

Co.

(now in

Eoiling water

Co.

180.000

service)

Aqueous homo¬

5.000

Westinghouse

geneous

Electric

Corp.

150,000

System

Group
submitted
a
< New England >
Undetermined
Not selected
Doubts Earliest Target Dates
200.000
Carolinas-Virginia Nuclear Power
completed proposal which contemplates con¬
Undetermined
Not selected
10,000
There
have
indeed
recently Associates
will be owned by the AEC and structing a natural uranium30.000
been sizable increases in estimated
heavy water-moderated,
will be operated under the so- fueled,
costs of the various projects.
*103,000 kw. nuclear plus 112,000 kw. oil fired.
A
called "Duquesne formula" which gas-cooled reactor of 136,000
attitude pre¬
West more conservative
calls for the utility to provide the electrical, kilowatts in
tial. investments in research and Part of the
vails now than two years
ago.
capital funds needed
generating equipment, operate the Central Florida.
On May 15, the Northern States The predicted downward trend in development. There is also greater for the construction of the plant
plant and pay for the steam pro¬
costs has not materialized because need,
more
than : before, for a is covered through grants from
duced at a negotiated price. The Power Company proposed a boil¬
close cooperation between govern¬ the
sponsoring companies. These
plant the research and development ex¬
price would be designed to keep ing water reactor power
ment and industry. Neither can do are then written
off as research1
the cost of nuclear power within designed to produce 66,000 kilo¬ penditures have been much greater
than anticipated. These research the
job alone in this twilight expenditures
over
a
the limits of conventional power watts of electricity.
five-year
and development expenditures are period.
period. These grants are intended
<' Pacific
costs. When the contract was re¬
Gas & Electrical Com¬
to cover the excess
capitalized and. result in a con¬
capital cost of
negotiated between the AEC and pany announced plans to build
Financing Power Reactors
a
nuclear plant over the cost of
siderably higher investment per
AMF,' the company withdrew its alone or in partnership with other
kilowatt of installed capacity, at
Regarding the financing of some a corresponding conventional
offer to undertake the Elk River California
utilities' a large-scale
least in these prototype reactors. of
these
power
reactors,
some plant of the same size. The State
plant at a ceiling cost, and was reactor in California.
The optimistic view of one or two utilities in the United States such Public Utility
Regulatory Com¬
West
Penn
only willing to proceed on a
Group,
including years ago was that we would be as Consolidated Edison
of
New missions and Income Tax Authori¬
straight cost basis. A similar col¬ utilities which operate in the Ohio able to achieve competitive power York are financing reactor
ties have adopted a most construc¬
plants
lapse of negotiations took place Valley and contiguous areas, an¬ in the U. S. by 1962. It seems as a part of the company's overall tive attitude by agreeing to
Power

___

The

reactors

when

*

between

Wheeler

rable

the

AEC

and

Foster

on

compa¬

Corporation

grounds for

the

Wolverine

nounced

plans

to

build

a

electrical

output

of about

this

that

now

small

prototype reactor by 1962 with

has

date

been

13,000

of

Capital costs on a kilowatt basis
important
projects, such as
Edison, are up from

Consolidated

$230

to

least

at

monwealth

$260—for

Edison,

Com¬

from $250
from $230

to

$333—for Yankee,
to
$425—for Power Reactor Develop¬

105 W. Adams St.,

Company, from $450 to 476.

A

guaranteed fair price schedule
for plutonium metal was recently
announced by the AEC in which
the price paid is adjusted accord¬
ing to the plutonium-240 content.
On this basis, the price to be paid

INCORPORATED

Chicago 3, Illinois

to June. 30, 1962 for plutonium
no
Pu-240 will be $45 per

up

with
t>d A iCv.

t.iiv

:

Underwriters and Dealers

gram, decreasing to $30 per gram
for 8.6% Pu-240 or greater.:. From

July 1, 1962 to June 30, 1963, the
price will be $30 per gram re¬
gardless

MUNICIPAL and PUBLIC REVENUE

of

Pu-240

content.

nually,
for

for

which

that

so

at

least

DEarborn 2-6363

CG 385

any

six

years

time

one

DISTRIBUTORS

Exchange

reprocessing

of

spent

nuclear fuel. The above prices are
to be paid for domestically
pro¬

U.

plutonium' produced

S.-built reactors

seas

is still

$12

per

at the fair rate of return to which

the

utility is entitled. As long as
the nuclear plant is of a capacity

that

to

distribution

of

costs

cover

The

networks.

general credit of the company

the

does

not

exceed

say

30 %

located

in

over¬

for

is
of

the

financing of the new
plants. It is integrated in
the overall development program

tional

of

utilities.

which

small
In

the

reactor

is

only

of

the

plant of

a

on

basis

used

normally

course

the long-term

by

Construction

electric

funds

other

instances

pooled their

such

companies, although in some cases
pension trust monies have been

as

used.

and organ¬ j!

resources

corporations
to
Jeonstr 06t> and operate the'reactors.

-

.".

Reactors

1

V A

non-profit

Rodman

contract

for

Ships

signed
last
April with the Babcock & Wilcox
was

&

Renshaw

Members:
Netv York Stoch

Exchange, American Stock Exchange (Assoc.)

Mi<lwest Stock Exchange, Chicago Hoard of Trade
V.

.y

V'"

Chicago Mercantile Exchange "

209 SO. LA SALLE ST.
•

'

;

■

'

>

;

"

-

i:

-

CHICAGO 4

.s

.

,

Telephone DEarborn 2-0560
/.

.Teletype CG 2296

,

-

gram.

cost of atomic energy
in
large units, including interest and
depreciation on the investment

and
on

the

an

range

nuclear fuel

80%
of

watthour,

INVESTMENT STOCKS

range
ago.

costs,

load factor

10

14

to

up

from

of 8 to

11

Estimates

the

based
in

are

mills

per

of

largely theoretical,
however, and will continue to be
until

ence

MULLANEY, WELLS & COMPANY
135

S.

LA

SALLE

ST.

10

FRankiin
2-1166




3

is gained.

1110

We

have

specialized

distribution
years,

years

certainly
before

sufficient atom
TWX—CG

operating experi¬

of

and offer

in

Illinois
you

the

underwriting

municipal

and

bonds for

73

experienced, prompt service.

The challenge of achieving com¬
petitive atomic power looms larger
than previously anticipated. It will
therefore

CHICAGO

ac.tual

Since 1885

years

nuclear

energy are still
so

MUNICIPAL BONDS

the

kilo-

estimated

mills two

of cost

no

In

the

have

another
a

self-

H. C.

Speer & Sons Company
ESTABLISHED

industry free from

major dependence
ment.

take

we

on

the Govern¬

meantime,

there

is

alternative but for the Govern-*

ment to continue to make substan-

are

secured from banks and insurance

part.

Commonwealth Edison of Chicago
and its associates, utilities have
ized

cost

is then financed

reactor

The

CORPORATE AND MUNICIPAL BONDS

of

total installed

capacity of the
sponsoring companies, the addi¬
securing this type
financing. In this instance, there tional cost to the utility consumer
is no separate problem connected will be negligible. The, conven¬
used

plutonium; the price to be

for

a

arriving

the

gram
previously — of the
plutonium offers an. economic in¬
centive but this does not offset

paid

needs

over

before

transmission lines, substations and

per

duced
Stock

the

write-off

period

the

considerably enhanced value—$12

chemical

Midwest

of

company

will extend at
in advance. The

the higher operating costs due to
element
fabrication
and

MEMBERS

the

this

five-year

an¬

period
prices of

fuel

UNDERWRITERS

consider

other

the

year,

period

guaranty

Teletype

one

guaranteed
have been established

plutonium

Telephone

part

In

plant forms
for capital of

The

Commission intends to extend

BONDS

facilities.

nuclear

the

with

ment

etc.

NONGARD, SHOWERS & MURRAY

production

words,

pushed back to 3965-67.

an

1885

Field Building

135
CHICAGO

Telephone

—

So. La

3

RAndelph 6-0820

Salle

St.

Volume

Number 5700

186

.'The Commercial and Financial Chronicle

.

.

Company for design and construc¬ $75-8100 million. The AEC has no
tion of a nuclear propulsion plant current plans for construction of
for
the
first
nuclear
powered this unit • and the Commisison
to hope
that private
merchant ship. Development work continues
is
going on intensely to build industry will take over the test
reactors
for
ships that will be reactor phase.

competitive.

economically

Large

scale conversion of the, naval and

of

fleets

merchant

atomic energy

bility.

a

to

distinct possi¬

USS "Nautilus" con¬
operate
most
satis¬

The

tinues

is

world

the

to

factorily. The USS "Seawolf" is
doing restricted service until such
time as the sodium plant can be

replaced with a pressurized water
reactor plant of the Nautilus type.
The

Seawolf

last

March.

was

is

It

here

attention

to

difficulties which

commissioned
to

call

fact

that

well
the

in

arose

connec¬

tion with the sodium reactor were
due

the

to

space

heat

fact

because of

that,

limitation, the two separate
exchangers which normally
be used in a conventional

would

As

source

a

will

reactors

of

industrial heat,

undoubtedly

find

applications in industry. In
fact, about one-half of the total
heat energy used in manufacturing
is required for high temperature
processes.
These high tempera¬
tures cannot be attained today in
nuclear
reactors, but with im¬
proved technology the reactors no
doubt will supply in time a large
proportion of the process heat that

(2691)

Fuel

1975.
end

Uranium-235

The

energy imports by the
1962 will be at a level of

of

drain

on

nations'

these

resources

for

importing nuclear plants in
the early years will indeed be
Plutonium, which is macfe from
The target of the European Atomic.
U-238
greater'than-the drain that the
U-233,
which
is
made
from Energy Community (EURATOM), import of fuels would represent.
composed
of
thorium
Belgium,
France, The end result, however, would
'
Italy, Luxembourg, the Nether¬ benefit those nations.
Coolant
lands and West Germany, is to
Without going into detail con¬
about

•

170

million

tons

of

coal.

,

Water

many

stabilize the imports of energy at
the 1962 level. This would require

Heavy Water
Helium

that

Carbon Dioxide

by

commissioned

Sodium Potassium

Alloys

capacity

Bismuth

This

Organic Coolants

1967

with

15

an

million

an

may

been

installed

goal,
quite

United

The

not

Heavy Water

have

Helium

Kingdom

plans

manufacture

is

involved,

the Export-Import Bank has ex¬
pressed its willingness to engage
in long-term financing., In fact,

al¬
- be

the U. S. Atomic Energy Commis¬
sion and the Export-Import Bank

to

kilowatts

S.

U.

kilowatts.

imperative

it

cerning the sources of capital for
financing the import of reactors
by overseas nations, it can be said
that where export of reactors of

nuclear

reached.

Water

is needed.

of

is

though

Moderators and Reflectors

of

stations would have

power

Sodium

the end

in

power

5

6

or

million

have agreed upon joint actions to
plants by 1965. Japan needs assist with the construction, of
by
1965
and atomic power plants in nations
Chemical Reprocessing and Waste
Carbon Dioxide
:
3 million kilowatts
by 1970. In which entered into Agreements of
Disposal
7
I
Beryllium
V-A;*-;. the United States, where emphasis Cooperation
with
the
United
Chemical
reprocessing
plants Control Elements
is placed on a variety of proto¬ States. The International Atomic
constitute an integral part of the
types rather than on the purely Energy Agency which now func¬
Boron
fuel cycle of the reactors.
These
kilowatt
aspect,
the nuclear tions in Vienna, Austria, may be¬
Hafnium
plants
recover
the
fissionable
capacity by 1965 may be only 3 come the/ultimate depository of
Cadmium
materials present in the uranium
or
4 /million; kilowatts.
Roughly these Agreements. In other words,
Gadolinium.:.
'
J ^
fuel elements for reuse; they also
speaking, the Free World 10 years these Agreements will in due time
enable the radioactive products to Structural Metals and Cladding of from now should have 25 to; 30
be; transferred
to "the / Agency.
Fuel Elements
be disposed of or put in usable
million : kilowatts of nuclear .ca¬
Furthermore, the existence • of /the
form.
To date these
operations
Stainless Steel
pacity with a total investment of Agency will help to eliminate the
have been performed in the Com¬
Aluminumsame $10 billion, exclusive of/the
marked ". general
preference
in
mission's own plants.
Zirconium
:
r
nuclear fuel. This figure may even
Europe for avoiding dependence
Over two years ago the AEC
In
a
reactor,
a
number
of be doubled if we take into ac¬ on the United States for enriched
announced a program to-encour¬ special
properties .are required. count the vother: applications of nuclear fuels. The dependence, if
age private industry to build and No one metal combines all these reactors in addition to electricity. any, instead will be on the Interoperate such plants. The Commis¬ properties.
national Atomic Energy Agency.
Private Financing
7
sion's survey has
revealed that
Facilities for the production of
In / February,. 1956 ./President
A substantial but unknown port
industry is not ready at this time beryllium and zirconium are being
Eisenhower announced .that 20,000
of these funds will.be financed by
to
undertake
the
radiochemical
expanded extensively on the basis
kilograms of .uraniumr235 was
reprocessing. The feeling is that of five-year contracts signed with private industry. It does not ap¬
being made available to friendly
the prospective income from the
the Commission. Once again, we pear that there*will be a lack of foreign
nations- with an equal
business available from the Com¬ are
dealing with contracts cover¬ capital::to - finance vital .'reactor amount for use within this coun¬
mission and private reactors is not
ing volume and price for a fixed programs abroad. It is true that try. Last July, these amounts were
sufficient yet to warrant the risks
money
conditions
are:- tight
at increased from
five-year
period
and
this has
20,000 to 50,000
the present time in most coun¬
involved in a very substantial in¬ made it
possible for the companies
kilograms,
making
a
total; of
vestment in new facilities.
The'. to build them to avail themselves tries, but in any event, Europe
100,000 kilograms, which at; cur¬
and other nations would have to
Atomic Energy Commission is at
of short-term financing.
rent prices is worth /about $1.7
; !
find the necessary resources to
the
present, time - reprocessing
Recently, gadolinium has been
Continued on page 60
import conventional fuels. The
spent fuels in Government-owned
found to have exceptional powers
plants.
The AEC has recently of neutron
absorption, in Tact,; by
decided to continue to use such
far the greatest neutron absorp¬
facilities to process the irradiated
tion cross-section of any of the
fuel
elements
discharged
from
E

Carbon

Graphite

or

900,000 »kilowatts

.

.

.

,

.

.

,.

plant had to be combined

power

.

into

trouble

The

one.

that

arose

.

the

in

superheater of the heat
exchanger should therefore not
lead anyone to believe that the
sodium-cooled type of reactor does
have

not

real

a

in

future

the

'

-■*

.

family
of
reactors.
The
third
nuclear-powered submarine,' the
USS
"Skate"
was
launched
in.
May. Its plant is of the pressurized
reactor type and the first

w»ter

.

-

.

'

tests conducted recently were ex¬

>,

satisfactory. Work pro¬
on
other reactor-powered

tremely
ceeds

submarines.
■

/

•;

*■,

'The

Army Package Power Re¬
actor, a prototype of a pressurized
reactor

water

was

dedicated

last

Fort Belvoir, Virginia.
The capacity of this plant is close
to 2,000 electrical kilowatts and
April

at

the plant

has been operating very
satisfactorily.
■
V'7,

Reactor experiments relative to
nuclear ? operation
of • turbo-jet
engines are being pursued vigor¬

f

ously.

7

-

'

-

,*

;•

.

,

pleted

last

Summer

and

Reactors call

which

will

operate at a capacity of 175
megawatts of heat.
*
-

atomic

'J

current

alone would
of
for

require construction

additional

facilities.

The

need

specific number of test
actors
becomes
quite clear.
a

recent

months

the

AEC

re¬

In

has

de¬

veloped specifications -for a very
advanced type of test unit called
the
"advanced
engineering, test
reactor,"

a • component > of
the inner portion of
reactor shields. Gadolinium Is one

of

to

which would cost from.

not

14
are

really not

Underwriters—Brokers

recently, it

was

them

MIMIinaNEW YORK «T®CK EXCHANGE

OETROIT STOCK EXCHANGE

are

new

•

MIBWEETETOCK EXCHANGE

AMERICAN ETOCK EXCHANGE <A«EO«IATI>

•

ion exchange.

by

earths will become

39 SOUTH LA SALLE STREET

useful' metals

their metallurgical and nuclear

CHICAGO 3, ILLINOIS

"r," An interesting new metal ih. tlW.
atomic energy program, is mobiurii I

in

(columbium). This metal has a
the sense that they are different fairly
low 'neutron
absorption
from those we know. There are cross-section. A. few years ago it
was
on
the list of critical ma*
only 92 elements in nature. What¬
ever new metals are used in re¬
terials, but vast new deposits have
actor technology,
they are only been found all over the world. The
new in so far as their use is con¬
metal
is
still
quite expensive,
cerned-.
Today
some
22 to f 25 costing about $40 to $80 per pound.
elements of those known to science Attempts are' being made'to. Imf
are used in,reactors. They can be prove
niobium oxidation resist¬
classified as follows:
-V
ance as this metal oxidizes readily^
new

Listed dc Unlisted Securities

Straus, Blosser & McDowell

No doubt that some of these, rare

as

«T

rare nor are

practically im¬

possible to separate them by con¬
methods. Today a new
method
has I been
devised
to

separate

r~—

earths,

rare

ventional

for materials that

metals

so-called

the

they earths. They are metals. Up

resist nuclear

These

or

which

engineering test¬ thermal

energy
programs. " The
Commission's ..programs

become ' i

moderators

withstand high temperatures,

can

radiation,-have'good
conductivity, or have an
ing reactor and materials testing especially desirable nuclear prop¬
reactor
facilities
by no means erty. Many new metals are being
satisfy the -needs > of, the various used -to meet these requirements.
The combined

well

.iU-.",

.-.v. New-Metals

com¬

It could therefore very

elements.

Special reactors are needed for research and power reactors. The
conducting; engineering
experi¬ processing services are planned
ments on the effects
radiation.
for an interim period which will
The former irradiation facilities of
be subjected to cancellation on 12
the AEC's materials testing re¬
months'
notice
when
private
actor, having a capacity of 40 processing services become avail¬
megawatts of heat, had become able commercially- at reasonable
insufficient.
They were supple¬ prices.
mented
by the engineering test
:,v
reactor
at the
National Reactor v-f
Testing Station, which was

'with air at high temperatures.

11

'
■

new.

york;

TELEPHONE ;

,

Milwaukee

;

"

detroit

/

ANdover a-BKlO

; =:

.

,

7 grand. rapids
;

7,7; TELETYPE

city

kansas

CG

7

mt.

clemens

659

-RITIVAH WIRE^STSTEM C9ASLT0 «WST

Retail

-

Trading

••

We

probably will have in 20
years from now a. nuclear installed
capacity as great as our conven¬
tional capacity today. With such a
program ahead of us, these new
metals will -come into increasing use

and demand.

in

•

-.

..

,

•

,

NEW

YORK

MIDWEST

STOCK

STOCK

•

EXCHANGE

./

.Energy

•

STOCK

Stifel, Nicolaus & Co., Inc.
67Meats Investment
of

Atomic

•

•

no

country is atomic power

Even in Eng¬

Underwriters & Distributors

land, where the conventional fuel
costs are high,' atomic power is

EXCHANGE

(ASSOCIATE)

'

DEALERS

-

Plutonium
the

which

Calder

comments

PARTICIPATING DISTRIBUTORS
M 35

SOUTH .LASAL.LE STREET-

Frenchr power:

.<•

•

1-WALL STREET

•>

TELEPHONE

3

STATE

>'
2-3100

A T. * T. TELETYPE CG 1194




NEW

YORK

CITY

5

-

NY 1-4872

European

energy

.

tons

of -coal

by

.

imports

rise to an equivalent of 200
1

Water & Sewer Revenue

Public Utilities

'•■Industrial & Corporate Securities

CHICAGO 3

ST. LOUIS 2

105 W. ADAMS STREET

314 No. BROADWAY

-

;

will

million

1965, and to

an

'equivademt' of- 300'mMMon^Jtofis^-by-

Bonds

^

reactor- program.
(as in many other

nomic considerations.

TELEPHONE OlGBY 4-3656
A. T. 8t T. TELETYPE

in

parts of the world), the need for
energy
transcends
purely eco¬

.*

*

CHICAGO

Bridge Revenue Bonds

Hall plant. The same
hold- true' for > the

But in Europe
.

is produced

,

Municipal Obligation*
Toll Road Facilities

hardly competitive in spite of the
high credit value placed on the

UNDERWRITERS

Banking

r

"In

EXCHANGE

competitive today.
AMERICAN

SINCE 1890

.

....

International Aspects of

MEMBERS

,

59

■

(JO

The Commercial and Financial Chronicle

(2692)

Continued, from page

portion of the equipment needed

59

in

Report of 1BA Nuclear
Industry Committee
the

Of

billion.

World Bank As a

50,000

of

amount

nuclear

stations

power

while

reducing the foreign currency requirements • considerably
below
what they would be if the equipment
was
purchased Irom this
country on a turkey basis. We
shall be competing with English,
Canadian and

German

attempting

control of atomic energy activities

be

by

governments,

must

both

abroad.

here

same

and

•
if

n

,

,,,

ment

COMMITTEE

Great being approved, it must be guar¬
Britain confirmed a previous offer anteed
by the Government of the
of 20 kilograms of U-235. Portugal
recipient nation and the World
made available 100,000 kilograms Bank
always insists upon inter¬
of
natural
uranium
oxide. The national
competitive bidding be¬
U.
S.
will
also
match
through fore letting contracts on projects

William

grams

U-235

of

while

added contributions the sum of all

euch

and

which the

Bank

is financing.

We

for American

industry in the for¬

for all nations to unite,
by the creation

necessary

is

symbolized

the

International

Atomic
quantities made may
also
mention
the
Inter¬
other members of the national Finance Corporation, a Energy Agency, but it is necessary
Agency for the period between its recently established subsidiary of to have close cooperation between
establishment and July 1, 1960. It the World
Bank, the Chase Inter¬ government and private industry
in any nation. Private industry is
is well to point out that materials national Investment
Corporation,
distributed by the U. S. to the and others.
This area of inter¬ grasping quickly the importance
Agency are not a "give away" as national
financing
is
growing
they must be paid for at no less apace
with the atomic
energy
Continued from page 32
than the charges established for field. New
,

domestic

of

the

U.

S.

further

in

the International

donations

tional materials

5,000

Research

Private Capital Must Share Blame

York

When

S. Hughes

kilograms

in

of

.

.

.

.

.

v

.

,

WUliain C. Jackson, Jr.
First Southwest

Dallas

,

Mark

Company,

••

of

excess

would

plants, nations of Europe
make greater
the services of consulting
engineers than have we in the

and elsewhere will

the

only

of

Sullivan, Jr.

Anchinpinc*

Pnrix

tional

Harold II. Young
Eastman Dillon,Union Securities
& Co., New York

be United

States.

This

will

enable

permitted by special authorization them to learn the technology and
of Congress.
also to build at home a substantial

irrespective of the initia-

tionships

certainly

own

problems

the soundness of

or

their economic programs.

titude

is

illustrated

statement

in

the

by

This at-

recent
that an

a

press

informed how much

lend it.

borrower waits

the U. S.

When the

to

the lender, sound economic
practice has been subverted to
purely political ends. Such
diplomacy," however it

serve

"dollar

be justified

may

as

an

emergency

expedient, simply does not make
economic

sense

industrial

209 S. LA SALLE ST.

if we regard sound

expansion

as

long-

a

term proposition.
Our Government has, moreover,
sometimes financed
state-owned
and

too

which

they

create,

further

many

been

world

economic

typical of the American

life.

'

wav

..

seize

all

the

private

opportunities for
investment
that
the dominant

than $30 billion per year—almost,

will notice, the total of our
foreign investment at the
present time—if the current rate

you

ever, that this U. S. private invest-

entire

nient abroad, impressive as it is,
might have been even larger had
?ar government made a more positive effort to-encourage foreign

o/:S» the'u

S

Xr countde^'end^t

of

increasing industrial output is
continue

0f

in

the

free

countries

neighboring continent.

our

Teletype CG 146-147

course: to
discourage private investors from

this

observation brings me

to my

MUNICIPAL and CORPORATION

nancial

management.
It must, I
believe, be a further matter of

that
on

detect

we

the

SECURITIES

to American businessmen

concern

a

part of

certain reluctance
our

Govern¬

own

ment, when disbursing foreign aid
funds, to voice the American be¬
lief

in the virtues

terprise

and

of private en¬
initiative: our

free

Beecroft, Cole

phasis

HICKEY Sc CO.
135

SOUTH

LA SALLE

STREET

it

3

STOCK

Midwest

1234

821

EXCHANGE

given the

Teletype KC 81

op¬

theories.
From

tries

has

been

in

made

by

private

and Condon

Incorporated

Municipal Bonds

scure

the

the

has

use

tended

of gov¬
to ob¬

INVESTMENT
225

EAST

sizable contribu¬
private sources. In 1946,
U. S. private investments abroad

term credits.

At the end of 1956,
these investments totaled $33 bil¬
were

some

in

$22

direct

billion

of

which

investments

with

$11 billion in short- and long-term
credits. The $33 billion was

divided

between

& Co

&

MASON

SECURITIES

ST.,

MILWAUKEE

New York Stock

CARL

M.

Exchange

LOEB,

NEW

YORK

Other Principal Exchanges

•

RHOADES &.

CORRESPONDENT

OFFICES THROUGHOUT WISCONSIN
•

•

•

•

Appleton
Eau Claire
Madison
Wausau

•

Beaver Dan)
Green

Bay

New London
West

Bend

•

Chippewa Falls

Janesville

•
•

Racine
•

•
•

LaCrosse
Waukesha

Wisconsin Rapids

equally

developed "and

undeveloped countries.

vestments, and the

These in¬

various rela-

2

members:

very

totaled about $13.5 billion, nearly
equally divided between direct in¬
vestments and short- and long-

it's

INCORPORATED

tion from

lion,

Chicago 4, 111.

over

ernment funds

Wisconsin

loEWl

investment capital, the particular
interest of our Association?
The

noisy debate

coverage

Private

Meanwhile, what contribution to
the development of foreign coun¬




Building

Teletype TK 8696

Sources

Teletype CG 276

Bank

KANSAS CITY, MISSOURI

for

208 S. La Salle St.

Columbia

T0PEKA, KANSAS

portunity to develop unhampered
by the weight of state controls
or
politically inspired economic

Contribution

McDougal

Stock Exchange

117 West 6th Street

will

world if only it be
CG

MIDWEST

Member

and

produce these same
happy effects in other areas of the

RAndoiph 6-8800

MEMBERS

action

lems, is largely responsible for the
extraordinary growth and vitality
of the American
economy,
and
that

CHICAGO

individual

on

the independent solution of prob¬

Company

&

T0PEKA, KANSAS

conviction, that the much-aligned
"capitalist system," with its em*'

The

challenge, then, is squarely in
front of U. S. business itself; and

to

state-managed projects with¬

exploring the possibility that
private capital might be available,
and
without
insisting that the
funds provided be given good fi¬

en-

America alone must rise about
300% by 1980, to a total of more

of

^e^iev'es» how-

'

in

exist—just recently, for inStance, Keith Funston of the New
York Stock Exchange has told us
Private investment in South

'

.

we

us

Good business opportunities and
die riSht climate for risk capital

\

"
~

of

so

do

de-

yelopment and also to present to
the world at large a concrete example of that "private enterprise"
s0

con¬

role
Private capital in this
terprise.

are

one

the

the

bluntly,

out

CHICAGO 4, ILL.

•

Tel. DEarborn 2-5600

industry from

Speaking

that

sound

of the great sources
stability on the tense international scene.
They serve both to

coyly to be wooed

by

since

area

do not therebv

we

S.'

busy criti¬
cizing the role of government in
foreign economic growth that we
have failed during the past decade

of

be

Exchange

II

today

us.

believe

they show in tackling their

is prepared to

Members Midwest Stock

U.

blame which it too must share for
the
condition
which

fronts

tive

partment know it is "waiting" to

William A. Fuller & Co.

War

absolve

would have assured

Asian nation has let the State De-

Brokers and Dealers

activity in this

World

„

Committee
us

adopt

crash-program philosophy that has
loo strongl
influenced our na_

PojnntK

S2 Parkei & Redpa'h

Report of IBA Foreign Investment
from-

recom¬

government

-

sponsibility for the long-term fi- nancing of foreign economic de¬
velopment, thus abandoning the-

'

1

'-V;V

<.

power

use

our

practice this policy of entrusting private capital with major re¬

business have

In their efforts to build nuclear

addi¬

Committee

your

mends that

Wagenseller & Durst, Inc.

A so-called Bricker

Atomic Energy Agency, stipulates
that

investment funds by adopting
policy of positive encouragement
of private investors.

new

lending techniques will be de¬
Amendment-to the Participation veloped. We are confident that no
lack of capital will obstruct the
Act,
passed
by
Congress
and
development by foreign nations of
which provides for representation vital atomic reactor
programs.
use.

Securities &

Corporation, New

available by

organizations and

Govern¬

is

in

the successful development
atom if enerrrv.
it
is
not.
atomic energy, it is not nnlv
only

as,

If the U. S.

is

ven-

reasonreason¬

a

For

of

a

of

New York

National

must

money

business

range financing of world economic
growth, it £an stimulate the flow

Robert Colton

eign field.

of

other

great business potential

a

these

sincere in its numerous
invitations to private capital to
assume a major role in the
long-

NUCLEAR INDUSTRY

kilograms allocated to friendly
The World Bank is another pos¬
bear
in
mind
that
the
United
nations, the U. S. has offered an sible source of long-term money.
will be hard pressed
initial contribution of 5,000 kilo¬ This institution is enabled to make Kingdom
from an industrial standpoint to
grams
of U-235 to the Inter¬ loans in the currencies of the
fulfill its own goal of 5 to (i milnational Atomic Energy Agency. nations from which exports are to
lion kilowatts by 1965. We believe
Russia made available 50 kilo¬ take
place. In the event of a loan
there is

in

investors

sound

a

able return.

,

Dr. Paul F. Genaclite, Chairman
The Chase Manhattan Bank

we

compete

since

thatfReir

ture that will produce

Respectfully submitted,
.

to

areas,

assured

going into

,

technology

develop rapidly, but

may

Thursday, December 19,1957

.

.

of atomic energy and this should
the possibility of dominant

remove

in the Free World. The latter two

Source

.

f

CO.

;

^\N I $

Volume 186

Number 5700

.

.

The Commercial and Financial Chronicle

.

£2693)
Scthird

point;

the

■'."idertake

major

financing
in

rnent
i

the

the free

countries

preoccupation

narrow

sound

with

thef

to

concerns of their own parof the' ticular.1 industry
or
firm, many
businessmen have been blind to

•

tries

tell

something

you

about

effort

the

required

by

concerted

International
ment

San

Industrial'

Conference

Francisco

sored

last

in"

met

month.

"Time-Life"

by

action.

Develop.-'"

which

_

.

-

.

Role of Investment Banking;

Spon-

and

.

Your

the

Committee

believes

has

that.

nearly

free world
-and the

dustrial

these

60

countries

of

the

gathered for discussion

exchange of ideas

development; and

in'-

on

from

of

process

countries

none

in

now

developing

their

re-

f

ideas

and

away:',with

came
.

T

the..conviction

the

recehtlv-lihdus-

more

trialized countries

-

horizon^

that all private businessmen, those
from

i

broadened

rfrom

Western

well

as

as

'situation.

-

Turning

that

some

now

to

these

tal;

-

y

lieve that
Can

exert

houses "'already have

in

Swiss

private capigoodwill

I should

they have more oppor¬
tunity to deal directly with Amer¬
ican businessmen and capitalists—
they will themselves take the in¬

in

an.

we

policies where¬

But^o far

the difficulties

as

concerned,

are

proceeds

socialistic

in

speak with the single

them

voice

to

that

influence

would

Because

of

the

This present audience does not
be told of the obstacles

permit

own goals, to work freely towards
achieving these goals within the

shaping of need to

to foreign investment: ineonverti-

engaging in controversy, businessmen have held aloof from, the
arena
of
political debate Where

bility. of currencies; political and

cf
*

economic

instability;

I

suppose, that our own system per¬
mits a man freely to establish his

authori-^Difficulties Not Insurmountable

certain fear

a,

or

communistic theories, we mean,

*

policy.

Lloyd Arnold

BEVERLY HILLS, Calif.—John

of

framework

law, and freedom
to enjoy the fruits of his own in¬
itiative, enterprise, and hard work.
By contrast, the theories of so¬

discrimina-

tory taxation and double taxation;

cialism
insist

and

communism,

which

rigid control of individ¬
ual ingenuity and enterprise, seem
so repugnant to us Americans be¬
cause they shackle the productiv¬
one

another,

with Lloyd
Company, 364 North

&

Corporate Bonds and Stocks

Co.

securities business from offices in
the Jenkins Arcade. Officers are

(Special to The Financial Chronicle)

Robert G.

Word, President; John
Donahue, Executive Vice-Pres¬
ident; Paul Warren, Vice-Presi¬
dent; and Ralph Alexander, Sec¬
retary.
All were formerly with
Federated Management Corp.

DENVER, Colo.—James H. Finnen
and Floyd E. Ingraham are
associated

States

with

Securities

F.

Mountain

Corporation,

Denver Club Building.

Samuel Swimmer Opens

With

LOS ANGELES, Calif.—Samuel
Swimmer has formed Samuel

in

securities business.

a

Smith, La Hue Co.

(Special to The Financial Chronicle)

Swimmer & Company with offices
at
210
West
Seventh
Street to

to the laziness of

man

inventiveness

the

of

ST.

PAUL,

Minn.

Falardeau is with
&

•

— Gary
R.
Smith, La Hue

Co., Pioneer Building.

HAMLIN
Members

N.

Y.

Stock Exch.

self-sacrifice
of

efforts

the

American Stock Exch.

.

s

.

,

.

v-

\

;

plodding

majority

going and uninspired

LUNT

Members

IN

the

to

&

Associate

BROKERS AND DEALERS

crats, imagination and the capacity
for

&

tankers.

PITTSBURGH, Pa.
Federated
Investors, Inc. is engaging in a

Two With Mt. States

engage

Eberstadt

Form Federated Investors

Both were previ¬
ously with Richard A. Fay & Co.

now

F.

affiliated

now

genius to the routine of bureau¬

AND

by

32,000-dwt.-ton

two

on

ity of

Municipal Bonds

Summer
for

E. Heitz and William D. Stanley

capital to take

"

to

a
subsidiary of United
Corp, A $25,710,000 fi¬
nancing for another subsidiary of
United Tanker was arranged last

(Special to Thr Financial Chronicle)

Arnold

is

Tanker

Camden Drive.

opment, that constitutes the "chal¬
lenge" to American business which
I spoke of before. When we busi¬
■'
ernment's intrusion into-the eco-.,.elementary. Thus we see the
pos- nessmen praise the spirit of "free
/ nomic
sphere lies with private sibility. of attractive opportunities enterprise," and contrast the vir¬
/ businessmen themselves. Because, .in.:this area for members of our tues of our own economic
system
businessmen have not been-united
industry
during
the
next
few with the claims of

tative

Inc.

With

are

over major respon¬
sibility for world economic devel¬

Shipbuilding Corp.,
Miss^ is now con-

structing two 26,400-dwt.-ton
tankers for subsidiaries of
Eagle
Terminal Tankers, Inc. They have
Baker, Weeks & Co., New York been chartered to the
Military Sea
John M. YoungTransportation Service for five
years after completion in the Fall
Morgan Stanley & Co.,
New York
of 1958. Eagle Terminal
Tankers,

ternational good which we believe
will result from allowing private

expressing their beliefs on this years..
subject, they have been unable,..

The Ingalls

Pascagoula,

of

cisely these difficulties, balanced
against the great national and in-

a certain point in the dcveloping countries, there must be
/•/ But the Conference also sub- ' capital" markets.
Some of these
stantiated
the
opinion of .your,exist already in a few places, but
Committee, expressed above, that .facilities, for underwriting, dis¬
part of the responsibility' for .goy,--,trifeliti9h_!and trading
are
very

Act.

Kuhn, Loeb & Co., New York

mittee would insist that it is pre¬

beyond

Title XI 6f the Merchant Marine

Ralph

America, N. T. & S. A.,

Com¬

your

mortgage bonds insured by the
S.
Government pursuant to

K. P. Tsolainos

extending private foreign invest¬
ment

group of

U.

New York

operate.

financing

a

already obtained for the private
placement of $15,750,000 of 20year
5%
first
preferred
ship

Co., Philadelphia

J. Emerson Thors

creating the atmosphere

can

due

is in addition to the commitments

Henry A. J

as

of sound economic

Corporation,

The First Boston Corporation,
New York
Bank of

debentures

was
arranged
institutional in¬
vestors by F. Eberstadt & Co. and

Andrew N. Overby

by representatives of such

itiative in

This

William F. Machold
Drexel &

Inc.

stock.

New York

be¬

subordinated

with

American

Tankers,

Dec. 16 that it has

on

1963
with
options to purchase
240,000 shares of class B common

George N. Lindsay

hope that as
know
American

say,

now
play iii^.bf oppprtttnities for investment in
developments The v. be- new/businesses abroad, enough
unless private business surely fo justify and demand the
more
influence in this services of an expert in the field,

industrialization

of

of

Ti

.

Edward Glassmeyer
Blyth & Co., Inc., New York

obvious

come
to
business better—perhaps

"imtnedihte and increasing number

As

the

and*

they

hi the. field of foreign investment.
Qfhercompanies,- we
believe,
Avohld do'well-to add to their staff
someone .with specialized knoWl.edge''of foreign investment who
pah devot^ his full time and enef-

development, the basic principles

for

WI

Terminal

completed arrangements for the
private placement of $3,000,000

hazard Freres & Co., New York

Conference

reasons

Eagle

announced

at

these countries

Francisco

sound

COM-

MITTEE

„

countries offers good

experience

There will be'

of free private
enterprise are
danger of being extinguished.

San

shown

governments

'"economic

in

INVESTMENT

Arranges

Private Placement

Milwaukee

hidebound

that
foreign
countries
themselves recognize the barriers
they
have
sometimes
erected

'

1

operate

F. Ebersfadf

,

joseph T. Johnson, Chairman
The Milwaukee Company,

lieving

of the larger investment

Europe, and '
role

the

which...we must view our more
POptical attempts to rectify 'the against the flow

'

that

to

The

those^gj?? "to'.expanding operations in

U.. S., are anxious about the

take

or

provided

of

sources, could have left the Conference without stimulating" new

;

political

a necessary condition of
doing
business with "foreigners."

particular aspects, especially witlirepresentatives, particularly in bur own industry, I would note

those
j

towards

are

Institute, it was' these.wider,- more general reasons
unquestionably the most impor-, for;"our failure to win a larger
tant meeting of its kind since 'the Share in foreign economic
expanrwar.
Over 500 private business- sio'n must; be stated; they con'stimen,
industrialists and" bankers--itute;-^ ill fact,- the context within
from

n

Respectfully submitted,

ex-

attitude that the inequities under
which foreign capital too
often

//

Stanford Research

;

advance

ficulties,

v

v

These difficulties

prise as a whole, unwilling to and economic maturity. Let us
like, in this connection, make, the. sacrifice of time and not, however exaggerate the dif-

I should

'

operate.

The San Francisco Conference

to

;t

business tradition in which

ist, nor will they simply disappear FOREIGN
overniglit as undeveloped conn-

the best interests of private enter¬

-

al

too

a

develop-

world.

now

^beeii,stated.

for

responsibility
economic

their reasoned views should have fear of expropriation; especially, sary to seize the
opportunity
Finally, because of perhaps, the simple lack of a before us.

that is,

reasons,

!•:which urge private capital to un-

61

of

LISTED and

easy¬

UNLISTED

men.

SECURITIES
Challenge to
*

RAFFENSPERGER, HUGHES & CO.
Incorporated
20 North Meridian. Street

All this is true;

the

prise,"

national

Indianapolis 4, Indiana

Free Enterprise

Complete Trading Facilities

but "free enter¬
point

central

of

our

involves

economy,

still

another sort of freedom: the free¬

MARINE TRUST BUILDING,

♦

Telephone: WAshington 4035
Bell

Direct

STREET, NEW YORK 5

Telephone: BEekman 3-7022

Teletype BU 145

dom, that is, to meet one's diffi¬

Retail Distribution
2 WALL

BUFFALO 3

Rochester, N. Y.

wire

to

Pershing

& Co., New

•

Norwich, N. Y.

York

culties and to solve them without

waiting for help from
from
This

beneficient

a

response

high,

on

or

government.

to the challenge of

great difficulties is surely one of
the

§SjT (Indianapolis Bond & Share
His
s.-v
*?

.

_

characteristics

BUILDING

INDIANAPOLIS

development

•

Whole.

of

120 E.

MARKET ST.

If, then,

Teletype IP-298

•

other

countries

ment,

DEALERS

-

BROKERS

benefits

of

or

eign

Listed Stocks

to

for both

was

Depart¬

the

path for

be that

gov¬

our

because

unable

to

if

private

Chas. W. Scranton & Co.
Members New York Stock

meet

209

the




we

in business and industry have

not had the
age.

or

the

foresight,

CHURCH

Exchange

STREET, NEW HAVEN, CONN.

Telephone MAin 4-0171

government

tor in the future it will be because

Exchange

statistical information.

some¬

Branch Offices in

continues to be the dominant fac¬

Member Midwest Stock

our

world, we

Slate

clear

But

listed and unlisted security mar¬

kets—and also

stepped in to finance for¬

emergency.

complete facilities

foreign govern¬

own

expansion

capital
*

our

a

It may well

ernment

CORPORATE BONDS

the

of

We invite you to use our

extended,

enterprise,

reasonably ask that

ment—should
us.

Over the Counter Stocks

the

private

body else—be it

•

If it's Connecticut

a

sincere in

we are

this economy should be

cannot

MUNICIPAL BONDS

as

4, INDIANA

Telephone ME Irose 2-4321

-

the

of the

nation

our

maintaining that

through

UNDERWRITERS

of

^

CORPORATION
INDIANA

notable

American economy, as it is

or

the

unselfishness

cour¬

neces-

Bridgeport

Danbury

New London

New York Phone: REctor 2-9377

Watrrbury

Teletype: NH 194

62

(2694)

The Commercial and Financial Chronicle

Continued from page

curities

4.1

Report of IBA Investment
Company Committee
shares

hardship on both the trustee and
the beneficiary.
a

1958

in

New

York

State

estate

kept posted
on other legislative
developments
including the following and would
he happj7 to answer inquiries con¬
cerning the details of any of these
matters:

(ILII. 7778, S. 2520): "Privilege
of Doing Business Fee" Bill.
(II. R. 7698): "Pro-Merger Noti¬
fication" Bill.

and

gift

tax

Other Regulatory and Legislative
Matters

All

(II. R. 99): A resolution creating

Oversight

Sub¬

committee" to study the SEC and

agencies.

(II. R. 8381): "Unintended Ben¬
efits and Hardships" Bill.
In

the

mittee

of

area

members

taxation, Com¬
have

been

con¬

cerned with

Treasury Department
regulatory proposals concerning:
taxation

investment

of

capital

gains

company

realized

self

but

not

the

tive

public against
securities,

assuring

tion

with

have.received

NASD

the

a

revision of the Statement of Pol¬

icy pertaining
in

the

pany
sales

sale

to

of

securities.
managers

literature used

Investment

Com¬

All partners and
of
IBA
firms

should be sure their sales repre¬
sentatives become acquainted with
the revised Statement of Policy in
in

accordance

with

A

produced

their

each

The IBA, along with every ma¬
jor group concerned with the se¬
curities business, has adopted an
official position in opposition to

year

first

and

of the

Association

and

state

so-called variable

an¬

;

.

m COMMON

STOCK FUND
'■',V '

'!

■

($49)

industry at
or

on

six

,

,

alert

to the problem of the
annuity. In 1957, pro¬
ponents of variable annuities made
more attempts than in any previ¬
ous year to circumvent by
chang¬
ing state insurance laws, the Se¬

variable

education
for

all

aids

and

or

in

the

the

news

assistance

Cooperation-' through
current classes

investment

on

Response to
requests

Many
booklets

for

-

These
pany

•

Balanced Series

:

now

information

carries

become

with

;

busi¬
major finan¬

company
a

Increased stature

it

increased respon¬

shareholders,. but also for
industry and the retail dis¬

the

-

educational

include

of their shares

the public.'

It

in rela¬

portant that thris Committee alert
the membership to these enlarged

responsibilities.; ^,,...*„■;

Trust

Other in¬

planning, as a substitute for life'
insurance, or savings bonds-. or

formational publications are now
in preparation.
The" Education
Committee of

received

IBA

the

have

brochures

savings accounts

also

interesting

many

ties.

There

many

of

stances,
should " not
invest | in
equity securities of any kind, in¬
cluding investment company.,

regarding
created by

shares.

•

other securi¬

or

people who,
personal circum¬

are

because

and

IBA member firms.

these

For

•••••••••«••••••••••**

•

reasons

.

•-* •

•

t

!

Dividend Series

UO$4\

j

•

,

"•

•

'

•

.

.

:?

»•-.

Fundamental Investors, Inc.

4

;

/ALSO

..

: ;

the years.

:

i*
•

r

/

• Growth Stocks.Series

«*»V-

-

Diversified Investment fund, lnrr—:
Investing in

a

balanced list of bonds,

ferred stocks and

common

stocks.

pre,

r (

-

V

Broadway, New York 5, N. Y.

wmmmmmmmxx

Manhattan Bond Fund, Inc.
Investing in bonds selected for income.
*

•

.

'

~

.

H SMISIRY FUNDS

Diversified Growth Stock Fund, Inc.
Investing in common stocks selected for
~
-

r>-

possible long-term capital growth—now
including such industries os: electronics,
-chemicals and atomic energy.

Prospectuses and other infor¬
mation on these mutual funds
'For

Prospectus write to

63 mil STREET, NEW YORK 5, N. Y.

p

h..

.
s

~ ~

Nam*

available from local investment firms—or

UtsfefteM Group, Incorporated

7—

checkmark your

Addr**»

preference above and mail
this ad to:

City and Stat*

/- ,
i,*

HUGH W. LONG AND CO., INC., Elizabeth

3, New Jersey

mmmmrn




-*-*'•-«-* *-***-»•»

*- • * •

» • •

•-•'* *-»'*-»-r-*--*--* *"r» *-* « »*"*::•

■

j;

common

'*

120

I

-

stocks selected for.
possible growth of capital: and- income

.Investing in
;

L

j,

Established 19S0
~

is

• 1

ABOUT THESE MUTUAL FUNDS?

NATIONAL SECURITIES & RESEARCH CORPORATION
w

it

••*j

•

..

.

HOW TO GET INVESTMENT
.

Income Seiies

'BONO FUND
★

im-..

seems

Shares—An Aid to Bankers

Information Foidcr and Prospectus on Request

'

each

not only for the indi-'
companies in;, relation) to «

vidual

available to you.
"Investment Com¬

tained from the NAIC.

:

Preferred Slock Series

:

;; Investment " company" s hares
Officers," "7 Reasons serve well in
meeting the long
for Investing in Mutual Funds,"
term investment needs of a -va¬
"The Story of Investment Funds
riety of investors. They are -not
and You,"* and "Investing Made
intended to serve as the sole ele¬
Easy," all of which may be ob¬ ment .in an investor's: financial
and

members

iTH£ 6£N£8At

"

r?

than 200 letter

information

cial institution.

tion to

over

.

instructing
Colleger-

companies;

more

investment

has

ness

are now

Stock Series

-—-

text

in City

A Look Ahead

The

Publications and Booklets

.

~

to

• Bend Series

;

I

and

month.

com¬

-

80ND FUND

Week

sibilities

*••••••••••••

I

v

of New York's full credit course...

r

tributors

Mutual; Investment Funds

/

stories;

a

mmm fund

%

Business;

their

investment companies

m

Educa¬

on

special comprehensive "Press Information Kitf'jf;

training of new investment
pany personnel.

worthwhile

im

<

of

program

Securities

seven

of

ideal visual aid for adult pub¬
lic groups and for preliminary

through the National Association
of Investment Companies.
The
Public Information
Program of

★

de¬
;

authors, students and teachers; '■&

an

'

mCAPITAL 5';

of

Editorial

pro¬

Invest¬

are

IBA

those

"Grit";

the Department of Justice entitled
"We Did It Ourselves" continues

Visual Education Aids
Visual

to

Magazine," "This
Magazine"
"Challenge"

ment

available

addition

dent

basis

\

duced with the cooperation of the
U. S. Treasury Department and

securities

in

Cooperation with magazine writers in connection with articles •'
appearing in "The Dental Stu-

modest

a

rental

a

NAIC.

16-millimeter,
black
white, sound motion picture

be¬

second

Committee
of

encompassed the following

Release

have

to be popular with television sta¬
Companies met with the tions and is available at a cost
first year class to discuss the in¬ of
nuities. If sold as its proponents
$15 to IBA members for church,
vestment company business in its
club, and adult education audi¬
advocate, by insurance agents and
To date over 25 million
in the guise of insurance, this type relationship to other financial in¬ ences.
of common stock investment eon- stitutions; the current President have viewed this film. • *
of the NAIC spoke before the sec¬
tract would have tax advantages
A sound, slide film narrated by
ond year class on services insti¬
over
other securities and would
John
Cameron Swayze
has re¬
tutional investors seek from in¬
circumvent the body of Federal
cently been released! and provides
vestment bankers.
the sale of

be

• •

thousand

-

In 1957

Regular monthly news releases
plus a monthly "clipsheet" dor
editors, each issue containing

audi¬

to

A

and the Executive Director of the

National

hundred

the

to

cost

classes of the 1957 program:
Chairman

The

has

Pro¬

becoming

on television by in¬
dustry spokesmen in Chicago,
Philadelphia and St. Louis;
v

film; during the win¬
prints will be released also

from

spring at the Wharton School

the

shown

•

Appearances

in motion picture theaters
throughout the country. Already

able

both

being

for use by local television sta¬
tions. In addition, prints are avail¬

demand
of invest¬

is

the Joint Committee

eight minute,
sound,
animated

ences

several

NAIC

an

Hope That Jack Built"

currently

Information

the

Participation

available.

1957

"The

ment company topics in the Sem¬
inar on Investment Banking held

try representatives appeared

-

/

June

>.

scribed above:

released to the public and is

ter,

a

for expanded coverage

fore

now

of

extensive each year.

matters

avail¬

viewed the

offering in¬

regulation
distributed;
t
Response from students to this
which has proved, essential ,to pro¬
valuation of investment company
tect the public investing in equity expanded discussion prompts your
optional stock dividends;
Committee to recommend that an
securities. The IBA State Legis¬
Subchapter M, pertaining to taxa¬ lation Committee will, no doubt, investment company lecture be
tion of. investment companies;
present to the membership a full included in the curriculum for
valuation of investment company report summarizing variable an¬ each of the three classes in future
Seminars.
Should this proposal
nuity developments during 1957.
The Investment Companies Com¬ be
acceptable,
the
Committee
mittee wishes to supplement that would, of course, be quite willing
to
prepare
topical outlines lor
report by urging all members of
the IBA—underwriters, retail dis¬ each lecture and to provide ex¬
@100? SECURITIES, INC.
tributors and banks,
perienced lecturers.
particularly
those with trust departments-r-to
Incorporated W33
★

are

16-millimeter,

of Finance and Commerce. Indus¬

standards.

become

tled

vestment company shares to

it

are

was

of IBA member firms

ac¬

in

informational

they

as

Public

gram
more

motion picture in Technicolor ti¬

steady growth in the number

clients, has

members

new

Information-Education

Activities
The

tion

Investing Banking

on

Other

Three visual aids for educa¬

In

Public Information and Education
Seminar

Committee

IBA

of

materials

able.

IBA

that

informed

IV

registered

with the

Thursday. December 19,1957

.

.

better

ment
company business.
That
committee has been very coopera¬

nuity matters which have arisen
in various states, but importantly
in
Connecticut,
Massachusetts,
New Jersey, West
Virginia and

Variable Annuities

(S. 1601): "Proxy" Bill.

other

is
aiming to
public understand¬
ing and knowledge of the invest¬

Policy
members

IBA

cepted

(S. 1168): "Fulbright" Bill.

and

organization

create

the District of Columbia.
Statement of

business

Bills.

"Legislative

that

Committee has concerned it¬
with watching variable an¬

your

(II. R. 9 & 10): "Jenkins-Keogh" order that they may conduct their

the

Invest¬

the sale of unregulated

Ill

The Committee has

•

the

1933.

various

petition,

purposes.

cor¬

recting this unfortunate overnight.
-

for

the

industry plans to
make every effort to obtain leg¬
islation

of

Company Act of 1940 and
Blue-Sky Laws and
Regulations.
In helping defend
the business against this threat of
unregulated and tax favored com¬
the

In

Act

ment

.

1
I

j.

.•

{■>'

Volume 136

,

.

.

in

the

Herman J. Sheedy

public

investment

a^well

as

of the

risks

the

of

potential benefits

Boston

Proper, selling, in all divisions
business, requires
salesmen who are not only well
informed as to their product but
It is

a

securities

Wylie
&

Co., Minneapolis

Henry J. Zilka

from

a

donor

or

while acting as custodian and before the donee attains the age of
21

It

years.

tax

avoided
todian

appears

that the

es-

might

relationship, including anylaws requiring the fiduciary to
obtain
court
approval
of
the
transfer, and
(c) Is not charged with notice
of and is not bound to obtain or
examine any court record or any
recorded or unrecorded document
relating to the fiduciary relationary

be

consequences

appointing as cusperson other than the
donor, preferably someone who is
under no
duty to support the
by

some

donee.

Report oi IBA State Legislation

,

-

ship or the assignment, even
though the record or document ist

,

t fibril

•

I.esal Investment I.a«s

-

its possessioni except that, if
Important amendments this year the security is not registered in
Investment Laws of the- name of the fiduciary, the
Alabama, Iowa, Maine, Minnesota, corporation shall obtain a copy oi
Missouri, New'. Hampshire, New a document showing his appointlork, Oklahoma and Wisconsin ment and, of court appointed, cerHI
Climmni'irorl in
dnnori/iiv
are summarized in Appendix 15
B.
tilled by the clerk of the appoint¬
Gifts to Minors
ing court within 60 days before
Acts on gifts to minors are now
V
the date of transfer, but the cor¬
effective in 39 jurisdictions in the
Security Transfers by
poration is charged with notice
United States.
Fiduciaries
of only that part of the document
The Uniform Gifts to Minors
.
.
to the Legal

secu¬

have included

a

"variable annuity"

•>1W

dependent, for its continued exist¬
ence and
growth, upon a public

option.

confident of its integrity.

insurance

ment

companies,

other

element

business,

merit

can

public

the

through

only

effort

to

con¬

a

<

bills to authorize
companies to issue and

In New Jersey

sell

"variable

annuities"

have

passed the Assembly (as they did
in 1956) and are now pending be¬
fore

confidence

tinuous

securities

the

of

Invest¬

less than any

no

the

Senate

Committee.

uwu

held

on
vr«

1177

which would have amended

long-term financial goals.

;;"

'

Respectfully submitted,
,

-

INVESTMENT COMPANY
v

COMMITTEE

—

S.

curities

regulation

Inc.

j-

-,*y.' A
i

Curtis II. Bingham

authority

Bingham, Walter & Hurry, Inc.

A

Los Angeles

This bill

Robert E, Clark

Bullock, Ltd., New York
B.

-

First of Michigan Corp., Detroit

by

a

sion

Shares

Management

Corporation, Chicago

A

:

PhHip F. MeLeilan

were

gifts

on

House

Bill

1560

panies to establish segregated ac¬
in

S to
piioi £ ^

The

Commission

~

'

tributors, Lie., Boston

continue

concluded

other

study

proposals

of

the

bill

advanced

at

Act

model

to

and
the

a

gift of

todian

/

for

a

for

for

A Growth Stock Fund

Century Shares Trust




;;

law

under 1he

>

in

was

a

a

custodian

the

to

ANGELII

Weet Seventh Street

^btained

Vndii

..irt,.i

"

as
as

without

P,inci

connec¬

A

prospectus
may

on

each fund

\he obtained

from investment dealers or

r

the

Act

or

donee,

which

of the

maintain

or

tent

so

transferred
is

used

in

NEW YORK
61 Broadway

extent

from

the

gross

income

that

LOS

ANGELES

453 S. Spring Sti

property

*

r

LYNCHBURG, VA.

in

16 Vista A ve.

includable in
of the

CHICAGO
120 S. LaSalle St.

income
SAN

FRANCISCO

1105 Russ

Bldg,

DALLAS

Mercantile Securities Bldg.

person

obligated to support or maintain

HUNTINGTON WOODS, MICH.:

income is taxable
■)

the donee.
<

Berkeley St., Boston, Massachusetts

"

minor is, to the ex¬

a

the

CORPORATION

or

the donee, such
to

PARKER
200

used, taxable to such per¬

To

derived

THE

income

satisfaction, in
whole or in part, of a legal obli¬
gation of any person to support
discharge

question is not so

LO#

return

Uniform Act.

derived from property

the

tio

-1

to

(b) The Internal Revenue Service has held that regardless-of the

the

-

~

is

Large current
income

gift under the
completed gift

relationship of the donor

CHICAGO

.

fund whose first

couple) and it appears
that the same ruling would apply

son.

South Lafcuio Street

mutual

objective

The Internal Revenue Serv¬

under

tzo

A

married

LIMITED

Broicwajr

Income Fund

INCOME?

cus¬

atjuthe time of the transfer- and
qualified for the annual gift tax
exclusion of $3,000 ($6,000 for'a

Canada General Fund

BOSTON

ahead.

gifts to' minors should
also be carefully noted:

model

DEVONSHIRE STREET

CAPITAL and

with

tion

(a)

6i

the

Ifor CURRENT]

minor,

ice has ruled that

VANCE, SANDERS & COMPANY

^

INVESTING

Ac^t so that it applies also to gifts

f^Iassachusetts Investors Trust

YORK

and

minor

of money.
<
Tax considerations

^

■

securities
possible

INCOME in the years

he desirable to amend the

would

te

-

are

give money to a cus¬

the

c

for

GROWTH of

purchase securi¬
so that there
is only one transfer of securities.
In states where the gifts to minors
act applies only to securities, it

Massachusetts Investors

111

seIe

of

.

invested

minor;' Under

the

which authorizes
security or money, the
a

list

a

i n

todian. may then

ties

relating to the shares of any of these separate
investment funds may be obtained from authorized dealers er

64

make

(2)

securities

the

(2K'When

donor may

A prospectus

Eslablithed 1925

mutual fund

gift, so that some transfer
agents have held that there are
two taxable transfers
(1) when
the securities are sold to the adult
transferred from the adult to the

OF BOSTON

page

Investors

INCOME?

act. has

the Uniform Act,

I

on

INVESTING

A problem
in ' some

money.

the

where

custodian

Bond Fund

Continued

aSS,gDment' ^

the

and

CJJZ

Prosed Uniform _Act "For the

i-

for FUTURE

whereas the
covers gifts of

the securities and then

hearing.

o-i

^ •. ^
,

previously been adopted because
the adult must first (1) purchase

equity securi-

y

.

.^Massachusetts Life Fund Dis¬

NEW

to permit companies to transfer to submit only his probate certifistocks-in estates and trusts as cate to transfer securities held in
rapidly as other stocks by mini- the estates in the name of the

encountered

been

has

states

ties for variable annuity contracts.

•

Uniform

securities and

which

permit life insurance com¬

invested

Under these provisions an exec-

This Act is designed utor or administrator would need

securities,

of

new

Legislative Study Commis¬

counts

Hugh W. Long
A
Hugh W. Long & Co., Inc.

hearings

.

,

California; Colorado; District of
Columbia; Georgia; Michigan; New

April 30, May 1 and May

on

would

Paul. A. Just

Elizabeth

held
2

'Television

Illinois, Connecticut and.

Delaware.

Jersey; New York;' North Caro¬
lina; Ohio; Rhode Island; South
Carolina; Virginia.
The model act applied only to

further

for

,,

.

approval of the Uniform Act is in

issue life insurance
annuity contracts.
also referred to the

Council

.

_

.

3S used

w hicll

tho

In Massachusetts

Henry Earle
.

was

Legislative
study.

Dean

A Harris, Upham & Co., New York
:

to

variable

and

..

*,

v h™
p Jf
yides that a corporation making mittee of the National Conference
Dkfanoma; renn- a transfer .of a security upon as- of Commissioners on Uniform
sjriva",a' kouth Dakota; leunes- signment by a. fiduciary:
State Laws currently is drafting a

M

was

^thOTizS the eshiblTshment^if
'insurancG
laws and sublet to ikS
under

.

,

...

n

_

.

a

Distributors Group,

_

_t

j.

Nebraska, mizhig the documentary problem. decedent.'.
\.
In general, the Model Act pro- ; It should be noted that a Com-

..

be^e^racta'*
the
1N^V rU?mP. Si

referred to the Legislative Coun-

mm nan v

Howard

under

The bill

state securities act.

Montana;

se-

,

*** with«wt

Boston

Herbert R. Anderson

Calvin

as

would

they

' '

V

'

*

.

xt.

,

A Model Fiduciaries Securities which provides for the appomtT'^nsfei Act was adopted this ment.

v

Coffin & Burr, Inc.,

"New York J;•;'{■■.

a

.

_i

_

year, m

•

97

' " ^ x- v i '
Arizona^ Arkansas; Connecticut;.
Delaware; Florida; lciaho; inciiana;
tt?nsas'\.
ap ar,cl\

was

House Bill

on

annuities

that

so

.W;. ? subject to

Amazeen

hearing

a

March 21

variable

define

'

Charles F. Eaton, Jr., Chairman
Eaton & Howard, Inc., Boston
Edward

Connecticut

the Connecticut Securities Act to

*

fnllmsnnt#

ihn

In

meet their needs and achieve their

x-i?-

,

Act, with some modifications in
Business Affairs certain
states, is now effective in

investors

help

to the fiduciary himself
to his nominee, is within his

though

of

value

of the Model Custodian
(b) May assume without inAct, is includable in the donor's quiry that the fiduciary has comgross estate for Federal estate tax plied with the laws of the state
purposes in the event of his death having jurisdiction of the fiduci-

tate

33

page

the

Visions

Portland

Co., Inc., New York

that

63

t° himself as custodian • for a authority and capacity and is not
minor donee, pursuant to the pro- in breach of his fiduciary duties,

Zilka, Smither & Co., Inc.

rities buying public,

f The entire securities business is

Baifd & Co., Inc.

Dain

ruled

ly

activities

the

to

M.

has

;

a

business

J.

0. Purkiss

Continued

thoroughly trained
personnel to represent the

provide

sales

Harold II.

Walston &

expected of it, it must make every
effort in its own selling

Robert W.

J: Lord, Abbett & Co., New York
Albert

ice

property transferred by

Milwaukee

Corporation

Boston

fact, of course, that
many
security sales are made
other than through the banking
and brokerage organizations
which make up the membership
of the IBA. If the IBA, however,
is to play the role properly to be

to

Parker

Harry I. Prankard 2nd

also well trained in sell¬

are

ing.

N

Carlton P. Wilson

William A. Parker
The

.

Co., Cleveland

Putnam Fund Distributors, Inc.
Boston

Vance, Sanders & Company

of the securities

&

.Charles M. Werly

Robert L. Osgood

of such investments.

who

McDonald

company

with,, full disclosure

(2695)

The Commercial and Financial Chronicle

interest that Walter L. Morgan
The Wellington Company
;
shares be
isold properly to the right people
Philadelphia
* V'
'
vital

•

Number 5700

e) The Internal Revenue Serv-

•:>

*)v

26058 Wyoming Road

64

(2696} T

The Commercial and Financial Chronicle

John

Continued from page 63

W.

Clarke

APPENDIX A

John W. Clarke &

Co., Chicago

Report of IBA State Legislation

Acts

Paine, Webber, Jackson & Cur¬
tis, New York
Stanley R. Dickover

Committee

Ralph G. Elam

Simplification of Security Trans¬
fers," and that there are wide dif¬

in

many

an

application

have received from

we

several

with the securities commis¬
the

of

state

or

states

in

B.

Courts &

Wm. P.

Co., Atlanta

Harper & Son & Co.

Seattle
Arthur II. Ilaussermann

,

Vance, Sanders & Co., Boston
Edde K. Hays

.

and

tered

not regis¬
otherwise ex¬

not

are

empt, has the burden of proving
that

transaction

the

specific exemption for

on

transactions,

agency

dealers

unsolicited

that

sume

transactions

securities

as¬

agency

not subject to the

are

registration

require¬

ments of the state securities act.

that any firm
exemption for un¬
solicited agency transactions (or
assuming that unsolicited agency
transactions are not subject to the
securities
registration
require¬
ments) in the securities act of any
state in which it does business,
consider obtaining for their files
and preserving some written proof
We

recommend

relying

that

on

such

an

transactions

are

unso¬

licited.

call

to

the

members

to

emptions

Under

attention

Digest of
State Blue

Ex¬

Buyers. Copies of this Di¬
gest were recently mailed to all
IBA member firms, and additional
copies are available on request

Commissioners
Association

Administrators

of

Securities

held in Santa

was

Fe, New Mexico,

on

Oct. 6-9, and

representatives of the IBA attend¬

state
year

the

amendments

to

securities
were

close

Also, most
of the preliminary work should
be done in 1958 on legislative pro¬
posals which are to be submit¬
ted to Legislatures in 1959. When¬

McDaniel Lewis

acts adopted this
made possible through

cooperation between the

se¬

&

90

you contemplate amendments
the
laws
of
states
in
your

to

Group,
ties

particularly

acts,

please

IBA Counsel
the

are

amendments

state

securi¬

remember
and

state

with

the

appropriate

Portland

McConnel, Jr.

sug¬

Foster &

Paul

Respectfully submitted,

Stringfellow, Richmond

MulI an ey

G.

Osgood, Chairman

Simmons, Chicago

H.

Walker

&

Rauseher, Pierce & Co., Inc.
Dallas

Granbery, Marache & Co.

to

of

.

Co., Detroit

Malcolm

Harry Beecroft

F.

such

and,

25517

&

the

nor

effect

shall

received

that

A. M. Law & Co., Inc.

Prescott, Shepard & Co., Inc.

Spartanburg

Cleveland

accepted

or

been

in

applied
*

..

for

(b)

tional

new

effective

new

of the

Co., Inc., St. Paul

Albert Theis &

Sons, Inc.

Brush, Slocumb & Co. Inc.

William J. Wallace

Francisco

Mellon

under

National Bank

&

Trust

of

1933

Company, Pittsburgh

W. W. Keen Butcher

the
in

Federal

Sherrerd,
Philadelphia

Elbridge S. Warner

Hayden, Miller & Co., Cleveland

been

Section

a

effective

within

fictitious

f

contain

fraudulent

or

false, fictitious or
statement,
shall
be

any

not

than

more

not

$10,000
than

more

Selected

ABERDEEN

(2) of Section 517.12
the registration of

to

Oct.

man

as

can't

a

submit

to

an

applicants

dealer

or

to

oral

and

pass

and

dealing
as

a

in

dealer

and
or

selling

as

securities

salesman.

a

GEORGIA

filed

Although

the

the

securities

Prospectus from
or

mail coupon

your

dealer

.

•

•

a

26, 1957, purports to be
securities

act,

a

complete

it

actually

makes only the following changes

Qeorqe

FUND

BALANCED FUND**

DAVID L. BABS0N --I
MANAGEMENT CORP.
Dept. CFC-58

Pleose

send

Broaoway, New Yorn 5, N. Y.
Abordeen

Fund

Prospectus.

sified

which supervises

portfolio

of

a

on

A

SELECTED

pos¬

sibility of long term GROWTH

emphasis on possible
long-term CAPITAL GROWTH

135 South La Salle Street

selected

for

the

Chicago 3, 111.

Prospectuses
-

Sfreer.

60
New York

on

Request

V

Putnam Fund

I Oft.




New Fund with

Investments Company

securities

of capital and current INCOME.

}.

FUND

request

diver¬

American

PUTNAM

GROWTH

com¬

Prospectus
pany

120

mutual investment

today to:

Distributors, Inc.

CONGRESS STREET, BOSTON

Chicago

act

in Georgia effective Feb.

Its

THE

appli-/

tcncy to engage in the business of

of 'Boston

object is possible
long-term growth

suc¬

exam-

compe-

to-determine,4he

PUTNAM

INC

lor

sales¬

a

written

or

qualifications

ination

as

•

american shares

FUND

,

1, 1957, by adding

require

may

cessfully

(exempt

"A

or

five

both.

or

provision that the Commission¬

The

•

the

Secu-:

or

Interested in possible

...look into

the

falsifies, conceals or covers
material fact or makes any

license

1957.

LONG-TERM GROWTH?

to

representations, or
makes or uses any false wriRfig
or
document knowing the same

new

125-1-13

Act

matter

any

effective

offering.

(2)

with

v

added

was

Securities

in

ever

Securities Act "adopted

connection

same

Butcher &

has

Florida

a

laws embody substan¬

statement

pre¬

/

dealers and salesmen) of the FloSecurities Act was amended

tially the provisions of the previ¬
ous laws with the
following prin¬
cipal changes:

tration

rule

rida

■

St. Louis

Gerald F. Brush

provision

Subsection

were

24,

by
:

.

(relating

Practices

April

.;

Aug. 7, 1957, to provide that who-*

er

Law"

books and
the Commission-

as

FLORIDA

imprisoned

Section 125-1-4 authorizes
registration by "coordination" for
any securities for which a regis¬

Harry Thcis

A

years

Law," "Securities Law" and "In¬
Contract

accounts,

~

.

to

permit

"Fraudulent

and

make .and

may by rule prescribe and shall
file such financial reports as the

fined

authorizing
the sale of the security.

A

such

in

may

-

er

fraudulent

proposed purchasers is obligated
to pay unless and until the com¬
pany has obtained from the Com¬
a

bonds

and

conditions

their

statement

.

specified types of institu¬
buyers; provided, the

missioner

$5,000

dealer shall

every

false,

(a) licensed brokers

none

surety

of

other records

up

agreement to sell securities of its
issue to

post

determine

fraud

and

-

.

to

amount

keep

for .registered

shall require registered

or

dealers

con¬

permit

a

(3) A new section was added
authorize an issuer to enter an

own

non-public offering.
;■•/,.;:
V (4) Section 125-2-3
(relating to <
the registration of
dealers and;
salesmen) provides that (a) the
Commissioner
shall, require
a

rities Commission,
knowingly and
willingly and with intent to de¬

is¬

or

(1)

Robert Z. Bronn

com¬

jurisdiction of the Florida

of

none

consideration

any

therewith, until

have

These

Robert O. Sliepard

insurance

scribe.

application;

securities shall be sold

adopted

Co.

Denver

bank, savings institution,

a

company,

Commissioner may

permit shall be condi¬
the

to

vestment

Roberts

Garrett-Bromfield

Henry J. Blackford, Jr.

.

COLORADO

Cruttenden, Podesta & Co.
Chicago

trust

a

verified

a

Robert A. Podesta

New York

legal

a

companies

25516

issue

agreement states that

Co., St. Louis

Charles C. Pierce

Gustave A. Alexisson

San

such

or

George A. Newton

sold to

(b)

which

as

trust

Sections

filing

Marshall, Seattle

Mullaney, Wells & Co., Chicago

COMMITTEE

Blunt Ellis &

L.

Section

delete, the

added to authorize the Com¬

shall

the Committee.

STATE LEGISLATION

certified
for

issued.

Joseph J. Muldowney
Scott &

of

to

securities

"negotiating
permit," to permit the offer, nego¬
tiating or taking of subscriptions

to
or

for

been

nection

Donald A. Meyer

officials.

Gilbert II.

have

be

Pittsburgh

to the sale; adds"
exemption for securities

new

the

(i)

amended

was

sued,

Singer, Deane & Scribner

a

dealers

follows:

as

Subdivision

25100

tioned

Pacific Northwest Co.,
W. Bruce

memoranda

in support of the desired amend¬
ments and to participate in con¬

ferences

Russell, Long & Co., Lexington

five years prior

minimum'; capital

for the sale of securities upon the

Richard II. Martin

that

prepared to draft

Corp.

r

.

■■

.

Legislature

(2)

Edwin A. Long

ever

this. Act-

days after adjournment of the

missioner

Nashville

standard

any

.

CALIFORNIA

were

Quitman R. Ledyard
Equitable Securities

is¬

by /concerns,

in

published and
circulated for at least;

generally

the

The California Corporate Secu¬
rities Law was amended effective

Co.,

Greensboro

rated

previ¬

secu¬

under the laws of the state.

islatures meet in 1958.

Kalman &

meeting.
of

Marshall II. Johnson

of

securities."

investment

Beecroft, Cole & Co., Topeka

Meeting of the Na¬

provisions

exemption

White, Weld & Co., Boston

regular

of the states where the Leg¬

many

F. J. Winckler

vm

Cooperation With State Securities

Many

in

not

Walter A. Bayer

from the IBA.

ed the

are

session, important legislative pro¬
posals are being considered in

Sky

tional

tional

states

for

in the registration and sale of such

(1)

Baker, Simonds & Co., Detroit
James Jackson, Jr.

of

Laws for (1) State and Municipal
Securities and (2) Sales to Institu¬

The Annual

so-

gestions regarding the activities of

Exemptions for Municipal Bonds
and Sales to Institutional Buyers
want

tion

many

We welcome comments

vn

We

the

"off" year in state legisla¬
because the Legislatures of

unso¬

was

licited. In some other states where
there is

Although next year is
called

and

the

securities

pany,
investment
company
or
.other .financial institution or insti¬
rities under the Act the Insurance
tutional buyer or to a broker or
Commissioner
"shall
have
joint
dealer; and adds a new exemption
powers with the Bank Commis¬
for transactions
pursuant to offers
sioner in approving or disapprov¬
to
existing security holders if
ing the registration and sale of
certain conditions are met.
such securities and in the making
(3) Section 125-1-14 changes the
of rules and regulations in con¬
definition of "offer to the public"
nection with the sale of such se¬
by reducing the number of per¬
curities and to supervise and en¬
sons who, may
be solicited in;a
force the

William L. Hurley

are

insurance'com¬

registration and sale of its

Ellis

Sherman Ellsworth

Groups of the IBA,

members of the Legislation Com¬
mittee meet informally during the
year

John

(including Illinois, Indiana,
Dean Witter & Co., Chicago
their Group to discuss problems
Kentucky, Louisiana, Ohio, Ore¬
under the state securities act.
In Wilbur E. Hess
gon, Texas and Virginia) specific¬
Fridley, Hess & Frederking
many cases there are no imme¬
ally exempt unsolicited agency
Houston
diate problems, but the meetings
transactions from securities regis¬
establish
a
cooperative working Carl II. Houseworth
tration. The burden of proving an
The Columbian Securities Corp.
exemption is ordinarily upon the relationship. We recommend that
such meetings be held occasionally
Topeka
person claiming the exemption so
in all Groups. ;
that a dealer, relying on the ex¬
Fred W. Hudson
IX
emption for unsolicited agency
Ball, Burge & Kraus, Cleveland
transactions in executing orders
Plans for Next Year
for securities which

by add¬
proviso that in all

which

sioner

states

amended

makes

In

acts

a

Arkan¬

1957,

pany

the state securities commissioners.

securities

ing thereto

was

13,

cases

ies* Securities Transfer Act.

The

Act

June

for

guaranteed

or

manual of securities

the

Sweney Cartwright & Co.

tion which

Unsolicited Agency Transactions

Securities

effective

of

Columbus

form act and the Model Fiduciar¬

VI

67-1203

eliminates

exemption

listed

in question and

lished drafts of this proposed uni¬

the latest pub¬

between

'

curities commissioner of the state

representatives of
the investment banking industry.
We appreciate the close coopera¬

ferences

'

'

ous

sued

ARKANSAS
Section
sas

Elworthy & Co., San Francisco

'

Thursday, December 19,1957

.

securities)

Amendments to State Securities

John F. Curley

.

.

Los Angeles

Washington

Orlando

Volume

in

the

Number 5700

186

.

.

Georgia Securities Act of

1953:

(1) Section 1(c) defines
ited

dealer"

who

ized to sell

or

tain

or

issue

is

offer for sale
certain

a

"lim¬

a

only author¬
cer¬

a

class

of

hibited by the Act or an order of
the Commissioner or declared to

the unlimited registration of secu¬

be

that

interest

subject

(2)

Section l(i), defining "se¬
curity," is amended by adding a
provision that security "shall not
insurance

any

policy

under

or

annuity

or

which

to

pay

com¬

fixed

a

number of dollars either in

a

sum

life

periodically

or

Section

insurance

supervision
state

by

for

lump
The
the

following

an

Iowa

amendments

Securities

Act

subject to. effective July 4, 1957:
agency of the
(1) Subdivision (5)
the

from

502.5
of

(3) Where the previous Act au¬
thorized
the
registration of all
non-exempt securities by notifica¬
tion effective when filed, the new
Act (a) authorizes under Section
3(a) the registration of securities
meeting specified requirements by
effective

standard for

when

amended

was

certified

mail

istered mail

ers)

6r

to

became

of Section
allow

to

instead

of

for notices to

of

or

pleadings

Act); (b) requires under Section
3(b) the registration of all other
non-exempt securities by quali¬

Insurance

such in another

only

dealers

or

licensed

to

or

banks

to

financial institutions under the
an

instrumentality

officer of the United States, or

or

or

of the Commissioner of Insurance

a

(3) Section 80.14 was amended
require non-resident invest¬
ment
of
advisors, before being
licensed, to appoint the Commis¬
to

sioner

use

reg¬

stock

for¬

be

directed.

are

as

sells

of the Commissioner of Banks

by certified mail to the
principal officers of the issuer
against
which
the
process
or

eligibility for

who

supervision of

warded

such registration is taken from the
new
Uniform
State
Securities

clarified by adding a
to
except
from- the
licensing
requirement
a

was

brokers

Section 502.9 was amended
require that copies of process
pleading served on the Com¬

missioner

80.12

provision

(2)

filed

trading."

(relating to
licensing of brokers and deal¬

the

exchange of withdrawal of the
exemption accorded the exchange.
to

initial

for

of Minnesota.

IOWA

or

-

(the

Idaho

panies engaged in "development
production of gas or oil."

classes of exempt securities.

notification

the

provide

secondary

and

Section

state

of

to

"both

dealer licensed

company

eliminated

is

26-1816

applies

dealer

or

exemption for securities issued by
an

of

IDAHO

other specified period." The

some

right

the

Blue Sky Law was amended ef¬
endow¬ fective
May 15, 1957, to provide
contract' that the law shall apply to com¬

insurance

an

promises

pany

to

it

(2)

investors, prohibiting such person
from
continuing such action or

amended

was

offering

of

protection

such person to a hearing.

dealers."

ment

the

for

or

securities; and Section 4 author-,
izes the registration of "limited practice,

mean

rities )

illegal, to issue an order if he
deems it appropriate in the public

of

Securities

their

as

at¬

torney for service of process.
re¬

quiring approval by the Commis¬
sioner

of

advertising

"containing

matter

constituting
an
offer to sell any security required
to be registered") was amended
to
required that no advertising
matter
"rendering
advice
with
relation
culated

or

thereto"
or

should

be

cir¬

distributed unless

and

until it has been approved by
Commissioner.

the

(5) Section 80.20 was amended
; '
to provide that the maximum fee
complete new securities act of $500 for
registration of securi¬
fication
which
is
not
effective was
adopted in Kansas effective ties
by application shall include
until the Commissioner so orders;
July 1, 1957.
This new act is the
$10 examination fee and the
and (c) provides that when the
based in large part on the modi¬
sale
of
registered securities is fied Uniform State Securities Act maximum _fee of $200 for regis¬
tration by notification shall in¬
completed, it shall be the duty of and makes many desirable im¬
due the $5 examination fee.
the person who filed the regis¬
provements
over
the
present
tration
statement to notify the
(6)
Section
80.32
(providing
Kansas Securities Act, including
fees for registration of oil and
Commissioner in writing within the
following:
30 days.
gas
interests) was amended to
(1) It provides that securities
(4) Section 4(b) of the new Act for which a registration statement provide an examination fee of $10;
to raise the minimum fee from

tion

as

plicant

pass a

the

that

salesman

a

to

condition of registra¬

as a

ap¬

written examination
of the

of knowledge

evidence

as

Commissioner

the

authorizes

require

securities business.

$250, but the fee for renewal
dealer registration remains at

of

$50.

The fee for initial registra¬

tion

of

a

limited dealer is

at

set

$100, and the renewal fee for such
registration at $50.
(6)

•

Section

6(j)

the

exempts

sale of securities not involving an

underwriting to

'

been filed under the

tion
be

with

and the Commis¬
sioner approves the request.
(7) The last paragraph of Sec¬
tion 11 adds a new provision de¬
claring
it
to
be
unlawful to
represent that filing of a regis¬
tration statement or the registra¬
exempted

the

registered

by

Federal

in

connec¬

offering may

same

coordination,

$25

to

the

maximum

include

the

registration of securi¬

ties under state and Federal Acts.

It permits ofering, prior to
the effective date of registration,
(2)

of securities for which

registration

statements

filed

have been

under

both the state act and the Federal

Securities
order

is

Act

of

effect

in

if

1933

no

under

stop

cither

Act.

(3)

It provides an exemption
outstanding securities
through a registered broker-

for sales of

by

or

dealer

if

specified

to

fee

provide
of

$500

during

information

regarding the issuer of such se¬
curities is available
in Moody's
Manual, Standard & Poor's Man¬
ual, Fitch's Manual or any recog¬
nizor socuritms manual approved
by the Commissioner.
(4) It exempts any non-issuer
transaction by a registered bro¬
ker-dealer pursuant to an unsolic¬

months

if

the

authorize

seller reasonably accepts

as

their

of

of

use

of

a

date' not

a

representations as true.
(b) In Subsection (10) the
issuance, sale or exchange of
any
security pursuant to a
statutory
or
judicially ap¬

days prior

proved reclassification, recap¬
italization or reorganization,

balance

more

sheet
120

than

Commissioner.

stock

s p

the date of filing,
instead of 90 days prior to such
date as previously provided and
(b) to make the filing of certain

(6) To provide in Section 409.100
an
application for registra¬
be ac¬
companied by a consent to service

tion by qualification must

(c) In Subsection (11) any
a security, other than

of process only where the applica¬
tion is made by the issuer and the

by the issuer, which has been
outstanding in the hands of
the public for the past five
years
if there has been no
default within the past three

with

fixed

a

fixed

a

if the issuer

■'

provision, and, where
security does not itself
have a fixed maturity or a
fixed
interest
or
dividend
the

the

of

five

was

its

current

Section

66-2002

wa»

other

mineral

lease, right, royalty or
interest therein, pre-organi*
zation certificate or subscription."
any

(2)

market

Section 66-2003, exempting
on specified stock

securities listed

exchanges,
extend the

was amended
(a) to
exemption to securities

approved for listing upon notico
or upon notice of is¬

(but not the

of issuance
suance

and

of

evidence

satisfac¬

tory distribution; (b) to authorize

pending application for regis¬
this

Sky Law5
effective March 8,

tion of security "oil, gas, or

acceptance thereof) securities
which are the subject of a
tration under

amended

.

Blue

amended to include in the defini¬

price.
(d) In Subsection (12) of¬
fers for sale of or solicitations
of offers to buy

Montana

(1)

im¬

preceding fiscal
years has had net earnings
per share equal to at least 5%
of the selling price, and, in
each case, if the security is
sold at a price reasonably re¬
to

not domiciled in

1957, as follows:

mediately

lated

was

MONTANA

.<

The

provision, the issuer during at
three

the

the state).

or

dend

least

in

(the Section previously re¬
quired a consent to service of
process with an application
for
registration by qualification by
the issuer or a registered dealer

interest,
divi¬

maturity

domiciled

not

state

of principal, interest, or divi¬
dends on any security of the
or

is

issuer

payment

the

in

years

discretionary with the

that

^

sale of

fiscal

to

documents

consolidation,

1 i t,

merger or sale of assets.

Continued

chapter.

on

page

66

1

that
shall

$10 examination fee.

BULLOCK FUND

MISSOURI

Missouri

The

1.957.

the

of

Some

amendments

Securities

effective

amended

was

were

the

Aug.

CANADIAN FUND

Act

29,

NATION-WIDE SECURITIES

requirement previously
40,9.140, that "every
registered dealer who intends to
offer any security of any issue,
registered
or
to be registered,
shall notify the Commissioner in
writing of his intention so to do,"
(1)

■

DIVIDEND SHARES

principal
following:

A

Section

in

was

eliminated.

<(2) A definition of "investment
advisor" was inserted in Section

409.020,
cluded

quire

and
in

the

a

provision

Section

was

409.140

registration

to

in¬

Calvin

re¬

of invest¬

Bullock
Ltd.

ment advisors.
Established 1894

(6) of Section
(exempting securities is¬
sued
and
fully listed on stock
exchanges aporoved bv the Com¬
missioner) was amended (a) to
(3)

Subsection

409.040

extend

the exemption to

any

.

Boston

Los Angeles

Chicago

Philadelphia
St. Louis

Denver

San Francisco

New York

se¬

ited order to offer to buy.
curities approved for listing upon
(5) It authorizes the Commis¬ notice of issuance and (b) to ex¬
security
or
the sioner to mouirc that applicants tend the exemption to any other
existence of an exemption for any
for registration as a broker-dealer security of the same issuer which
security means that the Commis¬ or
a^ent pass a written examina¬ is "of the same class."
sioner has passed in any way upon
tion as evidence of knowledge of
(4) Section 409.050, exempting
the merit of such security or has the
securities business.
certain transactions, was amended
recommended or given approval
by adding four new subsections

tion

(5) Section 409.070 (regarding
registration of securities by qual¬
ification)
was
amended
(a)
to

period of 12

any

consecutive

buyers represent that they are
taking for investment and the

a

procedure from the
Uniform
Act
designed to

coordinate

and

$35;

registration

of

not in excess

(not including sales to
persons in other exempt transac¬
tions), provided (i) such securities
are purchased for investment and
not for distribution and (ii) the
issuer makes written request to
the Commissioner that 1he
sale
25 persons

be

has

new

(5) The fee for initial registra¬
tion of dealers in raised from $50
to

A

Securities Act of 1933

state

issuer

(41 Section 80.13 (presently

KANSAS

,

65

(2697)

The Commercial and Financial Chronicle

.

London —Montreal

any

MINNESOTA

to it.

(8) A new provision is added in
Section 12 to authorize the Com¬

when

missioner,

a

person

has

The
was

Minnesota

amended

*

to exempt:

Securities

effective

Act

April 21,

1957, as follows:

(a) In Subsection (9) the
sale by any person of securi¬
ties of its own issue to not

(1) Section 80.07 (providing for

BALANCED

than

15

person

EATON & HOWARD

EATON & HOWARD
.

more

STOCK FUND

FUND

in this

Keystone

Keystone Fund

Custodian Fund.

engaged, is engaging or is about
to engage in acts or practices pro¬

of Canada, Ktd.

Covering all classes of
Fund with

securities, each

specific investment

or

&

BOSTON

Prospectuses from

Prospectus from




Russ

BOSTON
ESTABLISHED

your-

Company seeking

long-term CAPITAL GROWTH

Investment Dealer

Building

SAN FRANCISCO

1924

or

the above.

I

he

K.

your

an J

certain TAX BENEFITS under

Canadian Lavs

possible GROWTH

]

fully managed Canadian

Investment

HOWARD

INCORPORATED

24 Federal Street

purpose

For RESERVES, INCOME

Managed by

EATON

A
a

local investment dealer

or

.

66

The Commercial and Financial Chronicle

(2C98)

Continued jrom page

lice,

65

fraud

Report ol IBA State Legislation
Committee
curities listed or approved "upon

has violated or is
violate any provision of

the

or

Act

rule

any

or

license

thereunder, to transmit such facts
as
may
be available concerning
violation

such

General

whose

to

the

duty

it

Attorney

shall

be

apply to the District Court of
listing upon such other exchange Lewis and Clark County for an
order enjoining such person from
be exempt"; and (e> to extend the
exemption to securities equal in continuing such violation.

securities

rank to any

and

new

shall be deemed guilty of

offers to
during

to

pursuant

than 10 persons

wilfully, directly or indirectly of¬
for sale, or negotiate for the
sale of or sell, issue, or cause to
fer

and

(b)

the

out

carry

provisions
whenever

of

pur¬

the

Act

believes

he

shall be deemed
felony if he "in any
application to the commissioner,
or any proceeding before him, or
in any examination, audit, or in¬
vestigation made by him or his
that

a

person

guilty of

a

statement or

false

ceeds

(a)

.

.

the

"make
tions
as

rules

any

to

of

(7)

Section

the

and

do

expanded

other

tions
or

to

or

fact
the

in

order to make
statements made, in the light
necessary

of the circumstances under which

they

are

engages

made, not misleading, or
in any transaction, prac-

the

than

if

poses,

purpose

to

actually;

exceed

not

include

10)

was*

pre-drgan-;

in

such

used

be

to

such

for

For GROWTH..,

.

who, with knowledge that any
security has been issued, in vio¬
lation of any provision of this act,
.

thereunder, sells,
for sale, or who

regulations
offers the

tion

same

other

wilfully violates, or fails, omits,
or
neglects to obey, observe, or
comply with any order, permit,

posited in

decision, rule, regulation, demand,
or
requirement, or any part of
provision thereof, of the commis¬
sioner under the provisions of this

pounded

act,

who

or

other persons

permit

any

or

commissioner

visions of

or

of the

any

act."

this

registered
ceives

$100 to $500,
prison
sentence
from 90 days to one year and the
maximum
prison sentence from
one year to 10 years.
NEBRASKA

Securities

Nebraska

effective

amended
as

Act

May

27,

follows:

(1) Section 81-309 and 81-310,
relating to the licensing of $alesmen, were

amended to

remove

authority

of

to

issuers

the

appoint

solicit the sale

or

exchange of securities (now
only brokers may appoint such
salesmen).
amended

was

until

the

be

and
as

jurisdiction,;.
application,'
filing fee.;Of $25

a

submission

of

-

is

(3)

Section

application for

renewal

salesman's

a

or

investment

»-

;

-

•'

ties

the

and

(ii)

secu-

excess

of

.

/

having

securities

do

not '

»

unsold allotment

an

subscription
as

by such
participant in the

a

J

by the issuer or by or through
underwriter; and

;

shaYes)

r

-

an
*

•

"

(iii)
specified information
regarding the issuer is con¬

•

.

tained

in

Moody's,

and Poor's
or

Standard

other recognized secu-

any

,v

Fitch's Manual,

or

rities manual

Federal

.

approved by the

Commissioner.

(c) Any offer of
for

(c) all other;'securities (ex¬
cept mining 6r oil securities
or
investmerit fund shares)

which

the

both

a

security
state¬

registration

have

ments

been

filed

Oregon

under

Securities

Law and

the Federal Securi¬

ties

qualifi¬

?
48-18-20

*

distribution of such securities

Securities Act of 1933 may be

Section

-/'Vf
;

cur-

characteristic^);

the

or

dealer

.

registered by coordination.

(4)

in

transactions

constitute
to

•

under

not

comparable

..

.

(b) securities for which a
registration
statement ' h as
filed

•

;;

prices

at

are

price of the

mission' is

■<:.

(a)

been

to

,usual and customary commissions with respect to securi-

that:^'

only securities meeting
certain requirements may 'be
registered by notification.

c

thereto-

\

sales

-rent market

aJTsecu¬
oil 'secu¬

fund

amended to provide

;

.^Titles at the time-of sale (or,
if acting as agent, the. com-' ;

y,

previously provided for the regis¬

was

registered

a

distributed

and

the

of

Act

order
per¬

mit.

(relating

or

effect and

if

1933,

refusal

no

order

stop
is

in

public proceed¬
registration of dealers and
ing or examination looking
salesmen) was .' amended to re¬
toward such an order is pendquire the registration of invest¬
ing.
1
ment
advisers; to authorize the
(3) Subsection (3) of Section
Commissioner by rule to require
59.150 was amended to change the
a minimum capital
for registered
registration fee in registering se¬
dealers or to prescribe a ratio be¬
curities by notification or quali¬
tween net capital and aggregate
fication for amounts above $100,indebtedness; and. to increase the 000 from
(a) $10 for each addi¬
registration fee f6i* salesmen from tional
$100,000 or fraction thereof
$5 to $10.
%!
(up to a maximum fee of $500)
(5)
Section 48-18-21
(exempt to (b) 1/20 of 1 To on the next
no

to the

(3)

CAPITAL

(i)

;? 48-18-19 ~ (which

tration by notification of
rities except mining, or

by

securities

of

reasonably related to the

..

exempt from the registra-

tion requirements of the Act.

Sales
sold

the public if:

'

: ,

ticular security or transaction.;

cation.

or

.V

be necessary, to deter- *
whethepror not a par-v.

shall be registered by

original

fore

:

may

mine

(b)

dealer

•

.<■/,
...

suchcdata.

ing

for

im-

issuer re-

to increase from $5 to $10 the fil¬

fee

.

subsec-.

of institutional buyers.
,

written

payment of

rities
The
was

securities

new

,(a) Sales to specified types

,-.
rv

.

specified amount,./j

a

upon

pro¬

from

v v

be de-

and (2) that,;

Commissioner

The amend¬

minimum

cash,

by adding three

tions to exempt:

(c) Subsection (h) gives-the-

raises the minimum fine

conviction

on

the

than

escrow

and

*

proceeds from the sale of the

with one or more
conspires to violate
order issued by the

(2) Section 81-309

BALANCE

,.

purpose,

or

and 1

•

permit, or to any purpose speci¬
fied in such permit in excess of
any amount limited in such per¬
mit

purposes

Act."

pur¬

specified

any,

or

of

who

persons

subscribe

to ef¬

inter-*

or

partnership where the!;
solicited do not exceed 25i
a

person

orders

corporation to organ-»

a

the first instance

ests yin

to

regula--

or

necessary

the

Subsection

(exempting
subscriptions'
capital stock for the purpose of

ize in

author¬

such

issue

he deems

fectuate

(1)
59.110
.

qualifying

(f)

Commissioner

and

was:

effective 90 days after >
adjournment of the Legislature as
amended

"in¬

follows:

as

Oregon Securities Act

follows:

Subsection

izes

part thereof, to any purpose

any

salesmen to sell

For INCOME

subsections

or

1957,

establish such rules and regu¬
lations as may be reasonable or

to

define

to

(2) Section 48-18-18 (relating to
administration
of
the
Act) was
amended
by
adding three ; new

which applies the pro-?
from the sale thereof, or

same,

to

end thereof a
that "No permit

and

48-18-17

vestment adviser."

security contrary to
the provisions of this act, or in
nonconformity with a permit of
the commissioner authorizing the

involving any offer to sell
buy securities, or any sale
provision
purchase of securities, includ¬
under this Act shall be issued to ing any securities exempted un¬
any agent or stock broker who der Section
66-2003, directly or
has violated this Act or any per¬
indirectly, knowingly or wilfully
mit or ruling thereunder or who employs any device, scheme, or
has been convicted of a felony."
artifice to defraud, or makes any
(5) Section 66-2018 was amended untrue statement of material fact,
to authorize the Commissioner (a)
or
omits to
state any
material

adding at the

poses

The

or

(4) Section 66-2007 was amended

necessary

OREGON

7,

(1) Subsection (h) was added to
Section

be issued any

ment ajso

by

June

effective

follows:

as

or

any

(6) Section 66-2023, providing
penalties for false entries of state¬
ments, was amended to provide

period of 12 consecutive months or who, with knowledge of its
if the seller reasonably believes falsity, files or causes to be filed
that all buyers are purchasing for in the office of the commissioner
investment and, under subsection any false statement or representa¬
(11),
original
subscriptions
to tion concerning such company or
stock by those who signed articles stock-broker
or
the
property
of incorporation as bona fide in¬ which it then holds or proposes to
corporators, provided said articles acquire, or concerning its finan¬
are
not signed by more than 15 cial condition or other affairs, or
and no part of such original issue concerning its proposed
plan of
of capital stock is taken for the business,
or
who in connection
with any transaction or transac¬
purpose of public distribution.

new

1957,

representation,

(11) were added to exempt,
under
subsection
(10), transac¬

tions

felony if he "shall knowingly or

amended

was

they meet specified*,

not authority, knowingly makes any

number, was de¬
subsections (10)

and

more

on

$500.

to

if

substantially
different J'rom
the public offering price, or
to any person for a considera-

Subsection 10 of Section
66-2003, exempting securities of
corporations where the holders do
(3)

leted

$200

ment clubs

conditions.

The New Mexico Securities Act

or

approved.

not exceed 50 in

to

a

NEW MEXICO

Thursday, December 19,1957-

.

.

the
V•• ization subscriptions to securities;
issued .or to be issued: by any per-,
y(b) Subsection (g) author¬
corporation, trust, partner-;
izes the Commissioner by rule 4 son,
ship, limited partnership, cooper-,
01* order to
require as condi¬
ative association, joint venture or
tions of registration of any is¬
unincorporated association.
sue
(1) that any security, is-1
(2) ~ Section
59.120
sued
(exempt
within
the
past three
years
or
to be issued to • a
*■; transactions) was amended by re¬
promoter for a consideration
r arranging the subdivisions thereof

listed or

so

minimum fine

the
from

'"(7) Section 66-2024, providing

person

that any person
about to

other stock exchange as to
which there may be in effect a
written designation by the invest¬
ment commissioner stating that it
is id the public interest that se¬
curities
listed or approved for

The amendment

deceit."

or

conviction

penalties for violation of the Act,
was
amended to provide that a

extension of the exemption to se¬

any

or

raises

also

of business which
would operate as a

course

or

operates

.

Section 81-337 providing

a

.

KNICKERBOCKER

VENTURE

FUND

FUND

filing fee for brokers

ly ranging from $25 to $200 plus

$25 for
A

Mutual

investment
sis

on

Fund

with

program

income

a

A Mutual Fund investing in
Atomic, Electronic and
other
Companies selected for
GROWTH possibilities.

balanced

with empha¬

consistent

with

possible long-term growth.

For

(previous¬

of

40)

flat

original

or

in

excess

amended to provide

of

a

salesman

each

was

fee

$50 for each

a

broker's

renewal application for

broker's permit.

Prospectus and other information about

Knickerbocker Fund

or

Capital Venture Fund, write:

timely

a

KNICKERBOCKER SHARES, INC.

20 Exchange PI., N. Y. 5

investment

"

securities)

suggestion

ing

a

new

$200,000 or fraction thereof and
$25 per $100,000 or fraction therer

amended by add¬
exemption for invest¬

was

TELEVISION-

AXE SECURITIES CORPORATION

ELECTRONICS
V

FUND,
AXE-HOUGHTON FUND A, INC.

BEFORE

AXE-HOUGHTON FUND B, INC.

INC.

TEXAS* FUND

DECIDING

get the booklet-prospectus and
record

AXE-HOUGHTON STOCK FUND, INC.

of

from your

this

Mutual

Fund

investment dealer

or

A

$UTUAL FUND INVESTING IN
SE&JRITIES OF THE SOUTHWEST

AXE SCIENCE & ELECTRONICS CORP.

AXE-TEMPLETON
Television Shares

GROWTH FUND OF CANADA, LTD.

^Prospectus

Head

Office and Order Room:

Phone MEdford 1-2272

Tarrytown, N. Y.
135 S. La Salle St.,

1708

I

Branch Offices:

115

%

Chicago 3, III.

Broadway, New York 6, N.Y.

I
►

New York: 730 Fifth Avenue
COIumbus 5*0250

California: 430 N. Camden Dr.

15 William Street

HAnover 2*6962

San Francisco

BR 2*8258

EX




I

I

7*0715

or

..
*

| Name

Texas-/National

|

I

Bank
P.

O.

|

City-State

Telephone mCApitol 7-0211
j

n dertvrit er

Bldg.,

BOX

|

| Address

COMPANY
Vrin cipal

.-I.

*

2808 Russ Building

Beverly Hills

be obtained from your

'"fir
TEXAS FUND MANAGEMENT

MEdford 1-4612

Teletype Tarrytown, N. Y.

may

local investment dealer

Management Corp.

Houston,

Texas

871

Bell

Teletype: IIO 566

Volume

Number 5700

186

.

.

.

The Commercial and Financial Chronicle

of so-called

list

"standards and

(2699)

67

payment of the annual fee
current year and a rein-

(4)
Section
189.07
(exempt
ALABAMA
transactions)
was
amended
by
The law, authorizing Alabama
eration
in determining
what is statement fee of $10.
adding a new subsection (22) to
life insurance companies to invest
exempt interests in participating
"unfair, unjust or inequitable."
.
lOTe/^xrcw.'
in loans to corporations whose se¬
Section *48-1615, itemizing they v
employee savings or profit-shar¬
- ^WISCONSIN <.
.
(a): to raise the fee for renewal
curities have been approved by
of registration of securities from grounds for revocation of regis- The
following amendments to ing plans, if information required the State Securities
Commissioner,
tration of securities, was-amended the Wisconsin Securities Act be- by the Securities Department has
$10 to $25 for all securities and
was repealed.
been filed with it and the De¬
(b) to delete special provisions by adding as a ground for such came effective July 18, 1957:
a
for a $25 fee for investment con¬ revocation
finding that "the
IOWA
(l) Section 189.15 (previously partment has advised that the
tracts involving a continuous of¬
proposed plan of business appears providing that the registration of proposed issuance constitutes an
Subdivision 4
(a) of Section
fering and an exemption of co¬ to be unfair, unjust or inequit-. all
securities
expired
in
five exempt transaction.
511.8 of the Iowa Legal Invest¬
operatives from payment of a re¬ able." d
(5) Subdivision (f) of Section
years)
was
amended to provide
ment Law for Insurance Compa¬
newal fee.
(3) Section 48-1614 was amended that the registration of securities 189.08 (authorizing registration of
nies
(authorizing investment of
(5) Section 59.200,; authorizing to provide-that the fee for re- Of an investment company regis- certain revenue bends by notifica¬
legal reserves in obligations of
registration for resale of any, se¬ newai *6f' registration of invest- tered under the. Investment Com¬ tion) was amended to permit such
meeting
specified
curity, which has been issued and ment fund shares shall be $100 foiy pany Act of 1940 (other than a registration for parking facility corporations
is outstanding in the hands of the the first class of securities
earning requirements) was
regis- closed-end investment company revenue bonds.
public, was amended to clarify tered, plus $10 for each additional or any * .person issuing periodic
amended July 4, 1957, to author¬
APPENDIX B
that securities may be registered
class
(the previous registration payment plans
or
face-amount
ize investment in corporate obli¬
for resale "by the owner thereof"
renewal fee was $1) and to pro- certificates) will expire two years
Amendments to State Legal
gations if "at the date of acquisi¬
as well as by registered dealers.
vide for all other securities a reg- from the date of registration,
Investment Laws

of

a

on the aggregate amount above
$800,000 (up to a maximum'fee
of $500). v
'
'V ■>
(4) Section-59.180 was amended

factors"

be

to

into

taken

upon

for the

consid-

.

.

.

.

„

•

■

:

,

The; Tennessee
amended

was

1957,

as

istration renewal fee of $15.

V TENNESSEE

"fees)

Securities* Act
March "1,:

effective

follows:

A

;

to

registration of securities

/texas vd','
complete new Texas Securi¬
Act

Securities

the

under

Federal

1933, "if

sell

in

shall

Act

the

Securities

pealed

were

least

10

thereto,

«.

i

■

«

of the Utah Securities Law

men

effective

was-amended

days

1957,

May

14,

follows;

as

(afca?;provision was added that
applieaiits:for original registration
order
specifically '
authorized
(except an issuer)
when there shall" have been filed -asJVa / deafer
day

as

witli

the Commissioner

may

-the* Commissioner

quired
other
for all

by

-3\s

shall

r

the

prospectus,
prescribed items and

ten

^

.so

after

orders"

there shall have-been filed

a

•

(2)

the

•

securities,

specifying
refusing to reg¬

was

amended

to

examination

to

pass

which

a

the

writ-

shall

be

designed by the Commission to
test the applicant's general knowledge of the securities business and
to require salesmen
to pass an
examination
prescribed by the
Commission.

Section 48-1613,

grounds for

ister

>

no¬

tice of intent to sell, a prospectus
and the other required items.
"

required

Commission's satisfaction

other securities "when the

Commissioner

be

re¬

and
(b)

' notice,

(b)

was

added that

by if a license is not renewed on or
>

adding to those grounds "that the

before

proposed plan of business of the

licensee

issuer appears to be unfair,

inactive roll, but the license shall

or

unjust

inequitable" and by itemizing

be

Jan.

15

shall

renewed

of

be

each

placed

without

provide

a

.

companies.

the

year

upon

an

examination

This

appendix

summaries

of

amendments

legal

in

(exempting

securities

of

the

investment

ities

state

which

laws

particular

interest

the

to

banking

adequately

secured and have investment

the

to

1957

investment

of

tion the obligations are

contains

some

are

J1*. ^wlng amendments to

characteristics

and

speculative elements

predominant"

in¬

(subject

Continued

dustry.

on

qual¬

wherein
are

to

page

As
SPECIALISTS

MUNICIPAL

IN

BONDS

cordially invite inquiries from those New England
do not concentrate their time on this type

we

dealers who

of security. From time to time, we have special

offerings

of relatively high-yielding tax-exempts

underwritten

analysis by

this

by

one

of

firm

whish have been
after on-the-ground

only

officers.

our

Commission,

(3) Section 189.07 (previously
exempting sales by an issuer to
a
limited number of
persons

where

no

llmx.VEM,. Hahk.m;ss &

compensation was paid
promotion

did not exceed

sale

gate
or

price

$250, which

was

3%

of

expenses

Hh±

INCORPORATED

70 State

for the sale and the total organiTel.

Street, Boston 9, Mass.
Teletype BS 570

LAfayette 3-3310

of the aggre-

the

securities

ever was

greater),

amended to include attorneys

fees in
dollar

expenses

limit

and to raise

the

from $250 to $350.

Distribution
COFFIN & BURR

Purchasing and Listributing

iM.ORI ORATED

in NEW ENGLAND

State, Municipal, Corporation,
Railroad and Public

Founded 1SC8

Utility

for

more

than 100 years

Securities

BOSTON
NEW

YORK

PORTLAND

BANGOR

HARTFORD

HARRISBURG
National Distributor

.

NEW

MIDWEST

AMERICAN

STOCK

YORK

BOS'lON

STOCK
STOCK

STOCK

EXCHANGE

NEW ENGLAND

EXCHANGE
EXCHANGE

EXCHANGE

FUND

Estabrook & Co.?

Organized 1931

(ASSOCIATE)

15 STATE STREET,
Boston

ESTABLISHED

BOSTON

Telephone LAfayette 3-2400

Boston

New York

Hartford

Teletype BS-288

Providence

Poughkeepsie

Springfield

1833

Members New York and Boston Stock

UNDERWRITERS

Exchanges

and

DISTRIBUTORS of

Townsend, Dabney & Tyson
Established

GENERAL MARKET

Members

New

York

and

American Stock

1887

Boston Stock Exchanges

Exchange

(Associate)

*

*

'

.

MUNICIPAL
Y

-

BONDS

30 State

.

Street, Boston 5, Mass.

Specialists in Bonds of Municipalities
within Massachusetts

UNDERWRITERS
CORPORATE AND

AND

DISTRIBUTORS

OF

MUNICIPAL SECURITIES

ROCKLAND-ATLAS
RATIONAL

BANK

BOSTON

AUGUSTA, ME.

BANGOR, ME.

LEWISTON, ME.

Main Office: 30




MEMBER

Congress-Street, Boston 6, Mass.

FEDERAL DEPOSIT INSURANCE CORPORATION

GREENFIELD, MASS.

PORTLAND, ME.

KEEN'E, X. H.

FITCHBURG, MASS.

LAWRENCE, MASS.

MANCHESTER, X. II.

not

addi-

IS¬

suecl or guaranteed by any foreign
government) was amended also
to
exempt securities issued
or
guaranteed by any "combination
of forelgn governments."
(2) Subdivision (3) of Section
189.06 was amended to exempt seeurities issued by a corporation
operating a motor carrier the issuance of whose securities is regulated by the Interstate Commerce

gational and

provision

a

ment

189.06
i

/.

(relating to the
registration of dealers and sales-

such earlier

or-on

tiA

Section 61-1-15

•

prior

.

UTAH

preliminary form and a
in preliminary form
been filed with?, the
at

"

-

C'

prospectus
shall have

Commissioner

—

Act

notice of intent to

a

(regarding

to

Inlhe ^ isconsm Securities Act bere-can« ™Ve.°"
* 1f57:
■(■*) Subdivision (1) of Section

Texas

Act

and

Swurities

surance

registered

189.29

amended

•

The previous Texas

:

(a)- for securities

was

Jnew method of computing the filing fee for securities of invest¬

effective

was": adopted

Aug. 22, 1957i

provide that the effective date

of

of

.

ties'

; (1) Section 48-1611 was amended

be

Section

(2)

,/

68

68

The Commercial and Financial Chronicle

(2700)

Continued

jrom

corporation's net worth

67

page

the last fiscal year

requirements

general

from

of

shall

of

assets

domestic

a

invested in
ance

A
provision effective Jan. 1,
1958, provides that fraternal bene¬

societies

fit

shall

invest

life

are

companies arid
subject to the limitations thereon.
MINNESOTA

Section

61.11

solvent corporation,

Legal Investment Law for Insur¬
ance

Companies

fective

April

any

of

amended ef¬

was

25,

1957,

provided the

laws

code

registered
exchange

on a

Section

411.15

of

the

is

by

effective

adding

authorize
bonds

July

1,

Subdivision

investment

1957,

VII

in

to

revenue

meeting specified require¬

ments.

Section

considerable

a

residential

411.19

of

the

New

The

Companies

was

assets

the

asbestos

is

ance

do

not

otherwise

qualify

the statute.

The

is

with

15,

1957, to
investments

authorize
in

re¬

corporate

obligations which do not other¬
wise qualify under the
statute, not
to

exceed

Section

Vz

of

1%

of

the

Dec.

235

of

ad¬

as

banks

New

amended

was

April

25,

1957,

vestments in

other

1889

by

to

York

the

effective

authorize

of

of

New

created

Yok,

average

receipts from the

tion

which,

years

or

public

any

commission

or

state

of

in¬

bonds, debentures

obligations

authority

the

opera¬

change

considerable

1980

to

about

figure.

mutual

only

three

in

penses,

and

maintenance

not

were

less than

'

I

ri

in

are

a

should

1980.

The

fered in

of

double

in

especially,

its

its

export

paper

of

1957

lower

premium
to

due

of

the

higher

rates.

n^

the

to

not

>i.»...

<-.»

1956.

over-all trend

our

all stock

In

particular the expan¬
production of natural,
gas, oil and iron ore is for a con¬
siderable
part linked with the
growing demand in the United
sion

of

the

The United

States.

States market

expected to absorb larger
quantities of non-ferrous metals
is

industry

also

forest products,

and

dollar

overseas

increase their share.

also

United Slates,

Foreign

with

the

will therefore

con-

particular

in

trade,

programs

althougn

will probably*

customers

fast

We

memberships

on

•fyf •£<•>>

BO

exchanges in Canada.

serve

American banks, dealers

iii

'

'•

IIS

'

••

■

wm

<•->'

?*

v-,'

•

1

STOCKS

CANADIAN

and institutions interested in Canadian

✓,v

*

",

:

/ ''y ' ' f
WmmMsm

i

Government, Provincial, Municipal
and

Corporate securities and maintain

trading markets

on a

'

Markets maintained

Net U.S. basis

where desired.

of Canadian external

1

and internal bond issues.

Stock orders executed

W. C. Pitfield &
30 Broad

in all classes

Co., Inc.

Exchanges,

the Montreal and Toronto Stock

on

net New York markets quoted

or

on

request.

Street, New York
DIRECT PRIVATE WIRES TO TORONTO,

HAnover 2-9250

r

CALGARY,

VANCOUVER,

BELL

SYSTEM

MONTREAL, WINNIPEG,

VICTORIA

TELETYPE

NY

AND

HALIFAX

1-702-3

*

.

.

Canadian Affiliate—

W. C. Pitfield &
Members ofthe

*"

Co., Ltd.

.

Dominion Securities Corporation

"

"\
Investment Dealers' Association of Canada

Associate Member American Stock Exchange

Boston

Associates—•

"'/•

•

;

Canadian Stock Exchange




Toronto

PLACE, NEW YORK 5

Montreal

-

Hugh Mackay & Company
Member of all

40 EXCHANGE

Philadelphia

mm

Telephone WHitehall 4-8161 J

London, Eng.
Ottawa

Calvary

•

Canadian Affiliate
-

.

rt.

-

-

«—

*

Member Toronto, Montrmet

and Canadian Stock Exchanges

the

on

and reliable coast to coast wire system,
network of branches and

as

is to¬

over

complete touch with
through

be;

How-,

projections are based
expected growth of
consumption but in a

only

demand.

prac¬

of many pulp and paper producers

in

large measure on stronger foreign

and,

».u,j

will

country

years.

domestic

and freight

The heavy expansion

125%

by

increased

Canadian

wages

steel

The above

tically unchanged from the previ¬
ous year,
the mills operated at a
lower rate. Profits of the

of
the

million

the

next 25

markets.

remained

r

expected that 14 to

further expansion

ward

produced in the first nine

months

the absence

and

tariff

tons

in

8

whereas

suf¬

domestic

'Sixties^

for

ever, at the present time the in-;
dustry is operating below capacity.
Near-term recovery will depend
on
the general level of business,

1957 from the slowdown

demand

million

against

can,

industry

or

sales

one

market

sizable

any

16

Whereas the tonnage of pulp arid

ex¬

.Iv.:

.1

nearly

lumber

generally

consumed

According to estimates, produc¬
tries

possible
It may

the early

outlook

1980 when it is

mineral

mines

of

1959.

increasing and in 1956 Canadian
producers supplied 62.2% of the
domestic consumption. This ratio
will have further improved by

The gov¬

huge

uranium

of

capacity 10%

a

practically there...

Canadian markets

funds'

specified

protection.
However, the degree of Canadian
self-sufficiency in steel has been

however, provide for several dec¬
ades of uninterrupted production
with good chances of profitable
operations.

and

investment, after meeting

operation

The

and

the

of

mines

in

excess

domestic

Mines

uncertain.

ore.

in

term is

or

reserves

are

during the

immediately preceding the

dale of

Canada?

sub¬

provided

the longer
of growth.
In the fields of heavy as well
as
light industry Canada is at a!
serious disadvantage because of
the relatvely small extent of her

for

tion of the Canadian Forest indus¬

31.

the

1962

of

Legal Investment Law for savings
Boston

such

output in

but

purchase contracts expire
1963 and will possibly
be followed by a free market for
uranium

serve

Incorporated

funds

be ex-'
peeted that demand will catch up^

ernment

in

A. fi. Ames & Co.

and in

for

more

gal Investment Law lor Insurance
Companies was amended effective

the preceding

are

little

a

result

1958

for

very special position. A near-term
expansion of profitable operations
can be
safely predicted for this in¬

ture

mitted assets of the insurer

You

in

dustry, whereas the long-term fu¬
NEW YORK

14 CITIES IN CANADA AND ENGLAND

of

invested

will

which will raise

on

uranium

April

How do you go to

outlook

Status of Uranium
.

such com¬
invest in investments

of

double the 1955

Commissioner)
may

of

one

and

year

production

which

amount

slowdown

near-term

increase later

Insurance

panies

Exchanges

mutual

assets

more

construction, general
activity still remains

construction

next

Section 81 of the New York Le¬

ESTABLISHED

are

much above the levels of 1952 and

Hampshire Legal Investment Law

Limited

BUSINESS

the

1,

July

on
the activity of the
building industry. Although there

1954.

vY

A. E. Ames & Co.

New York

in¬

new

in

classes of securities.

amended

which

OFFICES IN

a

effective

shares

directly

under

Members Toronto and Montreal Stock

insurance

Repoit of IBA Canadian Committee

New

(subject to approval of the Insur¬

A. E. Ames & Co.

June?

new

a

mar¬
/•

mitted

UNDERWRITERS AND DISTRIBUTORS

Compart-?

effective

Continued from page 35

quoted

or

amended effective Juy 1, 1957, to
raise from 5% to 10% of total ad¬

Investment: Securities

amended

was

15, 1957, by inserting

1957.

for

Canadian

ment Law for Insurance

section to authorize investment in

previous

replaced by

were

surance

Hampshire Legal Investment Law
for
Insurance
Companies
was

un¬

principal

ies

Oklahoma's

NEW HAMPSHIRE

States,

to

as

OKLAHOMA

national
in

are

kets.

state, territory or possession
the United States or of the

District of Columbia,

raise

to

organized

der the laws of the United

the Minnesota

of

default

Subdivision (1) of Section 201.25v
of
the
Wisconsin Legal
Invest-^

interest.

or

years

stocks

provision was added effec¬
after adjournment of
the Legislature authorizing Mis¬
souri Life Insurance Companies to
invest their capital, reserve and
surplus in common stock of any

in

WISCONSIN

outstanding,
obligations have not

paid

and

established over-the-counter

A

insurance

earned

debt

the bonds

which

been

dividends

annual

Thursday, December 19,1957

.

.

common

tive 90 days

authorized by the laws of the
life

at

maximum
on

stock in each of the

common

securities

as

and

pur¬
least

Section 376.300 and such

MISSOURI

state for the investment of assets
of

of other insur¬

companies and banks.

their

funds only in such investments

stock

been

the

service

preceding such
acquisition; provided also that all
prior obligations
or
preference
stock of such corporation, if any,
are eligible for investment under

insurance company which may be
MAINE

been

fiscal

five

preceding
cash

and

have

its

on

4% to 7% the amount of ad¬

mitted

Subdivision (7) of that Section).

have

$10,000,000,

Committee
tional

shall

chase

Report of IBA State Legislation

of

shown

as

its balance sheet at the end of

on

.

Winnipeg
Vancouver
Halif&t

.Volume 186

tinue to

Number 5700

be

.

.

The Commercial and Financial Chronicle

.

extremely impor¬
of the growth

an

tant

determinant

and

prosperity

the

of

Canadian

will

It

surprising that Canadian public
opinion is very sensitive about
the

concern

country's exports.
wheat

disposal
program, for instance, has a con¬
surplus

siderable
culties

influence

wheat sales
The

U.

by

S.

diffi¬

Canadian

overseas.

possibility
tariffs

presents

the

on

experienced

increased

of

for

lead

and

zinc

direct threat to
Canadian exports to your country
and is bound to aggravate the dis¬
equilibrium of our
balance
of
trade

a

new,

which

in

reached

1956

a

surplus of imports from the U. S.
over
exports
to
your
country,

■r

amounting to $1,173 million.
the

growth

of

25

possible

to

dustry alone these
order

of

during

on

nancing.
Under

the

of the

the

last

12

months.

The

TABLE

Assumed

Net

.

Dollars

1955—

19,oxt>,o00
21,640,000

1965

1975

23,990,000

1970

26,650,000

;

r

i; .

.

,

Forecasts of
(Billions

f

the

National

Gross

of constant

1955

y'

50,000

Forecast

1955

38.7

industries

Resource

39.5

48.0

49.3

5.7%

(for¬

estry, fishing and trap¬

40.2

41.1

41.8

50.9

52.4

53.9

Construction

63.5

65.7

67.9

Civilian

78.9

82.0

85.2

56.3

58.2

70.3

ping,

60.2

67.7

73.0

light

1965-

.

1970
1975

—

1980—

40.7

39.9

39.1

-

48.8

1975—
—

51.6

62.0

64.0

73.3

-

1980

50.2

59.9

1970

76.1

services
storage
and

"Assumed
annum

In

was

Source:

rate of productivity increase
for

the

business

poses

mission

on

of

Product

billion.

"Preliminary Report," Royal Com¬
Canada's

of

Source:

on

is

cor¬

tries.

Commonwealth

However,

which await

aggerated.

countries
tinue

the

They

the

of

their

on

only
the

on

Gairdner & Co. Ltd.
Toronto

be

Wood, Gundy & Co., Inc.

con¬

New York
Peter Kilburn

con¬

\

Greenshields & Co, Inc.
Montreal

collaboration,

Stanley E. Nixon

the political but also

economic

-r

-

Edward S. Johnston

ex¬

easily, if the

free world

close

James A. Gairdner

difficulties

will

more

and

again

Dominion Securities Corp. Ltd.

plan.

Montreal

Respectfully submitted,

John Ilenry Ratcliffe

CANADIAN COMMITTEE

McLeod, Young, Weir & Co. Ltd.

,

Toronto

George P. Rutherford

L. G. Beaubien & Co. Ltd.

Dominion Securities

Montreal

F. B.

Corp.-

New York

Frederick B. Asliplant, Vice-Clim.

W. Pearson Scott

Ashplant & Co.

Wood, Gundy & Co. Ltd.
Toronto
Arthur S. Torrey

f

W. C. Pitfield & Co., Ltd.

Toronto

*

Irving II. Campbell, Secy.-Treas.

Montreal

t

Douglas B. Weldon

Bell, Gouinlock & Co. Ltd.

Midland Securities Corp. Ltd.

Toronto

London, Ontario

foreign

outweighed

a

Nineteen

Gross

New Investment Horizons

the

In Canada

ac¬

short time in August

Domestic

be less favorable than the current

year.

The problems which face

are

more

our

Economic

less

countries;

or

a

similar

The

numerous

have

fifty-eight promises to
us

in both

investment opportunities which

accompanied

dustrial

Canada's impressive in¬
growth have also created a need for

specialized facilities to
in this

dynamic

serve

those interested '
'

economy.

•

i"

probable decrease
To meet this need, we

have developed a com¬
of financial services for
corporations, brokers, dealers and others with

prehensive
a

range

stake in Canada's future.

CORPORATIONS

can

depend

cial

counseling,

knowl¬

on our

edge of Canadian capital markets,

McLeod,Youmg,Weir & Company

our

finan¬

underwriting and
distributing of security issues.
our

our

LIMITED

INSTITUTIONAL
from

and

DEALERS

IN

GOVERNMENT, MUNICIPAL

AND

SECURITIES

CORPORATION

our

our

INVESTORS

familiarity with

many

276 St. James Street West

Street West

Montreal, Canada

Toronto, Canada

Kitchener

Winnipeg

Quebec

benefit

memberships in all major Canadian

are

served with

prompt and accurate execution of orders in
all Canadian stocks and bonds.

Telephone: Victor 5*4261

Telephone: EMpire 4*0161
Ottawa

will

leading issues

exchanges.
BROKERS AND DEALERS

50 King

Please call
Vancouver

Hamilton

Windsor

Sherbrooke

us

at WHitehall 4-7380

Calgary

Edmonton

New York

London

Gairdner &

M€Leod,Young,Weir & Ratcliffe
MEMBERS Of THE TORONTO STOCK EXCHANGE
CANADIAN

STOCK

Gompamj Inc.

60 Wall Street, New York 5,

N.Y.

MONTREAL STOCK EXCHANGE

EXCHANGE

Affiliate:
STOCK

50

ORDERS

EXECUTED

ON

ALL

EXCHANGES

Gairdner &

Company Limited

Underwriters and Distributors of Canadian Securities
Members of Leading Canadian Stock Exchanges

King Street West, Toronto, Canada—EMpire 4-0161




j.

A. E. Ames & Co. Ltd.

coun¬

should not be

us

quered all the

current

prevailing earlier in the year.

cost.

Canada's

heavy inflow of
continued in the

exchange rate for the Cana¬
dian dollar was at a record high

100.0%

Prospects, December 1956.

Prospects, December 1956.

other

.

Toronto

the

32.8

"Preliminary Report," Royal Com¬
mission

Economio

table

factor

eco¬

prices. The profits of some indus¬
tries,
particularly
mining
and
lumber, were adversely affected
by lower output and prices. All
export industries wei^ also af¬
fected by the higher premium on

output used for the pur¬

this
at

activity,

profits
are
this
year
than 4% lower than in 1956.

but later it returned to the levels

.100.0%

measure

the

,

■■■*

lar for wages and transportation,
and due to their inability to raise

pot

1955, the Gross National Product

$26.8

(31.8

23.7j

~

'■The

the

situation of her principal
trading partners, first of all the
U. S., but also Great Britain and

are

economic

count. For

f

Trade, finance and services——.—

sector.

by

.

C. G. Fullerton

Andrew S. Beaubien, Chairman

adverse balance of the current

8,0

79.1
Total

influenced

New York

nomic

not

require

A. E. Ames & Co. Inc.

Canada is concerned,
of
events
will
be

as

course

strongly

con¬

Many
Canadian
industries
ex¬
perience a cost squeeze, under the
impact of higher costs, in particu¬

year

)
8.1

of

The

5.6

10.1

communications

level

capital

25.3

and

community
Transport,

also

As far

the

invest

spending. So far this year
expenditures for goods

7.2

6.5

—,—

government

James Richardson & Sons

New York
higher than in
any previous period.
Arnold B. Massey, Vice-CIim.
In spite of the generally high
Mills, Spence & Co. Ltd.

15.4

—

Primary

Average of the above
1965

and

Ralph D. Baker

economic

the Canadian dollar.

mining, electric
power)
9.9
manufacturing7.3
Secondary manufacturing 21.6

1975—
1980

Productivity factor 3\a% *

Note:

19C0
Forecast

12.8%

Agriculture

46.7

Output*

Actual

,

38.0

____

1970—

Total

of

Among the Various Sectors of the Economy

100,000

Productivity factor 2 Vatt*
1965

IV

.Distribution

of

Economic

1956.

U ..~!*LIi:ii

11TABLE

dollars)

75,000

Canada's

on

should

services

more

167

I

■

Product

Per Annum

,

i ,<L:

to

facilities. The

poration

151

Prospects, December

,

.

Assumed Net Immigration

-

119

135

2,859

mission

.

continue

new

personal
and

"Preliminary Report," Royal Com¬

Prospects, December 1956.
TABLE II

,

.

"Preliminary Report," Royal Com¬

•

hydro¬
mining in¬

gas,

uranium

will

par¬

economy depends more than
the sustained level of con¬

sumer

low

2,584

1980

natural

works

our

(1955—100)
100

2,320

1975

Source:

in capital expenditure which dur¬
ing recent years sustained the

ever on

1970__:

Economic

if

1958

higher expenditures.

Gross National

Per Capita
Gross National Product

•

and

lic

Annum

17,505,000

Canada's

in

Thus, the near-term outlook for

between the high and
projections (1955 dollars)
;

the

III

1,714
2,044

on

surprising

due to be opened for naviga¬
tion in 1959, and many other pub¬

Immigration—75,000 per

15,575 000

mission

1

way,

slower

Average
per

Persons

1980

4%

struction of the St. Lawrence Sea¬

than in 1956. Gross National Prod-

Annum

1960-X-IXXXIXXIXIXIX

be

high level and in

very

dustries

of

rate

however,

was,

a

heavily in

Product

1965

not

expenditures

electric

high

personal expenditure on consumer
goods and services, the Canadian
economy continued to expand in

I

Immigration—75,000

would

ticular

impact

level of capital investments and of

commercial

Year

Source:

It

this

capital

Forecasts of Per Capita

Net

be of the

may

billion

$25

first

was

Undoubtedly, as in the
past, foreign markets, and in par¬ should show some decline from
ticular the American market, will the exceptionally high figures at¬
supply an important part of this tained in 1956 and 1957. The over¬
huge investment capital, although capacity of production, apparent
some
it is expected that the savings of in
industries,
e.g.
forest
products
and
a
metals, will un¬
larger
and
more
prosperous
doubtedly slow down expansion
Canadian
population
will
con¬
tribute
an
increasingly
higher plans. In many fields, however,
percentage of the equity fi¬ capital expenditures will continue

Summary Forecast of the Population of
l-'y.
Canada
Assumed

the next

period.

intercourse, and not its decrease,
TABLE

estimate

capital in¬

over

the

for
year

69

boom; the fear that con¬
Winnipeg
■
'
\
sumer
spending will drop; and, W. T.
K. Collier
with the whole of 1956, the prog-' finally, difficulties caused
by the
Collier, Norris & Quinlan Ltd.
ress was less than 3%.
y
stringency of credit which has
Montreal
reached a degree unknown during
Slower Capital Spending
Andrew G. Curry
the last 25 years.

For the oil and gas in¬

years.

progress

There is not the slightest doubt
that

not

rates

annual

higher than in the corresponding
period of 1956, but, compared

sectors.

many

at

half of the current

complement

vestment in Canada

In these circumstances it is not

which

is

so

uct

countries,

our

total requirements for

Sensitivity in Export Area

measures

both

economies

each other in

economy.

Your

benefit

whose

(^2701)

Business Established 1921
Toronto

Montreal

Kingston

Quebec

Calgary

Winnipe|

Vancouver

Hamilton

Kitchener

London

Edmonton

New Yorl

Private wire system

70

The Commercial and Financial Chronicle

(2702)

dom and West

Continued from page 27

cap¬

Canadian

larger share

however,

Germany. Per

ita Canadians have

a

than

Speaking in Fiankest Terms
An Understanding
in World

War

proud to

were

the

under

serve

II

supreme

com¬

mand

of that great man who is
today the President of the United

States.

Canadian

forces

served

in

ington

October

Eisenhower
Macmillan.

We

recognition

of

dence of the

side by side with the United States
forces in Korea under a Supreme
United

can

the

Minister

growing

in

as

a

interdepen¬

which

In the
live

now

Nations

Commander

who

American. Canadian forces

was an

of

the

free nations.

world

kind

total

it

we

country, however strong,
stand alone.
We salute

one

no

understanding

evi¬

today standing on guard side
side with the forces of the

denced between the United States

United States in Europe under the

Free West has had reason to feel

command of the NATO
Commander-in-Chief who is an

insecure in

are

by

supreme

American.
nadian

Recently the

new

Government

and

Ca¬
the

United States Administration took

major step in the consolidation

a

the

of

tinent
Air

in

air

in

defences

the

creation

Command, with
and

command

Canadian

deputy.
cision

Air

this

of

of

a

con¬

Joint

an American
distinguished

a

Marshal

as

United

indicative

of

our

recognition of

our

The

the face of misunder¬

be

not

easy

to achieve or main¬

tain scientific superiority

without
a
mingling of effort and under¬
standing on the part of the United
States, the United Kingdom, Can¬

Trade

We

interdepen¬

much

as our

same

trade in the

External

num

for

is

Canadians

are

a

trading

people. In absolute volume we are
fourth

the

is by far the best
tomer of the United States.

running

at

Canada

weaknesses of

long
trading position.

our

rate

(b)

have prompted it to

inaugufar-reaching policies.

Of that $10y2
external trade,
billion

with

deed,
had
v

billion of annual

world,

trading nation in the
ranking only after the

United

States,

trade

with

do

in

same

Western

-'countries

and

trade"-'with others.^

United- States

with*

trade

States

has

derives

Canada

the?

special

re-!?

a:

sponsibility not to damage Cana¬
dian export opportunities and to'
adopt an understanding attitude
in; cases where Canadian- policies
touch particular United States in¬
terests adversely. \T£%'' ' '**
v

same

spirit

hail the
in Wash¬

we

the United King-

furthermore that

argue

*

the United States ought to modify

•

policies

which

the United

impede

Canadian

trade.

sales

to

purchasing ap¬
proximately 10% of our imports;
to her we sell approximately 18%

ada's

purchases from the United
in a considerable measure

Canadian

goods.

dangerous de¬

States

14%

of

we

has to

economy

been

sudden

changes
of

the

Another

vulnerable

in

the

United

to

economic

States

and

serious

weakness

in

trading position is our
heavy imbalance in commodity
trade. Last year Canada incurred
a
deficit of $848 million in her
commodity trade with the world.
This

INVESTMENT

was

due

imbalance in

entirely to

our

a huge
commodity trade

with the United States.

Canada

SECURITIES

worth

purchased

of

goods

from

Last year

from

Canada

comprise

finished

manufactured

ucts. Much of the total of Canada's

of

raw

States consists

industrial materials.

market

in

much of

United

the

States

a

for

surplus production of

our

industrial

While

glad to have

are

LEGGAT, BELL. GOUINLOCK

LIMITED

LIMITED

raw

Established 1920

Members Montreal Stock Exchange
Montreal

20 King Street, West
Toronto

the

import

of capital

goods

into

Canada and that these will swell

Our facilities
the

can

industrial

investors

in

we

faced

are

with

threat

the

*

It. is

development of Canada and of benefit

to

true

that

in

self-defence,

producers of
cultural

limited list of agri-J

a

products

that' threatened

from

their

Nesbitt, Thomson

two

countries that the disruption ?

of traditional
much

a

trading channels has '

more

severe;effect

•

The trade between
the

United

carried

States

Canada and

is

the

355 St. James Street

of

United

Canada than it does to the

is

States.

In

total that trade

the

equivalent of 22% of the
gross national product of Canada;
it is less than 2%

of the gross na¬

tional

product of the United
States. It is understandable, there¬

fore,

that the trade between

two

countries

Americans

than

quence

dians.

By

United

should
be

to

it

policies

can

than

appears

the

States

harm

Canada

—

Canada

much

harm

can

I

said

that

I

contend

25

Broad

140 Federal

and

then

invited

States

of which

to

like

buy

to

see

Administration

we

back.
the

are

We

United

and

Con¬

also

take serious account of the
these

of the

two

way

countries

and

in which United

has

is,

a

however,

disorganized
The

normal

Canadian

compelled to take

marketing.

Government

the recent

the United States market.

of

very

icies which have created them. At

meeting in Washingtonrepresentatives of the Govern-

(N.Y.)

Inc

Teletype: NY 1-3708

•

Greenshields & Co Inc

Street, New York 4, N. Y.

York, Montreal, Toronto, Ottawa, Hamilton,
Kitchener,
London

(Ont.), Winnipeg, Calgary and Vancouver

Business established 1910




Montreal

Toronto

Quebec

Slierbrooke

is.

serious
view of these results and the pol~.
a

Direct wire connections between
New

the

States has very seriously damaged
Canadian trading interests and

States tariff policies are excluding
Canadian finished products from

Canadian Affiliate

that

agricultural products surplus dis¬
posal program of the United

& Co.

Street, Boston, Massachusetts

the

fact

many

lo

finished

States

64 Wall Street

Company, Inc.

that

export opportunities abroad.-

into

United

Canadian Stock Exchange

Nesbitt, Thomson

the

United States by pursuing policies
adverse to United States interests.

Canada

Toronto Stock Exchange

the

trade

The

countries

other
there

Telephone: WHitehall 3-9525

Nesbitt, Thomson

to Cana¬

adverse

Branches in the principal Cities of Canada

Members Montreal Stock Exchange

to

conse¬

token

same

by

the:

appear

less

of

Provincial, Municijxil and Corporate Securities

W., Montreal

largest'

between any two coun¬
tries in the world. It means much
on

Limited

Head Office:

on*

Canada than the United States.

Specializing in Canadian Government,

Members of The Investment Dealers' Association

*

of the economies of the;

dian

to

Greenshields & Co

Company

and

imports'

livelihood,

vast difference !

a

to

participate in Canada's assured growth.

of

have had to protect Canadian

we

be of valuable assistance to those interested

selecting suitable investments through which

a

imports of our'
barley, barley malt, and oats. Now'

OPPORTUNITIES IN CANADA

in

Until

export

fabricated

should

represented

oil.

the United States'

for
be

tween

amount

linseed

ago
also

special re¬
sponsibility not to damage Cana¬

gress

this

restricted

materials neverthe¬

not content

heavy imbalance of the trade be¬

of

short time

merely to
dig these materials out of our soil
are

States, Canada incurred a deficit
of $1,348 million.
It is true that
part

milk,
and

we

commodity trade with the United

BELL, GOUINLOCK & CO.

wheat,
cheese, dried
dried buttermilk,

less

million worth of goods.

AFFILIATES

skimmed
flaxseed

more

Canadians

we

States

only $2,819
Thus, on

Can¬

tariff, however, not unlike
others, is such as to discourage
the importation of finished prod¬

products,

pur¬

States.

The nature of the United

million
the United

$4,167

States but the United
chased

States

sales to the United

Canada's

Street

NEW YORK

CANADIAN

a

e

trading policy at Washington.

INCORPORATED
64 Wall

T h

made

climate

BELL, GOUINLOCK & COMPANY

external

are

exports.

our

gree

total

our

From her

Canadian

of

cheddar

.rye,

more to

I would

States.

By
comparison,
largest customer the
United Kingdom we do only about

all

to

some

its

the
its

United

come

next

the

to

of

In the

joint statement issued

imports

flour,

contend,

which

nation, the United States.
a
disquieting degree Canada
has placed her trading eggs in one

our

sold

Last

sold

bilaterally ; in¬
itself "has always
substantial surpluses in its"

one

United

States

Canada

from

To

with

the.

products..

our raw

hovvever^ -that- in\ but there is such
the face of the laFgd-advantages
in the size

■

no
less than $7
two-thirds of it is done

or

it

as

deficits
I

United States

leave

Our Canadian fanners have be err;

should be balanced

These weaknesses give the Cana¬
dian Government deep concern,
and

wish "to

not

States- tariffs'
bined; nearly double .what it sold increased " United
to the whole sterling area, includ- - against our zinc and lead." Cana- •
ing the United Kingdom! I wouid.V dians cannot fail to be deeply dis- '
not
argue' that
trade could or furbed at this prospect.

16F2 million people. This fact,
must not be permitted

standing in

would

freely admits all

of
cus¬

Continental Europe; more than it
sold to all Latin America com¬

however,

to hide latent

United

approximately

amount

ap¬

per an¬

remarkable achievement

a

the

year

period in 1946.

trade

with the United States.

Canada

external

proximately $10!2 billion

I

.

impression that the United States

*

billion, a record for
period. It is two and a
as

fact,.

Thursday, December 19,1957f

.

.

selling advantage resting al-> hurt by United States restrictions'

ways

a

$8

same

half times

This

between these two countries witn

the

from the United States while 60% '
of our exports have gone to the

General

(a)

dence.

of

imports from the world have

his

confi¬

1

basket. For years 73% of Canada's

ada and other faithful allies.

This most significant de¬

is

Kingdom.

standings in past years. The grow¬
ing proof of renewed solidarity
augurs well for freedom.
It vvill

dence in the American nation and
our

the

and

nation.

of this year it reached

months

welcome

the

other

any

Canada's trade is running at rec¬
ord levels.
In the first nine

President

by

Prime

and

as

probably

production.

cannot hide a chronic
condition of imbalance of trading

of the external trade of the world

.

Ottawa

London, Ontario

Volume

Number 5700

186

of both countries

ments

obliged to register

The Commercial and Financial Chronicle

...

were

we

strong pro¬

a

which
have

in

invested

have

made

genuine

a

investment

against

It is

to

and in some cases perhaps
.result of deliberate policy,

ties'they intend to avoid so far.
possible interfering with nor-,

sons,
as

mal-

and

have-created

will'

ment.;.! refer in particular to the

commercial

that

■

the

barter

hereafter

Canadian
will

programme

While

ap¬

assurances

the

limited.

be

preciating
v

marketings

these

however,

Government,

continue

to regard with an
apprehensive eye
fire-sale disposal policies.

anxious

i

and

U. S. Investment in Canada

.

"

v

I

turn

which

a

to

now

a

subject

upon

certain degree of misun-;

derstanding

to have

appears

'

Government with

respect

development

resent¬

tures

Canada and deny¬

save

savings in the

the

of

to

of

resources

engaged in

vestment.

Our

,

capital

of

programme

capital

advanced

from

a

in¬

expendi¬

$5.8

billion

in

$8.8 billion in 1957. New capital
investment this year will con¬

participating in the
ownership of stock in such com¬
panies, especially when they are
engaged on a large scale in the
development of Canadian re¬
We

sources.

of

sought by

inducements

the
to

the

stock

selling its products in certain
controls

rate

of

This

is

a

large proportion of total out¬

very

put to be devoted to the construc¬
tion of

factories, mines, mills,
public utilities, roads,

new

schools

anct

nouses;

is

the

aad

difficult

to

anywhere else.

in

case

for

one

find

the

which

parallel

a

Eighty percent of

Canada's capital has been coming
Canadian sources.
This is

the

States has been

The? United

contributor,
but
Britain, Western Germany,

principal

Great

been

swelling

total. " Gross

the

investment in Canada from

billion

is

this total

of

abroad

Nearly $12
owned in

billion.

$15

exceeds

also

have

countries

other

and

Approximately

the United Slates.

$2% billion is owned in the United

and over $1 billion in
countries, chiefly Western

Kingdom
other

We

welcome the

investment of

We recog¬
role which
played by capital from

capital from abroad.
nize
the
important
has

been

abroad in the development of our
1

resources

the

and also in maintaining
of

momentum

the

Canadian

As firm believers in the
enterprise system, we intend
to
continue to create a climate
favourable to investment fro m
economy.

free

abroad.
.*

It would

impossible to
heavy commodity im-

be quite

sustain the

vestment

free

it

offers.

believers

in

ecutive, status, and that

tem.

subsidiaries

dian

times

that
are

of

engaging

in

and

subsidiaries

failing to bear their fair share
-community
philanthropies.

These

policies of which Canadians

complain cannot be cured by any
the

action

on

Administration.

part of the United
Indeed,

I

quite certain they are disap¬

am

proved of by the Administration
of this country. I bring them be¬

the hope that in doing
assist American inves¬
tors in understanding the feelings
of Canadians in such matters. They

fore you in
so

we

are

entertained

be

would
Americans if

feelings

same

by

as

in

offers its people as

Canada.

as

every

for

Canada

We

to

of

We

have

record

a

market.

metals

bright

is strong
have

economy

are

the

all

world

future

a

I do not pretend that

feature

factory.

the
or

of

a

sound

We

from

given to these aspects of in¬
vestment and management policy.

were

good

a

course.

to be confident.

reason

be

however, relatively substantial. At
the end of 1956 it amounted to

Many, perhaps
most, American corporations

$2*/2 billion,not including bank
balances or Government funds.

that I

say

to

! ada have

ings of irritation.

living in October showed

decline.

a

it

as

Money is not

has

been

in

•

"

f

shall face

we

us

The

United States and

today

have

the

ample to the world.

$250 million in excess of
prevailing minimum liquid

asset

ratio.

Interest

rates, which

five months ago were the highest
in
a
generation, have declined

rapidly.

Last week the Treasury

country sold Treasury Bills

rate of 3.51%,

the lowest rate
for a year. The Bank of Canada
interest rate is accordingly 3.76%,
likewise the lowest for

a

annual

Savings

Cam¬

Bond

paign designed to encourage

sav¬

ing by all our citizens and invest¬
ment in

Government bonds, par¬

ticularly by small investors. The
Canada Savings Bond

Twelfth

Campaign

which

has established

is

an

still

of

sales,

now

To

current

all-time record

aggregating $1 bil¬

translate this

into

com¬

parable American terms, this
would

be

the

equivalent of rais¬

ing $15 billion in the United States
from

the

a

tions
Investment by Canadians in the

I have

ALL LEADING

savings of the general

STOCK AND COMMODITY

fail in their

an ex¬

They cannot
duty to build

common

the free and willing allies of the
United States.' We respect each
other. As governments we do not

attempt

to

interfere

with

each

We talk together as

neigh¬
bours in the friendliest spirit and
the frankest

far

as

terms.

Let

united endeavours to

our

possible

as

us

bend

remove

sources

of ir¬

ritation between us.

Canadians

We

mindful

are

W ood,

gigantic burdens of world
leadership borne by the United
States.

We wish to

see

this nation

and able to meet

strong, ready,

the tasks and burdens which des¬

tiny

the

and

cause

have laid upon

will

find

always

and

operative

of

freedom

her. In Canada she
staunch,

a

,

Street, New York 5

105 West Adams

Street, Chicago 3

Wire connections to Toronto,

Montreal,

Winnipeg and Vancouver.
Stock orders executed

.

reason

selves

on

employed

to

Wood, Gundy & Company
Limited

TORONTO

HALIFAX

LONDON, ONT.

REGINA

congratulate them¬

LONDON. ENG.

HAMILTON

OTTAWA

SAINT JOHN

QUEBEC

VANCOUVER

WINNIPEG

MONTREAL

EDMONTON

CALGARY

KITCHENER
VICTORIA

and

having more people em¬

at

this

season

of

the

before, and on the fact that
have so largely absorbed and

Wood, Gundy & Company
Members of

year
we

all Exchanges in Canada.

affiliated with

necessarily

are

on

The Toronto Stock

Montreal Stock Exchange

Exchange

Canadian

&

Co*

JEL—

Securities
COMPLETE

FACILITIES

USBBOAOWAX

affiluueduiUi

THE

INVESTMENT DEALERS

FOR

AND

CANADIAN

BOND

STOCK

TRADING

OF CANADA

°*

James Richardson & Sons
EXECUTIVE

OFFICES

FROM

OFFICES

-

WINNIPEG

TORONTO

MONTRRAL

^"1

^

Spcitc©

MONTREAL TO VICTORIA
.

W*

foronto

^

Siock E.Chan,.
E"'hana®
siock

TORONTO

co¬

understanding

Gundy & Co., Inc.

40 Wall

of

the

EXCHANGES




Canada

responsibility to be

friend.

public.

CANADIAN

ESTABLISHED IB57

may

with

bridges of understanding and good
will. We Canadians give our tes¬
timony to the world that we are

other.

year.

The Canadian Government holds
an

it

Conclusion

last

MEMBERS

ASSOCIATION

confi¬

Whatever the future

Canadian Stock Exchange

'

over-

of

tight

as

two

the

Our Chartered Banks have

years.

when outdoor construction opera¬

given rise to strong feel¬

with regret

lack

We

ployed today than have ever been

is

that the policies followed by
'some American investors in Canyou

dence.

to

nor

realism and courage.

always encounter seasonal unem¬

have

into Canada.

confidence

ployment in the winter in Canada

positions

it not for the

American capital

heavy inflow of

yield neither to

most

In

balanced outlook. We

a

to

hold for

have

reversed.
In
the interests of good public rela¬
tions more careful thought should

the

mally said about Canadian invest¬
ment in the United States.
It is,

the

time for

a

intend

only

rose

Canada.

easily swayed

deed, record employment for this
period of the year.
Canadians

States were

with

in

1%

We Canadians are

is strong.

spoken of United States
investment in Canada. Less is nor¬

United

trade

its

of

of

.weaknesses must not
eyes to the unchallenge¬

United States

in

1/10

optimism. It is a time for
increasing our productivity. It is

base

encountering difficulty

stable people; not

Consumer

time of

a

sober

cost

able fact that the Canadian econ¬
omy

the

of the cities of Eastern Canada the

these

our

by

might be made.

For Canadians this is

surplus

our

finding profitable markets. Un¬
has been somewhat
larger in 1957 than in 1956.
But

The

erence

problems.

wheat

Some

satis¬

even

our

employment

close

pursued

checked.

There are many other encour¬
aging evidences cf strength in the

United

country's

in

may

the

Outlook

country

been

of the

Price Index in October

lion.

Economic
No

has

that

71

Canadian economy to which ref¬

Canadian

development

of their resources under that sys¬

some¬

research,

Canadian

some

the

discouraged

unnecessarily

from

the Cana¬

also

are

in

them

curtailed,
Our official figures, however, tell
a
tale of high employment—in¬

incurring

I even

firm

are

enterprise and the future that

awaits

,port deficit which Canada is now

It

opportunities

Canadians

quate efforts are made to train
Canadians for advancement to ex¬

States

Europe.

country and the attractive in¬

own

quarter

ever-increasing threat of inflation.
I confidently say that inflation has

from

of Canadians in the future of their

uine.

-

States

a

than

which

a

the

years

like

economy

our

States

is

recent

at

United

exceed

million persons.

of

purchasing policies of the Cana¬
dian subsidiary in a manner which
of Canada's resources. C a p i t,a 1.
consciously diverts its buying
from i abroad has; been entering
away from Canadian sources.
We
Canada this year in record volT
also hear complaints that inade¬

glowing" opportunities offered*

foy investment in the development^

a

represents

higher
it

it

the best evidence of the confidence

and

of

immigration

will

year

capital investment much

rate of

the

the

export markets

expenditures.

a

Canadian

estimated

an

approximately 28% of gross

national

these

of

excludes the Canadian corporation

from

stitute

to

pipelines,

investment

admit

1953

corporations to
by Canadians

such

encourage

in

have
tax

this

been

whatever

of

assimilated

In

ing to Canadians any opportunity

eign investment in Canada.. subsidiary corporations. We often
hear, complaints as well that in
Canada is currently the world's
such
relationships the United
largest importer of capital. Can¬
States? parent corporation
often
ada needs capital to develop our

Capital from abroad
has not been slow to see and grasp

States

tasks and aims

Canada has been

very large United
Staies corporations of establishing

to for¬

resources.

an

their country.

some

in

United

Canadians

encourage

subsidiaries

the attitude of the Canadian

cerns

Canadian

of my

one

heavy

policy of

creation
ex-,

isted in the United States.; It conn

a

the

and to invest their

as

.

in

heavy

as

Americans have in Canada.

as

United States4

to population

Canadians have twice

suc¬

these policies.- The cessful effort to be Canadian and
representatives gave^ to act in that spirit, but there are
many others which through either
the Canadian Ministers assurances
that in all surplus disposal activi¬ thoughtlessness or for other rea¬
test

in proportion

Thus

Canada

and

(2703)

72

(2704)

The Commercial and Financial Chronicle

I

Continued

from

holder the

31

page

privilege of purchasing

his pro rata share in the new
at

sue

Report ol IBA Industrial Securities

somewhat below
quotations.
This

market

record

on

certain

a

ing
is

as

transferable warrants

with the hope of obtaining equity
stock rights offerings
capital today at tomorrow's higher
offerings, but before con¬ prices. This technique has been the
sidering each of these in detail it subject of exhausive research and
might be wise to comment briefly goes beyond the scope of this re¬
on the others.
port, but the birth and phenom¬
Although preferred stock is a enal growth of the use of the
form of equity, it is certainly not subordinated convertible deben¬
the same thing as common stock. ture, together with older forms of
In the first place, the pressure to convertibles, makes it impossible
pay dividends at a fixed rate is to ignore this factor of growing
much greater in both legal and importance in the area of equity
actual senses. Since the preferred financing,

debt.

for

the

It

cost
of preferred
relative to the cost

would

Description:

investor

debt.

as

On

the

other hand,

certain corporate in¬
are attracted by the
tax free nature of dividends

vestors, who
85%
to

corporate

limited
glumes.

holders,

market
It

is

provide

for

not

a

preferred

surprising that

preferred stock, which is relative¬

terest in the

has

been

unimportant

rep¬

share.

new

If

-

the

choose

utilize

to

self, he
else.

stockholder

long

below

value

shares,

the

value,

of

«Km#S

M«S

COMOIS

£H

someone

the

-

■:

•

;

r

current

Mlti

ttEKUEK

I

TftEATIIIC CMKEMtttES »S CMMMHU

Seorot: Cdculated from Corporate Financing Umm of the la*ert»ent Dealer*' Digest,
July 30. 1356 aad January 2f,
1957.
Sea C J. Filcfcer, Raising Capital with Convertible Securities
(Michigan Business Studies Vol. XD, No. 2; Aaa Arbott'
Bureau of Buiumm Research,
University of Michigan 1955).
\
i

the

outstanding
will have a

rights

based

not

him¬

the subscription

as

remains

market

docs

rights

sell them to

can

As

price

the

the

on

size

of

"

v\

-V

the

>

•

4 -4 v

■'

chart in

7; '■;'•

?',■

COMMON STOCK OFFERINGS AND DOW-JONES INDUSTRIAL AVERAGES

discount and the number of rights

1929-1956

eHIU ifi£| |

necessary to subscribe to one new
share.
•;7
:;'7l

uuiuuiMii

ment:

date

the

are

sep¬

"ex"

trading

market

value

will

rights

the shares—the

from

in

shares

by

Stockholder's Invest¬

on

When

arated

parlance

of

the

the

—

outstanding

decline, theoretically,

amount equal to the value

an

of the

right.

This is a mechanical
adjustment made for the conven¬
ience

of

rights
period.

trading in the stock and
the
subscription

during

equity. In a number
of jurisdictions, there is a legal
The stockholder is not penalized
requirement known as the pre¬ by exercising his rights, provided
emptive right, under which exist¬ the company's expansion program
ing stockholders are entitled to is well conceived. If he exercises
this

opportunity

of

maintaining

their proportional interest, in

corporation whenever
are

ly unattractive to both issuers and

investors,

which

right for each share of
stock owned, and by requiring a
certain definite number of rights
plus a cash payment (subscription
price) for the purchase of each
one

Effect

A

that

seem

and

made by

resent

"Rights" Offering

rights offering
pre¬ usually takes the form of an of¬
ferred stock has some of the dis¬
fering of new shares of common
advantages of debt (for example, stock pro rata to the present group
claims ahead of common stock) of
common
stockholders.
This
without the advantage of the de¬ method results from the desire on
ductibility of interest payments the part of management to give
for tax purposes. Preferred stock, stockholders
an
opportunity to
although senior to common stock, preserve their proportional voting
does not give the same protection
rights and their proportional in¬
of

date

'.:i;7.;

dividend is not deductible for tax
purposes,
the
stock is high

CHART II

PERCENT OF DOLLAR VALUES

prescribed period. The offer
issuing to the holder

a

offerings.

—common

CHART I

DOLLAR VALUES

be exercised at any time dur¬

can

and cash

Thursday, December 19,1957

.

of purchasing the new
stock is issued to the stockholders

Committee

cerned with two of these methods

.

PUBLIC OFFERINGS BY CLASS OF SECURITIES
1956

is¬

privilege
of

Convertible debentures, in the recent financing of indus¬
previoqsly stated, also provide trial concerns.
an
important device for raising
As pointed out earlier, a sig¬
equity capital.
\
"
<
nificant portion of the financing
This report is primarily con¬ with convertible securities is done

price

a

current

.

new

shares

issued for cash.

This

by

the

objective is accomplished
offering each present stock-

his

rights, he increases his invest¬

ment and maintains the

same

per¬

centage interest in the company's
equity and voting privileges. On
the other hand, if the shareholder

111}' 3D' 31
Mir. I

32

11' 34

35

36

3/

33

13

W

«

41

43

44

45

46

47

4<

41

1J5J

51

51

55

54

55

03I-J3HES 35-STOCK mtktl. JHOHMK **«U*f A7f«M£S Of 11*111 CLOSINE£.

Source:

Harold W. Steventon, Common Slock Financinit,
Michigan Business Report No,
Ann Arbor:
Bureau of Business Research, University of Michigan, 1917,.

Corporate Financing Directory of the Investment Dealers' Digest.

chooses

not to subscribe, he may
rights. By doing this he,
in effect, obtains current market

sell his

value for the shares to which he
is entitled to subscribe, since the
market value of his rights will

represent the

difference

between

the

ROYAL

SECURITIES

CORPORATION

Limited

current market value of the
shares and the subscription
price.
His original investment then
rep¬
resents a smaller percentage in¬
terest

Business Established

1903

not

had

the

COMPANY

Members:

CANADIAN

STOCK

EXCHANGE

STOCK

EXCHANGE

undertaken.

then, the rights of¬

to

owners

first

a

participate,

but
secondary method of
shifting from these owners to the
provides

a

Collier Norris

open market for amounts not sup¬

plied

Exchange — Canadian Stock Exchange

The Toronto Stock

MONTREAL

than if the expan¬

present

opportunity

Montreal Stock

"

MEMBERS

fering is simply a method of ob¬
taining equity capital which al¬
lows

SECURITIES

'"'i;,, v:V\;

'i.

and

been

In essence,

Public Utility and Industrial Issues

Quinlan

&

'

stronger
and should presumably
more

sion

Canadian Government, Municipal

ROYAL

larger

a

company,
be worth

Underwriters and Distributors

,

in

Collier Norris

the

by

stockholders.

capital thus actually

Exchange

both the original

comes

MEMBERS

the

market, the relative amounts
depending on how much the pres¬
ent stockholders wish to
increase

Quinlan

&

Limited

from

and

owners

'

The

The

Investment

Dealers'

Association

of Canada

open

244 St. James Street West. Montreal
1,
Toronto

Calgary

Halifax

Edmonton

Saint John

Quebec

Vancouver

Ottawa

Victoria

Canada

Hamilton

Charlottetown

Montreal

Toronto

507 Place d'Armes

320 Bay Street

Victor 5-2201

EMpire 8-2984

their investments.
Winnipeg

Lay Offs:

St. John's, Nfld,

Until recently the in¬
banker could only wait

vestment

out the
subscription period and
hope the market would remain
strong enough to facilitate sub¬
scriptions for a large portion of

DAWSON, HANNAFORD
37

WALL

the

INC.

a

shares.

simple

shares

STREET

1940's

New York 5. N. Y.

In

a

utilize

DAWSON, HANNAFORD LIMITED

which

"lay

Montreal

King Street

West

Toronto
EMpire 6-9271

Underwriters

and

Distributors

Government, Provincial, Municipal and

CO. LTD.




become

known

procedure,

has

as

the

pressure

market

well

as

their

ment

his

and

the

on

thus

those

rights.

banker,

risk.

C°

the

UNDERWRITERS

DEALERS

AND

proved

Specialists in Securities Originating in the
Province

Government.

off procedure serves to
reduce the

selling

a-

LIMITED

to

dure provides

Exchanges

L. 6. BEAUBlEN

stockholders, invest¬
ment bankers and
issuing corpo¬
rations.
By
furnishing a more
orderly market for rights during
the subscription
period, the lay¬

sell

Members
and Canadian Stock

has

off"

of benefit

as

Montreal, Toronto

their

to

stockholders, those

Corporation Securities

DAWSON HANNAFORD

few

selling or¬
sell stock during
the rights period. This
technique,
ganizations

Marquette 2385

was

the investment bankers
to
purchase rights on the open mar¬

ket? and

50

case, it
sell the

to

remaining.
In
the
late
plan was devised to en¬

able

BOvvling Green 9-5177

507 Place d'Armes

that

matter

who

choose
the

lay-off

a means

From

benefits

School

the

of

Religious Institutions.

all

NOTRE DAME

STREET, WEST

MONTREAL

invest¬
proce¬

reducing

standpoint, the lay-off procedure
an

221

to

corporation's

reduces the chances for

Municipal, Corporation,

Commissions, Parishes and Fabriques.

in

who subscribe

For

the

stock

of QUEBEC

unsue-

Quebec
St.

Hyacinttie
Paris

Ottawa

I

Trois-Rivieres

Shawinigan Falls
Brussels

Sherbrooke

t

51

'

i

Volume

Number 5700

186

.

.

(2705)

The Commercial and Financial Chronicle

.

APPENDIX

EXHIBIT I
SUMMARY OF RIGHTS OFFERINGS OF COMMON STOCK IN EXCESS OF

Mugging

Dm*

Undtr writer

hsuer

Under¬
writer!

Juuury

3, 1956

Outboard, Marine & Manufacturing Company

Morgan Stanley k Co

March

6, 1956

Riegel Paper Corporation

Morgan Stanley k Co

March

Crucible Steel

7, 1956

.

Company of America

°t

86

213,845

24

6

194,155

0

5

The First Boston Corporation................

S

8,019,187

,1-10
1-5

51%

22.71

50%

21 %

10.59

20%

9.2

17

341/4

13.87

30%

4.2

Blyth k Co., Inc

59

0

395,096

19.00

7,506,824

Monterey Oil Company

Lehman Brothers

58

0

225,810

29.50

6,661,395

1-7

June

11, 1956

National

W. E. Hutton & Co.; Blyth & Co., Inc

June

22, 1956

Manufacturing Company

9, 1956

S perry

North American Aviation

Rand Corporation

14

416,666

47.00

19,583,302

1-8

14

54

12.97

51

55

335,714

29.00

9,735*706

1-7

17

32%

10.77

30%

17

0

269,204

24.50

6,595,498

1-7

17

28%

15.15

29

18.4

131

0

2,570,846

20.50

52,702,343

1-10

16

25%

20.77

24%

19.5

131

13

1,145,011

38.00

43,510,418

1-6

17

49%

23.81

41%

8.8

28

33

213,175

31.00

6,608,425

2-5

14

36

13.89

31

0.0

109

0

648,696

40.00

25,947,840

1-10

19

48%

17.53

43%

7.8

Lehman

Brothers;

Fenner

Poor k

September 11, 1956

Company

1, 1956

October

15, 1956

American

October

16, 1956

Bucyrus-Erie Company

Corporation

k

Co

Morgan Stanley k Co.....

Petrofina, Incorporated

White, Weld k Co.; Blyth k Co., Inc.; Hemp¬
hill Noyes & Co

0

999,093

11.00

10,990,023

1-4

18

0

311,040

42.00

13,063,680

1-5

Glore, Forgan k Co

25

610,664

12.00

7,327,968

1-6

18

Morgan Stanley k Co

16

11

176,450

28.50

5,028,825

1-8

Steel

January

10, 1957

Armco

30, 1957

Socony Mobil Oil Company, Inc

February

14, 1957

The Anaconda

Corporation

2, 1957

Reynolds Metals Company

April

2, 1957

United States Foil

5, 1957

The Babcock & Wilcox
Acme

21, 1957

Steel

Morgan

Staniey

12, 1957

The Timken Roller

14, 1957

Outboard

July

Company.....

Standard Oil

8, 1957

offering and
underwriting costs.

also

lowers

to

pur¬

rights, with certain excep¬
tions, only at prices which are
equal to or lower than the current
market bid by others or last sale.
This

prohibits them from bidding
the price, although in a weak
market they are able to enter the
market and cushion the drop in

up

price.
off

is

in

evident

of

the

data in Exhibit II of the Appendix.
used

used
a

no

several

of

Underwriters

issues

lay offs at all, while many
in a limited way, and

them

few used them extensively. (Nine

issues,

of the total, in¬
offs greater than 25%

31 %

or

volved lay

of

the

total

shares

offered.)

The volume of lay offs is
enced

to

a

great

1-10

15

63

1-10

20

53%

14.35

47%

86,743,250

1-5

19.

63

20.63

57%

15.5

52

26.2

4.1

0

450,866

42.00

18,936,372

1-11

14

52

19.23

0

701,074

28.00

19,630,072

1-7

14

34%

18.55

34%

25.0

1

535,148

35.00

18,730,180

1-10

17

43

18.60

41

19.6

51

1

396,079

29.50

11,684,330

1-6

16

33

10.61

31%.

255

260

1,050,223

220.00

231,049,060

1-10

20

332

33.73

19,371,040

1-10

19

50

20.00

k

Co.,

Inc.;

.....

Merrill

0

28

39

;

484,276

40.00

79

100

.

'

Pierce

Lynch,

486,058

27.00

13,123,566

1-15

17

0

331,237

85.00

28,155,145

1-20

15

288

32%

20.88

34%

6.4
30.9

•

25.0

49%

110

22.70

'

28

NA

52

47

380,312

28.00

10,648,736

1-10

15

32

NA

6,549,124

44.00

288,161,456

1-30

40

51%

13.94

21.3

27.1

108

12.50

311

Morgan Stanley & Co

extent

influ¬

by

the

of large

sell

holders of com¬

who

stock

must

new

their

do

not

elect

to

shares, and hence
rights sometime

The

the

of

essence

success

the

0.0

NA

purchase of rights.

The main objection to large lay

in the effect

offs

lies

the

issuer.

issuer pays

during the subscription period.
of

In

a

on

few

costs

the underwriters

to
the

cases

a

Midland Securities

corpn. LIMITED

set

standby fee for all their services,

members:

lay off is the selling commis¬ but in most cases the issuer pays
sion, which is usually pai(j from the underwriters, in addition to a
the so-called "take-up" fee.
This lesser standby fee, a take-up fee
commission
normally is several for each share unsubscribed or
times the regular Stock Exchange subscribed .for by the underwriters
The
commission, and therefore is- a and sold through lay offs.
strong inducement to salesmen of size of the charge for each un¬
investment firms to sell shares to subscribed or laid-off share usually

The Investment Dealers' Association of Canada

any

managing un¬ is equal to or larger than the
"book" of orders standby fee, as it must include
entered with him by other under¬ an attractive selling commission;
writers and dealers, and the man¬ therefore, the number of shares
ager is always in
a
position to laid off by the bankers can be an
know what the lay off demand is important factor in
determining
their

A wide variety in the amount

laid

60,938,024
199,278,989

50.00

Eastman Dillon, Union Securities & Co
The First Boston Corporation

subscribe to

chase

stock

56.00
45.50

1,734,865

Hornblower k Weeks

number
mon

bankers

1,088,179
4,379,758

157

Margin of Safety is computed by dividing the subscription price into the difference between low market
price during the subscription period and subscription price.

Regulations of
the Securities
Exchange Commission allow
investment

54

236

Morgan Stanley & Co

Bearing Company

Corporation

and
the

2.5

76

Morgan Stanley & Co

Corporation

Company (New Jersey)

a.

cessful

12.7

57%

'

132

Blyth

Lehigh Portland Cement Company

September 10, 1957

32%

11.11

132

Morgan Stanley & Co

Minneapolis-Honeywell Regulator Company

16, 1957

November

Marine

14.61

Dillon Read k Co., Inc.; Reynolds k Co., Inc.

Company

June

3.1

33%

Dillon Read k Co., Inc.; Reynolds k Co., Inc.

...

Company

June

8.0

12%

159
.............

Hallgarten k Co..

International Business Machines

21, 1957

5.7

45%

230

& Co

Fenner k Beane

May

11%

15.15
11.11

14% B

*

257

Smith, Barney & Co

Company..,..'

April

....

24.79

13%

18

Manufacturing Company

16

4.7

49%

15

64

-

25

The First Boston Corporation

January

May

Pierce

Scovill

3, 1957

April

Lynch,

JLibby, McNeill k Libby

November 29, 1956

January

Merrill

Beane.......

Bache & Co.; Kidder, Peabody & Co.; Dean
Witter

Johns-Manville

&

....,

Morgan Stanley k Co

Company

October

10.6

52

43

Morgan Stanley k Co

Company..,.

7, 1956

'

Smith, Barney k Co.; Blunt, Ellis & Simmons

Gypsum Company........................

July

8.3

26.9

15

The Budd

September

10.3%

32%

9.09

14

18, 1956

6, 1956.

33

1-10

12, 1956

July

Safety(a)

41%

12.79%

6,564,680

40.00

May

Union Tank Car

Morgue of

Period

43

14

March

The Yale k Towne

Subscription

Prospectus
Date

19

1-10

Company....,

on

(Days)

5,824,650

$

37.50
30.00

164,117

Ratio

Amount

Price

26
..

Offering

scription

Shares

Dealers

Period

Price During

Price

from Market

Market Price

tcription

Sub-

Number

Number
of

Low Market

% Discount 0/
Subscription

Sub.

Number

Pretpecteu

1957

$5,000,000 BY INDUSTRIAL COMPANIES—JANUARY 1, 1956—NOVEMBER 15,
of

73

clients.

The

derwriter keeps a

time.
The manager the size of the total fee which
until he knows he must be paid by the issuer. Where
can
lay off stock successfully— only a single fee is charged the
by
the
investment
that is, until the orders on his corporation
book exceed the number of shares .bankers, it should be noted that

at

any

one

usually waits

proposed

to

be

laid

off

Continued

against

on

page

74

Municipal

Canadian Government,
and

Corporation Securities

The Midland Company
Toronto Stock Exchange

members*

u

limited

Montreal Stock Exchange

Stock orders executed

on

all Exchanges

Toronto, Ontario:

50 King Street West

London, Ontario:

Huron & Erie Building

Sault Ste. Marie, Ontario:

Montreal, Que.:

St. Thomas, Ont.:
Private Wires to

116 March Street

215 St. James Street West

354 Talbot Street

Branches and Eastman Dillon, Union Securities Co., New
MacDougall & MacDougall, Montreal

York City;

For

Banks, Brokers and Dealers

Savard & Hart inc.
Members: The Investment. Dealers'
Association

SECURITIES

CANADIAN

SHERBROOKE

QUEBEC

Bought

—

Sold

—

of Canada

Montreal

TROIS-RIVIERES

—

—

SOREL

—

—

CHICOUTIMI

DRUMMONDVILLE

Quoted

Savard & Hart
Tel. WHitehall

[4-8974

14-8980

Members: Montreal Stock

TWX N. Y. 1-142

Exchange

Canadian Stock Exchange
Toronto Stock

HEAD OFFICE: 230 Notre

Danic Street West, Montreal

Branch

1203 Phillips Square

Exchange

—

Offices:

50 Jean-Talon St. West

Montreal

CHARLES KING & CO.

170

CHICOUTIMI

Members

—

Toronto

Stock
Stock

Exchange
Exchange

American

Stock Exchange

Street, Toronto

DRUMMONDVILLE

SHERBROOKE

Montreal

Bay

—

BROADWAY




QUEBEC

NEW YORK—MIAMI

—

—

ST. JOHN'S, P. Q.

TROIS-RIVIERES

BEACH—WORCESTER, MASS.

Canadian Stock Exchange

SAVARD & HART S. A.
61

—

THETFORD MINES

NEW

YORK

6, N. Y.

Geneva, Switzerland

SAVARD & HART LTD.
London, England

I

74

The Commercial and Financial Chronicle

(2706)

.

Thursday, December 19,1957

.

.

APPENDIX

exhibit ii
summary of underwriting cost data of rights offerings of common stock in excess of

$5,000,000 by industrial companies—january 1, 1956—november 15, 1957
RtsuUfl OBerlnu end Ley Of i
fluptttttd m%ct Total Shoret In lttutr-

,

Of

"tar

Saiicrlptltm
Price

luam

..)

Outboard, Marine k Manufacturing Company

'A t a % ol '
Suiter. Price

Siara

Per

$.35

Ttr

At a % of
Suiter. Trie*

2.53%

Share

1-00

5.33

—

—

1.60

2.tl

—

—

1.25

,

29.50

2.27*

AO

2.10

.30

.45

$140

L69

TOO

47.00

.90

1.91

1.10

29.00

.40

2.07

.75

The Yak t Towne

24.50

.50

2.04

.60

Manufacturing Company

North American Aviation
Poor *

American Petroftna,

Bncyrua-Erie Company
Libby, McNtM k Ubby.
Scovill

Armoo Steel

Corporation

.073

.30

.444

1J1

1.56

4.73

.110

.29

.910

2.39

.711

2.29

1.461

.061

.15

.811

6.36

.012(c)

•11(c)

•362(c)

1.20

2.85

1.20

—

—

291

.50

2.28
1.96

1.00

.74
3.00

7.07

1.77

—

672

632

88.58

6131%

10.20

<3.08)

248

16.66

19.34

241

2531

tl. 61

97.26

1.72

I-OI

1.72

2.74

'

1.461

4.71

43.10

30.15

26.75

93.86

5.12

1.02

91.31

5.94

2.75

4.98

50.39

37.92

11.60

.656

2.30

87.61

8.73

346

8.73

1.365

2.44

70.58

.076

.19

.735

1.84

36

.333

3.03

2.86

1.200

2.86

4.98

.598

2.72

8.63

38

'.

10.95

56.90(6)

30.15(b)
5.01

6.14

2.06

97.94

,,

.

2.59

1.94

•029(c)

-

-

1339(a)

16.66

25.21

9.01

3.29(c)

41

37.22

1339

1.21

62.65%

80.66

89.05

2.03

.118

—%

3643

,

2.06

6.29

(.33)

40.40(d)

(248)
(.003)

8.69

,

49.51(d)
12.39

.90

1.61

3.57

.265

.47

25.72

3.70

29.10

(3.37)

29.42

1.00

2.20

1.85

4.07

.398

.87

2.74

.127

.28

1.121

2.46

6034

36.92

2.14

34.74

2.19

39.76

'

2.50

2.25

4.50

.209

42

1.209

2.42

.256

.51

.953

1.91

83.25

14.28

247

1535

(136)

16.75

;

.18

1.076

2.56

.185

.44

.891

2.12

93.13

5.35

1.52

7.27

(1.93)

7.27(e)

.31

.987

3.53

.038

.14

.949

3.39

97.32

8.61

.51

ro.i3

(1-51)

10.13(f)

.648

1.85

92.24

6.45

1.31

7.33

(87)

7.24

2.00

130

2.62

2.10

5.00

.075

.95
.85

3.39

1.85

6.60

.087

.89

3.02

1.63

6.50

2.95

9.50

4.32

.870

4.00

.098

5.19

.393

3.35

1.55

243

70

175

90

2.25

27X10

35

2.04

.85

3.15

1.40

85X10
28.00

1.10
.84

1.29
3.00

1.75

2.06

2.85

—

—

44X10

75

1.70

1.00

2.27

.84

.19

.766

2.19

.118

.34

1.28

1.118

3.79

.085

.29

1.033

3.50

57.52

35.27

33.81(g)

1.46

3.870

1.76

.180

.08

3.690

1.68

86.62

13.19

.19

12.06

1.13

13.38

.798

2.00

.138

.35

.660

1.65

88.91

9.80

1.28

9.80

1.46

.943

3.49

.046

.17

.897

3.32

53.78

45.54

.68

45.59

(05)

46.22

.010

.01

1.110

1.31

.120

.14

.840

3.00

1.28

33.78

NA

NA

NA

NA

3.98

The effective take up fee is the additional fee paid on shares actually taken up by under¬
writer! related to the total number of shares offered.

1.16
"

NA

~

99.44

3.00

.990

.840

NA

NA

63.94

NA

NA

.

—

8.56

2522

NA

NA

7.76

.

11.08

.56

27.50

NA

V-

36

NA

NA

(e) Includes short position of 1,810 shares.

(c) The Underwriters' commitment does not cover 400,000 of the 999,093 shares offered.
Consequently, per share fees are computed on the basis of 599,093 shares.
,

(f) Includes short position of 7,045 shares.

(d) Does not include 87,000 shares from stabilization.

(a) Includes short position of 4,213 shares.

.

4248(g)

.40

.25

3.00

1.75

2.44

1.248

.378

5.52

1.60

1.365

.066

443

40X10

-

1.77

1.44%

,7239

2.26

.774

.124

.78

—

1.25

1 36

Compaay (New Icaey)

.860

.598

2.07

.248

5.79

3643

2.59

.13

"

6lil%

.320
.050

1.200

.85

3.51

1.87
2.00
238

645

1.65

4.16

.65
1.10
,

.10

4.71

4.37

.70

29.50

Corporatioa

*

2.11

.320

1.75

220.00

anhmtapoba-Hoaeywcll Regulator Company
Lehigh Portland Cement Company
Standard Oil

.516

.06

2.00

331
2.00
2.51

The Timken Roller Bearing Company
Outboard Marine

.07

.013

403

.90
.70

Company....

.016

3.94

3.18

28.00
35X10

International Buttneai Machine Corporation

449

.8075

2.50

United Stalm Foil

Acme Steel

2.71

.35

42.00

The Bibcock A Wilcox Company....

2X>7 ;

386

1.00

Reynold* Metal* Company
Company

.972

.07

L25

.35

45.50

.30

.021

242
1.87
3.18
2.86

75

50.00

.-—

.141

2.78

1.80

.85
1-00
1.00

Company

2.37

.807

2.63

12-00

SoconyMoba Oil Company. Inc
The Anaconda

2.08

1.113

2.44

28.50
56X10

^

Manufacturing Company

.614

.45

.71

.030

and Dealers

37.35%

_

198.:.

.584

.39

.213

.114

Underwriters

62.78

,

.

2.81
Z13

.405.,

.12

Jtffauu

Lay OS

93.78

573

1,

1.125

Shares

Sold be

Shares

Vnsubtcribei
Shertt

98.23

3.69%

1.569

.10

.023

.207

5.08

.50

.35

trout

Public

435

C00

.75

Ate%o1

Suiter. Price

Total

Lndorwrisers

by
Underwritert

Laid Off

Subscription

Per

51.385

.16%

.031

Pretired

Short

4.66

I JO

11-00
42D0

—

*

2.10

31X»

Incorporated.

3.39

.80

40.00

Company......-.. ...—
Corporatioa

Johna-Manville

2.25

.3075

20.50
38.00

_

Company...—..

$ .060

533
2.81

.428

At o% ol
Suiter. Price

r-Nel Con lo Company—,

1.10

2.45

...

Shares

Subscribed by

Subicrlpttoni
\

1.35

1.50

2.59

Monterey OU Company....-

Per

Shore

3.85%

1.600

1.125
.14

.028

Umubtcribed
Short!

on

,

At a % ol
Suiter. Trie*

$1,445

1.59%

$0,595

Company-^

2.00

2.34

Union Tank Car Company

Sperry Rand Corporation

Per

447

.85

2.37

lo

Short

2.81

19.00

—__

Ata%o!
Suiter. Price

5.33

1.25

The Bodd Company

Company

Pet
Ska/a

4.80%

$ 35

/-Grota Cotl

rtfeaht Take Up Ai'-,

Underwriters)
Asa%ot
Subset, trice

$ 37.50
30-00

Company of America

National Gypaua

Profit

none

others than

40.00

RiCfel Paper Corporatioa
Crucible Sue)

"

there

Remittance to Company of

Total Spttadv
subscribed for by

t—

Tjfcj ur Ttt

(g) Does not include 1,100 shares from stabilization.

(b) Doe* not include 12,200 shares from stabilization.

Continued

from

page

not be the same as the theo¬
retical price due to the "pressure"
may

73

of the

Report of IBA Industrial Securities

sire
the

funds to be raised

reflects

cost

an

estimated provision for

selling effort which
quired.
Terms
There

of

are

which

tal

number

a

the

a

Offering:
of

is

equity capi¬

as

consideration

on

capital

and

structure

feasible

in

the

of

market.

management
dividend

earnings

to

reason

the

is

discount

de¬

maintain

to

rate

sim¬

and

share.

per

Book value is generally of no
practical consideration in the de¬
termination
of
the
subscription
price.
However, most manage¬

ments

usually
sell
relatively clearcut figure in the

a^e

generally reluctant to
stock at

common

low

mind of the issuer.

factors

corporation

the

value

book

price be¬

a

of

their

out¬

standing shares.

issuing

Once

in setting up
rights offering. The

a

and

what

re¬

stock must consider

the terms of

based

The desired amount is thus

Rights

a

be

may

is

significant
the

same

ilar

this single fee is larger than the
standby fee on a two-fee issue and

of

the

approximate

amount to be raised

total

has been de¬

(3)

value desired.

desired

It is evident that

factors

can

be

none

of

these

number

(2)

terms of an
be
determined

considering ,each

of shares

Discount

of

the

of

without

want the discount

several

small

as

as

them

to

an

indication of the

subscribe.

do decline to

a

If

the

that

it

is

.

the

by

i

'/'y

.

market
,/<r

The Investment Dealers'1 Association

and

distribute

it

the

to

investing public.

rangement the issuers
of

I
I

&

Denton, Inc.

the

investment

P

205 Canada Bldc.

44 King St. West

Toronto

Windsor

EMpire 4-1131

CLearwater 4-6461

\

ar¬

assured

earn

Underwriters and Distributors

Investment Securities

Government of Canada Bonds
Provincial and

Determination

on

termined

(1)

a

Price:

of

in

two

can

Municipal Debentures

The

stock will

the market

Treasury Bills

Corporate Bonds and Shares

required to sell the issue.

offered

f

be

different

be

de¬

ways:

Prices
in

quoted in Canadian Funds for delivery

Canada,

or

fixed price, or (2) in unusual

U. S. Funds for delivery in the
United States.

formula price. Under the
price method, the banker

cases, a

I

Canadian and Domestic

I

fixed
and

§

:

1

i

prior

Affiliated with:

Boms Bros. & Denton, Ltd.

Burns Bros. &

•

and

Company, Ltd.

Toronto, Canada

Members: The Toronto Stock

Toiokto

Montreal

Ottawa

•

•

W




.

..

/....v.

plan

offering

Exchange

on

just
The

the

price,

market

pro¬

price
date.

establishes

lower limits

public

current

Direct private wire with Goldman, Sticks & Co.
20 Broad

Street, Neiv York 5, N. Y.

upper

proposed
based

quotations.

on

Equitable Securities Canada

A

typical formula plan might set as
top limit the last sale price or
the last offer, whichever is
higher;
the lower limit might be a certain

LIMITED

Members: The Investment Dealers' Association

a

Exchange
Winnipeg

•

Hamilton

v.

W/SS/AVS.#-//*.

public offering
the effective

to

formula

Toronto, Canada

Canadian Stock

the issuer negotiate the

posed

.

a

i

are

bankers

price at which the

§

this

fering price and the amount paid
to the issuer by assuming the risk
entailed in purchasing the issue
and for exerting the sales effort

Underwriters—Distributors—Dealers
m

exchanges

the spread between the public of¬

37 Wall Street, New York 5, N. Y.

i

all

obtaining their capital quickly

and

Burns Bros.

orders executed on

general

Under

1

I

of Canada

Description:

u

w*

.

\*

"

W "" '

)

Exchange

to

stock

WM

'

Members:

Toronto Stock

—

,

Co

'

worthwhile

not

&

Limited

i

rights

The cash offering
creating undue risk
Some of the
("straight" offering, public offer¬
of the market
dropping below the
considerations involved are as fol¬
subscription price, in theory the ing) is a less complicated method
lows:
of offering stock than the rights
issuer should have no objection
Instead of making the
(1) Amount of Money to Be to a large discount, since it in¬ offering.
Raised
As indicated previously, creases the value of the stock¬ offer to the stockholders first, the
original offer is made to the gen¬
management determines
the holders'
rights
by
an
amount
amount of funds
it needs on a equivalent to the reduction in the eral public.
The stock is usually
basis
of sales
estimates, capital average market value of their offered by the issuing corporation
budgeting, and other forecasting shares. In practice, however, the through a group of investment
bankers who buy the entire issue
techniques. The portion of these price determined
I

amount

prescribed

most

WALWYNj ST0DGELL

Cash Offering

pos¬

tain

\.

nominal value, the

either to exercise the rights or
sell them to others.

sible without

factors listed above.

issue

prior to
The size of the dif¬

which will appear, attractive
enough to stockholders to induce

decide

Subscrip¬

tion Price From the Market—The

the

riod

size of the discount is decided by
offering several factors.
Many corporations

the

after

stockholders may lose interest and

outstanding.

interrelation¬

the

cannot

same

share and depends only on the
total amount to be raised and the

automatically determines all four.
ships,

owner

per

sep¬

arately and independently. As a
matter of fact, a definite decision
on
any two of the four factors
Because

the

existing share is exactly the

of these

determined

from

by the issuer and in¬

banker

Ratio of New Shares to Old

—This ratio is

termined, the number of dollars relative
magnitudes of the exist¬
problem focuses on these factors: to be
sought from the holder of
ing common stock capitalization
(1) amount of money to be raised, each
outstanding share
is also and the new issue.
(2) number of old shares neces¬ fixed. It
may
be sought in the
sary
to
subscribe
to
one
new
(4) Value of the Rights — The
form
of
an
infinite
number
of
major concern of management is
share, (3) discount of the sub¬ combinations
of
different
sub¬
that
the
rights
have
a
value
scription price from the market
scription prices and ratios of old
throughout the subscription pe¬
price, and (4) theoretical rights and new
stock, but the
amount
of each

of leeway within a
period to select the
advantageous time for the,
the offering.
offer.
Since the formula plan is
ference between the lowest pos¬ based on market quotations, any
sible offering price and the current corporation whose slock does not
market price varies from issue lo have
an
active,
accurately re¬
issue, but it is usually a small ported market will usually wish to
use the fixed
figure.
'
price method.
When a stock is actively traded
Since the market is such an im¬
On the exchanges, some corpora¬
portant factor in the determination
tions prefer the formula plan.
It of the offering price under the
gives them flexibility in setting
formula plan, the Securities and
the offering price, as well as in
the matter of timing, since
this Exchange Commission has insti¬
method allows the parties a cer¬ tuted restrictive rules governing
vestment

becomes effective and just

offering.

Another
minimize

determined

amount below the last sale

or

220 BAY

STREET

—

of Canada

TORONTO, CANADA

Telephone: EMpire 6-1141

the

last bid, whichever is lower, and
within these limits the price is

Branch Office:

360 St. James

Street

West, Montreal

Volume

186

Number 5700

.

.

The Commercial and Financial Chronicle

.

(2707)

75

APPENDIX

'

EXHIBIT III

.'"v.

^

.,

SUMMARY OF CASH OFFERINGS IN EXCESS OF $5,000,000 OF COMMON STOCK BY INDUSTRIAL COMPANIES*—JANUARY
■'

■

1

frost* MM
Dot*

V

;

.

'

..

4

-t

v

.

'

»

,,

Issuer

January

II, 1956

General Shoe

20, 1956
23,1956

-V

Managing Underwriter

Koppers Company, Inc

February

■'

:

.The Txane Company...

Corporation

Pacific Coast

,7,4956

4449%

4.13%

50

160,000

$60.50

$ 9,680,000.00

$1.00

2.48%

$240

7

300,000

53.00

15,900,000.00

4.00

1,89

1.00

149

£.00

3.77

28

120,000

49.50

5,940,000.00

.85

1.72

1.00

2.02

4.85

.3.74

1040

34

450,000

14.75

.6,637,500.00

40

3.39

40

349

440

6.78

5441

1545

:547

201

500,000

68.75

34,375,000.00

1.15

1.65

1.25

1.81

240

349

209

250,000

25.00

6,250,000.00

1.00

4.00

40

340

1.80

75Q

11.92

169

573,575

2740

15,773,312.50

.85

3.09

.90

3.27

1.75

6.36

2750

127

115

350,000

78.75

27462,500.00

V 1.30

1.65\

1,50

1.90

240

346

$0.67

69

59

400,000

33.00

13,200,000.00

.75

2.27

1.00

3.03

1.75

540

2054-

70

120

497,100

32.00

15,907,200.00

.70

2.19

.90

2.81

1.60

540

$946

128

'127

30Q.000

54.25

16,275,000.00

1.00

1.84

1.25

2,30

2.25

4.15

Kidder, Peabody. & Co
Smith, Barney & Co.; The First Boston Cor¬
poration

64

9

190,000(a)

30.00

5,700,000.00

1.00

3.33

1.00

3,33

2.00

6.67

35

132

Smith, Barney & Co...

44

49

115

33

70.75

15,565,000.00

Blyth & Cb., Inc.

29

33

175,000

38.25

6,693,750.00

Hornblower & Weeks

38

69

200,000

27.50

5,500,000.00

June

19, 1956

Donnelley ffc Sons .Company

;

Lehman Brothers; Blyth & Co., Inc....
Blyth & Co., Inc.; Merrill Lynch, Pierce,

Cementing Company.

I

Company

Fcnner &' Beane..
October

16, 1956

Georgia-Pacific Corporation

Blyth & Co., Inc

March

12, |957

Owens-Corning Fiberglas Company

Goldman, Sachs & Co.; Lazard Freres & Co.;
White, Weld A Co

*

■
■

•

•

Standard Pressed Steel Co

.16, 1957

April

I, 1957
\

June

KLM

5, 1957

May

The Trane

Royal Dutch Airlines

"

Company

Kcrr-McGee Oil Industries, Inc

2$. 1957

Lehman

Brothers;

Strauss,

Blosser

■J...

Oxford Paper

16, 1957

;

,

September

9, 1957

Company

Amphenol Electronics Corporation
*

Excludes

.90

"V 3.10

2.00

649

1.00

2.14

1.85

347

♦758

1.00

1.41

1.50

2.12

2.50

353

1052

.90

2.35

1,10

248

2.<fo

543

22.98

.75

2.73

1.00

3,63

1.75

656

39.96

29.00

7;250,000.00

1.10

150,000

46,625

6,993,750.00

.85

3.79
v

;

V.Y

220,000

4.76

20.64(a)

,

■ ■

1.82

250.000(b)

&

McDowell

July

Price

$1.50

as a

%of Shares
Outstanding

Offering

14

Harriman, Ripley & Co.

June

1.65%

Offering

Ata%of

66

Blyth & Co., .Inc.
Lehman Brothers; A. G. Becker & Go.

R. R.

Halliburton Oil Well

Share

'99

Caterpillar Tractor Co........
Murphy Corporation

18, 1956

Acme Steel

Price

Short

Amount

23

Blyth & Co.,Inc.; Schwabacher & Co

15, 1956

September 18,1956

Price

Per

.Share

30

26

June

2. 1956

Dealers

iOffering
Price

Per

Offering

96
-

May

April

Per

of
Shares

Spread

Asa%of

As a%of

Number

Number
of

writers

Smith, Barney & Co
The. First Boston Corporation
Smith; .Barney & Co

Aggregates, 4pc

TouAUnderwrMpg

Concession

Underwriting

"
■

1,1956—NOVEMBER 15, 1957
Selling

■
No. of
Under-

February
March

i

23.18(b)

.

partial secondary offerings except where proceeds to the Company exceed $5,000,000.

(a) Excludes the portion of shares offered to employees.

(b) Excludes the portion of shares offered by European underwriters.

any

attempt by the underwriters
price through mar¬

to stabilize the

ket transactions.

Distribution
share

the

the

Organization:

risk

and

distribution

of

in

shares.

the

The

actual

sale

writers and dealers

of

the

under¬

of

be very

may

This

the

■stock.-

the

number

—

portion ,is

breakdown

A

neW

S."■

To

to accomplish

issue, the
managing investment banker or¬
ganizes
a
group
of investment
bankers, and sometimes even an¬
other group of selling dealers to
assist

which-sell

ers

a

.

("Concession")

spreads

to

■;

the

of

offering and attitudes Of different

Conclusion
between

cash

or

rights offerings has been a subject
of debate in the financing of cor¬

issuers

investment

and

bankers

which tries to

assure

financial

strength and coverage of the dif¬
ferent types and locations of po ¬
tential investors. An organization
of this

kind, motivated by a sell¬
ing commission on each share
sold, is capable of developing a
large demand, which is a funda¬
mental requirement for the suc¬
cess

of

an

issue.

The

not enter the market

of time
On the

as

in

stock

over a

the rights

does

period

offering.

contrary, in the cash offer¬

ing the entire

issue is placed on
the market on a given day and
aggressive selling effort is neces¬
sary
to develop enough demand
to place the issue without delay.

cash offering.
In

great many cases there is

a

problem, since stockholders may
pre-emptive rights
either
by statute or under the company's

and the other

the distribution

on

the

corporation
has
no
choice
in
selecting the method of common,
stock financing.

termining

from

such

the

price

price in de¬
paid to the

issuer of the securities.

(1) Underwriting Compensation
—This

portion is paid to all the
of
the
underwriting

members

in compensation for assum¬
ing the financial risk of the opera¬
tion, and expenses of the under¬
group

tin connection with the
issue, i.e., legal, advertising, etc.
writers

(2)

Senile; Compensation

stockholders

taken

ment of Mrs. Katherine C. Barton.

Frank B. Reid

Fulton, Reid & Co., Cleveland,

by the

subscribe

who

to

With First Trust Co.

Ohio

the

on

up

ley Investment Company, Inc. has
opened a branch office in the Ho¬
tel Flanagan under the manage¬

(Special to Thk Financial Chronicle)

LINCOLN, Neb. —Harold Tay¬

Stein Bros. & Boyce,

with the

lor has become affiliated

Leroy A. Wilbur

First

*

O

Baltimore, Md.

Trust .Company,

10th

Streets.

a

rights issue is small, most of the
funds must come from outsiders.

In a rights offering, these out¬
the
pre-emptive
right
siders
are
the people who buy
preclude public cash of¬
ferings, a decision must be made rights; in a cash offering, the out¬
When

does

on

not

basis of

the

A basic

tors.

a

number

consideration,

of fac¬
as pre¬

siders

are

customers

off by the
the type of

laid

bankers,

will

holders

of \ the

Campbell, McCarty & Co.
INCORPORATED

and

bankers

To the extent that shares

dealers.
are

the

investment

selling

much

be

BUIIL BUILDING

investment
share¬

DETROIT

new

the

same,

since the investment banker sells

<e>

to the same sort of

he
or

people whether
gets the stock from a lay off

from

If

a

the

direct

purchase.

McLOUTH

•

relative

size

of

the

various

the number and
type of institutions owning the
stock, and other forms of distinc¬
stockholders,

tive

stockholder

lead

to

situations

also

Where stock is largely held by a
small
more

has often proved
convenient to raise equity
group,

it

—

Sold

—

Quoted

INDUSTRIAL SECURITIES

COMMITTEE
Edward Glassmeyer, Chairman

Blyth & Co., Inc., New York

varied

emphases on the
different methods of selling stock.

Bought

Resj^ectfully submitted,

stockholder's holdings, the number
of

STEEL CORP.

amount of the lay

off is
large, it can be argued that al¬
the
technique
is
very
make such a cash offering difficult though
if not impossible to effect at a different, the funds come
from
reasonable cost.
Factors such as basically the same source.
the

Included in the Spread:

New York

Mohawk Valley Branch
MALONE, N. Y.—Mohawk Val¬

.

viously mentioned, is the desire
of management to offer stockhold¬
ers
an
opportunity to maintain
their
proportional voting rights
Compensation of the Investment and interest in the equity.
An¬
Bankers: The compensation of the
other important
consideration is
the practical limitation of a cash
investment bankers—contemplated
gross spread—is negotiated at the offering, where the percentage in¬
same time as the proposed public
crease
of the new shares or the
offering price and of course is dollar size of the offering may
deducted

depending

charter.

instances

Kuhn, Loeb & Co., New York
Samuel N. Kirkland

differences, there may be a funda¬ Julian A. Space, Jr.
Johnson, Lane, Space & Co.,
mental similarity in the source of
; Savannah, Ga.
the
|
funds,
amount of stock

these

Gilbert W. Kalin

♦

original stockholders of the cor¬
poration. If the number of original

In

JACKSONVILLE, Fla. — John¬
son, Lane, Space and .Co., Inc. has
opened a branch office .in the
Florida Title Building oinder the
management of Philip S. May, Jr.

Jenks, Kirkland, Grubbs & Keir,
On the surface, the rights offer¬
Philadelphia, Pa.
ing and the cash offering are two Thomas A. Larkin
very different methods of obtain¬
Goodbody & Co., New York
ing equity capital. One concen¬
Frank A. Petito
trates on the original shareholders
Morgan Stanley & Co.,

have

no

Co.,

also factors.

are

large, ranging from 57 to 270 in porations. In some cases the rights abilities of the investment bank¬
the issues recorded in the Appen¬ offering
seems to be more ad¬ ers' organizations. The techniques
dix.
The underwriting group' or visable and in others the circum¬ and problems are very different.
syndicate is organized in a man¬ stances seem more suited to the
Despite
these
rather obvious
ner

Johnson, Lane Branch

New York

the

The .decision

,,

Charles L. Hewitt
Francis I. du Pont &

the size of spread
offering price is
given in Exhibit II of the Appen¬
dix. :
>/.;■"- A ,:.r
;

cash offering to

a

Relative underwriting costs, the
mechanical simplicity of a cash

* *

:

each

through

of

shares

and

relative

'

of

funds

the public.

paid to the-underwriters and deal¬

P. Fred Fox
P. F. Fox &

JOHN L. KENOWER
T.

NORRIS

REGINALD MacARTHUR

JULIUS POCHELON
MELVIN R. STUIT

HITCHMAN

Co., New York

Madison H. Ilaythe
Alex. Brown &

Sons, New York

Underwriters, Distributors and Dealers in

Municipal and Corporation Securities

WATLING, LERCHEN & CO

Specializing in
Michigan Municipals and Revenue Bonds

Corporate and Municipal
Member: New York Stock
American Stock

Securities

Kenower, MacArthur & Co.

Exchange, Detroit Stock Exchange,

FORD

BUILDING, DETROIT

Phone—WOodward 2-3262

Exchange (Associate), Midwest Stock Exchange*

Michigan Trust Building
GRAND

RAPIDS

GLendale

DETROIT

26, MICHIGAN




t

Ann Arbor

•

Jackson

•

Kalamazoo

•

Pontine

1-2231

Members Detroit and Midwest

Bell Teletype—DE 475
Bearinger

Building

SAGINAW
PLeasant 2-7128

Stock Exchanges

and

76

(2708)

The Commercial and Financial
Chronicle

I

Governor

of the

leased

Continued from page 34

of our material to
in Maine where it re¬

the

aged

that as yet the situation had not
become acute since securities sold

under

with

turns

due,

cost

of

in

neces¬

greater

money.

high

rates

part, to the

interest

were

dividend

and

in

averaged

with

several companies
jurisdiction higher re¬

sions has given

its

they have been earn¬

than

ing. This latter development is of

a

which

followed

Albert

E.

Schwabaclier, Jr.

much

a

Bache &

the

we

investor

the

to

think this procedure

might be

followed in other cases.

Our

Committee

sentations

to

mittee

both

of

the

and

press

repre¬

subcom¬

proper

the United

States

Senate and House of Representa¬

.

Dec.

SOURCE:

summer by a rate cut order
issued by the Florida Commission

headline

readers

year

a

was

decision

by
the
Iowa
Supreme
Court
affirming "fair value" as the basis
for rate making in that state as

against the Florida Power & Light
and

of the

ment

develop¬

encouraging

Another

in the

Co.

The change of
heartening.

been

has

atmosphere

Electric

,

Power

tives in connection with the pro¬

ex¬

against original cost for which one

pressed considerable concern.
When all of the facts were as¬

had

municipalities
contending.
the

of

sembled and the incident closed
later in the year investors should

been

Not all developments, however,
rather than
been
favorable
and
our
Commission have
higher rate of return Committee has continued to be
for the company in question than cognizant
of responsibilities
in
it had allowed in previous pro¬ situations where the interests of
ceedings
and
the
Commission the investor are obviously being
Chairman
publicly
stated
that prejudiced. We gave special atten¬

earnings would be permitted to go
modestly above the return set

Public

without

grant

pressure

for

a

new

tion

rate

cut.

The

recently

to

Utilities
a

Maine

New

York

granted

Commission

the

New

we

not

to

York

refusal

the

the

rate
Power

of the

Maine

Commission

to

increase to Central
Co.

this

In

case

only made representations
commissions

and

to

the

constructive

be

more

seek

by which additional
requirements of the area

means

power

could be made by investor-owned
companies which pay taxes to the

Federal

Government.

wrote

SEC
FPC

the

to

and

Chairman

them

to

consideration

of

give

to

re¬

quests

of utility companies for
approval of limited non-callable
provisions in their bonds to facili¬
tate

financing at the most favor¬

able

rates.

One

the

of

year

of the
of the

used

the

largest projects

was

of
circularization

the

important utility companies
country which use or have
subscription rights in con¬

nection with their

financing,

urg¬

ing that dealers be paid a com¬
pensation for handling such rights.
We
are
pleased to report that
some

companies

made

of

which

have

not

practice of paying com¬
pensation in the past have in¬
dicated a willingness to study the

Underwriters and Distributors

a

matter

Corporate and Municipal Securities

next

before

the

time

of

their

9 Mos. to

Long-Term Debt:

;

Publicly
Subscription
Privately

;

J.

'

9 Mos. to

9/30/57

9 Mos. to

9/30/56 .V

•

$1,233,500

9/30/55

101,052

27,500

$592,500
37,737
67,150

$1,535,502

$748,779

$697,387

$59,057
1,639

$134,265
32,836
10,600

$112,425

$60,696

$177,701

$156,418

$120,856
291,524

Preferred Stock:

$63,362

$90,660

141,254

140,440

Publicly
Subscription
Privately

Common Stock:

Publicly
Subscription—

$412,380
Total

23,243
20,750

SOURCE: Ebasco

$204,616

$2,008,578
$1,985,768

Financing.
Money

Total New

$1,131,096
$1,127,000

$231,100
$1,084,905

$952,407

.

Services, Inc.

GAS UTILITY & PIPELINE INDUSTRY
12 Months

Total

Construction

Period

Revenues

Expenditures

(Millions)

June

30, 1957
June 30, 1956
Dec.

Dec.

31, 1954
31, 1951__—
Average

(Thousands)

$1,932
1,628
1,345

2,228

__

Customers

(Millions)

$6,115
5,750
4,901
3,052

June 30, 195.5

1,462
799

1940-46

29,988
29,190
27,954
27,528
24,953
22,267

1,055

1,565

FORECAST OF CONSTRUCTION EXPENDITURES

GAS OPERATING AND HOLDING COS. SECURITIES
SOLD
1956

1955

1954

(

COMMITTEE

Debt Issues-—-

Harold II. Young, Chairman
Eastman Dillon, Union Securi¬

Preferred Stocks
Common

$1,142,624,000
258,930,000
182,151,000

Stocks

$946,557,000

$1,861,595,000

192,043,000

274,153,000

327,585,000
242,082,000

$1,412,753,000

$2,431,262,000

ties & Co., New York
William N. Bamiard, 3rd

SHAUGHNESSY 8c COMPANY, INC.
First

National

ST. PAUL

Bank

American Securities Corp.,
New York

Total
SOURCE:

$1,583,705,000

-

Facts"

"Gas

Child^ & Co., New York

1, MINNESOTA

Carl

rk i

V

t

•

Laurence M. Marks & Co.,
New York
"
Edward J. Costigan, Jr.
Edward D. Jones & Co.,
St. Louis

II.

_

FIRST NATIONAL BANK BUILDING

1955—.

1954
1949
1946

Year-End

Independents,

1954_
1949

E. Richard Drummond

1946__

Pierce, White and Drummond,
Inc., Bangor

James M. Howe

Farwell, Chapman & Co.,
Chicago
Johnson, Lane, Space and
Co., Savannah
Hudson B. Lemkau

Morgan Stanley & Co.,
New York
Milton F. Lewis

A.

G. Becker &

Co.

Richard II. Martin

ESTABLISHED 1895

Pacific Northwest

UNDERWRITERS

&

DISTRIBUTORS

CORPORATE & MUNICIPAL
SECURITIES

Thayer, Baker & Co.,
Philadelphia
Robert H. O'Keef

YORK

STOCK

Marshall

Company,

Milwaukee

MEMBERS
NEW

Co., Portland

Wallace M. McCurdy

The
f

Inc.,

New York

EXCHANGE

AMERICAN

STOCK EXCHANGE
(ASSOCIATE)
MIDWEST STOCK EXCHANGE

George L. Perin
The First Boston Corporation,
New York
William C. Porter

MINNEAPOLIS

ST. PAUL

GREAT FALLS




-

Dittmar &

Company, Inc.,

San Antonio

ROCHESTER
BILLINGS

James M. Powell

Boettcher and
Denver

Company,

596,030,000
526,109,000
286,572,000
201,170,000

Bell System
.

-

;

v.;

Independents

1.956—
1955
1954

$2,323,052,000

j,

1

Bell System

$17,556,590,000

2,042,822,000

15,799,247,000

1,795,029,000

14,567,746,000

1949._

961,199,000

9,726,535,000

1946

655,878,000

6,440,847,000

SOURCE:

/

$5,966,190,000
5,425,442,000
4,907,481,000 -.t
2,970,690,000 •
2,157,917,000

Plant Investment

Thomas M. Johnson

Hopwood

System

'

Year-End

Hornblower & Weeks, Boston

Scott, Horner & Co., Lynchburg

&

—

■

Edwin B. Horner

Piper, Jaffray

Association.

51,344,000
48,029,000
45,044,000
34,776,000
26,900,000

$648,222,000

1955—

Co., Inc.,

Cleveland

Thomas B. Gannett
SAINT PAUL 1, MINN.

Gas

Bell

9,112,000
8,461,000
7,996,000
6,086,000
4,825,000

1956——

Doerge

Wm. J. Mericka &

Caldwell Phillips Co.

American

Operating Revenues

Langley & Co.,

New York
Carl

Report

Independents

1956—.

Francis J. Cullum
C.

quarterly

Telephones Installed
Year-End

C. Brown

W.

and

TELEPHONE INDUSTRY

Elwood D. Boynton
C. F.

Building

v,

$661,500
59,779

150,950

PUBLIC UTILITY SECURITIES

Mutual Funds Shares

"

(Thousa nds of dollars)

1958—$1,977 million; 1959—$2,265 million; 1960—$2,335 million

offering.
Respectfully submitted,

•

Commission.

of

Chairman

the

urging

favorable

Power

Securities Sold

to

would

We

,

by
it

method

the

a

of TVA,
financed,

whatever

the

Developments

Unfavorable

have been reassured
otherwise
as
the

adopted

expansion

125,753,959
118,010,526
110,029,299
102,592,410
63,100,334
42,405,436
29,839.459

Statistics, Federal

■}+;

posals to authorize the Tennessee

further

Installed Generating: Capacity
at Period End < kw)

624,302,252
589,452,837
518,363,951
471,686.354
291,099,543
164,787,878
92,180,273

—

31, 1949
31, 1941—
31, 1929

Dec.

INDUSTRY

(Thousand* kwh)

Aug. 31, 1957
Aug. 31, 1956
Aug. 31, 1955
Dec. 31, 1954
Dec.

'

made

UTILITY

Electric Production

Ended

is

obviously adopting an
attitude, something can be
gained by presenting the position
of

ELECTRIC
12 Months

*

duly repressive.

Co., New York

San Francisco

com¬

larger volume sold at lower particular significance to the
rates.
investing
public
because
the Valley Authority to sell revenue
bonds to obtain capital for the
California Commission has been
Rates of Return
traditionally regarded as one un¬ expansion of its system. We urged
It
is reassuring that already
that
rather
than
contemplate
some
regulatory bodies have al¬
lowed higher rates of return. Con¬
siderable attention was attracted

Thursday, December 19,1957

Charles Tatham

Schwabacher & Co.,

encour¬

unfair

However, many
commissions expressed the opinion

sary

re¬

we

to feel that where

us

mission

Telephone
& Telegraph
Co. a
higher rate of return and one of
the
most
encouraging
develop¬
ments has been that the California
Commission in a series of deci¬

when and if these become

press

reactions

Secuiities Committee
higher rates

but

..

ceived considerable attention. The

Report of IBA Public Utility
thetie to the need for

state

copies

.

Statistics of
the Independent
Telephone
Independent Telephone Association.

Industry—U.S.

Volume

Number 5700

186

Continued

from

.

.

The Commercial and Financial Chronicle

.

In the long run interest

economy.

36

page

should be lower

costs
erage

on

the

to

F. Brian Reuter

av¬

if all investor categories

encouraged

Repoz! of IBA Governmental

shoulder their

Mellon

are

der four years,

Over the past five
years,
this
demand debt has
shrunk to less than $15 billion.

and the short-term
debt is still large.
Indications of a downturn of

This

billion has been or
During 1958 the
amount outstanding stands to be
reduced by $1% billion as various
issues mature. Although the re¬
demption of this demand debt
added to the already difficult
problems of the Treasury, the pro¬
gressive shrinkage of this type of
debt means that financial prob¬

business, the reduction in tne dis¬
count rate, and the lower esti¬

proving the structure of the pub¬

mine the

lems

lic debt.

re¬

year

$4

Will be paid off.

related

bothersome

it

to

in

should

the

be

future.

mates

of

marketable

debt

deemable-on-demand

its

borrowing re¬

operations for
the year ahead. It is to be hoped
that these
operations will con¬
out

tinue

less

R.

financing

directed

be

to

toward

im¬

Treasury has demonstrated
understanding of the problems
and its willingness to take direct
steps toward

an

with

eventual solution.

for

A

is

debt

the

allocation

of

heavy maturities and cash re¬
quirements under almost uni¬
formly adverse conditions, would
serve as a pointed argument for

Treasury Needs in 1958

Looking ahead to 1958 the
Treasury has maturities of more
than $48 billion coming due, ex¬

the need for a balanced debt struc¬
ture. The advantages

to the Treas¬
and hence to the nation as a
whole, are tangible and vital. Our

ury,

an¬

Problems

oil

in

a

rick

Co.,

458

Mr. Sloan is
and

agement Company, and Vice-Pres¬
ident, Treasurer and director of
Texas Fund, Inc.
He formed the
W.

ANGELES, Calif.—Frede¬
Kimball

G.

and

Lowell

B.

former President

a

director of Texas Fund Man¬

Sloan

J.

Investment

Company

in

Manage¬

Houston,

fol¬

lowing his connection with Texas
Fund.
Mr. Sloan's investment activities

with William R. Staats &

Co., 640
Spring Street, members of

South
the

Horizon

New

Stock

and Pacific

York

Exchanges. Both

back to earlier association with
Company, Wall St.
28 years
Company
in an executive capacity.

go

Fahnestock &

Coast

were

brokerage house, and
with Smith, Barney &

for¬

merly with Marache, Dofflemyrc
&

Company.

He served 10 years as

of the

J. Logan Co. Adds

&

(Special to The Financial Chronicle)

Dealers

York
the

PASADENA, Calif.—Norbert R.

consistent

Controllers

of J. Logan

on

in

Association

City.

is

He

National

Blank has been added to the staff

& Co., 721 East Union

Chairman

Tax Committee of Broker

a

Institute

Securities

and

New

of

member

Committee
of

of

the

America

Exchange

regulations.

Street.

good debt management, fis¬

cal and monetary policy and avoid
an
additional base for further

inflation.

INVESTMENT DEPARTMENT

Respectfully submitted,
THE

GOVERNMENTAL

Emil

,T.

FIRSTNATIONAL

SECURITIES COMMITTEE

Pattberg, Jr.,

First

Th<*

Boston

Chairman

Corporation

Robert B. Blyth
National

The

CHARLES A. PARCELLS & CO.

City

Specialists in state and municipal bonds of

of

Bank

Cleveland, Cleveland

1919

Minnesota, North Dakota and South Dakota,

Milton S. Bosley

and U. S. Government bonds

National Bank of Detroit

Underwriters, Distributors and Dealers

BANK

MINNEAPOLIS 2, MINNESOTA

New York

Established

&

Trumbull have become associated

investable

manner

Sales Man¬

Exchange, has been announced by
President.
; \

ment

charged with directing our Gov¬
ernment. Unemployment, a lower
level
of business
activity, cold
wars, increased defense expendi¬
tures
and
the
development of
space satellites may all play seri¬
ous parts.
Your Committee hopes
that these problems may be re¬
with

as

D. Gordon Rupe,

(Special to The Financial Chronicle)

The year ahead may bring great
to bear on authorities

solved

Seidel

Spring Street.

LOS

pressures

ticipation issues.
In addition to free economy depends in large
refundings, cash offerings can be part upon a sound dollar, a cause
expected to finance seasonal needs, to which the Treasury can con¬
attrition and redemption of sav¬ tribute by its debt management
ings bonds.
Even though some policies. It is also important that
the Treasury correlate its financ¬
progress in the area of debt ex¬
ing operations with other capital
tension was made in 1957, the av¬
markets rather than being forced
erage maturity of the debt is un¬ to interfere with this phase of the

Rupe & Son

Texas—Appointment

Dallas Rupe & Son, Inc.,
Republic National Bank Building,
members of the New York Stock

Two With W. R. Staats

the

For

Treasury to succeed in its goal, it
will need the cooperation and sup¬
port of all investors who deter¬

difficulties

of

building a stronger base for sound
debt management. •

cluding regular bills and tax

of

survey

which the Treasury faced this year,
as it struggled with the financing

re¬

DALLAS,

of William J. Sloan

Morton

South

less essential that investors

attainment.

Dallas

,

ANGELES, Calif.—Frede¬
rick B. Dickey is now connected

jectives and of their responsibility

Urge Balance Debt Structure

,

Pressprich & Co

Ynvlr

LOS

be cognizant of the Treasury's ob¬

their

Trust

With Morton Seidel

The

for

&

(Special to The Financial Chronicle)

its

no

Bank

ager of

emergency.

It is

W.

Maw

Your

Committee is strongly of the opin¬
ion that the continuing substitu¬
tion

business

of

quirements for 1958, may make it
easier for the Treasury to carry

National

Rudolph Smutny

funds to the market.

savings bonds.

William Sloan Joins

Company, Pittsburgh

spective portions of the debt. Fi¬
nally, the Treasury must have a
significant degree of flexibility
and borrowing power in the case
of some monetary or international

Securities Committee

77

(2709)

Detroit

in

Wendell T. Burns

Northwestern National Bank of

Corporate and Municipal Securities

TELETYPE

—

IVIP

178

Minneapolis, Minneapolis
Dwight W. Chapman

Members
DETROIT

STOCK

MIDWEST

STOCK

American Trust Company
San Francisco

EXCHANGE

EXCHANGE

:

.

s

639

P. Newell Childs

Penobscot Building

C. F. Childs and

DETROIT 26
Bell

Telephone WOodward 2-5625

Company

Chicago
System Teletype DE 206

.Tames A. Cranford

Atlantic National Bank of

The

Jacksonville, Jacksonville
Stewart A. Dunn
C. J. Devine &

UNDERWRITERS *

DEALERS

•

BROKERS

•

Co., New York

DISTRIBUTORS
W. Wayne Glover

California Bank, Los Angeles

MIDWESTERN

ACTIVE TRADING

SECURITIES

Sheldon R. Green

MARKETS

The Chase Manhattan Bank
,

New York

II. Lyman Greer
The Fifth Third

ALLISON-WILLIAMS COMPANY
Union

Trust

MINNEAPOLIS, MINNESOTA

Co., Cincinnati

BAKER, SIMONDS & CO.
—

ESTABLISHED

1920

Teletype: MP 163

Phone: FEderal 3-3475

Alfred II. Ilauser

Chemical Corn Exchange Bank
New York

—

MEMBER DETROIT STOCK EXCHANGE

Hardin II. Ilawes

DETROIT 26

BUHL BUILDING

Harris Trust & Savings

Bank

Chicago
BELL

TELETYPE—DE

PHONE—WOODWARD

1058-9
—DIRECT

WIRE

1-3670

*

Russell A. Kent
Bank of

TO—

America, N.T. & S.A.

San Francisco

TROSTER, SINGER & CO., NEW YORK

CHURCH and INSTITUTIONAL FINANCING

George B. Kneass
The
>

Philadelphia National Bank

J Philadelphia
Frederick G. Larkin, Jr.

Security-First National Bank of

TWENTY-FIVE YEARS OF SERVICE TO
MICHIGAN INVESTORS

Los

Angeles, Los Angeles

McDONALD-MOORE & CO.

on

Ralph F. Leach
New

all Catholic

Trust

Church securities

ter

The Northern Trust

ing

Chicago
Bankers

BUILDING

First

WOodward 3-9565

New
STOCK

FVCHAMC.E

MEMBERS MIDWEST STOCK

EXCHANGE

MEMBERS

DETROIT

Trust

L.

Co., New York

National City Bank of
York, New York

E.

LANSING




Bank

1

of

*

1031

Pillsbury Bldg.

Herbert N. Repp
Discount Corporation of

York, New York

MINNEAPOLIS 2, MINNESOTA
FEderal 3-3522

GRAND RAPIDS

MUSKEGON

KEENAN & CLAREY, Inc.

Sumner Pruyne
The First National

Boston, Boston
FLINT

Church

century

of

specialized

hundreds of structures

throughout the United States.

Delmont K. Pfeffer

DETROIT

Clarey, Inc., un¬

experience based on financ¬

Company

Robert C. Morris

PENOBSCOT

&

securities, offer over a quar¬

Pat G. Morris

Municipal and Corporate Securities
1566

Keenan

derwriters of Catholic

Company of
York, New York

Guaranty

Markets maintained

New

78

The Commercial and Financial Chronicle

(2710)

Continued

from

gain

40

page

Report of 1BA Federal Taxation
Committee
resulting from the coun¬

revenues

try's growth are channeled into
reduction, rather than, as in

tax

it

that

in

reduction

provided

slight

a

taxation

double

the

in

for

of-corporate dividends by allow¬

tax credit of
received.
We

ing

individuals

creased expenditure.

4%

of

enues

would like to see further progress

entirely into in¬
Federal rev¬
have recently been increas¬

recent:

years,

ing at an annual average rate of
between $3 and $4 billion a year.
A substantial part

of this increase

should in effect be made available
to

do

To

taxpayers.

strengthen
and
invigorate
economy
and thus improve

a

dividends

along this line to the point where
the credit is 20%—equal to the
lowest tax rate—as it is in Can¬
ada.

would

so

exists

sold,

is

The

a

Turning

to

now

made

upon us.

considerable-

Averaging Should Be Permitted
A basic unfairness in the pres¬

income

the

to

progressive

steeply

tax structure is that, due

working

earning

man

income

personal

in

a

even

of arithmetic, a
given: amount of
instalments

over

period of years pays less tax

a

than another

amount. of

total

same

who

man

the

earns

income

in

irregular amounts over the same
period. This, of course, penalizes
the

small

businessman

who

nec¬

essarily doesn't receive the same
income every year. Therefore, the
income
tax
law
should permit
averaging of incomes over a rea¬
sonable period—say

five

years.

the

of

actual

duced

in

principle

a

significant

improvement in our tax structure

in

a

the rate
in

an

amount of

the

the

which

pe¬

1940's

this

avoid

can

tremendous

capital levy or transfer tax mere¬
ly
by sitting
tight and
doing
nothing.
This immobilizing effect
of the tax has, therefore, securely
tremendous

The reason

liability for the tax is
created voluntarily by the tax¬
payer—liability for the tax oc¬
curs
only when the holder of a
capital asset—such as real estate
ception

or
a

securities—decides to sell it at

price higher than the price he

paid for it.
holder

can

If he wishes
refrain

from

to, the
selling

he

dies, and his death will
void potential liability for the tax.

until

effect

the

this

of

ation for

indefinite period
all

segment of

the

that, to bear
burdens imposed upon it by

the
the

an

situation

population

and

by

growth,

its

badly

needs increasing amounts of ven¬
turesome

Therefore, we would like to see
very substantial cut in the rate
of the capital gains tax, and its
elimination.

eventual

Parentheti¬

cally, other capitalist countries,
notably Canada and England, have
no capital gains
tax; tnese coun¬
tries have long felt that such a
tax would impose an entirely un¬
necessary
limitation
on
their
growth capabilities.
The

Holding Period

Should Be

Shortened

In

the

addition
rate

to

the

of

a

the

tax,

in

lowest

we

will

almost

in¬

variably prefer to retain any asset
in which a gain exists until the
tax liability is as low as possible.
When a gain is in sight, the cer¬
tainty of reduced taxation if six
months

~

is allowed to elapse out¬
weighs the uncertainty of future
price action. Since this is the

trading markets

capital gains tax involved.

really

seems

There

logical argument

no

against

the

scheme,

and strongly in favor of

"full

it is the fact that
of all

reinvestment"

a

true

large part

very

Capital gains in

not

are

case,

the holding period might

well

be

short

as

be

in

taken from

him

by

To make clear the nature

of this

proposal, let us assume that
last June two men, each holding

wire systems

New York Stock Exchange

goidman, sachs & co.

pacific Coast Stock Exchange

dempsey-tegeler & co.

provision

present

and

too high,

was

that, for example, missile re¬
would be a more produc¬

search

form

tive

of

endeavor.

One

of

them had bought his stock in 1946
at

$10

share.

a

Thus, his tax posi¬

the event of

tion in

of

capital

oik &

Co.

SAN

inc.

FRANCISCO

sale would

a

losses

to

be

deducted

profit

each share and

on

tax

a

liability of nearly $15 per share,
or a tax equal to more than 21%
of his

with

capital. It can be concluded
some
positiveness that this

holder

Standard

of

refrain

would

Oil

of

N.

J.

from

selling. The
other holder bought his stock in
1956 at S5.9 a share. He, thus, by
selling would have a profit of only
$10 a share and would impose a
tax liability on himself of > only
$2.50 per -share, or 3.6% of his
capital. In this case tax liability
not

terrent

limitation

If

sale.

a

the

on

be

to

seem

to

toted

a

a

de¬

percentage
of

amount

the

relation

in

to capital at, say
set, then both holders
sell, two taxes would be
collected and, of course, a doubled

tax

4%.,

were

would

amount

would

of

venturesome

available.

be

therefore

would

damage

diminish the
of the capital
gains tax and increase its revenueraising potential if the law were
to

be

mum

25%

amended

that the maxi¬

so

capital gains tax was either:
of the gain or 4%
of the

sale, which¬

a

less.

was

Still

Reform

any

is

revenue

from

to

built-in

a

be

port

unfairness.

Reform

only

so

with

Proposals

now

proposals 'which
retention

of

!
re¬

modifications

We

mit

would

per¬

the. present

structure, would probably not

but,

tax
re¬

the contrary, would prob¬
increase revenues from the

on

ably

tax, and would have the effect of
freeing
from
the
"locking-up"
effect

of

the

capital gains tax a
capital.
The first

vast amount of

of

these

"full

extend

SAN FRANCISCO
800

-

Montgomery Street
Teletype SF 885
-

stock

exchange

Log ANGELES

Teletype LA 533




gains.
to

all

dwellings.
man

It

merely would
types of property

treatment
of

owners

has
(-associate)

647 South Spring Street

Private Wires to New York and AU
Division Offices

tax

to

a

american

proposals is called the
reinvestment treatment" of

capital
the

•

"the

ef¬

empha¬

burden

of

tax¬

ation

on our citizens is
heavy.' It
is my hope that some relief from
these
burdens
can
be
achieved

added that relief

can

hear¬

our

be achieved

by spreading the; burden- of
equitably and fairly among
the various groups' of the
taxpayirig public." It will be noticed that
.

taxes

the

words

"equitable" and/, "fair"
twice in these quotations.

pfSSfent steep¬
ly progressive income tax sched¬
ule

is

neither

"equitable"
nor
punitive,, unequitable
and unfair.
Therefore, if Chair¬
man Cooper's statement is tb have
any significance for this country's
"fair"

b

t

u

businessmen, ;and especially ' its
businessmen,-' tax reform
at
least
in
part take the
shape of a reduction of the steep¬
small
must

ness

of

More

importantly, because

come

and

tures

are

income

tax

our in¬
capital gains tax struc¬
positively harmful to a

capitalist

depending
incentives and a

economy

adequate

upon

progression.

large flow of savings
of

the

nature

prove

our

added

will

im¬

bear

to

that

burdens

imposed

fax reform

the

described

ability

,

well: be
in the next dec¬

upon us

may

ade.
It is

hoped that each member of

Association

thiS

will

his

make

the

subject of the

per¬

sonal income

tax and of the

cap¬

views

on

ital gains tax known to

his repre¬

sentatives in Congress in as forci¬
ble

a

way

possible.

as

Possible

to

economy

has

there
be

been

TAXATION

imposed

some

tax reform is

our

upon

by Russian satellite

cesses,

Walter Maynard, Chairman

Shearson, Hammill & Co.,

suc¬

a

House

the

of

COM¬

MITTEE

new

New York
Albert O. Foster

Commit¬

Foster &

Marshall, Seattle

71st

our

now

owner

-

accorded

occupied

Under the present law

who

sells

his

house

and

•

•

•

«

of

year

contributing
to...

CALIFORNIA PROGRESS
Since

our

early

capital gain can avoid cap¬
gains tax by buying a new
house for the same amount' of

days—when

•

-

j

William C Staats & Co.
financed such enterprises as
Southern California Edison
•

and Union Oil

California—to

•

*

Company of
some

of

our recent

'

*

"

money, or a larger sum, within a
year.
It can be seen that if this
were

permitted in other forms of

property, it would have the effect

allowing all

kinds

of

sales to

t

'

|

.'!<

underwrites: Brunswig Drug; The Stuart

-i

I

Company, Hoffman Electronics, California Interstate

i

1

!

i

i

t

I

:

Telephone, The Siegler Corporation, Solar Aircraft, Fluor Corpo¬
ration, Norris-Thermador, Northrop Aircraft, etc., etc.—is
of well
over

over

those

so) of

our

half

seven

a

a

span

century. We're proud of California's growth

decades. We're proud, too (and

we

think justly

contribution to California's progress... through public

offerings and private placement of securities. Our experience
be helpful to

you!

can

,

a

ital

of

•

•

to

advance

sult in any reduction in
revenues,

exchange

that

sized

minimum

a

government

Chairman

con¬

How¬

far in this

two

stock

The

.

to $5,000.

existing law.

exchange

fort.

with

•

and

collected

tax, the law must

Further

stock

taxpayer

#

the

We have dealt

midwest

of

losses and as few
possible.
Therefore, if

as

raised

coast

changes in economic conditions,
capable of compliance and

administration

FEDERAL

Recently

only reasonable that the present
$1,000 loss limitation should be

incorporated'

simi¬

many

as

gains

in the last 15 years, it would seem

pacific

between

income, responsive

and

probably

economic

capital

It

Chairman

taxpayers will always
their affairs so that they

in view of the inflationary
price rise which has taken place

First California Company

of

revenue

equitable,

The fact is thapGiiF

ever,

In the West's
greatest market

impact

dollars

appear

dead issue.
In this connection it is significant
that Representative Jere Cooper,

tain

Underwriters and Distributors

fair,

be that he would have almost $60

from ordinary income. The reason
for the present limitation is, of

take

members:

to

is

ings and study." Chairman Cooper

Tax

arrange

STREET

lar

revenue laws

obtainJ "A

to

next year as a result of

69, decided that it

course, that

CALIFORNIA

order

Standard Oil of N. J. then selling

burdens

the

of

source

at

sentiment that because of the

in

a

looking toward revi¬
internal

our

Respectfully submitted,

which allows only $1,000 per year

members

465

hearings will be

sions of

neutral

change

Brush, Sum

the

which

.

has

revision

information

system

all,

Me'ans,
tax

to
begin next Jan. 7.
Chairman* Cooper
has said that

in

at

Another modification in present
law which should be effected is a

Teletype SF70

and

general

hearings

Loss Provisions Should Be

Liberalized

Bill System

Ways

on-

gains

placed
upon
the
taxpayer's capital

a

can

the tax.

ever

retail distribution

of

amount

which

be

amount involved in

long.

as

limitation

tee

scheduled

our economy

capital

but

would

reduction

would, of
course, like to see a shortening of
the holding period.
As matters
now stand,
taxpayers in brackets
above

brokers

impos¬

tremendous

Thursday. December 19,1957

.

.

of

capital.'

a

is

gains tax isn't
actually a tax on capital gains, it
is in reality a transfer tax levied
only when property in which a
capital

economy

situation

world

own

Treasury

for this is that almost without ex¬

that

The Revenue Bill of 1954 intro¬

in

result

would

increase

revenues

that

confidence

would collect from it.

The
Increased Dividend Credit

tax

its

be stated with

can

reduction

substantial

of

because

culiar nature it

f

ent

that

is

the

.

,

to be laid

of

merely represent the effect on
prices of the. post-World War II
say, a sale at pres¬
-,
jrr
prices would cost him 16% of) inflation. *
his capital. The holder of Stand¬
The second proposal is a little
ard
Oil of N. J. bought in the
more
complicated. " It. is that a

area

our

because

That is to

ly.

of
property in the United Statesprimary interest — the capital securities,
buildings
and
land.
ability to bear the increasingly
gains tax—the first point to be This is
surely an unhealthy situ¬
heavy burdens that seem likely
-

our

take place which are now
sible

ent

locked up for an

Capital Gains Tax

is

extraor¬

an

dinarily high rate. For example, a
holder of Standard Oil of N. J.,
who bought it in any year be¬
tween 1946 and 1950, and wished
to sell it at recent prices, would
have a tax liability of not less
than 16% of the price at which
the stock has been selling recent¬

a

our

it

and

transfer tax levied at

.

William R. St.vats
established 1887
640 SOUTH SPRING

&

investment

STREET. LOS ANGELES 14, CALIFORNIA

Co.

securities

• !TRINITY 4211

Number 5700

186

7 Volume

Thomas Graham

.

.

(2711)

.The Commercial and Financial Chronicle

Continued

;

*.

from

HELLER,

42

page

T.

Benjamin H. Grisvvold, 3rd

h

ELLIS.

•:/- New York
M.

Maitland T. Ijams

Kirkpatrick

R.

/ Kir
kpatrick-Pettis

Stroud

•

EVANS,

;

Chicago;
EVERITT,

22
f

York

eroy, Inc., New

Bache

Bank,

York

New

Chas.

Co., St. Louis

WILLIAM
F.

G.

Shepard

Prescott,

&

Co.,

Inc.,

Cleveland

-«

■

Ginther

Richard

-v*

Greenshields

Stern Brothers &
Kansas

Co., /-

*

; /"

•

.'

"■•

Minister

,v>.;

^

Trubee, Collins & Co., Buffalo

*

Walton & Company, Inc.,

.

•

FOX,

Rock

P.

Fox

F.

D.

—

Baxter

Carleton

Adler is engaging in a

securi¬

I

business

Taft
i

,

from

He

Avenue.

with Plymouth
ration

and

in

at

offices
was

31

formerly

Securities Corpothe

past

with

was

Hirsch & Co. and Arthur Wiesen-

II.

MERRILL D.*
& Hutzler,

FREEMAN,

Bache

Bros.

JOHN
&

FRIEND,

Corp.,

Co.,

Walter,

Woody

&

B.

Hibbs

Chicago

Burns

P.

Garfield

Julius

become

a

Jan.

on

will

1

general partner in Gar¬

IIAACK,

field

&

York

City, members of the New
Stock Exchange.
Mr. Gar¬
has been a limited partner

York

field
in

the

120 Broadway,

Co.,

New

Bank, New York

Jr.,

ROBERT

HOWARD,

Reynolds

FRED

Lord,

Abbett

Milwaukee

G.*

Lewis

&

Co.,

Greensboro

ROBERT C.*

Jones

«fc

Co., St. Louis

PAUL A.

Management Corp.,

V

KANDLIK, EDWARD A.*

/

Chicago Daily News, Chicago
KAUFMAN,

Chicago

Rodman

*

Renshaw,

III, JAMES

New York Stock

R *

Chicago
C.*

Exchange, New York

Continued

York

New

G.*

C.
&

KELLOGG,

Co.,

Milwaukee

Company,
MARSHALL II.*

Chicago

W.*

&

Chicago

Bank,

Television Shares

New York

ALBERT

IIUGIIES,

National

*

Ball, Burge & Kraus, Cleveland

Co.,

T.

on

page

York

New

Co.,

& Co.,

Co., New York

Joseph, Mellen & Miller, Cleveland
JUST,

KENNETH J.*
Hogle & Co., New York

A.

&

MORTON

JOSEPH, HERMAN B,

II.

New York

Co.,

HOWARD,

HUDSON,
&

GEORGE

Upham &

EARLE*

JONES, GRAHAM*
Cooley & Co., Hartford

Company, Dallas

IIOWE, JAMES M.
Farwell, Chapman & Co.,

New York

P.

&

Denton,

New

York

Trust Company,

New York

WALLACE

Natl.: Assn.

W.

Baird

III,

JOHN

Mason-Hagan,

II.
Securities Dealers,

Washington

New

IIALL,

JOHN
York

Creston

&

Milwaukee

Co.,

C *

Richmond

Inc.,

R.*

Stock

Exchange,

New

Complete InmstmentAService^

York

DENTON I).

UNDERWRITERS * RRGKEAS • DEALERS • DISTRIBUTORS "

York

Trask &

Co., New
HALLIBURTON, GUS G,*
Spencer

Equitable

CRESTON II.
H. Funk, Hobbs & Co.,
San Antonio' ;'\V7
J':- 177":'

FUNK,

W.*

ROBERT

Robert

IIAGAN,

ARNE*

FULKERSON, Jr., W. NEAL
FULTON,

DEAN

Harris,
J.

New York
WILLIAM H.*

Sons,

Securities

Dallas

Eppler, Guerin & Turner, Dallas

Bros.

Bankers

&

HOWARD,

Ames

Edward. D.

New Yoric

I .*

Union

HOWARD, C. EDWARD*

Sons,

III,

Morgan &

GUERIN,

HAIRE,
"7

York

B.

Tribune,

F.*

Kidder, Peabody & Co., New York
JOHNSON, THOMAS M.
Johnson, Lane, Space & Co., Savannah
JONES, EDWARD D.

New York

Co., Philadelphia

Herald

J.

Jr.,

JOHNSON,

City Bank,

Dallas

A.

ROBERT*
Co., Cincinnati

McDaniel

Piper, Jaffray & Ilopwood, Minneapolis

GRIBBEL, 2nd, JOHN
Elkins, Morris, Stokes

J.

Heimerdinger,

S.
Daily News, Chicago

IUGLESTAD,

To Be Garfield Partner

&

Gregory

Philadelphia
MARTIN

CHARLES

FRYE,

Dallas

R.*

GRIFFIN,

E.*

Cincinnati

berger & Co.

HOUSTON,

II. C.

Manhattan

Chase

Gregory

S.*

JOHN

The

GREGORY,

E.*
Philadelphia

ARTHUR

York

New

GREGORY, Jr., WILLIAM II.

York

New

Folger, Nolan, Fleming-W.
& Co., Washington
ritOEHLrCII,

York

New

York

JAMES

JOHNSON,

IIAUSMAN, RUSSELL*
New

Co.,

SHELDON

The

Lynchburg

ARTHUR

Penington, Colket

Washington

E.

First

DeWITT

National

IIORTON,

Jr.*

B„

C.*
York Stock Exchange, New

GREEN,

THEODORE*

Securities

American

FltrCKE,

York

New

HORNER,

HARRY

Co., New York

JOHNSON* DAVID T.
Johnson, Lane, Space & Co., Savannah
JOHNSON, JOSEPH T.*

B.*

Dempsey-Tegeler & Co., St. Louis

Liberty National Bank, Oklahoma City*
GREEN, J. BRADLEY*
Guaranty Trust Company, New York

O.

A.

EDWARD

EDWIN

Philadelphia

Company,

Jenks, Kirkland, Grubbs & Keir,
Philadelphia.
JENNETT, EDWARD J.

York

New

B.

Co.,

(DECKER)*

HAROLD

JENKS,

Philadelphia

Scott, Horner & Co.,
HORNING, BERT II.

ARTHUR

GEORGE

Co.,

&

C.

William R. Staats & Co., Los Angeles

Scott, Horner & Co., Lynchburg

First

&

&

&

JARVIS,

(ELAINE)

Assn., Washington

W.

Southwest Company,

JARDINE,

HORNER, Jr., EDWIN B.

EDWARD

GREEN,
Dallas

PAUL

I

Bank, Fort Worth

Kidder

M.

New

New York

Co.,

Co.,

&• Co.,

REKLAND,

Salomon

ties

A.

First

Co.,

Pchl

& Co.,

Morgan

HORNER,

Assn., Washington

Lemon & Co.,

Jr.,

GRAY,

E. W.

&

FREDERICK,

CD. Adler Opens
LEXINGTON, Mass.

&

RANKLIN,

Atlanta

Co.,

II.

HARVEY

Johnston,

GRAY,

FRED*

P.

Dittmar
-

GRAM,

Seattle

C.*
Westheimer & Co., Cincinnati
BYRON

P.

Jr.,

JACQUES,
&

M.

HOPKINSON, Jr.,

E.

T.

First National

Detroit

O.

Marshall,

&

Louis

Colket

Southwest

JAMESON,

Bankers

NEIL

Drexel

&

Bankers

Investment

GRAHAM,

& Co.,

Evans

DAVII)

GORDON,

Cleveland

ALBERT

FOSTER.

A.

J.

St.

Co.,

ELLIS*

R,

GOODHUE, 3rd, FRANCIS
Calvin Bullock, Ltd., Philadelphia

York

LEONARD*
& Co.,

A,

JOSEPH

Glynn &

Clement

Investment

HOLT,

LAWRENCE

Bache &

G.

Hobbs

HOLMES, Mrs. JENTRY S.

Angeles

Rowles, Winston & Co., Houston

Canada

New

'

I

:

of

Weeks,

Baltimore

Los

T.
Langley & Co., New York

JACOBS,

Chicago

Barr Brothers & Co., New York
HOLMES, JENTRY S.
International Finance Corp., Washington

GOODWIN, Jr., ARTHUR E.

RALPH

FOSTER,

.

&

Aldinger

Fordon,
Foster

/

Gus B. Walton

Little

Finance

of

iHornblDwer

FORDON,

.

Frank C. Trubee, Jr.

o;-

Pittsburgh

M.

FLYNN,. -GEORGE T.

Sullivan, Jr.

Jr.,

Blewer,

GODSHALL,

Deane & Scribner,

Singer,

Auchincloss, Parker & Redpath, FLYNN, II.
'■'rtl Washington
'/: i/'r
••;// :: "-McDonald

,

GLYNN,

Funk,

Cincinnati

Co.,

MAITLAND

C.

First

New York

Co.,

&

IIINDON

JACKSON, Jr.,

WILLIAM

H.

J.

Penington,

Louisville

Sons,

HOLLAN, JOHN V.

WAYNE*
Bank,

W.

Antonio

San

F.

Legg & Co.,

W.

Jr.,

Creston

Ltd., San Francisco
Jr., JAMES M.

ILLOWAY,

S.*

EDWARD F.
& Hoban,

IIOBBS,

York

New

WILLIAM

&

Pittsburgh

Henry Herrman & Co., New York

York

New

McMahon

York

New

HYDE,

S *

Co.,
&

Co., Greenville

W.

Co.,

Hutton

E.

IJAMS,

&

Hilliard

B.

1IOBAN,
York

New

EDWARD

Co..

C.

California

York

York

New

Co.,

FLEMING, Hon. DONALD

vu// V-/--.-

City

.

Mark

&

&

Jr.,

John

GLOVER,

Jr., HOWARD*
Stearns & Co., New

FISHER, CHARLES N.

'

-.

Robinson-Humphrey Co., Atlanta

FIRSTBROOK, B. D.

Stern

J.

Blyth

J.

Wertheim

Cleveland

Co.,

GLISS,

Bear,

Baker, Simonds & Co., Detroit
5

&

GLASSMEYER,

The

Providence

D.*

NELSON

City National Bank, Kansas City
FAY,: CHARLES W.
Hooker & Fay, San Francisco

FINNEY,

Ralph W. Simonds

J.

D.

Brothers,

FELKER. RICHARD R.*

Edward P. Prescott

;

Chicago

Co.,

W.

IIENNING*

1IILSON, JOHN

Co.,

RICHARD

Lehman

GINTHER,

Hill

New York

F.

DAVID

HUTTON,

MALVERN

Malvern

G.

&

WILLIAM

MILLIARD,

Co.,

&

Gibbons

B.

GIBSON,

New Haven

D.

-

:

Ripley

ROBERT

Walker &

H.

Geo.

& Co.,

HILL,
New York

Humphrey,

Calvin Bullock,

Atlanta

Peoples National Bank, Charlottesville

GIBBONS, Jr., GEORGE B.

'

J.*

Scranton

W.

FARRELL,
1

Chicago

Harriman

GERRISH,

Co., New York
W.

Chicago

Co.,

1IILDRETH,

York

C.

EDWARD

L.*
&

duPont

&

Furman

&

Pittsburgh

ARTHUR F.*

McKelvy & Co., Pittsburgh
HURLEY, WILLIAM L.
V,
Baker, Simonds &; Co., Detroit
HURT, ROBERT G.

Philadelphia

Company of Georgia,
IIICKEY, III, MATTHEW J.

M.

Chase Manhattan Bank,

GEORGE,

Stone,

&

EUGENIC

Sherrerd,

&

ROY

G.

McKelvy

WILLIAM

Jr.,

HUNTER, FRANK II.

I.

Hiekey

Jr.,

HUNTER,

Co.,

Trust

New York

Dodge & Co., New
GENACIITE, PAUL F.*
The

\

Co.,

&

FAI.SEY,

George A. Newton
G. H. Walker &

National

V:.
WALTER A.

Roland

Louis

Clark,

EWING, ROBERT W.*
t
A. E. Masten & Co., Wheeling
FAIRMAN. FRED W.

Pom-

&

Hutton

Model,

St.

&

W.*

CHARLES

Francis

HIBBERD,

Gardner,

HUNT,

New York

Alester

P.*
Hess, Moyer

&

HEWITT.

R.

Stone & Co.,

GEDDES,

Atlanta

Co.,

&

York

New

Co.,

JOHN

GATCHELL, EARLE

W.

Illinois

Continental

Howard, Weil, Labouisse, Fried-;

&

GARDNER,

Hayden,

&

Butcher

ROBERT M.*

Reinholdt

A.

Evans

A.

2 M richs & Company, New Orleans:
Schoellkopf,

York

New

Co.,

W.

THOMAS

EVANS,

James K. Miller

Kidder, Peobody & Co., New York

Reynolds
&

Elizabeth

Co.,

P.

Philadelphia
IIEWARD, JAMES

MacGregor,

Applegate

Pittsburgh
HUNT, E. JANSEN
White, Weld & Co.,

J.*

&

&

Hulme,

ARLEIGH

Woodcock,

Co., Hartford
FRANCIS P.

&

GARDINER,

K.*

Thalmann

CLEMENT

Clement

-.

John P. Labouisse

Cooley

Long

KARL

Glover

HUMPHREY,

Birminghom

Winslow, Cohu & Stetson,

HESS,

GALLAGHER,

Francisco

Dodge & Co., New York

EVANS,

Commission,

Exchange

&

GAERSTE, JOHN L.

York

New

San

RUSSELL M.*
Co., Philadelphia

CARNOT

Clark,

Company,

Co.,

Co.,

Jr.,
&

Ladentaurg,

.■////

.-

Trust

CARL

ERPF,

York

7 Omaha

,

ERGOOD,

/.//iv/v

/

*.ri? W. C. Langley & Co., New

IIULME, MILTON G.*

Des Moines

Co.,

,

Wagenseller & Durst, LosVAngeles

New York

R.*

Mayes,

THOMAS

W.

1IERZER,

&

JAMES
&

HERBERT,

N.*

Washington

LESTER H.*

American

EDWARD

Securities

Atlanta

Co.,

SUMNER B.

Stanley &

Morgan

EMFEY,

Jr.

Hutton,

/ W. E. Huttcn & Co., Cincinnati

Stewart

&

EMERSON,
-

GADSBY,

B.

JOHN"

Courts

'Morgan Stanley & Co.,
James

Henderson

Hendrix

Hugh

S. Hall

*

C.

IIENDRIX,

Attendance at IBA Convention

^

Baltimore

Alex. Brown & Sons,
Herbert

HUGHES, WILLIAM S.*

M.

HENDERSON,

Louisville

?
1

JAMES

Shearson, Hammill & Co.,
TED C.

ri'>r.The Bankers Bond Co., Inc./,

Securities

7
Nashville

Corp.,

HALLO WELL,

IIENRY R.*
Sulzberger &

Hallowell,

Co.

Philadelphia
W. II.

HAMMOND,

firm.

^Denotes

Mr. and Mrs.

Braun, Bosworth <fc Co., Chicago
IIANNAFORD,

llANRAHAN,

&

Shields

&;

Co.,

Co.,

Coffin

Assn.,

Members

St,

New York Stock

Exchange • Pacific Coast Stock Exchange
Midwest Stock Exchange * American Stock Exchange
Honolulu Stock Exchange ■ Chicago Board of Trade
and other leading commodity exchanges

Louis

G.*

WILLIAM

&

&Co.

Washington

A.

Globe-Democrat,

HARDING,

Boston

Burr,

EDWARD K.

Jr.,

Dean Witter

7

Bankers,

WILLIAM

Louis

HARDY,

111

York

New

MURRAY

Investment

St.

Inc.,' New York

DOUGLAS

HANSON,
IIAPP,

v

I).

B.*
Worcester

PAUL

Hanrahan

HANSEL,

Specialists in Western Securities

JAMES

Hannaford,

Dawson,

Private leased

radiotelegraph

'

Underwriting and corporate financing
Private

placements

...

mergers

and reorganizations

The

Illinois

Company, Chicago
IIAKKINS, CHARLES B.
Blyth & Co., San Francisco
Hill,

Harkness

HARRINGTON,

Municipal underwritings

circuit to Honolulu

FRANCISCO

SAN

IIARKNESS, ROBERT B.
Dvinnell,

FULLER

A.

Advisory service to municipalities

Bache

DAVID
&

HARRIS,

&

S.

IIASSMAN,
A.

White,
First

Schwabacher & Co.

&

New

York

Co.,

Almost a Clxtumws Expehiexcl
on

Jr.,

the

B.

Co.,

&

Chicago
New

Bank,

expanding Pacific Coast in securities distribution
and service to

York

MAURICE M.*

National

'

Dallas

'

;

.

Chicago Board of Trade

(Associate)

New York Produce

Salt Lake

Exchange

Exchange

(Associate)

Corn

Exchange Bank,

Sanders

IIAWES,

&

HARDIN

Harris Trust &

HAYDEN,

Co.,

Boston

Bell

SAN FRANCISCO 4

DONALD

Underwriters

■

)

W.

System Teletype SF-349

#

Private wires to principal offices

New York Stock

Baltimore

HAYES,

MILTON

IIAYES,

J.

National

American

Bank,

Exchange

Fresno

Monterey

San Jose

Oakland




Santa Barbara

Sacramento

Santa Rosa

Journal,

New

460 Montgomery

York

Witter

&

St.

•

SAN FRANCISCO 4

TELETYPE! S. F. 308

Co.,

Adamex Securities

Loe
Van

Los Angeles

Angeles 14

New York 5

Nny# Bldg.

40 Wall Street
WHitehall 3-4000

Michigan 7711

San Jo«e, CaL
55 N. Fixat Street
CYprea* 2-2442

HEISKELL,
C.

F.

CORRESPONDENT OFFICES t

City Bank, Cleveland

York

PAUL

Times,

)

New

RAYMOND

Childs

&

Co.,

•

EXbrook 2-0900

S.P. 309

OTHER OFFICES

Corporation, New York

Dempsey-Tegeler & Co.,
National

-

Chicago

HECHT, JOHN C.

New

(Associate)

PHILIP
Street

HEFFERMAN,

Salt Lake City

Pacific Coast Stock Exchange

American Stock Exchange

Chicago

IIEFFERN, GORDON E.

New York

Industrial Brokers

MEMBERS

Baumgartner, Downing & Co.,

HAYES, EDDE K.

Tel. SUtter 1-5600

'

Investment Dealers and Brokers

II.*

Savings Bank, Chicago

HEALY, GEORGE P.*
Montgomery St.

i

sutro er co.

York

Vance,

Dean

100

V--

'

H.*

ALFRED

Chemical

Wall

City Stock Exchange

V

Since 1858

GILBERT*

IIAUSSERMANN, ARTHUR II.*

Pacific Coast Stock Exchange

industry and investors.

■

White, Hattier & Sanford, New Orleans
IIAUSER,
New

Members

Fresno Cotton

CHICAGO

L.

LLOYD

Weld

IIATTIER,

Commodity Exchange, Inc.

•

ELMER G.

HATCHER,

New York Cotton Exchange

NEW YORK

(GUS)*

Bleichroeder, New York

Becker

G.

HATCHER,

American Stock Exchange

•

Chicago

Co.,

HENRY

Arnold

Stock Exchange

LOS ANGELES

J.

Goldman, Sachs & Co.,
IIARTILL, CREIGHTON

New York

•

38 Offices Serving Investors

Boston

Harrington & Co., Jackson
HARRIS,

York

F.

New

York

79

DIRECT PRIVATE VIRES TO

Bererly Hllla
175 N. Canon Dr.
BRadahaw 2-5121

HaywarJ. CaL

1079 B. Street
JEOenoa 7-6811

Honolnln, T.H., Manila. P. I.

ALL PRINCIPAL MARKETS

80

-

The Commercial and Financial Chronicle
60

.

Thursday, December 19,1957

.

.

(2712;

McKEO.V,

LARKIN, THOMAS A.*

Continued

from page 79

:

Goodbody

.

E.

Bankers

WILLIAM

Jr.,

Weeks,

&

Hornblower

Boettcher

J.
Chicago

,

J.

-

Johnston, Lemon

LENZ,
New

Mead,

A.

•

G.

ROBERT

LEWIS,

Estabrook

A

}

,

.

:i
York

LEWIS,
•

L1ND,

JOHN

MILLER.

LITTLE,

S.

ALDEN II.*

Investment

Bankers

Hollywood

Assn.,

LOCKETT, JOSEPH F.

Dealers in Industrial & Public Utility

Townsend, Dabney A Tyson, Boston
LOEB,

IIENRY A.*

Carl

Stocks & Bonds

M.

Loeb, Rhoades A Co.,

I.OEWI,

J.

Loewi

A

Co.,

Active Retail Outlets

Milwaukee

LOUD,
F.

ESTABLISHED

1931

Howard,
NELSON

Eberstadt

A

Burr Brothers

Russ Building, San

Francisco 4

LOW,

Teletype SF 272

.

1

Stearns

A

Kansas City

Bank, Fort Worth

LUCAS,

Jr., MARK A.
Lucas, Eisen A Waeckerle, Kansas City
LUNDFELT, CHARLES E,
McCormiek A Co., Chicago

I.YKL1CMA,
A.

C.

WALTER

A Co., Chicago
III, THOMAS*
Moore, Leonard A Lynch, Pittsburgh

Mercantile

Underwriters, Distributors and Dealers in

LYNN,

Allen

Co..

A

LYONS,

SAM

York

New

Associate)

--

.

LOS ANGELES

.

.

Co.,

NEW YORK

Ma clean,

La Salle Street,
& Co.,

W.

Chicago
Nashville

OLIN*

Charlotte

New York

Jr..

WILLIAM

Continental

Illinois

A.

National

Bank,

NOYES, BLANCHE*

NUGENT,
Mabon

JOSEPH
&

Co.,

The

Philadelphia

Northern

O'HARA,

Washington

,

York

Co.,

New York

T.

&

Marshall

Co.,

EDMUND

O'LEARY,

~

Trust

WALTER

McKlnnon, New York
ROBERT II.*

O'KEEF,
The

Chicago

Co.,

C.

New

O'DAY, DANIEL

Thomson

Eastman

Milwaukee
G.

Dillon, Union Securities &

Co., New York

MORSE, Jr., CHARLES L.
Hemphill, Noyes & Co., New York

OLDERMAN, RUSSELL J.*
JIayden, Miller & Co., Cleveland
ORNDORFF, HARVEY II.* •

ED
New York

Blunt

N.

Ellis

OSBORN,

&

II,

Dominick

Smith, Barney & Co., New York

Simmons,
JAMES E.

&

Dominick,

Chicago
New

York

H.

Brothers,

New

♦Denotes Mr. and

York

ELWORTHY &
TELEPHONE GARFIELD

A

Mrs.

Offices

New

Direct Leased Wires to:

Shearson, Hammill & Co., New York»Scherck, RichterCo., St. Louis

CO

STREET

FRANCISCO

4

1-4460

of

Corporation and Municipal

Toronto

Co.,

Securities

Curtis,

Jackson &

Webber,

SUTTER

Underwriters and Distributors

C. w.

Gairdner

York

MAC V, NORMAN L.
First

The

Boston Corporation,

New York

Our

Trading Department Maintains Markets

MAGNUS, WILLIAM S;*

A

Magnus

Co.,

Cincinnati

Securities of the Pacific Coast

M.YM.EY, MILTON A.
Manley, Bennett A Co., Detroit
MANNING,

Paine,

STEVENS

Webber,

Discount

MARTIN,

Corporation,

GEORGE

International

SAN

SACRAMENTO

-

Jackson

Curtis,

A

Los

Angeles » ■
MARCKWALD, ANDREW K.*
v.

•

New

l.*
New

Bank,

York

York

MATHEWS, Jr., ROBERT C.
Trust

Company ot Georgia,
GEORGE
.

Atlanta

UNDERWRITERS

AND

DEALERS

IN

MATHISGN,

Milwauke?

DEALERS IN

MATTON,

CHARLES

Bank

Wuchovia

OVER THE COUNTER

Milwaukee

Sentinel,

Fj*

A

Co.,

Trust

Winston-Salem

Maxwell, j5 m.*
The

SECURITIES

MAY,

Northern Trust Company, Chicago

UNDERWRITERS and DISTRIBUTORS

DENNY

J.

Parker

The

Corporation,

WALTER
Hammill A

MAYNARD,
Shearson,

McANDREWS,

Hemphill,

McCALL,

York

State

of

General

in

California

and

its

Obligations
political

of the

subdivisions

New York

C.:;

Purman

McCANDLESS,

New

MARTIN J.

Noyes A Co.,

ARTHUR

Ale'ster G.

Specializing

Boston

Co.,

464-

Co.,

JOHN

California

Street

Greenville
SAN

A.

FRANCISCO

20

Vance, Sanders A Co., Boston
McCONNEL,

Jr.,

W.

BRUCE

Singer. Deane A Scribner,

J. S. Strauss & Co
155

MONTGOMERY*

STREET

MeCORMACK,
H.

Hentz A

McC-ORMICK.
American

,

SAN FRANCISCO

(4)

Exchange, New York

McDonald-Moore

A

'.

i

Co.,

donald

AMERICAN

Detroit

n.

TRUST

Elyth A Co., New York
Mcelroy,
J.

Telephone

Bell Teletypes




—

—

EXbrook 2-8515

SF 61, SF 62 & SF 621

P.

david

b.*

COMPANY

Morgan A Co., New York

McEVOY, Mrs. BERNARDINE
With

Mr.

A

Mrs.

"

"

Ralph W. Simonds,

Detroit

McGEE,
R.

DOuglas 2-74-11

EDWARD T.

Stock

McDonnell,

Telephone:

Teletype: SF 282

New York

McDONALD, H. ALEX*
.

Pittsburgh

FRANK
Co..

CUSHMAN*

W. Pressprich

BANKING

(nice 1$54

A Co., New York

McINTYRE, WILLIAM T.
R.

S.

Dickson A

Co., New York

,

EINER

Bradford

Riter & Co.,

York

MACLIN, LUTTRELL
Paine,

1

Philadelphia

Interstate Securities Corp.,

Jr., WILLIAM S.
Harris Trust & Savings Bank, Chicago

Press,

v
>

NIX, ALLEN J.

E.

EDMOND

N.

C.

NISBET, Jr.,
• *

SAN

Lyons A Co., Louisville
MacDOXALD, GEORGE C.*
McLeod, Young, Weir, Inc., New York

■*.

Hemphill, Noyes & Co., New York

New

JMACHQLD. WILLIAM F.*
Drexef ^:"
IglWlto

PACITTC COAST STOCK EXCHANGE

Private Wire Connections between all

1.

J.

New York

Chicago

L.

'

Tucker. Anthony & R. L. Day, New York
NICHOLSON, DANIEL F.

111

Magazine,
Jr., W. L.*

LYONS,
W.

SAN FRANCISCO

Philadelphia' Bulletin,
NEWSOME, JOHN C.

Louis

B.

Finance

ESTABLISHED 1883
NEW YORK STOCK EXCHANGE
t

Nc-whard, Cook & Co., St. Louis
NEWMAN, Jr., A. JOSEPH*

Bank, Dallas

LYONS, LAWRENCE II.

J. Barth & Co.
AMERICAN STOCK EXCHANGE

is

GENE

Sterne, Agee A Leach, Birmingham
LYONS, KEVIN
Lyons A Sliafto, Boston

"

Paul

New York

Chicago

Trust

MORSE, FRANK

•

NEWHARD, HAKKY W.

MORRISON,

MORSE,

./

Jr., FRANK L.«
>
Newburger & Co., Philadelphia
NEWHARD, CHAPIN S.
Newhard, .Cook & Co., St. Louis

NOONAN,

Bankers Assn.,

Northern

&V:7

New York

LYNN, IIENRY S.

Unlisted Securities

MEMBERS:

Investment

Ingen & Co.-,

Wertheim A Co., New York

Corporate, Municipal and

t

II. Heritz & Co., New YOrk.

MORRIS, PAT G.*

Lehman

F.*

National

*•"

r
..

NEW BURGER,

Co., New York

Bank,

FRANK

Associated

C.

Allvn

LEWIS

"

NEUHAUS, JOSEPH U.»Urderwood, Neuhaus «fc Co., Houston

CHARLES F.

Wellington

MORRIS,

Van

Discount .Corporation,

RICHARD

Hanover

J.

NIELSEN,

Edwards & Sons, St.

MORSE,

LYNCH,
LINE,

.

NEUMARK, ARTHUR. J, :■

Harrlman Ripley &

The

LUCAS, B. W.*
National

M.

MOREHOUSE, EDWARD J.

The

Commerce Trust Company,

-

/.»

\

,

Piper, Jaffray & Hopwood, St.
NAGLE, WILLIAM GC Y

MORGAN, WALTER L.

York

Lubetkin, Regan A Kennedy, New York
LUBY, JOSEPH M.

Worth

B.

MITCHELL, ROBIE L.*
Mitchell, Pershing, Shetterly <fc
Mitchell, New York
MOHR, Jr., SIDNEY J.

The

New

.

Nesbitt, Thomson.; & Co., New York
MURRAY, LEONARD
« U.'■i-V;yCJ-'

DUNCAN

Morgan Stanley & Co.,
MORGAN, EVANS G.*

LUBETKIN, LLOYD E.

Fort

CHARLES

MORGAN,

York

New York

Co.,

-

.

,

.

MURRAY, C. IVOR

Co.. New York

MITCHELL, JOHN N.
Caldwell, Marshall, Trimble
Mitchell, New York

MOREY,

V. THEODORE

Bear,
Bell System

Telephone EXbrook 2-7484

v,-'.

MURPHY, RICHARD- G.*

,

Laird «fc Co., Corporation, New York
MILLER, GLEN lt.r
Cruttenden, Podesta & Co., Chicago
MIRALIA, DAVID T.*
Kuhn, Loeb & Co., New York

A. G.

A Co.,

^

RODERICK D.¬
Branch, Cabell & Co., Richmond

Boston

Co., New
E.

LOVE, MALCOLM

" ;"

MOORE,

The Illinois Company, Chicago
LORD, Jr., ARNOLD J.
A

I).

...

New York

Shearson, Hammill & Co., Chicago
MOONEY, Jr., URBAN D.*
Fahnestock & Co., Nev/ York

Hugh W. Long A Co., Elizabeth
LONGSTAFF, RALPH S.
Taylor, Rogers A Tracy, Chicago
I.OOMIS, JOHN S.

Eaton

ROLAND*

MOON, RUSSELL F.

W*

HUGH

EDWARD

The Ohio Company, Columbus
MURPHY, LESTER V.; A.
■
Barr Brothers & Co., New York

Thornton, Mohr <& Farish, Montgomery

KELLOGG
Chapman A Co., Chicago

Farwell,
LONG,

New York

VICTOR

I.OGSDON,

W.*

.

Atlanta

Mullaney, Wells <fc Co., Chicago

Chase Manhattan Bank, New York

The

.

W.*

&

MILLER,

Portland

Co.,

A

York

L>

HERMAN

Camp
LINEN,

York

Davenport & Co., Richmond
MURPHY, DENNIS E.*

Laidlaw -St Co., New York
,
MIDDLEMLST, JOHN IE*
Northwestern National Bank, Minneapolis

Washington

New

Bankers Assn.,

Investment

Baltimore

Co.,

MEYERS, EDWARD J.

York

New

SALIM L.
Bear, Stearns A Co.,
LINCOLN, Miss MARY

<te

Lee Higginson Corp.,
Hirsch

New

New

,

MEYER. Jr., MAURICE*

J.*

Co.,

'

II.*

Co.,

.

LEO
t
Manufacturers Trust Co., New York

Jacquelin, New York

F.*
Becker A Co.,

&

Mullaney, Wells & Co., Chicago
ML'NEORD, BEVERLEY B; -w

...

First Southeastern Corporation,

MERUELI.,
B.

WALTER

A

WILLIAM

Morton

Muir Investment Corp., San Antonio
ML'LDQWNET, JOSEPH J.
Scott & Stringf ellow, Richmond
■,
MULLANEY, PAUL I,.
.'A

MENDEL,

MILTON

LEWIS,

Miller

MEANS, J.

C.*

York

Carlisle

MCIR,

Securities Corp.,

CARROLL*

H.

"

Merrill, Lynch, Pierce, Fenncr & Bean,
LEVERING,

York

G.*

Webster

W.

Corp.,

R. H. Moulton & Co., Los Angeles
MOWER, Jr., EDWARD B.
Newhard, Cook &: Co., St. Louis

'

Chicago
MEAD,

Washington

& Co.,

W1NTHROP

Bank,

G.*

Co., New

ROBERT

Stone

CHARLES E.
Chicago Tribune, New York ./ ;,
HUDSON B.
Morgan Stanley & Co., New York
LEMON, JAMES II.*
LEMKAU,

-

&

Research

&

ROAM) A.*
Publishing Co., New York

MOULTON, DONALD

Exchange

EUGENE

Earth

■MEAD,

,

LEKMING,

-

MORTON,

MeNUKLEN, PRESTON J.
V. S. Moseley & Co., Chicago

v-

Philadelphia

Co.,

Blue List

ANDERSON*
Corn

Securities
York

MORTON,

York

Mc-MAHON,

:

A

Chemical
New

RAYMOND

Bioren

.

New

Louis

St.

W.

MeLEOD, C.

II.*

Equitable Securities Corporation,
J.

Natl.

Cincinnati

P.

Co.,

Boston

Nashville

LEEK,

&

E.

Brothers, New York
Jr., JOHN M. It.
'

MORTON',

PHILIP F.*
Massachusetts Life Fund Distributors,

Reed, Lear & Co., Pittsburgh
LEDYAKD, Q. R.
v

Lehman

Co., New Haven

McLELLAX.

F.
Denver

Co.,

&

EUGENE

LEAR,

&

CLIFFORD

Walker

WALTER

MORSE,

G.

Scranton

Well, Roth & Irving Co.,

H.

G.

DAVID

LAWRENCE,

STEPHEN
W.

McKINNEV,

New York

Company,

Trust

LAWLOR,

The

City

Kansas

Co..

IVELLS*

LOUD-BROWN,

Attendance at IBA Convention

Cl.as.

York

McKIE, STANLEY

&

Hutton

F.

New

Co.,

A

JOHN

LATSIIAVV,

Member Federat Deposit Insurance Corporation

'

Volume 186

Number 5700

.

.

Morgan
Kay,

A'

U.

Co.,

Coppet &

New

News

S.

York

POWELL.

&

Exchange

Cumberland

I

>■

:

Cor;).,

ARNOLD

New

York

•John

Nuveen &

A

PERKO,
J.

F.

Co.,

Atlanta

JOHN F.
Perko

&

-

'J.'-'v.
Co.,

.

Gv;';'"f;
"if

PETERS, GERALD P.*
Peters,

De

New

Mrs..■V-:.t,

•

SMITH,
•■O

Financial

SMI

Chronicle,

Baehe

Carl

Seattle

&

& Co.,

New York

BRIAN*

WILLIAM

IRVINE

First National Bank, Oklahoma City
RICHARDSON, DONALD L.*
Nauman, McFawn & Co., Detroit

RIEPE, J. CREIGIUON*
&

McDonnell

SWANSON,

RUDOLF*

At will

Mosle

<te

W.

^

EVERETT C.
Miami Beach

Sr.,

&

New York

Co.,

&

Co.,

SYKES, MACRAE*
Shields & Co., New York
TAYLOR, EATON
•

Houston

Co.,

Witter & Co., San Francisco
GERRETT H.*

Dean

TAYLOR,

FREDERICK

Gundy

Wood,

Townsend, Dabney & Tyson, Boston

Co.,

&

York

New

JEROME F.
Dompsqy-Tegeler & Co., St. Louis
TERRELL, ALLEN M.
Girard Trust Corn Exchange Bank,
Philadelphia
THACKARA, CHARLES V.
Thackara, Grant & Co., New York
THAYER, ROBERT L.
Lehman Brothers, New Yofk

TEGELER,

JOHN II.

Higginson Corporation, New York

University, Nasliville
STANSBERRY, FLOYD F.
Bankers Trust Company, New York

W.*

RICHARD S., Jr.*
Reynolds Metals Company, Richmond
PHILIP J *
v

Brown

Rotan,

York

Corp., New

STROUD, DONALD

Vanderbilt

RIIOADS,

Alex.

New York V

STAMBAUGII, JOIIN II.*

REYNOLDS,

■

Co.,

R. W. Pressprich & Co., New York
SORENSEN, WALTER M.*

Lee

M.

Copley Newspapers, San Diego

QUINN, ARTHUR PA
Quinn & Co., Albuquerque,.

As

O. M.
Sun-Times, Chicago

STAFFORD,

Clark, Dodge & Co., New York
REYNOLDS,

•

Swiss American

Marks

Johnson, Lane, Space & Co., Savannah

Mellon National Bank, Pittsburgh

REX,

'

-V;'

■

■

M

CKER,

SPEXCE,

Rhoades

Wichita

York

SPACE, JULIAN A.*

York

New

W.*

M. Loeb,

REUTER, F.

CA

CHARLES W.

Co.,

JOHN

New

ROBERT II.

Laurence

SMUTNY,

RENDIGS, Jr.,

STOKES, EDWARD B.
Ellcins, Morris, Stokes & Co.,
Philadelphia
STOLLE, CARL .••\ "•*
G. A. Saxton & Co., New York
STONE, Jr., FRED D.*
Marine Trust Company, New York
STRA.DER, LUDWELL A.
Strader & Co., Lynchburg
STRAVITZ, HENRY*

Milwaukee

NORMAN*
York

SMITH,

Phoenix

Co.,

Washington

Guaranty Trust Company, New York

RAYMOND
&

III, ROBERT

STODDARD, DONALD A,*

Merrill Lynch, Pierce, Fenner & Beane,
New

Baltimore

Indianapolis Bond & Share Corp.,.
Indianapolis

RENO,

J.

Weeden

&

Company,

DUANE T *
The Small-Milbum Company,

REISSNER, FRANK L.

& Curtis,

Jackson

Albert

York

New

SMITH,

New York

York

York

SMITH,

JOHN J.*

Commercial

A.

JAMES F.
Webber, Jackson & Curtis,

Paine,

Writer & Cliristensen; Denver

*Denotes Mr. and

Orlando

HENRY WA
'
Coppet & Doremus, New York

QUIGG,

f

Philadelphia

Sons,

Jr., JOSEPH L.*
Ely, Beck & Co.,
KEILLY, F. VINCENT

PUTNAM,

PERSHING,. JOHN, Jr.* : /.'I
'";V.
'
Government Development Bank, San Juan

&

Milwaukee

St. Louis

Co.,

&

BUY

Refsnes,

PUTNAM, ALBERT D.
Putnam & Co., Hartford

■

Philadelphia

REFSNES,

A, Walston & Co.',. New York

"

Co.,

H.

Investment Bankers Assn.,

New

Eberstadt &> Co., New York
SLEZAIv, G. EDWARD
The

Peabody

Ed.vards

STEVENSON,

L.*

Lauer & Co.,

F.

Robert Garrett & Sons,

MARSOM BA
& Co., Boston

PURKI3S,

&

PAUL

FREDERICK

Alex. Brown & Sons, New York
STEPHENS, JACK*
Stephens, Inc., Little Rock
STEVENSON, G. C.*
Bacon, Stevenson
Co., New York

SLADE, JARVIS

Straus, Blosser & McDowell, Chicago
WILLIAM L.*
>='■ r-.
"V1

MALCOLM SA
Seattle-First National Bank,

; V

Sachs

Research Corp.,

WILLIAMfG.*

Jr.,

,

.

-

Simpson, Emery & Co., Pittsburgh
Stern,

REED,

Antonio

Co.,

<fc

G.

REED,

PROSSER,

Cleveland

PERSHING, F. WA '•'■■v;'
Pershing & Co., New York

t

A.

Estabrook

Chicago

Company,

ALFRED*

Kidder,

Co., Denver

Webber,

PRATT,

/

Co.,

Ball, Burge & Kraus, Cleveland
STEEL,, WALTER H.«
'
Drexel & Co., New York
STEIWER,

York

SIMPSON,

Trust

New York

REDMAN, W,

Boston

PENDERGRAST, THOMAS J.
Courts

Goldman.

ALBERT *

Paine,

L.

SIPP,

& Co.,

•

SIMPSON, Jr., F. BRADFORD
Hallgarten & Co., New York

THORBFUN

RAUC1I,

RALPH

Barney

I It ATT,

>

Dominick & Dominick, New York
PELIKAN MILES*

City

Co., Detroit

&

81

STEARNS, JAMES P.*

.

HARRY*

Natl. Securities &

Co.,

<3fe

Shnonds

Baker,

New York

Co.,

THOMAS

Rand

Report,

M.

ROBERT

POWERS,

Nashville

:

M.

RAND.

J.
Wheeler & Alleman,

Smith,

Clark, Dodge & Co..

&

POWF.LSON,

.

PECK. ANDREW F.

PECK,

JAMES

Boetteher

G,

Leedv.
Securities

J ■
Kansas

RALPH W.*

SIMON SON,

RANKIN, IIARLEY L.*

Dictm'ir A Co., San

Commission,

;

SIMONDS,

Philadelphia

WILLIAM C.

PORTER,

The First Boston Corp., New York
PATTERSON, HAROLD

Washington
PAYNE, CARR

SIFJFERT, RUSSELL
Stern' Brothers! & Co.,

K*

Paul

New

Burnhani &

World

&

Hughes

Fidelity-Philadelphia

ROYAL II.
Philadelphia Inquirer, Philadelphia
POOLE, MONROE V.*
Geo. B. Gibbons & Co., New York
POPPER, ELVIN K.
I. M; Simon & Co., St. Louis

PATTBERG, Jr., EMIL J.*

Securities

St.

A.

JOHN*

RALPH,

Co., Dallas

Washington

Pittsburgh

Doremus,

&

PLENTY,

PARRY, SIDNEY L.
De

Co.,

Indianapolis

(T1ARLES MA

I*I.ATT,

Co., Detroit

S.*

Richards

Pierce

Rauscner.

Corporation, Boston
H. LAWRENCE
Stanley & Co., New York

PARKER, II.

&

HENRY

Ralfenspergcr,
KAISS.

Angeles

Los

Co.,

&

PITFIELD, WARD C.*
W. C. Pitiield & Co., New York

Parker

PARKER,

Wood

Equitable Securities Corp., New York
EXSPERGEK, G. WILLIAM*

CHARLES C.

PIERCE,

PARKER, AMORY*
The

Witter

Dean

PARCELLS, Jr., CHARLES A;4
&

E.

RAl I

RALPH E.

PHILLIPS,

Antonio

Parcells

Harold

RADKMAKLR,

.

Allison-Williams Co., Minneapolis
1'AXCOAST, JOHN W.*
Dewar, Robertson & Pancoast,

A.

(2713)

QUIST. LEO L.

Newburger, Loeb A Co., New York
FFFFER, DELMONT K.*
First National City Bank, New York

I

The Bond Buyer, New York
OWEN, IRA J).

Charles

ajid Financial Chronicle

PF.VEAR, WILLIAM W.*
.
Irving Trust- Company, New York
PEYSER, BENJAMIN F.
'

OSGOOD, GILBERT II.
Blunt Ellis & Simmons, Chicago
OSTRAXDER, LEJE Jf.f >*
'W •<-••
White m Bliir fc Co., Chicago
OTIS, C. BAKRON

San

Commercial

The

.

STAPLES, JACK R.
'
Fulton Reld & Co., Cleveland
STARRING, Jr., MASON B.
A. C. Allyn & Co., New York

>■

THEIS, IIARRY
Albert

Theis

STEARNS, GEORGE*
The Economist, Chicago

&

Sons,

G

;

St. Louis

Continued

on

page

8%

Baltimore

Sons,

BOBBINS, CHANDLER
M.

A.

Schapiro & Co., New York
MALCOLM F.

ROBERTS,

Serving Southern California since 1927

Garrett-Bfomfield

&

Co.,

Denver

ROBERTS, WILLIAM J.
Glore, Forgan

Chicago

& Co.,

ROBINSON, ARTHUR G.
Wertheim

&

ROBINSON,

Co.,

ROBINSIN,

RAYMOND

Dominick

RODDY,

&

TELETYPE: LA 68—LA 35

&

John

EXCHANGE

REDLANDS

CLAREMONT

SANTA MONICA

28

I.
O.

ROSS,

SPRING STREET, LOS ANGELES
GARFIELD

AVENUE,

13

PASADENA

I

JULIAN

AVE NI DA

DEL

REDONDO

NORTE,

BEACH

lv.

Merle-Smith,

York

New

New York

MEMBER

PACIFIC

COAST

STOCK

EXCHANGE

ALFRED J.

Dick

Merle-Smith, N6w York

&

ROUSE,

ROBERT

G.

Federal Reserve Bank, New

ROWE,

1

NORTH

209

Legg & Co., Baltimore

&

ROSE, MIDLLETON*
Laird, Bissell & Meeds,

SAN DIEGO

453 SOUTH

Boston

Company,

PHILIP

C.

Dick

DIRECT PRIVATE WIRE—KIDDER, PEABODY & CO., NEW YORK
PASADENA

Orleans

New

C.

ROOSEVELT,

(ASSOCIATE)

New York

York Herald Tribune, New York

ROGERS,

STOCK

Jones,

ROGERS, DONALD
New

COAST

Investment Securities

Denver

Co.,

E.

JAMES

Schari'f

MEMBERS:
PACIFIC

<fc

Dominick,

ROEI1L, ORA
Keystone

AMERICAN STOCK EXCHANGE

Co

Bmeman Eichler

I,.*

ROCKEFELLER; Jr., AVERY

626 S. SPRING ST., LOS ANGELES 14
«

II.

New York

Co.,

Barrett-Broml'ield

Investment Securities
TRhily 5761

&

York
/•-, ;

New

EDWARD

Sehwabacher

ROBERT

Stroud

&

York

G.*

Philadelphia

Co.,

ROWLEY, JAMES
Chemical
New

DISTRIBUTORS

Exchange Eank,

Van

Alstyne,

Noel

& Co., New

SAFANIE, MURRAY II.
Shcarson, Hammlll &

of

SAGE,

INVESTMENT

Corn

York

RUSSELL, JAMES A.

ANDREW

H,

Lehman

SECURITIES

York

C.

G.

Brothers,

York

New

Co.,

York

New

Crowell, Weed on & Co.
Stock Exchange

JESSE A.*

SANDERS,

Sanders & Co.,

Dallas

Members Pacific Coast

SAVARI), J. ERNEST
Savard & Hart, Montreal

Biagiiam ATiiaek e Hurry, Ixc.
Member

Pacific Coast Stock Exchange

M.

A. Schapiro & Co.,

SCHLUTKR,

621 S. SPRING-LOS ANGELES

First
-

TRinity 1041

Now

HAROLD

National

Pasadena:

70

224

LA

S. Euclid Ave.—SYcamore

34196

650 S. SPRING ST.

•

PLACEMENTS

LOS ANGELES 14 • TRinity 0281
TELETYPE LA 38

of

Chicago,

Pasadena
ALBERT

Fusz-Schmelsde

,

New York

J.

Bank

<te

M *

Co.,

DISTRIBUTORS

•

DIRECT

York

SCHMELZLE,
TELETYPE

UNDERWRITERS

SCIIANCK, Jr., FRANCIS R.
Bacon. Whipple & Co., Chicago
SCHAPIRO, MORRIS A.

San

St.

Louis

Diego

•

Long Beach

Laguna Beach

•

Van Nuys

•

WALTER A.*
Poole, Roberts & Parke,
Philadelphia
*'
SCHOENEBERGER, CHARLES A.
National Boulevard Bank, Chicago
SCHMIDT,
Schmidt,

■

HAROLD

SCIIREDEK,

X.*

Distributors Group, Inc.,

SCIIWABACTIER,

New York
ALBERT E.

Jr.,

Sehwabacher & Co.,

San Francisco
BUFOR1I
Stringfellow, Richmond
SCUDDER, DANA B.
First National City Bank, New York

SCOTT,
Scott

J0

offices throughout the state for excellent

&

SKBEL,

HARRY

Selected

L.*

Investments

SEEBECK,

ROBERT

Chicago

Co.,

F»

Underwriters and Distributors

Hemphill, Noyes & Co., New York
JOSEPH

SENER,

W.*

John C. Legg «te Co.,
SEVERANCE, CRAIG

CALIFORNIA

F.

Eberstadt.

SKYING,

DISTRIBUTION

Co.,

&

r

■

York

Bond

Buyer,

New

PACIFIC

COAST

MIDWEST

STOCK

Ladenburg, Thalmann & Co., New York
SHEA, J. EARL
SIIEAI FEE,

THEODORE

EXCHANGE

National Bank, Dallas
S1IKPARD, ROBERT O.*
Presscott, Shepard & Co., Cleveland

•

Long Beach

San Diego • La Jolla • Whit tier

•

•

Oakland

Pasadena

•

•

San Jose

Ontario

DIRECT PRIVATE WIRE TO ASIEL & CO., NEW YORK




SIIEURILL,
Shields

623 S. HOPE ST.

•

•

American Stock Exchange (Assoc.)

LOS ANGELES 17

•

MADISON 5-7111

CORNER WftSHIRE AND HOPE

BELL SYSTEM TELETYPE LA

Co.,

New

York

CORNELIUS*

Shields & Co.,

S.

Keystone

SIIREVE,

York

1565 and 1566

NEW YORK CORRESPONDENT: PERSHING & CO.

VIRGIL*

&

SHIELDS.

SIIOLLEY,

New York

Claremont

Hollywood
Redlands

I..*

Company,

Boston

WICKLIFFE

Hayden, Stone & Co., New York
\

Pacific Coast Stock Exchange

SHERBURNE, HAROLD If.
Bacon, Whipple & Co., New

Jmh Angeles • San Francisco

CALIFORNIA MARKET

Members New York Stock Exchange

C.

Republic

EXCHANGE

THE

Lester, Ryons & Co.

Chicago

Janney, Dulles & Battles, Philadelphia
SIIELTON, I.OCKETT*

STOCK

OF

GEORGE

Chicago American,

members:

SOUTHERN

York

N.*
Municipal Finance Officers Assn., Miami
SHAW, LEO G.

corporation

COVERAGE

T.*
Sherrerd,
Philadelphia

&

SHANKS, WILLIAM S.
The

a

COMPREHENSIVE

FREDERICK

Butcher

SlIAW,

HILL RICHARDS & CO.

•

Baltimore

New

Corona del Mar

Long Beach
Riverside

San Diego

'

Enclno

Pasadena
Santa Ana

Glendalo
Pomona
Santa Monica

82

(2714)

The Commercial and Financial
Chronicle

Continued

from

WHITNEY,

81

page

LEWIS

First Pennsylvania

Wiesenbeiger

WILDE,
TIIEIS, Mrs. HARRY (ELIZABETH)
With Harry Theis, St. Louis
THIERIOT,
Carlisle

CHARLES

&

J.

The First

THORS,
Asiel

JAY

C.

New York
H.

&

Government

WALBERT

C.*

Mercantile

Development

Bank,

WALKER,

Juan

E.

Masten

TREUIIOLD,
L.

F.

&

G.

&

Dealers'

GEORGE

<fe

Bros.

TROSTER,

The

Digest, New York
S., Jr.

U

Boyce, Louisville

OLIVER J.

ARTHUR C.
Hanseatic

Corporation,

Bear,

York

First

E.

Unterberg, Towbin Co., New York
VALENTINE, HENRY L.

Davenport & Co., Richmond
ALSTYNE, Jr., DAVID

VAN

Alstyne,

Noel

WHITE,

&

Co., New
HEUKELOM, CAREL W.

Television

Shares

York

R.

VJALE,
L.

F.

&

Co.,

I

Lombardo,

Management

G.

G.

Boston

&

:

J.

New

Rothschild & Co., New York

New

<fe

divisions

<fc

Co., N.
PAUL I.*

S.

Pierce,

EDWARD

Carrison,

A.

M.

Kidder

ZAIINER,

&

Co.,

Washington

Stone

&

Webster

Securities

Corp.,

" *

1

:/;;-•

'■

attributed

of

to

"

months.

this

South

States

•

to

Portland,

line to Montreal.

t

YY "'*]

While most petroleum men in¬
clude the supplying of MontreaL
with Western Canadian crude in

ing in the prime portions of the their
long term thinking, feelings
Pembina field, Canada's
largest, is are very mixed as to the economic
approaching completion and there i; feasibility of
extending the Interis no large new production area
provincial Pipeline to Montreal in
in Alberta to
takeMip the slack.1 the immediate future. Some of
Probably
of
equal
importance, the major

vantage

Sarnoff, formerly

being

closer

to

the

and

able

jthe

North

Central

flexibility of tanker rates. rY
view, a num¬

In contrast to this

ber

United

States.

<

treacherous, due to the consider¬

-

major markets in Eastern Canada

in¬

an

of

with
more
' cheaply
transported
tanker " crude*
and
that the undertaking Y could
be

"

increasing production in S[aal^atchewan, which crude has the ad¬

vestment advisor and manager of
the New York office of Savard &

of

Alberta

ducers

have

independent

financed

New York petroleum consulting
firm to prove that Montreal "be¬

a

In sharp contrast to the
present
situation is the formidable task

chewan producers.

that faces the Canadian petroleum
industry if it is to meet the an¬

production

of

their

is*

John

•■"••.'":'

H.

maintains

Exchange,

Kaplan
office

an

as
funds

mutual

department.

'

&

ticipated

■

Co.

at

also

the

Hotel

Fontainebleau at Miami Beach.

BROKERS

McDonnells Co. Will
Admit Robert E. Becker
McDonnell

&

Co., 120 Broad¬
way, New York City, members of
the

Investment Securities

on

New

Jan.

York

Stock

admit

Robert

Ave

PORTLAND

•

.

l

1

Becker, a member of
change, to partnership.

NVvv Y >rk Slock
Exchange, American
.xcliange ( Associatel, CHic.iro Hoard of Trade

SI'.ATI EE -1

SPUR ANT

•

.

Teletype SE. -IK2 (5711

LUGFNF

•

YAKIMA

•

.

Ol.YMPI A

•

1!«X)

L.

Schenck

&

MFDFORD

formed

the

with

Co.

offices

has

at

9

in

securities

a

Nathan

1967

of

crude
will

1.2

barrels

While

the

making

desirable

1967

Production

of

would

1,

have

billion

8

in

reserves-

to

15

the

would

years

billion

the

be

barrels,

indicated

•

reserves

billion

on

intervening

the order of 3

or a little less than?
Western Canadian'

at the end of

barrels.

The

1956

task

of 3.1

dis-

of

'

covering and developing 800 mil-*

'of

oil annually

lion barrels of crude

for the next 10 years is a formid-,
able one, but it should not be be-i

of

yond

the

capabilities

of

the

Ex¬

Active markets maintained in

been,

CORPORATE & MUNICIPAL

Needelman

and

Stanley A. Schenck.

SECURITIES

.

v

i Revel

Miller Adds

(Special to The Financial Chronicle)

■

■

Garrett-Bromfield & Co.

,

LOSANGELES,Calif.Andrew

State and

Municipal Bonds

Berkey II has been
added to the staff of Revel Miller
& Co., 650 South
Spring

members

Stock

U. S. Government Bonds

Member Midwest Stock Exchange

D.

of

the

SECURITY BLDG., DENVER

Pacific

Coast

Teletype DN 76

Exchange.

With

2, COLO.

PHONE AC 2-8621

Street,

Cunningham Cleland

(Special to The Financial Chronicle)

SAN DIEGO, Calif. — John C.
Yavorsky is now with Cunning-

the

best advice

ham-Cleland

Company, Orpheum
Theatre Building.
i

For

Prime

Distributions

-

.

,

With J. F. Lynam
LOUIS,

Shields

is

now

J. F. Lynam &

Meramec

BOND DEPARTMENT

Seattle 24,
Telephone Main
Member

Federal




Insurance Corporation

connected

~

L.

Building.

Y "

Both

Municipal and Corporate Y; V
■

Try

•

;yYl~ Y

•

'

■

■

-

"

'

»

*•.

T

^

'

*

Avenue.

Daminski

with

-

,•'

Rocky Mountain Securities

with

Co., Inc., Ill South

CLEVELAND, Ohio
A.

.

O,

Coughlin

(Special to The Financial Chronicle)

Teletype SE 489
Deposit

J ohn

—

of
Ail

With L. A. Caunter

Washington

3131

Mo.

"

:

(Special to The Financial Chronicle;

ST

:'V

A.

is

—

now

Caunter

&

Darvine

affiliated

Co.,

Park

6•

SECURITY

•

BUILDING

Company
DENVER 2, COLORADO

Telephone:
KEystone 4-3201

Teletype:
'

Members

be

barrels.

E.

Maiden

re¬

to

■

daily, of which about 70%
supplied from domestic

resources.

a

ratio

approximately

requirements

million

in

serves

be

engage
Partners

business.

Assuming

future.

currently some 750,000 barrels
daily, of which a little more, than
half is being
supplied domesti¬
cally. Estimates prepared by the
petroleum industry indicate an
anticipated Canadian demand .by

Lane, New York City, to
are

oil

the

longs" to the Alberta and Saskat¬

are

Form L. Schenck Co.

Flume ME'.

crude

of

Exchange,

will

demands

Canadian

Mi. M It IKS
Stock
S2U Second

pro¬

study by

a

'

Future Canadian Needs

manager

Foster & Marshall

and

crude

brought by
Maine, from
where it is transported
by pipe¬
tanker

the New York Stock

Corporate and Municipal Securities

now

American, Middle East

United

John H. Kaplan &
Co., 120 Broad¬
way/New York City, members of

DISTRIBUTORS

mai;-

at

Hart, has become associated with

UNDERWRITERS

Cana¬

250,000 barrels daily. That
present is served with

market

may be
that drill¬

fact

of

reaching the lush Montreal
ket, where refining capacity

decline

the

consumption

are predicated on the
Western
Canadian
oil

of

-exceeds

being

by the decline in sale^pnthe Pacific Coast and the
steadily

John N. Kaplan Co.
Paul

of

•

crude

basis

maintained-Yin

about

Paul Sarnoff With

,

WHITLOCK, DANIEL P.*
Ladenburg, Thalmann & Co., New York

number

a

•.

domestic

•

is

y\.

dian

Canada.

drilb'ng

well

;

The foregoing estimates of 1967

-

lowables, which has been brought ;Montreal

'

»

&

in

This

•

City

K.

York

daily.

the

by the
situation, is

evidence

minimum.

companies contend that
however, is the reduction in the pipeline
supplied crude would be
Alberta daily well production, al¬ "•at a
competitive disadvantage - in

II.

Kansas

ZEIJGNER, ORLAND
New

York

New

wildcat

Some

B.*

Co.,

VICTOR

Za'nner &

in

for

VOUMANS, PAUL E.
-!V;^'/;y-;%Y:
Bosworth, Sullivan & Co., Denver ;T
YUNKER, ROSWELL J.
r
,

of

,

the abso¬

.

conservative

demand would require
production of 1.25 million barrels

Y;

Canada,
development
drilling, particularly in Alberta,
has been declining rather
steadily

Wulbern, Inc.,
Y:;Y YY'Y.rY
YYYyY'YY-;

.

.

a

combined

conditioned

.

Y;Y'Y' reasonably
Western

^

Y'V':Y

Treasury Department,

WULBERN,

York

T'T

.

.

While

/

New York

Y.

.

prevailing

much

LAWRENCE

WREN,
U.

Co.,

."

paradox

industry

.

presently

II.

&

an

;of

necessity of
thinking and
planning in terms of the future,
but
having
current
operations,
particularly in the exploration

York

Co., New York

is for

production

500,000 barrels.
perennial

due to rapidly changing
conditions, 400,000 barrels
daily by 1967 would appear to be
world

The outlook

1957

daily

estimates of future exports is haz¬

ardous,

was

lute

Boston

New York

Boston

♦Denotes Mr. and Mrs.

The

M.*

Bradford

Allen

With Kelton E. White, St. Louis
WHITESIDE, THOMAS
^ >
Chace, Whiteside, West & Winslow,

CHESTER*

Stetson,

KENNETH

C.

balance of

petroleum

York

&

Walker

WREN,

Co., St. Louis
WHITE, Mrs. KELTON E. (ALMA)

New York

H.

WOOD,

Corp., New York

KELTON E.
Walker

Witter

Jacksonville

Co.,

New

from

almost

production

accordingly.

the

around

Wood, King <& Dawson, New York
WOOD, FRANK A.* ;
Goodbody & Co., New York

GILBERT*

H.

Corporation,

WOOD, DAVID

Bank, Chicago
CHARLES M.*

White

D.

WHITE,

Corporation, New York
VEAZIE, WILES W.
Mabon

'

GEORGE B.

The First

VAN

Co.,

shipment

California

and

average

W'OLL, ALBERT J. T.
Hayden, Stone «& Co.,
WONHAM, FRED S.

i

Co.,

for

Milwaukee

Co., New York
WITTER, WILLIAM M.
Dean Witter & Co., Chicago

York

Co., New York
MILES A.*

&

reduced

Weekly, New York

&

Dean

Putnam Fund Distributors, Boston
WESTERVELT, PAUL T.*
Howard, Weil, Labouisse, Friedrichs
«fe Co.,
New Orleans
WHITBECK, BRAINERI) II.*

Underwood, Neuhaus & Co., Houston
UNTERBERG, THOMAS I.

Van

Hartford

New

&

Baird & Co.,

York

WINSLOW, SAMUEL R.

National

WEIILY,

,

Laird

for
to

disappeared

G.

Winslow, Cohu &
WISE, JOSEPH B.

JOHN

Stearns

WEKDT,

LNDERHILL, ARTHUR J. C.
Arthur Wiesenberger & Co., New York
UNDERWOOD, MILTON R.

C.

York

WEIIRI1EIM, ROBERT V.
Philadelphia National Bank,
Philadelphia
WEINTRAUB, ALLAN

TURBEN, CLAUDE F.
Merrill, Turben & Co., Cleveland
York

ATKINS,

New

crude

Vancouver

Co.* Baltimore

New

ra¬

Gas Securities Committee
dian

WILSON, HARVEY 1).
Model, Roland <fe Stone, New York
WINPENNY, Jr., EDWARD I,.

Company,

Buyer,

Stubbs, Smith
Birmingham

Baker, Weeks & Co., New York

New

Robert W.

B.

Co.,

Williams &

T.

Barron's

GEORGE*

Bond

<fe

&

Battles, Philadelphia

E.

Co., New York
CLAUDE IV.*

WILSON, FRANK

W'ATTERSON, WILLIAM II.
Fahey, Clark & Co., Cleveland
WKEDEN, ALAN N.*
Weeden & Co., New York
WEIIMANN, GILBERT II.
White, Weld & Co., New York

Singer & Co., New York
TSOLAINOS, K. P.*

New

Walker

Asiel

Troster,

TURNER,

City

Walker, New York

WASHERMAN,

The Martin Company, Baltimore
TRIPP, JEROME C. L.
Tripp & Co., New York
1ROST, MILTON S.*
Stein

H.

Report of IBA Oil and Natural

&

Newburger, Loeb & Co.,
WILSON, CARLTON P.*

HAROLD Ei

&

•>

York

New

M.

WILSON, ALFRED

LOUIS

WANDERS,

;

Co., New York

RAYMOND*

Investment

TRIMBLE,

Pittsburgh

EUGENE*

Rothschild

TRIGGER,

WALKER,
Co.,

C.

GRAHAM :

McManus

TRESCH, ARTHUR
A.

S.

Trust

-

Co.,

Baker, Watts <fe Co., Baltimore
WILLIAMS, Jr., C. T.

Blyth <fe Co., Chicago
WALDMANN, GEORGE R.

Co., New York
D.

UILHIDE,

Corporation, New York

RICHARD

JOHN

Gairdner

Lucas, Eisen & Waeckerle, Kansas
WAGNER, ROBERT L.
Leedy, Wheeler & Alleman, Orlando

Co., Pittsburgh
DAVID L.
JOHN

GEORGE

WAECKERLE,

& Co., New York
ANTHONY E.*

Jr.,

WILEY,

Stranahan, Harris & Co., Toledo
WORTH, ARTHUR L.*
Dillon, Read & Co., JNew-York

E.

Pitfield

TOWNE,

Boston

BERTRAM

Janney, Dulles
Crouter &

WADS

&

TORREY,

San

WADE,

York

New

Loeb

Thomas
W.

Co.,

WILLIAM

Kuhn,

TOMASIC,

■

&

& Co.,

TODD,

Chicago

EMERSON*

Loeb

B.

VIVIAN, RICHARD C*

HAL

Chicago American,
Kuhn,

EGERTON

DeHaven <Xs Townsend,
Bodine, New York »

Jaequelin, New York

THOMPSON,
THORS,

VINSON,

IL*

Continued from
page 39

Angeles

Banking <fc Trust Co.,

Philadelphia
WIESENBERGER, ARTHUR
Arthur

Thursds\y, December 19,1957

.

.

F.

Deinpsey-Tegeler & Co., Los
WHITTLESEY, ALBERT W.

Attendance at IBA Convention

.

DN
Midwest Stock

Exchange

296

in-

.Volume 186

dustry.

Number

5700

.

.

.The Commercial and Financial Chronicle

Subsequent to the Leduc

pathetic study yet afforded by

discovery in February, 1947, some
19,000 wells have been drilled in
Western

ernment

gas and

contained

a

Canadian Government.
A

Canada, with 3,360 oil,
dry wells having been put
down in 1956.
Drilling in the first
half

of

Crude

1957

oil

totaled

1,430
and

Sept.

devel¬

to

ern

to

sedimentary
in

miles.

square
v'-'!

'►

distribution

rapidly, and the

very

sized

to support
many

a

more

than

demand

sufficient

..yy

welcomes

Canadians

companies

yy'1

>

M?,'iy■■■

in¬
ask¬

are

make

to

Cana¬

-V./

jy v

111

/' '

,-/y,\y

"

^

'•1

r

as

and

Offshore Exploration and

size,
,*

Development
A

decade

has

passed since

now

the first commercial

yr:%\-

.

Canada
but

equity stock available
dians.;^".
/;

drilled to permit appropriate daily

production.-;

that

Canadian

combined

of this

country's

investing in Canada incorporate

wells will have to be

more

that

im¬

an

ing that United States companies

and
grow

demand may well reach as much
a "billion
feet daily by
1960.
While known Western Canadian
are

of

situation

a'

own

over-estimate
the effect natural
gas will have on.
the economic life of Canada.
In

drilled arid

addition

oil well

was

have

'.

It .is

difficult

to

its

to

multiple

energy
applications, natural gas will un¬

doubtedly
use

find

a
steadily rising
chemically based and

in many

affiliated industries.
It

is

still

without
effect

many

of

1957,

too

of

the

early to predict,
reservations, the
election
in
June,

Conservative

a

ment to the

govern¬

Canadian Parliament

the Canadian petroleum in¬
dustry. The Canadian Petroleum
Association late in August sub¬
upon

mitted

brief to the Prime Minis¬

a

ter

and

ing

a

Minister of Finance ask¬

revision in certain of the in¬

come

tax

laws

pertaining to the

industry.
The proposed amendments, five
number, which deal essentially
with more realistic depletion al¬
/

in

lowances and "write offs" of

non¬

productive
signed
ternal

properties,
are
de¬
to, provide additional in¬

capital for

the

expanding
industry and to place
Canadian
companies „• on
equal
footing with foreign cousins in
needs of the

developing

Canada's

petroleum

The proposals are ex¬
to- receive the most sym¬

resources.

pected

these 10 years some 50 companies

appeared on the scene and
acquired a combined total of 3M>
million

of

acres

coasts

of

This

\

completed in the tide-

lands off the coast of Louisiana. In

leases

Texas

and

off

the

Louisiana.

represents

approximately
20% of the total area lying off
these coasts to a point where the
water depth reaches 120
feet, or
about

l/10th of the

water

depth
50

same
a

of
total

feet.

to

The

each

of

close

to

$1.7
billion in this offshore region by
April, 1957. A total of 1,940 wells
have, been drilled with only 592

holes

dry

resulting.
With
the
drilling of these wells, the indus¬
try had
"proven, probable and
possible" reserves of about W->
billion

barrels of oil

10

and

tril¬

lion

cubic feet of gas.
At first
glance the total $1.7 billion accu¬

mulated investment did appear to
have brought rich returns; how¬

ever,-by-dtviding
total

investment

panies
the

in

estimated

the

offshore

oil

we

per

$875,000.

com¬

today

total number of wells

to-date,
cost

the

the

of

by

drilled

find that the average

well
This

'is

approximately

compares

with

of

$125,000
times

seven

American

offshore

has

well

added

onshore well.

Since there is con¬
evidence
that
current

siderable
well

costs

running

are

under

the

substan¬

further

INCORPORATED

-19571953

Daily
ft

average—

increase
previous

1954

1955

1956

26,800

44,000

70,700

113,000

Jan.

Feb.

Mar.

April

162,000

150.000

over

61ft

64 <

year

60 ft

43 ft

33 ft

It is of interest that two of the

tested, with 53 wildcats and 8
offshore fields discovered. Emphasis, there¬

this

re¬

Of Texas 30 prospects have

Continued

been

on

page

offshore gas production to

a rate,
consistent

relative

to
reserves,
with that onshore.

Record

To

the

High Growth

HESS

of April, 1957, the
industry's accumulated production

end

offshore totaled 128.7 million bar¬
rels off the coast of Louisiana and

approximately
offshore

1

million

Texas.

barrels

Cumulative

production to April,
212.9 billion cubic

McFAUL

&

INVESTMENT SECURITIES

American Bank

Portland 5, Oregon

Bldg.

gas

1957, totaled

feet, all off the

coast of Louisiana. While this may
not represent a great amount of

production when related to

daily
S. output of some 6.5 million
barrels, it is actually quite an ac¬
complishment for an area which
up to a few short years ago had

Bell

U.

been

never

tapped

by

the

Teletype—PD

254

drill

bit.

The fact is that growth of off¬
shore
oil
production challenges

Specialists in Securities

the record of any other region in
Western Hemisphere. In the

the

past three
nual

years

increase

the

average

of the

an-,

in offshore oil out¬

Pacific Northwest

an

barrels

average

61%

60%.

In

1953, total
26,-

UNDERWRITERS

DEALERS

DISTRIBUTORS

daily, increasing 64%
44,000 barrels in 1954.

increase

1956

in

1955

boosted

of

1957

followed

with

60%

a

,

INVESTMENT SECURITIES

INVESTMENT TRUSTS

daily average of 113,000

a

aver¬

SINCE

U.

S.

BANK

BUILDING

gain

1929

The

combination

and

trimmed

OREGON

reduced

offshore

April,

1957,

daily.

Teletype PD 280

While

average

FIRST
D ML Ml IUT

JNLflUI IVlmflJL MwraJM. IRl

to

of

PORTLAND

4,

production

153,000

this

for

represents

the

past

in

barrels
a

than

three

If you

deal in Western securities, listed

maintain

a

executions.

unlisted,

or

we

complete service in trading, information and
Direct wire to 46

Correspondents.

Zilka, Smither &. Co., Inc.
INVESTMENT SECURITIES

TELEPHONE

Pacific Coast Stock Exchange
TELETYPE

gl3

w

ALDER
PD

CApitol

OREGON

OREGON

lower

Member

PORTLAND

1927

allowables

much lower rate of increase
the

A BONDS

the full year average in

over

1956.

STOCKS

BONDS

CApitol 8-1318

aged 162,000 barrels daily, a 43%

BUILDING-,-

CORPORATE

•

MUNICIPAL

In the first three months

production offshore

demand




PRODUCTION

drilling will be required before
the industry will be able to boost

barrels.

OF

OIL

daily production to 70,700 barrels

BLANKENSHIP, GOULD & BLAKELY

jk iWWTMM% Ml ML M

to other areas in the WestHemisphere.

considerable amount of additional

gain to

mv

ern

000 Barrels

In

im¬

gion to-date reflect only a modest
amount of development work.
A

and

Bell System

OFFSHORE

$875,000 figure,

are

However, expenditures in

to

4,

it, nevertheless, represents
impressive gain when re-

,

A

PORTLAND

very

proved. * "
'
Another factor which

800

WILCOX

a

companies entering the
play at an early date—Shell Oil fore,
has
been
on
discovery
Company and Standard Oil Com¬ rather than development. As this
will add
pany
of California—account for lemphasis gradually shifts from
materially to investment return close to 60% of the total current
discovery to development, which
will be the development of ade¬
production offshore. In fact, out it already gives evidence of doing,
quate transportation facilities to
of the 50 companies now holding it is apparent that income will
move the oil
and gas to market.
interest in offshore leases, 13 ac¬ increase to a point where it will
As of Aug. 1, there were 18 shutcount for 92% of total current off¬ more than balance outgo.
The
in gas fields in the Gulf.
Of the
strike ratio continues high, par¬
shore production. 1
50 odd other fields, only a
very
Following the passage of the ticularly off Louisiana where the
small
number have been suffi¬
Submerged Lands and Continental rate has been approximately 40%,
ciently developed to warrant the Shelf Act in
1953, the industry compared to the national average
construction of pipelines for the
rushed to obtain leases and the of 11%.
transportation of the oil and gas.
&
#
primary emphasis since that time
As more development takes
Ever since the operations off¬
place, has been to hold these leases by
however, pipelines will be built.
obtaining
production
on
them shore have reached large scale
Transcontinental Gas Pipe Line
prior to their expiration. This is proportions, the question of how
Corporation has recently received evidenced
by the fact that as of all the installations and equip¬
FPC approval to build a 28.5 mile
the first of this year a total of 108 ment would stand up under real
line, and Marine Gathering Com¬
prospects have been tested off hurricane conditions has arisen.
pany has a 25-mile scheduled for
Louisiana with 190 wildcat wells.
This question was answered
in
completion in September.
This Of this
total, 97 were drilling off¬
will be a 12-inch line, with a
June of this year, when "Audrey,"
shore
Louisiana
and
11
were
capacity of 45,000 barrels per day.
with winds above 125 miles and
operating off the coast of Texas.
economics

offshore production averaged

ESTABLISHED

years,

to

approximately nine times
hydrocarbon added by each

the

put exceeded

Pacific Northwest Securities

as

83

Petroleum

reserves

a

These

had invested

companies

combined

out

area

600

onshore

about

or

Institute, however, estimates that

the

in

nonresidents

vestment

as

reserves

much.

tially

existence

ing the operation ; and develop¬
ment of the country's
economy."
.The Prime Minister then empha¬

.

will

New

resources and
industry, and
therefore, in a position to
make important decisions affect¬

750,000

'systems

lines

College,
Hampshire,
in

are,

anticipated that the re¬
quirements of, the various gaso¬

transportation

Dartmouth

at

basic

is

line;

an

portant. part

•=:;-;

Natural Gas -V

\V

~

gov¬

dent

estimated

of

8

where

C''

■'-ffiXi'*
It

are

excess

new

possibly be

may

well

that the question
is being asked whether a country
can "have a
meaningful indepen¬

of West¬

areas

Canada; which
cover

in

to

as

which he stated

be drilled in the next 10
years

in the

policies

Hanover,

oped in the 10-year period is es¬
timated
at
approximately
3.7
billion barrels.
Using these fig¬
ures as a criterion, it is indicated
that some 40,000 wells will have

clue

cost

average
per

address given by
Minister
Diefenbaker on

Prime

wells.

discovered

further

(2715)

SALEM

155

PORTLAND 5, OREGON

8-8261

•

EUGENE

•

MEDFORD

•

PENDLETON

84

«9

/ 0*71 A\

84

(2716)

The Commercial and Financial Chronicle

Continued

from

should

83

page

taken also

be

of the

Sat¬

Gas Securities Committee
pushing before
arrived.

it

to

25

The

40

results

foot
were

electric
the

utilities

F. P. C.

and

after

applied by
of the

passage

of

decade.

Natural

this

confined

was

the

to

loss

or

destruction of landing platforms,
stairways and walkways—all out¬
side structures—easily replaced.

IV

Natural Gas Industry

to

of the

new

The

the

The circuit
decision and

problem of the sent the case back to the Com¬
natural gas industry continues to mission for further findings with
be one of proper pricing of gas respect to
comparative cost of
subject to F. P. C. jurisdiction, service considered necessary to
i. e., gas sold by producers and support this new method of pric¬
by
pipelines.
Gas
distributors ing. The U. S. Supreme Court re¬
have, generally speaking, been fused o review the case and the
able

principal

obtain

to

needed

rate

in¬

However, over the longer

creases.

term, the outlook for gas dis¬
tributors is closely related to that
of the producer and

pipeline com¬
panies. Unless adequate profit in¬
centives

restored to

are

producers
pipelines, the necessary addi¬
supplies
of
natural
gas
needed
to
satisfy growing de¬
and

tional

will

mands

neither

be

developed
nor
transported to markets and
the ability of distributors to meet
their

load

own

curtailed.

In

growth Will be
circumstances,

siich

F. P. C.

is

following

circuit

the

court's opinion.

Meanwhile,

the 1954 decision
of the U. S. Supreme Court in
the
Phillips Case gave to the
F.

P.

C.

regulatory
jurisdiction
substantially all natural gas
producers through an interpreta¬
over

tion

the

of

Natural

Gas

Act

broadening trie definition of "nat¬
companies" selling gas in

ural gas

interstate

commerce.

In

Likewise, rate increase appli¬
of pipelines are still not
being acted upon with sufficient
promptness. 1 T h i s
"regulatory
lag," in the face of steadily in¬
creasing costs, has resulted in a
serious earnings uncertainty for
transmission companies. Gas dis¬
tribution companies, howevej-,
have enjoyed a more satisfactory
cations

**

Because

its

convenience,
natural

law

to

reasons,

Such

years.

the

as

Harris-O'Hara

again in detail the origin of the

Bill, will still be
pending in Congress in 1958 and is

natural

reported to have at least

It

seems

unnecessary

industry's

pricing
The 1956 report of this

gas

problem.

to review

Committee

discussed

the

histori¬

cal reliance of the F. P. C.

rate-base

method .of

on

the

regulation

chance

for

worthy that the F. P. C.,

is

even

note¬

in line

with its position in the Panhandle

used

originally

case,

has

sion

in

such

legislation.

by the Commis¬
regulation of interstate

It

success.

an

consistently

favored

Finally,

note

stimulating

virtually

Northwest in 1956 and 1957, bring¬
ing natural gas from the San Juan
Basin of the Southwest and from
the

Peace River

British

70th

ANNIVERSARY

of northern

area

Columbia

that growing
time.
Major

and

Alberta

to

section for the first

pipeline expansion
projects pending include several
designed to transport additional

Province

from

prolific
principally in
Alberta, to the

of

markets

of

California,

as

newer

OUR

the

States.
This
period
of
extraordinary pipeline1 expansion
was brought to a close with com¬
pletion of lines to the Pacific

and

SECURITIES

of

part

every

United

the

INVESTMENT

con¬

struction of transmission pipelines

quantities of gas
Canadian sources,

Seasongood & Mayer

■

and
demand for

strong

distribution

now

'

cheapness

has developed in the

gas

postvyar period,

the two
known

.-I:

£

of

Phillips decision by
allowing producers a "fair field"
price failed to be enacted into
varying in
legislation,

re¬

recogni¬
bodies of
the necessity lor higher earnings
under conditions of rising costs of
gas, materials, labor, and money.

1956 and

of

of

cases, indicating greater
tion by these regulatory

offset

number

rates

turn have been allowed in recent

become very difficult for
managements of investor-owned

a

marketed

production of
natural gas is expected to increase
at a lower percentage average rate
4.7%

rate

per

of

greater

sales

the

this

next

projected

increase

lesser

or

in

annum

Whether

or

some

will

rate

even¬

tuate will, of course, depend to a
great
extent upon
restoring to

the

northwest

well as to the
states.
Application

consequent increased cost.
the
required' new. re¬

Whether
serves

be

can

developed to

sup¬

the

at

lower

oil

to

gas

depths presently
drilling, the ratio of

in

reached

discovered

has

been

greater, increasing in recent years
by about 50%. In comparison to
the oil industry, the reserve posi¬
tion of the natural gas industry is

gas producers, as well as pipeline
more favorable
since, on a BTU
transporters, the necessary profit
basis, gas reserves exceed oil by
incentives justifying expansion. If
40%, although consumption of gas
a
reasonable price, structure can
is 45% less than consumption of
be developed, then further large
oil.
•
L
.

expansion

of

markets

gas

It

be expected. The A.G.A. esti¬
a 51% increase in sales and

end

of

the
age

ent

ultimate

efforts

ers

and

10

some

is

recently

purchased

238

of

reserves

trillion
1956

years

of

at

sufficient

Warmer

weather

in

the

1956-57

heating season also hurt sales
and earnings in that period.
To
restore
earnings to more satis¬
factory levels, pipeline companies

the end
for

Rates

ended

year

at
a
rapid rate, but
operating income up only
4%, rate of return declined. Cost
of purchased gas was
up
14.5%.

approximately

cubic feet

were

the

of
%

reserve.

with

pro¬

Doubling Reserves
Gas

potential

actual

production

continued

Additional indus¬
has

at

Again, the

June
30,
1957, revenues of pipeline com¬
panies, as reported by the FPC,
increased almost 11%, but net in¬
come decreased
2%, compared to
the
previous
12
months.
Net
plant increased 18% as expansion

air-conditioning division

try financed research
ceeded on 20 projects.

recoverable

estimated

promote

and

Need Higher
In

manufactur¬

liable gas air-conditioning equip¬
ment.
Arkansas Louisiana
Gas

Company

full

to

$1.5 million on the de¬
velopment of economical and re¬

Servel's

been

to

necessary

development

spent

for $4 million.

ultimate

have

supplying of incentive to pro¬
through pricing flexibility

develop suitable gas air-condi¬
tioning appliances.
In 1956 the
A.G.A.

will

Fed¬

new

a

ducers

ca¬

continue

of

650 trillion cubic feet.

the

Strenuous

eco¬

situation

reserves of 238 trillion

feet,

reserves

1947-1956,
number of underground stor¬
pools increased from 70 to 188
estimated

passage

proved

cubic

In the period

their

this

regulatory measure in 1958,
allowing
pricing
flexibility
to
producers. As compared to pres¬

1957

additional

expand.

in

eral

through 1965.
quantities
are
sold for heating in the winter, the
use of underground summer stor¬
age facilities should continue to
As

hoped that the clear

influence

68% gain in revenues from the

a

is

nomic facts

mates

pacity from 250 billion cubic feet
to 3,402
billion cubic feet.

higher

with

will, in the opinion of many ex¬
perts, depend upon the satisfac¬
tory solution of the present F.P.C.
regulatory impasse. Fortunately,

plished,

significantly

legislation introduced in
Congress to amend the Act and

for

large share

very

and

it may

companies to oppose
successfully pressure for expan¬
sion of public gas systems.

a

regulatory trend under state util¬
ity commissions. In several states

in, 1957

the

get

con¬

port projected industry expansion

may

regulation.

1956-66.

residential market. In

scale

reversed

period

househeating

Thursday, December 19,1957

.

.

view of the rapid postwar growth
which has already been accom¬

importance to the investorNatural Gas Act in 1938 to rate owned natural
gas industry.
In
regulation of natural gas trans¬ the absence of, and pending pas¬
portation companies through 1954. sage of such legislation, F. P.C.
on
numerous
Then, in the Panhandle decision action
producer
the Commission changed its ap¬ cases has been held
up, creating
proach to allow "fair field" pric¬ uncertainties,
indecision and
a
ing of pipeline-owned gas to pre¬ retarding effect on progress of the
vent the rate discrimination re¬ whole
industry.
sulting from valuation of those
States Allow Higher Rates
companies? reserves at cost under
court

'

the

gas

tinues

rate-base

most gratifying.
With very few
exceptions, the mobile units, plat¬
forms and tenders survived, with
only superficial damage.
Most of

for

vital

Report of IBA Oil and Natural
seas,

pated

Case, in which a group of
producers are in effect attempting
to
free producers
from F. P. C.
jurisdiction by asking the Su¬
preme Court to reconsider its de¬
cision
in the Phillips
case.
It
is our hope that fullest support
will be forthcoming for the Har¬
ris-O'Hara
Bill, in view of its
urn

.

22

at the 1956 production rate.

The F.P.C. and underwriters
gen¬

have

erally require a 20 years' supply
for new projects. Additions to re¬

higher rate schedules designed to
increase returns to rates of 6 \'z %

serves

in

1956

14.1

were

to 6%%. With

trillion

cubic feet greater than withdraw¬
als of 10.9 trillion feet. However,
to

meet

even

the

estimated

requested

required
now

de¬

to

mand at the lower average annual

mortgage

increase rate of 4.7%

view

the
an

year over

a

next 10 years would require
approximate doubling of pres¬

in

of

bond

of

costs

interest

614%

the

approval of

pipeline companies
pay

to

up

FPC

for

rates

first

new

continued

increase

materials,

gas,

in

and

money,

and

labor, it is apparent that higher
On the average,
rates are necessary to protect the
drilling is now at
has also been made for a certifi¬ exploratory
twice
those
of
cate to link major Rocky Moun¬ depths
1947, financial integrity of these comtain pipeline systems with those
Y///////////////S/////////S///////S//S///7////////////S/////////////////////////S/////S///////////////////////////^
of the middle west, creating, in
s
effect, a cross-country grid multi¬
plying the interconnections of gas
north

central

ent

reserves,

and markets.

reserves

I;

MUNICIPAL BONDS

Marketed production of natural
gas has increased strongly from a
little over four billion cubic feet
.

i

Established 1887
★

204

Ingalls Bldg.

;

■;

'V

;

;

/

W'
CINCINNATI

2, OHIO

homes from
to

lesser extent

a

sions

from

heat

coal

oil

to

an

increase

of

to

over

1940

an

16.1

POHL &

million,

320%.

414

ers
using gas for househeating
has increased from 35.5% in 1949
to 57.9% in
1956.
By 1959 this

proportion

is

expected
65.0%.

Cliasc

Walter, Woody & Heimerdinger

CINCINNATI




CINCINNATI

Phone—MAin

gas,

Teletype CI 381

^///YYYYYYY/Y/Y/Y/////Y/YYY//////YYY////////////////YYY/////////////Y////////Y////Y/Y/////Y////////y///////////YY/y

Study

as

production of
shown above, in¬

DEALERS and DISTRIBUTORS

an

1957, showed
compared

2

months.

an

to
In

increase

the
its

of

OF

30,
8%,

preceding
12
study
"Future

Chase

Manhattan

Bank

states that the spectacular postwar
growth in sales was substantially
due
to

to

displacement

lesser

a

other

hand,

have been

tinue

so.

most

coal and,
oil. On the
conversions from oil

important and will con¬
With

the

completion

r

DEPARTMENT

respectively

are

Provident

Savings Bank & Trust Company

of

this
conversion
trend,
gaina in gas and oil usage of 58%

64%

BOND

of

extent,

of

and

•

MUNICIPAL BONDS

Growth of the Natural Gas Indus¬

try,"

Bldg.

(2), OHIO

1-6515

annual average rate
of 9.5% in the postwar
period, re¬
sults for the year ended June
-

CO., INC.

Terminal

Dixie

marketed

creased at

MUNICIPAL BONDS
403 DIXIE TERMINAL

natural

have

to

Manhattan Bank's

While

★

This

percentage of residential custom¬

increased to

★

conver¬

In

average of 3.8 million homes were
heated with gas, but by 1956 this
number had risen

★

★

and

gas

through

heat.

BANK STOCKS

CINCINNATI

in 1945 to over ten billion in 1956.
Much of this increase in gas sales
is
attributable to conversion of

CINCINNATI 2, OHIO

PHONE CHERRY 1-6111

antici¬

L

*

r

#»•*-'¥

¥

r

i

rr?

'

»

«r

t

1

«

a

*•'

»

J

i

*.

»

*-

►

i-t'i

i

*

a

*.

Number 5700

Volume 186

1199546

..

.

The Commercial and Financial Chronicle

Below

shown -gasV

are

Prospects for 1958 do not
to offer the likelihood of
improvement in the re¬
finer's
position, unless the na¬
tion's industrial activity is able
appear

utility

a

and

pipeline industry construc¬
expenditures in the postwar
years
and as estimated by the
AGA through 1960:

tion

1947

1948

5

/r

=

higher than 1957. Ac¬
prevailing forecasts,
industrial activity is more likely
to trend slightly lower next year.
Earnings for this segment of the
petroleum industry are now dis¬
appointingly small and show little
promise of a fundamental im¬
provement.

$310
758

—

-

-

770

——

-

———

959

1,198
1,462
1,067

1952
1953
1954

1960

Inventories
in

2,128
1,977
2,265
2,335

(Forecast)

sharp step-up in construc¬
during the years 1956-60 is
especially noteworthy.
The ag¬
gregate in those years of $10 bil¬
lion is expected to increase net
plant'70% and to be applied 45%
to production and storage, 16%
for transmission, 34% for distri¬
bution and 5% for miscellaneous

\""v

'--V

■

finance

•

this program in
1957, the gas utility industry is
expected to raise a total of $1,300
million, or 44% more than in
1956,
according to
the
Irving
Trust
Company.
In
the
first
eight months of 1957 financing
amounted to $1,075 million, com¬
prised of $943 million of bonds,
$102 million of preferred stocks,
and $30 million in common stocks.
;

v

.

The Refinery
The year

difficult

Situation

1957 has been another

one

for

crude

oil

re¬

"annual increment" to bail the

compare

more

The

of his present position.
to the refiner to improve
his position by further curtailing

Spread

runs

cost of crude and wholesale value

of

tended to
through
most
of
1957
the weight of excessive in¬

narrow

under

ventories,
been

Thus,

forced

have

refiners

to

absorb

the increase in the crude oil
which became

the

.

VI

in Janu¬

effective

Petroleum

lower

even

these

than

.

.

demand

gross

again

tion

has

the

of

side

Investment Assn. of NY

the mechanics of "Oil Payments"
has prompted your Committee to

figures indicate.
The

Accounting

The interest shown last year in
the section of the Report covering

gross

.

are

inventories and
of deteriorating

year

best

The
a

a

cover

a

subject related

Holds Annual Dinner
The

to

that

can

be

seen

is

relative inventory improvement
the

position of
gasoline and distillate compared
with the same period of a year
ago.
However, the price which
refined petroleum products com¬
mand in the market place is deconcentrated

in

1957.

the

for

mand

first

Oil

&

quite small,
increase. This is

no

especially important to the petro¬
leum

industry,

finer

as

other

well

because the re¬
his partner in

as

segments

industry

this

of

geared to a market growing
at a 4-5% annual rate.
Absence

are

this

and

factors

5%

some

fewer

than

warmer

lasjt

because

Distributors

attendance.

Co., President of the Associa¬
tion, was master of ceremonies. A.
Parker Hall, Jr., Shearson Hammill & Co., was chairman of the
entertainment committee.

Eugene R. Black, the guest of
a most interesting ad¬

honor, gave
dress

Forms Gross & Co,
UNION, N. J.—Ben Gross is en¬
gaging in a securities business
from offices at
nue

1460 Morris Ave¬

under the firm

of Gross

name

&

Company. Mr. Gross was previ¬
ously with Berry & Co.

co-author.

Any analyst in

"off the record."

C. S. Kakouris

Opens

industry in
MIAMI, Fla. — Carlos S. Ka¬
a study of
any oil company would be well kouris is engaging in a securities
guided in using the contents of business from offices in the Ainsour

the process of making

this

article

quiries

and

Statements

as

a

basis for his in¬

research.
of
larger

Financial ley Building. He was formerly a
companies partner in Makris & Kakouris.

winter
normal,

factor
its

Underwriters

Distributors

Dealers

Municipal and Corporation Securities

disconcerting

is

is

cause

unknown.

the growth trend for
gasoline has moderated in re¬
sponse
to
crowded
highways,
home
air-conditioning,
which
makes the home more pleasant in

Securities

Summer, and the high fuel cost
mile of today's powerful au¬
spectacular
acceptance of small foreign cars

per

tomobile. Perhaps the

1707 Union Central Bldg.

in

the

United States

consumer's demand

CINCINNATI 2, OHIO

14, OHIO

in

400

&

Possibly

Municipal & Corporate

1556 Union Commerce Bldg.

than

Maitland T. Ijams, W. C. Langley

a

installations

burner

new

resulting from credit restrictions
on
residential
construction, un¬
favorable
weather
last
Spring,
and a surprisingly small gain in
Summer
gasoline
consumption.
The

Underwriters and

more

adversely affect¬

ing 1957 demand include

Co.

In¬

price struc¬
exception.

weak

a

This year is no

Other

1908

the

anticipated rate of gain
creates excessive

supply

ESTABLISHED

of

always

ture.

Field, Ricliards

dinner

Gas

•

While the decline is
it represents

annual

Association
of
New
Industry, which vestment
would be factual and informative, York, held Dec. 11 at the Waldorfand one not too widely understood. Astoria, was most successful with
the

equa¬

been

throughout

explanatory footnotes, more

study, could ask pertinent and re¬
vealing questions.
*
V'
The article has been reproduced
with The Journal of Accountancy's
permission and is contained in the
full Committee Report.

year.

The result is evident
refinery spread is
smaller today than in 1956.
Therefore, current net earnings
.

The basic character

economics

price

1957.

ary,
.

refinery

relatively unprofitable for another

of

most

to stills.

makes it
unlikely that runs to stills will be
sufficiently curtailed. Therefore,
refining is expected to remain

of refined products has

85

accurately interpreted in the light
of
techniques discussed, in this
study. In the case of smaller com¬
panies, an analyst would, in many
cases,
have personal interviews
with management and, armed with
the knowledge gained from this

finer out

between the

spread

gross

almost

CLEVELAND

carry

re-?

It is up

Narrower Cost-Price

of

Of

points. In any event, we can¬
not look forward next year, to the

disappointing
Domestic de¬
Petroleum Accounting has been
eight months
strength.
a mystery to most analysts in our
of 1957 increased only 1% over
Inventories
for the first five
1956. The gain was 4.4%, includ¬
industry and the evaluation of oil
months
of 1957
increased at a
ing abnormally large exports in company balance sheets, as well
more rapid rate than for the cor¬
the first quarter, but the latter as comparisons between compa¬
responding period of 1956. Since
represents mostly crude oil. One nies, have, of necessity, been less
the Suez Crisis required the ex¬
important factor to which per¬ accurate or revealing.
port of relatively small quanti¬
haps too little attention has been
The Journal of Accountancy's
ties of refined products and large
paid in recent years, is the im¬ article, December, 1956, issue, ti¬
amounts of crude oil, the refiner
tled
"Petroleum
portance of the level of business
Accounting,"
did
not benefit from
the tem¬
activity.
Since early 1954, the written by Dr. Horace R. Brock,
porary bulge in European demand
FRB index of industrial activity Associate Professor of Accounting,
for domestic petroleum. However,
increased from 123 to a high of North Texas State College, Den¬
commencing in the early summer 147 last
December, interrupted ton, Texas is a condensation of a
months, oil refineries began re¬ only by the steel strike during report based on considerable re¬
ducing runs to stills in a belated the Summer of 1956.
The 1957 search in the field of Petroleum
attempt to avoid burdensome in¬ trend has been downward at a
Accounting, and is the basis of a
ventories and accompanying weak
book on the subject, shortly to be
very moderate rate to a current
refined product prices.
level of about 143.
published, of which Dr. Brock is
accumulating

therefore

The

Toi

months

recent

products

favorably interpreted as yet, be¬
cause
1956 itself was a year of

tion

items.

refined

of

favorably with "year ago" fig¬
ures.
However, this cannot be

1,552

-

1957 (Forecast)
,1958 (Forecast)
1959 (Forecast)

V

age

ply and demand, and not .by com¬
parison with statistics of previous
time periods.

to

preliminary
signs of
encouragement are to be found.

1,345

——

.

average

Certain

1,350
1,055

mT 1955
"V 1956

basic

cording

(In Millions)

1949
1950

to

Expenditure

Year

termined by the interplay of sup¬

finers.

panies and to attract capital for
further growth.
V

(2717)

Telephone PRospect 1-2770

Telephone Main 1-3776

Teletype—CV 174

Teletype—CI 197 & CI 150

reflects

The First Cleveland

Corporation

Member Midwest Stock Exchange

the

again for
economical transportation. If this
is a new trend, the implication
should
be
disquieting for both
the
petroleum
and
automobile

National City E. 6th

once

Building

;

,

CLEVELAND 14

Telephone PR 1-1571

Teletype CV 443

,;

-

CV 444

industries.

Ostensibly, the average refiner,
being an intelligent man, should
be able to adjust his manufactur¬

DEALERS

AND

UNDERWRITERS
•

i

IN

CORPORATE AND MUNICIPAL BONDS,

ing activity to turn out just enough
products to satisfy the market.
However, the refinery is a con¬
tinuously operating mechanism,
operating every hour of the week
in order to spread its heavy over¬
head

costs

over

AND

PREFERRED STOCKS

In
in

CURTISS, HOUSE & CO
Established 1914

SPECIALIZED—PROMPT

past

York

American

Stock Exchange, Midwest Stock Exchange
Stock Exchange

(Associate)

years

Cleveland 14, Ohio

MAin 1-7071

demand

Correspondent: Clark, Dodge & Co.




We clear for dealers in New York
-

Pittsburgh

Address

-

Chicago

the

1957

level.

Consumers

V

more

J PA! Oft

NCLV.

cautious in

period of business uncertainty.
The most favorable prospect in
a

is

the

possibility

nomally cold winter.
underwrite at least

an

of

a

At

OHIO'S LARGEST BANK

This would
increase in

best, 1958 consumption may
parallel 1957. At worst, consump¬
tion may decline several percent¬

Assets

Over

Cleveland,

Teletype: CV 240.

Bank Wire:

are

-

Loans and Securities De¬

partment.

tivity is not expected to rise above

heating oil demand.
New York

CLEARINGS

the annual increase

has been
heavily counted upon to tighten
the supply - demand relationship,
strengthen product prices, and re¬
vive refinery earnings.
The 1958
outlook does not appear to present
such encouragement. Business ac¬
petroleum

evidence
Union Commerce Bldg.

^

#

likely to become
Members: New

maximum

the

volume.
tt

COMMON

DEALERS

SECURITY

One Billion Dollars

I

86

'

(2718)

The Commercial and Financial
Chronicle

To increase operating
NP

gradually

is

dieselization and

efficiency,

increasing
gradually is

placing the last of its steam
used

the

Northern Pacific
Northern

Pacific

able

been

to

Railway

has
earnings

maintain

and

traffic.

The

to keep

drop in general

some

since 1951 and this trend is
expected to continue.
year

has

road

operating

control

been

expenses under

received

but

"other income"

able

increased

from

its

oil

and

lumber operations.
For the

net income of

lent to $3.57
shares

with

Pacific

reported

$17,724,838, equiva¬
share

a

outstanding

on

as

a

standing

the

at

will

come

mented

continue

by sale
of

rental

and

been

in

aug¬

and

only has
that North¬

concentrated

end

of

the

like

to

latter includes

4s.

a

come

months

this

of

Northern

companies.
with

In

year.

Pacific

One

reality

consists

of

two

land company

a

from

revenues

mineral

rights, mainly oil, and the other
from lumber..
The

the

Williston

land

interest

Basin

(fee

in

and

rights) covers some 3,200,000 acres
of high dry land, that, prior to
1950, seemed to have little com¬
mercial value.

In

discovered

was

April, 1951, oil

about

60

miles

from the nearest Northern Pacific

properties.

10

months

of

this

showed

of

In July of that

charges

earned

before

taxes

3.26

compared

of

as

taxes

were

tion

tion

on

of Williston Basin's produc¬

1,040,000 barrels as com¬
with 384,000 barrels from

was

pared

old fields outside this basin.

year's

production

is

substantially greater

be

noted from
income

come

the

from

as

larger

this

This

expected

be

of

por¬

to

might
source

source.

In¬

from oil and gas sources has
a constant increase
year by

shown

the

troller of

the

noncallable

entered

First

became

1932,

cashier

with

organized

Joe

and

M.

the

Club

of

was

Board

3 956-1957.

"

of

Trustees

y^YY Y- "Y 'v

and

''T.;

in

;t;

••

society

memberships
.Dallas
Country
Club,
Dallas Athletic Club, Dallas
Club,
Northwood
Country Club, City
include:

assistant

Callihan,

Callihan

of

the

organized sev¬
ago, serving as Chair¬

years

man

the

employ of
National Bank, Piano,
1928/ Two years later

Texas, in

.,

Club and-Bond Club of Dallas.

he

Mr/ Jaekson

and

is

married

to

.

the

Jackson, -former
Sally C. Harrington. They
partnership engaging in the in¬
;reside in -Dallas, Texas.
v
banking business, which
was
subsequently
incorporated
.1 The New President's
;.Y
and then liquidated
(1942) when
Yv Inaugural Address

of

"other

Northern

income"

Pacific.

This

for

has

the

the

The

the

outstanding

issues,
quoted around 148 which gives
indicated

market

holdings of
about
book

$15

some

for

in

excess

Dividends

in

recent

from
years

on

railroad

a

the

Pacific

primarily is
road depending
Better

irrigation

of

has

agricul¬

of the
increase

territory has tended to
the yield per acre and also to

diversify

crops.

Midwest

trict

Stock

west

with

pany

>

Chapman & Co., Treasurer.
Elected

as

Company
Mr.

First

was

Jackson

Board of Governors
M. Freehling of

hoff &

were

Freehling, MeyerCo.; John J. Markham of

as

a

Committee,

.

Nuclear

*

on

Jan.

1

will

tire
Dec.

from

limited

,

admit

partnership

The New York Stock
Exchange
has announced the
following firm

Bob

our

v <

the
goes

■'->*

<

,

the

Associa¬

during

the

past year
'demonstrates

bis able lead¬

ership.'We

are

debted
for

n-

him

to

his

work

h

e

i

the

1 f of

a

Associa¬
W.

tion.

our

Jr.

f

limits

of physical

capacity

—in order to finance the

greatest

construction

boom

history,

I believe

may

we

in. all

be proud of

our
ex¬

Committee,

industries.

-

of

our

capital requirements
country's rapidly expanding
\

Monetary

policies

adopted
to
check inflationary trends have in¬

tended

Secretary and Treasurer, 1938.
Executive
Committee,
Chairman, 1940.

1 9 3 9;

Municipal Securities Commit¬
tee, 1947-1950; Chairman, 1947.
director

and

creased

our

to

encourage savings and
security ownership more
attractive.
Our Association con¬

sistently approved and supported
these anti-inflationary policies —
long

so

they

as

president

Fears

suddenly

now

phasis

has

straint

of

of

of

Services, Inc.,
Ripley Shirt Company, and Good¬
will Industries, Inc. of Dallas.

required.

were

Recession

and Company, Ante¬
Oil Corporation, and Provi¬
dent Oil Company; and a director

Log

underwriting risks,
time, they have

same

to make

Jackson

lope

Electrical

Jackson,

the members of
have been strained

industry

the

to

ing the Texas Group of the IBA:

a

C.

During the
past two years

traordinary

1955-1957.

is

of

report on the
activities of

but, at the

He

President

Craft's

Mr. Jackson has also been ac¬
tive at the regional level in serv¬

of

Exchange
Weekly Firm Changes

of

is

tempered by
responsibility that

-

Committee,

.!

31.

New York Stock

of

record in helping to meet the

Chairman, 1954-1957; Vice-Presi¬

Stock

YT<U

\

.

Industry

1956-1957.

dent,

Y

./

1955.

Paine, Webber to

Thorson

office

Association
sense

Municipal Securities Committee,
•in'b

Oil and Natural Gas

New York

the

indeed

Committee,

/.-.-.'-..y;;

.

the

follows:

The pride I feel in being elected

to

tion

com¬

since inception.

mittee, 1953-1954; 1956-1957.
Governor, 1953-1955.
Nominating' Committee, "1954-

mons; B. Henry Sincere of Sincere
& Company and Robert M.
Sproat
of Lamson Bros. & Co.

of

gural address
-,

South¬

Committee on Revenue
Bonds, 1948-1952.
Municipal
Division
Council,
1950-1953.
Administrative
Review
Com¬

Willard

Admif New Partners

of Mr. Jackson's inau¬

-

Special

Hornblower & Weeks; Richard W.
Simmons of Blunt Ellis & Sim¬

help

text

v

organized,

serving

3946-1953.

<

Richardson, Jr. and Robert
to
'partnership.
Charles F.
Adams, Jr. will re¬

Huntington Bank Building

the

'

members of the

new

was

...

Exchange

INVESTMENT SECURITIES

1946

Federal Legislation
1940-1941.

;

Farwell,

D.

CO

and

of

He has served the IB A in
many
capacities at the national level:

7.

Paine, Webber, Jackson & Cur¬
tis, 25 Broad St., New York City,

&.

duty in
rank

Secretary of the Navy,

Dealers, Dis¬

John

CARTW RIGHT

Commander

Early in

Exchange

& Co., was elected
Vice-Chairman,
and Francis C. Farwell of

The

awarded Letters of Commendation .with the of■l'ice.v/
:
••
by the

of

Gordon Bent of Bacon,
Whipple

or

the

tural
on crops and
lumber shipments in the
territory
served.

inactive

permanent

1

Northern

an

to

a

Lieutenant

two

Philipp is also Chairman

ciation of Securities

an

Northern Pacific's stock.

As

with

and Chair¬
of the Practice and Procedure
;
Group Chairmen's
Committee of the National Asso¬ 1939-1940.

is

This has been equal to from
cents a share to $1.50 a share

90

past

returned

Army. Mr. Jackson

man

NP's

$124 million

million

value.

Burlington

value

1945

Clearing Corporation

minority stock, which is less than
of

Was

was elected Chairman
Association for the coming

the

Lieu¬

a

director and president of the

Mr.

jointly controlled by the NP and

J %

with the U. S.

Mr.

during

.

became

(j.g.), USNR, and another
principal left the business to serve

Paine, Webber, Jackson

served

Jackson

tenant

years.

is

road

Decker

Philipp succeeds John
G. White of Reynolds &
Co., who

The Chicago, Burlington &
Quincy also has been a big pro¬
ducer

vestment

Curtis,

of the

members

SWENEY

Celeste, Texas,
completion of his formal

eral

secretary-treasurer of the Ulen
Securities ■ Company, Dallas. ; In

year.

in

property

and upon

born in

he

&

2.98 against 3.03.

1951.

in

of

was

education

on

change Firms, Guenther M. Philipp, resident partner and con¬

3.63 in the like 1956 period, while
times charges earned after income

meant

year,

non-

lien

Elecl New Officers

with

rapid and in 1956 the road's

came

second

a

He

CHICAGO, 111.—At the annual
meeting of the members of the
Chicago Association of Stock Ex¬

income

held under mineral rights. Since
that time developments have been

oil well

are

Texas since it

'

of

Chicago Exch. Firms W

times

$6,226,342 while the equity
undistributed profits of the
C. B. & Q. has ranged from
$4,300,000 to $7,500,000 a year since

an

all

inco m e"
producing properties
from railroad operations.

in¬

total

year

record

a

the Great Northern Railway.

railroad's

almost

Hef has been a trustee of
Municipal Advisory Council

years.

impossible, to separate the "other

were covered 1.3
times by pretax nonoperating in¬
items alone.
For the first

325,508 against $11,654,144 in the
1956 period.
1957, net income likely will
equal or exceed the $4.23 a share
reported in the year of 1956, de¬
spite a drop in traffic in the final

engaged
in the securities
business in Dallas for the
past 27

fee.

of these issues, it is be¬
lieved it would be difficult, if not

come

It is estimated that for the full

in

a

amounted to $13,-

year

3s

Because

$10 million and

532

owned

come.

013,356

the 10 months

been

on

feature

interesting to note that in
1956 fixed charges of
all types
amounted to slightly more than

compared with $15,536,year ago. Other income for

lands

page

Association of America Holds !
46th Annual Convention

properties securing the prior lien

It is

1956 period. Net operating income
for the period aggregated
$15,as

all

callable

of income for some time

source

first lien

the oil and timber lands. The

on

development of its timber
holdings, which are vast, and a
program instituted to work these
properties in a modern manner,

a

on

The

It

years

has

secured by a

are

first

Thursday. December 19,1957

.

.

The Investment Bankers

practically all railroad properties

of timber rights

lands.

recent

Pacific

ern

be

to

power

water level section. By

a

of

The noncallable prior lien 4s of
19.97

anticipated that other in¬

4,970,986 looking for conservation and re¬
This should provide
compared forestation.

total of $17,390,546 or $3.50
share on 4,959,652 shares out¬

a

is

the

first 10 months of this

Northern

year,

It

on

end

Continued from

its

.

re¬

1959, the road expects
to be completely dieselized. In ad¬
dition,
modernization
of
yards
also is underway and these factors
should bring about a reduction of
transportation expenses.

Railway Co.

this year despite higher costs and
wages

'

,

Quite

a

been

the

shifted

inflation

em¬

from

re¬

to

avoidance

business recession.

Plant and

equipment

for

programs

1958

are

expected to be trimmed below the

changes:

Columbus, Ohio

A.
solve

J.

Cortese

Dec.

&

Co.

will

dis¬

20.

S. Paul Kramer will retire from

partnership in
&

Auerbach,

Richardson Dec. 31,
Landon

Palmer

Cabell

from

Branch, Cabell &
Daniel

will

nership in

and

retire

Irving
from

Gartman, Rose

1"

■

-

'

'

'

'

.

in

''
•

The Ohio
G.

part¬
& Co.

J

■' '

s

Company

/

/

Co. Dec. 31.

Cowin

Kaufman

well, markets

must be available.

will

partnership

serve

Y

''

withdraw

Since 1923

To

Pollak

V

creates and maintains

Dec. 31.

Arthur

Specializing Exclusively in

J.

draw from

leider &

STATE

Schwartz will

•

with-r

•

•

such markets through

partiiership in Unger-

Co., Dec. 31.

IMPROVEMENT

its

Purcell

and

Purcell
New

wide distribution of

Jan.

1

Co., 50 Broadway,
City, members of the

York

Stock

will

exceptionally

Admit

&

New York

MUNICIPAL BONDS

to

Exchange,

admit

Franc

on

j

securities in Ohio.

C.

Graham, Jr. to partnership.

Braun, Bosworth & Co.
Incorporated

Robert E. Palmer, partner in
the New York firm of
Reynolds &
Co., Inc., has been elected to the
board
of
directors
of
Williams

Municipal Bonds
Toledo

-

New York

-

Detroit




-

Chicago

•

Cleveland

-

Cincinnati

Thorough

INVESTORS

R. E. Palmer Director

•

.

Brothers

Companj', Tulsa, pipeline

constructors.

"

'I

distribution makes

The Ohio
INVESTMENTS
51 North

High Street Columbus 15, Ohio

:

1
.

good markets.

j

Volume

Number 5700

186

.

.

The Commercial and Financial Chronicle

.

(2719)

and

level of 1957. because

1955

tries

week will

our capital
some indus¬
resources and our in¬ Governors, the various committees
temporarily overbuilt. genuity. Our national imagination of our Association, and our very
Consumer expenditures also may¬ already, has
soared
into. outer fine and competent staff in Wash¬
be curtailed by declining personal space, but there remains the mun¬ ington—we can meet the challenge
incomes as the rate of industrial dane problem of how to pay for of our national responsibility.
activity falls.
But there is no the trip.
Speakers at the Convention
While we often wonder where
prospect of any net reduction of
The principal speakers at the
Government expenditures, such as the money will come from, I be¬
the
retrenchment
following the lieve there will be no lack of sav¬ Convention were newly elected
President
William
C.
Jackson,
Korean War, which intensified the ings—corporate and personal—to
recession of 1953. On the contrary, capitalize the continued expansion who is also President, First
it appears that our defense expen¬ of our productive capacity, if the Southwest Company, Dallas, Tex.;

"

'

- are

ditures

will

increase

essential. incentives

of

because

indicate

;
'

-

20

—

urban and urban

producing

prospect promises a continued high

housing construction and
investment in municipal facilities

We

are

or

nature
the

take

to

capi¬
peculiarly

savings

the

by

funds,

lead

of
in

our
our

Let

out

begin our contribution to
well-being
by holding
ourselves
to
high
standards
of
us

national

conduct

in

our

Eisenhower

Vice-Chancellor

University;

has long been
neglected* because of the pressure
of
more/ business
than we had
which

our

business and

tive for them.

of

to

of

position of our invest¬

in
full
text and Committee Reports
are given in this issue starting
on page 22 with exception of
[These

addresses

Jackson's

President
which

confident

assistance

of

banking industry.

The

job

—with

will

tax

able Vice-Presidents, the

the

cation

e

tion Committee.

Education

ported

have

sup¬

since

tinues to maintain

inception, and we are continuing
to give our wholehearted coopera¬
Home
The

Study

Despite the age of Opportunity,
(five years) 27 ABC-TV
affiliates used Opportunity,
U. S. A., on "Enterprise," a sum¬
mer replacement show.

U. S. A.

Program

correspondence

in

course

investment banking offered by the
Education Committee in coopera¬
tion with the Home-Study De¬
partment, the University of Chi¬
cago, had a record enrollment of
273
registrants during the past
year.
Since the course was made

available
than

seven

three

ganizations
for

hundred

have
the

ago,

years

member

program.

was

Activities of Member

Organizations and Groups
Educational and public relations

of members and Groups
including
recruitment,
training,
public information, and promo¬
programs

more

enrolled

or¬

tional activities are steadily being

per¬

As

expanded in diversity and scope.
have
been
many
note¬

of

There

increased from

Attention

fees.

its circulation

momentum.

tion.

worthy projects including, among
others:
Use of

is

Educational TV—Follow¬

ing the lead of the Central States

factory

Group with its "Ticker" program

completion

correspondence

the

of

course

IBA

Continued

is accepted

on

page

88

the

re¬
activi¬

Baxter

by members
and Groups

also

and

projects

the

Education
Co

m m

The

ittee.

highlights
the

some

five

of

major
W. Carroll Mead

activi¬

ties

and,

addition,
brief

sents

comments

-

in

pre¬

various

on

'

\

of Investment Banking

1957

Institute of Invest¬

the

by the

sponsored

Banking

Education Committee in coopera¬

the

with

tion

School,

Whartqn

*

could

addition,

In

Joseph, Mellen

not

facilities,». The

of

1170

program

Union

than

More

from

our own

financial

EXCHANGE

Commerce

Building

again

Cleveland, Ohio

instances enthusiastic.

Cleveland 13, Ohio

Miller, Inc.

INVESTMENT SECURITIES

highly successful and
comments
by
registrants
were
uniformly favorable and in most

was

&

there

than 40 applicants who
be accommodated for

more

were

lack

PRospect 1-4500

NEW YORK

CLEVELAND

following

operated at capacity-plus with 265

Investment Securities

Exchange

and

services of the

registrants.

saunders, stiver & co.

Company

&

Member Midwest Stock

University of Pennsylvania, again

STOCK

serve the industry effectively.
Through our distributing agency,
175 prints are available for audi¬
ence screening, and 15 prints for
use by TV stations.
The film con¬

The IBA and the

Committee

Invest-in-America

ties conducted

that

Board of

Anniversary

MIDWEST

Opportunity, U. S. A., continues
to

sub-committee of the IBA Educa¬

public

lations

In

MEMBERS

Opportunity, U. S. A.
The official IBA motion picture,

working with Investin-America headquarters. J. Earle
Jardine, Jr. is chairman of this

d ucational

and

ment

•

ments.

as

headed by W.
Mead, of Mead, Miller &
Co., Baltimore, reviewed the great
variety of

Institute

One Terminal Tower

serve

Committee,

projects.

25th

to

partial satisfaction of the reg¬
representative require-

istered

The Annual Report of the Edu¬

As evidence of my

am

Reports

Activities

feeling regarding this impor¬
tant field of endeavor of our Asso¬

I

by the New York Stock Exchange
in

again called to the fact that satis¬

Committee

Year's

On

the

in

Department

adjoining page.]
Education

1958

April 27-

$45 to $60 as part of a general
upward revision of Home-Study

the

on

In

Committee

July 1, the fee

address

found

he

may

liaison

sonnel

'

own

Association.

and

Commission; and
George. S.
Trimble,
Jr.,
VicePresident, Engineering, The Mar¬
tin Company.

providing incen¬

financing the future

ment

Gadsby,

Securities

the

.handle. In a
political, ciation, I have carefully chosen
talented
young
men
to
and social changes are developing several
so
rapidly that this is a. time for serve on important committees of
the Association.
reappraisal of our objectives and
During the coming year I shall
policies.
There is good reason
for confidence, but we cannot af¬ depend on each of you to help me
ford
to
be
smugly complacent in furthering the purposes of this
the

N.

Edward

broader sense, scientific,

about

and

Vanderbilt

of

America

Finance;

Reynolds, Jr., Presi¬
Metals Co.; John

President

to

1956.

observed

Carroll

Plans

Future

Consolidation

prepared

of

dent, Reynolds

business relation¬

Our plans for the future of the
For
the coming year
I see a
period of consolidation — a time investment banking industry
when / all management, including should include continued emphasis
pur
own,
strives for day-to-day on the training of younger men in

been

Minister
S.

Exchange

speaking

lates.

efficiency

Richard

for

in

communities

such as water, sanitation, schools, ships with borrowers, lenders, and
equity investors. In relation to the
hospitals, and roads. '
underwriting risks we assume, at
Private industry will
<^arry on times we
may feel that we are not
with plant construction already in
adequately compensated for our
progress. New products are being
services to the economy; but that
developed and—in the utility field
—in part—is a result of the grow¬
especially — the need for new
ing, capital strength of our indus¬
equipment continues in a strong
try and the competition it stimu¬
growth trend.
of

Honorable

policies which will encourage the
formation of savings.

of

Period

Corporation;
Donald
M:.
Fleming,

Chairman

populations. This

'

rate

function.

business

'

*

Investment

II. Stambaugh, Special Consultant

tal

the

undreamed of concentration of subyears

Interna¬

Canadian

investable

for

growth qualified

population

which will average more than IVz
million persons annually for the
next

"

in

acceleration

an

Chase

functions and the

by the Census Bureau

of' our

in

and fiscal policies,
Government competi¬

the

and
equitable division of revenues be¬
tween the labor-m anagement

tion

"will be getting under way.

; rate

tional

of

in

be

May 3.
Early this year President Craft
appointed an IBA Invest-in-

retiring President Robert H. Craft,
President

restraint

tary technology. At the same time,
the new Federal highway program

\c. Estimates

are

sound monetary

in mili¬

of advancements

abreast

save

provided. These incentives include

the emphasis on the missile-satel¬
lite program, and the need to keep

'

to

49

87

80

25

persons

Broad

St., New York, N. Y.

drawn

industry from other

427

Glessner Ave., Mansfield,

Ohio

business gen¬
erally, government, and the uni¬
versities, participated in the pro¬
gram
as
speakers, panelists,
discussion leaders, or moderators.
It is gratifying to note that many
IBA leaders — including present
groups,-

past presidents, vice-presi¬
dents, national committee chair¬
men, and
Group officers — are

and

•

FULTON REID & CO.,INC. •

INVESTMENT SECURITIES • FULTON RE1D & CO.,INC.

O
TO

o

manifesting their interest in the
Institute through participation in

z
>

the program.

Mcdonald & company

Since

inauguration, this execu¬

development
program
has
conducted without cost to

tive
been

the Association.

A reserve repre¬

c

CORPORATION AND MUNICIPAL SECURITIES

of receipts over
expenses
has
been
established
and, in recent years, the met pro¬

z

ceeds to the Association have been

UNDERWRITERS AND DEALERS IN

*

senting the

excess

added to income.
more

MEMBERS
New

York Stock

Exchange

Midwest Stock Exchange
American

Stock

Exchange

(Associate)

-

The

O
m

TO

Fulton Reid

In 1957, slightly

than $5,000 was

realized.

V




1186 UNION COMMERCE BLDG.

TELETYPES

CLEVELAND 14, OHIO

Corporate Dept. CV83

Telephone: CHerry 1-1920

Municipal Dept. CV613

m
—t

in February.

The Invest
ment is

-

in

-

Week

America

TO

03

c

move¬

s

continuing to make steady

progress. During
was
observed in

1957 "The Week"
73

communities.

TO

FULTON REID & CO.JNC. •
*-

v

This

TO

1958 Institute will be held

Invest-in-America

CLEVELAND 14, OHIO

Go., Inc.

during the week March 30-April
4.
It is expected to have the de¬
tailed announcement folder ready
for distribution to members early

UNION COMMERCE BUILDING

&

compares

with

22 cities in

vt

•*:«<? 1

1

INVESTMENT SECURITIES • FULTON REID &

'• t'

•

•

•"*

'■

' ''

CO.,INC.'
•

'• "

in

88

The Commercial and Financial Chronicle

(2720)

Continued

from

comprehensive Group conferences,

New York, and

the

87

page

tion

IBA

municipal research pro¬
and Invest-In-America have

gram

all

The Investment Bankers

excellent

been

The

Association oi America Holds

enjoyed

with

press

some

Fundamentals

educa¬

ol'

advantage

taking

are

Philadelphia,

week
over

also

of

part

as

was

of

of the association has

name

been

the appearing in

the Treasury and the

ing,

others, the following:

among

with

nection

Federal Re¬

visits

his

to

con¬

the

Groups; the better integration of

retailing
forum

at Work Forum—•

supported
exhibit

and

the

Publicity
panies

mittees
ments

Wana-

of

the

publicity

articles

and

and

Groups

and

their activities to the press.

public

ASE,

which the

is

peculiarly

expansion of the
movement;

Committee

as

an

ad¬

source

a

with

impending

eral

are

jor projects; the annual Forum on
Finance, and Research Into Ma¬

sponsorship

the

four

of

terial
Manual

Securities

on

The Manual

Forum

manship is now in its seventh
printing.
Many members place
frequent quantity orders for the
booklet.
It, too, is a source of

Investment

Reprints

have

by

uted

the

Sulphur

large

to

tee

investment

is

Many members have

quantities

the

of

and

a

research

being

Merwin

re¬

IBA

on

Organization and

widening

employed

by

some

members and Groups.

rities

markets, and investing. More

memorandum,

America

Invest¬

Association

Bankers

ment

the

from

IBA

Washing¬

it is

SMITH, POLIAN & COMPANY
Members

Midwest

Stock

as

the 1955

SOUTHERN UTAH POWER

Common

SAULT ELECTRIC

was

members.

to

of request

use

er

Eastern Pennsylvania

and

William

F. Machold, Drexel &
Co., Philadelphia.

The study is called In¬

Banking Functions, and

will

available for

be

Michigan
Alonzo

dis¬

C.

in

in addition

Through

cards, delegates
may

have

and

scope

than

originally

to

the

thesis, including

a

anti-trust

committee

addresses

con¬

review of the historical

Minnesota

ment of investment

New England
Albert

on

American

Paine,

Webber,

Curtis, Boston.

banking from

of the outlook for the

Forum

Pratt,

Jackson &

develop¬

New York

the earliest days and an appraisal

respective organizations.

Jaff& Hopwood, Minneapolis.

ray

syn¬

reports mailed direct from Holly¬
wood
to
selected
personnel
in

Joseph

industry.

Ludin, Dillon,
Co., Inc., New York.

LOUIS

MARKETS

Read

Securities

Business Wins Award

The
424

Omaha National Bank

OMAHA

2,

Teletype— OM

on

The

ST.

Amer¬

Our Trading Department Is Active In All
Local Listed

by the Industrial Council of Rens¬
Polytechnic Institute re¬

NEBRASKA

Telephone—JAckson

conference

ican Securities Business sponsored

Building

ceived

5065

the

Freedoms

Foundation-

"If there is

George Washington Honor Medal
award in February gf this year.

180—181

Participation
one

in

this

forum

And

Unlisted

Securities

And Invites Your Inquiries

selaer

We
40

was °

Specialize

In

Market

a

Orders

registered representatives give

you

we

For

can

find

Banks

it"

and

Dealers

pin point distribution in this

area

of the major activities of the

IBA Education Committee in

EDWARD D. JONES & CO.

1956^

ESTABLISHED

Junior Investment Associations

1871

MEMBERS

Early in 1957 the
the

&£SloiHXf
OVER

40

WRITERS
OF

HIGH

business

in

in

Neto York Stock

Phila¬

THE MIDWEST FOR
YEARS
AND

AS

are

Midwest Stock Ezclntng*.

American Stock

300 North 4th St.
CEntral

now

junior investment asso¬
ciations in the following cities;
San Francisco, Chicago, Toronto,

UNDER¬

Exchange

Chicago Board of Trade

delphia organized Hie Investment.
AssociaUSh of Philadelphia. There,

Exchange < Associate)

Saint Louis 2, Mo.
Bell

1-7600

Direct

Private

Wire

Connections

Teletype SL 593

with

Josephthal <£- Co., New York, arid Francis I. du Pont & Co., Chicago

DISTRIBUTORS

GRADE

CORPORATE

MUNICIPAL

AND

securities

young men

SECURITIES.

Municipal and Corporate Bonds and Stocks
Trading Markets in Local Securities

\
I#,

MEMBERS MIDWEST
STOCK

Slefh Brofe
INVESTMENT

EXCHANGE

1009-1015
KANSAS

OMAHA

ST

IOUIS

6

BANKERS

Co

LUCAS,

EISEN

CITY, MC

WAECKERLE

&

INCORPORATED

BALTIMORE

916

WALNUT

STREET

BLDG., KANSAS

CITY 6, MISSOURI

CHICAGO

Telephone BAltimore 1-4096
Member Midwest Stock
•

* i

£4

hi

~

f

•




P

Bell Teletype
Exchange

Co.,

C. Edward Howard, Piper,

con¬

extensive

more

Allen, Blyth &

Inc., Detroit.

As it de¬

templated and incorporates topics

made

at the convention

COMPANY Common

WASHINGTON NATURAL GAS CO. Common

blower &

(of which

Chairman)

Central States

J. Lawlor, Jr., HornWeeks, Chicago.
Frank L. Reissner, Indianapolis
Bond
and
Share Corp., Indian¬
apolis.

the

their

SOUTHERN CALIFORNIA WATER COMPANY Common

EDISON

service

vention

COMPANY

is

tribution early in 1958.

part of the Accent-on-Youth

a

available

active retail interest in:

and

Reports

Annual Convention

program, a new

the
an

'

William

veloped, the study became broad¬
At

Exchange

Underwriters and Distributors

We have

Addresses

He has completed

,

Charles B. Harkins, Blyth &
Co.,
Inc., San Francisco.

Professor

expected that the completed

study
Committee

Walter

Waterman, Bureau of

Ames

vestment

Office.

Convention

by

Div.

H.;; Bingham, Bingham,
& Hurry, Inc., Los An¬

geles.

study

Research, University of

by others.

GOVERNORS

California
Curtis

being reviewed by members

Amyas

Nature; Purpose; Or¬
ganization; and Major Activities,
has been prepared. Copies may be
ton

H.

The

of the Joint Committee

of

—

obtained

NEW

preliminary manuscript which is

Activity
brief

A

oroiect.

conducted

Michigan.

now

being

in

Business
Memorandum

aid.

The incoming Governors elected

appropriated
$5,500
representing the IBA contribution
toward a total budget of $34,500
in support of the Joint Commit¬

distrib¬

been

junior

associations.
used

have

and

to

available

made

been

members

cial

con¬

Governors

Davis,

early in
along with

by their respective Groups and
Project — At White who took office at the 1957 Con¬
1956 the Board of vention are:

Research

W.

George

use

business

ing the project and giving finan¬

17
through July 3
registrants in attendance,
mostly full professors, department
heads, and administrators.

How

organized

June

ducted

Success In

address,

was

booklet should be

Our Association

groups
and many corporations is
support¬

Finance offered

by the Joint Committee

to Achieve Success in Investment

Banking,

1958.

with 30

Banking

the

of

on

manuscript has been
is
currently being

The

ready for classroom

Finance—The seventh

on

economy in
The first of two

and

reviewed.

other

annual Forum

income to the Association.
IIow to Achieve

the

men,

Connection

in

Better

American

high schools.

revised

trust Suit.

Securities Sales¬

on

Collected

National

is seeking to
and improve education

room
experience
and
critical
reviews by teachers and business¬

with the Investment Banker Anti¬

Salesmanship

public interest in securities, secu¬

financing;

on

financial

edition^ of

tbe

Bureau)

Introduction for Young Citi¬
zens, has been tested in approxi¬
mately 100 high schools in 42
states, in
classes totaling 5,500
pupils. In the light of this class¬

Committee is conducting two ma¬

Fed¬

fessional public relations agencies

Committee

Joint

book

visory group to the Treasury in
connection

the

of

Advance¬

An

ASEF,

published this year under the

print.

Pro¬

with

NAIC, NASD, and
is
an
associate
(I ANY
member) — is continuing its sup¬

of

the

teaching
aids
planned
by
the
Council, American Capitalism —

Education

along

and

the

NYSE

of¬

houses, in Brazil.

state¬

on

banker

informed;

Securities

about

stories

news

more

service of the IBA Governmental

value

supplying

are

other

Invest-in-America

in¬

are

the

:

general interest

well

Both member com¬

recognizing

roof;

one

by IBA leaders on questions

investment

—

and

creasingly

under

cipals

for

of

encourage
about the

Education representing the Amer¬
ican securities business. The Joint

ments

week-long

a

at

staff

It is

IBA.

Portuguese
was

frequent oral and written state¬
before Congressional com¬

IBA member in

every

phases of Association operation

with

maker store.

of

awareness

uled for the IBA President in

Philadelphia engaged in securities
,

growing

value of favorable

—

all

Practically

courses

port

serve.

Your Money

—

income to the Association through

the work of

on

on

Association

semi-annual royalty payments. A

the Money Market

emphasis

by

classroom

Committee

Our

of the

Council

Business

business.

securities

the

of

Young

Secondary
Education
(sponsored jointly by the Asso¬
ciation of Secondary School Prin¬

contribute

and

Joint

standard

as a

as one

flection of various factors includ¬

of the
publicity at the
Acting upon the suggestion made Group and member level; the
by President Craft, the New Eng¬ steadily expanding scope of IBA
activities and projects, nationally,
land Group sponsored a seminar
regionally,
and
by
individual
on
the money market with par¬
members; press conferences sched¬
ticular

and

members

efforts

basic volumes for both the home-

study

The
ment

Bank¬

telecast

the radio.
on

ing, continues in use
college text as well

their

for

Citizens

materially to the public relations

textbook, Fun¬

fered

A

Forum

„

their

the press with in¬
creasing frequency. This is a re¬

a

commercial TV station and

a

over

par¬

the consolidation
IBA offices in Washington, the

Investment

Investment

ol

Introduction

assimilation

into the business,
understanding of

men

community, and
broaden their acquaintanceships.
They
provide
educational
prograins
and social
activities for

Banking

damentals

American Capitalism—An

asso¬

investment

14-

program

sustaining series

News

since

ticularly

ing cities: Denver, St. Louis, Pitts¬
burgh, and Minneapolis-St. Paul.
Invest-in-America

the

During the last decade and

tional TV channels in the follow¬

In

In

the

an

of

young

enhance

tra¬

excellent
20 to 30 financial

The official IBA
IBA

of

editors and writers in attendance.

46th Annual Convention
inaugurated in 1956. other Groups

has

These

Thursday, December 19,1957

.

.

Montreal, in addi¬

Philadelphia.

ciations facilitate the

sourees.

Convention

annual

ditionally

news

to

.

KC

42

&

Volume

186

Number

5700

,q

The Commercial and Financial Chronicle

.

William

S. Renchard, Chemical
Exchange Bank, New York,
Walter H. Steel, Drexel & Co.,

Illinois

tinental

Corn

Bank

Foreign

Investment:

Johnson,
Ohio

The

Curtis

Joseph

Milwaukee

T.

Milwaukee.

pany,

Baxter, Hayden, Miller
& Co., Cleveland.

Governmental
ert

E.

Murphy,. The
Company, Columbus.

Group

T

Ine

Richmond

P.

A.'Lucas!
Lucas, Eis'en
Waeckerle, Inc., Kansas City.
be

found

Rnnt ^nri0f!hth? 1957

ernors

oe

National

Chairmen
m,

AT

The

their

,.

page vui.

and

for

F.

Ge-

;

Donald

N.

Railroad

Skaggs

&

Co.,

W.

Davis,
San Fran¬

State

Education:

Robert

Shepard

O.

&

'

Federal Taxation:

Shearson,

GROUP

W.Evans,Con-

Byrd

First

of

a

and

Ohio

non-essentials

in

govern-

defense expenditures on

the basis
priority of present
developing methods of warfare; !
our

reevaluation of the relative

"Without

impairing our defense, to eliminate
methods, and techniques, and
wasteful practices which exist in many Defense De¬
partment activities;
.'

obsolete

Valley

weapons,

"To

"To

Shea,

Murphy

Favre,

Inc,^ Spokane.
Rocky

Mountain

Nisbet,

Jr.,

non-essential dollar out of
programs." — Senator Harry F.

every

domestic-civilian

Byrd.

V

There is

Southeastern
Olin

squeeze

.

eliminate

extravagance in foreign aid, and
put more emphasis on military assistance, while
reducing economic aid; and

more

sentences than

good

have

we

packed in these
good while past.

commonsense
seen

for

a

Interstate

Chairmen

Group

oncoming

„

for

the

follows:

year are as

Southern

„

Carr Payne, Cumberland Seculities Corporation, Nashville.

CHAIRMEN

One

our most

important services to

institutions and

Paulen E Burke> Bttrke & Mac_
Donald, Inc., Kansas City.

&

G.

Fridley, Fridley,
Frederking, Houston.

Hess

I$5

*

Business

Western

Established

DEALERS

of

Southwestern

Earl

i

Addison

Pennsylvania

W.

Arthurs,

1874

Arthurs,

I
I
I

individuals

to

IL S. GOVERNMENT,

STATE AND

MUNICIPAL BONDS

| Lestrange & Co, Pittsburgh.
Sites

mm

and

Dates

of

Next

f

Year's Convention
«noun

%
The Americana Hotel in Miami
|f Beach, Florida, has been selected

i. M. Simon & Co.

It

York

New

Midwest

Stock

Stock

American

CEntral 1-3350

Exchange

Exchange

Stock

Exchange

(Assoc.)

SL 288

Exchange House

igp

,>

ri*'HT; KT i
tf' V-*',

vj

y.J&V.'A

•

1

■

fli

SAINT

New York

LOUIS

I,

MISSOURI

Correspondent 14 Wall Street

Chicago Telephone to Bond Department Dial 211 Request
I\ESOLRGES

OVER *000

Enterprise 8470

MILLION

Oppenheimer Adds
|

s

deposit

COItP'l«*TfOS

the site for the holding of the I

I

ST. LOUIS 2, MO.

Oldest Stock

as

lH»U««N«e

'

flf Association's 47th Annual Conven- \
|§ tion in 1958. The meeting will be
|f held during the period of Nov. 30
If to Dec. 5, 1958.

MEMBERS

Louis'

non-es¬

in

Cluelt' Securities Corporation, Charlotte,

a£°™

ft.

St.

afford

not

can

ment civilian activities.

"To rechart

The

Texas

\

the other
superior

"Preliminary to broader action, to meet the sit¬
us we need immediately:

Pacific Northwest

I

and

and

uation before

Ray L. Robinson, Garrett Brom& Co,, Denver

—

BROKERS

F.

or

Staples, Fulton, Reid &

S.

by

military programs,
non-essentials in foreign aid,

1

field

-r,

rated, New York.

Co,
The

Thomas

..

enslaved

,

Roy

W.
„

Harry

Lyons, Jr., W. L. Lyons &
Company, Louisville.

M. Geddes, Clark, Dodge &

,,

Walter May-

&

,

allow

Ilarnman Ripley & Co., Incorpo-

'

Hammill

"We

Cleveland.

Rtla«,OB8! Eu"
?

™

.

New York.

Finance:

Bee-

military,

sentials

Valley

Cannon,

Ohio

shall not
be

to

We

before.

ever

and

in both.

Caldwell,

W. L.

Co, New York.

Wadsworth, Dillon, Read & Co.,

nard,

Harry

„

Federal Securities Aets: Arthur

Inc., New York.

Legislation:

Mock

gene

vnni.

Co., Inc.

Topeka.
Shepard,
Co.. Inc.
Co, Inc.!

Cleveland
Cleveland.

rk

jack R.

can

economic. We must be

England

Northern

we

own

one

Boston Corporation, New York.

Fulton,
Co., Inc., Cleve¬

&

A.

in

we
have two fronts to maintain—

Si-

William H. Claflin, III, Tucker,
Anthony & R. L. Day, Boston.

Francis

more

extravagances.
"We must recognize that

Popper, 1. M. Simon &

New

croft, Beecroft, Cole & Company,

cisco.

Prescott,
•.

Elvin K.

J.

land.
George

our

Baker,

Phillips,

Mississippi

Small Business: W. Yost

Fulton, Reid

ronto.

Davis,

Alfred

Merle-Smith, New

York.

Canadian:
Arnold
B.
Massey,
Mills, Spence & Co., Limited, To¬
Conference:

M.

not

ourselves

01 m n'

Minnesota

Securities: Thorn-

Securities:

Dick &

Ross,

■"

.

"A

i h

n
.

New York

M. Johnson, The Johnson, Lane,
Space Corporation, Savannah.

York.

r 11

Paul

Morse, Smith, Barney
Co., New York.

Public Utility

McDonnell, Blyth & Co., Inc., New

L.

Industry:

Edmond N.

Alfred

Securities:

Hurley,
Co., Detroit.

Guybert

Securities:
Securities:

as

Aviation

•

Company, St. Louis.

&

•'

i

.

L.

Horning,

Oil and Natural Gas Securities:

Rauch,
Kidder, Peabody & Co., Philadel¬

phia.

t>

than

us

must

Michigan
William
monds &

H.

nachte,
The
Chase
Bank, New York.

are:

Arrangements:

T

r

Sachs & Co., Philadelphia.

York

,

chairmen

Bert

fore

Philips Co, St. Paul.

Nuclear

>jLjL

respective

1957-58

-

Committees

,

1 ftj/t?™1:11

,

c

spend

destroy ourselves fiscally and econom¬
ically stands more clearly be¬

Eastern Pennsylvania

Companies: Charles

Howard,

be made to

Central states

Nominating: Robert H. Craft,
The Chase Manhattan Bank, New

on

1957-58

_

.

National

Durst,

to

us

must find ways to spend less in

we

other directions. The Communist view that

States

John M.
J
Trust
Maxwell,
The
Northern
Company, Chicago.

Municipal

5lue

on

&

Anwlps

Eaton,

Committee

for

Wagenseller

T.n«

direction,

W. Fairchild, The First
Corporation, Chicago.

Paul
Boston

_

'^mpsey-Tegeler & Co., St. Louis

1956-57 IBA Board

r

Central

_

J.

...

.

Membership:

Mark

?rnor« ll ! found
1
will

■

David

Jr., Eaton &
Incorporated, Boston.

G.

Southwestern

will

.

.

Investment

McCall, Alester
Furman Co., Inc., Greenville.

Governors

.

_

s:

Inc., Los Angeles.

C.

"■•■'A list of the

,

Chairmen

Hughes,

THrhmnnrl

Southern

Arthur

.

one

Massey, Mills, Spence
& Co. Limited, Toronto.

Industrial Securities: William S.

Roderick D. Moore, Branch, Caill &
bell Br. Crmmnnv
Company,

IBA

Rob-

Harris, Bache & Co., Chicago.
'

Southeastern

of

Securities:

Hear!

"If the missile crisis forces

Canadian

Blvth, The National City
Cleveland, Cleveland.
.

Ohio

Hear!

Walter & Hurry, Inc., Los Angeles.

of

Jjj

Alan G. Florea has become
sociated
with
Oppenheimer

as-

&

Co, 25 Broad St, New York City,
members of the New

Exchange,

as

York

registered

a

Stock
repre¬

sentative.

Cleve. Analysts to Hear

st.

securities

louis

Inquiries invited in all securities—Listed
Over-the-counter—from Dealers, Institutions
Individuals—Nationwide

UNDERWRITERS

Private

Wire

DISTRIBUTORS

-

-

or
or

System.

CLEVELAND, Ohio — Ellery
Sedgwick, President of ithe
Medusa
Portland
Cement
Co,
will speak before the Cleveland

Society of Security Analysts
Wednesday, Jan. 29, 1958.

DEALERS

on

Newhard, Cook & Co.
Members

Underwriters and

New York Stock

Distributors

Exchange
American Stock

Listed and

J. Barth Adds

Exchange

Unlisted Securities

(Special to The Financial Chronicle)

reinholdt & gardner

(Associate)

LOS ANGELES, Calif.—Herbert
Shore has been added to the staff

Midwest Stock

of
Members
New

York

Stock

American Stock Exchange (Assoc.)

Central

Stock

Bell

335-336

Teletype—NY
BEekman

•

Springfield, Mo.

Direct

Private

Wires

•
to

1-2419

Low

Ross,
way,

3-5880

•

&

Co,

120

OLIVE

New

York

Jan.

1

lich

will

to

admit

general

Emanuel

partnership

Ehr-

and

Clara G. Wolfson to limited part¬

nership.

LOUIS

Broad¬
Branch

New York City, members of

Joplin, Mo.

Fort Smith, Ark.

Correspondents:
Pershing & Co. and Goodbody & Co.




AND

SAINT

Ross, Low Partner

the New York Stock Exchange, on
Clayton, Mo.

Exchange

FOURTH

N. Y.

120 Broadway

1-6640

Springfield, 111.

Municipal Bonds

Co, 3323 Wilshire

Exchange

NEW YORK 5,

400 Locust Street
Teletype—SL

&

Chicago Board o) Trade

ST. LOUIS 2, MO.

Bell

Barth

Boulevard.
Midwest

Exchange

J.

89

»

Bingham,

Bingham,

Arnold B.

_

Dennis

&

B.

Bank

Ohio Valley

H.

Com-

Dana F.

:

California

and Trust Company, Cnicago.

New York

Northern

National

(2721)

Alton, Illinois

•

Clayton, Missouri

•

Private

Offices

Belleville, Illinois

•

Harrisburg, Illinois

Jefferson City, Missouri

Wire

to

Clark,

Do-tee

*

& Co., New

Centralia, Illinois
York

\>

90

The Commercial and Financial Chronicle...

(2722)
—

n

Continued

from

such

6

page

Thursday, December 19,1957

a

statement should go hand

in hand with

government policy

a

which causes the expropriation of

IBA

PAST

1955-56

1956-57

Inflation: Cause and Prospects

PRESIDENTS
is

1954-55

the

tion.

thrust of wages
major cost of produc¬

upward

which is

a

This

because

about

comes

monopolistic unions which cannot
be opposed by any countervailing
force

the

under

law

able

are

to

pretty nearly what they ask
for every time. We have come to
a period in our industrial relations
where
wage
increases
become
get

others

hurt.

are

Every

the unwary

citizen,

v»

<

„

,

v

Prior to the last few years there
was

bond¬

important

no

United

holder, every holder of life insur¬
ance policies, every
savings bank
depositor,;. every recipient of a:
pension — all these people/are
cheated
by
inflation.
Consider/
this simple fact.
The net total

States

inflation

that

voice
would

in

the

defend

way of life.
After
history is strewn with; the
wreckage of nations which Tried
to succeed by the inflation rpute.
But now this has Changed. There
are some very important voices
in
this country that tell us that: ini¬
tiation can be a way of life—but
as

a

all

debt outstanding both public and
private (excluding life insurance

obligations) was $684 billion at it must: be slowinflation,
-say
industries in¬ mid-year 1957. The debasement of 2 to 3% a year. Quick inflation
the currency totaling .3%, which;
granted regardless of
they admit is deadly, but a slpw>
whether there is a
productivity occurred in the past year, means
ballooning of currency and a com-gain sufficient to offset the rise that over $20 billion of savings thiual but slow rise in
prices is, a
in wages.
was
wiped out in that short pe¬ good thing. ; f
.
7
3iIt is a disturbing fact that even
riod of time.
Just imagine that \
: One of the best answers to the
while the index of production de¬
—loss
of
purchasing power of Slichter policy of inflation was
clines pay increases mount. To¬ $20
billion in 12 months by a given by Mr. C.
Canby Balderday there are in existence, 1,197 large segment of the population!
ston, Vice Chairman of the Fed¬
contracts covering
more
than 4 It should be considered unethical eral Reserve Board. Here is
what
automatic. In many
creases

are

,

Robert H. Graft

Walter A. Schmidt

George W. Davis

1953-54

1952

-

53

million

1951-52

'

which

workers

call

for

for any

nation to engage in

a con¬

automatic pay increases next year

zens

he

scious policy of cheating its citi¬

regardless of the state of business
the

or

The

public

median
hour

an

next

demand for

under

goods.

will

increase

these

be

8c

contracts

year.

by

policy

a

debasement.

monetary

of

-,

said, "A misconception that is

part of our intellectual currency
today is that a little inflation is a

But there is another

good
thing.
A little inflation
one.
sometimes thought of as roughly
forever.; 2% a
year, would double the price
There comes a final end to in-' level
everyj 35' years.
However",
flation and then comes the deba- n
even if
\ye accept the inevitability,
cle.
The shock to the economic, \ of
reason

and

Inflations

a

important

very

work

not

do

,

Now this spiraling of wages and
prices cannot go on forever un¬

creeping inflation, and I cter-;
political, and social fabric of the; tainly
dip not, it is;not possible to
nation
by the inflationary:1, rise ' have jusi a Tittle" inflation. Once
and the deflationary fall is a dan¬
a eom muiuty accepts • the prospect
ger to the maintenance of a free,
of continued inflation and begins
forced to curtail. Unemployment * democratic
society. --V:, v;-!* v
to make its business decisionS/in
then develops as a result of the .
Contrary to some current the¬ the light of that prospect, the in-r
high prices. This is the kindv of ories there is ruo such thing as a fant ceases to creep. It leariis to
self-adjusting mechanism we used
creeping inflation. The foremost walk, run and finally gallop even
to have. But it has not been work¬
exponent of the "creeping-infla¬ though the gallop may carry it
ing that way in the past few
tion" theory is Professor Sumner over the brink of the precipice
years. Whenever costs and
pricesf H. Slichter of Harvard. Now it is that everyone agrees must be
get too high and a readjustment
avoided. ..."
is called for, then the government interesting to note that when Dr.
In other words once the public
Slichter at first recommended an
steps in with some more inflation
catches on to the fact that the
inflation of 2 to'3% in the price
of
the
money
supply and the
level each year, he considered it swindle of inflation is going to
whole process starts up all over
a necessary evil.
Since the unions rob them of the buying power of
again. This is what happened in
savings,
then
everybody
are
strong enough to force the their
the recessions of 1949 and 1953.
rushes to protect himself by get¬
wage and price level higher, he
When the readjustment began to
reasoned,monetary authorities had ting rid of dollars and buying
take place, the Federal Reserve
better
validate
this
w^ge-price something tangible. "VVhen that
policy was modified, money was
happens nobody can protect him¬
made easier, new bank deposits spiral by supplying the necessary
self any longer.
The swindle is
dollars or we would have a reces¬
were created (on top of a $7.5 bil¬
over—the game has been played
sion—and that would be too pain¬
lion
1954)
less it is supported by the mone¬
tary authorities. When prices get
too high, the public backs off and
buys less. Some producers are

T. Jerrold

Bryce

Ewing T. Boles

Joseph T. Johnson

'ESTABLISHED 1900■

BAKER, WATTS & CO.

tax cut effective in

Members
Members

New

York

Stock

Exchange

the fuel for

Philadelphia-Baltimore Stock Exchange

Associate

Members

U.

S.

American

Slock

Government

Listed

Active

Authority and

and

Unlisted

Trading

Markets

their easy money policy in 1953-4,
and therefore
the result, was a

Bonds

CALVERT &

in

and

Local

Bonds

really

Federal

It

the horns of

REDWOOD STREETS

on

%

must

rotting away.
Maintaining the
stability of the dollar is a primary

Bell System Teletype—BA 395
Telephones: New York—CAnal 6-7162
Baltimore—MUlberry 5-2600
■■

responsibility of the Federal Re¬
Board.

serve

It

(2)

must

also

watch the trend of industrial pro¬

duction, and the
necessity for
funds to finance that production.

Representative—Clarksburg, W. Va.

But

when

tries

the

throws

price

Federal

resuscitate

to

production

We 3,wile

is

Board

the buying power of the dollar is

BALTIMORE 3, MD.

it

index
fuel

more

fire.

the

Reserve

drooping
inevitably

the

on

There

wage-

is

ample evi¬
dence that the operation of our
present labor policy protecting
monopoly unionism makes the ef¬
fective employment of monetary
policies politically impossible. Un¬

IJour 3,nauiried

less greater restraint in wage de¬
mands is exercised by union lead¬

BALTIMORE

a

RYLAND

SECU

Stein Bros.&Boyce
A

Baltimore Institution since 1853

6 South Calvert

Telephone: SArotoga 7-8400

Teletype: BA 393

OTHER OFFICES

CUMBERLAND, MD.

TOWSON, MD.

or

omy

then

curiously

now,

several

out.

of

years

Chronic Nature

such

advocacy, we find Dr. Slich¬
implying that inflation may be
a
good thing. Such sentences as
these appear in his writings. "Now
fact

that

of

inflation

be

may

a

health and vigor of

the

the

economy

fact

that inflation

alter the
problem."
Imagine that—"inflation may be a
not

does

is

a

of

Currency

If this

machine
all

is

parts

what extent will

people get
of mind once
they are certain that inflation is
a
chronic disease?
Won't people
To

this / frame

into

against, their life insurance
equities in order to buy stocks or
veal
estate?
Will not business

borrow

of the health and vigor of firms cash in government bonds,
economy.", At another point -borrow as much as they can and
he says that inflation "is a cost buy as.much of their future needs
that the country must accept in as possible? And when that buy¬
binge is over for awhile,
order to achieve benefits which ing
couldn't we get a sudden vacuum
are worth many times the cost of
result
the

creeping inflation."

Note how the
into his
thinking with the word inflation.
"benefit"

word

If

inflation

creeps

becomes

national

a

policy, would it not be fair to ask
who

favor

of

advocate

it

warning

those

the

to

in

be

public

which would hit industry a stun¬

ning blow? In other words once
is wise to the fact that
inflation
is a continuing policy

everyone

might

tell

Would it not be ethical to

the

public

Frankly, I am not very sanguine
halting the secular infla¬

about

tionary trend.

As I said previous-,

for every
invest at
least $500 and perhaps more of
their purchasing power will be

ly
I
think this is a political
problem for which there is no

lost within a

generation? On ethi¬

hope of halting the long-time in¬

grounds I would imagine that

flationary cycle unless there is a

thousand

cal

that

not get booms and busts
put everything that

happened heretofore in the shade?

against investing in a government
bond?

we

would

that

dollars

they

ready solution.

1 can see no real

Williams & Co.

C. T.

INCORPORATED

market-econ¬

to

work

must

be

well,

investment

bankers

made

Well, if wage rises can somehow
brought under control and if

PADUCAH, KY.

YORK, N. Y.

EASTON, MD.

leading exchanges

United States Government and Municipal Bonds

Railroad,

Public

Utility and

Industrial

Issues

be

can

prevent recessions by in¬
wrong with infla¬

flation, what's
tion?

There

on

people

many answers to

Inflation

of

the

supply finally has its ef¬

money

fect

are

question.

prices,

are

and

while

some

helped by rising prices

!

Debasement

ter

Congress

What's Wrong With Inflation?

that




But

after

laws

production.

we

NEW

MEMBERS OF NEW YORK STOCK EXCHANGE
and other

bear.

flexible.

Street, Baltimore 2, Maryland

LOUISVILLE, KY.

unless

changes
which
give them the
power
to
achieve
rising labor
costs despite recession, monetary
policy cannot achieve its purpose
without staggering loss to the na¬
tion in unemployment and lower
ers,
the

to

enough,

result

Reserve

dilemma.
keep its eye on two im¬
portant trends. (1) The trend pf
prices which indicates whether

Securities

ful

the

splurge in '55 and '56.

Bonds

The

Stocks

in¬

was

Only recently the Fed¬
eral Reserve, authorities said they
had probably gone "too far" with

Exchange

Revenue

and

inflation

troduced.

State, County and Municipal Bonds
Public

new

BALTIMORE

FIDELITY BUILDING
Telephone:
J

PLaza 2-2484
'
.

Private

Teletype:

BA

1, MD.
499

**

Telephones

Branch

Bell

Office

Bell

to

—

New York and Philadelphia

Grymes Bid?., Easton, Md.

Teletype

—

ESTN

MD 264

-

Volume

basic

186

Number 5700

The Commercial and Financial Chronicle

.

.

the

out plant and equipment not to
profits. Some machines cost be-

not

tween

era

unions.

the

the

government will be forced to

price of 10

out of

try

to

privileges
monopoly labor

present

Inflation

surface, to be

seems,- on

an

difficulties

easy

way

the

and

authori¬

ties will probably take that road.

The first step will be to

.

plentiful for loans by
banks, and
to
de¬

money more

commercial

interest rates.

crease

A first

in this direction has

made

by

Board.

As

all

you

Federal Reserve

to

use

icy.

(1)

count

an

has

which

easy

the

three

it

the

banks,

redis¬

and (3) It can buy
obligations and thus
of the

reserves

mercial banks.

com¬

By a combination

these

policies we can get an
of "easier money." Now since
present recession was in part

era

the

due

to

the

imposed

monetary restraints
the Federal Reserve

by

Board, it seems probable that the
easing of these restraints will en¬
courage some increase in demand.
But

•

the

question

is

whether

now, or in the near future, this
policy of credit inflation will be

sufficient
level

to

When

raise

to

those

business

heights
when

and

becomes

not

are

the

then the administration will prob¬

ably

engage

tion.

in

direct infla¬
budgetary

more

will

It

create

deficits and in that

This

manner money

the

Norway
home

the tool
of the capitalists to enslave the
people. But the record proves that
in

billion

be

sufficient.

be

in

the

of $5

or more.

I

am

forecast that such

ing a

take

place

I

then

Results

There

course

fairs' that

I

is

effect

to

rise

it

at

over

many

When

the

rate will

interest

recessions

becomes

money

and

back

the

course

fluctuate.

interest

come,

plentiful

more

This

falls.

rate

has happened in the past. Interest
rates declined in the '48-'49 reces¬
sion

and

But

reliably

count; totals
is

billion

Davi

to

do

so

thev

1953-54

recession.

bull

in

market

having

are

small

a

which

bonds

well continue into 1^58. But

flationary
the

as

then

(as well

may

as

in¬

take effect, and
for
money
in¬
activity

moves

demand

creases,

industrial

and prices) will
again. The history
of rising interest rates of the past
10 years is likely to be repeated

start

as wages

upwards

in the future

the

regardless of whether

administration

Democratic

is

Republican..; Probably

or

the

under
inflationary
be faster. The point is

Democrats

will

pace

that

if

we

flation

the

will

the

;

"going to

are

have

in¬

of interest rates

trend

be

been

pushed upward, as it has
past, and as it has in
inflationary country in the

in the

every

world.

■

inflation

As

going

;•
-

is

to

instance

For

it; will

continue

to
cause the overstatement of profits
by corporations.: Profits being re¬
ported today in dollars worth only
fraction

a

ago,

years

phantom
this

of

net

their

are

to

profits.
income

a

A

value

of

extent

great

good

should

located, to., depreciation

10

part
be

of

,

our

to

fallacious

ideas

have

that

been

to people in this country
absolutely untrue to say that
we cannot have
prosperity in this
country without inflation. It is

spread
It

untrue

to

growth

and

say

have

cannot

we

without

progress

statements.

in-

the

In

early

1920's, before inflation took hold,
was
a
sound, rising pros-

there

perity and emplyoment in this
country. This occurred despite a

falling

commodity
price
level.
many
other such in¬

There

that

upon

this

as

central

a

fact

when you weigh the future
0f inflation in this country.

The substance o£ what 1 have
been sayinS is that while >n£latio" seems an easy »ath out °£
trouble'jt is in reality a dalk road
that leads to
s°«a£ a"d
political

troubles.

We

need

fortitude
u.

intelligent

and

,,r

not

some

leader-

.

..

ple

There is

in

the

a

world

shining
today

cur-

L. A.

oI

BOSTON, Mass.—At the Annual

this

Meeting of the Boston Investment
held Wednesday, Dec.
11,

llle path we take is up to
the people of this country. They
can

make the decision

know the

Warren, Jr.

exam-

1957 at the Harvard Club of Bos-

only if they

the

ton,

elected to

truth

following officers were
serve during 1958:
1'

President:

Fr»rm

M

Lowell

A.

P#*rlr fn

Wayren,

Jr., Dominion Securities Corp.

S. M. Peck & Co., members of
the

New

York

Stock

Vice-President: Dixon B. White,

Exchange,

Hornblower & Weeks

tlbe TTon arfian-1 rth
at

°hlces

York City.
M.

120

Broadway,

Partners

Treasurer:

New

Secretary:

Peck, member of the Exchange,
l

ge

f.,

partner

and

H

Pai;iner» ana n-

YecK

limited partner.

stances. The fact is that

have

solid

tion.

It

prosperity

is

cannot

we

that
finally
depressions and the
that bring misery in their

J

.

.

look

to

Murray,

^

^

kinson, Eaton & Howard, Inc.

To Be Leavitt Partner

.

Lewis D. Bornstein on Jan.
will become

New York City, members of

a

Europe.

What is the most prosperous coun¬

try in Europe? What country rose
from rubble and ashes and in 10

& Co., 40 Wall Street, New York
City, members of the New York

limited

partnership.

Stock Exchange.

'////////////?//////////////////////////////////////////////////////////////////////////////////.'///'////'/////////*

of phera&menal progress be¬
the leader? It is the Federal

years
came

Republic of West Germany. This
phenomenal
recovery
was
no
miracle.

It

due

was

that

Germany

who

understood

the

to

led

was

by

fact
men

basic prin¬
capitalism and
who turned their face irrevocably
away from inflation. Ludwig Erhard, Minister of Economic Af¬
fairs, did'" this despite pressure

ciples

of

the

Mead, Miller & Co.

private

from American authorities

the

and

inflate their currency.

American

in

course

—Members—
New York Stock Exchange
American Stock Exchange

(Associate)

to fol¬

low

1947

Philadelphia-Baltimore Stock Exchange

While

Germany was pursuing the antiinflation, private capitalism role,
and

England

were going
pseudo-socialism
today is

down the road to

inflation.

and

plain for

The result

to

anyone

Here

see.

The

road.

countries

of Europe,
England,
give

and

evidence

that

the

inflation

Chase Sts.

BALTIMORE

other

leading
like France
compelling

and

Charles

is

living evidence that the best road
for a country to take is the antiinflation

1, MD.

Telephones

New York—WHitehall 3-4000

Baltimore—LExington 9-0210
Bell

road

Teletype—BA 270

leads only to trouble.

al¬

worn

to

Finally, I would like to suggest
you a very compelling reason
stability

the

and
who

Those

of

the

dollar

main objective of

a

monetary poli¬
in desperation

inflation

to

solve

tional

our

policy, overlook

They

assume

stand

one thing.
that this country
for continually rising

Professor
course

Galbraith
will

be

indicates
taken.

INSURANCE STOCKS

Covcriiiiieiit-Miuiiciiial-Ctirporate
Securities

Dealers

—

Underwriters

—

Brokers

If

prices rise consistently, the pub¬

Johnston, Lemon & Co.
MEMBER

PHILADELPHIA-BALTIMORE
BOSTON

STOCK

UNDERWRITERS

-

lic

demand

will

kind.

There

pressure
STOCK

EXCHANGE

EXCHANGE

(AssociateI

DISTRIBUTORS

-

DEALERS

controls of

will

be

some

insistent

for wage and price

con¬

it

was

suggested

Building, Washington 5, D. C.

Telephone: STerling 3-3130
Branch




Bell Teletype:
Office:

WA 28, WA 95 & WA 509

Alexandria, Va.

Established

that

might be made national pol¬
With wage and price controls
come, as we all know, a
perfect miasma of restrictions and
impediments to production and
industrial progress.
It would be
the final blow for a dynamic soci¬
would

ety like ours.

So

the alternative

1699

Members

this

icy.
Southern

•loiix C. Le^g & Company

trols and in the Democratic policy

statement,

1

partner in Leavitt

Gallic to

Jan. 2 will admit Susan

of this,

E.

the New York Stock Exchange, on

.

example

Richard

Publicity Chairman: Neil S. At¬

McMannus & Mackey, 39 Broadway>

Hurley,

Mackey

To Admit

inflation

the

causes

McMannus &

with infla¬

M.

May & Gannon, Inc.

Peck

E

Joseph

Jr., Harris, Upham & Company.

Stephen

are

are

what

I !l

Ill

I suggest,

think

you

/

these

by
1920

j.

i I!

political freedom.

is

ocratic Policy Committee authored

!

and

The recent statement of the Dem¬

Correspondent

ESTABLISHED

Elects New Officers

means

economic

prices and a rotting dollar with¬
out doing anything about it.
But
I
submit
that
they are wrong.

M. Loel», Rhoades & Co.,
New York

which

both

rency.

will

Carl

controls
of

difficulties, or those who advo¬
cate it openly as a consistent na¬

SECURITIES
Wire

loss

maintain the stability of the

welcome

1 i

Ditect- Private■

wage

the

Boston Invest. Club

of price controls

era

unemployment
and
recession?
Must we go from the frying pan
into the fire? The reason they ask
this question is because of the vast
inflationary propaganda and the

government

WASHINGTON

and

an

alternative to inflation large-scale

cies.

Markets In

but rather

shl?' We ca" have Plenty and

,

of

maintaining dollar stability is
happy, zooming, inflationary
where everybody is well
off,

a

take tllat road i£ we have

Inflation

Many people who dislike mflaask the question - Is the

why

I!!

do

TOntinue
nroceeds
proceeds.

to

tion

France

it

continues,

create;many distortions
and cause a great deal of trouble.

infla¬

I

will

inffation
inflation

Without

must be made

•

are

whSh

Dioi ts

on

and
as the
tne

Prosperity

then,

in the

terest rates; We

tionary policy upon interest rates.

\

in

corporations

Todav

taxes

e

norexist
to toi

"busts
as inflationary policies
effect, interest rates climbed wake.
higher. Today #iere is a softening
of business and a lowering of in¬

stress.

Firm

billion

$40

over

Running

$6

estimated that
profit ac-

the

of

took

about

an

will

rates

from today.

Of

it

of

inflation,

have

to

look

we

as

years

event

like

interest

low

of economic af¬

would

the

point

in

money

Five-percent money for a firstrate corporation may sound very

Debasement

another

is

the future

That

of

com¬

the years. We will have a history
similar to that of other countries.

case.

Some

-

borrow

going

are

we

believe? is evident from the facts
the

up

But the
point that I am
making is that in this country if

will "occur in not too many years,
in

forced

were

more.

not mak¬
an

countries

these

these countries today for less than
8 to 10%. Some have to pay even

or

but that

soon,

rates

cannot

pany

mas¬

billion

of

one

as

ideas. A first-rate industrial

$3 billion will not
They will • have to

nature

$10 billion
will

or

every

rates

despite their fallacious theoretical

sive than anything we have known
in peacetime until now. Deficits of

$2

interest

interest

eventu¬

more

In all
long been

money.

been

years ago.

overstatement

ist and left-wing officials attacked

higher

probability is that when such in¬
ally have to be much

in Britain,

as

has

to borrow and cheap. Social¬

easy

the
waste, inefficiency,
or
bad
judgment which has been built up
in the economy, then the govern¬
ment will have to eventually en¬
gage in the most direct form of
inflation, which is inflation
through budgetary deficits and
government
expenditures.
The
it will

well

as

of cheap

The money
recovered in the depreciation ac»
count
for
10-year-old machines
only partially covers the cost. It

every

Holland

like

their

three times

and

two

government policy to make money

that the

occur

in

done

countries

the

the form of tax
people can
spend the money and create de¬
mand.
When
public
policy
is
dedicated
to
creating a definite
level of prosperity regardless of

flation does

the

temporarily

money

been

and

public in
so

govern¬

curtail

country in the world—even in the

Maybe those deficits will be given
to

has

socialist

will be spent directly by the gov¬
ernment for a variety of purposes.

reductions

that

to

of

and to raise the cost of borrowing.

public

insistent,

more

is

use

availability of

popularly desired levels.

achieved
clamor

the

restraints

can

One

forms.

of

can

pol-.

(2)
It
can
lower
requirements for commer¬

increase the

ment

curbing will

This

number

basic

the

it.

curb

a

of these countries it has

money

lower

can

government

of

know,

rate.

reserve

cial

It

Reserve

Board

weapons

make

move

already been

Federal

the

powerful

make

take

91

<2723)

If inflation
is
engaged in as a
general policy, then from time to
time it will get out of hand and

change in the policy which

permits

and immunities of

our

.

New York Stock Exchange

American Stock Exchange

(Assoc.)

Philadelphia-Baltimore Stock Exchange
BALTIMORE

NEW YORK

92

(2724)

The Commercial and Financial Chronicle

"Why did

was,

after

all

telephone

you

these

months?"

me

He

that

Securities Salesman's Corner

the

recommended

I had

sider
he

By JOHN DUTTON

There

people who will fol¬
suggestions without too
niuch persuasion—there are some
think they know all the
swers—and
there
are
some

•who

working.

were

are

low your

Told

their

office

Continued

from

about

a

half

day

can

you

Mr.

"I've had

was:

Dutton,

con¬

"Doctor, didn't

we

office

year

"When

replied.

you

come

the

relate to you

dried

and
to

success.

across

I

one

this week it is

make

would

leads

"If I

YOU.

said

The Busy
a

to

write

Doctor

successful

I met

ago

year

Doctor

his

in

"Yes,

Doctor,"

said

I,

questions

I

and unless
few minutes seri¬

a

you

office,

have the time to do

out

it

take

into

I'll

so.

let

know,

you

I

de¬

should

I

think

I

you'd

with whom I had done some busi¬

quite a bit on myself wouldn't
you? Your financial health is a

the

in

We had

past.

very

a

that

I

taking

was

pleasant interview
but
nothing
developed and for a while I kept
this itian on the mailing list and

you and

then cut him off. Much to my sur¬

tell

important matter and if
1 are ever going to do any
together 1 am going to
you right here and now that

we

will

I received

prise
a

weeks

few

worked

who
him.

She

ago

in

said

Doctor had

pretty

business

telephone call
from his wife

a

office

his
that

decided

with

last

at
to

the

unless
now

tax

to

any

good

investment needs today, and

what is the best program for you.

exempt bonds and she wanted

me

you

first find out what you
in the way of securities,

own

your

buy some

do

never

we

once

again call to

both at his office at
after

his

office

see

specific time

a

I

hours.

to

was

bring along
whatever
literature
I
thought
they should read, etc. I made the
appointment and followed it.
prepared

come

experienced

any

situation
the

where
were

the

thought
own

and

we

this

do

to

1

was

wife
kind

they

salesman
obviously one

and
of

the

could

decisions.

The

Doctor

people
make

who
their

take

can

the

time

I am not
help you do
job
that
you
should, accomplish.
Can you and
Mrs. Hurryitis relax and talk with

going to

the

am

stressed

though

I

attractive
other
be

for at least

shall

we

a

half

make

hour now,
time

an

it

some

—

providing

about this?"

you

are

serious

to do

man

point

free

better

that

and

myself

and relied

on

bonds,

and
would

it

him

if he

who

highly

(either

a

even

that

for

someone

this

in

tax

knew

lie

field

someone else)
their specialized

or

knowledge to help him select the
right bonds for his account.
mistakes
too

reasons

was

that he

he had made
too

was

busy

unqualified to make the

investment selections

didn't

him

tell

this

but

I

—

it with

a

Opened Up

indicative of the way their minds

He

agreed to talk for a while
and the first question I asked him

The

I

second

of

sort

same

ventories

has

The

been

value of in¬

rising

for

32

pared

consecutive months.

However, the
rate of inventory accumulation in
1957
slowed down
substantially

$28

and
financial
welfare as you
would give my
health—if you will allow me to
do

in

your

How about it?"

so.

Control

the

of

areas

to

$35

billion

by

creases

economy:

the

an

this

the telephone with
occasional luncheon interview,

or

one

ments
more

over

or

two

special

year,
don't
time on them.
a

Construction

and

expenditures

this year are rising and

are

now

capacity'.

2% above the 1956 total. This

increase

state

in

Residential

other
little
ber

construction,

hand,

continues

lag

will

ness

annual rate of

an

The

If

declined

be

be

nine

thousand for 1957.
the

ing to let this type of person keep
busy telephoning, and send¬
ing mail, and then wait for his

below

1958,

you

There

horses that have to

with

a

tight

rein

and

are

be held

they

will

ride well—and you won't be able
to handle them any other way.

hundred

first

housing
spending

one

by

but

1958

is

in

about

the

same

inventory
to

even

or

slower

effects

versely,

a

inventory
1956, and
in

rate

1957

business

but
help

for
to

activity ad¬

the long run it
produce a more

stable economy.
Total

inventories

tember showed

increases

est

1958,
rate

one

during
of the

Sep¬

small¬

of

any month
this
In at least the first part of

year.

we

may

find that business¬
further the

will try to reduce

of their investment in inven¬

tories.

or

be

of

one

rapid rate in

very

men

starts

to

much

this

fallen

of

A shift by business
policy of inventory accu¬

should

capital
less in

number

increase

probably reflects good business
management. For the short run

eighty

mortgage
be available for hous¬

the

may

business

a

the

additional

some

to

Business accumulated
at

1948 that
If

reluctant

accumulation,
tends
to
reduce
production. In 1949, and again in
1953-54, nearly all the decline in
national
output was due to in¬
ventory liquidation.

number

have

million.

money may

ing

will

starts
one

of capac¬

reduction in the rate of inventory

This year may

since

year

excess

manufacturing

at 92%

liquidation,

were one

and

a

mulation
1

starts in 1956 compared to a prob¬

able

him!

the

as

There

these

is

cycle.

from

a

are

you

boss your customer will be agree¬
able and you will have a worth¬

forget

much

as

of housing starts.

1955,

were

ness

volume

dollar

1958

Inventories

1956, with the num¬
housing starts in October
units.

manufac¬

reducing

(4) Inventory accumulation and
inventory liquidation have a very
important influence on the busi¬

behind

of

mining

reason

productive capacity.

the

on

to

any

waste

and

ity; in 1956, 86%; and in 1957, 82%.
These figures suggest, that busi¬

munici¬

and

In

operations

expansion
has
been
the
result
largely of increased expenditures
by public utilities and the persist¬
ent

and

recent

will be in the manufactur¬

railroad

principal
turers
give for
expenditures in

Starts

Housing

Construction

(1)

1956

The

industries.

ing,

million, three hundred thousand
housing starts in 1955 and one
million,
ninety - three
thousand

appoint¬

1955.

The

running at

Unless you can handle accounts

billion in

in

Hill survey estimates
expenditures will decline
7% in 1958. The biggest de¬

background, let
briefly ten specific

examine

of residential construction has not

like

any

these

With this broad
us

million

Account

sold

be

McGraw

compared to 1956.

specialization,

interest

be

Equipment

pur¬

pal projects, such as schools, high¬
way.
"Doctor, you are busy
ways, sewer and water facilities.
10, 12 hours or more out of the A recent
government report esti¬
day
practicing
medicine
and
mates that construction expendi¬
you've put in many years of study tures in 1958
may be 5% above the
and
preparation for your work. current
spending level. However,
Although you certainly have been
with some down turn in business,
buying securities for quite a while construction
outlays in 1958 will
there is one thing I can do for you
probably hold
around the esti¬
if you will only let me—and that
mated $47 billion to be spent in
is give you
the benefit of the 1957.
sincere

may

should

there

Spending for Plant and

this

some

Established May 20, 1893

1958.

it

put

that

cars

If

tendency unwisely to extend ma¬
turities
or
permit
inadequate
down payments in order to facili¬
tate sales, it would be unfortunate.

for which business spends is

pose

over

One of the

1957.

(3) Business spending for plant
and
equipment will amount to
about $37 billion this year com¬

in

decision,

I bring some literature along was

in

cline

while account—but if you are go¬

And I said

smile.

request that

American

Business

se¬

values

specialized

upon

■

,

steadily in the postwar years, but
is now leveling off and will de¬

for inventories.

prepared

was

investments,
lot

a

lected

to

later in the week when you can do

the

■

The Business Outlook

since

pleased to send him literature

sorry,

be able

me

so

I

i

.

income

investment job.

investment

or

To

the

"Unless

them

good investment

a

constructive

and

if

and

over

along with another of his friends
ness

as

office and

your

medicine

agree

higher

■

.

taken

leaving with his list, I made
another point clear and that was,
that it takes a good client as well

proper

the

the

had

fore

it

a

read
is

bonds

in

He

■
.

con¬

a
sizable
by the government sector of the
licking in common stocks and he economy
may
be
increased in
was ready to talk bonds. This
1958.
opened the door to an analysis of
Business spending accounts for
his list, the possibilities of tax loss the remaining 15% of the output
selling, and a constructive ap-, of the economy. Spending by busi¬
proach to the entire account. Be¬ ness for plant and equipment rose

Doctor I feel sick,
prescription for me

you,

I'll

cide

very

a

spend

came

and

About

ago?"

few

a

like to ask

when you

AFTER YOU HAVE SOLD THEM
ON

in your

meet

ously talking with me now, I will
gladly make another appointment

clients

best

are

you can

Some of these

the

a

"Well,

"there

I've tried the other way

and it won't work.

people

to
cut

a

that

procedure

about

that's why I called you again," he

situa¬

a

going

am

leave

you

can

going to do a satisfactory job for
customers. It is to their ad¬
vantage that tliey understand this.

your

like

busy

a

what literature you have with me
and we'll go over it and let you
know." My reply was as follows:

trol your accounts you are never

tion

was

finally ushered into the sanctumsanctorum and the first words the

the. facts of life and, unless you
do so, you will never do business
Unless

Then I

in¬

Doctor said

them.

hour.

an¬

vestors who want you to tell them

with

waiting

kept

was

an

he

Thursday, December 19,1957

.

6

page

met

we

now

When I arrived at

I

time

tax-free

some

was

bracket.

Some People Have to Be

last

.

re¬
'•

plied that

.

.

Industrial Production

possibly slightly up, compared to

(5)

Contrary to the usual sea¬
increase, industrial produc¬
tion declined two points in October

1957.

sonal

Scott &

Louis G,

Mudge With
Chas. E. Quincy Co.

Stringfellow
Members

New York Stock

American Stock

Richmond Stock

Buforci Scott

Louis G.

Thomas D.

Eldridge Longest

Neal

Mudge, formerly dep¬

International
James H.

L. Thornton

Scott

Fleming

Joseph J. Muldowney

struction

become

and

Quincey &

|

Building

Teletype RH 190

Telephones Milton 3-1811 and L. D. 3

Mail:

Private If ire

Richmond, Virginia

to

P.

O.

Box

1575,

Richmond, Va.

Clark, Dodge & Company, New York City

York

New

York




Co., 25

with

has

Chas.

Broad

E.

Street,

City, members of the
Stock

Exchange

and

International
a

Bank,

still

too

early

and

the

extent of public acceptance of the
new

models.

Automobile

sales

will reveal the present attitude of

the

effect

toward
of

the

spending

Direc¬

year

if sales

and

price increases.

The year 1958 will be

First Boston Corp.

It is

determine

to

Mudge

Mr.

Vice-President

direction business will take.

consumers

Prior to his association with the

tor of The

DEALERS

Recon¬

American Stock Exchange.

was

MUNICIPAL

for

Development,

associated

New

115 Mutual

Bank

Automobile Industry

to

uty director of marketing for the

Exchange

Walter S. Robertson

Marion N. Fitzgerald
R.

Exchange

Exchange (Associate)

The

(2)
The automobile industry
supplies millions of jobs and an
important percentage of the pur¬
chasing power of American work¬
ers.
Automobile sales during the
next few months will play a sig¬
nificant role in determining the

come

production in

persistently
levels
stood

well
the

at

under

such

Steel

80%

of
as

lower

of

and
are

of

electrical

down

substantially.

1957.

1956,

probable

NORTH and SOUTH CAROLINA
MUNICIPAL BONDS
F. W.

CRAIGIE & CO.
IN

STATE and MUNICIPAL BONDS

616

EAST MAIN

STREET

-

RICHMOND

15,

machine

carload ings
steadily
that

in

indus¬

production will decline fur-

VIRGINIA-WEST VIRGINIA

Telephone Milton 3-2861

are

for

to equal¬

trial

orders

orders

declining

is

equip¬

machin¬

Manufacturers'

unfilled

have

ing the approximately six million

DEALERS

capacity and

good

It

it

production is

to

been

the

when

producers'

has declined.

1957.

1957 has

under

December

147.

backlogs

tools

remained

last

output

ment,
ery,

of

Compared

a very

near

142, the lowest level for

Industrial

VIRGINIA

Teletype RH 83 & 84

Volume

ther

Number 5700

186

there

before

is

upturn.

.

.

.

The Commercial and Financial Chronicle

sustained

a

"

4

«

-

(9)

ket less tight.

— in¬
will; lead ulti¬
mately to larger expenditures.
(10) Bank loans — some easing

To the extent that

civilian

percentage of the

clined

analysis of the busi¬
we
ought not over¬
look the possible impact of for¬
eign developments on American
(10) In

4.6%

in

months
there

of

the

of

nine

first

1957, and in
a
reduction

was

workweek

from

40

to

business sentiment and the

ten

areas,

the

3.9.5 hours,

Middle

thirds

occur

in

ahead, with

a

world's

two

admit

and

the Middle East

industrial

in consumer income.

G. C. Haas & Co., 65 Broadway,
York City, members of the

Western

New

Europe.

*

profits were ad¬
controls
the
Suez
Canal
by
the steel now
strike
and
the early
autombile through which a large part of the
oil for Western Europe is also
model changeover. However, it is
not probable
that third quarter transported. If Syria and Egypt
profits in 1957 will be up from should finally come completely
the
second
quarter.
Corporate under Soviet domination, it would
profits after taxes were $21 billion present a serious problem to the
If we were faced with the
in 1955 and again in 1956. For the West.
first six months of 1957 they are possible
economic
collapse
of
Europe,
our
defense
continuing to run at an average Western
rate of $21 billion. Although busi¬ nearest to the Soviets, we would
ness has spent tens of billions
of be confronted with the necessity
dollars for capital expenditures in of making some hard decisions.
recent years, profits have not in¬
France is facing an extremely
creased
proportionately. In the difficult period. She has had 23
first half of 1953, this problem
governments since 1945. She has
.promises to be no less difficult.
a bad inflation.
She has rebellion

defense

for

about

is unbal¬

practically

are
Unless

she

ex¬
borrow

can

and is willing to ac¬
cept economic austerity, she may
resort to the printing press for
money. In view of the magnitude
of these problems, a failure to
meet them might have severe re¬

more

expenditures

budget

gold reserves, except
500 million of special

reserves,
hausted.

ex¬

penditures! An enlarged defense
program will require some time
before its full impact is felt on
the economy. But even a decision
defense

Her

Her

anced.

(8)
Recent
international de¬
velopments seem likely to result

increase

Africa.

in

Expenditures

in

money,

significantly, after the strong pub¬
lic and Congressional emphasis on percussions in all of Western Eu¬
a
balanced budget in 1957, might rope.
be
a
Summary
buoyant influence in the
economy.
At present, it seems
The probable business outlook
probable that for the months im¬ for the months immediately ahead
mediately ahead, the increase in may be summarized as follows:
defense
expenditures cannot be
(1) Total construction—approx¬
large. However, with an expan¬
imately equal to the estimated
sion in research, greater defense
$47 billion for 1957.
expenditures seem certain to fol¬
(2) Housing starts—about the
low, perhaps within a year. More¬
same as 1957, or up slightly.
over, once expenditures start in¬
creasing they almost invariably
(3) Automobiles—if sales come
grow larger
than originally in¬ near to equaling 1957, it will be a
tended. A clearer picture of the good year.
~

effect

of

increased

defense

ex¬

penditures must await the new
budget and tax program and the
debate in the Congress.

may

experience some decline, we

may

also assume that the volume

of bank loans

will show

a

down¬

ward trend.
The

recent

action

of

the Fed¬

System in reducing
the discount rate implies that the

eral

(4) Business spending for plant
and equipment—down

Reserve




M.

Laurence

M.

Marks

oil

Fries

made

be

reduce

to

further

decline

there is

a

is

likely

—

a

before

sustained upturn.

Labor

—

some

Corporate

Wall

1 Hallgarten & Co., 44
Street, New York City, mem¬

bers

of the

change,

New York

Stock Ex¬

admit Edward S.
Wilson, David S. Gottesman, Fred¬
erick M. Peyser, Jr. and Calvin
M. Cross to partnership.

will

Julien H. Collins

Form Tower Sees.

E.

Charles S. Garland

Hopkinson, Jr.

(Special to The Financial Chronicle)

DENVER, Colo. — Tower Secu¬
rities Corporation has been formed
with

offices in

ing to

the Boston Build¬

in

engage

Officers

ness.

WVWUVnUHHVVVUWVWUUUVVHHVHHVUUVUVUHVWW

securities busi¬

a

Norman

are

Feld-

President; Roberta Feldman,
Vice-President; and Harry Feld¬
man, Secretary.
man,

UNDERWRITERS
DISTRIBUTORS
DEALERS

Counselors
LOS

Management
Cal.—Counse¬

ANGELES,

lors Management Company

gaging
from

Street.
and

in

is en¬
business

securities

a

offices

AND

Stephen Titus

are

Good.

George C.

MUNICIPAL

Hill

South

606

at

Partners

CORPORATE

Both were

formerly with Witherspoon & Co.
t'

'

-

-

'

.

I

.

'A

y

SECURITIES
J '

SCOn, HORNER & CO.

Creary-Ross Opens
HOUSTON, Tex.
Associates

and

with

offices

Street

to

business.

—

has

at

engage

Creary-Ross

been

formed

1408

Jefferson

in

securities

Partners

a
are

Dan

W.

Creary, Charles D. Ross and Ted

ESTABLISHED 1932

VIRGINIA
MAIN

WEST VIRGINIA

OFFICES—LYNCHBURG, VA.

NORTH CAROLINA

Telephone 8-2821

TENNESSEE

Corp. Teletype LY 62, 63

A. Molfino.

Mun.

Form Le Vesque

Teletype LY 82

increase

profits

—

Assoc.

(Special to The Financial Chronicle)

Vesque

and

HILLS, Calif. —Le
Associates has been

formed with

in

curities
Russell

cline of perhaps 5 to

porate profits.

Admit Four Partners
On Jan.

offices

at 321

South

Beverly Drive, to engage in a se¬

unemployment.
(8)

Hallgarten & Go. to

BEVERLY

production

Industrial

(7)

the rate

accumulation.

(6)

1946-47

1947 -48

about 7%.

(5) Inventories—further efforts
will

of inventory

Bank Loans

(9) If we assume that business
in the first six months of 1958

Mills

who

leaders

of

affected

increase

Exchange,

admit

and Edgar T. Mead, Jr. to general
partnership and llse H. Levinger
to limited partnership. Mr. Fries
look
is Manager of the firm's Research
ance.
pipelines that supply Western Eu¬ Department.
rope run through Syria.
Egypt

ter of 1956 when

some

Stock

will

is now in con¬
apparently
to Soviet Russia for guid¬
All of the operating oil

trol

is anticipated that they will be
-considerably above the third quar¬

Defense

1

The Syrian army

(7) The reports on corporate
profits after taxes are not yet
available for the third quarter. It

versely

York

Jan.

-

*

Hal H. Dewar

Company

To Admit Partners
New

of

Albert T. Armitage

Berlinger, Jr.
partnership.

G. G. Haas &

reserves

equipment and all the

equipment

military
Corporate Profits

G.

the

much of the

runs

William

and John Gribbel II to

Oil from

in the Middle East.

are

consequent decline

and

Stock

in

oil

1948-49

members of the New
Philadelphia-Baltimore
Exchanges, on Jan. 1 will

York

fraught with con¬
danger.
Almost two-

of the

1949 -50

Building,

is

East

siderable

unemployment may
in the months immediately

rise

situation

current

The

compares to 40.7 hours in
With
a
continuing slow
decline in production, some mod¬

1950 -51

Pa.—Elkins,
Morris, Stokes & Co., Land Title

France.

which

to

PRESIDENTS

PHILADELHPHlA,

econ¬

Consider briefly only
the
Middle
East

omy.

October
in

an

outlook

ness

>1956.

in

PAST

To Admit Two

unemployed

force

labor

at

Elkins Morris Stokes

The International Situation

(seasonally
ad¬
justed) which is higher than in
any month of 1957 or 1956. Manu¬
facturing
employment
has
de¬

stood

erate

IBA

was

in October. The

•

research

in demand.

bank loans decline in the months

high, the increase over
ahead, the need for action by the
September was not as great as Federal
Reserve
to
ease
the
usual.
Unemployment
did
not
money market may be lessened.
show the usual seasonal decline

93

Defense expenditures

creased

which will make the money mar¬

Employment
(6) Although employment in Oc¬
tober

System will also take those steps,
perhaps
in
the
open
market,

(2725)

a

de¬

10% in cor¬

business.
J.

Le

Partners

a r e

Vesque, general

partner, and William H. Matthews,
Anthony Toth, Wesley A. Pro¬
vencal,

and

Virginia Securities

Charles Mittleman,

limited partners.

Municipal Bonds and Corporate
/929

Mas°n;HAGAn
INVESTMENTS

RICHMOND
IIIO East Main

Securities
Local Industrial &

Utility Stocks

Trading Markets
Street

Telephone Ml 8-2841

Retail Distribution

Teletype RH 460

ROANOKE
415 Mountain

Bank

Trust

Building

Telephone Diamond 2-3101

STRADER and COMPANY, INC.
LYNCHBURG, VIRGINIA
LD 39

-

5-2527

-

TWX LY 77

The Commercial and Financial Chronicle

(2726)

94

Continued

from

1

.

Thursday, December 19, 1957

.

prices and of loan to value policies

10

page

.

of lenders.
-

IBA
1943-44-45

Borrowing

PRESIDENTS

PAST

1942 -43

Economic Outlook Implications
.

much

may

improve.

As

FHA

and

and

loans

VA

offset

not

the

decline

i

As

-

.

the demand.for.business credit,

a,ready noted the Federal Gov-

ernment

has

a

current

cash

sur-

a;

on

tight

haveVrestricted the

policy.

of

will

in

com¬

bination of fixed contract rates

flow

debt,

..

•

the

knows,

everyone

money

.

local

and may rise further but, togetoer
the
increase
in
mortgage

Deposits
■

,

and

with

the demand for homes, pated as an economic policy meas-

how

State

are
at near record
levels of $7 billion reached in 1954

1939 -40-41

For Interest Rates and

by

governments

into

money

mort-i

home

The steady,' decline in new,

gages.

mortgage lending during the past
year
and a h^
confined
largely to Government guaranteed
and insured loans, i reflecting the
big drop in housingi starts under
VA and FHA inspection. Conven¬

John Clifford

Emmeft F.

Jay N. Whipple

Folger

Connely

tional

remained

have

starts

at

a

high level and for the first eight
months of 1957 were at the high¬
level

est

1935-36

1936-37

1938-39

Further

1953.

since

business-conditions.

l'uture

feel

observers

The.

Some

that

regardless .of j
the
proposed Budget, total ex-?
penditures will rise substantially

and

their direct and indirect

that

effects

will

far

go

to

offset

turn

in-

forMnterest

Rates

a continuing
business and" with

in

easier

bound

are

down*
it

an

policy, vinterest

monetary

rates

fall.

to

Clearly

the

turning point in interest rates
following a three-year rise has
already been reached. How far

cipient declines, in demands in the
private economy.

re¬
Demand
Demand

Outlook

£ Assuming

and how raPidly rates will fall is

for Funds
for Fund*

starts and in
another
question.
The
answers
The over-all demand for credit
the volume of mortgage financing
depend upon the extent to which
is obviously tied upyvith FHA and duripg coming
months/A^iljj^r^t^e
riecbnomiczdcftfoa tui'n • has' Its
housing

in

covery

Federal Reserve:

pbHcies/^^

>htisiness/ defers

as

exneiiditurcs:

the

How

demands for housing
affected depends upon the

works off

inventories.;, The dcclint fiuous inventories, which, can only
in business demand for fundi will
;be - cured, by. ratheiv painful/compersonal incomes, upon
probably.be greater t&an any net petitive; .adjustments,";*; and ■>.upon
housing costs, and housing credit •
in
housing credit d<> the exL^hf f o which economic de¬
terms. There is undoubtedly a big increases
latent demand for housing, but: it mand or in governmental
borrcw^;t^ity:^espdhdsr:,to(-an expanded
will be

in

trend

will not be activated unless home

buyers view the future with con¬
fidence and can obtain credit on
easier payment basis than now

an

banks

Two With Merrill Lynch

Shearson, Hammill Branch

(Special to The Financial Chronicle)

DENVER,

Colo.

—

William

BOSTON,
N.

Ganderson and Carl H. Gustafson
have become affiliated with Mer¬
rill

Orrin G. Wood

Edward B. Hall

Jean C. Witter

Lynch,

Pierce, Fenner &
Beane, First National Bank Build¬
ing.

H

a m m

i 11

Mass.
&

Co.,

—

Shearson,

will

open

branch office at 75 Federal

a

Government

Street,

Outlays

Governmental

of Dec.

another
creased

as

30, under the manage¬

expenditures are
potential source of in¬

economic

ment of John Dean.

No

doubts

one

of

Underwriters

Distributors

State

and

SECURITIES

billion, or by 10%, and this rate
growth will continue. However,

of

there

Southern Textile Securities

is

Properties

&

evidence

Federal

COMPANY, INC.

Member Miduiest

>

Stock

SPARTANBURG,

Exchange

S.

Telephone 3-8446

C.

Bell

Direct

Wires to New

Hayden, Stone & Co.

certainty

the

about

Government

Federal

outlays although each day brings

Established 1892

-

less
of

course

new

A. M. LAW

for

roads, sewers, hospitals
and other public facilities.
Pur¬
chases of goods and services by
State and local, governments have
risen during the past year by $3

CORPORATE AND MUNICIPAL

and

needs

critical

schools,

Dealers

Teletype ZP 67

York City

Troster, Singer & Co.

,

of

expanding

an

budget.

The

Midyear
Budget
Review
published last October, is already
outdated by economic conditions
and by current reappraisal of the
defense program.
A budget sur¬
plus of $1.5 billion for fiscal 1958
($3.1 billion of net cash income)
was predicated on a high level of
business

activity

national income.

receipts

and

which

J',>•

r.-'idefense program .and to,an easier
commercial^mionetary policy. % r
£?!;•.£

of

rose

almost

from

the

without

middle

ol

increasing

and

Our most recent

declining.» Loan demand

in

some

manufacturing categories such

as

much
rates.

I have

term

rates

generally the trend is down-

ward.

months

of

1957

$2.0 billion

was

more

than in the

$9.9

billion,
same

period

last year.
If plant and
equipment outlays decline in 1958,
new
issues could contract rapidly
considering that funds from depreciation and amortization will
continue to

accrue.

1953-54

tions

so-called

internal

of

non-financial corpora(retained profits and depre-

sources

ciation allowances combined)

by

$0.7

sources
sues

and

mortgages) dropped $2.5

billion.

■

_

A

rise

year

rose

billion, while external
(bank loans securities is-

in

to the

-

housing starts next
1,100,000 level would

mean
a
more
rapid
growth in
mortageg debt. Mortgage debt on
1-4 family houses could rise by

$9.5

billion

with

$10.9

an

in

1958

estimated

in

1956

and

compared
$8.9 this year,
as

$12.5

in

1955

when starts reached 1,329,000. The
rise in the debt will be moderated

by the rise

in

the

volume

of

sharply than long-term

more

no

doubt that short-

will

decline

greater

The volume of corporate securities issues during tne first nine

In

show

again

long
but,
looking ahead only through 1958,
I have

that

doubts

some

cline in rates will be
the

was

case

as

1953.

in

the

You

0.65% in

year's time, while long-

a

declined

Treasuries

term

around 3Vh

to 2J/2%

CORPORATE

AND

MUNICIPAL

SECURITIES

jn
the
present
instance,
the
turning point occurred at a time
when yields on short maturities

in

the

market

for

Government

securities

were

long-term

securities,

istic

character-

a

of extremely tight monetary

conditions.
expect
in

those -in

above

Nevertheless, I would

that

the

decline

in

coming year will proceed
more slowly and not go as far as
it did in 1953-54. Much will clepend upon the skill with which
Federal Reserve operations
are
managed

and

the

upon

way

to

in

the

ness

developments and to Federal

Reserve

strategy.

I

observe

crease

re-

vestment officers concerning Fed-

outstanding
debt,
depends not
only on starts and purchases.of
existing houses but also upon the

eral Reserve policy. There was a
time not long ago when the me-

payments
New

on

loan

demand

size of individual mortgages which
are
in turn a function of selling

chanics of monetary controls were

not
now

widely
understood.
People
complain that the drop in the

ciscount rate per

se

doesn't by it-

Clement A. Evans 8c Company
incorporated

Distributors A?id Under writers

making but, according
Washington, the

expenditures

duction

of

the

on

missiles

pro¬

Investment^ Securities Since 1894

and

related,
items by $2 billion and to increase
appropriations for mutual security
by $1.1 billion. Time will tell in
what other areas the Budget will

ESTABLISHED
Members

1032

grow.

that

Midwest Stock Exchange

Since
efforts

it

may

to

cut

categories will

ATLANTA
Murray 8-5185
augusta

Teletypes:
macon




savannah

be

doubted

non-defense

successful, a.
deficit in fiscal 1959 appears high*ly probable.
A rising trend in Federal ex¬
penditures lessens the possibility
prove

The Robinson

348-340

of

a

tax

economy

prolonged
in

Federal

cut.

Of

were

to

course,

the

experience

downturn,
taxes

if

a

could

a

reduction
be

antici-

-

Humphrey Company, Inc.

rhodes-haverty building

...

orlando

a

growing sophistication among in-

from

reports

the

financial fraternity reacts to busi-

higher expenditures

Administration is proposing to in- ;

rates

the

left

still

from

(Old Series),

Somewhat lower

Midyear
Budget
Review
unchanged
the
anticipated
spending for the Department of
Defense at $38 billion, but the Acvministration has already conceded
that this target cannot be met.
The
Budget for fiscal 1959 is

as

will

recall that the yield on Treasury
bills dropped from about 2x/4%-to

The

DEALERS

de-

rapid

surplus.
DISTRIBUTORS

a

than

than estimated could eliminate the

UNDERWRITERS

was

for :a period of about one year,
with ; short-term
rates declining

public utilities has been sustained
but

experience

1953^54 recession';when.' rates

; the

middle of 1957 are now- "fell

*?•

demand.

that

local government outlays will con¬
tinue
their steady
postwar rise
because

loans

interruption

prevails.

Although restrictions on
the supply of credit are usually,
given as the chief reason for the
past two years' decline in residen¬
tial building, it is also true that
effective housing demand has been
dampened by consumer resistance
to high costs and by the burden
of
debts
already contracted by
potential home buyers. Construc¬
tion costs have risen steadily to
new highs.

V->'

!
Business

ATLANTA 1, GEORGIA
JACKSON

1-0316

LONG DISTANCE 421
Bell Teletype AT 288

t

'I

Volume

Number 5700

186

.

.

The Commercial and Financial Chronicle

.

(2727)

anything to the supply
Historically, aggregate personal - primary source of all savings, has ics of savings banking and to
In earlier times they^ savings tend to ciecline absolutely;; halted at least temporarily.
curtail the vigorous promotion of
granted that a lower and. relative to income in periods
An
analysis
of
the
flow
of savings accounts.
Thus in 1958
discount rate meant an increased Of- cyclical / recession.
In all re- savings through mutual savings savings banks may find that the
V
J
'•
1 Q9Q
1
» <"-0"
.»***■ v
A** MV VtVIA MU v
# B
device cessions since 1929 personal sav-*;
rmoney
supply.
Yet
the device cessions since 1929 personal sav- banks shows that deposit inflow, competitive pressure from corndeposit inflow,
combanks will be less
seems to retain its magical
prop- ings," as defined by the Depart- which "had
been steadily rising mercial banks will be less intense.
intense.
erties—because it is a forerunner menUof Commerce, fell absolutely began to flatten out during 1956 However, in my opinion, over the
mi things to come—judging by the and relative to disposable income, before the'major'Impact o? com- longer run commercial banks will
way the markets responded to the Bht-the personal savings figures
mercial bank competition/In con- remain active in the savings field
news.
' '•
of the^ Department of Cdmmerce trast, the amount of withdrawals and it would take extremely easy
self

*61'

add

Alex. Brown & Sons

money:it

•■took

95

for

To Admit to Firm

'

m

1

.

.

RATTTMnRF
„

AW

a A ^ 1 A*VA u n 1L» 1VAa*

S?*

*

& !0^j?^rfl9n„0p

^

k SfLmfS!',,
j

w

^lwillad^

.

us

The Federal Reserve's volte-face
came

as

surprise

a

(1)

t0 interpret.

with

Credit

need

the

inflation and

rate

order

the

in

employed

was

to

fight

a

half-

because

(2)

reduction

'.point
*

in

restraint

continued

for

/fhe subtler device of

^homes

® J? ^ i homes. Fluctuations
111 t1,e net investment of umncorporated businesses in plant and
«>d m inventories
v

The suddenness of the
action is not easy to understand,
1'fhe explanation apparently lies
operations.

*

in

'

«

■

a

f"deetc^e

of

reappraisal"

"agonizing

an

the economic outlook and

Fluetuations

a

very

impor-

the

assist

'What

through

Treasury

might have been

difficult

a

-financing period.
The

r,'

-

Reserve's

Federal

-

;

the

h

thai? nthtrTvne*

of

the

of

1948-49

xaxc,

uia^vxxxxx.

has

iaci,ibe

investments

combined

wflfsoften the impact oTjecTntag bers„ of the

Robertson

stated. inHi^Hnals

New York Stock

Exchange

/

.

.

Chicago Analysts to Hear
CHICAGO

Las

Til

On

,

,

rj

i

XidXi. lb

,

deposit growth Bank; Theo.

Savings bank

t«^VinT"isnntc**inWiVwr°i7"

of

XiUol

06

Hong

some

impossibility."

run

-Board

is

nctual 1 v lareer in

were

th^ii7l953"Tn

the recession

With 5.1% tor the mutuals.

—^ity has begt

^^nd^^to^iSil

easy.

viz..

policy will become actively";--- ,
•'
Chairman Martin and others" ^ looking ahead into 1958 we
insisted that
they
tcofpsorp^*.i^
e further denot going
to'repeat their ■.gimps, jn- manufacturing employ-

^
Connecticut,

0-1

as interest rates fall,
gM^rhn^+fs credtt and demand monetarv polFalling
for business
Massachusetts
credit and an easier monetary poieasier
an

and Pennsylvania, the gains of the

mutuals were relatively greater
j were
-than those of the commercials.
mistake of 1953-1954 of giving the^msit and in hours worked. Per- The adverse experience in New
loirol
Old
onrl
»n!no/l
"'economy
an
overdose
of .easv sonal income could levei out and York, where savings banks gained
"money. At the"present time there oven decline. There is the added only 4.9% compared with 12.2%
have repeatedly

.

tri

conn

is

:

no

evidence that the Board

re-

onnl/1

inooivin

be

<

the

in

credit than by

anticipating actions

of

One
am

Savings

of

Trend

the

Bank

answer

'

in

forum
fomrn

the

what-Will

'

.

irpnH^^nf-

thp

hp

dwosifs''-^

mutualVavings
savings

bank aeposus
Dan*

_

the Korea^war

savings deposits will rise
•_

■

HJixuvfFiii

in 1956.
-

k^wrfl

V>

»A

compared

anu

the

1 OSC

TVliA

bitors

S

d®'\he
^

market value of

raviw

^ the same time

ibe

This is

an

of

to

therefore,

To Admit E. G. Crist

HARRISONBURG, V a.

ic

review

a/\W4m A

+ iftttp

iwHAn/lfN

.

l-v

*

r

(Special to The Financial Chronicle)

Garrett is engaging in a

business

rJ

—CT

^ 1958 but at the

years,

>d.

,..k

'

same

•

•

0ffices

.

'

1

*

1YIOIYI nPfO

AT

Tenn.

Trio

At

to their surplus and reserves.

nership.

pres-.ri

time,

-^1

Specialising in.

..

GEORGIA,

Alabama, Florida, North Carolina,
South Carolina, and General Market

DEALERS

MUNICIPALS

Company

MUNICIPAL AND CORPORATE SECURITIES
SPECIALIZING

SOUTHERN

Trust Company

IN

MUNICIPAL BONDS

FLORIDA

ALABAMA

NORTH AND

SOUTH

of

CAROLINA

MEMBERS

NEW

YORK

Company of Georgia Building

Atlanta

AT

EXCHANGE

TELETYPE

1196

FA'rfax

DIRECT PRIVATE WIRE TO NEW YORK




I.

DU

PONT

CM

Telephone: HAnover 2-1561
Bell

6094

CO.

Teletype: NY 1-2712

Private wire Atlanta

7-3626

CORRESPONDENT

&

Representatives

15 Broad Street

National Bank Building

Fourth

Jackson 4-7991

FRANCIS

New York

Columbus, Georgia

3, Georgia

TELETYPE

STOCK

Georgia
Telephones:

First Southeastern Corporation
Trust

securities
36

West

J. C. Bradford to Admit

m

.

First Southeastern

GEOR^A

at

Bay Street.

% (-M

as I have indicated, the upward
trend
in personal
income,
the

DISTRIBUTORS

UNDERWRITERS

from

nAmvV\Ai'.-

0f. relief from competitive

! will be slower than in recent

eon

ALHAMBRA, Calif.—Arthur O.

own demand deposits, commercial attention. Where a savings bank's
banks have incurred interest costs liquidity is adequate, lengthening
'

is some prospect

195T.and;'s^

The probability is
of deposit growth

monnnoi.

Arthur O. Garrett Opens

be

in delinquen¬

appropriate time,

On

-

Jan 1} Edwin G Crist n will be
T".;?
T
—

admitted to partnership m Branch,
Cabell & Co., members of the New
York Stockof 4Vin fifm'c TTnv.r-1Crist
Exchange Mr.
is manager of the firm's Harrisonburg office, 91 East Elizabeth
Street,

the quality of

mortgage portfolio will

tested by some rise
cies.

tortoT

Branch Cabell Co.

■

lor.

rate

out

de

o'

to X ClX^t- dividend rates to
U1V1UC11U
while rising bond nrices

mortgage
their portfolios for items that may need

savings

Tiie currently slower rat° of of them to reconsider the economgrowth is attributable initially to

ipAjuyi /lfwxiiyix

to. 5.8%

come

IIICUIS

to

to

fee for auests <52 50

NASHVILLE,

4A

would-be 5.0% for 19$8v

6.6%' for 1956.
that

-

_

\

rf

The;resDectiye perpentagev

increases

■

\

x^i/i

-

have

^nts

rates

This will reliew the pres„U
vinBt.
hank manaee-

rs''

—

J.

C.

annual rate of but have acquired no income. In of the maturity of the bond acNASHVILLE, Te: Union Street,
In th^ third a period of easier money the cost count will add to income from Bradford & Co., 418
|\J
P^a?gv.;bf>ginning in 1956, measur- UJ- holding these deposits and those investments. I regard 1958 as a Exchange, on Jan. 1 will admit
the rate f xxuxunxg uxcdc vo
Smif
of growth has slowed ud
ably and in .1957 will be only attracted from savings banks and year in which most savings banks James c> Bradford, Jr. and Eleaother institutions, will lead some should be able to add appreciably nor A. Bradford to limited partfrom 1952-55.

:

latt^r^cluestion0!6 an^kipate °that
mutual

aceoimtg

interest

...

•

a^une

memb

Grand

free

members' fee for ^uests 52'50*

which I ra'Pd averaging an

is what is
.

muiuai

.

giowth was at an

1946-51

inaugurated

happening to savings and, specific
■'>aiir

from

To the extent that their

by
Deposits -'boom, deposit growth became more

questions

ected
expected to

In phase 1,

for. rather distinct phases.

demand

of the Federal Reserve. "

,
f,

New York has been the chief focus

of competitive pressure from comby recessionary deposits is characterized by three mercial banks.

governed more

tendencies

l-nv,l-n

...L.

A cut m per- for the commercials, explains the
relatively noor combinec^performance in all 17 states. Of course,

gards the current economic ad3^a^.ifnf
jiistinent as anything but a moder-; being ,■ anticipated a shoit while
ate one.
If so the rapidity with..,aSo. now seems unlikely
which interest rates change will
The postwar growth in savings

'

.>

tt^.,1.

hazard of strikes.

to be short-lived,

proves

dePoslt growth should not be sedeposit growth aixuuiu xiul uC sc-

hekSel? saltoslknk stete? wUl lessen

i"?n^L^L^^iincome..
tary

How-

Wlth ^lor1tll<; mutuals. However, savings banks had a greater riousiy impaired. Competitive
Percentage increase than commer- pressures from commercial banks

vear

Jg

Until the

and

Christmas'receptioi^ will
STtoS

dep0sits' risinS bY 6% compared downturn

1 hlX

saisfied.^thatriif|y/^®

entirely

; the inflation

pome

its

OclVXll^o

R. Goldsmith;

is
'without

hold

iri

bwkJs|Wire"to"the^'year"^nded

ipated
drastic proof Of its
of its

Thn«?dnv

Analysts

atThe Midland
the Midland

reception

wel

LvWc aronnnts■?.P*ei,cialx bank? m„lhe 17 savil?S? already has been impeded by com"Sat^Vbe.pHm^m^etarj^ueSlon"'u^j^ds^^^Sb^'^°U2n({••
and by a slower growth q0 The
; before the country is still whetherd"".e 1°
follow
^ .relatively greater in income and by some unemploy- gSiow^ the
Governor

.

office.

TOLEDO, Ohio—On Jan. 1 Ed-

backs and stretchouts in business

»

xvcacxvc

xcucacii

.

^

*

.

DePosit Sains in some areas have a resumption of our postwar eco-

1953-54

and

*

,

Admit E. P. Wolfram

ac-

past year, the picture on the whole productivity, are potentially strong
has some encouraging aspects.
and will in due course bring about

scale

.

Although an increasing number trend. However, it should be borne Dec 19 the investment
<fav of banks have exPerienced month in mind that the basic factors of Soci'ety 0l Chicago will
hold *° month deposit losses durin« the economic Srowth' Population and
f

the

businessman and

in business

,

Bell & BeckwiHi to

earlv

a con-

business capital investment. But
there are no other important new
some forces now in view that will put
the economy back on a rising

withdrawals, or produce
combination of both. •

•

f

J™*

of convictions about the.

consumer

<

c

inPnfi t

moving toward an easier monetary
policy was the. fear of. inflation,
and its belief in the necessity

•ridding

in

faced

Fp

.

It is hardl
necessary to remind capitalinvestmentresultingfrom ward p- Wolfram, Sr. will be adbankers that sustaine'd deposit excess cVpicity An expanded d™ mitted to partnership in Bell &
growth can not be achieved merely fenseprogram 'and easier money Beckwith, 234 Erie Street, mem-

s

f dpVplonments

,v.

.

delay

is

downturn

tinued

gam m deposit balances this year,

ge

;to

Summary
country

.

.

^' statistical element in the ■ net tivity induced primarily by cut-

Thus °a 'gfven
net !?y Srediting divide"dai tba divi:
h
£n'ersonal savinVmav dends must generate an increased
jnange inl personasavings may volume of new deposits, or curtail

desire

,

^v?WashinWnn<
firm's Washington

withdraw from the

of them

deposits in all mutual savings

d^c..-n.® an«. various oxner types credits have been

than

market

open

new

coIInS Tnd°variou^Tthe^'H-DS R ii-."0uteW0Kthy that diyidend 1958 with the prospect of

discount

rather

Bear

inrmnd this aggregate covers not banks were only 1.3% higher than field,
persons but unincorporated . jn the same period of 1956 while
businesses, including farmers, ft withdrawals were greater by 6.3%.
-phe

-•most recent official statements re-

iterating

much and jias continued its upward trend, money and a prolonged recession
changes are for the first ten months of 1957 ® cause any considerable number

very

to-.Quarter

Qoaitei

it

because

inconsistent

-appeared

pn i

-

New York

JAckson 1-1671
Bell

and L. D. 521

Teletype AT-283

The Bank Wire

96

The Commercial and Financial Chronicle

(2728)

~

Continued

from first

.

our

page

Thursday, December 19,1957

.

.

minds

want

IBA

PAST

PRESIDENTS

subject to all the

cross

cur¬

of

pressure from pro¬
tectionists and advocates of

The

rates.

not

C. M. Loeb to Admit
Carl
42

M.

Wall

members

Loeb.

Street,

Rhoades

New

of the New

Exchange,

on

Jan.

1

John L. Loeb, Jr. to

Ray

Pliny Jewell

&

York

Glore,

City,

Forgan

&

Street, New York

York Stock

will

Morris

Glore, Forgan Partners

Co.,

Co.,

on

Jan.

will

1

Caulkins and

limited part¬

to limited

nership.

Exchange,

admit

CORPORATE

and

SECURITIES

—

STERNE, AGEE & LEACH
Members

New

York

Stock

Exchange

Birmingham

Dan

P.

William H. Jackson

partnership.

Underwriters & Distributors of

MUNICIPAL

Wall

City, members

of the New York Stock

admit

40

now

Wires

Between

Private

Wire

to

&

Co.,

New

York

of

time

not

was

—

and

is

relief under the terms of the

law.

And

—

at face

value,

It

ism.

one

One of these

was

the

so-called

"peril point" provi¬
by which the President

Offices

Goldman, Sachs

it is

absurd to suppose that much
could be done in this direc¬

was

this

that

mess

would procedure soon won the repu¬
obliged to conclude that tation of being costly, time- Congress at the behest of the
New Deal ran away from in
the only imports to be per¬
consuming and for the most
1934, and it is this mess that
mitted to increase very greatly part
not rewarding.
There
it has tried time and time
would be those of a relatively were often other avenues of
again to run away from as
few products not made in this
escape, such as defense re¬
the 1934 Act came up for re¬
country or found in this coun¬ quirements, stock piling pur¬
newal.
What it will do this
try at all.
chases, and other ways of get¬
time, the future will have to
ting at least some of what
The Protection Mechanism
disclose.
The trend
of the
was wanted. But
by and large
Mechanisms for the protec¬ the
protectionists and influ¬ legislation since 1934 has
tion of American industries
been J to
tighten* more and
ential elements in American
were
more: the
provided and strength¬
provisions which
industry feel deeply dissatis¬
ened from time to time as
were designed to limit the re¬
fied with present arrange¬
duction in our trade restric¬
protectionist sentiment grew ments.
They believe, or many
stronger and as the influence of them do, that they are left tions.
of protectionists in Congress
Meanwhile, conditions such
largely helpless in the hands
ances

his

and
Direct

international

Of course,

be

sion
Private

answer

the

at

waxed.

Montgomery

free

not.

really
larger i

Congress' Dilemma
only a small pro¬
This
is
the: dilemma
by
but three Presi¬
portion of the favorable find¬ which
Congress has always,
dents in succession gave em¬
ings of the Commission have been faced when it
began to
phatic assurance that it could been followed
by Presidential make or remake tariff sched¬
be done and would be done.
action of the sort petitioners
ules.
It is a situation made
No American industry was to
desired.
to order for the development
be sacrificed, or permitted to
of lobbies and the pulling of
suffer serious harm or even
Growing Optimism to
all sorts of wires. The net re¬
be
threatened
with
serious
Existing Law
sult has usually been in re¬
harm by any tariff rates or
The fact of the matter is in
cent times, in any event, that
other trade terms to be nego¬ any event that the larger in¬
little
or
nothing could be
tiated under the Act of 1934 dustries have not made it a
done
directly by Congress
as
amended
from1 time
to practice of going to the Com¬
about excessive
protection¬
time. If one took such assur¬ mission. The "escape clause"
clear

Trowbridge Callaway

of

a

The shifting
of smaller industries would
personnel through the doubtless find the
going hard.
Naturally, there were those years seems to have had some
even then who wished to be
Theoretically all the re-;
effect upon the Commission's
sources, labor and other, thus
told how all this was to be
willingness to find for pe¬
brought into disuse could find
done without injury to do¬
titioners, but the fact is that other and
mestic
probably better
industries,
some
of the Commission
generally
uses, but this is a doctrine
which had come into exist¬
speaking has not been easy not
popular with those whose
ence
or been
operating with to convince that this, that or
ox is
being gored.
the protection of high tariff
the other industry was due

1925 -26

1926-27

the ultimate out¬

ot

come

we

conceived ideas.

Industry Promised

1929-30

if any upon

or

whether

Jencourage

negotiations with the tion without
stepping on the
various nations is a matter
toes
of
some
producers or
freer trade. The Trade Agree¬ of
conjecture.
The "escape would-be
producers in this
ments Act otficialiy haci the clause ' has
given relief to a
country. We have large in¬
objective of making life eas¬ very few industries, and then dustries which
have built
ier for exporters in this coun¬
quite often relief regarded as themselves
up behind tariff
try by enabling foreigners to inadequate by the complain¬ walls.
Some of them, perhaps
sell more goods here—and in ing inuustry. The Tarift Com¬
most of them, could survive
this way assisting in banish¬ mission,
like Congress, and with
considerably less protec¬
ing the depression which for that matter any other tion. It
might well require
hung so heavy over our heads semi-judicial body, is manned
very
considerable and pos¬
in the year 1934.
by human beings with vari¬
sibly quite expensive adjust¬
ous
backgrounds
and pre¬
Protection of American
ments, however.
A number

Henry T. Ferriss

Allan M. Pope

Bovenizer

W.

trade

1930 -31

rents

G.

volume

As We See It

1931-32

1934

to

negotiators

informed

be

were

to

advance

in

of

of officials with definite free

trade

leanings.
Hence, a
strong, perhaps growing onocsit:on,

the

degree in which tariffs
might be reduced or other re¬
strictions

removed

to

any

tension of the
or

one

further

ex¬

existing statute

persistently unsettled world
and the develop¬
ment
of labor monopoly at
as

conditions

home have reduced the ranks
of

free

changes

like it.

,

traders

have

while

done

.price

as

much

to reduce the burden of tariff

National

without

Policy

Obscure

rates

as

have"

legislators

or

'

danger

of

serious

injury to
the industries whose products
were to be
subjects of nego¬
tiations.

SOUTHERN

Another

so-called

of

course,

that

we as

a

nation,

and

Congress as the law mak¬
ing body of the nation, have

never

been

able

to

make

up

administrative officials. About

the

only certainty is that we

shall

continue

to-have

tariff oroblem with

us

our

regard¬

less of what is done this year.

"escape clause" under which
any

AND

the

was

The trouble with all this is.

industry believing itself
or in danger of seri¬
iniury tw anv concessions

injured
ous

GENERAL

MARKET

MUNICIPAL

BONDS

oranRd

could

apn^a]

to

the

United States Tariff Commis¬

RkrneyPekry «S» Company
incorporated

sion

to

have the facts

d°ter-

mined—after which the Pres¬
ident

could,

and

at

least

tb«

protectionists thought, would
act

STUBBS. cMITH & 10MBARD0, INC.
BIRMINGHAM 3, ALABAMA

to

relieve the

petitioning




Teletype: BH 287

(ftfifuficdsL SsimJiiiiaA

industry.
Effectiveness of "Peril Point"

FIRST

Doctrine
Telephone: ALpine 2-3175

SixdsL, (founh^ & Tftimicipal (BondA.

Almost

no

information

is

available about the workings
of the "n°ril point"
arrange¬
ment.

What effect it has had

NATIONAL

BUILDING

BIRMINGHAM 3, ALABAMA
TELEPHONE
Direct

FAIRFAX

Private

2-4553

Wire

to

TELETYPE

Shields

&

Company,' New Yorh

BH

394

Volume

Number 5700

186

.

.

Financial Chronicle

The Commercial and

.

nimble indeed—and few

Continued from page 3

successfully.

do it

can

stocks

to

t^ecpme more valuable

be

good

Market's "Good

V

economically
How

does

a

,

ol a great threat to our
national existence
which must
and
scientifically, galvanize us into economic activdepression fit into ity as a matter of national sur-

against building the strongpossible America, militarily,

argue

est

I

.

stock

market

is

Among

Stocks

the

to

Revive

industries

business

whose

1958

I

believe the devastating, emotional

special

knowledge, have suffered

of Sputnik—
and I
might also add the nonIn
its
precipitous fall of 100 emergence of Vanguard — will
points since July, the stock mar- probably
keep us
from
testing
ket has discounted a recession in
fully the most significant legislabusiness and a decline in corpo- tion of our
postwar era, the Full
rate profits in 1958.
Stocks have Employment Act of 1946.
I am
declined from 14 to 11 times curamong those who believe Governrent earnings. The normal course, ment has become so
important in

markets of the fall of 1957 repre- a bear market of great magnitude,
sent the same kind of "good cry" From the earnings standpoint thev
tnat the market had in 1946 and have suffered the three worst
1937. Both of those bear markets, years in their entire history and

tried

because there was

the

So

Recession

Marketwise

Discounted

true

and

the

over

years,

and

around, like the little ball

the

on

emergence

lives that

Gur

would be for the market to bounce

will

avoid

economic

major

future.
The
will be our
secondary line of defense against
until it becomes clear whether the a
depression in 1958. Already the
recession
would
deepen into a Federal Reserve has given a sign
depression. Time alone only could that it is familiar with this Act.
tell that—and according to classic Sputnik and Soviet Russia will be
lines, the future course of the cur first line. Therefore, I take
market would only be decided by as a fundamental
premise that we
roulette table, subject to recurrent

iits

ol

the

optimism

of business

course

catastrophes

the

in

Full Employment Act

pessimism,

and

itself.

The

shall not have

fundamental

great for-

no

vestment

ei#n menace. The recession in
business in those years did not
t-arry through into a depression.
bi 1946 it took three years for the
market to start up in earnest even
though business actually improved

values

income

such

and

as

net

in-

worth

share, than at any time since
i932. The underwriting situation
has become so bad that it is a
question of survival for some of
the smaller companies — and at
this point conditions have always
during
those
years.
Investors, improved drastically in the past,
hypnotized by the past, simply Corrective measures are being
-ould not be persuaded that a war taken both in fire and casualty
boom did not have to be followed and it is anticipated that these
by a depression. The 1946 decline will bring about a revival in unturned out to be a false move, derwriting profits. Yields as high
per

depression. I am
busicapital expendi- ness economists and students of Similarly in 1937 the stock market as 51/, anc| qo/0 can be obtained 011
tures might bring about reduced the business
cycle, more learned viewed the previous business re- good
grade
fire
and
casualty
payrolls which
in
turn
would than myself, that the present re- covery as unsound. Yet this de- stocks, many of which sold 75-80%
cause reduced
sales which would cession will be held to moderate cline in the market was also a higher as long ago as 1954. There
still further reduce payrolls, etc.
limits,
say
within
5%
of
the false move and values gradually are many good opportunities here.
recession

might feed

curtailment

itself,

upon

went

down

together,

by

previous

and

abuses

resultant

financial

weakness, the

economy

would sink
In

from recession into depression.

recovered during the next year,

present.

Market No One-Way Street
stock

The

market

already reIt will not be

fleets this thinking.
a

street

one-way

more

than

it

1958

111

has

been

—

there

are

those

who

say

that missile development calls

for

qualitative rather than

titative

quan-

spending—that not

additional

much

or

be spent

mand

second to none, prepared not only
for missile but for all types of
We shall need to sustain

warfare.
old

allies

through loans and

liomic aid.

It

eco-

We shall need to make

through similar methods,

new ones

better

far

seems

to

give

our

allies and potential allies the capital goods, the turbines, the ma-

chinery, the tools, whatever
necessary now

seems

to bolster and

to have to

ship

arms

to them later

in the event of open conflict with

the Soviet Union.

There used to be

These programs

centive to abandon

a

powerful instocks

common

at certain stages of the cycle—the

knowledge that cash would sooner
later become valuable or in-

or

m'" ?H™"late our caP"al S°ods the
""ease in with
v?J"e- Nowage push this
l0"ger is incase

be

cannot

denied

that

the

death of the bull market has been
a

blow to confidence.

Confidence

will not be regained overnight.
normal times such a rebirth
would

confidence

time

indeed.

normal

peaks

require

But

these

of

churches
to

rise

economic
times

not

more; in fact, cash will probably
become worth less. Therefore, the

True, as at the dangers of holding cash have
other booms, we have creased, as investors during

ing, skyscrapers,
seem

rising—the yield spread
between bonds and stocks is agai 1
now

are

inthe

times.

had vast commercial

and

prices

In favoring the- latter. There is no
of certainty that cash will be worth

long

a
are

our

Furthermore, bond

flation.

we

new

which

office build-

country clubs
traditionally

at the end

upsurge.

But

have not had

of

in

great
other

the

emer-

a

past

quarter

learned

to

,

century

their

have
It

sorrow.

to steD from Mgh

common

back

often

normal

The

of

22

million

cli¬

stocks,
this

year

—

but

one

more

once

expectation

public

tobaccos,

utilities,

This is

{'

ls

fBM

_

Gj

Cornin*

Perhaps

Chemical

Dow

,ss

Mining

Minnesota

Honevwell

£?!!' ?arTdngf
J™? fo .iv fo^

to

IliM-but

future,

annual

should

this

happen

grow^

Basically,

.'

investors

power

of

the

believe
position
shopper who goes

woman

from one store to another on 34th

simply in the hope that
"buy it cheaper." Natu¬

Street
she

can

rally investors also want to "buy
them cheaper."
For that reason
will probably he sub¬

The life insurance stocks
as

stocks.

growth

Yet

stocks have been in

a

qualify jected to emotional ups ancl downs,
life particularly in early 1953. But the

the

minor bear

market for the past two

ance

stocks such

as

trend

longer
seems

ter years.

of

stocks

the

during

do so at their

too long

be

like

1953, a year of consolidation,

with

sold

and

own

peril.

heavily

in

up-thrusts

could

1958

depressed industries as their earn¬

It will prob¬

ing power revives.

ably

be

a

laying

of

year

groundwork for a

cjoser

we

the bull market advance

and new

Connecticut highs by 1959.

Schwabacher & Co. Adds
(Special to The Financial Chronicle)

SAN

FRANCISCO, Cal.—Rich¬

added to the staff of
&

Co.,

has

Thornburgh

H.

ard

100

members

of

Montgomery
the

New

was

1st Floor,

population'

enormous

and sharply rising

increases

grade

Midwest

vestors again be willing to future.
pay to

Stock Exchange

Kentucky Home Life Bldg.

LOUISVILLE

fam¬

be

tins

discount

Teletype LS 186

glamorous

America

Unless

is

willing

2,

KENTUCKY

JUniper 4-0226

to ac¬

cept a lower per capita standard
of
living,
which I very
much
in

Eighty -Five Years of

family formation

to

sustain

Investment Service

gins

J. J. II. HILLIARD & SON

and

on a

or

1872

richer

Associate Member American

Exchanges
Stock Exchange

Tax-Exempt Bonds—Investment Grade Common Stocks

a

year.

W. JEFFERSON ST., LOUISVILLE 2, KY.
i

Irvln

Cobb

Hotel, Paducab,




Ky.— Masonic

'

economists

the

soothsayers

are

Building-, Ouensboro, Ky.

will

Perhaps we discounted the

1956-57

but

'60's
time

too far
does

ahead in

march

on.

realization

plus
the slow but steadily creeping in¬
flation will cause common stocks
and

INVESTMENT DEPARTMENT

all

be a far
country in 1968 than next

America

sensational

we

Local Securities

mar¬

The Ws will be here sooner than

419

Kentucky Municipal Bonds

is the future expecta¬

business

wrong,

improve profit

unless

tion—and

ESTABLISHED

mean

growing volume of busi¬

That

ness.

Member New York and Midwest Stock

will

greater volume of business and a
greater volume of profits.
How
can it be otherwise with our popu¬
lation increasing 30 million over
the next decade?
It is far easier

think.

in

This

particular

the

growth

THOMAS

POWHATAN

GKAIIAM

HECTOR W. BOHXERT
WILLARD
Mrs.

E.

P. McNAIR

C. LEWIS

v

and

formerly with Dean Witter &

Co.

The

Member

Street,

York

THE

little

been

Schwabacher

Pacific Coast Stock Exchanges. He

mobile business did not do better
pretty soon. General Motors should

toward the 1960's,

move

their

pays

the

resumption of

in

one

in

it

year

Investors who stay out

up.

dynamic

advance.

bright

discount

In V

in the

now

When the future does

appear'

riot

good

I

however,

are

to

is translated into
and dividends at

which

earnjng

jater dates.

a

time.

in

50

difficuU

business of 25% or more,

)

fact, it would not be unreasonable
to expect a testing of the old lows.
If this happens to coincide with
unexpected 01* disheartening de¬
velopments
abroad,
these
lows
might be broken.

the

increases

is

it

and

0ff"

<-]au„h

;

the microcosm,

that 1958 will be

me

k h£)S dcclined 20-25% in the

meantime

price

to accumulate stocks care¬
fully. We may not go through the
old 1956-57 highs next year but

high

too

was

Jersey

should

one

doubt, this rise in population and

In Louisville Since 1872

to

year

economic skies clear. Because they

Minneanolis

of New

time when

a

America's
says

the General, Lincoln National, Travelers,
Aetna Life and the
more

etc., will begin to lose favor as

Oil

levels,

down in
33% from its high?

some

pressed due to being out of fash- years and
this is reflected in
jon. The so-called defensive stocks, steadily higher prices. Life insur-

foods,

Standard

ily formations, the more will in-

'must

and

should

they

markets

and a quar¬
Meanwhile, 1957 will be
the best year in their entire hiswould tory and 1958 looks even better.

shares \ changed

a

is

stocks into cash and then

again

and

respond

these

at

favored the seller in 1957. Not have declined less than other dynamic growth issues such as
only will the investor begin to groups, they will be subjected to Franklin, Continental Assurance,
discount the coming rise in busi- gelling pressure in order to raise U. S. Life, Republic National Life
ness
due to revival of capital funds to buy the more depressed appear to be in a particularly fagoods industries and renewed con- groups
which
will
enjoy
the vorable situation now.
sumer
spending,
but
certainlj largest increases in earnings, as
One cannot be an expert on all
there will be more inflation talk for example in the capital goods industries as I said at the beginspurred on by the foieign situa- section.
ning. But after its rolling read—
lion and labors wage demands in
Growth stocks will regain favor, justment of the past several years
1958.
particularly at these lower price 1 would be surprised if the auto-

industries.
It

Oct.

011

in

with

recovery Life insurance sales are up 25%
rnism, the up days, will outnumber jn X958 to take place with varying from a year ago, interest earnings
the days of pessimism.
Just as degrees of selectivity. The em- are at an all-time high and morinvestors in 1957 strove to dis- phasis will be upon groups and tality continues its slow but steady
count a recession or depression, so industries that first begin to show improvement. Many life compawill investors in 1958 strive to increasing earning power or those nies are able to double their capidiscount the coming turnabout and which have become unduly de- tal and surplus every five or six

1m-

their economies rather than

prove

maxed

But in

establishment high levels of the market, the odds

military

a

break

the. initial

1957.

could
effectively. The problem
is not that simple.
If we are in rise in business—and possible inmortal peril, it is not just an ac- flation.
The odds will favor the
celerated missile program that the buyer in 1958 just as, riding at
nation will demand. We shall de- the top of the boom and at certain
need

money

to

The

already

volume

their long time growth trends. The
oil
companies have already ex¬

1958 1 believe the days of ooti- be for the stock market

#

realize

any-

proximately 90% of the decline in
both 1937 and 1946 occurred 011

>vlien 5
of abject hands.
in

view, world events make such There may well be days
developments highly unlikely to- optimism and pessimism.

my

I

Growth of Life Companies

It is important to realize that ap-

aided and
financial

abetted

a

inclined to agree with those

in

That is the classic merry-go-round
of recession. And if all industries

profits

in

not lose sight
of the long view
for many companies 1957 will be because of temporarily upsetting;
the worst of all. Many fire and short-term news, such as layoffs,
in
casualty
stocks
are
actually declines
profits,
disquieting
cheaper today, relative to their statements. The big broad view of.

will recall, were short-lived
!h their intensity. Within a few
months they were all over, they
had done their worst to values,
The building up time was longer
you

shall be able to

we

begin

again.

once

companies have
recession

a

tional at times. I furthermore be-' place-at a high level the insurance
lieve the stock market every so stocks. For three and a quarter perienced a diminution of demand
often likes to have a "good cry." years the fire and casualty stocks, and they are getting their house
It feels better afterwards. And I jn which I do claim to have some in order. Can one go very wrong

gence

vival.

this idea?

the

believe

Insurance

like a woman; it can be very emo- shares should revive in

•

„

Cry"

value

chemical

in 1958.

'

•;

tasted

The Outlook for the 195B Market

97

(2729)

M. CONWAY

CHARLES C. KING
JAMES
OSCAR

M. FETTER

C. WRIGHT

93

The Commercial and Financial Chronicle

(2730)

Continued

from first

great advantage,

a

U. S. Economic

Stability Key
To Fiee World Security

an

me

alarmist, but I know
to

state my

General

you

cold

convictions

Doolittle predicted the
might last 100 years. He

war

with respect to the conditions con¬

urged

fronting us. We are now actually
engaged in the most colossal strug¬

cordingly.

gle in world history. I do not
this language extravagantly.

to prepare ourselves

us

ac¬

In the present
sure

the

to

be

wring

try

use

of

listened to

General

which

the

hard

facts

Doolittle's

testimony,
fortified by other wit¬

were

Facing the facts, we realize the
people of the United States are

nesses

in open and closed sessions

of the

Committee, I attempted to

in

evaluate conditions in Russia and

deadly and unrelenting

a

con¬

flict with the Russian Goliath. The

those

struggle is not

then compare them.

We

probability.
and have been

in it now,
War II.

are

since

one of

World

weeks

cent

the

But, in

has

Disarmament

guarantees
in

are

not

truly earth shaking
battle of the giants. And we are

as

attacked

ing

on

a

fronts—military
supremacy,
economic advantage,
fiscal stability, and ideological, if
not human, survival.
We

many

not

can

military

form of free

premacy, our

ment,

have

or our way

sources

of

on

of

any

its

in

the

and

not

fields

of

satellites.

gained.

it

is

have

to

prestige

be

*

Services

mittee
of

ago

ficiencies.

its

our

.Under

be

taking

legislative

can

never

problem.

Subcom¬

first

nations and

the

able

lead¬

cur¬

States

We have

have

we

a

We give economic

man.

allies and, at the

our

same

time,

carry the burden of their
defense.
We are obligated to the

free

world

to

maintain

the

in¬

tegrity of the American dollar. If
confidence

paired,
will
of

wit¬

in

our

our

international

im¬

is

money

trade

destroyed, and the chain
economic strength in the free

pair.

will be

In

broken beyond re¬

We must have outside

kets for

our

country

and

mar¬

production.

short, these

are

differences between
a

some
a

free

of the

totalitarian

nation.

The

Russians

dispose of domesticcivilian problems by decree, even
to the point of extinction, if neces-

working longer
are
for military

we

supremacy.

Freedom is the

sary.

,

vgffity

,

we

than

us

selves to

commu¬

made

be

can

fiscally and
before.

ever

be enslaved

We

by our

extravagances.
We must

own

We

recognize that

have

we

programs,

in

foreign aid,
in government

^

source

of

our

certain

fields.

How

civilian

ac¬

shall

our

the

meet

we

Shall

debt, and set off another

c4 volatile

The

increase

has

btam

who

h

taxes?

the

out

inflation?

Shall

shall

Or,

we

nonessential and
military

is

soundly

directed,

believe

I

regain unchallenged mili¬

can

have

Stami
for

the

dollars

worth

are

that our

49 cents

by the

1939

index; we have had record
deficit financing for a quarter of a
century; our federal debt is near
its

peak; and taxes

their

are near

Deficit financing during the past

fiscal

the
,

.

level
full

tax

revenue

.

equal

1956.

year

.,

...

about

aI+L

was -on
.

of

the

living

of

cost

has

The interest

debt

is

lion

our

$275 billion

costing

a

total

on

us nearly $8 bil¬
This is 11% of the

year.

federal

The

revenue.

debt

than

the

This

will

that

mean

suining

to

expenditures/are

cost increases.

applied

were

interest
or

If the current rates

to

would
than

more

whole debt,
total $11
billion,
the

of federal rev¬

15%

Certainly, neither our total
expenditures nor
taxes

without

economy

be

can

gov¬

a

as-

r;-,

to

reduction in

$6 billion

or more

moderate general

over-

so badly
And this

hardship
ness.

areas, such as small busiAnd neither does it provide

;-*-%■<'■">Tor

increase

will
for

thes

any reduction in - the terrible
federal debt.

total

in

expencjiresult5-in 'h

certainly

.

••

of

like

National

Manufacturers,

which-analyzes

no

.

organization

An

Association

ending Tiext

year

•

-

federal

expend-

Former

Secretary of the Treas- Vitures, knows they can and should
Humphrey testified before the be cut. It knows that constructive

ury

Senate

in

even

$12 billion deficit at the rate

which

on

the

are

essential

so

retrench

to

us

.

why. .it

reasons

for

.^,

skating.

are

in all nonessential domestic-civil-

The

reductions

tion

This shows the thin
we

year as a

appropriations.

spending he anticipated

time.

These
is

Manufacturers

" job last

level

a

ice

Association of
did a tremendous
part of the grass
roots demand for a reduction in
National

The

minor recession

a

prosperity — even to- the
of 1955—would result

our

high

Committee -last '.reduction can and should-be made.

Finance

July that

.appropriaunprece-

were

Unfortunately the

dented.

Administration

did

reduce

not

expenditures in the same proportion.
;
.

.

.

and
military
weapons,
teghniques and practices for elimina-

I urge continuation of this mtelligent and effective campaign,
We must not be discouraged. We

tion of the obsolete and reduction

have made an important stride
toward
economy
when
people
back home demand that expendi-

and

lan

foreign

activities,

„

review

the obsolescent.

aged

by

I

encodr-

was

President's.

the

this

upon

very

Recent

review in the

military,

of

necessary

offsetting

the

cut

of

expense

budget.

I do not
at

taxes

say

the

fense.
tax

I

firmly

reduction

lant

to

While I

.

a

balanced

it is wise to

believe

-of in-

a

sound

areas

more

economy

in

military, foreign aid,

and domestic-civilian,
Since 1954 we have increased
domestic-civilian expenditures
50%, from $19 billion to $29 billion.
;; I have

been

in the Senate 25

In 1934 there were 23 pro-

years.

improvement,

enough reductions

be

must

There

stirriu-

grams

would

not say

,

as a means

expense

business
can

An economical Federal Govern-

of

tures in the missile programs.
I do not advocate tax reduction
at

tures be reduced

An economical
ment- is now much more lmportant than ever before in history.
exppndibefore -in historv.
kind

be

I

am

a

optimis-

tic under present conditions, stern

enue.

,

million

needed in this country.

creased expenditures in vital 'bal-

the

$225

a^Ltax reduction which is

listic missile procurement for de-

refinanced

are

give

in-

not

and

they

cost

billidniycill does not count relief in .so-called

creased.
An

f

would

duced revenue,
to

;JV

million,'

$200

bracket

these sampies, it would cost, in terms of re-

esti-

the

income

As you can see from

be

surplus of $1.5

reduced

billion

would cost almost another $1

estimate

^

middle

a 2%
corporate taxes.

is largely in short term securities
as

It

-

$1.3 billion
published
by the Bureau of the Budget'in its
October Mid-year Review.

be

-

give relief to the heavily bur-

6 billion to give

„

will

revenue

mated

-<i

to 65%.

But Third quarter

/S'

r
>
those for the fourth quarter. --

less

to m-

reduce high income bracket rates

....u

„

that

to

insisting

the

matter of

group.

a

debt

course,

a

from $600 to $700.

aeiiecj

It

year.

statement to the effect that he;was

doubled.

as

It would cost another $1
to

estimate

25 years has increased the federal

by $250 billion to a total of
$275 billion and, paralleling this

But

densome federal excise taxes.

Mr.

s

in

all time high.

or a"y particular tax reduc-

Avhfere'-^10T1?S ^

from

revenue

current

at that

not forget

v

pvnpnrfitnrpc

indicates that for the first half of

ority in ballistic missiles, rockets,
satellites, etc., within the limits
of the country's economy..
can

*

cost in terms of reduced
revenue,
and therei'ore in terms of reduced

M

recived

his latest

of federal

we

■

,

just

tary supremacy, including superi¬

But

<

$1 billion additional '
ft. .would cost another $1 billion
hrnr'kpt
arpa
bracket nr area withmir' to S^ve relief from the more bur¬
or
without1

flnv

any

in

States.

r,«

tion program.

grave consequences.

in govern¬

say, there can be no se¬
curity in the free world without
fiscal
stability
in
the
United

i

jnformation, I can give you some
samples of what tax reductions

of the outstand-

one

June 30.

if

r^°„Uiif£^CU„S; r?tes
Committer on

Joint

to raise even
in
in

ment

ment," I

considera-

■

I am not at this time recoup
mending any specific reduction in

«.

.

,

that he would not know

me

deficit

spending?

reduction
,

.

and all down the line of govern¬

For "sound economy

tax

ing tax men in the country. Mr.
*
"
Stam, after careful and continuing
wou^ cost $2.8 billion
analysis of tax returns, reports to::Jfeas®lnS°™e.

tures

we

,

Revenue Taxatmn,. of
CJwirman in Janan excellent staff of tax

^
uary,

obsolete activities in the

creased

BIDS AND OFFERINGS

•Ion.
sions.

*?ufr£aT

resort

we

for

,

„

federal taxatl0n

in

tax

that

requirement?

wipe

tion

tion.

more

"

one.

nonessen¬
nonessen¬

or

military
expenditures will be increased in
rocketry and ballistic missile

we

are

penditures could produce justifica-

Mr. Stam estimates that fdderal

is

siege

taxes

A

,

ernmental

v

minor

tivities.
It

that

Thursday. December 19,1957

.

.

easily paid in times of prosperity.^ Thefact
'is^hat "nonessential
than in times of recession, even
federal expenditures require nonthough the recession may be a essential federal
taxation.
> .

1957

not afford nonessentials

military

tials

We

superior in both.

can

know

I

two fronts to maintain—one mili¬

must be

for
We

■>

tary, and the other economic.

total

in federal

ex-

through which the Federal
Government made grants to states
and payments to individuals, and
the expenditures through these

our

in¬

further

weakening

our

in inflation, and by dan¬

Underwriters

.

SPECIALIZING

Firm

IN

Bids

gerously stimulating deterrents to
increased national
It will

1

production.

be of interest to

look

at

the total tax take from the Ameri¬

Mississippi —Tennessee

can

and

The

destroy ourselves

before

be

world

surpasses this country in tre¬
mendously important elements of
warfare, notably in the field of
rockets, missiles and satellites. He

FIRM

us

economically stands more clearly

competi¬

much enjoyed in all his¬
We have business incentive

aid to

sia

is

im¬

no

right to earn and retain
earnings less taxes. We have
the highest living standards ever

point

the

of

with the

before the Armed Services
Committee. He testified that Rus¬

than

United

known to

to

are

its

Gov¬

our

nesses

Russia

the

tory.

purpose we are

among

deficits

exploits
allies.

never so

de¬

already de¬
and shocking
steps

It

no

We have individual freedoms

so.

series

military

Trade is

tive enterprise system offering the
opportunity to start at the bottom
and rise to the top, if we possess
the ability and the energy to do

General James A.
Doolittle, one
of
our
most
respected military

said

As

development,

question.

no

democracy.

possible in this troubled world.

hours

ap¬

concern.

militaristic

In

security

^was

to

ways

that

forces

direction,
to spend less

directions.

view

potentialities

future economic welfare.

one

It

the rulers in the Kremlin.

Our

the way to things which must be
done to provide the best

authorities,

nist

tials

is valuable only within the
or the nations under her
domination. It is manipulated by

The Committee has

facts.

other

in

rency

constructive and objective.

startling
But by this

in

find

crisis

in

more

must

we

country

re¬

ership of Senator Lyndon Johnson,
the hearings were
nonpolitical,

veloped

living, at this time

portant consequence. Russian

the Senate Armed

on

missile

the

spend

creased

be

completed

activities.

be of little

ernment

missiles

best.

Preparedness

hearings

social

great

system and ourselves and the free

week

to

dif¬

starting points:

satellite

people of the world.
A

their

of

again to deficit financing, with in¬

there is

regained in a
assuring survival of our

manner

least

between domestic-civilian niceties

superiority

must

second

must

the

be

not

weapons.

here

war

totalitarian country.
controls all economic,

and

to

pears

conceded

ballistic

This

will

dangerous

our

all

The prop¬

allies.

our

and

A world leader

afford
\

do

Assum¬

a

standard of

force

we

cold

does

moment,

ple in their daily lives. It arbitra¬
fixes their wages.
Their

strength.
Defeat
these battlegrounds

sia's strength lies in armed
behind a dictator's decree.

that

the

rily

our

moment

security

commands the behavior of its peo¬

Rus¬

the

state

our

will

every

aganda advantage of the sputniks

sound

on

at

are

war.

of the fundamental

some

business

govern¬

of life, without

war

it is desired.

as

and

cold

or

our

continuing

a

The

su¬

totalitarian system,

1 At

of

Russia is

would be disastrous.
In

much

are

and economic stability.
In
system, freedom, democracy
competitive enterprise are the

and

States,

we may

leaders

must not and shall not allow our¬

based

likely

seem

ferences in

fiscal
our

United

disarmament

now

worsened.
We

the

The alternatives to real

re¬

situation

in

and

us

situation,

Russian

possible di¬
concession, and more,

plomatic

If

I

As

the launch¬

as

ing of sputniks proved.

from
to be

want

has

strength. In a cold war, under a
barrage of propaganda, Russia has

page

.

people each year.

91

f
/

ARK

1

Distributors
MISS.

-

.

1

Firm
.

•

Offerings

,

Arkansas
Total Tax Picture

Municipals

The

Federal

United States Government

Security, highways and
ployment programs. Tax
tions

by

States

and

Union Planters National Bank

BELL TELETYPE

ME

billion.

This

$13

eessenneT1

DISTANCE 218 & 502

is

from




v

,

United

States

Government

exclusive

Ma

of this

•

General

Market

Municipals

billion,
another

in

of

more

revenue
sources

than

M to? IMmm

collected
—

OF

MEMPHIS

Committee, I have thought
time that

MEMPHIS

federal,

Chairman of the Senate Fi¬

some

Securities

The

non-tax

nance

-

$15

takes

unem¬

state and local.

99

WIRE

for
- -

total

taxation

billion

As
WIRE SYSTEM— THE BANK

-mm r?x

BONOS

collec¬

grand total of
taxes
paid annually out of the
earnings of people is the astro¬
nomical figure of $112.7 billion.

Bond Department

Memphis

local

$15

wmmmmm

Quotations

Dealers

col¬

$12.1 billion is collected for Social

Securities

LONG

government

lects $70.6 billion in taxes for gen¬
eral revenue purposes. In addition

a

tax

burden

magnitude long continued

TELETYPES

ME-283
"

■»

•

1, TENNESSEE
TELEPHONE

ME-284

WIRE SYSTEM

—

THE BANK

WIRE

JAckson

5-8521

Volume
tv i.

186

Number 5700

,,

•

*

.

totaled

programs

.

The Commercial and Financial Chronicle

.

.

•

.

billion.

S1.8

We need to fortify our fiscal
I have always sup¬
balanced budget short solvency which is the life blood
And we need
of war, just as the President did of the free world.
stabilize
our
in his campaigns of 1952 and 1956. to
economy
upon
I do not worship a balanced budg¬ which
our
production
capacity
et at the expense of any essential depends.
military program, but I am
In
the
Senate
Finance
Com¬
preaching a budget balanced by mittee, which considers legislation

In

roads,

cost

was

'It

numbered

was

76

the

and

fortunate that

Congress,
last session, defeated the proposal
to

■

federal

grant

aid

for

public

school construction; It would have

i

•.opened wide
<iOr

spending

should

that

nonessential

of

ex¬

and social

There

?

are

than

more

500

struggling with
eral budget to

ex-

penditiire accounts in the federal

is

budget ;>for strictly domestic
•

ductions

can

and

iii every

;

pro-

and activities. T know

grams

one

of them.

give in

'T

;'

,

Connecticut.
would
State

-

who

reduce

old

expenditures

Connecticut

by

10%,

ex¬

Since

World

II

we

have

the

within

"In

tion

statutory

extremely diffi¬

if

would

it

write

limitation

a

before

is just

us

od/ of

as

.

made available

essential

by Congress, v.

Government.

itself,
can
±

of the Fed¬
The military,

;

no

understand

must

have

of

magazines,
what

only

News

S.

I

and

be

to

It

mean.

to

read

reminded

found

a

of

Penta¬

I

operating

units,

committees

and

90 listings of
officials, boards

in

"the

chain

authority in the missiles field."
Under such
der

we

conditions,

of

I

u-

the Presi¬
dent
said
in
Oklahoma,
would
"sacrifice security worshipping a
balanced budget."
My long rec¬
ord

.supporting

sary

funds

for

neces¬

and efficient defense speaks

for itself.

We

f

things
.

need

York

immediately

to

put

first.
quick recovery of ac¬

knowledged superiority in devel¬
opment of new weapons, and
unquestioned
efficiency
in
our
military establishments — on the
part of both those in uniform and
civilians.
covery

of

And
our

need

quick

re¬

prestige among

our

we

allies and the position of strength

required

^4.'

a

annii

i?
and $6,000,000 of 4.20% debenJ

tures maturing May 1, 1958 were
nrivatelv placed

Solpdroa^dPs 7i

The

o m

(Special to The Financial Chronicle)

iokq

1

«

financing

PAPim

pramo

Mkh-Tflmps

affiliated

.

...

with

B. .Allen is now affiliated with
&

Fahnestock

Co., Peoples

Na-

tional Bank Building.

wm be used to refund $122,000,000
of 3 30% debentures

^

maturing Jan.

Irt5wie Qt«.xAr«fc Jtr Cn

Joins otOWers Ot l^O.

1958.
The

new

issue

group

(special to the financial chronicle)

is being offered

John T
Knox>
fiscal
and a nationwide selling
of recognized dealers in

through

agen^

KANSAS CITY, Mo. —Richard
J. Witherspoon is now connected
with Stowers & Company, 312
West 56 Terrace,

securities.

as

'artforc

//eur Yor/^

'PJti/acfe/pAr^

Corp. of Durham, N. C., has been

need

We

m8.turiti.6S $3,000,000 of 4*/4% do.

.

With Fahnestock & Co.

announced that of outstanding

of

indulging in partisan,

am

first

,

no won-

range of vital defense.
I am not one who, as

r

not

offering

public

pro¬

and

talking in terms of what we
need now—with tools at hand,

lagging behind in this

are

am

JJetr01t otocK jlxc ang

52,000 shares of capital stock (par

missiles.

of

recent

The

limited to

political discussi.op here.,,1 am not
talking in terms of some political
overturn in some future election.

chart showing

gon

1

duction

not be

development

research,

World

*

debentures

$1) of Capital Cities Television
Corp. at $5.75 per shard, through
Harold C. Shore & Co. of New

should

this

and

,

the
Report,"
the nation's most reputable

You

one

we

™rvath Jr. ha;s been^dded to me

'

appraisal of what is essential and
what is nonessential; and perhaps
a
whole new pattern of policy—

longer tolerate federal ex-

travagance as usual.
"U.

that

dated Jan. 2, 1958,
maturing Oct. 1, 1958. The debentures are priced at par. It was al$0

has been added to the

Horvath Jr

Capital Cities TV
Stock Offer Completed

,

strength and weakness; an honest

than in any other area
eral

areas.

In my judgment this requires a
soul-searching inventory of our

Actually there is probably more
waste in
the military
agencies

J

Banks yesterday (Dec. 18) offered
a
new
issue of approximately
$107,000,000 of 3.65% nine-month

amounts in proper and

necessary

that sufficient funds have not been

Carr Adds to Staff

Credit

Intermediate

Federal

,

of the Government has contended

Lewis B. Franklin

Roy C. Osgood

FIG Banks Place Debs.

.

,,

^

IHHHHBtlib

warfare;

•

*

,

§

'

L,

we

us

expenditures from both old and
(2) Without imparing our deserious for new
money into every item in
fense, to eliminate obsolete
the nations that are participating
the^appropriation bills enacted in
weapons, methods, and techniques,
in these programs, as it is for us.
the coming year.
and wasteful practices which exist
They, too, must make some sacri¬
This is one of the principal pro¬ in many Defense Department acfice.
visions in the so-called single ap¬ tivities;
When
we
talk
about
expend¬
itures for stockpile and defense propriation bill which I have been
(3) To eliminate extravagance
advocating 10 years and which has in for pi py» aiH and nut more cmin
ioreign aia, d uu put iiiuic cm
production, we all know how
already been passed by the Sen¬
these
phasis
on
military
assistance,
programs
have been ex¬
ate-three times; but not by the
while reducing economic aid; and
ploited.
Housest±\
m
cnuppyp
everv
nonessenIn
the
four
years
since the
(4) to squeeze every nonessenDeficit financing and increased
Korean War ended in the summer
tia! dollar out of domestic-civilian
taxes, short of war, should be
of 1953, we have spent nearly $11
used only as a means of last re¬ programs.
billion
in
these
programs.
We
Our military danger is great, no
sort, even for funding necessary
should look more searchingly at
military expenditures.
But ad¬ doubt; but further to imperil our
the need for some of the materials
mittedly this requires wise plan¬ national security, by ^impairment
we are buying in this program.
ning, and efficient and alert per¬ of our fiscal stability and loss of
In all of the recent inquiry into formance in the armed services confidence
in
our
government,
the activities of the military de¬
and foreign aid, plus limitation of would be overwhelming.
partments, no responsible official domestic - civilian
expenditures to

fronting

1

mHk ~*i''.J
%•?'|

preliminary to
meet the situa¬
need immedi-

conclusion,

;

present

of

on

governments.
'

MImIIK
HjjSwjL

Organization for

the

and

,

•>

I

(1) To rechart our defense expenditures on the basis of a re-

-Congress

.

great

military aid to foreign
The situation con-

j

ately:

could make
a
contribution in this effort

The

'

1

broader action, to

cult task.

,foreign economic aid and $20 bilin

$70

debt ceiling is an

War

spent approximately $40 billion in
lion

unexpended

necessities

cept fixed charges.

J

appropriations

approximately

he

announced

all

Trade,

balances ,in
still totaling
billion, limit¬
ing nonessential expenditures in
order
that we may finance
the

:J,iI like. and applaud thi action

1915- 17

;> s* v?

accompanied by the equally controversial proposals for the Gen^
eral
Agreement on Tariffs and

effort to get expendi¬

an

rKCjIuClM I i

-

public

legislation probably will be

.'This

PDCCIHITklTC

1920-21

versial proposals before us.
:

tures under control.
With

s-recently taken by the Governor of
a:

in

re¬

be made

should

all

need

Fed¬

next year's

be presented by
January.
They
the- assistance one
can

President

the

,

v

Reciprocal Trade Agreements Act
will be one of the most contro-

■

PACT

iMj I

and

customs

tariff,

and

veterans,

White ♦ House
and
the
unanced by state and local govern-'- V The
ments.
d
;
v'- Budget Bureau at the moment are

IRA

I DM

assistance
security, renewal of the

and

taxes

on

penditures.

fi-

be

a

elimination

box

pandora

new

a

99

course

ported

than S5 billion.

more

Of

v

1956 these programs, still includ¬

ing

(2731)

•

■

a

deterrent to war.

•

■*

Securities

First

and

City,

cmaxzaazi

fully subscribed, according to an
announcement on Dec. 16.
The company

/ft

is in the business

operates

It

telecasting

a

^

a/*f.

Albany-Troy-Sche-

business in the

State
(also serving Western Massachu¬
setts)
and, through its wholly-

nectady area of New York

owned

r' "/

\

broadcasting

radio

and

business

c ',1

AfemtfW-jX
\Z. \

:

of television and radio broadcast¬

ing.

GreeHs£orp\

iyfrJacjpo# \
i

i

if"

v

Durham

subsidiary,

Broadcasting Enterprises, Inc., a
telecasting business in the Dur¬
ham-Raleigh area of North Caro¬
lina.', >'
"

Giving effect to this financing,
outstanding 1,101,988

there will be
shares

of

capital stock out of an
issue
of
2,000,000

authorized
shares.
•

The net

of the

proceeds from the sale
shares will be used to

new

retire

loan of $220,000

a

terest)

the company

to

made

the Bankers Trust

and

for

by

Co., New York

corporate

general

'

poses.

PRIVATE WIRE SYSTEM

(pins in¬

SERVINQ SOUTHERN

pur¬

MARKETS

-

J. N. Black With Vercoe
(Special to The Financial Chronicle)

COLUMBUS,
Black has

Equitable's extensive direct wire system

with

Vercoe
Bank
New

Black

&
Company, Huntington
Building, members of the
York
Stock Exchange.
Mr.
was

scott & Co.
the

formerly

makes

Nelson

Ohio —J.

become associated

with

for

broader markets,

up-to-the-minute quotes,

and faster execution of orders.

Pres-

In the past he was in

investment

business

in

New

York.

Stone, Moore & Co. Adds
(Special to The Financial Chronicle',

DENVER,
Hackstaff

Colo.

has

—

been

Richard

added

staff of Stone, Moore &

Life &

Casualty Tower

TELETYPE

NY 353

*




★

Nashville 3, Tenn.

ALpine 4-3311

and 5-9911

(Trading Dept.)

817

Seventeenth

A.

Securities Corporation

the

DALLAS

•

HOUSTON

Company,

ATLANTA

•

HARTFORD

Street.

to

He

•
•

was

formerly with Amos C. Sudler &
Co.

EQUITABLE

322 Union Street
Nashville 3, Tennessee

BIRMINGHAM

•

NEW ORLEANS

•

MEMPHIS

GREENSBORO

•

PHILADELPHIA

•

JACKSON

Two Wall Street

New York 5, New

Yoiil

100

Continued

Observations.

PACIFIC
ROCKY

CALIFORNIA

MOUNTAIN

NORTHWEST

community

interests in the
is to a great extent

vouchsafed

in

stockholder

few

a

groups and organizations, such as
the
Investors
League
and
the

America.

of

Stockholders

United

affairs, the stock¬
holder's interests are promoted by

In his company

colorful individuals drama¬

lew

a

their activities at the an¬
or in proxy fights.

tizing
nual

meeting

While the individuals involved in
proxy

they

instead of raiders.

rescuers

Curtis H.

Walter

Garrett

<v-

Co

Hurry, Inc.,
Los

Murphey Favre,

Bromfield. <&
.

Inc..

There

Spokane

Denver

Angeles
,

several

are

in

stacles

major

way
of adequate
protective organiza¬

Shareholder committees and

groups entail severe public rela¬
tions problems, as being suspect,

Joins

Joins Daniel Reeves
(Special to T;ie Financial Ckronicli )

neth

M.

Spitzer

has

joined

solved.

(Special to The Financial Chronicle)

"BEVERLY HILLS, Calif.—Ken¬

SAN FRANCISCO,

the

liam

Wehrmeister, Jr. has joined
of Irving Lundborg &

Co., 310 Sansome Street, members

the

of the New York and Pacific Coast

New

York

and

Pacific

Coast

Exchanges.

staff

support, which could
effective in exerting pressure

ganization
be

legislators. Usually an indi¬
vidual is only a shareholder parton

sure

groups.

But even under these
(Special io Tut Financial Chronicle)

wards

&

Sons,

409

Smith, Clanton & Co. Adds

P. Earls

the staff of A.

handicaps,

done

the

for

GREENSBORO, N. G.—William

Eighth

Nugent has been added to the

tional Association of Manufactur¬

B.

Street, members of the New York
and Midwest Stock

be

legitimate protection of the stock¬
holder's
interests
by
existing
business organizations, as the Na¬

(Special to The Financial Chronicle)

G. Ed¬

North

could

more

staff

Exchanges.

Smith, Clantdh & Com¬
Southeastern Building.

of

pany,

the

and

ers

Chambers

S.

State

and

of

Commerce; by bro¬
kerage firms; and by the invest¬
ment
companies in the case of
abusive

Slate &

U.

fund

situations.

If

voting

its

in

stock

mutual

refrains

management

a

from

controver¬

sial

situation, it is in a way dis¬
franchising its own shareholders^

U. S. Government Securities

liberal

Municipal Bonds

event, the stockholder's

any

♦

are

of

abuse,

company

be

the

ques¬

OF

issue

JACKSONVILLE, FLORIDA
Bell

<

Member Federal Deposit Insurance

as

his

and

company

Issues

owner.

aggra¬

vated

by the separation of own¬
ership from management, which
basic
situation
I've
just
men¬
tioned, would include compensa¬
tion, dividend policy and stock

Teletype JK 132

Wire System—The Bank Wire
I■

between

himself

A

Organized 190$
Phone ELgin 6-5611

Corporation

options, and independence of the

est

tive

work

to

and

—

his

for

making

effectively

very

interests

in

company

coincide

stock

those of the body of

his

DEALERS

OUR TWENTY-SEVENTH YEAR

rather

or

addition

in

and

dominate

the

a

than

that

fair opinion

of

the

lies in the

who is

holder

part owner of a!:

a

business, with the obligations and.
To-tell him ;
to get out if he doesn't like it is

the

to tell

same as

and

actionbehave

overall

think

as

business

a

conscientiously
duties

discharging

obligations

and

Barnett National Bank

Building

Stock

the stock

Director
There

Reform

right.

several ways of con¬

are

structively improving the director
Cumulative voting should

system.

clude

ences

the

dividend

Whatsis

the

director

outside

of

gory

And

com¬

Whether this latter cate¬

holders.

is

not

vital.

not

is

But

paid

if

dividend:

dividend?

a

venient

the

company's stock

Those

around

its

financial

hgnd; against

one

for

the

either

Here

the

shareholder

it is dif¬

management

of the

of

you

1920's—marking the wildest;

construc¬

as far as he can,
and management to
fulfill the obligations

them

trusteeship.
Your

Proxy

Responsibility

Do you use your

direct voice in
Do
you,
the
stockholder, use your opportunity
to vote through the instrument of
company?

your

the proxy?
Exercising your vote
through the proxy is the one way
in
a

which you can help to exert
continuing check and participa¬

tion

in

the

affairs

of

your

com¬

pany.

Every company must hold an
annual meeting, although there is
no legal requirement necessitating
the solicitation of proxies for it.
SEC supervision of proxy solici¬

addition

In

the

dividend

own.

words.

to

the

usual

HOTEL/GOLF CLUB

HOLLYWOOD FLORIDA

THANK
.

.

YOU!...

Investment Bankers of

.

America—for

To




other

j \ (

insiders,
policy

manipulate

or

market

.

dawn. oraip..»

*

in

suiting

consciously

„•

-

price
•=■

to

either,

statement

on

of

10 0

of thinking
independent
a proposal
to the meeting, is an extremely
important
matter,
particularly
my

right

the

of

the HOLLYWOOD

your

HOTEL...

just

BEACH

as you

have

done every year during

the

past ten years.

I

of

YOU'RE WELCOME!...
...

to

and

enjoy

curities

earned

the

HOLLY¬

WOOD BEACH HOTEL the

reputation of being "Amer¬
ica's

liberalization

restrictions

have testified

finest, most luxurious

and most efficient

Committee

and

Exchange
-j'::

conven¬

tion

headquarters."

John

W.Tyler,General Manager

of

toward

before

Committee,

arid

up-

an

and

the
now

have several proposals before the

sion. '

the

recreational

meeting facilities that

Ben

Senate

all

way

to submit

event

present

Fulbright

dividend
.

holding

46th annual convention at

of

This may be done via an

which

or

vote

to

you

reelection

shareholder

the

be

com¬

as

this

in

should

be

for

up

explanatory

against

R \

were-

all, the stockholder must

tax considerations of the directors

W I lit I

who

directors

on

pletely objective. At least guarded

to

a

con¬

"bee,"

put the

or

,

is

during the market frenzy

have

ficult

Between'Offices

a

the

here too.

Above

of

is

metic.

his

the

to the stockholder.

(\ R R IS O N

differ¬

When

Here
is

answer

re¬

muneration is given, the vehicle of

Teletype: TP 8040

PIERCE,

basic

between the stock split and

stock

split

the stock

and

the

three

these

policy abuse arising from personal
Private Wire

/

Split

to-the-minute

including

-

the

of

position

Telephone! 2-4628

Teletype: JK 181

your

simple
board might in¬ formula laid down by the New
categories of York Stock Exchange, namely that
more
than
24%
directors; (1) managers who are a dividend of
experienced in the business; (2) is a split. Please realize that the
owners
who are stockholders in recent stock split craze manifested
substantial amounts; and (3) in¬ in the great number of splits in
telligent businessmen, accustomed the last couple of years, consti¬
a
to directing the affairs of others tutes
major
"bull"
market
and appraising their results, who foible. This is in line with Wall
recurrent
would serve to protect the inter¬ Street's
psychological
ests
of
the
non-director
stock¬ aberrations in elementary arith¬
universalized.

be

611 Madison Street

Telephonest ELgin 3-8621 & L. D. 47

your ;

Now for a few pertinent words;
stock it is
the
increasingly popular
motivations about
will not conflict with those of the
proclivity (accentuated during
bull markets) for the stock split, public stockholder.

directors,
election of auditors, etc., the right
is provided for any independent
shareholder to make proposals of

on

•„

By actually owning
guaranteed that his

put

poration,

TAMPA

to

and

thus

capital.

such

the immediate short-term benefits

JACKSONVILLE

owner*

questions which management

strength,

Offices

citizen of the

a

States, if he doesn't like 1
the way his country is being run, '
to go off to another country.
As a final word as to you, the
shareholder's
best
constructive

regarding which there is no in¬
flexible rule, is the balancing of
the long-term interest of the cor¬

Corporate Securities

of the share¬

the essential status

question of dividend policy.
Rebasic
determination,

Municipal &

mani¬

complete misconception of

a

quiring

Southern

,

with

vote.

often the manage¬

executives

board which is presumed to repre¬
sent
the
interest
of the
stock¬
holder

order:

shareholders.

tion

ment

DISTRIBUTORS

with

along

salary, instead of the stock
option. This gives the executive
a
forceful and continuing incen¬
cash

management.
One of the great
difficulties in getting a fair solu¬

managers. Too
—

itself

stock

in

via reg¬

direct inter^-

a

tation, pending the possible pas¬
sage of the Fulbright Bill, is lim¬
ited to companies which are ex¬
change-listed. To all intents and
purposes with the great majority
of companies in which you own
stock, you will receive a solicita¬
tion for a proxy, that is for your

directors from domination by the

UNDERWRITERS

of

fests

not

met, namely:—Is the
worthy
of confidence?
And, is the man¬
agement consistently treating the
stockholders fairly?
In any event, the stockholder
must, either on his own, or with
reliable aid, exercise continuing
judgment on the main items of

JACKSONVILLE

constructive

more

ular distribution of

management capable and

national bank

say,

not many abuses

are

have

instances

overriding

tions

,

ers, no matter how justified the
complaint may be, or how obvious!
the abuse, so often the attitude is
taken "if you don't like it sell
your stock." Now this "brush-off"
is insulting as well as wholly but

United

tive

two

Bond Department

cases

rights of that status.

protection
meanwhile
remains
haphazard. With public attention
largely concentrated on second¬
ary matters, as salaries and in¬

of Federal Agencies

mat¬

brought up by stockhold¬

of course, that
avail¬
able and actual in stock options.

dividual

Bonds

meeting.

this

in

treatment

to

Not

ter.

there

or

Protection Continues Haphazard
In

annual

the

aim should he ob¬
jectivity on both sides with the
shareholder being fair about the
matter, and above all guarding
himself
against
jealousy
over

to other effective communal pres¬

and Francis I. du Pont & Co.

■

ST. LOUIS, Mo.—Jean

outside

Here again, the

time, this being sublimated to his
profession or business; in contrast

formerly with Hooker & Fay

was

has joined

wholly

Exchanges. Mr. Wehrmeister

Stock

With A. G. Edwards Sons

been

never

Moreover,
persistent
apathy hinders or¬

stockholder

Calif.—Wil¬

staff of Daniel Reeves & Co., 393
South Beverly Drive, members of

the

have

which

Irving Lundborg

"hot
potato" is
the
option to management con¬
cerning
which
there
is much
current
discussion, both during

to

ob¬

the

shareholder
tion.

Another

principle I would like to give
you
is that remuneration seems

Organizational Difficulties

Roy S. Shea

Ray L. Robinson

Bingham

of

know

A

contests are sometimes cas¬
as "raiders" in some cases
are actually sorely
needed

tigated

in

better,

would

stock

and

Thursday, December 19,1957

.

.

abuses

Another "Hot Potato"

and

rights

your

•

•

.

A very important abuse in the
management-stockholder
rela¬
tionship is the habitual tendency
of management and corporate of¬
ficials, and also more objective
outsiders who you would think

from page 5

CHAIRMEN

GROUP

IBA

Bingham,

Chronicle

The Commercial and Financial

(2732)

the

Se¬

Commis¬
r-

"I"

Tobin, President

John F. Monahan, General Sales Manager

Volume

boom

that

fictions

.

.

The Commercial and Financial Chronicle

.

history, will
the major

in

crash

and

remember

Era's

Number 5700

186

of

one

contributing to that New
the illusion via

excesses was

the Investment Trust and Holding

Company

the

that

craze,

mere

of putting together sepa¬

process

rate
pieces of paper made the
resulting whole worth a substan¬
tial premium. At that time the
speculative
technique
was
oc¬

assembling

with

cupied

usually comprises the evidence of
the privilege which is given to an
existing shareholder to subscribe
an additional stock offering at

price
to enable him to protect his in¬
vestment position in the company.
It is important for you to know
that very often in the case

ing

the terms of the offering.

on

tion

lic

whole

this

in

of

excess

unit

at

a

the total of the

con¬

is governed
the

of

by the rela¬
price of the
to the equity

market

outstanding

stock

behind

value

it,
and
also
on
rights are exercised
sold.

stituent

whether your

and

by

parts; with second, third
fourth
degree
pyramiding.

glamorously exploited the
public's remarkable unawareness
of
the
multiplication table; the
whole

then

being

worth

more

than

deemed
the

sum

to

be

of

or

of

using

your

the

under

is

(1) Where the outstanding stock
selling at a discount below its

and by that is
below its proportionate
of the capital value of the
company — here
the stockholder
who does not exercise his rights

the

value

—

Southwestern Public

Service

supplies electricity and some natu¬
ral gas and water to a population

were

worth more than the
whole; disregarding the fact that
cutting a piece of paper in two,
gives you no more than you had
is

paper

out

dilution-wise.

even

-

(3) Where the outstanding stock
is selling in the market at a pre¬
mium, that is, above its equity
value, the nonsubscribing stock¬
holder not only escapes dilution
but he enjoys a net over-all gain

known

as

Plant "X" (277,500

kw.)

dle, Texas South Plains and New

excess

796,000; in a contiguous area in

similarly, take a look at
its first cousin, namely the stock
dividend, remembering that a
splintering off of 24% or less con¬

me

now,

stitutes

split.

instead

dividend

a

Dividends

are

of

a

Mexico

Pecos

Valley.

Amarillo

Lubbock in Texas, and Roswell
in New
Mexico, are the
and

The region is

primarily agricul¬

tural

(cattle grain sorghums, cot¬
ton and alfalfa) but has substantial

fiscal

The

in 1952 and

has increased its
efficiency in recent
years, a very large portion of its
equipment being comparatively
company

the dividend

in

natural resources—oil and natural

are

gas, potash, etc.—and has experi¬
enced
strong industrial growth.

percentage

55.6%? compared

sales

256%,

the

fiscal

year

1957,

increased

308%,
balance for

and

kwh.

revenues
common

has doubled in the
decade but with improved
generating efficiency the cost per
kwh. is up only 18%. Moreover,
the company has fuel clauses in
past

industrial

its

schedules.
The

and

return

of

1957

The

on

four years and re¬

or

around

that

level; accord¬
ingly the company does not expect
to ask for rate increases.

paid in stock

instead of cash, most often to con¬
serve

cash

and

capitalize

future

earnings." This is legitimate when
a

as

company

it

chooses

to call them or not
ordinarily rests on
the company

1.48

2;00ormt)ro

the first quarter of the

share

and

earnings
budget
$1.93 for fiscal 1958.
behind

were

the

Now all this is eminently okay

there is no misunder¬
standing on the part of the receiv¬
ing stockholder as to what he is
really getting. But unfortunately,
such
misunderstanding is quite

after
a

all,

a

contract

lender,

and

between

the

At

the

present price around
with the current dividend
$1.48, the stock yields 4.5%.
The price-earnings ratio is
18.4
based on earnings of $1.78 for the
rate

12 months ended Oct. 31, but
would
drop to 17 if the budget estimate

for fiscal 1958 is realized.

With

Wilson, Johnson

(Special to The Financial Chronicle)

SAN

Keen
with

FRANCISCO, Cal.—Hugh
an

has become

connected

Wilson, Johnson & Higgins,'

300 Montgomery Street, members
of

the

Pacific

Coast

Stock

change.

.

ABOUT

the

you,

the

corporation,

borrower. This kind of

option

ar¬

Diversified

The stockholder rangement, in other words, giving
should realize that the stock divi¬ the borrower the option, not the
widespread.

dend, like the stock split merely
changes the printed form of own¬

what

formerly

was

obligation, to get out of the con¬
tract when it suits his best in¬

100 terests, is

a

one-way

square

miles

—

we

that's

the

word

that best

describes the 45,000

electrically.

serve

proposition;

shares has now become 110 smaller

come

that

and inflicts on you, the lender, a
heads-you-lose, tails-I-win prop¬
and osition. I make it my own in¬

is
if

not

he

constituted

so

the

sells

dividend for

cash, his remaining holding repre¬
sents a smaller share in the prop¬
erty, and hence that there is no
avoidance of income tax involved.
It

seems

to

me

that

the

its stockholders on the

receiv¬

ing end; but if it does not, you, at
least, should know what you are
and what you are not getting.
i

The Stock Right

Now for stock rights.

Similar to

the stock split and the

stock divi¬

dend

in

much

of

is the stock right.

in the
well
as
in any kind of corporate bor¬
rowing; and I certainly commend
to you never to buy a bond that
flexible rule, and

this is

of the known oil reserves,

95% of the nation's potash production,

of tax exempt bonds, as

case

and

50% of the carbon black output, there's

that keeps

growth going

—

an

economic balance

up.

their workings

in relationship
as well as to
your market doings as a whole I
leave you with two words "Be
So

to

now,

your

again

company,

SOUTHWESTERN

aware"!

PUBUC SERVICE

With Brown, Madeira
(Special 1o The Financial Chronicle)

CHICAGO,
Fiorenze

is

now

111.

—

Luigi

connected

This instrument Brown, Madeira & Co.




so

farmland, one-eighth

stock- contains this unfair call-feature.

distributing company has the ob¬
ligation to make this crystal clear
to

With one-sixth of the nation's irrigated

He should realize that in¬

shares.

COMPANY

C.

with

i

I

}
i

•

'

i

of

32-14,

arrangement is

bond

v

However, in
days, kwh. output has taken
a sharp
upward spurt with Dec. 2
showing a gain of nearly 14%? over
last year, which should help to
offset the poor earlier showing.

A GROWTH STORY

contract between two

cents

recent

READING

unique in any form of
people; and,

certainly

5

estimate

can

provided

new

fiscal year, kwh. output ran about
the same as in the previous year

i

market, it has the privilege of
profitably use calling off the contract. This con¬
plowed-back earnings instead of stitutes a most inequitable and
paying them out.
unfair
arrangement
which
is

•

able to realize

'

getting better, or on a change in
money rates; that is, if the cor¬
poration can borrow more cheaply
due to a change in the money

growth or otherwise expanding

company

ership;

$2.80

SOME LIGHT

credit of

the

either

31

1962

$1.93

company was

In

A recent

stock 202%.

to/ de¬

budgeted earnings estimate of
$1.80 for the fiscal year ended
Aug. 31, 1957 — in the first few
months
earnings
exceeded
the
budget by 7 cents but later this
surplus was lost.

original cost) was 5.76%? in 1957
and
should approximate 6% in
1958.
It is expected to go up to
main

cal¬

its

estimated rate base (slightly above

7% in three

continue

1958

Earnings
$1.80
Dividends1.40 ;

commercial
earned

will

Fiscal Years Ending Aug.

%

,

rate

tax-free in

cline, with the tax-free feature
expected to disappear in 1962/'
Chairman Nichols has recently
predicted the following increases
in earnings and dividends: '

1950.

Fuel cost of gas

all

was

endar year 1956, and about 37%
is estimated for calendar 1957. The

Employees
fewer in number than in 1952.
60.6%

paid have
1946

1956.
Due largely to
amortization, 50% of

accelerated

The operating ratio (electric)

in fiscal 1957 was

with

Dividends

(from 50 cents to $1.48) excepting

operating

new.

1957.

increased in each year since

privilege given to the corporation
selling bonds to retire them be¬
fore
maturity.
The
decision
whether to exercise the option of
the

remain

in
1954)
have increased
steadily to the recent $1.80 for the

of 28%.

customary

The Stock Dividend

should

back

found itself with excess capacity.

.

So much for the stock split. Let

and

financing.
equity is now

ily from 99 cents in 1946 to $1.36
in 1949, receded to
$1.30 in 1951
and (except for a negligible set¬

rate simplification plan was put
Activity in the area served is into effect, providing for singlestill at a high level, and precipi¬ meter service to commercial, rural
The Market's Record
industrial
customers.
This
tation is now plentiful following and
constituted the largest single step
How in actual market experi¬ if he does not subscribe.
some years of drought. Amarillo's
toward rate simplification insti¬
ence does a stock split affect the
new building permits in 1957 were
(4) The stockholder who sub¬
price of the shares that are split? scribes to the rights in a premium 42% over 1956, and recently have tuted by the company since its
Earlier this year I completed, and
been showing a gain of 26%—de¬ formation in 1942. Under this pro¬
situation escapes dilution and
published (In the "Commercial comes out even.
spite a decrease in Dallas. Expan¬ gram, 87 present electric rates will
and Financial Chronicle," Jan. 17,
sion is planned by International be replaced by seven rate sched¬
Thus, in a discount situation,
Simplified rate application
24, 31, Feb. 7, 1957), a statistical that is where the price is below Minerals, Frontier Chemical, Ccl- ules,
and
billing have resulted in a
analysis based on the comparative the
equity value, you, the stock¬ anese, Shamrock Oil & Gas, Phil¬
action of split and un-split issues
lips (which is building a large greater degree of rate understand¬
holder, must subscribe to protect
in 1955 and
1956. It was found
chemical plant) and lour or five ing
by the customers.
Electric
yourself, constituting a form of
revenues will be increased slightly
that prices tended to be stimulated
assessment.
In a premium situa¬ potash companies. Kilowatt hour
in the rumor stage preceding an¬
sales increased about 11% in 1957, by this program.
tion
you
gain if you sell your
nouncements of splits and to some
$12.8 million was expended for
equaling the increase of the pre¬
rights; come out even if you sub¬
extent
vious
immediately
thereafter; scribe.
year;
sales to residential construction in fiscal 3957 and
with the advantage being effaced
customers gained about 15%;. Rev¬ slightly more is budgeted for 1958,
with the 11th generating unit be¬
thereafter with post-split fading
enues are expected to be up about
Ileads-I-Win-Tail-You-Lose
becoming
intensified
with
the
11% in fiscal 1958. The heat pump ing installed in July. $15 million
Now, finally, a few words about
is now being actively promoted—• has been appropriated for gener¬
passage of time.
Furthermore, in another corporate financing prac¬
while there was only one in the ating unit No. 12, which is sched¬
most instances of price advances'
tice
which
I
believe is
ex¬
uled to go into operation in July,
the
motivation
stemmed
from
area in 1956, there were 50 in 1957
tremely
important for you
to
sources other than the split, such
and there will be a substantial I960.
know about particularly in this
The company will borrow from
increase in 1958.
as
dividend
increase,
earnings stockholder - corporation
discus¬
The company, after completion the banks to take care of construc¬
growth, etc.
sion. I refer to the call feature of
tion in 1958, with no public fi¬
of
the large generating station
bonds.
That
is
the

before.

1959.

around that level in fiscal 1958.

the Texas and Oklahoma Panhan¬

of

with

>

f

•

stock

35%

until

equity

some

to

kind

early in 1962 there

or

common

close

Capability of all plants as of Aug.
31, 1957 was 813,300 kw. compared
with a peak load of 636,000, an

Industry is largely connected with
oil and gas, potash, carbon black,
food
quoted at consider¬
processing, and chemicals.
able
discounts
(in lieu of the
Phillips Petroleum, the largest
to subscribe to the new stock of¬
former
premiums)- below
the
company served, is expanding rap¬
readily calculable value
of the; fering suffers a dilution of his idly in the production of synthetic,
constituent
units.
Now
"again equity.
rubber.
:
(2) The stockholder who sub¬
The company has enjoyed very
.midst its split-craze proclivities '
bf the 1950's, the public is indulg-" scribes to his rights in a discount rapid growth.
Population in the
ing in the mathematical illusion" situation, that is where the price area has increased 61% in the past
that the sum of the split pieces of is below the equity value, comes, seven years. In the decade ending
solution,

The

Southwestern Public Service Company

how( you principal cities served.

rights,

any

101

Share earnings increased stead¬

the alternative ways

respective conditions:

1940s, contrastingly, the equity
meant
public utility holding companies
share
in process of SEC-directed dis-"
In

summarize

to

make out in

its

parts.

you

Now,

This

of

be

may

Utility Securities
By OWEN ELY

of stock
existing

rights, dilution of your
interest is involved—this depend¬
Dilution

pub¬
price far

an eager

Public

less than the existing market

and then

selling to

nancing

Late in 1961

to

group
of individual stocks into one unit
a

(2733)

Ex¬

The Commercial and Financial Chronicle

(2734)

302

Continued

CHAIRMEN

GROUP

IBA

from

4

page

1

.

.....

given greater purchasing value in
the marketplace.
,• :i»yi

.

1° short, it is the profits

,,

realism

by

of

OHIO VALLEY

OHIO

NORTHERN

uses of energy sources and
various means by which the
wages of today can be paid .and be
the

A Time for Vision

WESTERN

PENNSYLVANIA

create

by the time-tested means' those eight years; corporate taxes
experience.
rose by some 32%; yet the price
all

As

of

recall, this of manufactured goods was raised
same sound approach to economic; a mere
10%. Accordingly, sorhematters carried over into the af- • thing had to give, and as usual,
fairs of business and government.-it was profits—the profit per unit
"You don't get something for noth-,of ^output,, after
taxes,; declined

tiffe

to

; 25%.
It
-

competitive and remain
that no government
could return to the people the lull
stay

if,

dollar

56%,

which

increased

output

solvent, and

in

sales

total

manufacturing profits,

these

Jack R.

Addison W. Arthurs
Lcstranye

Staples

Rcid

Fulton

&

Pittsburgh

Co.,

William L.

Co.

&

IF.

L.

Lyons, Jr.

Lyons

&

actions

nomic

,

.

days of basing ecorealistic

on

figure

facts,

a

is

of

era

an

1 think y0Ll wili agi'ee tnat any

of

Harris,

Upham

Co.,

&

120

Broadway, nationwide investment

brokerage

firm

with

offices

36

coast to coast and members of the

New

York

ored

its

at

a

the
U.

Maxwell, senior partner
Tucker, Anthony & H. L. Day,

has

Stock

Equipment

Exchange, hon¬
Club

Knickerbocker

senior

and

board

of

Precision

it

was

by Hermann G. Place,

dent of GPE.

of

the

Harris,

firm, ad¬

Joseph Lampiase

of

of

Eastman Dillon Adds
(Special to Tur Financial Chronicle)

LOS

ANGELES, Calif.—Richard
T. Quaile has been added to the
staff of Eastman Dillon, Union Se¬
&

curities

Co., 3115 Wilshire
Boulevard. He was formerly with

increased

Another story that

days

Hill Richards & Co.

the firm's margin department.

tion

of

cause

words

of

?

-

*

•

r

.

DEALERS

•

'

(i-

-• ■

■

all
all

the
the
tne

nn
on

is

-

•

;

,

.

.

are

m-itter
matter.
matter,

concon

to the incon-

given

that

fact

No
No
jno

hourly

em¬

per

hour.

man

at

rose

annual

an

rate

ol

Specializing in Louisiana

r

inS population.

*

r

,

and Mississippi

v

in

niitnut

nrodiipf

our

man

npr

a

Municipal Bonds

nntrmt

rpftpptd

Obviously,
costs

ment

&

SANFORD

when

of

h

°f

ipg foreign nations build

hope
anci

adapting nuclear

in

electronic discoveries

ductive processes.

energy

to

lav

pro-

than the rate of productive output,

We hear it said,

mankind
fhe

seems

keep

feet

our

to

the

on

succeed

by

a

must

Our

strength

to

a n

^

lent
of

that

too

was

However,
Washington was

in

accusation

profit

„

rate

our

high,

of

the

when

the

fact
,.

,

inflation
a

J.

ZOLLINGER, JR.

of

this

and

matter

and

r

c

is

in

all

the

that

-J

time

we

when

The
most

have

come

we

Scharff I Jones
INCORPORATED

L.

Floor!

D.

235

Tulane 0161

NEW ORLEANS 12, LA.

SHREVEPORT, LA.
BATON

ROUGE, LA.




was

an

thriving.

]esson

•

of

^^y tJank Montniy Letter pointed

scrw?wr.;»

s°™h™- - — « —

natural laws ot economics cannot vested

^hnlf

aohipvp thp

npvpr

?

imno«;'

we &ha11 never achieve the impos-

is time that
took

in

iron

ore

auto-

mines,

Kuf oroS-ess '"Jb*5"6 Plaf-S' anAhSteel %"ls ^
I

And particularly, it

told the German government

took steps a few years ago

to encourage

business management

everyone,, once

and

all,

for

the payment of divi-

dends to stockholders.

action to convince

concerted

world, and

am

even

West

that

between

Germany
a

had

choice

its

state-planned

economy

the
are

money

left

subtracted

over

after

from

sales

income.

Perhaps

initiative.

It

elected

has

we

could

begin

surpassed the highest peaks
reached under the socialism
of Germany's past. Some of its
neighboring countries also faced a

by

ever

proving conclusively that our system is not a "price system," as
refer to
it, but rather, a
"profit and loss system."
It is
profits and losses, as you and I
are SQ well aware> that direct and

similar choice in the not-toodistant past. Their decisions were
with the proponents of state-plan-

some

ning, and that, undoubtedly, is
why their people must be leg-

re-direct our business planning to
conform to the changing will of
the people.
It is profits, and the
use of capital attracted by profits,
available the better
tools of production, the more efthat

private

piace its hopes in the hands of
private initiative and already it

make

weary

from

pedaling

bicycles,

while

West Germans have been
busy "peddling" automobiles.
.

•

And what of America? Despite
these ominous lessons, despite the

in

even

The

Board

JACKSON, MISS.

LAFAYETTE, LA.

know,

to

concern

in

I

National

Asso¬

a

recently
study, based upon
Federal

Taking the period from
1948 to 1956, essentially the
post¬
war
period, the Association dis¬
covered

about

some

our

interesting facts
manufacturing

nation's

the first

when

place, it

unUs

of

was

found

ou+^,1+

taken

as
a
common
measuring
stick, compensation of employees

showed

an

Specialize in

LOUISIANA

Municipal Bonds
Barrow,

Leary & Co.

Investment- Securities Since

industries.

that

We

Reserve

statistics, which illustrates

this fact.

In
'

years

of Manufacturers

government and

Ground

close

reached

industrial

nation.

completed

•

? years

applies,

same

every

ciation

CARONDELET ST.

had

years

production, we have never
equalled that figure.
The only

this

181

are

real

nine cents.

LOCAL CORPORATE ISSUES

&

we

194Q, and despite peak

1955

180

and

of

BANK STOCKS AND

no

,

nine

previous

°-

LOUISIANA AND MISSISSIPPI

219

of

began, U. S. Steel made

a

since

TELETYPE

in

-l

A .ce°ts per little below the
dollar of sales,
this was

earned

in

that

cycle

rii

average rate of profit

Trading Markets

is

present
—

profit, after taxes, of

a
j

Active

of

are

traffic

t0

.

JOHN

production

highways

commercial

ritv R.irii, Month!v T pffpr nointed

us

and

1940,

E. RODDY

our

Germany.s
experience," as the First National

just

The

JAMES

the

to

only

pleasure - seeking
German
Commercial shops and

,.The

costs

heard

we

about the most fantastic story that
has come out in a long, long time.

SCHARFF

the

Its

with

businesses

business profits are far more than

the

D.

years

in

peopie.

all

IKE

second
in

ten

busiest

crowaea wnn commercial tranic

ability

asked

free

nation in tne production oi

+

on

jobs

is

just

the

automobiles.

impaired

malntamlnS
do the

It

crowded

the
represent the only

tax-cost squeeze

which

we

state

now

nation

own

11 we

not be

direction—a

.

are

world.

gigantic tasks

—iu.-u*.-—
responsibilities.

—-j
and

to

ago,

first

the ground if

one

demolished

and

But it

must

we

Ju
these

assume

earth

travel.

obvious that

\

are

its

off

of space

era

onlv

Today, West Germany has one
of the strongest economies in all
of
Europe.
Its shipyards, in a

^at industry will be reqUired to play an important role
^ financing scientific research to
jfft

in

something has to give.

New Orleans

measures

economy.

ajSOj

{or nothing."
for

costs

increasing faster

are

state-planned economic

sible task of gaining "something

employ-

our

similar

and

suppliers

our

ITE, HATTIER

InctaHaHon

thp

and biDToved mach
improved machinei*v
e y.

new

dertook the challenge of rebuild-

f I^or\ge1r ^onomies. Industry is of East Germany, they recognized
Peing. io?ked uP°n as the main that the shortest road to recovery

hour

compounded annually over
the same period of time, and that

an understatement.
Yet
tne leaders of West Germany un-

ill

™

be

alm°st

the Ground"

on

lmg that once great section of Eu~
^ a
rope' In stark c ° n t r a s t to the

'/J®

Btxrwxarjs'.
-

,

pie were demoralized would

,

"Keep Our Feet

S.

U.

In

1.1.1
Steel, total pmnlovment costs per
employment costs oer

hour

/

cur-

ployment and other costs have in¬
creased at a far greater rate than
output

•

that

spinning
this
modern
tale,
are
being
branded as the culprit behind the
steady rise in the cost of living.
The fact that prices are a reflection of costs, as the steel industry
pointed out lecently in Washing
ton, appears to have no bearing
sideration

DISTRIBUTORS

who

those

trovertible

•

inflation

the

Prices
Prices, or more specifically
or
moie?speciiicaiiy,
^administered prices,
to use the

af
at

UNDERWRITERS

those wh.o con<^emn business recovery from the ravages of war
nn^ inT« and postwar Ration just a little
individuals who call upon indus- more than a decade ago. To a
S :?
l-nrKfnr atrnw. rge extent, its industry had been
yi(te jobs and products foi a grow destroyed, and to say that its peo-

and

rently grips the nation.

economic

PSfifenniQ i[n !!

villains—

profits.
The first of
these—prices—is said to be the

for

past summer, and one of the countries I visited was West Germany,
This half of Germany began its

cour®e' 1S the fact

productivity.
is extant these
two

tne

concerns

fantasies

Cites Western Germany
a few weeks abroad this

,

There is, for instance, a fable
being told frequently today that
promises a shorter work-week at
equal or higher pay, with no men-

prices

George

U.

dressed the group now numbering
89 through the additions of Walter

Carney

the

members

Club.

Henry

partners

to

General

Corporation,

announced

dinner Wednesday, Dec. 18 in

and

of

Chairman of the board and Presi¬

25-Year

Harris

elected

been

directors

citizen

every

i spent

pr°flt.s being excessive is, indeed,
a
ry tale. Equally dis-

In fact, I believe we
appropriately label these
modern fantasies the "grim" fairy
tales of the Twentieth Century.could

John C.

25-Year Club Members

im¬

more

land.

economic

illu*?fon. '™h\ch inay exist, about

grim outlook.

Harris, Upham Honors

before

facts.

^^ra^rfantasv^It

could well give our future a very

J. C. Maxwell Director

task

*'■

are

sales in 1929.

on

economic tables that

emerged into

any

'

an

I cart-

It is the only
way
going to return economic<V
reasoning-to a- sound basis, ' and
it is the means by which we can
help the American people chal-1.
we

less than half the profit

was

margin

Co.,

Louisville

Cleveland

Inc.,

V

speed^

:in 1948 to just a little more"Jenge the baseless" assertions Of
than 3% in 1956 — and this last those who insist upon substituting

irairv

rL
those

travelling "along'at

facts

this

of

.

rviwi

development of new
keep our entire*

Operative than the job oi' placing

and

as

that'

and

economy

amount of what it took from them ;
percent of sales, again took a back
in the first place.
.
.
.
seat.
They dropped from almost

From

and

ever-higher rate of

astonishing

an

realized)

industry

jobs, build efficient pro-'
capacity, underwrite re-

products

volume

40%;

some

rose

* search

and

^: not visualize

-

also found that since 1948,

was

period

a

business

ductive

can.

you

ing," was the way most people expressed it.
This meant business
organizations had to work hard

Arthurs.

Thursday, December 19, 1957

.

.

fective

v.

-

.

increase of 23% during

Phone

3-2573

.

1934

515 Market

SHREVEPORT,

Street

LOUISIANA

,

Number 5700

186

Volume

.

(2735)

The Commercial and Financial Chronicle

.

.

103

recorded failures of social¬

many

ism; despite our own tremendous

through free, ^competitive
it would appear that

progress

Our

enterprise,

Reporter

well be facing a decision,
also.-The phrase, "standing at the
crossroads," has become well-used

we

and

£ The Government market is be-; favorable

quite familiar; but it is an apt
situation con-

ihg pushed around a ;bit, but this

-

being looked

fronting this nation today.

At the fork which lies ahead

upon as a

normal

;>

forest '/of'signposts,v Nonetheless, the market for Gov-

figurative

which

prices

can

MICHIGAN

MINNESOTA

William L. Hurley

Guybert M. Phillips

STATES

be

obtained during a period of., adjustment has hastened the move

quotations has been very sharp and
over a'very short period of time.

on

there stands

the :road of freedom,

CENTRAL

•":development when consideration into the most distant Government
; is given.to the fact that the rise in securities.;,;

,

a,"

CHAIRMEN

GROUP

IBA

Governments

By JOHN T. CHIPPENDALE, JR.

description of the

;

on

may

,

givej ernment securities is still bullish,

and. the world is not. going to

-.

Business Trend Favors _ ,
V 'V/ Government Market ..
The deterioration of the busi-

their .r in the. opinion of most money*, ness picture /continues - and in
deci- market specialists, because they' some cases the downtrend has

US; much
time to ponder
significance and make our

sion.yA;^/. expect, money rates to go lower, been very sharp/ These data seem
Pointing in opposite directions,^This/will be-..brought'about either to
prove
that the inflationary
these signposts tell us
; ^
by 'important/open ' market op- trend is over, and the economy
; :we can have either decentral- ^rations
or by a decrease in is in a recession, the duration of
ized government or central- reserve requirements.
The de- which is the subject of considerized government.
feneration in the business picture able prediction and much discus:We can have either profit- indicates that important and fasion. The fact that the business
•"

.

.

.

Paul W. Fairchild

•

The First

Corporation,

■

motivated

progress

market action
indicated in the near future.:
vorable

state-

or

planned chaos.

;.

money

is

:

•

/A"

.

continue to indicate that the de-

experience either fiscal

posit banks are building up hold¬
ings of the most liquid Govern¬

'v-.

.

*

"

We

can

1"-:-

inflation
sponsible action.
soning

.

-

'v
:

art-

w+hpr

thof

wuum
which
-

'/L™hv
•y.fl,rn in'tu„ Hirpr'tinn
law
tu

Phase

'The money .market is still mak*nS hay and, although there has
,jcen adjustments in the bond
market, there is no question about
conditions being on the favorable

j men

b—
the

The minor hesitation, ^
or

side.

,

ofgovCTnmen

Consolidation

for the market in
There
is
it
i! competitive entei- fixed income bearing obligations
LotHivnontnr fixed income bearing obligations
selling*free
tQ pause
...
-to pause and catch its breath, is
and catch its breath, is
.

„

opportunity

„

pris6

>

action

Greece

has

awarded one of his nation's

inaction of

or

Banks

est

Federal

themoney market.

t<>t^ people ot tnis na- ^ejing considered to be

<

can give the money market con-

leadership-m a troubled cen-

ning, ° ur.

fmankind.
1

responsibilities to

"

Half hidden behind all of

^hepe,

profittailing and selling which has come

_

uauau,
mn.es
—
usually takes yxaeC bers of the New York Stock Explace — after the turn of the year. An- change
other way in which quick and efother way in which quick and efMr. Tsolainos was cited for his
fective help can be given to the continuing contributions to Greek
fective help can be given to the —
—w

American

.

word

the

is

side

one

munism;"

p

of our

promise

the

_

."The

of freedom

As the achievements

and

"Com¬

t h e r,
Way of Life."
the

on

present,

signs beGod grant us the

greatness illuminate the
fore

may

us,

the

and

vision

wisdom to decide

with firmness and

critical

most

make

conviction the

Vice-Chairman

decisions

that

sure

Selling

Loss

Tax

The fast

D. F. Barton Director

.

election

The

of

D.

Barton as a director,
Stores,

has

Inc.

of Food Fail-

announced

been

by Louis Stein, President.
Mr. Barton is a partner
investment
iran

in the

banking firm of East-

Dillon,

Securities

Union

&

Co.

the

R. R.

ner,

been

General Part¬

Hemphill, Noyes & Co., has
elected
as
a
Director of

Ketchum

nounced

&

by

Co., Inc., it was

Harold

M.

money

now

reserve
.

„—

_

in the
market

of

the

Board

were

so

tutions

were

ported
are

still

that

tax

loss

adjustment has not

switches,
that

since it is re¬

shorter-term

being swopped

issues

into the

Also, the more

UNDERWRITERS—DISTRIBUTORS—DEALERS

of

ners

are

H.

Abe

and

Madoff

,

John E. Kerrigan

does

group

LOUISIANA, MISSISSIPPI, ALABAMA,

GEORGIA,

TENNESSEE, SOUTH CAROLINA, NORTH

CAROLINA

MUNICIPALS

and OTHER SOUTHERN

NEWMAN, BROWN & CO.

Equipment

INC.

Trust Gtfs. Offered
Salomon

&

Bros.

Hutzler

and

Investment Bankers

NEW ORLEANS

Long Distance 345 &

Teletypes NO 189 & NO

The

is

issue

FIRM

be

to

secured

Marine

by

Canal Assets, Inc.

UNDERWRITERS

Co.

&

OP

&

Co.;

NEW ORLEANS

12, LA.
Bell Teletype—NO 175

Fifteen Oil Company

Glasscock-Tidelands
Hibernia Nat'l Bank

Mississippi Shipping Co.

Inc.

ANGELES,

Hafferkamp

was

Central Louisiana Electric

Nat'l Bank of Commerce

MUNICIPALS

are

H

Calif.—Robert

CURPURATE SECURITIES

Harold L.
affiliated with
m i 11 & Co., 520

Grand Avenue.

NEW

Whitney National

ORLEANS BANK STOCKS
Members
New Orleans Stock

Mr. Passig

Stock

Exchange

Exchange

previously with G. Brashears

& Co.

Howard, Weil, Labouisse, Friedrichs

Allied Sees. Co. Opens
Sol Abramowitz is engaging

in

a

securities business from offices at
160

West

46th

Street,

New

York

City, under the firm name of Al¬
lied Securities Co.

Inc.

Southshore Oil and

and

now
a m

San Jacinto Pete.

Southdown Sugars,

Development

Midwest

BLDG.

DEALERS

With Shearson, Hammil

South

Crane

COMMERCE

—

DISTRIBUTORS

Eastman Dillon,
Union Securities & Co.; and Stroud

Drexel

MARKETS
Drilling

Canal Trust

top hopper cars, estimated to
cost not less than $10,875,000.
Associates in the offering are:

Shearson,

Arnold

190

Commerce Commission.

open

Passig

I;

389

250 50-ton box cars and 900 70-ton

G.

Corporate Securities

12, LA.

Issuance and
sale of the certificates are subject to authorization of the In¬

(Special to The Financial Chronicle)

Municipal and

Building

321 Hibernia Bank

cording to maturity.

LOS




Associates has been formed with

Wm. Perry Brown

LOUISIANA

& LD 419

Form Gibraltar Assoc.

'

&

Raymond 0711

•

be changed.

this

terstate

concerned.

The market

effected

low

pretty much-.,out of
as far as some insti¬

longest maturities.

BANK

City.

business

Broadway,

HEMPSTEAD, N. Y.—Gibraltar
. eri . .
.
.
fnrmpd with'

^

President of Ketchum.

NATIONAL

New York

160

at

is

Corp.

securities

a

offices

from

Sylvia Madoff.

Morris W. Newman

about the time
requirements will

associates yesterday (Dec. 18) $8,700,000 of Louisville & Nashville
RR. 3%% (non-callable) equipment trust certificates, maturing
annually Jan. 15, 1959 to 1973 insince the level of prices was high elusive.
•
enough so that they could take
The certificates are scaled to
tax losses.
Previously the quota- yield from 3.50% to 3.75%, ac¬

an¬

Altshul,

when

by the lack of ease

money

selling was
the picture

Spence Director

Securities

conducting

money

tions

Robert R. Spence,

question

L. & N. RR.

Active

market and, when
conditions tightened a bit
more last
week, there was profit
taking in the Government market.
Also, there has been some
outright selling by institutions,

in

Frederick

some

certain

operators

moving operators have

been disturbed
,

is

of

have

gains

the

have

we

faced.

ever

There

minds

established.

been

Biltmore Sees. Opens
Biltmore

Trustees.

been

haS

Exchange Place, New

education and for his service to offices at securities business.to^ en9 Centre Street PartAthens College, of which he is gage in a

It is indicated that
not look for
very readily absorbed,
changes in; reserve requirements
To be sure, an adjustment in the
until after the turn of the year,
quotations of bonds is to be ex- As against this, there are those
pected at intervals, because it is who believe that reserve requirevery seldom that prices go straight
ments could be changed at any
because there is always the trader time. They believe that the weakand f}ie dealer who is inclined to ened economy needs the stimulus
sen out hjs positions in order to of lower reserve requirements.
time

into the market from time to

road that lies ahead.. On

40

at

the

matter of, fact, the

a

indicates the ultimate
ci each

in

has not les-

upturn

sharp

sened the buying of these obligatioris.' r '"V

signpost which
destination

is one

moreover,

recerd

Co., Inc. is engaging

York City.

.vuxvn
loans which

a

made

levels

from

fate of shun-

tury, versus the

&

securities business from of¬

fices

.wcno

_

*

a

honors,

siderable aid by doing nothing at presentation was made by Greek
all, such as not selling Treasury Foreign Minister E. Averoff.
bills to offset the return flow of * Mr. Tsolainos is a senior partcurrency and the paying off of ner of Baker, Weeks & Co., mem-

•

y

in

the

con- money market is through a reduc.\v<°?}\' or
structive development. There is tion in reserve requirements of
r•: the/foreign ideology oi
bus^ir, sti]j a very large demand around the member banks of the system.
system.
ness by. government dictate.
|-or Government securities, and
Cut in Reserve Requirements
There
iS^the opportunity loi die kackjng away of quotations
Matter of Time

*

Paul

high¬

the Golden Cross of
Phoenix, to K. P. Tsolainos as
Commander of the order. The
J
t
_
.

to

help

can

Greek King

of

Paul

King

ones.

Central

ease

Honored by

a

rnntimm

must

\%rex

in

Barnett

of the

and credit one

money

the

Market

startling claritv

noint out with

*

v

-

Phillips

St.

Bar nett Co. Formed

K. P. Tsolainos is

.

signs

uasu;
are;-basic

mere
There

for

important

Also, the

issues.

ment

irre-

by

or

And this is not all.

■

-

by intelligent rea-

soundness
'

Co.,

w

«

'

Detroit

pattern is on the defensive is not
an unfavorable factor as far as

The Treasury bill market is still " the Government bond market is
growth through adequate
'"^'depreciation "aflowances^for hnhing plenty of demand in spite? concerned. There will be ease in
?iridustry or retrogression of the recent increase in the of- money and credit conditions which
can
be
brought about in many
V' through inadequate industrial feri"S °f this obligation Reports ran he hrnnrht lessened in
ways with the
demand
Either

Co.,

Chicago

Caldwell,

Simonds &

Baker,

Boston

AND COMPANY

TELEPHONE
TU 2711

TELETYPES
NO 364

(Corporate)

NO 38 (Municipal)

222

CARONDELET

NEW

ST.

ORLEANS

Bank

104

The Commercial and Financial Chronicle

(2736)

.(b) Authorize the NLRB, un¬

Continued jrom page 11

der

trades

struction

unions

bar¬

as

Thursday, December 19.1957

.

9

page

Gearing Economic Policy

gaining representatives, without

prior elections.
(c) Eliminate the non-Com¬
munist affidavit requirement.

Eisenhower Administration

jrom

.

appropriate circumstance,
certify
building and con¬

to

Specific Labor Proposals of

Continued

.

To the Crisis Before Us

(d) Prevent parties to a valid

Act which we con¬

Taft-Hartley

Secondary Boycotts—The Presi¬
will

his 1954 recom¬
mendations to Congress that the
law be changed so that concerted
activity against employers per¬
forming farmed-out struck work
and on construction project sites
dent

should

repeat

be

not

considered

sec¬

as

ondary boycotts.
There

other

sec¬

boycott activities which
definitely contrary to the pub¬
lic interest and as undesirable as
ondary

are

the secondary activities now pro¬

Taft-Hartley Act.
therefore, that
any secondary boycott instigated
by a union now covered by the
Act would, be prohibited if it co¬
erces an employer directly, or in¬
hibited by the

We will propose,

to

of

course

refuse

order

to

perform services in
an
employer to

to

coerce

This

coercion of all employers, includ¬

to

bargaining representative. When
it is clear that the employees of
the
employer do not desire
a
union as their bargaining repre¬
sentative, the use of a picket line
force

to

that

union

upon

em¬

an

his employees should

ployer and

be restricted.

employers.

made
a

an

it

employee repre¬
distinguished from
present coverage of employer
payments "to any representa¬
tive of his employees."

be

or

coerce,

(c)

attempt to coerce, an employer to
recognize or bargain with it as the
bargaining representative of his
employers where:

(1)
nized

The

employer

has

another labor

organization

representative

of his
executed
a

has

and

collective

bargaining agreement, and a ques¬
tion
of representation
may
not
appropriately be raised under the
Taft-Hartley Act; or

der Section

employees do not wish to be
resented

the

by

labor

un¬

jurisdiction in labor disputes af¬
fecting commerce, some problems
have arisen, as you know, due to
recent

in

the

We

cases).

That

(2)

rep¬

organiza¬

related

recommend¬

Federal-State

ju¬
labor-management
disputes, which I feel would tend
in

break

uniform

down

national

labor-management relations.
will

we

that

recommend

be

met

by

But

"these

amending
so that the

the Taft-Hartley Act
jurisdictional gap which

now

ex¬

would be closed by authoriz¬
ing the States to act with respect

ists

matters

to

which

over

the

NLRB

These

labor's

honest

well

as

and

cure-all.

tion

to

millions

decent

relations.
Much

of

They

the

which

be

can

labor-

corrup¬

has

traced

are

been

directlv

inadequate
enforcement
of
laws, particularly at the

existing

it deserves in

other

sections

of

the

Eliminate

(a)

prohibition
nomic

the

which

strikers

statutory
bars

from

eco¬

voting

in

of

the

American

every

would

Member

Exchange (Associate)

without

is

the

without

unions,
labor

great

as

love her.

To

resolution and with determination
to make the labor movement

and

com¬

the

right ones—this is
the job that you have undertaken,
and it is

that all

one

men

will everywhere will

Distributors

have
be

a

our

no

of good

help with.

I

doubt that the result will
and

new

proud chapter for

a

or a

will

for

have

consumer

to

be

filled

sometime.

Although

recent

country.

measures

to

restore

and

to

move

ance

Accumu¬

new car.

demand

of

durables

indi¬

surveys

Even

if

Product

1957

the

in

year

will

This

will

still

be

nearly

industrial

constant

demand

equipment
such

impressive figure of
billion.
There is a

an

$35

in

the

as

for

capital

certain

industries,

utilities

and

petro¬

There is still need lor

leum.

more

schools and

public buildings.
The
building of new highways
must
go
on.
Expenditures for
military
purposes
will
be
in¬
new

creased.
The effect of increased

military
the economy will de¬
pend largely on the state of the
budget — whether it is balanced,
spending

budget is unbalanced
large degree, we could
easily have a resumption of infla¬
in

history

Our

has so
built-in safeguards against
economy

sion that it is inclined to

many
reces¬

have

an

inflationary

bias, and a large in¬
military spending could
start the inflationary spiral again,
in

if it involves deficit financing.
It is
radar

tinental

ballistic

missiles, defense
against submarines launching
long-range missiles, development
of
interception techniques, and
the

whole

sile

field

of

development

perimentation,
imagines.
in

and

space

cost

may

billions

more

rocketry, mis¬

than

ex¬

the

military spending

$435

of

1956.

After

1956.

substantially above

In

higher in 1958.
optimistic about the pros¬
for the coming year if we
take intelligent, aggressive
steps
of
policy to meet the current
even

I

am

pects

crisis.

believe

I

more

to

of

that

Municipal Bonds
Bank and Insurance

safely the threat

inflation.
We may expect some

sagging in
activity during the next

economic

few months, but that is
for

gloom

loss

or

of

to show their

set-backs

strength, to take

in

stride

competition

with

and

Public
—

increased

—

Common Stocks

not

afford

cause

of

ditions

to

lose

when

we

next dec ade will

dous

confidence

Preslan is
&

Mercantile Bank

now

with L. A. Caunter

Co., Park Building.

Building
With Bos worth, Sullivan

Dallas 1, Texas

(Special to The Financial Chronicle)

DENVER, Colo.—David M. PolAustin

Midland

•

•

Fort Worth
Odessa

•




•

Horlingen '

San Antonio

•

•

Tyler

Houston
-

•

Lubbock

•

Victoria

,

•

Waco

Iock

.u

connected

Vvilii

Bos-

worth, Sullivan ^ fmnpany, Inc.,
660 Seventeenth Street.

-

be¬

temporary adverse
know

bring

opportunities

service to

a

con¬

that

us

for

the

tremen¬

economic

growing country.

Joins Paynter & Co. Staff

to

affect

(Special to The Financial Chronicle)

FT.

MORGAN, Colo.

Whitcomb
with

has

Paynter

—

become

and

<

»

Clay T.

affiliated

Company,

114

East Kiowa Avenue.

With A. M. Kidder Co.
(Special to The Financial Chronicle)

Bold

Plans Needed

We need bold

FT.

plans to meet the

win

LAUDERDALE, Fla.

W.

Gass

is

double crisis of the threat typified

Kidder

by Sputnik and the threat of

now

with

—

Ed¬

A.

M.

Olas Boulevard.

economic
bold

recession.

plans

action.

an

but
offensive

take

must

action

against the double threat. Only
by taking adequate action, can
we
remain
strong in
both the

military and economic sectors of
our

national

take

It is

life.

failure

to

Join A. M. Kidder & Co.
(Special to The Financial Chronicle)

MIAMI, Fla.—Kenneth A. Wood
and Robert H. Davis II

M.

Kidder

&

Co.

are

Inc.,

with A.

139

East

Flagler Street.

adequate action which spells

The
nomic
does

A. M. Kidder & Co. Adds
fact

the

that

expansion

not

mean

machinery is
It

Co., Inc., 207 East Las

Nothing

ever won

We

an

&

simply

has

that

no

rate

of

eco¬

slowed

our

up

economic

longer efficient.

that some parts
have been moving

means

of the economy

ahead too fast and that they must

little

pause

a

catch

up.

We

for

the

were

others

to

fearful

of

impending recession in 1949 and
were

able

In both instances,
to

take

effective

(Sper'a' to Thf Financial Chronicle)

ST.

PETERSBURG,

fred L.

Fla. —Al¬

Dyson, Jr. has been added

to the staff of A. M. Kidder &

Co.,

Inc., 400 Beach Drive, North.

With Curtis Merkel Co.
(Special to The Financial Chronicle)

ST.

PETERSBURG, Fla.—R. D.

Michaels

is

with

Curtis

Merkel

Company, Inc., 601 First Avenue,
North.

toMjfener

CLEVELAND, Ohio—Arnold W.

em¬

merchandising of quality
products. As businessmen, we can¬

connected

(Special to The Financial Chronicle)

Utility, Railroad and Industrial
Preferred Stocks

any

meet

selling, advertising and

on

Investment

With L. A. Gaunter

to

sound

ing.

Company Stocks

reason

Now is the time for businessmen

Ohio —William

become

Reserve

no

confidence.

Company, Dixie Terminal Build¬

Mutual Investment Funds

Bonds

has

it,

use

economic recession than

an

have to curb

(Special to The Financial Chronicle'

the

have

we

power, if we will but

stop

we

limited segment of our
economy, but it would spread as
expenditures are stepped up.

we

with

al¬

my opinion, total produc¬
tion of goods and services will be

Joins Reserve Inv. Co.

O'Brien

in

year

a

again in 1954.

CINCINNATI,

billion.

highest

now

increase

be only
$2 or $3
billion next year, the
program is almost sure to expand
as the years go by.
At first such
only

billion

services is still

may

expenditures would tend

about
the

many

anyone

Although

materially

$20 billion above the

and

$414.7

phasis

quite possible that effective
defense against inter-con¬

quarter of

rise

lowing for the price increases
which took place during the year,
physical production of goods and

any

tion.

be
be

on

not. If the

or

National

fourth

not

above the $43.9 billion rate of the
third
quarter, the total for the

spending for

that

cate

better bal¬

a

ahead.

Gross

the

does

plant and equipment in 1958 will
be 1'ft lower than in 1957, it will

defeat.

challenge is clearly before
face it with courage, with

pletely free of all motives but the

Dealers

•

America

upright labor

know and

we

true

Underwriters

proposals

leaders, would not be America

us.

M'uluest Stock Exchange

that

and

The

Exchange

support of
has labor's

cripple labor deserve their
these

lation

I

condemnation.

America

Co., Inc.

people.

interest at heart, just as I believe
other
types
of
legislation
that

strong

&

who

home

new

hearts and

American

believe it deserves the

conviction

Rauscher Pierce

the

preparing for the
they will purchase a

more,

when

time

of

members
in

abuses

violence

and

benefit and

many

curb

as

management
no

recommenda¬

designed to

are

protect

fair,

legislative

saving

crease

declines to assert jurisdiction.

Behind

Brokers*

(Supreme

and

not

are

concurrent

ing

tion

representation elections.

American Stock

Guss

or

Taft-Hartley Act be amended to:

tion.

New York Stock

decisions

court

Court

minds

9 of the Act that the

proceeding

over

training trust funds.

Where within the last pre¬
ceding 12 months the NLRB has
(2)

a

payments

Federal-State

of

area

by an employer, his
local level. We should remember
representative to an
that there are laws already on the
employee or group or commit¬
books, after all, against bribery,
tee of employees to encourage,
against murder and embezzlement.
discourage or influence other
These
laws, of course, must be
employees of the employer in
enforced to the hilt.
the exercise of their right
ol
I
believe
this legislative
pro¬
self-organization or the selec¬
gram will be of great assistance,
tion of a representative.
however,
in
helping
the
labor
'(d)
Permit
employer pay¬
movement to regain the high posi¬
ments
to
apprenticeship
and

employees

in

Prohibit

agent

the

determined

a

disclosed

job duties

law

as

as

and above payments for regular

recog¬

with

accordance

in

pay¬

any

sentative,

unfair labor practice for

labor organization to

to

employer

designate some
or
employee to

acting general counsel
successor is appointed.

the

tions

Cover

(b)

Administration
that

Taft-

unauthorized

Prohibit

(a)

ments

recommend

also

the

of

302

may

the

as

problems

payments
made
to
employee
representatives by
employer
agents
or
representatives,
as
well as those made directly by

an

Picketing—The

also

that:

Section

(1)

until
In

to

Hartley Act be amended to:

other person.

will

will

Administration

The

employer from
being coerced to enter into or
perform on agreements to refrain
from
doing
business with
any
prevent

Taft-Hartley

Amendments

propose

serve

risdiction

Other Proposed

re¬

a

vacant

becomes

officer

other

organization
power

NLRB

President

could claim a
force a union
upon employees who clearly
clo
not want that union to be their

ing those not now under the Act's
definition of "employer," such as
railroads and municipalities.
It
would

the

be

labor

is

there

office of the General Counsel of

right

must

the

unless

contract

of legitimate picketing
preserved, there can be
situations
when
no
responsible
the

employees, in
their employment,

doing business with others.
proposal
would
apply to

cease

life of the

ing its complete elimination. The
matter has been deeply consid¬
ered and we believe that while

'

the

during

opening provision or the parties
agree to the contract being re¬
opened.
(e) Make clear that when the

individual

duces

contract from being required to

bargain

coercive

however,

are,

There
is
unquestionably
public sentiment against all
organizational picketing and some
responsible sources are advocat¬
(3)

much

appropriate and timely.

sider

^ecarifoeJ

duiUtftfeten ttfundred

Q)a/taJ, SexaJ

Volume

186

Number

5700

.

.

Financial Chronicle

The Commercial and

.

(2737)

in

the

foreign exchange value of

the Canadian dollaf does
the

CHAIRMEN

GROUP

IBA

earnings

of

LETTER

cut Into

producer

any

Reader Suggests Changing Role
Of the Rediscount Rate

whose

prices- must be-competitive
prices
abroad. But it is
equally clear that in an inflation¬
ary environment the absence of a
rising exchange rate would have
meant
higher costs than tnose
actually experienced.
,
*
It has, in fact, been open to the
monetary authorities all along to
seek
to
encourage
a
lower ex¬
change rate, but this would have
with

MISSISSIPPI

VALLEY

TEXAS

SOUTHWESTERN

-

involved

restrictive

less

a

undoubtedly,

policy
prices.

and,

nomic

situation

it

balance

new

the

noc

cient amounts

7.

-t

Paulen E. Burke

Elvin K. Popper

:

Simon ' &

M.

Burke

Co.,

&

Inc.,

St. Louis

:M

Earl G.

MacDonald,

Kansas

FriOley,

Iless

Frederking,

City

&

Houston

is
of

forces

the

ex¬

We

currently read in the press
great deal about what the Fed¬

a

Changing Pressures
Bank

!;

Nova

of

Scotia

on

the Canadian Dollar
and the

goes

Canadian
have

leveling-off in the
is

economy

bound

to

of

payments and in the ex¬
change market lor the Canadian
dollar, says the current Monthly

ance

Review

The

of

Bank

of

Nova

the

in

ments

exchange rate

ing the past few
One

it Will be held
-

its

3%,

difficulties

to suggest

in

policies would not be removed
In

certain

a

fixed rate

sys¬

circumstances, in¬

construction materials of kinds
in

or

in

Canada.

conditions

fair

economic

easing, there
imports

are

chance

again

that

Now

that

is

a

more

gineering fees.
.

The

big

question,

however,

is

whether these developments

(which would tend to sustain the
exchange rate) will proceed as
rapidly or go as far as the various
factors working
in the opposite
direction.
Among the latter are
the

possible downturn in exports,

the

addition

certain

more

to

in¬

terest and dividend payments (be¬
cause

of the heavy foreign invest¬

ment

of

most

important

the past

contraction
of

in

few years) and,
of all, the likely

the

overall

inflow

the

past

wood
and
spite of a
scheduled further rise in exports

uranium, it is difficult to fore¬

seven

years,

favor¬

able export markets and the asso¬

port
most

requirements,
of

the

change rate.

period

In

an

producing for
a strong ex¬
atmosphere of

Sanders




months

any¬

Turning more directly again to
the exchange market, the Review

the member banks sufficient

amounts

to

needs and

case

be,

to

s o m e

of their

level.

let

may

the

reasonable

the

borrowing customers; and
banks

themselves

the

meet

legitimate requirements

as

which
must
the

that

compete

to

rates

dollar

Canadian

been free to
response

payments.

I cannot

the

Frederick G. Shull

it
that they are

on

seem

them for loans.

One
FED

gets the impression that the
its

has

finger

on

the pulse

try and can at any time say just
what the needs of business are

Ralph Madoff Opens
HEMPSTEAD,
N.
is conducting

Y. — Ralph
securities

Madoff

a

business from offices at

9

Centre

Street.

and

it

it

how

does

assume

should

not

of

seem

his

wizard of finance

Daniel Mook
Daniel

Mook

is

Opens

engaging

in

of
a

securities business from offices at
64

West

36th

Street,

New

York

City.

and

Planning

Dorothy Gluck is engaging in a
666 Fifth

Avenue, New York City,
Security

the firm name of

individual

function;
reasonable

but

pie who in the aggregate possess
a lot more financial sense. But if
am all wet in these observations,
I hope some banker or economist
will point out the flaws in my
argument.
.

I

the

FREDERICK G. SHULL

individual—
capacity as a

—

can

,

.

to

or

possibly

Nov. 23, 1957.

financial

try to decide what moves to

C. Russell Berger
C.

Russell Berger passed

is

jle

Was

struck

by

a

train while

Mr. Berger
particular corporation—
&
teA
then they occasionally was a securities cashier for G. A.
make mistakes in guessing what' Saxton & Co., Inc., New York City,
the future has in store for them, with which he had
been assoot

their

and

retuming to his home.

^

even

less, therefore, can the ciated for thirty years.

This

subject

only to regular Exchange Fund
operations aimed at resisting what
to

seemed

be

excessive short-run

fluctuations but giving way grad¬

such

the

in

ually

The

trends.
a

face

of

decision

persistent

to return to

free rate system was influ¬

enced to

a

considerable extent

difficulties

which

had

by

been

experienced between 1946 and 1950
with

a

fixed rate.

Free Rate Kept

Costs Down

With

regard to recent criticism
of the free exchange rate system,
the Review says there can be no

denying that

&

NATIONAL

an

appreciable

Company

rise

<S<nithu>eAtcompany

first

Exchange

BANK

MERCANTILE BANK

BLDG.

-Dallas

..

Abilene

Lubbock

away

Dec. 16 of injuries received when

down in

forces.

movement

4

2009 Chapel Street,
New Haven 15, Conn.

nation's industry as a

How much

Planning Service.

one

upping or downing the discount
rate to commercial bankers—peo-

make to further the best interests

securities business from offices at

in the field

people as to be able to intelli¬
gently regulate their activities by

of tneir officials to uiscuss policy,

Forms Sec.

under

a

how

as

business involving our 170,000,000

needs
whole,
or, for that matter, even a small
segment of it. Why, even large
corporations get together a flock
comprehend

see

well

System—can possibly be so well
versed in the financial needs of

that any one

regardless

as

—the head of the Federal Reserve

consid¬
erably handicapped in trying to
determine the proper rates to ac¬
cord
their customers
depending

have facilitated adjustments in the
of

di-

public,

other

of business in general.

con¬

with

tact

would

in this field

of

minds

In

again

once

up

market

to
of

freedom

has

move

among
be of¬

to

borrowers."

in

leave

lectly in

pe¬

those

points out that since the autumn
of 1950 the exchange rate on the

Members Ae-w York Stock
REPUBLIC

coming

thing better than a level rate of
total export income.
There may,
indeed, be some decline.

ciated high rate of investment and

capital inflow have tended to more
than offset greatly increased im¬

the

for

see

the

capital.
In

demand for most of

overseas

country's
basic
mineral
exports.
In
of

may

heavily affected.
There may also be similar reduc¬
tions in payments for freight and
shipping and for such business
services
as
royalties
and
en¬
be

and

dis¬

3%, and maintain
through thick and thin;

rate

loan

as

with

its

at

rate

that

the

And

set

would

Reserve

count

of tlie entire business of the coun-

this

quantities not readily available

eral

>

or again
raised
or

be

lowered,

bankers

a

Exports Slowing Down

During 1957, the Review goes on
to say, the total flow of Canadian
exports has been slowing down,
and markets for many products

1955

whether

—

■

words, let the old law of supplyand-demand be keenly operative

balance

Canada's

of

a layman, it would seem to
that it would make for greater

certainty

tem.

and 1956, the
imports rose have become more uncertain than
Overseas
much more rapidly than domestic at any time since 1954.
production. In. large part this was shipments of grain have fallen
has been a
because
the
expanding
capital sharply and there
softening in both U. S.
program required machinery and gradual
in

strength

volume

-

present

deed, they might be considerably

which will be affected

area

of

;

As

other

years.

by recent developments is that of
merchandise
imports. When the
investment
boom
was
gaining

-

fered

the

by the return to

economic policies.

dur¬

interests

best

whole.

a

doubt and un-

cal

Canadian balance

investor confidence and in official

Scotia, which discusses the move¬

the

as

helpfulness to business if the Fed¬

easing export markets and slack¬ riod of
rapid economic growth and
ening capital investment, the ex¬ of
great optimism among foreign
change rate might be weaker. The investors about Canada's
prospects
factors
involved,
however,
are the flexible
exchange rate has for
complex, capital movements
in the most
part worked well.
particular being sensitive to
Changes in the rate have been
changes in business conditions, in
relatively small and these changes

important effects in the bal¬

in

industry

with the discount rate

increased. The fact is that in
current

relied upon to say what

ing appropriate monetary and fis¬

of payments.
The

be
be

me

authorities

on

FED

determin¬

that

analyzes current trends affecting the

market for the Canadian dollar

Review

to their lending rate.

eral Reserve has done, or may do,

at

The
•

needs, and allow

as

will

Chronicle:

give an added push to such a de¬
velopment will depend on the
degree of easing
they consider
appropriate in the Canadian econ¬
omy
and whether they wish to
move
more
rapidly
than
the

Fridley

business

themselves

Editor, Commercial and Financial

United States in this direction.

£A

meet reasonable

to

banks to compete among

gradually
possible that the

Canadian

redis¬

proper

nently fix its discount rate at 3%, lend member banks suffi¬

is

in

difficulties in arriving at

numerous

rate, Reader Shull suggests the Federal Reserve perma¬

higher

change market may in themselves
be leading to a lower rate. Whether
or

Perceiving
count

credit

Now that the general eco¬

changing,

' /

'

TO THE EDITOR:-**+ *.

105

BUILDING

DALLAS

Plainview

San

Antonio

Tyler

106

The Commercial and Financial Chronicle

(2738)

Continueed

Thursday,December 19,1957

.

...

first time

jrom page 4

because

since

and

1954

will

there

be

finally,
indus¬

no

try-wide steel strike in 1953.

The State of Trade and

IBA GROUP CHAIRMEN

CANADIAN

NEW ENGLAND

open

the first quarter of

as

NEW YORK

time

rolling

some

Midwest

producer has gone off
and is urging all sales
recheck long-term de¬

allocation

offices

early
One

as

1958.

to

Industry

compared with
of

earlier estimate

an

$37,200,000,000. The annual rate

for

the first half of

the year was

$37,000,000,000.

trade
mark

The automotive industry boosted

output 6.1% last
is scheduling its 6,000,unit

States

United

the

of

despite

vember

theUnited

least

.

have

Occurred

the

as

1957

industry's third-best

year

in

the

like

The

First

R.

New

L.

Anthony

Mills, Spence & Co.

&

Day, Boston

Limited,

Toronto

York

EASTERN

SOUTHEASTERN

PENNSYLVANIA

history. The only other times
6,000,000 cars have been built in a
12-month
period were in
1955
when
output
reached
7,942,132
units, 1950, 6,674,933 units and

the

short of

volume

Tucker,

Boston

Corporation,

Arnold B. Massey

Claflin, III

volume

scheduled

is

to

be

ex¬

ceeded in the closing days of this

SOUTHERN

tinuing,

statistical

United

States

162,094
the

plants

week

at

a

and

in

160,866
with

compared

week

last

same

production

trucks

and

counted

agency

week's

past

cars

182,548 in

year ago.

Car output alone climbed 6.1%
the
preceding
week
to

over

148,069 from 139,506 units with
General
Motors
Corp.. taking a
bright 54.9% of December assem¬
blies

thus far.

Ford

Motor Co.

is

holding
down
26.2%.
Chrysler
Corp. 15.8% and American Motors
Studebaker-Packard is tak¬

2.2%.

ing 0.9%.
W. Olin

Harley L. Rankin
Goldman,

Co.,

Sachs

&

Nisbet, Jr.

Interstate

Philadelphia

Carr

Securities

Payne

Cumberland

Corporation,

rities

tinues

Secu¬

Corporation,

been

and

Saturday overtime con¬
figure into weekly car

to

truck

assembly,

"Ward's"

despite

building

home

near

or

over

in

the

first

indicated

1957

million

a

with

Nashville

what

is

total

about

of less

officials

last

week

for

entire

States

attained

No.

in

1957

honors

1

the

production

trucks.

Chevrolet

of

and

cars

actual

Capacity
...

,

time since

...

„nnf

1954, except for strike

holiday

or

periods.

down

were

..

.

1

to

1,789,487

cars

Creston H. Funk, Hobbs & Co.
Members Midwest Stock

Chevrolet

this

week

establish

No.

passenger

Exchange

its
car

assembly.

1

will

also

position
It

in

accu¬

mulated

UNDERWRITERS
&

ii

/

\

*

DEALERS

DISTRIBUTORS

•

.

Corporate and Municipal Securities

1,450,676 units through
last week vs. 1,457,359 for Ford
but is out-producing Ford by 15,000 cars on a weekly basis. Ford,
of

holds

course,

commanding

a

year-to-date lead in

new car

sales.

of

Z0+points from

the

produced,
"Steel"
magazine reported on Monday of

Business spending for new plant

equipment in the first

quar¬

ter of 1958 will decline 5% below

Frost National Bank
BIdg.
San Antonio 5, Texas

Creston H. Funk
Wm.

CApitol 7-6215

G.

Edward

Teletype SA-11

Delton

•

Hobbs, Jr.
W.

Holland

Bennett, Jr.

outlays for the fourth quarter of
this year.
This will be the first
decline since early 1955, a joint
report by the United States De¬
partment

Commerce

of

and

the

Securities and Exchange Commis¬

titiTn

>
an
69.2% of capacity,

of

The

on

inventory
across

liquidation

the board in

almost

tons

the

plants'Were much higher

A

hopeful

note

lower

are

the

rate

1, 1957,

like week

1,945,000

the actual

a

76.0%

was

month

and

tons.

A

is

than

ago

produc¬

year

ago

weekly production

w as

placed at 2,525,000 tons

or 102.6%.
operating rate is not com¬

The

parable because capacity is higher
than

capacity

in

1956.

centage figures for 1956

that steel
they were
year ago, the weekly magazine
of metalworking added. One year
ago, stocks totaled about, 20,000,000 tons, after a 4,000,00QWon iaddition in 1956. By last May, they
rose
to 22,000,000 tons and now
stand at 19,000,000 tons.
stocks

capacity of 133,495,150

of Jan.

as

For

metalworking

than any one suspected.

industry's ingot production

annual

tion

The curtailed ingot rate reflects

a

rate for the weeks in 1957 is based

this week.

on

The

per¬

based

are

annual capacity of 128,363,tons as of Jan. 1, 1956.

an

090

a

Trading Markets
and

new

consecutive week.

steel

General

in Texas and other Southwestern
Securities

rate

and 1,770,000 tons

Operations

at users'

Jan.

a

wCek agoX*y,':
Steelmakers
worked below 70%;,.v. sieel operations are expected'to
of capacity last Week for the first •
re,onl declines for the eleventh
_

tion

since

ton,

gross

Slec!as IcoM,
to Drop to 67.9% of Ingot

and suggests that steel inventories

trucks compared with 1,781,891 for Ford.

a

Jow since October, 1954, concludes

of tight

the past week swelled its produc¬
and

$32

to

prime steelmaking
fell another 33

week

have expected
They have blamed the ef-7erating rate-of steel companies,
credit ^controls and 'having 96.1% of the steel-making
high interest rates for the lack - capacity for the entire
industry,
of
home
mortgage ?:mon^;; and /win be 'an average of 67.9'.%'!-.'of
this, in turn, forifie drop i«'hous-v.capac[ty' for the ! week beginning
ing starts.JfA
; Dec. 16, 1957 equivalent to 1,739;-

United

Chevrolet's record output

the

year.

fects

tons

that

.to

line:;y5ls trade--weekly.•

in

previous weeky falling to 69% of
capacity or about 1,800,000 net

noted

continues

housing ;V The American" Hon and Steel
for'- thei:institute announced that- the op-

government

said,
particularly
in
plants
of
Chevrolet, Ford and International
"Ward's"

on

last

cents

of the year.

than

posite

months

four

_

demand

grade

million because of lower

a

tinue

for

months

at

and

stocks may

least

the

six

steel

reach about 15.000,000

Many steel buyers
stocks

because:

are

their

trimming

business

is

down; virtually every steel product

is

readily

available

for

Further

Records
Past

Week

energy

distributed by the electric light
and power industry for the week
ended

Saturday, Dec. 14, 1957, was
at 12,570,000,000 kwh.,

According to the Edison Electric
Institute.

Output

continued

its

gains of the previous week,

16,000,000 tons "Steel" §tated. 7.7

or

in

j f The amount of elegtric

con-

next

mid-1958,

by

Output

Gains

estimated

will

liquidation

Electric

.

The

past

week's

output

rose

255,000,000 kwh. above that of the

previous week and by 350,000,000
kwh.

the

or

2.9%

comparable

that

above

1956

week

of

the

and

by

sion

predicted.
joint
report
placed the
seasonally - adjusted annual rate
of capital investment for the first
The

quarter

of

000,000

compared

mated
CORPORATE

AND

MUNICIPAL

SECURITIES

fppyi!

•;#,

<£.

of

at

with

$35,500,an

the

Frederkiny
STOCKS & BONDS

under

♦

DISTRIBUTORS

»

DEALERS

$37,500,000,000 for

$35,000,000,000

the

UNDERWRITERS

esti¬

total

of

such spending in 1956, but 5% be¬
low the 1957 average
and well

u

W u-

rate

year

the final quarter of 1957.
The
prospective first - quarter
rate would be somewhat higher
than

Fridlcy,
:\4t
v

next

$36,900,000,000

TEXAS
•

Municipal Bonds

•

Corporate Securities

annual

rate of the similar quarter of 1957.

Plant

and

equipment

spending

is considered by many economists
to be

key factor in the economic
situation. The leveling out of such
a

investment

Members,Midwest Stock
Exchange
TEXAS

NATIONAL

BUILDING




main factors
ness

BANK

Houston, TEXAS

Telephone CApitol 8-8221

over
the 1957 year is
cited by economists as one of the

Teletype HO 42

in

the present

Members Midivest Stock

Exchange
TELEPHONE

busi¬

CApitol 2-9944

decline.

TELETYPE

Results of the latest survey in¬
outlays rose to a rrecqi'd

HO 395

dicate

seasonally-adjusted annual rate of
nearly $37,800,000,000 in the third
quarter of

topping the

previous

$37,200,000,-

this year,
estimate of

000.

Fourth quarter spending is ex¬
pected to be about $37,500,000,000

;a

force scrap prices lower, though
the pace of the decline has slackened noticeably.
''Steel's" corn-

rate

Harvester.

Charlotte

r

million,

a

work.

\'"■-r;
The absence of active mill and

foundry

the actual building rate would fall

The

The

that

stated

private

has

year.

the

it

successive months in which

seven

defense

in

for small,lots and,pn

for those months since 1949. Con-

1953, 6,134,534 units, but the 1953

Wm. H.

Francis A. Cannon

ago

as

flowing in steadily, bdt

are

and-the smallest

period

year

^ new orders! for finished

-

milestone vehicle will stamp

a

Further, widespread cutbacks

week, "Ward's Auto¬
It pointed out that private hous-;:
motive
Reports,"
declared
on ing starts for the first llj;m.bnths.'.C
Friday last.
of this year totaled only 926,700 p
teel
"Ward's"
observed
that Vthe or 10% below the 1956 figure-for*
this

year

report it is at

slower: Most inventories are high,

^

.

Most

iQ% slower than

an<j gom<, say it is as

St°atSioepart-

mi2Ft ■5won
d cated.

Turnover is the worry in steel

'

vvarehouses.

.seasonally

a

^narrate of just over

car

week and

000th

V'jgoods, fasteners and stampings. :7;f

J101?6*

for 1957 will fall short of the million

passenger

■

^

V

.

this

commitments,
weekly reports.

livery

A "Steel" survey of 12 buying
categories shows inventory liqui¬
dations going on in autos, appliances, electrical equipment, material
handling equipment, steel
mill machinery, general machinery, farm equipment, oil country

1330

BANK

OF THE SOUTHWEST

HOUSTON 2. TEXAS

BLDG.

Volume 186

Number 5700

.

.

The Commercial and Financial Chronicle

.

t2739)

968,000,000 kwh. above that of the
week ended Dec. 17, 1955.
;

mained

;'r»r

the 249 last year and 247 in 1955 rable 1956 date. The index

o

;iA,ai

Loadings Kose^ 11.6% in
Post-Holiday

>i/

Loadings of

the

failures.

p°rts,

ago,

.

-

for . the

.

group

%

.

.

week

below

the

1956 week and

680

corresponding
below the

responding week in
v*

('

cor-

1955.

*

■

Liimneci

*

'

;

°awU* ^o5*' Week

6.1%

Above

1 receding

Week.

.

Passenger

the

$5,000

of

The

or

in

total

for

the

more

this

size

Small casualties with

lia-

AB.pf^thd decline during the

<

week

concentrated

was

in retail-

wjiere i casualties dropped to

114

.

from

149.

In

the

contrast,

latest week ended Dec.
13,
1957, according to "Ward's Auto-

manufacturing total edged to 54

motive

to

21, construction to 48 from 41 and

advance above that of the previ¬

commercial service to 25 from 23.

ous

In

Reports,"

continued

period, recording

6.1%.

a

gain

of

week's

output totaled
148,069 units and compared with
139,506 (revised) in the previous
week. The past week's production
total of

car

and trucks amounted

cars

to*169,866 units, or an increase of

c& weehs
Last week's
that

by 8,o63

car

of

output advanced

the

In

The

most

from

a

noticeable
ago

year

wholesalers and

increases

occurred among
manufacturers.

Geographically, failures dipped

mhSi\/n!Uile
Mi^dlg Atlantic States rea

f

previous week

the

corresponding

were

Last week the agency reported
were 21,797 trucks made in
the United States. This
compared

including the Pacific States where
thp total

rose

to 70 from 62

More

yeafago
^

{

of

nine

the

re2ionS

with

shiest u^irig S
in

centered

tral

the

East

W56

North

Cen-

States-

Canadian output last week

at,

6,080

trucks.

In

Dominion

and

cars

the,

plants

1,166

previous

week,
4,439 cars

built

1,089 trucks and for the comparable 1956 week 10,587 cars and
2,033 trucks.
Lumber Shipments Fell 3.7% Be
.

low Production in the Week
Ended Dec. 7,

Week

Registered a New High
Covering a Z\'i Year Period

Last

prices

the

same

period,

stocks.

and

Production

shipments

new

orders

to

26%

of

22.4%

was

14.0%

were

Fa.iluJe® Sl}°Z MM
m
Latest Week

Declines

Commercial and industrial fail-

declined to 269 in the week

ended

Dec.

12

from

287

in

the

preceding week, according to Dun

index
of

raw

general
food

1956.

ures

total

is

werg

corn,

beei,

Lower
cocoa,

unchanged,
private estimate,

the amount of wheat under Government

loan

as

of

moderately

rose
a

Nov.

15

was

above

those

of

week earlier,
There

fractional decreases

were

in prices of oats and soybeans,
while

quotations

rye

remained

close to week-earlier levels. Buying of flour slackened, following
reports of favorable growing conditions for Winter wheat and a

lower support level for the next
crop.
On Friday flour receipts at
New

York

terminals

railroad

Joseph

30,158 sacks, includ12,416 for export and 17,742

ing

sacks for domestic

use.

the Executive Committee.
Mr. Dixon has been
the

Inventories

succeeds

continue

low and supply lines from
Brazil I and CoFuhibia tightened.

ago.

' International tension in Indonesia resulted in a sharp gain in
trading in rubber futures. Prices
rose substantially as buyers an-

"ciPfed «« PWiblUty of rc-

d".ced car£°
tor rubber
shipments from Indonesia followthat

large

a

director and Vice-President

a

organization in 1949, and is

were

reports

H. Theodore Freeland

Wm. N. Bannard. Ill

Dixon

since-joining

former member of the Board of

a

Governors of the Investment Bankers Association of America.

Coffee prices rose somewhat as

trading increased.

W.

President, and William N. Bannard, III, will become Chairman of

amounted to

Dutch

shipping company has ordered its
ships not to return to Indonesian
ports. There was a marked gain

Emmett
as

He

Connely, who will retire as President but

F.

director and consultant.

a

Freeland

Mr.

is

director

a

and

has

been

Vice-President

in

charge of the corporate buying and trading departments, which, in
addition to his new

duties, he will continue to supervise.

Mr. Bannard is also

director and is Vice-President in charge

a

of American Securities' sales and research activities; and

utilities

Now J. I. Ferrell Inv.

Form J. D. Inv. Co.
FT.

vestment Co. is engaging in a se¬

business

West

137

MARION, Va. —Jane I. Ferrell

COLLINS, Colo.—J. D. In¬

curities

the public

department.

Ballah is

Oak
a

from

Street.

offices
G.

at

Wayne

is continuing the

investment busi¬

of Ferrell &

ness

Ferrell,. Center

Building, under the firm name of
Jane I. Ferrell Investments.

principal of the firm.

Underwriters

Distributors

—

CORPORATION

—

MUNICIPAL

AND

TRADING
LEADING

the

show

to

renresents

the

sum

price per pound of

foodstuffs
use

In Chicago, price of hogs fell
somewhat

and

meats

the

general

trend

of

trading

MARKETS

Dealers

SECURITIES

IN

SECURITIES

SOUTHWESTERN

expanded

sll?htly higher than a year
ag0< Prices and trading in lard
a»d vegeteble oils were close to

Russ & Company
INCORPORATED
I

,

-

Members

^

niimiwi

Although cattle receipts cln b
noticeably^ over those of the pre-

New York Stock

'similar U>56
below those pi the similai I9oo
Wholesale Commodity Price Index period. Trading was about on a
In Latest Week Broadened Its
par with the preceding week, but
Gains of Preceding Period
Prices dipped slightly.
WholeThe
week.

commodity

general
advanced

moderately

price
last

The

daily wholesale commodity price index, compiled by
Dun &
Bradstreet, Inc., rose to
278.46 on Dec. 9, from 276.94 a

salers reported a slight decrease
lamb prices. Tiading slackened
and receiPts were down 11 om a

Alamo National

..

ANTONIO

SAN

(Associate)

Building
5, TEXAS

Bell Teletypes

MUNICIPAL DEPARTMENT—SA 53

TRADING DEPARTMENT—SA 23

m

year ag0/

Exchange

Stock Exchange

American

prices at the wholesale level.

level

STOCKS

sharply

receipts

«}«*<* a week earlier and

Pjjv*®

INSURANCE

TEXAS

slackened.

over

in

and its chief function

as

Hog
were

and steers

Vhc

above

4.9%

butter'

h-ims

currants and hogs

pr^e

3]

oats

rve

raisins

Jn

above

the previous week and 10.2% below production for the like week
of

wheat

orders

new

3.0% below production. Un-

above;

prices
a

AND

Barometer.

filled oiders amounted

time, H. Theodore Freeland will become Executive Vice-

w^ere

Preciably.
sale food price, index for Dec. 10
Sugar futures declined slightly
at $6.45, represented a new high
at the beginning of the week and
for the past two and a half years,
purchases picked ..up moderately
—"
It compared
with $6.42 a week Raw sugar prices rose somewnat
earlier and marked a gain of 4.4%
toward the close of the period,
above the $6.18 for the corr.paWholesalers were concerned over
rable date a year ago.
extensive fires in cane fields of

egg?

were

same

/n Prices advancing ap-

in

tional

Trade

Corp.

Joseph W. Dixon will become President of American Securities
Corporation on Jan. 1, it was announced by William Rosenwald,
Chairman of the Board. Mr. Rosenwald also announced that, at the

preceding

wheat

foodstuffs continued the past week
and the Dun & Bradstreet whole-

trend

higher

Co^°durfng^^m^eek1 w™re° flour

Lumber

Officers Named by Arccriczn Sees.

in Purchases of hides, which re¬

The

shipments of 485 reporting mills in the week ended
Dec. 7,
1957. were 3.7% below
production, according to the Na-

Lumber

In

was

the
of

of

was

and

-

of

sluggish with
According to

in?
Wholesale Food Price Index Last

with 22,588 in the previous week
and 24,117 a year ago.
-

grains

most

efeSesin'peaild iS three regions" somewhat from a'week

there

placed

in

that

Purchases

CaNorth'"cSkted- ***** 'Wefttorfe^totaled about

East

t^ek last year 153,431 cars and 'the
trucks
assembled.
24117

ago,

low.

to

week.

month

a

X

cars,

week.

close

275.69

output,

while truck output
decreased by 791 Vehicles during
the

all lines except retailing, failexceeded their 1956 levels,

fhc

!e thal

above

from 53, wholesaling to 28 from

ures

•

Last

1957

Trading

of the failing concerns had liabilities in excess of $100,000 as comPared with 22 a week ago.

ing

production

car

in

with

com-

bilities under. $5,000 dipped to 34 173,000,000 bushels, up 20,000,000
|rom 35 in the previous week and bushels from Oct. 15. Both cash
^cre down slightly from 39 in the arid futures prices of corn adsimilar week of 1956. Twenty-six vanced slightly and transactions

decrease of 103,-

a

cars, or 14.4%

270

fell below the 252 a week
but exceeded the 210 last

year-

ended

Dec. 7, 1957. totaled 617,838 cars,
ar" decrease
of
120,413 . cars, or

16.8%

of

involved in 235 of the week's

were

preceding holiday week, the Associgtion of American Railroads re.

level

prewar

Liabilities

the

above

pared

the

Seiioeek ended Dec* 7' 1957>were
64,116 cars or

Loadings

Casualties re—week earlier, but was noticeably
higher than below the 301.59 of the compa-

comparable week of 1939.

freight for

11.6%

moderately

,

and they were about even with

Week

revenue

Bradstreet, Inc.

&

107

Direct

Carl M. Loeb, Rhoades &
and Connecting

f

Private

Wires

to

Co., New York, First Southwest Co.,

Dallas,

Wires to Principal Financial Centers

Expectations of a cut in the
next °ff*cial. C1'°P forecast and an

unexpected increase in the parity
price encouraged trading in cot¬
ton futures, and caused prices to
advance moderately.

of

exports

cotton

United States
for the week
estimated by

UNDERWRITERS

DEALERS

DISTRIBUTORS

BROKERS

the

Underwriters, Distributors and Dealers

ended Tuesday were

New

York

Cotton

Exchange

at

91,000 bales compared with
107,000 bales in the previous week

and

Muir Investment Corp.
101 N. ST. MARYS ST.
Branch Office: 2501 Cedar

SAN ANTONIO 5, TEXAS
Springs.(Dallas, Texas

Corporate
and

Municipal
Securities

163,000

bales in the compa¬

Direct

Wire

to




McManus

&

SA 116 (Municipal)
Walker, New

York

Municipal and Corporate Securities

rable week last year. Exports for
the season through Dec. 3 were

estimated
pared

at 1,709,000 bales com¬
with 2,145,000 bales a year

ago.
Trade

Volume

Declined Moder¬

ately Both for the Past Week
and Like Period of 1956

weather and transit
some regions curtailed
Christmas shopping in the period
ended on Wednesday of last week
Rainy

strikes

Dittmar & Company, inc.
Over 30

in the Texas Market

Members:
New

and volume fell moderately under
that

of

as

whole.

a

Years Experience

in

a

year

ago

in the nation

year-to-year declines prevailed in
and
major appliances.
Over-all ap¬
parel volume was down slightly
from the comparable week last

Continued

on

page

108

York

American

Stock

SAN

Efxchange

Stock Exchange

Midwest Stock

The most noticeable

-sales of furniture, housewares
Teletypes: SA 172 (Corporate)

in

DALLAS, TEXAS

ANTONIO, TEXAS

201

N- St, Marys St.

(Assoc.)

Exchange

Dallas Federal Saving*

Direct Wire to Laurence M. Marks

& Co., New, York

Bldg.

108

The Commercial and Financial Chronicle

(2740)

TEN-YEAR

STATISTICAL

RECORD--PER

Ccmtinued

L'nd.

Invest.

Result

Income

Taxes

Earn.

Dlv.

Iligh

17%

1947

$25.25

$0.56

$1.16

$0.07

$1.65

$0.80

22%

26.77

1.24

1.29

0.30

2.23

1.0C

25%

31.76

2.36

1.44

1.00

2.80

0.88

31%

22%

1950

0.84

1.67

0.70

1.81

1.40

35%

1.04

1.71

0.57

2.12

1.50

39

32%

45.67

1.09

1.75

0.83

2.01

1.40

40%

34%

1953

44.73

0.78

1.79

0.43

2.14

1.47

41%

33%

1954

59.76

0.15

1.85

0.21

1.79

1.50

51

36

This member of the America Fore insurance fleet opened its
doors to the public in 1853 with a capital ol: $500,000. New York

1955

63.81

0.61

1.90

0.49

2.02

1.625

55

1956

72.23

—0.45

2.33

a0.04

1.92

2.00

58%

as

At around the

carriers

time several other insurance

same

1853

Fidelity

Insurance

of

other members of the fleet, but consoli'da turns have reduced the number to four; and today Continental

1956324

National

runs

shares,

mium volume to

over

$157 million, and assets to $295 million.

e

The

$750,000;

% cost

insurance

the

v

"■t

destroyed 28,000 structures and
$225 million; three great wind

The
tail

its

affiliates

write

practically all

total

dollar

of

volume

re¬

trade in the period ended

Industry

forms of

Bradstreet, Inc.

1956

levels

centages:
States

by the following

West

to

+2

North

per¬

Cent

r a

1

4 6%;

West South
England 0 to
4-4%.; Mountain —1 to 4-3% ; East

North

Central and South Atlantic

Unearned
Losses in

...

Interest Accrued

Cash, and in Banks.
Other AssetsiA

.

.

Prem.

$72,431,173

Process

of

■

Contingency Reserve

$432,333,103

Cash &

following distribution

20.8

58.0%

8.6

3.0

<

50.7

8.3

•

20.5

3.9

44.4

4.3

48.0

7.2

the bull market in stocks progressed, was
shifting from equities to fixed income
A program of

some

on the other side of the shift to fixed income
securities
find Continental
adding bonds, undoubtedly of better quality,
a declining market.
This shift to bonds had another beneficial

constitute

a

safeguard than do equities.

NATIONAL

Bankers
Trust

better

Company,

of

Bankers
Head

to

the

Office:

London,
on

Government la

West

Request

End

26-

E.

C.

(London)

Branch:

Laird, Bisseil & Meeds
f
►

Members New York Stock
Exchange
American Stock Exchange

Members

120

BROADWAY, NEW YORK 5, N. Y.

Telephone^ BArclay

f 1
(L

Beli Teletype-~-NY
A.

7-8500

1-1248-49

Gibbs,_ Manager.Trading.

Specialists in Bank Stocks




Dept.).

land

Protectorate.

Authorized Capital

Paid-Up

Capital.!

£4,562,500
£2,851,562
£3,104,687

Reserve Fund
The Bank conducts every
description of
banking and exchange business."

Trusteeships and Executorships
also

undertaken

tions.

with

Nov.

common

con¬

effected under the

was

The

of

The

30.

National

under

the

Bank

title

of

First

Company

the

effective
the

the

buying
laun¬

weather.
the

in

There

call

coverings.
while

slight rise

a

linens

floor

and

Interest in gifts, glass¬
china climbed again,

ware/and

sales

sluggish.

was

for

of

housewares

were

Wholesalers

reported a
continued rise in volume in lamps
and

lighting fixtures, while inter¬
in

television

appliances

and

major

food

buying slack¬
during the week. Declines
occurred in purchases of butter,
cheese, eggs and poultry, offset¬
ting gains in fresh meat and fresh
produce. Trading in flour, baked
goods, frozen foods and rice was
ened

close; to

that-of

the

preceding

week.

dresses,
sales

coats

of

and

women's

reported

gains in furnishings
sportswear, but the call for

and

overcoats

and

suits

sagged. Pur¬
of children's
clothing were
equal to. those of last year..

chase

Food

buying at retail showed

a

little change from the
prior week.
Best-sellers were canned

goods,

frozen foods, and fresh meat.
Retailers in New York

strike,

way

while

urban

stores

higher

than

sales

were
a

in. sub¬

Retail

ago.

volume in Los
Angeles, Pittsburgh
and Toledo were also
curtailed

transit strikes.
an

by

-

the

sales

store

on

a

taken from

as

Board's

ended

in¬

Dec.

7,

period last year. In the preceding
week, Nov. 30,* 1957 a decrease
of 19%
(revised) was reported.
For the four weeks ended Dec.
7,
1957
a
decline
of 7%
was
re¬

ported. For the period Jan. 1, 1957
to Dec. 7, 1957 no change was re¬
corded from that of

-

Trade

New York

the

The

volume

period

year

a

trade

ago,

estimate.

subway

strike

bad

and

heavily to tlic

lower volume.

Board's

serve

store

the

to

the

Federal

index,

Re¬

cessories-a
salers
from
of

weekly period ended Dec. 7,
decreased

7%

under

that

of

-There

1 textile

ago.

,

Whole¬

moderate

topcoats,

gain

suits
-

•

•

was

-

another

activity-

wholesale
some

a

in

markets.

scattered

and
-

for

weeks,

1957

a

tered.
1957

major

print

ending

decrease of 6%

For
to

the

Dec.

registered'

7,

an

that

Dec.

was

of

1957

the

increase

.

the

7,

regis¬

period of Jan.

.

in

Except 'for

orders

four

above
.

decline

most
•

the

ac¬

preceding week in purchases

men's

furnishings.
w

week

reported

fashion

Boardmaii
of

elected

was

the

National

American

Bank

Trust

&

Indianapolis, Ind.

-

and

staff

Savings

Kenneth

bank's

R.

ment,

Harris

V.

Trust

Chicago,

Bank,

111.,

President

by

Zwiener

board

New
ert

•

.

promotions in

of

announced

were

\

ffi

of other

official

the

* '

Vice-Presidents and

new

number

a

/_

#

Three

after

meeting

the

Dec. 11.

on

Vice-Presidents

Rob-

are

:

Blackburn, trust ^depart¬
and Ellsworth A. Handy

Henry S. Kahn, banking de¬
partment.
All were formerly

Assistant
Milton

Vice-Presidents.

C'./Burkhart,' Vice-Presi¬

was transferred from bank¬
ing administration, where he has
Cashier,
to the general division, where he
will have responsibilities for new

dent,

beeri Vice-President and

leasing and

Charles

matters.

C.

•

related

Looney, for-

merely Vice-President in the gen¬
eral

division,

becomes

operating

Vice-President of: the banking de-

/

partment and4 Chairman of
bank's operating committee.

'

Delbert

the
;

N.,

Urick, - formerly
Auditor, be¬
Comp¬
troller.
Maurice K. Heald, VicePresident, will be responsible for
general service departments and
the
operations research departVice-President

comes

and

Vice-President and

••

Arthur

■

\
!
•

-"

-

E.

Urick

Assistant

from

promoted

was

Vice-President

to

Cashier, and Raymond J. Coakley
Assistant

tor.;;

New

dents

Auditor

Assistant

Audi¬

Vice-Presi-

-

Charles S.

to

Connell

;

and

I

Kuhn, both formerly As-

i

are

John A.

partment.

department

sales in New York City for

the

dresses, coats and

/:

sistant Secretaries in the trust de¬

According

their re-orders for women's win¬

increased

L.

from

ter

retailers

-

in

15% compared with

weather contributed

1957

attempt to replenish de¬

stocks,

Paul

City the past week de¬

about

like

sales

like period last year.
In the
preceding week, Nov. 30,* 1957 a
decrease of 22% was reported. For

pleted

%

Vice-President
Fletcher

ment.

Retail

clined

1956.

re¬

substantially

year

Department

observers

City

ported sharp year-to-year declines
in trade due to the extended sub¬

profits of not less

$612,325.

construction,

1957 decreased 5% below the like

total

than

and

unchanged.

was

Wholesale

sets

in

held

capital stock of $1,000,-

undivided

and

Co.,

week

slightly

was

con¬

bank

000, divided into 100,000 shares of
common stock of the par value of
$10 each; surplus of $1,000,000;

by openings in New
York, buyers stepped up their or¬
ders for draperies despite rainy

for

volume

a

of

date

consolidated

Attracted

dex

2.

13, St. James's Square, S. W. 1.
in India, Pakistan,
Ceylon,
Burma, Aden, Kenya, Tanganyika,
Uganda, Zanzibar, and Somali-

Branches

expecta¬

year ago. ;

.

Bishopsgato,

below

Reserve

In

INDIA, LIMITED

gain occurred in
industrial fabrics,

was

Federal

Kenya Colony and Uganda

New York
Bulletin

BANK

and

Speifcerville,

week earl¬

a

the

several

years has seen mounting
"underwriting
fire-casualty industry, and under this condition fixed

tained at the level of

country-wide basis

ers

generally,

securities

in

automatic

below
comparable year
levels despite rising volume
in fashion accessories. Haberdash¬
•

company of Continental's
size, for their holdings of common stocks are large in most cases
and not easily liquidated without
disturbing the market. As the
large insurance companies adhere to the better grade securities

income

traditional

ago

9.2

18.5

The past

declines

Declines

9.7%

55.2

-

22.0

as

in

apparel

1.9%

in

improved,

suits

22.0

losses in the

:

Other

2.3

worsteds

and

dry equipment and television sets.
Although sales of toys and dolls

Assets

*

trading

Trans¬

est

of

refrigerators,

Stocks

17.2

aspect.

of

•less than

(bonds and preferred stocks in this case).
this nature is difficult to handle for a

m

moderate

8,829,768

Common

18.0

trend,

Atlantic States

furniture lagged.
Major appliance dealers reported

Stocks

17.3%

media

Middle

sales

Bonds

15.9

Thus the

East

draperies and floor coverings was
close
to
that
of
the
preceding
week. Despite a slight rise in purchases of dining room furniture,

Pref.

13.1%

,

and

Other

r. S. Gov'ts

4-2%;

0%; Pacific Coast —6 to

overall

$432,333,103

A break-down of these assets
gives the
past full calendar years:

the

for Continental to do

we

t

.

;

to

—2

gifts, glassware and china climbed
appreciably,
volume
in
linens,

____

All

New

to —10%.
While
interest

16,990,697 """Adjustment
14,221,474
476,754 Reserve for Be Ins.2,201,205
7,205,024 Reserve, Taxes, Exp.
2,062,000
7,709,493 Reserve, Other Liab.
2,794,986
Capital
25,000,000
Surplus i
304,792,497

.

to

—2%

Liabilities

.$399,661,465

and

—14

31, 1956

289.670

Agents' Balances

lor

Central

ANNUAL STATEMENT

Ileal Estate

Citizens

of

Ohio,

of

and

At

during the week, but
carpet wool was sus¬

volume

—4

December

woolens

A
slight
buying of

Central

Assets

in

diminished

ier.

South

Bonds & Stocks....

actions

but

was

ago,

year

Excluding the Firemen's merger, capital consisted of 5,000,000
shares of $5 par value. The merger
plans provide for a total of
6,700,000 shares; and the America Fore fleet will become one of
the few very large multiple-line
group? in the business.
Both

'

goods lagged.

the

a

Continental and Firemen's have very large
agency plants.

;

Lima,

stock of

$50,000, consolidated ef¬

as

solidation

broadcloths, interest in

gray

on

below

Regional esti¬
mates varied from the comparable

% auto physical damage 9%; auto property damage 7%; workmen's
compensation 10%; liability (other than auto) 6%.
»v

cotton

5 to

&

Coverage, except life. On the basis of premium volume fire ac~
•T counts for about 26%; extended coverage
9%.; auto liability 15%;

'

cloths and

according
to spot estimates collected by Dun

Wednesday of last week
1%

and

of

will have
year.
While automobile dealers
reported
a
moderate
decrease
from the prior week in the buying
of new passenger cars, sales of
used models were steady.

losses.

Continental

The

Spenccrville,

Lima

The Slate oi Trade and

The

companies
f' storms of hurricane force beginning with 1938; and the devastat¬
ing storm of 1950 which cost Continental some $7 million in

•

Bank,

stock

of

common

of Lima.

companies; the Boston fire of 1872; the
which

s

Bank

National Bank and Trust

Among the catastrophic losses that Continental has weathered
in its 104 years of existence were: the great Chicago fire of 1871
which bankrupted many
San Francisco fire

and

Farmers

charter

for each 20 shares of Firemen's.

a

*

National

Lima, Ohio, with

107

terms give the holders of Firemen's stock 17 shares of Continental

F 1900

was

value $10).

par

fective

page

Ohio,

$1,000,000 to $1,375,000 effective Dec. 4. (Number
of shares outstanding — 137,500

/ Insurance and Fidelity Phenix each

from

Com¬

Trust

and

from

solidation

Continued

~

Steubenville,

increased

$18 million in stock.

own a one-half interest in
Niagara and Fidelity & Casualty. In process of consummation is
i/a merger in which Continental will take over the Loyalty Group
of companies, five in number, headed by Firemen's Insurance
Company of Newark. This merger will bring Continental s pre-

4

r-

Bank

in

pany

premiums

writing profit margin (through 1956) consolidated, was well abovrthe industry's 4.4%, while the company ran a low average ex¬
pense ratio. Its exposure is very low, 0.38 to 1. The ratio of gain
to the stockholder in the decade to the Dec. 31, 1946, price of the
stock was 397%; and to the liquidating value at the same date
235%, considerably above the industry showing.
The present dividend is $2 annually, payable quarterly, and
with the stock selling at present around 42%, the yield is about
4.7%. The unbroken dividend record goes back to the time of
organization. Some $176 million have been disbursed in cash;

several

were

unrealized apprecia¬

an

t

:;

the sale of new stock,- the
common capital
^tock of The First
By

somewhat higher than the industry's. The ten-year average under¬

writer.
There

had

tion in the value of its assets of $33.77, net.
Its ratio of underwriting profit
to earned

Brooklyn.

in 1956.

"

,

In this clecade the company has

companies

In due course
these units were to be added to the America Fore fleet, Phenix
first having merged with Fidelity Fire Insurance Company, to
make the present Fidelity Phenix, in 1910. The first risks assumed
by underwriters were those arising from the perils of the sea.
Then came the writing of coverage against fire and lightning.
Finally a departure from strictly property insurance came, and we
had the casualty company with its numerous lines. This development brought to the fleet the present Fidelity & Casualty Cornpany, probably the largest and oldest New York State casualty
Company

Credit.

a

seven

Vice-President in 1944.
.

♦Adjusted for 20% dividend in stock in 1950, and for split of 2-for-l

were

organized, in 1850 Niagara Fire Insurance Company, and in

were

a

there were but 17

fire companies in the city, and after major losses
loath to accept any but the better risks.

*?

years, he was
of the Investment
Analysis Department and elected

43

difficult to obtain in 1848

was

After

1930.

made Manager

43

recovering from two catastrophic fires, those of 1835 and 1845,

was

and insurance

!

Banks & Bankers

25%

41.68

1952

THE CONTINENTAL INSURANCE COMPANY

38.07

1951

Insurance Stocks

News About

19%

1949

By ARTHUR B. WALLACE
—

21

page

Low

1943

This Week

from

—Price Range—

Liq.
Value

Bank and Insurance Stocks

SHARE*

Net

Federal

Thursday, December 19,1957

...

1,

index

of

1%

corresponding

'

„

New Assistant Cashiers

ward

.

1

■

.

Ed-'

j

K.v. Aldwort,.'

Kaufman and

William
L.
Harvey R. Untiedt.

Charles D. Wesselhoeft

Assistant
from

V;

r

are

was

Comptroller,

Assistant

<

named

promoted

Auditor.
.

■,

*

j!
t

|

Newly appointed Sales Managers
in

the-Harris

Bank

investment

!

are James J. Carlton,
j
representative for the j
department,; and Robert M. Schal-: I

department
a

St. Louis

ler.

Peter J;. Brennan was named
Trust
Counsel
in the

Assistant

tru^t department.

period of 1956.

Other

!

-

new;.assignments

'

were,

given'to Robert J; Schumann, As♦Comparisons

are

that

Thanksgiving

later

this

year

than

affected-by the fact
Day
last.

was

one

week

:

sistant Vice-President, transferred

\

to

banking department-operations;

and Arthur T.

Wellman, Assistant

Volume

Number 5700

186

.

.

The Commercial and Financial Chronicle

.

Secretary, transferred to trust de¬

the

partment operations.'

Utah

V

merging Zion's
Savings.

Savings

and

elected

1953,

V

V

investment
the

Dilatush

trust

if

dent

J.

of

three

banks

&

Bank

final

formal

Chicago,

National

elected

was

the

of

First

Na¬

tional Bank, Mason City, Iowa.
Jjt

Final
be

taken

Dec.

Wis., and Bank
Sheboygan, Wis.,
charter

Sheboygan,

of

merged

Citizens

of

title

new

under

State

Citizens

Bank

of

Bank

Sheboygan, Wis.
^

if.

a

National Bank

Commerce

of

of

Lincoln, Neb., increased its com¬
mon capital stock from $1,250,000
to $1,375,000 by a stock dividend
and from $1,375,000 to $1,500,000
by the sale of new stock effective
Dec. 3.
(Number of shares out¬
standing—75,000 shares, par value
.$20.)
•
1

•

.

,

First

*

^

-

date

three

31

set

the

for

of

merger

National

*■*

-

4

Bank

board

'Chronicle,"

2442,

page

if

Wadsworth,

General

Manager of The Canadian Bank of

*'

Charlotte,

Bank,

new

if

if

elected

J.

dents.
if

approval by the Comp¬

Currency, Washing¬

ton, D. C.j-recently made effective
increase in total capitalization

of the Republic National Bank

of

nounced

on

the

bank, it

Elliott
the

including contin¬
gency reserves, to more than $102,000,000, it was announced jointly
by Karl Hoblitzelle, Chairman of
the
Board,
Fred
F.
Florence,
Chairman, Executive Committee,
and James W. Aston, President.
Previous items relating to the in¬
crease
in capitalization appeared

fornia,

of

N.

The

appointments
Jr.

derson,

Bank

Francisco,

and

and

Assistant
bank's

Comp¬
Yeadon,

as

R.

Gordon

Officer

Trust

Seattle,

at

the

office

Wash,

•

to

Assistant Trust Officer at the San
Francisco

Cashiers

Assistant

John

were

Vandall

M.

of

San

Francisco Mission Office, Ian B.
Coffin, Oakland Office and Theo¬
dore
C.
Tegler at the Seattle,
Wash., Office.
Mr. Anderson has been serving
Assistant

as

Cashier

Loan

and

Officer at the bank's Head Office

Mr.

Bank, Den¬
Harold

Jr.

Berger,

continue

to

Mr.
serve

a position he
1955.
Merriam

Of¬

if

■

Kenneth E. Brewster

,

named

appointed

was

Denver, Colo.,

December

meeting

of

of

at

Mr.

Brewster has been associated with
bank for the
if

past 17 years.

if

Zion's

merge

Dec.

separate

11,

Savings

voted

Bank

to
and

Trust Company and the Utah Sav¬

ings
into

Bank and Trust Company
First National Bank of

the

Salt Lake City.

stitution
First
In

First

will

The resultant in¬
be

called

Zion's

National Bank.

addition,
National

stockholders
added

four

of
new

directors to their former 16-member

board

proved

of

not

directors

establishment

and

of

ap¬

branch

•offices at the present locations of




Street,

Exchange,

on

New

Jan. 1.

was

THE

Best

Francisco,

SOLUTION

established

was

location

of

Bank

Angeles, at Westwood.

a stock dividend, the com¬
capital stock of The National

of

Commerce

of

GIFT

Seattle,

PROBLEM

was

par
if

★

★

★

value $80.)

common

tj:

capital

stock

capital1 stock

mon

812.50

to

Give

of

a

Subscription to

Washington,

from

com¬

THE COMMERCIAL & FINANCIAL CHRONICLE

$4,482,-

$5,200,062.50 by

stock

a

dividend effective Dec. 6.

(Num¬

*

*

Every Thursday, The Commercial and Financial
Chronicle devotes

Consolidated Cement

Debentures Offered
Public

offering

Consolidated

5%

of

wi

headed

ChrOlliclc?

3Q different

Net proceeds from the sale of
the debentures will be used by the

$

principally to retire $4,000,000
outstanding
term
loan
notes, incurred in connection with
the expansion of its facilities at
Paulding, Ohio.
The balance of
the proceeds will be used to re-

g

ite
v
1,0
PiirnnfiA^

g

AUijAUSC.

store

R

capital

previously

WVllt

«

are

The

Bank

of

Francisco,
Jose

San

and

2nd

amount

California, N. A.
Calif.,
office

San

opened

its

Dec.

g

over-the-counter
_

the

sixth

Max B.

enbach

to

if

if

Streets.

be

opened

if

Leo

Vice-Presidents

Frank

L.

California

were

of

the

record

of

dividend

if

r™

™

-c

~

j

of

Angeles,

Los

,

g

,

j

1

.

Today,

many

funds

borrowed

on

.

years ago to
,

the company

year.
Consolidated
and

for

an

community,

thousands

pay

$65

per year

CHRISTMAS GIFT SUBSCRIPTION ORDER

e me n

three

t

Corp.,
cement

g
w

<j<he Commercial and Financial Chronicle
—

„

,

,T

^5 Park Place, New York (8) N. Y.

types'of' portteiS^cementif repre- 8

„

nine

98% of the company's

over

in

months

1956
of

and

1957.

the
The

1 ™

USM for which please send The

R Commercial and Financial Chronicle for one year

g
w

Reichen-

bach, city division, and Leo E.
Smith, head of the bank's Atlan-

plants is 4,750,000 barrels, and an
expansion project at the Ohio

g

tic-Whittier

plant,

completed

R

Will

g

1,250,000

To

g

g

and

Mr.

Horn

William

E.

Office.
is

in

charge

of

co¬

ordinating public relations activi¬
ties

for

California

Bank's

Orange County offices.
the staff of the bank in

nine

He joined

1951,

was

!

S,
C

operates

first

Horn

for

h*.

aggregate rated annual productive
capacity of the company's present

Directors

,

g

shipments

of

the

the privilege of receiving this publication,

«

interest cost to
of less than 5% per

having

total

Board

as

,

financial and general

&

that

sented

Vice-Presidents by the
were Max B.

£.

g

of

of three

Vice-Presidents.

ho

help its subscribers to be acknowledged

£

est, except that until Dec. 1, 1967,
such redemption may be made

j

Chronicle was founded 118

R

no

Calif., has announced the election
Elected

at

a

Municipal News Section.

manufacturing plants in Kansas, g

President

King,
Bank,

to

also

prior

debentures

securities;,

announcements;

latest data on Corporation earnings, and

I

owns

Los Angeles.

if

if

The

redeemable

inter.

purpose

Smith

E.

be

^SToToVr(npTuSs accrued
out

Horn, William E. Reich-

and

will

optional

debentures,

maturity.

on

,

complete

a

16

on

Carlos

This becomes the bank's 16th of¬
and

of

both listed and

quotations

kj

1

Monday Issue includes

K

business affairs in their

The

San

if

and

day edition,

best posted individuals

if

Registration

ingS sections> in the Thurs-

5

on

In

(«

gramnded on this exPansion Pro~ $
debentures
entitled to
I
The

departments and

Prospective Security Offerr

Beane.

working

special

features, ipcluding Securities
Now

by

Lynch, Pierce, Fenner &

company

and

All told, there are some

ers.

.1

•

.

W Ilcll IS IH0

interest from Dec. 1,1957, is being
made today (Dec. 19) by an un¬

syndicate

news

by top authorities—

banking and business lead-

$5,000,000

Cement Corporation

1, 1972, at 100% and accrued

Merrill

edition to current invest¬

articles

sinking fund debentures, due

Dec.

an

ment, financial and business

approximately 91% of the total

if

*

outstanding—416,005

value $12.50.)

par

or

was

1952.

California Bank,

holding

& Co., 25
York City,

members of the New York Stock

cost

in

Stockholders of three Salt Lake

City : banks,
meetings on

Droulia

to

estimated

$4,648,750.

,

elected

if

in

Broad

R

the

Directors.

partner

a

5

He

fice

the

by

Dec. 1, I960 through 1971,

member

a

1930.

since the first of this year.

Board

equipment
less than

secured

railroad

tures

since

National

bank's

are

standard-gauge

appointed Assistant Trust Officer

staff

Assistant Cashier of the American

the

The certificates
new

R

at

was

and

"

Bank,

Julius L. Rendinaro will become

g

the

new
if

H.

with

Droulia Partner

Commission.

sinking fund sufficient to retire,

B.

Vice-President.
if

1928

has

appointed ' Executive

was

being made subject to ap¬
proval of the Interstate Commerce

at their principal amount plus accrued interest, $380,000 of deben-

late

since

Personnel

Mr. Yeadon has been

of

B.

is

Williams

Assistant Cashier in 1949.

Kountze President to succeed the

Berger

San

branch

former

derwriting

Office.

Head

Appointed

since

elected

affiliated

TO YOUR

Vice-Presi¬

ficer and has been with the bank

held

Los

Berrien P. An¬
Wilbur J. Wil¬

of

if

National

*

Kenneth

by the group at competi¬
tive sale yesterday (Dec. 18) on a Thomson & McKinnon, 231 South
La Salle Street.
He was previ¬
bid of 99.22%.
ously with Lamson Bros. & Co.

Cali¬

announced the

10

Assistant

as

of

icle, page 2232, and the Nov. 28
issue, page 2338.
if

—

•'!=

Company,
A

the

shares,

San

A.,

Dec.

on

liams

if

in the Nov. 21 issue of the Chron¬

Chairman,

*

ber of shares

if

since his appointment to that po¬
sition in 1953.

as

CHICAGO, 111.
Daegling is now

was won

McAllister, Chairman of

Board

Calif.,

an¬

was

12.

Dec.
if

of

Texas,

will

he

Tacoma, Wash, increased its
Vice-President and

a

dents, Glenn K. Mowry

if

Ihomson, McKinnoru

Special to The Financial Chronicle)

(

Award of the certificates

Angeles, at Westwood, Los Angeles, Calif, was ab¬
sorbed by First Western Bank and

The

troller,

Kountze

3.875%,

,

With

Vice-Presi¬

the National Bank of

J. P. R. Wadsworth

D.

Assistant
Cashiers, as Assistant Vice-Presi¬

George

xxr,

annually
9, 1959 to 1973, inclusive, at
prices to yield from 3.75%
to
g

of Los

if

Director

Pyeatt, formerly

Colo.,

n

bank.
*

Bank

The

Francis,
Senior
Vice-President, an
Ex¬
ecutive
Vice-President,
R.
L.
Thornton, Senior Vice-President,
and David M. Bernardin, Horace
C. Lemons, Hulon A. Lofman, and

ver,

1947

Assistant

an

title

Mercantile National Bank, Dal¬

Colorado

i

•

been elected

if

elected

in

and

100,000 shares,

Commerce, Toronto, Ontario, has

Dallas,

u r

increased from $6,000,000 to $8,800,000 effective Dec. 5.
(Number of shares outstanding—

tinuing bank.

an

in 1945

Wash,

C.,

N.

Bank.

Company and

troller of the

His assignment at
Office be¬

gan

By

formerly operated
by the discontinued bank will be
operated as branches by the con¬

Formal

t

Jan.

'

three branches

if

in the real

Atlantic-Whittier

Bank

American-Commercial

Webb

estate business.

mon

merged under charter of Ameri¬

Texas,

17

California

years

the

of

J. R. For¬

lotte, N. C., and The Commercial

las,

of

joined the staff as a
in real estate lending

specialist

following several

in

if

if

m a

Hammill & Co.

R.

!l!

Trust

He

Calif.

American Trust Company, Char¬

can

Bank.

with

Trust

Vice-Presidents.

National

Ira Haupt & Co.; McCo.; Wm. E.
Pollock & Co., Inc., and
Shearson,
Master Hutchinson &

Issuance and sale of the certifi¬
veteran

a

service

dent of the

Oneal Netherland

,

is

years

,

R.

P.

certificates

& Co.;

man

and

'

Kiper, Louis F.
O'Shea
and
were appointed

rester, John B.
Gammon,
Ted

Smith

•

J.

Inc.

cates is

Mr.

_

if

if

Co.

&

are offering today (Dec.
19) $3,705,000 of Northern Pacific
Ry. 3.%% serial equipment trust

ant Vice-President.

proposed merger
given in the Dec. 5 issue of

Co., Tulsa, elected W. L. Kendall
Senior Vice-President.

Trust Company, New
York, and held the title of Assist¬

Details of the

Trust

&

ufacturers

Bank

of
Salt
Lake
City are Joseph
Fielding Smith, Donald P. Lloyd,
Virgil H. Smith, and L. R. Weber.
Zion's Savings was established
in 1873; Utah Savings and Trust
in 1889, and the First National
Bank of Salt Lake City had its
formal beginnings in 1890.

the

September of

he had been associated with Man¬

directors named to the

of the First National

were

in

Bank,

institutions.

new

Bank

with

came

Office in Los Angeles. From 1937
until he joined California

the

Stuart

Dick & Merle-Smith; R. W. Pressprich & Co.; Baxter & Co.; Free¬

associates

Reichenbach

this year and has assumed duties
in the city division at the Head

on

Halsey,

109

Associated in the offering are—»

Halsey, Stuart Group
Offers Equip. Tr. Gffs,

Executive Vice-Pres¬

as

California

will

as

associated

,

Mr.

Currency.
merger

special meeting

a

27, with Dec.

The

and

at

effective
the

the
the

on

formerly

ident.

if

if

Citizens State Bank, Sheboygan,

*

of

action

in

Vice-Presi¬

1954.
was

Springs,

pending
approval
of
the
the
United
States

by
Comptroller

Shore

He

Cashier

Assistant

with the First National Bank, Hay

recessed

merger

Zimmer, Vice-Presi¬

Vice-President

completing action on the
and related items, the
stockholders'
meetings
of
the

merger

of

if

if

North

of

Bank

the

Chicago, 111.

Co.,

Robert

pro¬

in

department

National

American

Trust

was

Vice-President

Assistant

an

and

dent in

After

C.

Luther
moted^ to

(2741)

in

the

expected
first

to

be

quarter Of

1958

increase such capacity by

barrels to

ap

aggregate of 6,000,-

000 barrels of cement.

ft

«

«.

Address

City

State

Mention that this is a Gift from
.

(2742)

110

The Commercial and

Securities

Now

it Agricultural Marketing Association,
Socorro, N. M.
(letter of notification) 300,000 shares of common
stock.
Price
At par ($1 per share).
Proceeds — For
equipment; buildings and working capital.
Underwriter
Dec. 3

—

—None.

it Alden

(Vern E.)

Underwriter—None.
Allen

Walter

H.) Co., Inc.
notification) $150,000 of 10-year 6%
unsecured debentures, due Nov. 1, 1967, to be offered to
stockholders. Price—At par (in units of $1,000). Proceeds
4

1

(letter of

—For construction of

a new

addition to present building.

Office—6210 Denton Drive, Dallas, Texas.

Underwriter

—None.

to be used

in realty financing activities.
Midland Securities, Inc., New York.

Underwriter—

it American Dynamics Corp., Maynard, Mass.
Dec. 12 (letter of notification) 20,500 shares of common
(no par). Price—$7.35 per share. Proceeds—For
working capital and general corporate purposes. Office
—146 Main St.,
Maynard, Mass. Underwriter—None.
stock

American Hardware Corp.,

New Britain, Conn.
(par $12.50)

Nov. 5 filed 125,000 shares of common stock

being

offered

shares

in

exchange

of common

for

stock of

not

to

exceed

250,000

Savage Arms Corp.

on

the

basis of one-half share of American
(plus cash) for each
Savage Arms share. The other is conditioned upon ac¬

ceptance by holders of not less than 100,000 shares of
Savage Arms stock not later than Dec. 23, 1957. Under¬
writer—None.

Statement effective Dec.

9.

American Hospital & Supply
Corp.

(letter of notification) 1,300 shares of common
(par $4). Price—At market (around $41 per share).
Proceeds—For working capital. Office—2020
Ridge Ave.,
Evanston, 111. Underwriter — Taylor, Rogers & Tracy,
Inc., Chicago, 111.
stock

American Israeli Paper Mills, Ltd.

(12/20)
Oct. 29 filed
6,000,000 series B ordinary shares (par one
Israel pound per share). Price —
$1 per share, payable

either in cash

expansion

or

in State of Israel bonds.

program.

Office

Proceeds—For

Hadera, Israel.
Under¬
writer—Lee Higginson
Corp., New York, on a best ef¬
—

forts basis.

American Life & Casualty Insurance Co.
Dec. 3 filed 101,667 shares of common stock
(par $1) to
be offered for
subscription by common stockholders at
the rate of one new share for
each two shares
held; un¬
subscribed shares to be offered to
public.

Price—$10

per

share. Proceeds—For capital and
surplus accounts. Office
—Fargo, N. D. Underwriter—None.
»

it American Mutual Investment
Co., Inc.
Dec. 17 filed
490,000 shares of capital stock.
Price—$10.20
per share. Proceeds—For investment
in first trust
notes,
second

trust notes and construction
loans. Company may
develop shopping centers and build or
purchase office

buildings.

Office

None.

—

Washington, D. C.

Underwriter—

American Provident Investors
Corp.
50,000,000 shares of common stqck
(par one
cent).
Price—$2 per share. Proceeds
Feb. 15 filed

—

capital
Tex

and

general corporate purposes.

Underwriter—Peoples

For

working

Office—Dallas,

Securities Co., J. D.
Grey,
Orleans, John S. Tanner, of Dallas, and C. L.
Sdmohds, of Houston, three of the 22
directors, are
Jhairman, Vice-Chairman and President,
respectively.
Anita Cobre U. S.
A., Inc., Phoenix, Ariz.
)f

New

Sept. 30 filed 85,000 shares

of common

stock. Price—At

($3.75 per share).
Proceeds—For investment in sub¬
sidiary and working capital.
par

Underwriter—Selected

curities, Inc., Phoenix, Ariz.

Se¬

'

Artesian Water Co
Oct. 15 (letter of

notification)

3,404 shares of class A
par) being offered for

non-voting common stock (no
subscription by common and class A
common stockhold¬
of record Dec.
2, 1957 on the basis of one new share

ers

of class A common stock
fcr each eight shares
of com¬
stock and class A
common stock;
rights to expire
Jan. 2, 1958.
Price—$30 per share to
stockholders; and
$32 to public. Proceeds—To
purchase assets of Collins
Park Water
Co.; Willow Run Water Co. and
Sedgely
Farms Water
Plant; also to
mon

purchase

additional storage
tanks, water mains, etc. Office —501
Newport & Gas
Pike, Newport, Del.
Underwriter —Laird, Bissell &

Meeds, Wilmington, Del.

• Autcfloat Corp. of America
9
(letter of notification) 500

Dec.

Price—$100 per unit. Proceeds—To
and for working capital.
Business

loan

bank

Manufactures and rents commercial

chines.

Office—515

coffee

brewing

re¬

Shop Pastries Inc., Rockport, Mass.
Sept. 17 (letter of notification) $100,000 of 6%% deben¬
tures dated Sept. 16, 1957 and due Sept.
15, 1972 and
40,000 shares of capital stock (par $1) to be offered
of

&

$50 debenture and 20 shares of capital
Price—$90 per unit. Proceeds—To retire mort¬

working capital.
Gould, Salem, Mass.

Underwriter—Mann

Brantly Helicopter Corpv Philadelphia, Pa.
(letter of notification) 21,818 shares of common
stock (par 50 cents).
Price—$13.75 per share. Proceeds
—For equipment, supplies and
working capital. Offices
—24 Maplewood
Ave., Philadelphia 44, Pa., and Fred¬
erick, Okla. Underwriter—None.
:

shares

of

6%

non¬

voting non-cumulative preferred stock
(par $100) to be
in units of 10 shares
each.
Price—$1,000 per
unit.
Proceeds—For working capital and
general cor¬
purposes.

Sheffield, Ala.

Office—312

N.

Montgomery Avenue,

Underwriter—None.




★ Cador Production Corp., Far
Hills, N. j.
16 filed 1,680,000 shares of common stock
(par five
cents), of which 1,680,000 shares are to be offered in
Dec.

exchange for oil properties located in Oklahoma,
Texas,
New Mexico, Louisiana, Kansas and
elsewhere; the re¬
maining 80,000 shares are to be issued as commissions.

Underwriter—Cador, Inc., Far Hills, N. J.
★

Cambridge Electric Light Co. (1/20)
9 filed $4,500,000 of
30-year notes, series B,

due
Proceeds—To repay bank loans and for
construc¬
tion program. Underwriter—To be
determined by com¬
1988.

petitive bidding. Probable bidders: Halsey, Stuart &
Co^
Inc.; The First Boston Corp.; and Coffin &
Burr, Inc. and
F. S. Moseley & Co.
(jointly). Bids—Expected to be re¬
ceived up to 11:30 a.m. (EST) on Jan.
20.
Canada

Mortgage Bonds, Ltd., Englewood, N. J.
Sept. 3 filed $1,000,000 of 8% mortgage bond trust cer¬
Price

—

At

(in units of $250, $500 and
For purchase of
mortgage bonds.
par

.

Road,
Yonkers, N. Y. Underwriter—To be furnished by amend★ Colombia

★ Caribe Stores, Inc., Aguirre, Puerto Rico
(letter of notification) 247,560 shares of common
stock (par 50 cents) to be offered
for subscription by
Dec. 2

common stockholders.
Price—52 cents per share. Pro¬
ceeds—For general corporate
purposes.
Name Change-

Underwriter

—

Lerner

&

Electric & Gas Co.
Nov. 25 (letter of
notification) 15,000 shares of common
stock (par $3.50) to be offered to
employees pursuant to
Fourth Employees' Stock Purchase
Plan. Price—Not less
than $11 or more than
$16 per share. Proceeds—To
chase shares in the
open market.

500,000 shares of

common

stock

Champion Industries, Inc.
(letter of notification)
75,000 shares of common
(par 10 cents). Price—$4 per share.
Proceeds—
For development and
engineering expenses, raw mate¬
Nov. 7

rials and working
capital.

Business
Office — 22

—

Jalousies, storm

windows, screens, etc.
Jericho Turnpike,
Mineola, N. Y. Underwriter—Allstate
Securities Inc., 80
Wall St., New York.
Chess Uranium
Corp.

May 14 (letter

of

stock

notification) 600,000 shares

of common

(par $1—Canadian).
Price—50 cents per share
(U. S. funds). Proceeds—For
exploration costs, etc. Of¬
fice—5616 Park
Ave., Montreal, Canada. Underwriter—
Jean R. Veditz
Co., Inc., 160 Broadway, New York.
Offering—Expected at any time.
Chicago Tit?e & Trust Co.
filed

23.907

shares

of

common

stock

(par $20)

being offered in exchange for common
stock of Title In¬
surance Corp. of St.
Louis at the rate of
five-eighths of
one share
of

The

Chicago Title stock for each Title Insurance
exchange offer is subject to acceptance

by
30,600 shares (8C%) of the
38,250 Title Insurance shares
The offer will,
expire on Dec. 23. Under¬
writer—None. Statement effective Nov.
21.

Coloiyal Aircraft Corp., Sanford, Me.
July 5 filed 248,132 shares of common
stock
Price

At

be

market.

Underwriter—Glich
effective Aug. 10.

(par lOtf).
stockholders.
New York. Statement

Proceeds—To
&

(Colombia)

,

..

The

$15,000,000 of 4% notes dated March 1,
in
liquidation of claims owing to
banks "and exporters as of Dec.
31, 1956

offer

will

expire on
Underwriter—None.-

extended.

de la

.

issued

by payment of such claims of 60%
notes.

in cash and 40%-in

March

31.

1058, unless

<

|

V"

it Columbus & Southern Ohio Electric Co. (1/7)
Dec.
16 ,filed $14,000,000 of first
mortgage bonds due
1988. Proceeds—To reduce bank loans.
Underwriter—To
be determined by competitive
bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Dillon, Read & Co. Inc. and
The Ohio Company (jointly); Lee
Higginson Corp. and
Salomon Bros.
& Hutzler
(jointly); Eastman Dillon,
Union
Securities &
Co.
and
Glore, Forgan & Co-,
(jointly); White, Weld & Co.; Lehman Brothers. Bids

—Expected to be received up to 11 a.mF(EST)
7 at City Bank Farmers Trust
Co., New York.

on

Jan.

it Commerce Oil Refining Corp.
Decy 16 filed $25,000,000 Of first mortgage bor^ls due
Sept. 1, 1968, $20,000,00 of subordinated debentures due
Oct. 1, 1968 and 3,000,000 shares of common stock to be
.

offered in units as follows: 81,000 of bonds and 48
shares
of stock end $100 of debentures and nine
shares of stock.
Price—To be supplied by amendment.
Proceeds
To
construct

refinery. Underwriter—Lehman Brothers, New
Offering—Expected in January.

York.

Commercial
Oct.

Credit Co.

10

filed $50,000,000 senior notes due Nov.
1, 1977.
Price—To be supplied by amendment. Proceeds—To in¬
crease

Corp.

working capital. Underwriters—The First Boston
Kidder, Peabody & Co., both of New York.

and

Offering—Indefinitely postponed.
it Continental Mining & Oil Corp.
(letter of notification) 250,000 shares of common
stock (par 10 cents).
Price—$1. per share. Proceeds—
Dec. 9

mining expenses. Office—1500 Massachusetts Ave¬
N. W., Washington, D. C. Underwriter—E. L. Woll'e
Associates, Washington, D. C.
nue,

it Continental Steel Corp.
Dec. 3

!
(letter of notification) not to exceed

of common

stock

1.000 shares

(par $14).

Price—At market approxi¬
mately .$35 per share. Proceeds—To stockholders en¬
titled to receive fractional shares in connection with
stock dividend paid to stockholders of record Nov.
Office-—1109 South Main .Street, Kokomo, Ind. Un¬
derwriter—None. '
0
*
v
3%
29.

Cooperative Grange League Federation, inc.
Sept. 27 filed $600,000 of 4% subordinated debentures
Jan. 1, 1966; 10,000 shares of 4% cumulative
pre¬

due

ferred

stock par $100; and 150,000 shares of common
(par $5). Price—At principal amount or par value.
Proceeds—To finance inventory
purchases, to make cap¬

Co., Inc.,

ital loan advances to retail

selling

subsidiaries; to reduce bank
Office
Ithaca, N. Y.

loans; and for working capital.

—

Underwriter—None.
Cubacor

Explorers, Ltd.

Oct. 28 (letter of notification) 600,000 shares of
funds.

mortgage bonds and
(par five cents) to be

stock

share.

filed
States

stock (par

offered in units of $100 of bonds and
10 shares of stock.
Price—$100.50 per unit. Proceeds—For
purchase of first
mortgages or to make first mortgage loans and
for con¬
struction business.
Office—Miami Beach, Fla.
Under¬
writer—Aetna Securities
Corp., New York. OfferingDate indefinite.

24

to

United

pur¬

Office—144 Soutli 12th-

Underwriter—None.

Central Mortgage &
Investment Corp.
Sept. 12 filed $5,000,000 of 20-year

Oct.

13

stock

it Central

Street, Lincoln, Neb.

(Republic of) and Banco

Republica
Dec.

For

Canadian Prospect Ltd.,
Calgary, Canada
Sept. 27 filed 4,851,810 shares of common stock
(par
16% cents) to be offered in
exchange for capital stock
of Canadian Export Gas Ltd. on
the basis of 2% Cana¬
dian Prospect shares for each
Canadian Export share,
subject to acceptance by holders of at least
80% of
Canadian Export shares
outstanding. Underwriter—None.
Statement effective Nov. 4.

Formerly Tybor Stores, Inc.
Co., Boston, Mass.

ISSUE

—

Dec.

tificates.

REVISED

ment.

one

gage notes and for

ITEMS

Columbus Electronics Corp.

1957

Blacksmith

units

ADDITIONS

PREVIOUS

Nov. 13 (letter of notification) 110,000 shares of common
stock (par 10 cents). Price—82.50
per share.
Proceeds—•
For working capital.
Office—1010 ISawmill River

Madison

Ave., New York. Under-,
Burnsidc & Co., Inc., New York.

writer—Willis E.

stock.

Thursday, Deceinber 19, 1957

.

—

ma¬

outstanding.

offered
porate

Jan. 1, 1963 and 30,000 shares of
i^mmon stock (par one
cent) to be offered in units of $100 of debentures and 10

in

.

SINCE
•

(12/23)

(letter of notification) 8300,000 of 6% 5-year
convertible sinking fund debentures (subordinated) due

$1,000). Proceeds —
Underwriter—None.

Nov. 29

•

Corp., New York

29

Nov. 25

Allstate Commercial Corp., New York
Sept 16 filed 256,300 shares of class A common stock
(par one cent), of which 233,000 shares are to be sold
for account of the company and
23,300 shares for the
account of Ben Degaetano, President of the underwriter.
Price—$1.50 per share. Proceeds—For working capital

•

Bamm

tire

Co.

3,000 units of 10-year 12%
employee participation certificates, series B, to be of¬
fered to employees and retired partners of the
company.
Price—At par ($50 per unit).
Proceeds—For working
capital. Otfice—33 North La Salle St., Chicago 2, 111.

Nov.

Registration

shares of stock.

Dec. 2 (letter of notification)

.

^INDICATES

in
Nov.

Financial Chronicle

$1-Canadian). Price—50 cents

Proceeds

common

per share-U. S.

For exploration and
drilling costs.
Suite 607, 320 Bay St., Toronto,
Ont., Canada.
Underwriter—Stratford Securities Co.,
Inc., 135 Broad¬

Office

way,
•

—

—

New York.

Dalton Finance, Inc., Mt.
27 filed $-500,000 of 7%

Rainier, Md.

Nov.

bentures

due

Price—At

(12/24)

subordinated

10-year de¬

Jan.

2, 1968 (with warrants attached).
(in denominations of $100 each). Pro¬
expansion, making of loans and to reduce

par

ceeds—For
short-term

debt.

Underwriter

—

McDonald, Holman

&

Co., Inc., N.ew York.

Daybreak Uranium, Inc., Opportunity, Wash.
May 7 filed 631,925 shares of common stock (par

10
At market (approximately 53 cents'per
share). Proceeds—To selling stockholders. Underwriter
Herrin Co., Seattle, Wash.
.

cents).

Price

—

DeLuxe Check Printers, Inc.
Aug. 28 (letter of notification) 25,000 shares of common
stock (par $1) td be offered to employees and
present
stockholders. Price—$11.80 per share. Proceeds—To ac¬
quire new machinery and equipment. Office — 530 N.
Wheeler St., St. Paul 4, Minn.

Underwriter—None.

Disc, Inc., Washington, D. C.
Oct. 10 filed 400,000 shares of class A

$1).

Price—$2.50

per

Business—Purchase

share.

stock (par

common

Proceeds—For investment.

and

development of real property,
and acquisition of stock of business
enterprises. Under¬
writer—None.

Irving Lichtman is President «nd Board

Chairman.
Doctors'

Motels, Inc., Kansas City, Kan.

Oct. 25 Filed 500,000 shares of common
stock, of which
426,497 shares are to be offered
publicly, 39,568 shares
are

to be offered in exchange for

debentures, 3,085 shares

are

$432,055 outstanding 6%

to be issued

dend and 30.850 shares are presentlv
—At

and

par

($15

per

share).

as

a

stock divi¬

outstanding.

Price
Proceeds—For construction

operation of motels and to repay bank loans.

derwriter—None.

Un¬

.

Volume

186

Dow

.

Nov.

Number 5700

Chemical

filed

25

issuable

.

.

The Commercial and Financial Chronicle

.

Co.

maturing Dec. 15,

shares

84.121

of

stock

common

(par $5),

$4,000,000 4% sub¬
ordinated convertible debentures due June 1, 1980, orig¬
inally issued by The Dobeckmun Co., the: liability of
which was'assumed by Bow Chemical Co. as of Aug. 31,
J937.
These debentures are held by three insurance
conversion

upon

companies.; /

the

of

" '

,

'7V*..

-.:

•

Durafoy Co., Scottdaie, Pa. (12/26)
12 filed 69,000 shares of common stock (par $1).
be supplied by amendment.
Proceeds—For
modernization and improvements.. Underwriter—Mor¬
timer B. Burnside & Co., Inc., New York. V
Price—To

Durox

of

Minnesota,

Inc., Denver, Colo..

Sept. 23 filed 750,UOO shares of common stock (par $1)
Price—$2 per share. Proceeds—For capital expenditures
and

capital.

working

Business — Building material.
Underwriters; Inc., Englewood,

Underwriter—American

Colo.. Statement effective Dec."
Electro Precision

Oct. 30

Corp., Arkadelphia, Ark.

$1). Price—$4 per share. Proceeds—For office
and laboratory equipment;
inventory, working capital,
etc. Underwriter—Nunn-Groves Co., Little Rock, Ark.
Ex-Cell-O Corp., Detroit, Mich.
be

to

filed

~

.

(par $3)
stock of Bryant

88,000 shares of, common stock

offered in exchange for. common

Chucking

Co.

Grinder

Springfield,

of

Va.,

at

of

rate

an

Ex-Cell-O share for each full Bryant

Offer will

become effective upon acceptance by

four-tenths of
share.

holders of not less than 209,000 shares (95%) of all com¬
mon stock of Bryant
outstanding.; Underwriter—None.
Exuanded
Nov. 26

Inc.

Shale Products

par.

N. M.
Famous Virginia Foods Corp.
6

(letter of notification)

5,000 shares of. common
stock.
Price—$6.67 per share.
Proceeds—Tt) selling
stockholder,. Office—922 Jefferson St., Lynchburg, Va.

Underwriter—Whitney & Co., Inc., Washington, D. C.
First International

3395

S.

Bannock St., Englewood, Colo. Underwriter
American Underwriters, Inc., Englewood, Colo.

—

&

Co., Washington, D. C.

(letter of notificationK60,000 shares of common

stock (par$l) and $180,000 of 6% redeemable debentures

Life Insurance Co.,

Phoenix, Ariz.

July 29 filed 106,500 shares of common stock (par $4),
of which 90,000 shares are to be offered publicly and
16,500 shares to employees pursuant to stock purchase
options. Price—To public, $12 per share. Proceeds—For
expansion and other corporate

purposes.

Underwriter—

None.

Fluorspar Corp. of America
Nov. 12 filed

$1,400,000 aggregate market value of com¬
(number of shares to be supplied by amend¬
ment). Price—Also to be supplied by amendment. Pro¬
ceeds—To finance additional exploration work on min-

mon

.

filed

First National

Food Fair Properties,

Inc.

Nov. 12 filed 2,499,116 shares of common stock

cent)

being offered for subscription by

December 20

Israeli

American

stock

(Lee

Ford Home
;

j

.Kigginson Corp.) $6,000,000

(P.

Erooks

W.

Industries

''■*[

&

•'

"•

(Bids

bank loans and for real estate operations and financ¬
Underwriter—Eastman Dillon, Union Securities &

pay

ing.

Food Fair Stores, Inc., owner of about
45% of the outstanding common stock, has indicated that
it intends to exercise its subscription rights.
Ford

Nov.

Home

Leases, Inc.

a
$100 debenture and five shares of stock. Price—
$100 per unit. Proceeds—To repay $90,000 of notes and
for general corporate purposes.
Business—Financing of

homes.

Office
McDonough,
Philipson & Co., Utica, N. Y.

(Bids

(Monday)

Finance,

;

:v

,

,

*.

&

December 26

•

Co., Inc.)

.

••7(Mortimer B. Burnside

(#eillv,; Hoffman

&

Ohio
(Bids

Co,',- inc.>.-69,000 shares
__________

.

it Ford Motor Co., Dearborn, Mich. .
Dec. 17 filed $60,000,000 of participations in the com¬
pany's Savings and Stock Investment Program for
Salaried Employees, together with 1,500,000 shares of
company's
•

common

stock issuable under said program.

Forest

Laboratories, Inc.
Aug. 28 filed 200,000 shares of capital stock (par 10
cents). Price—$2.50 per share. Proceeds—For sales pro¬
motion of company's products, working capital, addi¬
tional inventory and accounts receivable, for research
and development and for other general corporate
pur¬
poses. Office—Brooklyn, N. Y. Underwriters—Alfred L.
Powell Co., New York; and H. Carroll & Co.,
Denver,
Colo. Offering—Expected in near future.

.

(Thursday)

;

Central Power &

V'"'

January 7,
-

....

..

Minnesota

(Bids

11

Co.;

Bonds

-

~

iBids.tO;.be invited)

January 9,

.

invited)

be

Michigan

Transport &

Bonds
.

v

(Bids

invited)

be

$4,620,000

,

(Putnam & Co.;

Bonds

(Kidder, Peabody & Co.;_ Blvth & Co., inc.; White, Weld & Co.;
and Laurence M.*Marks & Co.) $30,000,000

14,

'Tuesday)

1958

Chicago,Burlington & Quincy RR.__Equip. Tr. Ctfs.
$4,500,000

invited)

be

(Bids

to be

Power

Co
11

(Thursday)
Bonds

a.m.

$8,000,000

EST)

February 24, 1958

(Monday)

Bonds

Pennsylvania Electric Co
11

a.m.

$29,000,000

EST)

February 25, 1958

(Tuesday)

(Bids to

15,

Pacific

$15,000,000

be invited)

(Bids

Pacific Power

to

Equip. Trust Ctfs.
invited)

be

Bonds

& Light

(Bids 8:30

Pacific Power &

PST)

a.m.

$15,000,000

Preferred

Light Co
$10,000,000

(Bids 8:30 a.m. PST)

March 4,

Alabama

Power
(Bids

Bonds

Co
11

a.m.

EST)

$23,000,000

to" be

Royal

Dutch

Petroleum

(Friday)

January 20,

Common

Co

1958

March 5,

a.m.

EST) $4,500,000

.Notes

$30,000,000

1958

to

$35,000,000

(Wednesday)

Electric Co

Iowa Illinois Gas &

(Bids

11

General Credit, Inc., Washington, D. C.
Aug. 17, 1956 filed $2,000,000 of 6% subordinated sink¬
ing fund debentures, due Sept. 1, 1971, with detachable
warrants to purchase 160,000 shares of participating
preference/stock, to be offered in units of $500 of deben¬
tures and 40 warrants. Price—$500 per unit. Proceeds—
For expansion and working capital Underwriter—None
named.
Offering to be made through selected dealers.
Application is still pending with SEC.

EST)

1958

$21,500,000

(Tuesday)

Appalachian Electric Power
(Bids to be invited)

Co
$25,000,000

Parking, Inc.

June 18 (letter of notification) 240,000
stock (par $1). Price—$1.25 per share.

Underwriter—L. L. LaFortune &

shares of

common

Proceeds—To

re¬

Co., Las Vegas, Nev.

Genie Craft

Corp.
Aug. 8 (letter of notification) $100,000 of 10-year 6%
convertible debentures and 120,000 shares of common
stock (par 10 cents) to be offered in units of one $50
20 shares of common Stock.

Price—$100

unit.

Proceeds—To discharge short term obligations;
purchase merchandise inventory; and for working cap¬
ital.

Office
1022 18st St., N. W., Washington, D. C.
Underwriter—Whitney & Co., Inc., Washington, D. C.
—

★ Genisco, Inc., Los Angeles, Calif.
Dec. 13 (letter of notification) 4,290 shares of common
stock (par $1) to be issued to employees pursuant to
exercise of options granted Dec. 20, 1956.
Price—$7.75
per

share.

Federal

Proceeds—For working capital.

St., Los Angeles, Calif.

Office—2233

Underwriter—None.

Gold Seal Dairy Products Corp.
25 filed 175,000 shares of class

A stock (par 10
15,000 shares are to be reserved
prior otfer to employees.
Price — To be sup¬
plied by amendment. Proceeds—To acquire outstanding
stock of Kulka Electric Manufacturing Co., Inc. Office
—Elizabeth, N. J. Underwriter—Amos Treat & Co., Inc.,
cents)

of

which

New York.

Offering—Indefinitely postponed.

Divide

Oil Corp.
(letter of notification) 300,000 .shares of common
stock (par 10 cents).
Price—$1 per share. Proceeds—
To pay balance on oil and gas properties, and unsecured
notes and for drilling and working capital. Office—207

Bldg., Salt Lake City, Utah.
Birkenmayer & Co., Denver, Colo.
Great

Bonds
a.m.

assem¬

Ga.

Oct.

(Thursday)

1958

manufacture and

Newhouse

Debentures

$9,000,000

be invited)

Georgia Power Co
June 3,

(Monday)

Light Co

(Bids 11:30


tablish-production facilities for

Oct. 11

Bonds

March 20,

(Offering to stockholders—to be underwritten in U. S. by Mbrgan
Stanley & Co.) between $200,000,000 and $250,000,000

Cambridge Electric

May 23 (letter of notification) 100,000 shares of common
(par $1). Price—$2 per share. Proceeds—To es¬

Great

(Tuesday)

1958

invited.)

(Bids to

January 17, 1958

$30,000,000

Ohio Edison Co
(Bids

(Thursday)

January 16, 1958

Debens.

England Telephone Co

(Bids to be invited)

Bonds

Co

(Wednesday)

February 26, 1958
Southern New

$3,450,000

tPC

Atlanta, Ga.

for

(Wednesday)

RR

Missouri

1958

May

Oct.

Bonds

Public Service Co

Central Illinois

Cleveland Electric Illuminating Co

$50,000,000

invited)

Bonds, Etc.
$10,000,000

_

(Bids

on

stock

per

(Bids noon EST) $30,000,000

January

General Automatics Corp.,

debenture and

(Wednesday)

February 20, 1958
Gulf

Bonds Debentures

Commonwealth Edison Co

-Preferred

(Bids to be invited)

(Bids

to

(Tuesday)

Northern Illinois Gas Co._

Washington Water Power Co.____Bonds & Debens.

(Bids

Common

$7,500,000

invited)

be

February 19, 1958

Chas. W. Scranton & Co.; and Estabrook
& Co.) $30,000,000

January

(Friday)

"

Connecticut Light & Power Co
-

to

(EDT)

outstanding debt; for expansion of subsidiary cor¬
poration and for working capital. Office—c/o Edwin
F. Clements, 5312 Glenwood Ave., Youngstown, Ohio.

Trading Co., Ltd

February 18, 1958

Equip. Trust Ctfs.
to

Corp. (jointly); Kuhn, Loeb & Co., Lehman Brothers
Glore, Forgan & Co. (jointly). Bids — Had been

scheduled to be received up to 3:45 p.m.
13 at Room 654, 101 Indiana Ave., N.

tire

$25,000,000

Gulf States Utilities Co

(Thursday) ;

Chicago, Rock Island & Pacific RR.
(Bids

EST)

Bonds

Co

Electric

a.m.

-

$3,9.75,000

1958

11

February 14, 1958
Shell

Equip. Trust Ctfs.

Pittsburgh & Lake Erie Ry—
(Bids, to

&

(Offering to common stockholders—underwritten by Morgan
Grenfell & Co., Ltd., etc.) $112,000,000 to $154,000,000

/;.•"•

$24,500,000

(Thursday)

and

Peabody

(Wednesday)

Januarys, 1958

.

Indiana

(Bids

& Co.;
115,000 shares

Kidder,

and

General

Chicago, Burlington & Quincy RR.____.

'

(Friday)

February 13, 1958

EST), $14,000,000

a.m.

Piper, Jaffray & Hopwood)

,

$12,000,000

February 7, 1958

Mining & Manufacturing Co.__Cemmon

(Goldman,. Sachs, &

'

—Bonds

invited)

American Telephone & Telegraph Co._ .Debentures
(Offering to stockholders—no underwriting) about $720,000,000

(Tuesday)

1958

Columbus & Southern Ohio Electric Co

,

(Tuesday)

Light Co

Inc; i 6309,232

.......

....

.Equip. Trust Ctfs.

be

Underwriter—To be determined by competitive bidding
First Bos¬

Atlanta, Ga. Underwriters—Armstrong & Co., Atlanta,

:

Wisconsin Southern Co., Ind.;_ ___ _1_ _ --Common
■/ (Offering to common stockholders—underwritten by the
Milwaukee.. Co.;' Harley., Hayden ■'& Co.; and Bell- & Farrell,

=

(

E«uip. Trust Ctfs.

February 4, 1958
>.

Corp., New York

$3,435,000

/

Preferred

& Sweeney, Inc.); $150,000

3, 1958

(Thursday)

invited)

be

(Bids to be invited) $5,700,000

Common

—

bly of controls; and for other corporate purposes. Ad¬
dress—c/o Positronic Corp., 2572 Ridgemore Road. N. W.,

$5,000,000

RR

to

(Bids to

Y Januray

Preferred

Brothers)

Great Northern Ry

_r_.

Sovereign Resources, Jnc.__-—

Equip. Trust Ctfs.
$4,140,000

January 23, 1958
Baltimore

Underwriter

W., Washington 25,

Bonds

(Bids noon EST)

'\ff. '■

$500,000

Y.

D. C., but bidding has been postponed.

$10,000,000

Norfolk & Western Ry...

(Lehman

(Thursday)

Duraloy Co.
::

$60,000,000

(Wednesday)

Portland Gas & Coke Co

..Debentures

(McDonald, Holman

Bonds

invited)

be

to

N.

—

Probable bidders: Blyth & Co., Inc., and The

Iowa Power & Light Co

_Y__—.Common

Ltd._____

(12/20)

29

(letter of notification) $250,000 of 6% sub¬
ordinated debentures due Jan. 1, 1968 and 12,500 shares
of class A common stock (par $1) to be offered in units

ton

(Tuesday)

be invited)

to

January 22, 1958

r-'f; V; December 24y0uesdayp

Dalton

$8,500,000

January 21, 1958

$500,000

__.Debentures & Common
Willis7 E. ..Biirnside '& tp: liter $300,000

;C>.

Bonds

,

invited)

Pacific Gas & Electric Co.__

Bamm Corp

y v,,

Co._

be

to

—.Debentures
Inc.)

Co.,

,December 23

*

\

„.\l.

•

Brooks & Co,,-. Bur.) $250,000

P. W.

,

(Bids

Leases, Inc.---'-Debentures .& Common
(P£ilip*on & CO. ) '$250,000 7*. '
'[' '

Litecraft Industries, Ltd.____
Litecraft

West Texas Utilities

(Friday)

one

stock¬

Jan. 14 filed 426,988 shares of common A stock (no
par)
and 1,537,500 shares of common B stock (par Si).
Pro¬
ceeds—To the Attorney General of the United States.

CALENDAR

Paper Mills, Ltd.2_Series B ord.

(par

common

holders of record December 6, 1957, on the basis of one
new
share for each two shares
held; rights to expire
on Dec. 20, 1957.
Price—$2 per share. Proceeds—To re¬

General Aniline & Film

ISSUE

NEW

Office—

of

D. C.
500,000 shares of class A common stock
(par five oents); Price —$5 per share. Proceeds — To
purchase properties.
Underwriter — Whitmore, Bruce
27

ing properties and to provide working capital.
Portland, Ore.

111

Co., New York.

Fire Insurance Co.

Aug. 26 (letter of notification) 100,000 shares of common
stock (par $1). Price — $3 per share. Proceeds — For
capital and surplus and for first year's deficit. Office—

Nov.

(letter of notification) 60,000 shares of common

Nov.; 25

debentures, at

First Leaseback Corp., Washington,

l.i.,7';\V/*' •'«.

stock (par

-,*•

1967.

Price—Of stock, $2 per share;
Proceeds—For exploring and de¬
veloping mineral properties with objective of producing
expanded shale. Office—728-29 Symes Bldg., Denver 2,
Colo.
Underwriter—Minor, Mee & Co., Albuquerque,

of

Nov.

Nov;

•

(2743)

Bonds

7

Northern

Life

Insurance

Underwriter—

Co.

44,400 shares of common
stock (par $1). Price—$6.75 per share. Proceeds—For
capital stock and unassigned surplus. Office — 119 W.
Rudisill Blvd., Fort Wayne, Ind
Underwriter—North¬
western Investment Inc., Fort Wavne, Tnd.
r
(letter of notification)

Continued

on

page

112

112

The Commercial and Financial Chronicle

(2744)

Continued

from

page

—Manufacture of incandescent and fluorescent lighting

111

fixtures.

Office

Passaic, N. J.

—

Underwriter

Insurance Corp.,

Brooks &

Baltimore, Md.

Aug. 16 filed 300,000 shares of common stock, of which
200,000 shares are to be publicly offered and the remain¬
ing 100.000 shares reserved for issuance upon exercise
of warrants which are to be sold at 25 cents per warrant
to organizers,

incorporators, management, and/or direc¬
tors. Price—$10 per share. Proceeds—For working cap¬
ital and general corporate purposes
Underwriter—None.

if Lorain Telephone Co., Lorain, Ohio
13 (letter of notification) 1,785 shares of

For additions and improvements.

St., Lorain, Ohio.

Hartford

Electric

capital

Underwriter—None.

rdaho.

Malcolm

C.

Brown

is

President.

Standard Securities Corp., Spokane,
Idaho.
Minnesota
10 filed

Dec.

Price

—

Mining & Manufacturing Co. (l/7 >
115,000 shares of common stock (no par).
supplied by amendment. Proceeds — To

To be

Estate of John

C. Dwan,

'•

Dec. 3

$250,000 of 6% subordi¬
nated debentures due Jan. 1, 1968 and Jan. 1, 1973. Price
—At par. Proceeds—For real estate; to retire preferred
stock; purchase machinery and equipment and for work¬
ing capital. Office—4th & Jule Street, St. Joseph, Mo.
Underwriter—None.

•

if Holly Corp.
Dec. 3 (letter of notification) 40,000 shares of common
stock (par 60 cents) issued as part payment of purchase
©f Alsop, Dye & Eeisz-Dewig leases from Petrex Corp.
at a value of $1 per share.
Price—$1.12% per share.
Proceeds—To selling stockholders. Office—405 Lexing¬
ton Avenue, New York

17, N. Y. Underwriter—None.

Nov. 1 filed 50,000 shares of class A common stock to be
offered to the public at $5 per share and 116,366 shares
of class B

stock

common

be

to

offered to

stockholders

at $6 per share at the rate of two new shares for each
five shares held. Proceeds—For working capital. Office

—Fort

Lauderdale, Fla.

Underwriter—None.

Horace Mann

June 27

filed

Price—At

Fund, Inc., Springfield, III.
100,000 shares of capital stock (par $1)

market.

Proceeds—For

investment.

Distrib¬

utor and Investment

Manager—Horace Mann Investors,
Inc., Des Moines, la., of which Charles F. Martin is also

President.

Office—216 E.

Hortac

Monroe St.,

Ltd.
(letter of notification)

Springfield, 111.

Mines,

Nov.

20

mon

stock.

Price—At

($1

300,000 shares of

com¬

share). Proceeds—
To repay loan, to purchase equipment and
machinery
and for working capital.
Office—1551-A Eglinton Ave.
West, Toronto 10, Onf., Canada. Underwriter—D'Amico
&

par

Co., Inc., Buffalo, N.

per

Y

International

Staple & Machine Co.
Oct. 14 (letter of notification) 20,000 shares of 6% cumu¬
lative preferred stock of which 10,000 shares are to be
offered to the public and the remainder to stockholders
of record Oct. 10, 1957 in exchange for seven shares of
common for each share of
preferred
Both subscription
and tenders for exchange must be received on or before
Nov. 30, 1957. Price—At par ($10 per share). Proceeds
—For working capital. Office—497 Union Trust Build¬
ing, Pittsburgh 19, Pa. Underwriter—None.
Isthmus

May 21
mon

Steamship & Salvage Co., Miami, Fla.
(letter of notification) 300,000 shares of com¬

stock (par 10 cents).

Price—$1 per share.

Proceeds

—To purchase a ship and for working capital. Under¬
writer—Anderson Cook Co., Inc., Palm Beach, Fla.

Janaf, Inc., Washington, D. C.
July 30 filed $10,000,000 of 5V2-8% sinking fund deben¬
tures due Aug. 1, 1972 and 100,000 shares of common
stock (par 20 cents) to be offered in units of a
$1,000
debenture and
and

$2

10

shares

of

stock,

or

a

$100 debenture

share of stock, Price—Par for
debenture, plus
share for each 10 shares of Stock. Proceeds—For

one

per

construction of

a shopping center and other
capital im¬
provements; for retirement of present preferred shares;
capital, etc. Underwriter—None.

and for working

King Pharr Canning Operations Inc.
Nov. 25 (letter of notification) $200,000 of
6%% sinking
fund debentures dated Dec. 1, 1957 and due Dec.
1, 1977
(with common stock purchase warrants). Price—At

par.

Proceeds—To retire notes payable.
Office—Cullman, Ala.
Underwriter
Berney Perry & Co., Inc..
—

Birmingham.

Ala.

Products, Inc.
notification) 150,000 shares of common
(par five cents). Price—$2 per share. Proceeds—
For
capital expenditures,
equipment,
repayment
of
loans and working capital.
Business—Welding and cut¬
ting equipment.
Office — 253 Boulevard, Hasbrouck
Heights, N. J. Underwriter—Pierre Rossini Co., Westwood, N. J.
Nov. 25 (letter of'

ctock

•

Litecraft Industries Ltd.

(12/20)
Nov. 22 filed $500,000 of 6%% sinking fund debentures
due 1977 (with warrants attached) and 50.000 shares
©f common stock (par $1). Price—Of
debentures, 100%
and

Hopwood, Minneapolis, Minn.
Monticello

accrued

ceeds—To

interest; and of stock, $5

retire

mortgage

and

other

per

share.




Pro¬

indebtedness;

purchase machinery; and for working capital.

Associates, Inc.

expenditures,

including

construction of motel,
roadside restaurant and gas station. Business—Has been
processing and selling of gravel. Office—203 Broadway,
Monticello, N. Y. Underwriter—Walnut Securities Corp.,

Philadelphia, Pa.

to

Business

;r

? ,

Engineering Corp.

100,000 shares of common stock (par 25
Price—To be supplied by amendment. Proceeds
indebtedness to Norden-Ketay Corp., to
purchase additional equipment and for working capital.
cents).

...

—To

prepay

Underwriter—Hayden, Stone & Co., New York. Offer¬
ing—Temporarily postponed because of market condi¬
tions.
Oil

&

Oil

Gas

Ventures—First 1958

& Gas

Madison,

Fund, Ltd. and

Ventures—Second 1958 Fund,
N. J.

Ltd.,

Oct. 29 filed $2,500,000 of participations in
capital as lim¬
ited partnership interests to be offered in
$25,000 mini¬
mum
amounts.
Proceeds—For acquisition,
etc. of oil properties.
Underwriter
Co., Ltd., Madison, N. J.

Oil &

Mineral

—

exploration,
Projects

Mineral

Operations, Inc.

Nov. 4 (letter of
notification) 100,000 shares of common
stock (par $1).
Price—$2.50 per share. Proceeds—For
development 6f oil and mineral properties. Office—208

Mortgage Clubs of America, Inc.
Aug. 19 filed $1,000,000 of participation units in second
mortgages of real estate to be offered for public sale in
units of $100, plus a sales commission of $10 per unit
to the company. Proceeds—To be invested in small loans
secured by second mortgage on home
properties. Office

Wright Bldg., Tulsa, Okla. Underwriter—Universal Se¬
curities Co., 201 Enterprise
Bldg., Tulsa 3, Okla.
^ /

—Springfield, Mass. Underwriter—None. Charles Hersh-

Price—$260

..

is President.

man

Old American Life Co.,
Seattle, Wash, v
July 22 filed 15,825 shares of class A stock (par $10) and
3,165 shares of common stock (par $10) to be offered in

units

Roanoke, Inc., Roanoke, Va.
(letter of notification) 60,000 shares of common
stock (par 40 cents).
Price—$5 per share. Proceeds—
For purchase of land, construction and
working capital.
Underwriter—Southeastern Securities Corp., New York.
★ Motel Corp. of Italy
Dec. 11 filed 20,000 shares of class A

common

stock and

$1,000,000 of 8%

income debenture bonds due July 2,
1933, to be offered in units of one $100 bond and two

shares

of

stock.

construct

chain

and

of

per unit.
Proceeds—To
through Italian corporations, a
Italy.
Office—Silver Spring, Md.

in

U nderwriter—None.

Municipal Investment Trust Fund, Inc. (N. Y.)
May 9 filed 5,000 units of undivided interests in Munic¬
ipal Investment Trust Fund, Series A. Price—At market.
Proceeds—For investment.
Sponsor—Ira Haupt & Co.,
New York.

Nassau

Fund, Princeton, N. J.
May 8 filed 250,000 shares of common stock. Price—At
market.

Proceeds—For

investment.

Office—10

St., Princeton, N. J. Investment Advisor
Hoisington, Inc., same address.

—

Nassau

Harland W.

National

Biochemicals, Inc.
(letter of notification) 100,000 shares of com¬
mon stock
(par 10 cents). Price—$3 per share. Proceeds
—For cost of plant and
inventory and for general cor¬
Sept.

10

porate purposes.

Office—Room 202 Houston Title
Bldg.,
Houston, Tex. Underwriter—Scott Taylor & Co., Inc..
New York, N. Y.

National Bowlero,
Dec.

4

filed

$900,000

Inc., Cleveland, O.
5% 10-year debenture bonds,

of

9,000 shares of 4% non-cumulative preferred stock
(par
$100) and 15,000 shares of common stock (par
$10) to be
offered in units of $9,000 of
bonds, 90 shares of preferred
stock

per

and

unit.

150

shares

of

common

Proceeds—For erection

bowling sports centers.

stock.
and

Price—$19,500

operation of two

Underwriter—None.

William N.

Skirball is President.

be

amended.

National Mortgage Discount
Corp., Waco, Texas
Nov. 27* filed 10,000 shares of
class A preferred stock
(no par) and 5,0()0 shares of class B
preferred stock (no
par).
Price—$100 per share. Proceeds—For investment
in real estate

notes, for

reserve

and

for real estate develop¬

general corporate purposes.
Underwriter—
Proctor Elder Securities
Co., Ltd., Fort Worth, Texas.
Natural Gas Pipeline Co. of
America

Nov. 19 filed $40,000,000 of first
mortgage pipeline bonds
due 1977.
Price—To be supplied by amendment. Pro¬
ceeds— To reduce bank
loans. Underwriters — Dillon,
Read & Co. Inc. and
Halsey, Stuart & Co. Inc., both
of New Vork.

Offering—Temporarily

postponed.

New Orleans

Public Service Inc.
12 (letter of
notification) 5,965 shares of comftiOu
stock (no par)
being offered for subscription by minority
stockholders of record Dec.
2, 1957 on the basis of one
new share for each
eight shares held; rights to expire
on Dec. 26.
Price—$25 per share. Proceeds—For con¬
struction program.
Office—317 Baronne St., New Or¬
Nov.

leans, La.

unit.

and

Proceeds

Pacific

Underwriter—None.
1

m

*4

three

class

the

shares.

Petroleums, Ltd.

Petroleums, Ltd.

at

A

For

working capital
Underwriter—None.
—

rate

of

Pacific

one

share

for

(par $1),
exchange

common

each

two

stock

Merrill

shares; the remaining 15,000 shares are to be issuable
upon exercise of presently outstanding options
granted
by Merrill, which options will be assumed by Pacific.
Office—Calgary, Alberta, Canada. Underwriter—None,
Statement

effective

★ Pacific

Power &

Dec.

13 filed

Nov.

13.

Light Co. (1/15)
$15,000,000 first mortgage bonds due 1988,

Proceeds—To repay bank loans and for construction
pro¬
gram.
Underwriter—To be determined by competitive

bidding.

Probable

Eastman

Dillcn,

bidders:

Union

Halsey,

&
Co.
(jointly);
Stearns & Co./ and Salomon

Stuart

& Co. Inc.;
Co., and Kidder,
Lehman
Brothers;
Bear

Securities

Peabody

Bros.

&

&

Hutzler

(jointly);

Blyth & Co., Inc. and White, Weld & Co. (jointly). Bids
—Expected to be received up to 8 a.m. (PST) on Jan. 15.

if Pacific Power & Light Co. (1/15)
Dec.
13
filed
100,000 shares of cumulative
stock

(par $100).
Underwriter—To

preferred

Proceeds—For construction program.
determined by competitive bid¬

be

ding.
Probable. bidders:
Kidder, Peabody & Co.,

Halsey,

Stuart

& Co. Inc.;
Dillon, Union
(jointly); Blyth & Co., Inc.; Smith,
Barney & Co., and White, Weld & Co. (jointly). Bids—
Tentatively expected to be received up to 8 a.m. (PST)
Securities

Jan.

on

&

and

Eastman

Co.

15.

Pan American Tool Co.,
Houston, Texas
Oct. 28 filed 165,000 shares of common stock
to be offered in blocks of not less than

(par $1),
3,000 shares. Price

—To

be

supplied by amendment.

charge trade
ment and for

Proceeds

—

To

dis¬

accounts payable, to buy tools and
equip¬
working capital. Underwriter—None...

Pearce-Simpson, Inc., Miami, Fla.
Nov.

7

filed

415,450 shares of common stock (par 50
Price—$1 per share. Proceeds—For capital ex¬
penditures; to retire loans and notes outstanding; and
cents).

inventories,

tools,

and

other

corporate

purposes.

Underwriter—Christopher Corp., Miami, Fla.

(par one
cent). Price—$1.25 per share. Proceeds—For
acquisi¬
tion of
properties; for ore testing program; for assess¬
ment work on the Yellowknife
properties; and for coat
of a concentration
plant, mining equipment, etc. Underwriter~-Gearhart & Otis, Inc., New York. Statement ex¬
to

share

common

per

Oct. 11 filed 1,603,998 shares of common stock
of which 1,588,998 shares are to be offered in
for outstanding Merrill

for

National Lithium
Corp., New York
Feb. 19 filed 3,120,000 shares of common
stock

pected

one

Price—$101

operate,

motels

of

and other corporate
purposes.

Motel Co. of

ment

Koeller Air

corporate

Nuclear Science &

former director of company.
Underwriters—Goldman, Sachs & Co. and Kidder, Peabody & Co., both of Now York; and Piper, Jaffray &

Nov. 18

Home Owners Life Insurance Co.

other

Proceeds—For working
purposes.
Underwriter—

Sept. 20 filed

a

capital

Co.
(letter of notification)

and

stock

share.

per

Treasurer.

Underwriter-

Wash., and Kellogg,

—None.

.

Price—S5

Sales to be made through Eugene M.
Rosenson,
President, and Marcus T. Baumann, Vice-President and

Kellogg, Idaho
June 3 (letter of notification) 800,000 shares of common
stock.
Price—At par (17V2 cents per share).
Proceed?
—For mining expenses.
Office—Sidney Bldg., Kellogg,

Feb; 18 (letter of notification) 300,000 shares of common
itock.
Price—At par ($1 per share).
Proceeds — For

Chemical

(par SI).

Mascot Mines, Inc.,

Light Co.
Oct. 8 filed $2,400,000 of 3% secured debentures, series
A, due Aug. 1,. 1967, being offered in exchange for 3%
first and general mortgage bonds, series D, due May 1,
1982. of Connecticut Power Co. on a par-for-par basis
The exchange offer expires on Dec. 27.
Underwriter

if Hillyard

North American Finance Co.,
Phoenix, Ariz.
27 filed 300,000 shares of class B common

Nov.

share.
Proceeds—
Office—203 West 9th

per

None.

Gulf States Land &

Industries, Inc.
Sept. 25 filed 316,814 shares of common stock (par 50
cents) and $2,754,900 6% first mortgage sinking fund
bonds due 1972 being offered in exchange for the out¬
standing $4.50 prior preferred stock on' the following
basis: For each preferred share (a) 11% shares of com¬
mon
stock, or (b) $100 of bonds, plus IV2 shares of
stock. The offer, which is conditioned upon its accept¬
ance by holders of at least 85% of the 27,549 outstand¬
ing preferred shares, will expire on Dec. 20. DealerManager—Howard, Weil, Labouisse, Friedrichs & Co.,
New Orleans, La.
Statement effective Nov. 13.

Price—$28

held.

shares

.

bank loans and for working capital.
Business — Sells
hatching eggs and day-old chicks. Underwriter—None.
George E. Coleman, Jr., is President.

common

stock (no par) to be offered for subscription by common
stockholders at the rate of one new share for each
60.4364

Thursday, December 19,1957

.

Nov. 14 filed 25,000 shares of common stock (no par);
Price—$27 per share.
Proceeds—To repay short term

Co., Inc., New \ork.

Dec.

.

Nichols, Inc., Exeter, N. H.

P. W.

—

'

Guardian

.

9

«

r0

fa

^Peninsular

Metal Products Corp.
; \~
65,000 shares of 6% cumulative convertible
preferred stock. Price—To be supplied by amendment.
Dec.

16 filed

Proceeds—Together with funds from sale of $318,000 5%
subordinated debentures, to purchase all of the out¬
standing

104,500 shares of capital stock of George L.
Nankervis Co., Detroit, Mich., for $15.75 per
share, or a
total of $1,645,875.
Office—Ferndale, Mich. Underwriter
—Wm. C. Roney & Co.,

Detroit, Mich.

Peoples Security Investment Co.
Oct.

28

filed

1,000,000

preorganization

subscriptions to

class A voting common stock and
250,000 preorganization
subscriptions to class B non-voting common stock to be
offered in units of four class A shares
and one class B
share, the purchaser
agreeing to donate each class B
share to the
Peoples Security Foundation for Christian

Education, to be incorporated as a non-profit corpora¬
tion.
Price—$2 per share. Proceeds
For capital and
—

surplus to finance
named

Office

a

proposed insurance company to be

Peoples Security & Endowment Co. of America.
—

Montgomery, Ala.

Patterson

is

Underwriter

Permian Basin Pipeline Co.
Nov. 22 filed 826,500 shares of common
to

be

at

—

None.

T. J.

President.

stock

(par $1)

rate

offered for subscription by common
stockholders
of one new share for each
two shares held of
record Dec. 12. 1957;
rights to expire on Dec. 31. Price

.be^suppiied,tpy ajnepdment,- Proceeds—Together

Volume

with

186

Number 5700

other

Natural

.

.

.

funds, tc repay advances from Northern
Go., the parent, and for construction pro¬

Gas

Underwriter—No^e.

gram.

\

.

•

Pittsburgh Brewing Co., Pittsburgh,

Pa.
Nov. 15 filed $5,646,750 of 5% sinking fund income suboridnated debentures due Oct. 31, 1992; 112,935 shares ofJ
common stock.'(par $1); and 451,740 warrants to pur¬
chase 451,740 additional shares of common stock to be
offered in units of $50 of debentures, one common share
and warrants to purchase four common shares to be
^offered in exchange for each outstanding share of pre¬
ferred stock

(par $25) plus accrued dividends. Purpose
or reduce preferred dividend arrearages.

-—To eliminate

Underwriter—None.

Pittsburgh-Des Moines Steel Co.
Nov. 29
stock

(letter of notification)

5,750 shares of common

to be offered
for account of selling stockholder, and 3,830 shares for
company. Price—$52 per share.
Proceeds—To purchase
steel inventory items. Office—Neville Island Pittsburgh
25, Pa. Underwriter—None.

Rocky Mountain Quarter Racing Association

•

Oct. 31

Price—At par

($1

per

outstnding indebtedness.

pay

Underwriter—R. B.
Rose

share)."Proceeds—To re¬
Office

—

Littleton, Colo.

"

Ford Co.

.

•

Records, Inc.

July 22 (letter of notification) 11,022 shares of common
Proceeds—For work¬
ing capital. Office—705 South Husband St., Stillwater,
Okla. Underwriter—Richard B. Burns Securities Agency,
Strlkvater, Okla.
-. *.
'

stock. Price—At par ($1 per share).

Rule

(C. T.)

Construction Co..

Sept. 13 filed 127,289 shares'of common stock (par $10).
Price—$13 per share.
Proceeds—To retire outstanding
loans and for working capital and investment in addi¬
tional equipment. Office—Nashville, Tenn. Underwriter
Statement effective

—None.

Nov. 20.

St. Louis Insurance Corp., St.

Louis, Mo.
1,250 shares oi class C cumulative pre¬
ferred stock (par $57).... Price—$97 per share.
Proceed*
—To R. M. Realty Co., who is the selling stockholder
Underwriter
Yates, Heitner & Woods, St. Louis, Mo.
Offering—Indefinitely postponed.
filed

27

—

Pleasant Valley Oil & Mining Corp.
Sept. 30 (letter of notification) 2,000,000 shares of
mon stock.
Price—At par (five cents per share).
ceeds

com¬

Pro¬

For

geological studies, reserve for contingent
liability, for machinery and equipment and other re¬
serves.
Office
616 Judge Bldg., Salt Lake City, Utah
Underwriter—Steven Randall & Co., Inc., New York.
—

—

Polytronic Research, Inc.
Nov. 4 (letter of notification) 80,000 shares of common
stock (par 10 cents). Price—$2.50 per share. Proceeds—
For equipment and research, development program and
working capital. Office—4130 Howard Ave., Kensing¬
ton, Md. Underwriters—First Washington Corp. and The
Stanford Corp., both of Washington, D. C.
Change of
Name—Formerly Acme Tool & Engineering Corp.

Ar Ponce Hotel Corp., San Juan, P. R.
12 filed 1,590 shares of 6% cumulative preferred
stock, series A (par $100), 12,410 shares of 6% cumula¬
tive preferred stock, series AA (par $100) and 364,000
shares of common stock (par $1) to be offered in units

Dec.

of

one preferred share and 26 common shares.
Price —•
$126 per unit.- Proceeds — Together with proceeds of
debt financing, will be used to purchase hotel site, con¬

equipment of the hotel. Un¬
Compania Financiera de Inversiones, Inc.,

struction, furnishing and
derwriter

—

San Juan, P. R.

'

Office—1400 Northern Life Tower,
Underwriter—None.

■At Professional Life & Casualty Co., Champaign, III.
Dec. 16 filed 120,000 shares of common stock.
Price—
$15 per share. Proceeds—To increase capital and surplus.
Underwriter—None.

filed

113,000 shares of common stock (par 50
Proceeds
Savings Insurance Co., the selling stock¬
Office—Charleston, S. C. Underwriter—None.

29

Price—To be supplied by amendment.

cents).
—To

Pyramid Mining & Metal Corp.
(letter of notification) 236,000 shares of

Oct. 24

common

(par $1). Price—$1.25 per share. Proceeds—For
mining expenses. Office — 508 Great Plains Life Bldg.,
Lubbock, Tex. Underwriter—Sterling Securities Co., Inc.,

Odessa, Tex.

class B

com¬

stock

ing

(par $1) and 4,575 shares of class B vot¬

stock (par $1) to be offered in units of 10

common

shares of class A and

one

share of class B stock.

Price—

For investment in mortgages,
notes, real estate and for working capital. Office — 2508

$55

unit.^ Proceeds

per

—

Marie

Ava
A. L.

Drive, Gadsden, Ala.
Bixler, Gadsden, Ala.

Underwriter

—

Burr

Sentinel Security Life Insurance Co.
27 filed 5,000 shares of common stock

(par $10).
supplied by amendment. Proceeds—For
working capital. Office—Salt Lake City, Utah. Under¬

Nov.

be

Price—To

writer—None.

Oil

Corp.

v

Sept. 11 (letter of notification) 40,000 shares of common
stock ((par $1) to be offered for subscription by stock¬
holders; then to public. Price—$1.25 per share to stock¬
holders; $1.37% to public. Proceeds—For expenses in¬
cidental to drilling of oil wells.
Office—Suite 14, 1500
Massachusetts Ave., N. W., Washington, D. C.
Under¬
writer—None.
Shaleen Oil

&

Dec. 9 (letter of

notification) 2,000,000 shares of

200,000 shares of common stock (par $1).
be supplied by amendment. Proceeds—For

filed

10

Price—To

expansion program-and working capital. Underwriter—

;

;

Blyth & Co.; Inc., New York.
postponed, y "
Research

Offering

—

Temporarily

;

Instrument Corp.

(letter of notification) $125,000 of 10-year 10%
and 12,500 shares of common
stock (no par) to be offered in units of one $100 debenture
and ten shares of-common stock. Price—$200 per unit.
Oct.

7

..convertible debentures

Proceeds—For

equipment,

working capital and

inven-

tory. Office—7962 S. E. Powell Blvd., Portland, Ore.
Underwriter—Campbell & Robbins, Inc., Portland, Ore.

•

Resolute Bay Trading Co., Ltd.
1 Oct. 29 (letter of notification) 30,000 shares of common
.stock. Price—At par ($5 per share). Proceeds—For work•

ing capital, etc. Business—Purchase and sale of commo¬
Office—St. John, N. B., Canada. Underwriter—

dities.
.

Irving Weis & Co., New York.

Zelienople, Pa.
Dec. 6 filed 20,000 shares of common stock to be offered
•for subscription by stockholders of record Dec. 1, 1957
Resolite Corp.,

shares for each 10 shares held;
unsubscribed shares to be offered to public. Price—$10
in the

ratio of 3!a

new

share. Proceeds—To pay $100,000 outstanding obli¬
gations and for improvement and rehabilitation of plant
and facilities. Business—Fiberglass panels.
Underwriter

per

—None.
•

Roach

(Hal)

Productions

375,000 shares of common stock (par $1).
Price—$3 per share.
Proceeds—For expansion of pro¬
duction of filmed television commercials and for working

Aug. 8 filed

capital.

Business—Produces films for television.

—Culver

New York.

poned.

Office

Fuller & Co..
Statement effective Nov. 14. Offering—Post¬

Citv. Calif.

Underwriter—S. D

Not expected until after first of 1958.




Corp.,

Dallas, Texas

filed 677,408 shares of common

9

stock, of which

377,408 shares, 132,558 shares, 61,392 shares and
respectively, are to be issued as dividends
stockholders of Texolina Oil Co., Mountain Valley Oil

Of the

47,606 shares,
to

Corp. and Trigg Drilling

of¬

Co.; .while 57,239 are to be

balance of
78,613 shares are to be similarly offered in the near
future. Price—To be supplied by amendment. Proceeds
—To selling stockholders. Underwriter—None.
immediately to the public, while the

'

Texam Oil Corp., San

Antonio, Texas

May 29 filed 300,000 shares of common stock (par $1),
be offered for subscription by common stockholders
on a basis of two new shares for each share held. Prlco
—To be supplied by amendment. Proceeds—To repay
Indebtedness, for acquisition and exploration of oil and
gas

leases, for drilling and
corporate pumoses.

other

completion of wells, and im
Underwriter—None.

Trans-America Uranium

Mining Corp.

stock (par one

3,000,000 shares of common

Price—25 cents per share. Proceeds—For land
acquisition, exploratory work, working capital, reserves,

common

Underwriter—None. Al¬

corporate purposes.

and other

writer—None.

(letter of notification) 15,000 shares of common
stock (par $5). Price — $4.50 per share. Proceeds —For
working capital and payment of current liabilities. Ad¬

Shop Rite Foods, Inc.
2 (letter of notification)

9,400 shares of common
Price—$13.50 per share. Proceeds—For
general corporate purposes. Office—617 Truman, N. E.,
Albuquerque, N. M. Underwriters—The First Southwest
Co., Dallas, Tex., and Minor, Mee & Co., Albuquerque,
(par $5).

N. M.

of

$2.50)

$2,500,000 of debenture bonds to be offered in units
share of stock and one $50 bond.
Price—$52.65

one

Proceeds

—

la., is President.

Manufacturing Co.

A- Trask
5

dress—Wrightsboro seetioiv3 miles north of
N. C. Underwriter — Selected Investments,
N. C.

'

"

'

'

-

Ulrich Manufacturing

•

'

■;

Wilmington,
Wilmington*,
: :

**
;
6% sinking fund debenture#

Co*

:

shares of class A common stock (par $1) to
be offered in units of $500 of debentures and 25 shares of
stock. Price—To be supplied by amendment. Proceeds—
To reduce bank loans, to repay all or part of an out¬
standing 5% term loan and/or provide additional work¬
ing capital.
Office—Roanoke, 111. Underwriter—White.
and 30,000

For construction, ownership and

Pa.

& Co., St.

basis.

Louis, Mo., on a best-efforts

Union of

South Africa

•

12 filed $15,000,000 10-year external loan bond#
due Oct. 1, 1967. Price—To be supplied by amendment.
Proceeds—For transportation development program. Un¬
derwriter—Dillon, Read & Co. Inc., New York. Offering
Sept.

•

Simplicity Pattern Co. Inc.
155,000 shares of common stock (par $1).
supplied by amendment. Proceeds—To two
selling stockholders. Underwriter—Merrill Lynch, Pierce.
Fenner & Beane, New York. Offering — Indefinitely
Oct. 10 filed

Price—To be

postponed.
•

Owens of Waterloo,

E.

Sept. 24 filed $600,000 of

•

unit.

fred

Dec.

Dec.

Sovereign

Nov. 19 (letter

Resources, Inc. (12/26-27)
of notification) 1,500 shares of 7% cumu¬

lative preferred stock. Price—At par ($100 per share).
Proceeds—For construction, payment of promissory note

working capital. Office—3309 Winthrop St., Fort
Worth, Tex. Underwriter—Reilly, Hoffman & Sweeney,
Inc., New York, N. Y.
and

Standard

Steel

Products

Manufacturing Co.

of notification) $165,000 of 7% 10-year
debentures, 11,000 shares of common stock (par $2.50)
and warrants to buy 11,000 additional common shares
to be offered in units of $30 principal amount of deben¬
Oct.

3

tures,

(letter

two shares

of stock and

shares at $7.50 each.

common

i

•

South

None.

Price—10 cents per share. Pro¬
ceeds—For mining expenses. Office—c/o Bruce Kistler,
Counsel, 450 Denver Club Bldg., Denver, Colo. Under¬
(par one cent).

management of shopping centers, luxury hotels and other
commercial property.
Underwriter — None. Offering
to be made
through Akiba Zilberberg, of Pittsburgh,

Oct.

Price—$1 per share. Pro¬
working capital, etc. Office—19
St., Port Washington, L. I., N. Y. Underwriter—

stock, class B (par 10 cents).
ceeds—For equipment,

mill).

Mining Co.

Dec.

.

it Technical Animations, Inc.
(letter of notification) 100,000 shares of common

Dec. 12

Nov. 6 filed

per

Inc.

ing—Indefinitely postponed.

to

nium concentrating pilor

Reichhold Chemicals,

offered for subscription by common

fered

and

;

to

stockholders on
the basis of one new share for each four shares heldL
Price—To be supplied by amendment. Proceeds — To
retire short term bank loans and for working capital and
general corporate purposes. Office — Rochester, N. Y.
Underwriter—The First Boston Corp., New York. Offer¬
be

377,403 shares are to be issued for the account of selling
stockholders and the remaining 300,000 shares issued
from time to time in exchange for oil and gas properties.

(letter of notification) 45,750 shares of class A

common

and

-

Instrument Companies
of common stock (par $10)

Taylor

Oct. 1 filed 99,195 shares

Tekoil

Aug. 13 filed 125,000 shares of common stock (par one
cent). Price—$5 per share. Proceeds—For exploration

development of properties and completion of a ura¬
mill. Office—295 Madison Ave.,
New York 17, N. Y. Underwriter—None.

Congress.

Dec.

29

it Shopping Centers Corp., Pittsburgh, Pa.
17 filed 50,000 shares of common stock (par

(New York)

Ramapo Uranium Corp.

share. Proceeds — For ihvestqient. UnderwriterEquitable Securities Corp., Nashville, Tenn. Offeringup
pending passing of necessary legislation by
per

Held

Nov.

stock

stock

(which is to be merged
19, 1957) on the
IV2 shares of

Sept.

-

Exempt Bond Fund, Inc., Washington, D. C.
June 20 filed 40,000 shares of common stock. Price-—$2$
Tax

Ar Seminole Investment Corp.

Public

holder.

Underwriter—None.

Underwriter—None.

held.

share

mon

effective

Corp.

share of preferred stock and
stock for each White class A or

one

common

stock

Public Savings Life Insurance Co.
Nov.

Schering

basis of

Shacron

Merry Tiller, etc.

Seattle, Wash.

with

•

■

A- Power Rents Inc.
Nov. 26 (letter of notification) 1,000 units on invest¬
ment contract. Price—$180 per unit. Proceeds—For cost
of

Schering Corp., Bloomfield, N. J.
Sept. 19 filed 278,983 shares of 5% cumulative con¬
vertible preferred stock (par $30) and 413,475 shares of
common
stock (par $1) to be issued in exchange for
stock of White Laboratories, Inc.

July 24 filed 1,165,750 shares

.c

(no par), of which 1.920 shares are

March

Republic of Panama)
of common stock (par $2)
to be offered for subscription by common stocknuldera
of Ogden Corp. on the basis of one new share for. eacl*
four shares held and to holders of options 011 the basia
of one share for each option to purchase four shares of
Ogden common stock; unsubscribed shares to be offered
to certain employees and officers.
Price—$2 per share.
Proceeds-i-To pay outstanding obligations to Ogden Corpt
Syntax Corp.

~

(letter of notification) 300,000 shares of common

stock.

113

(2745)

The Commercial and Financial Chronicle

a

warrant to buy two

Price—$45 per unit. Pro¬

equipment and working capital. Office—
St., Milwaukee, Wis. Underwriter — The
Milwaukee Co., Milwaukee, Wis.

ceeds

2836

For

—

S.

16th

Stuart-Hall Co.,

Inc., Kansas City, Mo.
of 20-year 6% convertible de¬
bentures due Dec. 15, 1977.
Price—At par (in denom¬
inations of $1,000 each). Proceeds.—For working capital
and to reduce bank loans.
Underwriter—White & Co.,

Nov.

St.

fiied.

27

$650,000

Louis, Mo.
Surinam Corp.,

Houston, Tex.

shares of common stock (par
cent). Price—$1 per share. Proceeds—For explora¬
tion and exploitation of oil, gas and sulphur properties.
Underwriter—T. J. Campbell Investment Co., Inc., Hous¬

Oct.

21

filed

one

ton, Tex.

10,000,000

—Postponed temporarily.
United

'

,

States Coconut

*

.

'

Fiber Corp.

Sept. 30 filed 735,000 shares of common stock (par $1).
Price—$4 per share. Proceeds—For expansion program
and other corporate purposes. Office—Washington, D. C.
Underwriter — Southeastern Securities Corp., New York.
United States Sulphur Corp.
Oct. 3 filed

1,500,000 shares of common

stock (par ono

cent). Price—$1 per share. Proceeds—For plant rental*
etc.; to retire corporate notes; for core drilling; for
working capital; and for other exploration and develop¬
ment work.
Office — Houston, Texas.
Underwriter —

/;

None.

.

Universal Drilling Co., Inc., New
Oct.

31

filed

400,000

shares

Orleans, La.

of class A common

stock

(par $1). Price—$5.50 per share. Proceeds—To pay ob¬
ligations incurred and to be incurred in connection with
construction and equipping of a drilling barge; and for

working capital and other corporate purposes.
writer— Kohlmeyer & Co., New Orleans, La.
Uranium Corp. of America,

Under¬

Portland, Ore.

April 30 filed 1,250,000 shares of common stock (par ltt
cents). Price—To be supplied by amendment (expected
to be $1 per share). Proceeds—For exploration purposes.
Underwriter—To be named by amendment. Graham Al¬
bert Griswold of Portland, Ore., is President.
it Van Norman Industries, Inc.
12 (letter of notification) a

Dec.

shares

of

common

stock

(par

maximum of 53,809
to be offered to

$2.50)

eligible employees pursuant to Employee

Stock Purchase

Continued

on

page

114

314

The Commercial and Financial Chronicle

(2746)

Continued, jrorn page

toward purchase

of stock.

Proceeds—To reimburse com¬
New York Stock Ex¬

for purchase of stock on
change. Underwriter—None.
pany

St., Amarillo, Tex.

Underwriter—None.

★ Verson Ail Steel Process Co., Chicago, III.

shares of 6% cumu¬
be offered for sub¬
scription by employees. Price—At par ($5 per share).
Proceeds—For working capital. Office—1355 East 93rd
St., Chicago, 111. Underwriter—None.
Dec. 13 (letter of notification) 60,000
lative non-voting preferred stock to

Ar Vulcan Materials Co., Birmingham, Ala.
Dec. 12 filed 114,396 shares of 6y4%
cumulative pre¬
ferred stock (par $100), 54,631 shares of 5%% cumula¬
tive preferred stock
(par $100), 87,000 shares of 5%
cumulative convertible preferred stock (par $16) and
2,390,230 shares of common stock (par $1) to be issued
in exchange for stock of Union Chemical & Materials
Corp. and Lambert Bros., Inc. under an agreement of
merger to become effective Dec. 31, 1957, viz: Each of
the 1,143,968 shares of Union common stock outstanding
are to be converted into
1% shares of Vulcan common
(1,429,960 shares) and 1.1 shares of Vulcan 6%% pre¬
ferred (114,396.8 shares); each of the 1,092,639 shares of
Union 5% preferred stock outstanding will be converted
into
l/20th share of Vulcan 5%%
preferred
(54,632

shares); and each of the 1,200 common shares of Lam¬
bert will be converted into 486%
mon

shares of Vulcan

com¬

(583,600 shares) and 72% shares of Vulcan 5% pre¬
(87,000 shares). Vulcan will also issue 376,670

ferred

shares of its

common stock in exchange for the stocks of
Materials, Inc.; Wesco Contracting Co., Asphalt
Paving Materials Co.; Brooks Sand & Gravel Co.; and
Tennessee Equipment Co.; 50% of the outstanding stock
of Chattanooga Rock Products Co. and 66%%
of the

Wesco

stock

of

merger,

Warwick Valley Telephone Co.
Oct. 24 (letter of notification) 4,708 shares of common
stock (no par) to be offered for subscription
by common
stockholders on the basis of one new share for each two
shares held.

Price—$20 per share. Proceeds—For con¬
telephone plant. Office — 47-49 Main
St., Warwick, N. Y. Underwriter—None.
struction of

new

Washington National Development Corp.
Oct.

(letter of notification) 50,000 shares of common
stock (par $1) of which 34,280 shares are to be offered

publicly at $1.20

per

share and 15,720 shares

are

to be

offered to certain individuals under
options. Proceeds—
For general corporate purposes. Office — 3612

Quesada

St., N. W., Washington, D. C.

Underwriter—Wagner &

Co., New York City.

Washington Water Power Co. (1/9) Dec. 11 filed $20,000,000 of first
mortgage bonds
1983.
To

due

and

$10,000,000 of sinking fund debentures due
Price—To be supplied by amendment. Proceeds—

retire

writers

like

a

of

amount

short-term

notes.

Under¬

Kidder, Peabody & Co., Blyth & Co., Inc.,
White, Weld & Co. and Laurence M. Marks & Co., all of
New

—

York.

Western Chrome Inc.
Nov. 4

(letter of notification) 300,000 shares Of

stock.

Price—At par

mining

expenses.

($1

Office

per
—

share).

Suite

common

Proceeds

901-902

convertible

—

For

Continental

Bldg., Salt Lake City, Utah. Underwriter—Utah
General Securities, Inc., Salt Lake
City, Utah.
Western Copperada Mining Corp. (Canada)
Aug. 30 (letter of notification) 300,000 shares of common
stock. Price—At par ($1 per share). Proceeds—For de¬
velopment and exploratory work, drilling costs and sur¬
vey, and for working capital.
Office — 1205 Phillips
Square, Montreal, Canada. Underwriter—Jean R. Veditz
Co., Inc., New York. Offering—Expected at any tim6.
★ Wisconsin Southern Gas Co., Inc.

19,327 shares of

common

(1/3)

stock (par $10) to

be offered for subscription
by common stockholders of
record Dec. 26, 1957 at the rate of one new
share for
each six shares
held; rights to expire on Jan. 17, 1958.

Price—$16 per share. Proceeds—To
Underwriters—The Milwaukee Co.,

repay

bank

loans.

Milwaukee, Wis.-

Harley, Hayden & Co.
Madison, Wis.

and Bell &

and

Farrell, Inc., both of

Young (Donald W.) & Son, Inc.
14 (letter of
notification) $75,000 of 10-year 6%

Nov.

debentures due Oct.

1, 1967, with common stock warpurchase 7,500 shares of 10-cent par common
stock at $1 per share.
Price—$100 per unit of a $100
debenture and one warrant. Proceeds—To
repay short
term debt and for
working capital. Office—Stockholm
ranis

N. Y.

to

Underwriter—Sherry Co., New

Dec. 6 it

was

plans to issue and sell
1988.

Proceeds

—To finance construction program.

by

Underwriter—To be
competitive bidding. Probable bidders:

Halsey, Stuart & Co. Inc.; Morgan, Stanley & Co.; Leh¬
man
Brothers; The First Boston Corp.; Blyth & Co., Inc.;




Stanley & Co. and W. E. Hutton & Co.

(jointly); Blyth
and The First Boston Corp. (jointly); Mer*
Lynch, Pierce, Fenner & Beane and Lehman Bros,
(jointly); Eastman Dillon, Union Securities & Co. and
;.
.
White, Weld & Co., (jointly).

debentures

the

on

$720,000,000 ol
of $100 principal

basis

each nine

shares held.

Co. Inc.

&

approximately

rill

Sub¬

.

.

..

,

_

Cincinnati Gas & Electric Co.
Nov.
the

★

Appalachian Electric Power Co. (6/3)
2, it was reported that this company, a subsidiary
of American Gas & Electric Co., plans to issue and sell
$25,000,000 of first mortgage bonds. Proceeds—To repay

it

8

additional

l-for-16

a

that

announced

of 1958 to offer to its

450,000

about

also

was

summer

basis.

i

plans in

company

common

stockholders

shares

of common
Underwriter—None.

stock

on

.

:.

Dec.

bank

loans

—To

be

and for

construction

determined

program.

★ Cleveland Electric Illuminating Co. (2/25)
:
Dec. 16 it was reported company plans to issue and sell
$30,000,000 of first mortgage bonds due 1993. Proceeds-^
To repay bank loans and for new construction.
Under*

Underwriter

by competitive

Halsey, Stuart ■&
Kuhn, Loeb & Co..
Securities & Co. (jointly);
Bids—Tentatively expected

bidding. Probable
Co. Inc.; The First Boston
and Eastman Dillon, Union
Harriman Ripley & Co. Inc.
to be received on June 3.

★

(1/23)

bidders:

Corp.;

Baltimore & Ohio RR.

Bids

will

be

writer—To be determined by competitive bidding. Prob*
able bidders:

Halsey, Stuart & Co.-Inc.; Blair & Co., Inc.
Baxter, Williams & Co., (jointly); Glore,. Forgan &
Co.; Blyth & Co., Inc.; The First Boston Corp.; White;
Weld & Co.; Dillon Read & Co. Inc.
Bids—Expected to
and

be received up to noon

received

by the company at 2 Wall St.,
New York 5, N. Y., on January 23 for the purchase
from it of $3,435,000 equipment trust certificates. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Salomon Bros. &

Dec.

and

sell $22,000,000

of first mortgage bonds next April
Proceeds—To repay bank: loans and for con¬
struction program.
Underwriter—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Lehman Brothers; Blyth & Co., Inc., and
F. S. Moseley & Co.
(jointly);'-Merrill Lynch, Pierce,
Fenner & Beane; Harriman Ripley & Co. Inc. and The
First Boston Corp. (jointly); White, Weld & Co.
or

May.

California
Nov.

appears
after

Electric

Power

Co. '

Carl C. Ernst, President, said that "it
we will be back to market more securities

the

first

the

of

of bank loans and for

year."

soon

Proceeds—For repayment

construction.

new

now

Underwriter—

To be determined by competitive

bidding. Probable bid¬
ders:
(1) For any bonds—Halsey, Stuart & Co. Inc.;
Kidder, Peabody & Co.; White, Weld & Co. (2) For
common stock—Merrill
Lynch, Pierce, Fenner & Beane;
Carl M. Loeb, Rhoades & Co.; White, Weld & Co.; Kid¬
der, Peabody & Co.
Any preferred stock may b*3 sold
on a negotiated
basis, and underwriters may be Merrill
Lynch, Pierce, Fenner & Beane and Kidder, Peabody
& Co. (jointly).
Cambridge Electric Light Co.
22 it was reported company may issue $4,500,000
of first mortgage bonds,
underwriter — To be deter¬
mined by competitive bidding. Probable bidders: Halsey,
Stuart & Co. Inc.; The First Boston Corp.; and Coffin
& Burr, Inc. and F. S. Moseley & Co. (jointly).
Bids—
Tentatively expected to be received in January.
Oct.

★ Central Illinois Public Service Co.
Dec.

9

it

was

(2/25)

bank loans and for construction program. Underwriter—
To be determined by competitive bidding.' Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Eastman
Dillon, Union
Securities & Co. and Equitable Securities Corp. (jointly);

Kuhn, Loeb & Co. and A. C. Allyn & Co. Inc. (jointly);
Salomon Bros. & Hutzler; Blair & Co., Inc.; Blyth &
Co.,
Inc., Kidder, Peabody & Co. and Merrill Lynch, Pierce,
Fenner & Beane (jointly). Bids—Expected Feb. 25.
Central
Dec. 9 it

Power &

was

Light Co.

reported company

(2/4)
plans to issue and sell

$12,000,000 of first mortgage bonds.

Proceeds—To repay
bank loans and for construction program. Underwriter—
To be determined by competitive bidding.
Probable
bidders: Halsey, Stuart & Co. Inc.; Eastman
Dillon, Union
Securities & Co.; Kidder, Peabody & Co.; Lehman Bro¬
thers and Glore, Forgan & Co. (jointly); Blyth & Co.

Inc.; The First Boston Corp.; Kuhn, Loeb & Co.; Merrill
Lynch, Pierce, Fenner & Beane and Salomon Bros. &
Hutzler (jointly).
Bids—Tentatively expected to be re¬
ceived

on

Feb. 4.

★ Chicago, Burlington & Quincy RR.
Bids

(1/8)

expected to be received by the company on Jan.
purchase from it of $24,500,000 of new first and
refunding mortgage bonds due Feb. 1, 1978. Proceeds—
are

8 for the

To retire

$24,500,000 general mortgage bonds due March
1, 1958. Underwriter—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;

Morgan Stanley & Co.; Lehman Brothers.

★ Chicago, Burlington & Quincy RR.

(1/14)

Bids

are
expected to be received by the company on
Jan. 14 for the purchase from it of
$4,500,000 equipment
trust certificates.
Probable bidders:

Halsey,

Stuart

&

Inc.; Salomon Bros. & Hutzler.
12

it

was

announced

company

plans to sell about

sometime after the
Proceeds—To repay advances made by
Peoples Gas Light & Coke Co., the parent. Underwriters
Co.

Inc.

are
expected to be received
Jan. 9 for the purchase from it of

trust

certificates.

•

Probable

Co. Inc.; Salomon Bros. & Hutzler.

Halsey,

Stuart

Under¬

Commonwealth Edison Co.

(1

14)

construction

program. Underwriter—To be determined
by competitive bidding. Probable bidders: Halsey, Stuart

& Co.

Inc.; The/First Boston Corp.; Glore, Forgan & Co.
Bids—Tentatively expected to be received on Jan. 14,
1958.

Registration-—Planned for today;: (Dec, 19).

Connecticut Light & Power Co. (1/9)
Nov. 25 it was reported company plans to sell
of

first

bonds

mortgage

due

1988,

j

,

?

.

$30,009,-

Proceeds—For

construction

program.
Underwriter — Putnam & Co,,
Hartford, Conrt.i Chas. W. Scranton & Co.. New Haven,
Conn.; and Estabrook & Co., Boston, Mass.
Registration
—Planned for Dec.

"

20.

Dec. 3 it

was

V

y

.

Consolidated Edison

'

'

of New

Co.

stated that about

York, Unc.
$60,000,000 of new bonds

may be sold next year to repay bank loans incurred
through August, 1958. Underwriter—To be determined
through competitive bidding. Probable bidders: Halsey,

Stuart
Boston

& Co.-Inc.; Morgan
Corp.
"*>•'* ' V? *

★ Duquesne Light Co
Dec.

12

around

it

was

—

Co.; The First

"

reported company plans to issue and sell

$15,000,000' of

Proceeds

Stanley &

V

To repay

first mortgage "bonds due 1988.
bank loans and for construction

Underwriter—To

be determined by competi¬
Probable bidders: Halsey, Stuart & Co.
Inc.; The First Boston Corp.; White, Weld & Co.; Glore,
Forgan & Co.;.Kuhn, Loeb & Co.; Eastman Dillon, Union
Securities & Co/, and A. C. Allyn & Co. Inc. (jointly);
Drexel & Co.'and" Equitable Securities
Corp. (jointly).

program.

tive

bidding:

half

of

1958.

★ Georgia Power Co. (3/20) , y
^
Dec. 6 it,was annQunced company plans to issue and sell
$21,500,000 of fir^t mortgage bonds due 1988, Proceeds—
To finance

construction program. Underwriter — To be
by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.; Leh¬
man
Brothers/-The First Boston Corp.; Blyth & Co., Inc.,
Kidder, Peabody & Co" and" Shields & Co. (jointly);
Equitable Securities"Corp. and Eastman Dillon, Union
determined

Securities

&< G&" (jointly). -Bids—Scheduled

ceived up to 11 aVmV
Planned for' Feb;'21:
Great Northern

Bids

(EST)
'

Ry.

-

'

:

,

(1 23)

expected to'be

are

Jan. 23 for the

Feb. 20,

on

to

be

re¬

Registration—

1

.

.

received

by the

company

on

purchase Jrom it of $5,700,000 equipment

trust certificates.

Probable bidders: Halsey, Stuart & Co.

Inc.; Salomon Bios.

%"■

;

& Hutzleri

•

Gulf, Mobile & Ohio RR.
Nov. 8 company' applied to the ICC for permission
issue

"J>

-

$28,343,800

5%

of

income

debentures

to

to

mature

Dec.

1, 2056 m-exchange for the 283,438 shares of out¬
standing $5. preferred stock (no par) on the basis of
$100 of debentures for each preferred share.

★ Gulf Power Co.
Dec. 6 it

was

(2/20)

announced company plans to'issue and sell

$8,000,000 of first mortgage bonds due 1988. Proceeds-^To finance construction program.
Underwriter—To be
determined by competitive bidding.
Probable bidders:
"Halsey, Stuart & Co. Inc.; Kuhn/Loeb & Co.; Blyth &
Co., Inc.; Lehmriah Brothers; Eastman Dillon/Union Se¬
curities & Co. and Equitable Securities Corp. (jointly);
Merrill- Lynch,; Pierce, Fenner & Beane and Salomon
Bros. & Hutzler r(jointly).
Bids—Scheduled to be re¬
ceived up to 1 Ta.iti .(EST) on Feb. 20.
Registration—

Defe.
sell

16

it

75,000

was

announced

shares

of

:

; •

(2/18)

:

•

plans to issue and
preferred stock (par

company

cumulative

Proceeds—To repay bank loans. Underwriter—
Td be determined by competitive bidding. Probable bid¬
ders: Stone
..Webster Securities Corp.: Lehman Bro¬
$100).

and

Equitable: Securities Corp. (jointly); Kuhn,
Co.; Glore, Forgan & Co. and W. C. Langley &
Co.: (jointly). Bids—Scheduled to be received on Feb. 18.

Loeb &

(1/9)

by the company on
$4,620,000 equipment

bidders:

stock.

common

"Dec. II it was announced company plans to-sell
$50,000,~
000 of sinking fund debentures due 2008/ Proceeds—For

thers

★ Chicago, Rock Island & Pacific RR.
Bids

250,000 shares of

—

★ Gulf States Utilities Co.

turn of the year.

"•

plans to issue and sell

Planned:fof;Jan.y24.;rt vyt. •••*.•-

$5,000,000 of first mortgage bonds

&

Electric Co.

company

Offering—Plahned in first

reported company plans to issue and sell
Proceeds—To repay

$15,000,000 of first mortgage bonds.

Feb. 25.

on

Ohio

Dillon, Read & Co. Inc. and The Ohio Co.
(jointly).V :> -; ; Vy: /•. ■
' '<;■

000

20,

(EST)

Southern

it was-reported

writers

★

announced that company expects to issue

was

9

1958 about

in

Brooklyn Union Gas Co. 1
Nov. 25 it

&

Columbus

Hutzler.

—Probably Dillon, Read & Co. Inc. and Halsey, Stuart

$23,000,000 of first mortgage bonds due
determined

of

issue

Chjcago District Pipeline Co.

(1/16)

announced company

Underwriter—To be determined by competitive bidding.
bidders: Halsey,- Stuart & Co. Inc.; Morgan

Probable

(2/7)

about

York."

Prospective Offerings

To

announced company pians to offer to its

an

it was reported company plans in 1958 to sell
$15,000,000 of first mortgage bonds. Proceeds—
repay
bank loans and for construction program.
8

about

scription rights are expected to be mailed on or about
Feb. 7, 1958 and the subscription period will run until
about March 12, 1958.
Proceeds—To meet demand for
new telephone facilities.
Underwriter—None.

Nov.

★ Alabama Power Co.

& Telegraph Co.

of debentures for

amount

Bank

Dec. 12 filed

Telephone

was

stockholders

Nov.

♦

...

2

1988

Nov. 20 it

Rockwood

Slag Products, Inc.
Prior to the
Lambert owned, and as a result of the
merger Vulcan will own, the remaining 50% stock in¬
terest in Chattanooga Rock and the remaining 33%%
stock interest in Rockwood Slag. Underwriter—None.
above

Scheduled for Dec. 20.
American

k Vernon Furlow Inc.
Dec. 9 (letter of notification) 240,000 shares of class A
non-voting common stock and 30,000 shares of class B
voting common stock. Price — At par ($1 per share).
Proceeds—For working capital and equipment. Office—
500 Alabama

Cincinnati Gas & Electric Co.

Securities

Company will contribute 20%

Price—At market.

Plan.

Dillon, Un'ion Securities & Co. and Equitable
Corp. (jointly); Harriman Ripley & Co. Inc.
and Goldman, Sachs & Co. (jointly).
Bids—To be re¬
ceived up to 11 a.m. (EST) on Jan. 16. Registration—
Eastman

113

Thursday, DeceirJher 19,1957

...

&

£ Illinois Central RR.'
feids are expected to be received by the

company

in January for the purchase

a

from it of

new

early

issue of

Volume

186

Number 5700

.

.

The Commercial and Financial Chronicle

.

equipment trust certificates to

amount

an

fipance three-fourths of the cost of

sufficient

consideration

to

equipment. Pro¬
ceeds—Together with other funds to buy, 7Q new loco¬
motives* costing approximately $12,250,000, and $250,000
of spare parts. Underwriter—To be determined by com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; Salomon Bros. & Huzler.
Indiana

&

Michigan

or

new

Electric

-For

reduction

of

to

bidding. Probable bidders: Halsey, Stuart
Inc.; Harriman Ripley & CO. Inc.: The First
Corp.; Eastman Dillon, Union Securities & Co.
Tentatively expected to be received up to ll;a.m.
on

Feb. 13,- IQ58.-

-

it International

v

•

-

&

to

Co.

announced company

Feb.

ciates

Seaboard Air Line RR.

common

for

share

Approximately

—

each

stockholders
eight shares

Co;}./(3/5.).^.';

and

construction

for

$20,000,000 to repay
Underwriter

<

(3/4)

reported

was

to

—

&

gan

Co.,

Union

.'.•

plans to. issue and sell
$9,000,000 of debentures (probably convertible). Proceeds
—rTo repay...bank loans and for construction program.

program.

company plans to offer $30,000,$35,000,000 first hiortgage bonds du^ 1988. Pro¬
ceeds—To repay bank loans,-etc. and for new construc¬
tion. Underwriter
To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Morgan, Stanley & Co.; First Boston Corp.; Glore, For¬

000

White,

Weld & Co.
(jointly).

Ohio

!v

Eastman

and

Securities & Co.

March 4.'

Bids

—

Dillon,

Expected

on

:

:t

Sept., 26

it

December

reported company to issue and sell in
issue of $1,500,000 convertible subordinated

was
an

Co.;-Glore, Forgan & Co.; The First Boston Corp.; — debentures.. Underwriter—McDonald & Co., Cleveland,
Ohio. Registration—Expected in near future.
Harriman, Ripley & Co. Inc., Eastman Dillon,.Union Se¬

White, Weld & Co. (jointly),: Lehman
Brothers; Merri 11 Cynch, Pierce, -3?gnpejv.j&. Beano; Equi¬
table Securities. Corp.; Blyth & Co. Bids—Expected on
March 5.

Oklahoma Gas & Electric Co.
Nov.

18 it Was reported
company plans to raise about
$20,000,000 next Spring, through sale of bonds and other

Registration—Planned for Feb.? 5^*;'•••"•fty.>.

securities.

★ Iowa Power & Light Co.
sell

tive1'-bidding;^.Probable bidders: (1) For bonds-—Halsey,
Inc.; Equitable Securities Corp.; The First
Corp.; Kuhn, Loeb & Co., Merrill Lynch, Pierce,
Fenner & Beane and White, Weld & Co.
(jointly); Har¬
riman Ripley & Co. Inc. and Eastman Dillon, Union

-

For construction program.
& Co., New York.
>

9 Tit

Boston

Underwriter—Smith, Barney
.

Securities & Co.

★ Iowa Power & Light Co. '(1/22)
Dec.

announced

"

company

Harriman

offering

bidding,:; Probable bidders:

Halsey;: Stuart &' Co. Inc.;
Kidder, Peabody & Co.; White, Weld & Coi; The First
Boston Corp.; Equitable Securities Corp; Bids—To be re¬
ceived

Jan. 22.

on

•-Litton
14

ec.

of

Inc.""V,'
par

in. the authorized

done

privately.

,

creation of

an

preferred stock and

-\\j

;/■

stock from

*t

an

Gas Service

Co.,

common

Gas

&

Lynch,

Electric

Co.

Pierce,

refunding mortgage bonds.
loans
be

for

&

$60,000,000 first

Proceeds

To retire

—

construction program.

determined

by

competitive

Underwriter
bidding. Probable

bidders: The First Boston Corp. and Halsey, Stuart & Co.
Inc. (jointly); Blyth & Co., Inc. Bids—To be received on

Jan. 21, 1958.
Pacific
Nov. 4 it

Gas

Electric Co.

&

announced company

plans, following bond
21, to offer a small amount of common
stock to keep the capital structure in reasonable balance.
Underwriter—Blyth & Co., Inc., San Francisco and New

sale

properties to Louisiana
,^

and

Fenner

(1/21)

16 directors authorized the sale of

—To

in¬

2,000,000 to

may

company./:

new

a

gas

of

bank

borrow $11,500,final financing program relat¬

ing to the disposition of its

—

Co. Inc.; Kuhn, Loeb & Co. Any
stock may be made to common

and

issue

r "

★r Louisiana Power & Light Co„
Dec. 16, it was announced company
000 from banks pending a

For preferred stock

Oct.

common

.

Ripley &

Pacific

-Jv.:...-

3,500,000 shares. Underwriters —• Lehman Brothers and
Clark, Dodge & Co. handled last equity-financing which
was

(2)

stockholders, with Merrill
Beane underwriting.

/

stockholders approved the

16,000 shares of $100

crease

£*

/

Industries,

(jointly).

Merrill Lynch, Pierce, Fenner & Beane and White, Weld
& Co. (jointly); The First Boston Corp.; Lehman Bros,
and Blyth & Co. Inc. (jointly); Smith, Barney & Co.;

plans issuance and
sale of $19,000,000 first mortgage-bonds due 1988. Pro¬
ceeds—To repay bank loans and fon coftstikiction pro¬
gram.. Underwriter—To be determined by competitive
was

Underwriter—To be determined by competi¬

Stuart & Co.

9 if was announced company: plans to issue and
$3,000*000 of cumulative preferred stock:' Proceeds—

Dec.

y

was

16

it

offer to

was

its

reported

York.

common

may

for about 166,070. additional shares oFcommon stock
l-for-10 basis.,1 Underwriter—Kalmah

olis, Minrr,
'Mississippi
Dec. 4 it

". --V*.

was

Power

Co'.;. Minneap¬

&

plans to issue and sell,
probably in May or June of 1958, $10,000,000 of first
mortgage bonds.
Underwriter—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Kuhn, Loeb & Co.; Equitable Securities
Corp.
and Shields & Co. (jointly); Blyth &
Co., inc?;;Merrill
Lynch, Pierce, Fenner & Beane, Eastman Dillon, Union
Securities & Co.; White, Weld & Co. and Kidder Peabody & Co. (jointly); The First Boston Corp.
Bids

received

are

expected

to

be

/

Dillon, Union Securities & Co. and White, Weld & Co.
(jointly); Harriman Ripley & Co. Inc. Bids—Tentatively
scheduled to be received up to 11 a.m. (EST) on Feb. 24.

* Pittsburgh & Lake Erie Ry.
Bids

Multnomah

/

Nov. 25 it

was

Fund,

announced

company

Portland
Dec.

Public

-

sell

be

determined

by competitive bid¬
ding. Probable bidders;, Halsey, Stuart & Co. Inc.; Lee
Higginson Corp.; Equitable Securities Corp:;and Eastman
D.illon, Union Securities & Co. (jointly); Kidder, Peabody & Co. and Stone & Webster Securities Corp.

(jointly); White, Weld & Co.; Salomon Bros. & Hutzler.
Norfolk & Western

Ry. (1/22).
expected to be/received by "thisTeompany up to
noon
(EST) on Jan. 22 for" the purchase'from 'it of
$4,140,000 equipment trust certificatQs:(tfurd instalment)

Bids

to

are

mature

semi-annually from May I, J'958 to and

cluding Nov. 1, 1972.
.

Probable,

&

Co.

★

Northern Illinois Gas Co.

Dec.
raise
made

13

this

J(2/19kt;^

V

-.

•

that .it:now plang. to
in. 1958.
No decision-has been
to the form of the proposed financing, but no
company, announced

$10,000v000
as

in¬

bidders^Halsey, Stuart

Inc.; Salomon Bros. & Hutzler..

early




1
in

it

To

reduce

was

1.958

Riddle

Oct. 21 it

bank

loans

about Dec. 20.

★ Southern Counties Gas Co. of California
16 it was reported company plans td issue and sell
March, 1958, $15,000,000 of first mortgage boiids. Un¬
derwriter
To be determined by competitive bidding.

Dec.
in

Co.,

bidders:

Inc.;

Halsey, Stuart & Co. Inc.; Blyth &
Weld & Co.; Merrill Lynch, Pierce,

White,

Fenner & Beane.

Southern Nevada

(par $100).

Electric

announced

$25,000,000

&

Gas

Co.

stock.

it

will

Proceeds—

Airlines, Inc.
was

to raise in mid--.

1958 between $5,000,00® and $6,000,000 new capital, about
two-thirds of which will be through bond financing and

the

balance

through common stock financing. Under¬
stock, may be Hornblower & Weeks, Wil¬
liam R. Staatjs & Co. and The First California Co. (joint¬
ly). For bonds, to be determined by competitive bid¬
ding.
Only bidders in 1956 for $4,000,000 bonds were
Halsey, Stuart & Co. Inc.; Hornblower & Weeks and
William R. Staats & Co. (jointly).

writer—For

★r Southern New England Telephone Co.
Dec.

it

12

sell

(2/26)

announced company plans to issue and

was

$30,000,000

Proceeds—For

debentures.

of

repay¬

ment of advances received from American

Telephone &/.
Telegraph Co. and construction program!. Underwriter—
To be
determined by competitive bidding.
Probable
bidders: Halsey, Stuart & Co. Inc.; Morgan Stanley &
Co.; White, Weld & Co. and Kidder, Peabody & Co.
(jointly); Lehman Brothers and Salomon Bros. & Hutzler
(jointly); The First Boston Corp.; Merrill Lynch, Pierce,
&

Fenner

Feb. 26.

Bids

Beane.

—

Scheduled to be received

on

Registration—Planned for Feb. 4.
t

ic Tennessee Gas Transmission Co.
17

Dec.

directors

a proposal to issue and sell
stock early in February, 1958.
Proceeds—For
construction
program.
Underwriters—
Stone & Webster Securities Corp. and White, Weld &

approved

1,000,000 shares of

common

Co., both of New York.
Texas Utilities Co.
Nov. 4 it
tional

announced company may sell some addi¬

was

common

stoqk in

amount not exceeding 4% of

an

Proceeds — For
Underwriter—To be determined
by competitive bidding. Probable bidders: Kidder, Pea¬
body & Co. and Merrill Lynch, Pierce, Fenner & Beane
(jointly); The First Boston Corp. and Blyth & Co., Inc.
(jointly); The First Southwest Corp., Rauscher, Pierce
& Co. and Dallas Securities Co. (jointly); Lehman Bros,
and
Bear, Stearns & Co. (jointly); Eastman Dillon,
12,210,000 shares.

program.

Union Securities & Co.
Tuttle
Nov.

Engineering, Inc., Arcadia, Calif.

Harry Oedekerk, Chairman of the^ Board, an¬
nounced corporation plans a public stock issue in the
near future.
Proceeds—For working capital and other
6,

corporate purposes.
Union Electric Co.

it

11

Nov.

was

(Mo.)

reported company plans to offer around

additional

of common stock, first to
Underwriter—To be determined

shares

stockholders.

competitive bidding.
Probable bidders: Lehman
Brothers; Merrill Lynch, Pierce, Fenner & Beane.
by

Union Electric Co.

(Mo.)

plans to issue and
first mortgage bonds.
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Lehman
Brothers and Bear, Stearns & Co. (jointly); White, Weld
& Co., Blyth & Co., Inc., Eastman Dillon, Union Securi¬
ties & Co. and Shields & Co. (jointly); The First Bos¬
it

11

Nov.
sell

anticipates

company

of preferred

Power Co.

Dec. 3 it was announced company plans

and for construction

was

reported

approximately

ton

Corp.

company

$35,000,000

Offering—Expected early in March.

announced company

plans to register with
an issue of new common stock, the number of
shares and the price at which they will be offered not
yet determined. The authorized common stock has been
increased from 7,500,000 to 15,000,000 shares.
Proceeds
—To finance route expansion and for working capital.
Underwriter—James H. Price & Co., Inc., Coral Gables,
Fla. and
New York, N. Y., handled previous public
offering of 500,000 shares of common stock at $3.25 per
share in July, 1956.
the

or

common

Underwriter—Lehman Brothers, New York.
Service

(2/14)

announced company

plans to offer to stock¬
holders of record Jan. 17, 1958 between £40,000,000 and
£55,000,000 additional capital stock (equivalent to $112,000,000 and $154,000,000), of which it is estimated, not
exceeding £4,500,000 ($12,600,000) may be subscribed
in the United States. Price—To be governed by market
conditions prevailing at time of issue.
Proceeds-^For
capital expenditures. Underwriter—Morgan Gferrfell &
Co., Ltd., London, England. Registration—-- Expected on

1,000,000
(1/22)

Underwriter—May be Merrill
Lynch, Pierce, Fenner & Beane, New York.

'•

was announced company
plans to issue and sell
$6,000,000 of first mortgage bonds in the Spring of 1958.
.

—

Public

Aug.
•

Dec. 4 it

Underwriter—To

Co.

reported company plans to issue and sell

For construction program.

W

Service

Coke

Gas &

was

program.

has applied to SEC

permission to issue and sell in the'United States its
class A common shares, of which-there are' authorized
1,900,000 shares (par $1) and 10,000 shares outstanding.
Orleans

it

3

Proceeds

for

-New

Halsey, Stuart & Co.

50,000 shares of cumulative preferred stock

Ltd.

Office—Vancouver* B. C., Canada.5*.:

(1/8)

received

Inc.; Salomon Bros. & Hutzler.
.

/

Canadian

be

by the company on
purchase from it of $3,975,000 equipment
to

trust certificates. Probable bidders:

by the company on
$3,450,000 equipment
Probable bidders: Halsey, Stuart & Co.

Inc.; Salomon Bros. & Hutzler.

expected

are

Jan. 8 for the

Jan. 15 for the purchase from it of
tfust certificates.

(2/24)

Halsey, Stuart & Co. Inc.; The First Boston
Corp.; Equitable Securities Corp.; Kidder, Peabody &
Co., Merrill Lynch, Pierce, Fenner & Beane, Eastman

announced company

(1/15)

Co.

able bidders:

Light Co.

★ Missouri Pacific RR.

Electric

writer—To be determined by competitive bidding. Prob¬
'1'

* -

Transport & Trading Co., Ltd.
was

construction

Dec. 4 it was reported company plans to issue and sell
$29,000,000 of first mortgage bonds due 1988. Proceeds—
To repay loans and for construction program. Under¬

on a

•••..wsw&e:'

1
'

j

&

Shell

present outstanding

Pennsylvania

be' planning to
stockholders/ the right' to subscribe
company

•

Oct. 3 it

about Jan.

★ Minneapolis Gas Co..
Dec:

was

Probable

Co.

&

curities & Co. and

reported company plans to issue and sell
equipment trust certificates. Probable bid¬
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler.

ders:

—

Water Service

'

Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Kuhn, Loeb

Morgan Stanley & Co. and asso¬

—

expected to underwrite about 60% of issue and
European financial institutions. Registration
—Expecteu around Dec. 20.

Nov. 18 it

Co.

January to
new'

one

★r Ohio Edison Co.
Dec. 12 it

Underwriter
are

balance t'.

19.
Gas

in

late

of

Proceeds

bank loans

M

Proceeds—For capital expendi¬

vailing at time of issue.
tures.

—None.

January, 1958.

was

stock

Proceeds—

115

$5,445,000

basis

Bids—
(EST)

Underwriters—The First Bos¬
Corp. and Morgan Stanley & Co., both of New York.

Dec. 9 it

common

company

offered

the

held.

Bank for Reconstruction and

★ Iowa Illinois Gas & Electric

on

Natural

the

Boston

Development ("World Bank")
Dec./, 17 it; was announced that the. Banh is planning to
market $150,000,000 of bonds in this country before the
ton

25

be

on

.

middle of

of

stock.

common

announced the proposed issuance
of 456,813 additional shares of common stock (par $10),

by competi¬

tive

be received

Nov.

Proceeds

Underwriter—To be determined

program.

sale

to

Underwriter—For any bonds-,

by competitive bidding. Probable bid¬
Halsey, Stuart & Co. Inc.; The First Boston Corp.;
Glore, Forgan & Co.; Blyth & Co., Inc. Bids—Expected

construction

and

given

ders:

Northern

for

loans

banK

being

to be determined

Nov. 15 it was announced company plans to issue and sell

$25,000,000 of first mortgage bonds due 1988.

is

securities convertible into

For construction program.

(2/13/58)

Co.

(2747)

Washington Natural Gas Co.

SEC

in

the

18

Oct.

directors

debentures.

authorized

the sale! of $5,000,000
Un¬

Proceeds—For expansion program.

derwriter—Blyth & Co., Inc., San Francisco and New
York.

★

West Texas Utilities Co.
9 it

Dec.

was

(1/20)

reported company plans to issue and sell

$8,500,000 of first mortgage bonds due 1988. Proceeds—
repay loans and for construction program.
Under¬
writer—To be determined by competitive bidding. Prob¬

To
•

Royal

Dec.

18 it

Dutch
was

stockholders

(Petroleum)

announced

Co.

company

(1/17)

plans to offer to its

7,602,285 additional shares of capital stock

able
Co.

bidders: Halsey, Stuart & Co. Inc.; Kuhn, Loeb &
Lehman Brothers (jointly); The First Boston

and

Blyth & Co., Inc., Harriman Ripley & Co. Inc.
(jointly); Equitable Secu¬

(par 20 guilders) at the rate of one new share for each

Corp.;

eight shares held

and Salomon Bros. & Hutzler

as

be sufficient to raise

of about Jian. 17, 1958. This would
betweeen Fls.

800 million and Fls.

rities

Corp.;

Kidder,

Peabody
Bids

&

1,000 million

Pierce, Fenner & Beane.

000).

Registration—Planned for Dec. 23.

(equivalent to $211,000,000 and $263,000,Price—To be governed by market conditions pre¬

—

Co.; Merrill Lynch,
Expected on Jan. 20.

116

(2748)

The Commercial and Financial Chronicle

Join G. Glidden With

John C. Glidden has

Mutual Funds

Corporation,

Broad Street, New York City.

He

formerly

general

a

in

What's Ahead for the Economy Next Year

partner

In

contrast

to

"

in the securities firm of

Morris & Co.

'

•

!'

r

primarily

Glidden,
- •

caused

recession results'to

•

and

resulting shrinkage in profit margins in

a

plant and equipment which, during the first half of
an annual rate of $2 to $3 billion, accompanied by
a rate of about $1.5 billion, as against 1957;
accumulations of $1.5 billion. In addition, the latest spell of "dollar
.shortage," especially in Western Europe, is likely to reduce our
exports. • • • .- ;
;///
•
■,/

'•

an

RJJUXi
•

; •

"

tjtphlhhtd ms

invested

mulval fund

A
in

INVESTING

Incorporated

for

CURRENT
VVKRKm

ll

"cow"/ income
A

P'incipah

each

on

in the Federal

Reserve

The Parker Corporation

Berkeley Street

Boston, Mass.

automobile

in the Middle East and NATO's current weakness could

Massachusetts Life Fund is

The

paying

a

dividend of 24

cents

per share from net investment
income for the quarter ending
December 31, 1957.
; .:
•• .•
A

distribution of

16

%

j
;

cents ; .;

share from realized capi-/
gains is also being nnule
by the Fund. ^
•
r .v< -' v
per
tal

-

,

-The dividend from income

and the
tion

are

ber

16,

trust

1957

to

.holders

labor

certificates of record

In 24th Month

at

the

end

Investor purchases of mutual
fund shares in November exceeded

c€oni/tanyf Trustee

50 State

of

$8,751,774,000 at the
year.

JfnUilance

October

same

wage

and

;

$100,000,000 for the 24th consecu¬ shares continued in November as
month, according to the Na¬ investors
opened 17,663 new ac¬
tional Association of Investment
cumulation plan accounts.
Companies.
Cash, U. S. Government securi¬
Reporting Dec. 16 on its 140 ties and short-term obligations
open-end member companies, the
held by the
140 mutual funds
Association
revealed
that

observe

that

Wall

and

wages

a well-known

investment

organization.

econ¬

about

Street

research

:

The study was reported to Tri-

one-

continental

tion's

end

negotiations in 1958.

Corporation, the na¬
largest diversified closedinvestment
company,'
and

three-. associated
mutual / funds,,
Street Investing Corpora¬

Broad

companies) expire in March and tion, National Investors Corpora¬
the negotiations and attitudes of tion-and Whitehall Fund, Inc., by
the
auto workers
will
indicate the economists of Union Service
whether
face

or

Corporation..

not the economy will

extended

; It brought out that study of the
period of labor
difficulties in 1958," the Keystone group- movements of stock prices
since the end of 1953- "reveals that
report states.
Among the industries and com¬ the general averages/ obscure the
panies which will undergo wage highly diverse results of individ¬
negotiations are aircraft, apparel ual industry groups of stocks.-/ - :
and
textile
manufacturers, and
- "The timing of th'e higlis* of in¬
an

November.

to

$100,291,000,

com¬

Value

of

shares

turned

in

for

redemption dropped in November
to $28,017,000 from- $35,648,000 the
month

before.

In

November

of

1956, shares valued at $27,536,000
were

redeemed.

mutual fund in¬

vesting in "growth"
for

dividual groups has- been spread
widely over the period," the re¬
port noted, "with- the- result that
it

important, to recog¬
highs of. the in¬
made
Chalmers and New" York trucking
than to- be governed; by general
companies in July; airlines and market: considerations: This may
glass
companies
in
September. also toe true of the lew points*, and
Various
regional building trade
many groups may haye completed
contracts also expire throughout
their readjustments and^be in a
the year.

Except
extended

for

the

strikes

as

a

more

when

the

dividual groups were being

rising trend before the ' general
of stobk price averages have reached
theit lows/'
that employ¬
.'."With the record of the high

possibility
in

industries, it appears
ment

was

nize

certain

key

whole will be relatively

A moderate decline prices of individual groups vary¬
months will be coun¬ ing so widely," the report stated

stable in 1958.
in the early

the end of terbalanced in the last half of the iii amplification, "it is reasonable
to expect the lows—while perhaps
with year,, the outlook says.
not. to be so widely spread—to
cash holdings of $509,207,000 at
Total consumer expenditures are
show considerable time differences
expected to be somewhat higher in
the end of October.
from the lows indicated by the
the second quarter of 1958 than
market averages." This
for the corresponding period in general
carries the implication that one
1957, and the FederaL Reserve
Elmer J. Pearson
should not concentrate on endeav¬
Board index of production, after
Elmer J. Pearson, partner in
oring to determine theexactlow
declining slightly to 139 in the
of the 'market,' but should con¬
Rodman & Renshaw, passed away next few
months, will ease back
centrate on 1he problem of which
to somewhat higher levels when
Dec. 4.
individual groups have reached or
inventories have been worked off
to the point where rebuilding is passed their low points."
"."Already: it would: appear that
necessary.
\
Keystone economists hold out the:. Retail' Stores^Food; Chains,

totaled $516,036,000 at

pared with $135,125,000 in October
and $113,282,000 in November a
year earlier.

selected

:

popularity of plans for the
regular purchase of mutual fund

chases by investors in November

stocks

of

workers Uqion (with the aviation

The

amounted

a

decline, according to

matter

"The first contracts of the Auto-

time last

pur¬

is

Beyond Lows

third of the companies employing
more than 5,000 workers will face

produce

tive

Street, Boston

;

,

000

CfCcbfatfa/

the

early in the year*; New England
Net assets of the Association's
truckers in April; General Motors
open-end member companies as in
May and Chrysler and Ford in
of Nov. 30 amounted to $8,928,June; Deere, International Har¬
892,000, compared with $8,666,442,vester, Caterpillar Tractor, Allis

13, 1957.

ndfateac/tttictfo

that

Consolidated Edison of New York

at
•

suggests

negotiations, Keystone

omists

estimates and 1956 actual figures.

of

the close of business December

the

On

.

Sales Over

capital gains distribu¬
both payable Decem¬

report

mercial projects.

news

,.

'

Some Stocks Are

mar¬

A study of the group movements
be substantially of stock prices indicates that some
unchanged because of balancing have already passed their low
factors
like
road
building and points even though. the general
municipal, state, church and com¬ market averages may continue to

Mr. Ring's: analysis includes projections for the major com¬
ponents of the Gross National Product, as broken down for the
first half and the second half of 1958, and compared with his 1957

3 :

,<

home

construction may

and emotional swings in the stock market wider
than warranted by economic considerations.

unpleasant

new

over-all decline in business expan¬
sion will be about 10%, but total

months

DIVIDEND

and

Will Congress reduce taxes?

kets?

ther

Life Land

out¬

For

Tri-Coit States

the

assumptions, it is logical to expect a somewhat fur¬
easing in the money and capital markets during the first
in 1958, accompanied by renewed firmness in the bond
markets. The stock market seems currently fairly well adjusted
to these economic prospects, within 5 or 10% of its current level.
Probably the political and psychological uncertainties in this situ¬
ation are greater than the economic uncertainties. Russia's foothold

.

,

Board

On these

Massachusetts

J1

data commonly used in analyzing
period can be deter¬ basic
trends
in
the
American
example: What will economy.
'
*:
businessmen do about plant ex¬
pansion and inventories? How will
labor unions handle wage negotia¬
tions? Will consumers support the
mined.

industries likely to turn in a superior profit
showing next year are the following: Electric utilities, food
processors, food chain stores, tire and rubber companies, electrical
equipment makers for the utility industry and, later in the year,
the producers of military electronics equipment.
Some segments
of the residential building industry may also benefit from a mild
upturn in residential building. On the other hand, the industries
closely identified with private capital outlays for plant and equip¬
ment, as well as those with fairly pronounced temporary excess
capacities, could show a somewhat slow resilience during the first
phase of recovery from the current recession.

investment dealer.

200

decline

before the economic

swered

production
index in the first half of 1958 may be limited to perhaps 4 to 5%,
carrying the index down to around 136 to 137, corporate profits,
due to the big leverage factor, could well decline by an average
of 10 to 12%, to rebound later in the year nearly as much. Naturally,
strong companies in relatively well-situated industries will make
a better showing.
Among

fund is available from
your

the

1

The

look for the

down in the first half of 1958,

While

come

■-

Thus, the country's overall business trend will probably be
with good prospects for a gradual
recovery in the second half of the year.

Fund

T*

prospectus

recent

longer than now seems likely. As it is, the down-trend in. business
is likely to be increasingly offset by rising government spending
in the second half of 1958.
Defense spending may rise about $2
V billion annually by that time—without substantial offsetting
budget cuts—and state and municipal spending should again climb
by about $3 billion next year.

V

A

the

'

mutoal fund
whose firs,

"
«»*..risk

for

technological and diplomatic
of the Soviet, the current recession might last somewhat

successes

r

«>d

thay«arsohecfcL

not

were

renewed advance

.

.

it

a

activity should

.

inventory decline at

passible

far

GROWTH of CAPITAL

INCOME in

:.

rifles

list of

o

isltctei

-

decline in private invest-

a

1958; «iay reach

>

for

number of in¬

a

-V

ments in new

•

(N¥ESTING

'•

These factors have set in motion

.*

and

...

business

about in -1959-and 1960."

Keystone publication ineludes two interesting charts
showing the breakdown of 66,500,000 American workera by in¬
dustry and a tabulation of. the
value of common stocks, by in¬
dustry; listed on the- New York
business and financial outlook.
Stock Exchange. Service industries
Keystone?s economies depart¬ today account for 60%. of total"
ment, headed by Andrew P. Fer- employment, while manufacturing
retti, points out that the present accounts for 25% and agriculture
readjustment is complicated by less than 10%
Since 1930 the
Federal debt problems, world-wide number of
agricultural workers
monetary questions, troubles in has declined more than 50%. :
the Middle East, political prob¬
Included is a liSt bf key business
lems at home, and by the psycho¬
indicators,, with gross national
logical
effect
of
the
satellite
product for the first half of 1958
launchings.
'
listed at $435 billion, down slightly
Looking ahead over the first from estimated year-end figures.
half of 1958, the Keystone report
The entire back page of the Key¬
considers numerous pertinent
stone 'outlook is taken up with
questions
which
must be
an¬ financial and economic indices and

the first two postwar recessions, which were
by inventory adjustments, the current third
a great extent from temporary excess-capacities

dustries.

INCOME? M,

become clearer toward the middle

growth potential of the
United States, currently in a pe¬
riod of consolidation, will undergo
no marked
change until mid-1958,
when the upward trend is likely
to be resumed* according to the
January-June 1958 issue of Key¬
stone Custodian Fund's economic,

90

Thursday, December 19,1957

.

of 1958

By ROBERT R. RICH
The

Securities

was

Upswing

In Second Half

eales department of Stone & Web¬
ster

Economic

joined the

.

off a major downward spiral in
production and employment. . / *
The growth potential in the U. S. A.
is still there. This fact may again

Keystone Sees

Stone S Webster

.

This

compared

.

their possibilities for

gain in value

over

the

little hope for a tax reduction and
estimate that there may even be

years.

Send for

a

free copy

booklet-pro¬
spectus by mailing this
A

advertisement.

Common Stock Investment Fund
Investment

CALVIN

objectives of this Fund
are
possible-, long-term
capital
and
income growth for its shareholders*

BULLOCK

Established 1894
ONE WALL

Prospectus

upon

request

ST., NEW YORK 5

Name.
Address.




Lord, Abbett & Co.
New York

—

Chicago

Atlanta

—

Los

:on

June 20,

1956, and have risen to a current
a
budget deficit of $1.8 billion. figure of 40.00, may well not re¬
turn to the earlier figure in the
An increase in the Federal debt
limit is practically certain, says market and so have already passed

Fund

of the

which/stood/at: 35:60

Angeles

the

report.

It also suggests that their low point. Likewise, the- drug
stocks "may have.; already
seen

interest rates Should firm and that

over-all better tone may be their lows."
The report brought out that bull
expected in the bond market.
No drastic changes in the eco¬ market highs of individual groups,
nomic situation are likely, accord¬ during the period of the study,
ing to the Report. "Industry, ad¬ occurred at widely varying times,
an

justments, short of some cata¬ running 'all -the- way/ frOm / Janu¬
clysmic international development, ary, 1954, the high of the? Bev¬
will not be severe enough to set erages-Brewers group, to Novem-

Volume 186

ber,

Number 5700

1957 *

(T

o

b

.

..

o-Crg

a c c

The Commercial and Financial Chronicle

a r

Manufacturers).
Another notable feature brought
out in the study was

ally

the "gener¬
participation in the

modest

$18,855,312

Manhattan Bond

594,864

Fund

consumer

Reports

Manhattan

market."

goods

'7

-

est

to

usually

Bond Fund,

shareholders

and

to

bond

of

man

throw such

report

that

er's

the

of the chief objectives

one

bond

investor."

the

Over

past decade, dividends paid by the
fund from net investment income
have varied within

The

report noted that "with the investors in general.
prospect of a slowing down in
First, "Lower bond prices do
capital expansion for the next not
necessarily
indicate
lower
year or so, and the probability
credit
standing for the issuing
that
consumer
incomes
will be
companies, or any basic change in
relatively
well
maintained be¬ their financial
position or ability
cause
of, social
legislation and to
pay bond interest." In this con¬
perhaps government assistance, an nection the
report points out that
interesting question is raised as in
1954, when bond prices were
to whether in the period
ahead
relatively high, the average after¬
the stocks of companies depend¬
tax
earnings of the companies
ent on consumer purchasing power
whose
obligations are currently
will not make a better showing
held by the fund "were 3.91 times
than those dependent on capital
their bond interest requirements.
expansion."
In 1956, they averaged 4.15 times
"There are," the report added,
such requirements."
"many complex factors involved
in such a question, but it is an ; Secondly, the report states that
continued
easing of the money
area deserving of real study since
situation is likely to affect bond
one often encounters new leaders
in each succeeding forward move¬ prices favorably and thus, the net

a

range

of only

3.5 cents per share per year; from
37 cents in 1952 to 33.5 cents in

3 949.

34.5

The

1957

payment

cents.

period ended April 30, 1957 bonds
newly added to the fund's holdings
included
Columbia
Gas
System
debentures, series H, S^s, 1982;
J. Ray McDermotfc & Co., convert¬
subordinated

debentures, 5s,
1972; and Shamrock Oil & Gas
Corp.,
convertible
subordinated
debentures, 5F4S, 1982.
were

Southern

Pa¬

official

own

only

the past

short

a

abstract human

able

the

direction.
In a
institutions
changing or collapsing, it ap¬
pears to offer something tangible,
something to which to cling.
many

have

than

to

We

known

never

nation

a

assist

about

greatest

an

pros¬

within this
and new in¬
institutions
designed
foster

freedom

in

meeting

Institutions

needs.

World

functional

such

as

the

Health

Organization, the
International Bank, International
Finance
Corporation
and
the
Monetary Fund.
„<:v

interested

are

the

to

ternational
to

us.

as

.

consensus.

in fact

Second,

liberty it entails
be less meaningful to people

who

bring

be

among

framework existing

of

may

will

they

cooperate

and

larger

This

are

loss

to

pect for strengthening the United
Nations and for fulfilling the high
hopes held for it at its beginning.

and
so

better

ever

fact

that much of the danger of com¬
munism lies in its strong sense
world where

cohesiveness,

themselves

,

to

up

r

which to build.

communities, regional
otherwise,
gain in strength

or

being and human¬

face

must

Republics during
It provides a

years.

on

As these

and

ity in general."

100

foundation

principle against petty-bour¬
geois humanism which operates
under the slogan of defense of an

The

structure of free

the 21 American

made

purpose

a

world communities in the work of

in

of

117

their

quote

declaration

We

:

basic pattern for de¬

a

veloping such

over¬

(2749)

(

system.

a

time ago: "Marxism—Leninism is

totaled

During the six months since the

Eliminated

To

We have

dignity,.: the

thrust of Communism is to

>

•

fund's semi-annual report for the

ible

national

and

compared* withv $22,the same date last year.
reminds sharehold¬
"Income
continuity
is

on

The

Inc., in
its
annual
report for the year
stocks, which as a class were in ended Oct.
31, 1957 makes several
the forefront of the 1942-46 bull
points of more than passing inter¬

bull market of t he

■\r

1981. Reductions in stability—therefore our goals
These institutions are the best
were made in previous holdings of
require long-range plans and con¬
tools for facilitating joint actions
American & Foreign Power Co., structive programs.
The Soviets are interested in by the sovereign nations in their
Inc., junior debentures, 4.80s, 1987;
Cleveland, Cincinnati, Chicago & instability.T h e i r - goal is to - struggle to meet the needs of
asset value of shares of Manhattan St. Louis Ry. Co., refunding and heighten
tensions, promise : all their people and the pressures
ment of the stock market."
-J *
Bond Fund. "While it is too early improvement, series E, 4V2S, 1977; things to all people. "But they caused by their growing popula¬
While it is a difficult task to
& Rio Grande
Western have only one objective in mind tions.
7'-';
to appraise the long-term signifi¬ Denver
■,;
r
'•
cific

Co.,

41/2S,

.

forsee

changes which, in hind¬
cance of
the recent Federal Re¬
sight, show enormous potentiality
serve action, it should be observed
for profit in selecting the right
that the bonds now held by your
group of stocks, the report stated,
fund are selling at prices which
"it can, liowever, be fairly said
that the chance of being able to provide possibilities for substan¬
tial
improvement.
The average
spot an -industry change or the
market price of the bonds held
relative attractiveness of groups
by Manhattan Bond Fund on Oct.
is greater than attempting to fore¬
31, 1957 was 713/4." Net asset
cast general market movements."
\alue per share on Oct. 31 was
$6.25, compared with $7.38 a year

Boston Income Fund

earlier.

net

Total

assets

were

Declares Dividend
The Income Fund of Boston, Inc.
announces

declared

a

that the directors have

Continued

Co., income mortgages, •—ultimate world domination.
We want peace — the
series A, 4Iks, 2018; Gulf, Mobile
Soviets
&
Ohio
Railroad
V- •
Co.,
general want victory.-' :
Thus we and the rest of the free
mortgage income, series
A, 5s,
Never
2015; The New York Central Rail¬ world face grave peril.
before

sential to know what

from page 7

in

Only

this

world-wide

35.7c per
compared with 35c per
share paid in the corresponding
period of the preceding year (ad¬
justed for 20% stock dividend paid
to shareholders
of record April

patient process of
education, organization and capi¬
tal formation.

30, 1957).
The total assets of the fund on

social and industrial

Science and Development

suits require a

the third
revolutionary
force
being felt
Underdeveloped and newly in¬ throughout the world — that of
dependent areas too often seek to scientific discovery and develop¬
absorb

in

a

few

years

political,

developments

been

enterprise and state regu¬
lated economies and facilitate the

so

,

Meeting Deep-Seated Problems
With a Firm National Purpose

share,

mankind

ment

share from net investment
income payable to shareholders on
Dec. 16, 1957.
Total dividend payments from
net investment incomes during the
first nine months of the fund's
current fiscal year were

has. all

free

flow of capital to needed areas.
Co., refunding and improve¬
; ;< u-.U
Third, we must face squarely
mortgage, series A, 4-^s, dangerously threatened.
the totality
of the Sino-Soviet
2013; New York, Chicago & St.
What Are We For?
- •Louis Railroad Co., income deben¬
; Communist threat in all its phases
To master and guide the revo¬
—political,
tures, 4V2S, 1989; Tennessee Gas
psychological,
eco¬
Transmission Co., debentures, 41/4s, lutionary forces in the world will nomic and military.
1974.
require positive motives on our
By effectively carrying out the
part.
It is not enough to know first and second objectives we
what we are against, it is also es¬
should be able to minimize the
road

quarterly dividend of

12c per

Imaginatively designed institu¬
tions on a world or regional basis
can help bridge the gap
between

Railroad

This

brings

us

to

ment.

ourselves
move

revolution

have

are

the

which

helped

communist efforts to capitalize on

for.

can

we

manner

to

this

the United States is to playrightful role of leadership in
creating such a structure, it can
only do so if we as a people really
understand the nature and impli¬
cations of the basic revolutionary
forces which exist in the world; if
we recognize that we as a nation
cannot live apart from the rest of
If

its

mankind—either

is

a

revolution

that

materially,

insurance

institutions, such as underprivileged
investment

companies,

the

Latin

Reynolds Adds to Staff

force

are

bent

conquering the
world through any and all means.

running even higher than ours
a
rate which will
double

people in Czarist Russia 40 years
ago, to control of over a billion
populations in the next 30 people — more than one-third of
SAN FRANCISCO, Calif.— years.
<•
the population of the world.
James F. Pannell has been added
While the productivity of these
Neither
Chinese
nor
Soviet
to the staff of Reynolds & Co.*
areas is
also going up, the truly Communism recognizes any of the
Chronicle)

(Specinl to The Financial

425

Montgomery

Street.

Joins Walston Staff
Chronicle)

(Special to The Financial

SAN
Frank
with

FRANCISCO,
L.

Nipp

Walston

is now
& Co.,

Montgomery Street.

Two With First

—at

their

po¬

direction
search

frightening indications are that
the population growth is rising
even
faster. The result
is that
these areas of the world face the

traditional

or

conventional

con¬

rp«s

Southern

of the world's

political struc¬

ture.
-

As

treaty
Thus

things

now

stand,

.

it

is rising

agreements
where

as

Chronicle)

the

joined
Digitized forthe staff of First Southern
FRASER
Corp., G52 Peachtree St., Northeast.


developed areas can cope

impact of this situation.

with the

an

the

expectations

binding.

revolution

is

world

of

on

international system based on

principles of respect for hu¬

the

as

provided in Article 51

must

functional

we

be

regional

groupings

and

encompass¬

must face squarely

the

fact

our

international goals by

up

that

we

achieve

giving

social gains.
accomplish these goals,
must get rid of the softness

we

to

and waste that have
In
our

our

crept into the

democracy.;' {

conclusion,

say

that

determination to follow

such

may

I

national purpose can

give new
meaning and value to the lives of

a

every American,
as well
as
to
people throughout the world. Let

rededicate

us

great

and

ourselves

basic

beliefs

to

the

of

our

nation:

.

The brotherhood of
power

man

|

and the

of love;

The dignity and worth of the in¬

dividual;
The

equality of

man

and his in¬

herent rights to life, liberty and

happiness; and
The

challenge

and

responsibility

of opportunity.
;

;

With B. C. Morton
rSpecial to The Financial Chronicle)

DETROIT, Mich.

whether neutral

now

—

M. Manuel

with B. C. Morton

Helfman is

& Co., Penobscot

not.

cannot

our

But

ing all nations of the free world,
or

at

opportunity in education, in work,
social welfare; face squarely

•

There

the

achieve

in

or¬

Charter.

the free world

home the basic problems of equal

Therefore,

of

provide for

we

opportunity to

least),

ganization.

Nations

can

and

and

the positive goals of humanity.
And
last
(but by no means

within the structure of the United

the
hard to see how the 70 or more
whole produced by the desire of
ATLANTA, Ga.—Roy V. Clay¬
independent nations of the under¬ newly awakened peoples to enter
ton
and John P. Nor veil
have
(Special to The Financial

Only thus

the
only
way
in
which the true hopes and aspira¬
tions of the peoples of the world
can
be
achieved
is to
develop
communities of sovereign nations

totalitarian

partnership and

program

time

providing this frame¬

they consider negotiations only as
a
tactical tool to encompass the

Calif.— possibility of a declining rather
than a rising standard of living— downfall of the non-communist
affiliated
this in the face of the surge of
world, their word means nothing
Inc,. 265
rising expectations and the weak- and they do not consider their

a

ourselves

munist Bloc, which seeks to bring
a

re¬

tions in the process.

work because of the Soviet Com¬

about

of

must be ade¬
quately financed and our national
economy
protected from distor¬

pre¬

cepts of diplomacy—either in ne¬
gotiation or agreement. Because

financing

respect.

Such

establishment of a workable,
acceptable framework for world
order and development.
vented from

and

basis of true

a

on

mutual

the

is

,;i

at Home

and

fibre of

Nations

steps, particularly:

handling
of
any\}u limited
war
which might be forced on us, mil¬
itary cooperation with our allies

First, to create the sense of se¬
curity, confidence and direction
which can help to shape events
and avoid crises.
This requires

United

the

development, unified
commands, flexible and decisive

include:

The

enslave

A national program of scientific
education, training and basic re¬
search; the reorganization of the
Defense
Department to permit:
overall
strategic planning
and
weapons development, centralized

on

population growth
underdeveloped areas of
Born in Germany, it spread
America, Asia and Africa from a small movement of 80,000

The rates of
in

trusts, and the like.

areas.

and

Our Strength

.

by financial

subvert

fundamental

is with

must

to

free peoples of the world.
In the military field there is no
time to
lose
in taking
certain

spark,

into constructive channels.

litically or spiritually; and if we
which have taken 150 years in increasing rapidity changing recognize
that the
world has
Oct. 31, 1957 were $17,006,952, an the Western World.
reached a point in its develop¬
every phase of our lives. It opens
increase of 32.6% over the total
,7These
pressures; are
further up new and undreamed of vistas ment where the well-being of na¬
assets of *$12,830,768 reported on
tions
and
peoples
cannot
be
complicated by an unprecedented of opportunity for the future but
Oct. 31, 1956.
The net assets on
at the same time undermines the achieved except within a frame¬
surge of population growth.
Oct. 31, 1957 were $14,938,610, an
work which
can
encompass the
very basis of our security.
increase of 34.9%
over the net
world as a whole.
Population Pressure
On the one hand, these revolu¬
assets reported on the correspond¬
Out of such an understanding,
For instance, when most of us tionary developments in science
ing date one year earlier. we
can
develop
the necessary
were
born there were less than may well hold the secret to abo¬
sense
of national purpose based
During the quarter ending Oct.
100,000,000 people.in the United lition of poverty and want.
on our heritage of moral and spir¬
31, 1957 the fund has continued to States.
Today
there
are
170
On
the other hand, new and
itual beliefs.
purchase bonds and fixed dollar million.
frighteningly destructive weapons
The effect of achieving a na¬
obligations. On that date 10.52%
At our present growth rates, by technology is bringing
about a tional
of the fund's total assets were in¬
purpose
related
to
the
1980 there will be 260,000,000; by situation where incredible devas¬
world as a whole will be to: give
vested
in bonds
and preferred
the year 2,000 there will be 307,- tation could be triggered without;
stocks and 87.39% in common
meaning and value to the innu¬
equal to the warning. This factor alone makes merable problems we face today at
stocks. The fund's portfolio rep¬ 000,000 — almost
it clear that the construction of a
home and abroad and to relate
resents investments in 119 secu¬ population of India.
And
should
these rates con¬ peaceful international order has them to each other; it will jnake
rities which on the average have
never been more important.
it possible for us to establish pri¬
paid consecutive dividends for 22.6 tinue, it is estimated that in 100
And lastly, let us consider the
years there would be over a bil¬
orities in our plans and actions;
years.
of
the
Sino-Soviet
lion people in the United States. revolution
it will give continuity to our ob¬
The average age of the com¬
Even with our great resources, the Communism.
jectives.
panies
(including predecessors)
In the midst of this world-wide
whose securities are held by the problems we face are tremendous.
Submits Program
fund is 63.4 years, and 97% of But they are nothing compared to upheaval, there has been released
Specifically,
our
objectives
ideological
and
imperialist
these securities are reported held those faced by the people of the an
It

period of emerging hopes in

order

we

Building.

118

The Commercial and Financial Chronicle

(2750)

The

Indications of Current
Business Activity

week

operations

steel

Week

42

Aao

condensate

and

gallons each)

*69.2

76.0

102.6

§1,739,000

*1,770,000

1,945,000

2,525,000

BUILDING
Total

-

(bbls. of
6,829,350

6,849,500

6,796,220

Dec.

6

Dec.

0

17,807,000

7,807.000

6
6
G

27,670,000

27,205,000

12,896.000

12,554,000

7,592,000

7,322,000

7,151,000

oil

—

(bbls.)

output

new -

7,540.000

Dec.

'

2,292,000

2,447,000

1,934,000
to

G

31,283,000

32,661,000

34,177,000

33,111,000

G

163,145,000

167.594,000

173,963,000

58,839,000

58,807,000

59,338,000

■■■'

175,427,000

"V

ASSOCIATION OF AMERICAN RAILROADS:
Revenue

CIVU,

CONSTRUCTION

ENGINEERING

7

617,838

553,722

675,273

7

528,911

548,125

'586/246

738,251
.:}

Public

Public

_Dec. 12

$200,970,000

$372,988,000

$528,078,000

114,409,000

152,699,000

372,307,000

Dec. 12

112,140,000

75,807,000
125,163,000

220,289,000

105,251,000

118,735,000

166,675,000

122,812,000

6,889,000

6,428,000

53,614,000

32.959,000

and

muhlcipal

COAL OUTPUT (U. S. BUREAU
Bituminous

STORE

SALES

SYSTEM—1947-49
ELECTRIC

Electric output
FAILURES

Dec.

7

9,070,000

8,090,000

9,400,000

Dec.

lignite (tons)
anthracite (tons)

DEPARTMENT

7

455,000

374,000

453,000

=

100

*159

215

7

Dec.

INDUSTRIAL)

DUN

—

12,315,000

11,953,000

287

12,570,000

Dec. 14

AND

206

269

Dec. 10

(E.

M.

A

Lead

(St.

Zinc

Louis)

Aluminum
tin

U.

$32.00

$66.42

-

I:

26.375c

26.075c

Dec. 11

22.425c

26.575c

22.800c

13.000c

Dec. 11

*

13.500c

13.000c

Dec. 11

12.800c

12.800c

Dec. 11

10.500c

10.500c

Dec. 11

10.000c

10.000c

10.000c

Dec. 11
Dec. 11

26.000c

26.000c

26.000c

92.750c

91.500c

89.500c

(primary pig. 99%) at
(New York) at—

13.300c

93.28

91.62

90.63

99.52

98.41

94.41

100.00

95.16

93.97

91.77

98.41

90.77

89.78

88.95

96.23

Dec. 17

a

82.27

81.42

Dec. 17

88.95

91.19

90.48

-Dec. 17

94.86

Dec. 17

Dec. 17

88.33
96.23

.

81.29

87.86

Dec. 17

Railroad Group
Public Utilities Group
Industrials Group

89.08
88.95

8G.91

corporate

—

3.08

3.07

3.45

4.37

4.49

3.99

3.85

4;11

3.75

>

-•

4.06

"

T

peel

""

1

•

45

■

44
''

-

580
;

;•

512
to": """-120*

127

"

45

50.
44

.77

*

.

11

38

35
141';

to

134

..

96

65-

•

•

55;

.

35-

r

to

102

•11

,79.
-

►

11

!•:,

September
•

,

-----J.

$54,100'

Li—r

S.

*$54.20C

12,800

$50,800'

12,800

12,600

*24.300

23,400

*$91,300

24A00"

$86,900

'

"

'v.^>9i,4'6b

VA-V;";.

■y**'-

1

•
...

construction

»

$1,231,900
,,"
564,899

$1,699,872

—2-——-

(>67!o01

833,242

municipal_._____.__.___-3_--_-_

,560,310

—--3

106,691

'

.

construction
and

Federal

3.43

4.30

42'

-

2'Un

■f

COM¬

OF
"

.

"371'

-■

-

2f

,

73

•

.

construction

State

COAL EXPORTS
; U.

4.14

4.29

S.

of

(BUREAU OF MINES)—

August:

exports

of

tons')

(net
To

North

'To

3.85

$ 1.735,723j

976,252*

866,630

'

'759,471

703,356

641,801*

129,886

'

117,670-

4.36

4.43

4.49

3.99

Dec. 17

5.00

5.07

5.08

4.38

..

Railroad Group

Dec-17

4.49

4.64

4.08

■(

Dec. 17

4.33

4.51

V t

,..

,f4

''/•

.

•'

"•

'

America

(net

tons)

288,910

465,024

213,789

142.770

220,274;

212,139

'

138,539

229,053;

19,579

-

.

(net tons)
r.

449,279

"

Central

(net tons)-

v

■

anthracite
—J——

and

Europe

To Asia

17

Baa

-.

Pennsylvania

'

■

A*

dollars):-

of

,
-

-

"

113

-

I

U.

Public

96,69

3.78

Average

•v: 9i.i9

*

34

38

—

1,299:
30

/

development^.—

12

-

-

-:

261

.

'.

26

:

INVENTORIES —DEPT.

Month

MOODY'S BOND YIELD DAILY AVERAGES:
U. S Government Bonds

and

public-

•

'

-

413

,,

to

' 128

•"'*

-b

18

97.16

93.52

41/
100

343,"

52

,

94.86

.4

88.67

130
* 484

...

1,453

.

1

17-

■

.

"'

;

41

_—

Private

90.48

'

ENGINEERING

Total

\

w-

:

,

426

555

sy&teius^—w——

CONSTRUCTION — ENGINEERING NEWS-KECORD — Month of
November ( OOO'.s omitted)U,
ir,.
'.

S

')•

93.27

Dec. 17

..27

16

41'

'

34

.

l

water

•

CIVIL

31-

8S

v

"4o

buildings-

to

104.750c
'**'

\

service

and

Total'

"25.000c

•

■'

49'.

558

y

'

262

"y

>13

-to

to"-'

159

itlS*

.

_

13.500c

'

Dec. 17

-II—

other

,/ Retail

14.000c

1

,

403

to.

Wholesale

15.800c
'•

BOND PRICES DAILY AVERAGES:

S. Government Bonds

1

^

f Manufacturing ;

16.000c

10.500c

1

at—

-i,

service. enterprises

(Millions

48

17

1

MERCE. NEW SERIES—Month of

35.475C

•.'34.500c

,19!).

••

$65.17

*

23.175c

at

Average corporate

A

All

-Kit).

■--to-8'

1,402

-

Conservation

$63.04
*'■

$33.00

320,
to.vto

154

.-'.v

-• .'to,
.

427

,'b_

^ ^

.v¥r^

,

nonresidential

and

Public

5.622c

•

(East St. Louis)

Straits

$66.42

$32.00

at__

(delivered)

MOODY'S

$66.42

Dec. 11
:

^rsL-

Water

BUSINESS

(New York) at

tZinc

249

;

-

220

94

.

QUOTATIONS):

Export refinery at

;

•

Sewer

copper—

Domestic refinery at
Lead

,'

5.967C

5.967c

Dec. 10

J.

5.967c

Dec. .10

„_

Pig iron (per gross ton)
Scrap steel (per gross ton)

Electrolytic

12,220,000

■U:

(per lb.)_—

private

Administrative

Sewer

___Dec. 12

tor

.

>'

42

Military facilities
Highways

&
•

INC.

<

'

other

Other

•

563

telegraph___«^«J_311-if":-

public' utilities—

278 r

''•160

-

47'

i6..:

'■: * ••'.

Educational

226

260

*

133,

—to__—Jn^tototo-.

and

.:7D7'

322-

27

to-

Industrial'

628,000

135

.

41-

"108

44'to toy'

,

Hpspital and institutional

IRON AGE COMPOSITE PRICES:

METAL PRICES

All

"

(in 000 kwh.)

(COMMERCIAL

steel

-7-.

..

Residential buildings
Nonresidential buildings

INDEX—FEDERAL RESERVE

AVERAGE

: 344

'

'

47
■

to-to_—to—-I.

—

to.—

Public construction

to

INSTITUTE:

BRADSTREET,
Finished

•

OF MINES):

coal and

Pennsylvania

'

.,•"80

recweatiohatM—„'to—toJto

utilities

other

10,774,000

construction

State

1
2—,;

,—

and

Telephone

155,771,000

Dec. 12

—

...

Federal

EDISON

$226,549,000

—Dec. 12

——.

-Dec. 12

construction

•;

'

802
•

i

Railroad

g. construction—.

U.

Private

1.195,

,

47

r256

:

construction

Farm

NEWS-RECORD:
Total

1

378

802

.

—

Miscellaneous

662,434

ENGINEERING

—

1,580;

:

.1.140

V

367

%

2—>.

nospi,taJ and institutional^

'

Sofeial

freight loaded (number of cars)
Dec.
freight received from connections (no. of cars)—Dec.

Retenue

.':

1,120

,

•«.

3,003

1,5G5

->

48

buildings

Educational
.

1

1

$4,302

..

3,102

1,535

————

Religious

■-

at

3.050

1—
-.'
^ v. 332
buildings and warehouses—to' f7 to.'177.-;/ •'
•Stores, restaurants,- and- garages—u />
155 ;toto'
Other nonresidential buildings—to—---to
214
'

43,755,000

at

(bbls.)

it?

•

Office

145,550.000

G

180,805,000

$4,5G5

"

Commercial

8,360,000

..Dec.

*185,203,000

$4,452.

r

,

(nobfarm"...

v industrial

•

...

13,198,000

—Dec.

188,087,000

Year

"

,

6

Month

millions):

——to,—i:—

—

Nonresidential

2,885,000

Distillate fuel oil (bbls.)

oil

(in

Previous

OF

dwelling units
;
arid alterations.i_———

Nonhousekeeping

/,.-,

27,237,000

in transit, in pipe lines—
Finished and unfinished gasoline (bbls.) at—
Dec.
Kerosene (bbls.) at
Dec.
fuel

DEPT.

Additions

7,865,000

26;224.Q00;

Stocks at refineries, bulk terminals,

Residual

October

of

construction.

New

7.353,200

11,870,000

G

.

■

fuel

CONSTRUCTION—U. .S.

construction
Residential buildings

output (bbls.)—
—
——Dec.
Kerosene output (bbls.)_—„————iDec.
Distillate fuel oil output (bbls.)
Dec.

of that date:

are as

Month

§67.9

Gasoline

either for the

are

Latest

LABOR—Month

Crude runs to stills—daily average (bbls.)

Residual

of quotations,

cases

I

Private

output—daily average

;

in

or,

Ago

i

PETROLEUM INSTITUTE:

oil

production and other figures for the

cover

Dates shown in first column

,

that date,

on

Year

Dec. 22

Equivalent to—
ingots and castings (net tons)

Steel

AMERICAN
Crude

month ended

or

Dec. 22

capacity)

of

(percent

month available.

Month

Week

AMERICAN IRON AND STEEL INSTITUTE:

or

Previous

Latest
Indicated

following statistical tabulations

latest week

Thursday, December 19,195

.;.

11—

*

3.93

Public

Utilities Group

Industrials

MOODY'S

Group

4.57

t.

4.38

4.08

4.17

4.33

3.96

Dec. 17

391.7

392.8

380.3

439.2

INDEX

'

Production

(tons)

Dec.

258.322

7

281,322

237,804
269,285

316,667

7

:

Dec.

7

84

86

Dec.

7

409,957

355,159

485,369

••275,418

94

Unfilled orders (tons) at end of period
1949

AVERAGE

=

108,68

107.81

Dec. 13

•.

'

'

95

OF

451,283

•

ACCOUNT

OF

;■

109.60

•

in

109.62

MEM¬

purchases
sales

687,056

635,800

the floor—

on

-

4,243.160

,

Nov. 23

2,186,086

1,877,310

3,632.515

Nov. 23

2,843.236

2.704,660

4,662,925

1,305.322

1,244.973

2,657,011

1,119.047

$53,691,351

$51,551,986

$110,734,130

$53,844,053

1,070,306

960,910

825.727

23.100

11,372

Food

Nov. 23

1,045.275

937,810

1,598.952

814,355

$71,874,869

$42,504,410

Monlh

All

Nov. 23

$43,988,883

$39,971,650

Nov. 23

of

284.930

246,160

298-590

28A930

246T60

298,590

181" 420

Nov. 23

569,110

522,130

1,298,350

466.070

Dollar
Odd-lot

value

1,534.060

2,821,550

(customers'

orders—Customers'

437,600

537,830

1,231,200

1,042,710

2,410.820

short

sales

Nov. 23

1.668,800

1.580,540

3,150.500

Customers'

other

sales

Nov. 23

431,530

347,750

517,580

Nov. 23

70,100

126,400

125.100

20.600

'i

Other

Nov. 23

TOTAL

ROUND-LOT STOCK SALES ON THE
EXCHANGE AND ROUND-LOT STOCK
round-lot

Y.

.

-

561,681

904,030

149,450

163,120

165,630

69,100

S.

DEPT.

1,566,810

13,189,350

11,260,460

20,634,830

14.243,820

12,489,440

22,201,G40

Less
.

All

Processed

~

foods

Meats

2

commodities other than farm and

*117.9

117.3

116.2

91.8

*91.6

91.8

88.6

Dec. 10

I

118.0

Dec. 10

107.0

*106.3

106.3

103.0

I.Dec.

I

10

94.1

92.3

93.2

79.5

Dec. 10

foods

125.7

*125.7

125.6

124.6

•Revised

?r Ja^'

figure,

flncludes 986,000

i957« as against Jan.

one-half cent

a

pound.




I,

i:Prime

barrels

of

IBased on
tNumber of

foreign crude runs.

1956 basis of 128,363,090 tons.

Western Zinc

sold

on

delivered basis

at centers

new

annual capacity of 133,495,150.tons as
not reported since introduction of

rrders

where freight

from East St. Louis exceeds

Net

115.8*

*

:

"

care

lOO.i;

92.3

181.6

126.2

92.1

133.9-

132.6

181.1

173.0

125.5

122.9

7139.7

139.0

134.1

126-2

125.1

120.8

——■

113.4

113.3

108.5

1_

126.8

126.7

123.0.

$345.6

*$346.6

$331.1

239.9

*241.5

230.4

106.8

*102.2

64.6

*64.8

60.9

33.9

31.4

40.6

*40.6

38.4

"6.8

6.8

,

'

1

UNITED STATES

COMMERCE)—Month
•

,

income

2

"

7

•

•

.

,

„

contribution

for

special

'

income

^

interest income

nonagricultural

and

99.6

in-

1,

5.7

a.O

dividends-

*

_r.

;

•

8.0

7.6

51.0

51.1

49.9

31/7

*31,6

30.1

21.8

income

330.3.

*21.2

18.8

*331.3

31G.1

$10,330,300

$56,176,500

TRANSACTIONS IN DI¬

AND
GUARANTEED
SECURITIES
S. A.—Month of October:

purchases

108.2"

,99.6
128.1

33.9

OF

THE

(in billions)-

sales

103.6:

109.3

/-'r 135-8

-

_

—L

MARKET

106.8'

.,....,125.4.
A-s—

—

care

labor

124.2

107.3

92.5

-

—

132.9-

126.3

128.3

*'

_

1—

136.8
104.6

100.6'

j* '

.If

—

1

112.0

107.7

Ll—'

:

133.4'

128.7

1T"

122.8

135.7

104.8

L_^_ "

126.3
113.7

137.6,

1_

—

Total transfer payments

RECT

113.9

115.0

-

109.4

oil.r__

,—.—-—..^

industries

Personal

OF U,

110.71

113.1

113.8

Proirrietor.s and rental income

Net

100.8

110.3

114.8

116.2

and

TREASURY

Monthly Investment Plan.

126.8.

126.6

boys'——
girls'—

employees'

Total

131.2

114.2

,

L—_•

surarice

Other

Dec. 10

3

-

'!

113.1-

1H.7:

114.5

•

;

Government

OF

117.7'

117.C
115.5

106.3
-

"

and

personal

Service

(1947-49=100):

Group—

121.1

131.4

,

- 4

salary receipts, total—
Commodity producing industries—
Distributing industries *

10.040,080

.

114,7.

—"

of October

517,230

=

116.4

,

Reading and, recreation
2
Other goods and" services——b.

9.522,850

Nov. 23

,

1,223,980

•

121.1

—,1—!_•

PERSONAL INCOME IN

Total

—Nov. 23

21-

_

commodities
Farm
products

Medical
Personal

•.

1,054,470

,

—

«DEPARTMENT

Nov. 23

.

WHOLESALE PRICES, NEW SERIES
—U.

All

761.850

~__Nov.

.

Wage

Other sales
Total sales

—

23

■;

227,970
362,960

STOCK

,

LABOR

207,370

602.450

sales—

Short sales

Commodity

477.350

488.320

TRANSACTIONS
(SHARES):

FOR ACCOUNT OF
MEMBERS

Total

N.

361,920

487,380

Nov. 23

~

sales

Round-lot purchases by dealers—
Number of shares

417.280

Nov. 23

2,200

J00-*.

_!

fuel

Private

sales by dealers—
of shares—Total sales
Sbprt sales

=

:

home—

and

apparel
Transportation
Publin

Round-Jot

Number

3,875

2,310

...i.

operation

Other

243,990

value

3,310

3,898

..

Footwear

1.241,560

Dollar

fuejs

Women's

969,040

Customers'

3,644

3,948

7,60! *

136.0

Men's and

272,520
J

3,560

•

!___

Apparel

1.276,500

739.680

Nov. 23

9,385'

——__

electricity.

Household

sales)—

total sales

9,852

"

bakery products—
poultry and fish

and

Solid

Nov. 23

purchases by dealers

Number of

1947-4!)

Housefurnishings
•

1.887,080

6,951

Rent
Gas

Nov. 23

„

1,781

7,913

2,276

,

Housing

EXCHANGE — SECURITIES EXCHANGE COMMISSION:
Odd-lot sales by dealers (customers'
purchases)—t
shares-

1,86C

7,955

____i

—

7,867

' 1,879

" 1

——

at

: >

7.871

and

foods

14,478-

15,539

T__l

home—

Other

30,811-

15,519

33,244

—'

—

Dairy products
1'
Fruits and vegetables

'181,420

Nov. 23

sales

f
•'

L__.

—

Cereals

Nov. 23

sales

33,159

..

9,784

'

■

——

■

$40,196-

1

"

'

of October:

at

j
"

INDEX

items

Meats,

members—
r

$43,011

.

'

'J-.

credit

PRICE

971,0001

S43.028

gooe

Food

25,031

1,645.299
46.347

CONSUMER

47.869,000

•

~

1,951,888

Nov. 23

_

:

-

—

consumer

Service

STOCK TRANSACTIONS FOR ODD-LOT
ACCOUNT OF ODDLOT DEALERS
AND
SPECIALISTS ON N. Y. STOCK

of

Automobile

Nov. 23

account

>

credit

—

Single payment loans
Charge accounts
'

•

the floor—

for

term

credit

loans
■
Noninstalment ciedit-.

1,589,668

sales

IUC-'

SERIES—Esti-:

credit

consumer

Nov. 23

round-lot transactions
Total purchases
Short sales

THE .FEDERAL

Personal

362,220

...

off

Total

Number

millions

Nov. 23

—.—

40,750,000

*2,185,000

"

:

Repairs and modernization loans

1,883,490

1,030.410

sales

Other

482,358

827,350

Short sales

Total

909,975

2,443.490

purchases

Other

"

-

413,258

.

4

transactions initiated

Total

-

744.345

657,150

sales

Total sales

Total

to.

3,080.460

r

Other

■

Nov. 23

Short sales
Other

472.680

—Nov. 23

Total sales
Other transactions initiated
Total purchases

OF

and .intermediate
as of Oct. 31: *

Instalment
Other

537.606

Nov. 23

Short sales
Other

-

Nov. 23

*

,

tt'

>

BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:
Transactions of specialists in stocks in which
registered—
Total

GOVERNORS

SERVE SYSTEM—REVISED

Total
FOR

'

tons)—- 45,550,000
anthracite .(net ;tons)
^ 2,162.000

mated .short

100__

TRANSACTIONS

*

*

'

(net

CONSUMER CREDIT OUTSTANDING—BOARD

OIL, PAINT AND DRUG REPORTER PRICE INDEX—
ROUND-LOT

'

lignite

330

327,486

287,763

Percentage of activity

"

'

15,697,

"*7.601

3.442

(BUREAU OF MINES)—Montll

of October:

Pennsylvania
_Dcc.

.3

;

Bituminous coal and
'

NATIONAL FAPERBOARD ASSOCIATION:
Orders received (tons)
;

—

(net tons)—.

Undesignated

COAL OUTPUT

•

Dec. 17

a

—

COMMODITY

•

To South America,

,

-

'

,

$26,571,900

Volume

Number 5700

186

.

.

.

The Commercial and Financial Chronicle

to

close

and

ran

the

best

names

5%

on

further protection of five and

of

some

corporate

among

noncallable clauses.
Right now, unless there

year

borrowers.

be

Even at those levels it appeared

hard

move

saying

But for

...

peared
The
at

underwriting fraternity,

least;, that

handles

the

down

for

Unsold

the-

the

than

of

quite

rule,

to

contrast

reversal

that

to

Federal

the

Credit

its

of

point, yields

Reserve's
policy.

Up

falling

were

few years

a

holding out

were

in

hundredth

explains in no small measure the
rousing
scope
of
the
advance

basis

,

the yield side.

for

has been in progress.

re¬

of them

ties,' "many

carrying

the

long

ago

only

Continued from page 2

meagre

dealers,

who

inclined

were

willing to

concerned.

the

to

inventories

expand

illustrate

to

serves

stantial values behind
which,

stock

the

in

sub¬

Southdown

.

On

the

writing,

25 Broad

In addition to the acreage cited
in Valuation Summary, Southdown

possibilities for further increases
resulting from mineral activity
and
growing land values, make

priced

the

in

33-35

•

(Table I.)
-

interests

mineral

owns

in

acres

in

11,100

the stock

and

in

14,192

ment.

Alabama

in Mississippi, 1,513 acres of

acres

which

under

are

lease,

in

which

to

of

20

oustanding

cents

stockholders

business

Stock

February
record

of

January

on

'

open

bids

$50 million of bonds and de¬

bentures
week

A.

Petroleum

offering of
to raise

meeting of the Board

a

share

■

Gibson

to

Co."s

—

Field

—_

21 L

._

_

'

Value Per Acre,

ned

common

T.

stock designed

Montreal, December 9, 1957.

DOMB

MINES LIMITED
December

DIVIDEND

At

NO.

The Garlock

1957

9.

161

•

-

meeting
of

of

the

Seventeen

Board

of

One-half

and

30,

3

Cents

1957.

Crescent Farms Field———l—*—' —2,552

Hollywood—Crescent Farms Area
Ardoyne Plantation——————

Waterproof Area
Lake Hatch Area

Vacherie Area„

3,373
2,412
3,518
2 5,547
5,363

300
500
400

:

90

.1,000
,1,500

682

...

1,000

'<*

La Pice Area———

Acadia Plantation

..

1,500
500

„—_—

New Hope Area

'___r__

1,175

—1__

Bearwood Plantation

300

1,000
1,000
1,500

3,297

—

3,253

Monroe Area——

.

.

^

At

J

meeting of the Board of Direc¬
held this day, a quarterly divi¬

a

tors,

dend of 25<£ per

GENERAL REALTY 8.

Dividend on Capital

Secretary

UTILITIES

H. B. Pierce,

declared

16,

1957.

1957.

16,

UNITED

210th

INTERNATIONAL

Dividend No. 217

16,865,000
/
723,600
1,759,000
2,218,000
5,363,000
135,000

Quarterly Dividend of Twen¬
ty-Eight Cents (28e) per share
on all the outstanding stock of
Combustion Engineering, Inc.

per

.25

this

has

day

able

To

dend

business
was

share
dend

de¬

the

the Board of Directors.

of Fifty
the capi¬

30

and
of

Directors

of

quarterly divi¬

a

of

an

5c

cents
extra

record

of

at

outstanding

the close of business December 12. 1957.

Abilene, Kans.
December 6, 1957

ALDEN

L.

to

15,1958.

PACIFIC

April 1955.

IlilHIIIIIillHiHiilllUUIillllUlllllim""'""""""""""""""""''

5

1951.

POWER

& LIGHT COMPANY

Light Wall Street

DIAMOND

Annual Christmas Tree
At noon,
York

Stock

of

Exchange,

the

New

Gardner Corporation on December 12,

76d

CONSECUTIVE

with

the

FOR THE

FUTURE

$1.50

1,

ceremony.

white

i"

^ack

surplices.

cassocks

-




and

also

1958

to

are

$1.13

per

share

on

the 4.52% serial

meeting

ferred stock,

$1.54

per

share

on

the 6.16% serial pre¬

quarterly

ferred stock,

and 40 cents per share on the common

on

same

per

a

share

Preferred

on

the

the

Stock.

payable February

stockholders

Quarterly dividends of $1.25 per share on the 5% pre¬
ferred stock,

share

declared

37V2C

Cumulative

of

record

stock of Pacific Power &

PERRY S. WOODBURY

Secretary and Treasurer
MATCHES

•

CARTONS

•

PULP PRODUCTS

LUMBER

•

BUILDING SUPPLIES

•

WOOUENWARE

pre¬

Light Company have been

declared for payment January

10,1958, to stockholders
December 31,1957.

of record at the close of business

January 3, 1958.

sing

dressed

per

Stock. At the

of

quarterly

regular

a

45c

Both dividends

this annual

The Choir itself will
Christmas carols.
All the
singers — 28 boys from 9 to 14
years old and 1? men — will be

of

Board

dividend
CROWING

famed Trinitv Church Choir, will
assist Mr. Funston in

declared

Common
the

Raymond Bietry Jr., 11-year old

sings

1957,

dividend

YEAR OF DIVIDENDS

Street in front of the Exchange.

-who

Dividend Notice

The Board of Directors of the Diamond

for¬

will

mally light the Financial Commu¬
nity's traditional Christmas Tree
—a
50-foot spruce — on Broad

chorister

GARDNER

CORPORATION

Friday, Dec. 20, Keith

President

Funston,

PORTLAND,

AnvAAxr

OREGON

December 11, 1957

HART,

President

Dictmbw 1,19S7

the

12, 1957

on

common

December
record at

fany, payable on or before
1, 1957, to stockholders of

ANDREW W. JOHN5QN

palmer, Secretary

r. e.

December

per

divi¬

share

per

capital stock of the com-

regu¬

a

1958

,15,

February

closeof business January

shares,

April 1907.

stock dividend, January

of

declared

tal stock of the Company, pay¬

October 1956.

stock dividend,

declared

quarterly dividend

stockholders

stock split,

close

13, 1957,

Board

The

rec¬

Vlct-Praiident and Trtasurtr

.335

10%

the

clared by

^Zhe board of directors

.67

for 1

at

December

No. 40

.53

5 Plus 25%

share payable on January

1, 1958 to stockholders of

Y.

York 20, N.

1953

3 2

ICTOORPOISATM FD
51st Consecutive Dividend

of 60i

Dividends!.

capitalization—1,161,600

WALLACE M. KEMP,
Treasurer

UNITOD UTIMWHS,

Plaza

Rockefeller

30

New

1954

4 Plus

quarterly dividend

ord

$97.05

lar

present

the Preferred stock and 62 Vi

per

w

.

Common Stock
A

NATURAL GAS

Cents (SOt) per share on

stoek dividend,

de¬

187 TH

i11111 j 1111) 11111111111111 u ? 1111 u 11111 ii ii 111 u i ijj^u 1

.33

to

has

cents per

December 11, 1957

St. Louis

CONSECUTIVE DIVIDEND
HJ1111 n i' 11 ii i' i u i.u u u

.414

Adjusted

37^

Vice-President and Treasurer

.75

2

on

dividend of

1958.

COMPANY

Otto W. Strauss

.90

2 Plus 10%

a

1957.

business December 26,

.453

—_

Quarterly Dividend

Board of Directors

share on the Common
stock, both payable February 1,1958
to stockholders of record
January 3,

SHOE

payable

declared,

been

has

$.602

1955

share
cents

January 23, 1958, to stockhold¬
ers of record' at
the close of

$Tio

1956—

clared

A

Dividend

Per Sharel

Consecutive

The

II

—

1957——

SHOE MACHINERY

CORPORATION

Net Earnings

1958—

Secretary

SAMUEL M. FOX, Treasurer.

:

Feb. 28

an extra

Company, payable December 27.
1957, to stockholders of record at the
close of business December 18, 1957.

Shares

of Directors has

Board

business December

COMPANY

TABLE

share and

dividend of 25<£ per share were de¬
clared on the common stock of the

CORPORATION

CONSOLIDATED

Year Ended

COMMON DIVIDEND No. 326

quarter-annual dividend of 20 cents
per share on the Capital Shares of the
Corporation, payable January 2, 1958.
to stockfrolders of record at the close of

$112,732,800

Per Share

December 11.1957

\m*.us.r*xorf. U

a

682,000
571,000
615,000
2,737,500
357,900
3,297,000
1,175,000
4,879,500

500

■

Salsburg Plantation--1,142
Lcckport Area—Nora Plantation—
410
Thibodaux Area
5,475
St. Rose Plantation—————_i__
1,193

.

Packing Company

A

Directors of
Mines Limited, held this day, a quarterly

a

The

$17,190,000
41,066,000
12,760,000

500-20,000
5,000
5,000

3,356.

_ _

F. Turner,
Secretary.

DIVIDEND NOTICES

Total Value

$5,000

Capital

January 6, 1958.
By order of the Board.

$200 to $250 million.

December

3,438

Ordinary

declared in respect of

was

on

"rights"

of

I

Acres O

.

Field..

the

on

Stock

VALUATION SUMMARY

H oily wood

of

Directors held today a final divi¬
dend of seventy-five cents
per

the year 1957, payable in Canadian
opening up a funds on
February 28, .1958, to
brings several other shareholders of record at 3:30 p. m.

Street-sided issues and also Royal
Dutch

KENNEDY,
&

Dividend Notice
At

Jan. 14,

on

which

1958.

President

Vice

close

on

TABLE

is

Co.

com¬

1958,

value has been assigned.

Earnings- and: dividend

Edison

CLIFFORD W. MICHEL,
President and Treasurer.

The stock is speculative and suit¬
the able for individuals and institu¬
1,161,600 shares outstanding have tions investing for capital gains.

no

financing.

the

on

the

RAILWAY COMPANY

$30 million.

tentatively scheduled to

December

Over-tho-Counter Market.

the

of

Commonwealth

Y.

the

of

3,

at

10,

JOHN

Southdown Sugars, Inc., is
but is traded actively

share

per,

Common

payable

pany

listed

not

amount

of Directors of this company
December 18,
1957, declared a div¬

idend

most attractive invest¬

a

is slated to

The Board
on

away

CANADIAN PACIFIC

Washington

(17V2c)
per
share (in Canadian Funds) was
declared payable on January 30, 1958, to share¬
holders of record at the close of business on

New York, N.

Street,

day

Year in corporate

are

CITY IINVESTING COMPANY

per

passed

DIVIDEND NOTICES

These two will touch off the New

carry

now

Table.II.

range.

is

this

at

Beane,

formidable

same

combined

Dome

share is modest, the high in¬
trinsic. value plus
the excellent

is,

is necessary to
ahead to Jan. 9

Water Power Co. also

such holdings.

DIVIDEND NOTICES

While the current return of 60c

&

piece of
business, Connecticut Light &
Power Co.'s $30 million of bonds.

dividend

and

Fenner

not

rather light despite the season, are

shown annual increases, as shown

It

way

next

And banks, with demand for funds

Security I Like Best

opinion, this is a realistic appraisal

limited

new

for

On the contrary, it should be
recognized that with the Federal
Reserve committed to a policy of
seeking to "check"' the slipping
economy,
any
operations of its
open market committee would be
primarily on the buying side of
governments.

Accordingly

The

But

spell they did pretty, that, of itself, is hardly to be
garded as the whole story.

a

for

offer bonds and debentures in the

back.

This line of reasoning probably

ings. when the borrower was the
boss. But, as usually happens, the
turnabout eventually
came,
and
recognizing the Reserve's action
as a long-range barometer, big in¬
vestors were
quick to grab up
available high-yield debt securi¬

with the situation which prevailed

prior

on

And

rather

in

are

Jackson,

partner in Merrill Lynch, Pierce,

corporate debt offerings Dec. 4.

as

jump all the

well after long years of lean pick¬

emis¬

new

exception

,

for

managers

which

...

remnants

are

last

the

point

more
so, in fact, than appeared
likely to be the case a couple of

sions

are

ap¬

institutional * investors

banking circles,

house in pretty good order, much

months ago.

portfolio

as

far

.

Treasury Bonds

"ballroom

the

are

pur¬

so

1

,

they

C.

Calendar Bare

For the next fortnight the new
issue calendar is absolutely bare

119

William C. Jackson
William

in

Treasury bonds,, especially the
long-terms, have set the pace for
the investment market generally.
The Government list undoubtedly
was
depressed far beyond reason
on its long drop from the levels of

tabbed among some in investment

is
coming
year-end ..with its

the

to

though

large

part of it which
of floating new

task

securities,

corporate

time, it certainly

a

as

boys"

or

chases.

at work

money

in Treasurys.

shift

policy,

probably keeping

to

those recent

on

10-

^

were

drastic

and

sitting pretty

around

will.

you

sudden

a

indicated 'credit

offerings. There's
the Street,
"Don't try for the last eighth." It
applies,, of course, primarily to
stock
traders,
or
speculators if
to

old

an

(2751)

H. W. Millay, Secretary

120

The Commercial and Financial Chronicle %

(2732,

Thursday, December 19,1957

.

.

undergoing
as

marked recession

a

result

a

drought

on..

time following

years.

Many

f

the

of

excessive

the

of

rains at harvest

;»

counties

have

been declared disaster areas by

Behind-the-Scene Interpretation*
from the Nation'*

President

-Vghll

/f "FI/j

jljLII/IM/

Capital

Nixon and

tion.

possible
candidates for the Presidency in
1960,
shook
hands
and ex¬

start

President Richard M.

Adlai E. Stevenson, the

pleasantries

changed

.'than

one

was

.son

occasion'\theri -Steven here as

) ■

:

consultant to

preliminary to the NATO meet-,;;

,;ing in Paris..-!'..r'~ •*;|
de"twice - |'
defeated prophet of doom." The
facetiously

Stevenson

himself

scribed

titular

head

few

himself as

j

affair.

of doom is directing

:

that

-,

matically launched their scien¬
tific missiles.
During the 1950

a

Tliere

numerous

are

»

prq-

Stevenson Democrats in Wash¬

ington asserting that Stevenson

;

probably
the, Democratic
party's strongest man. They be- •?
lieve he, can beat Mr. Nixon.
is

However, this may be
thinking on the part
There

presidential
have

their

the nomination, hopef ul

on

that po-

j

strike their

fortune will

litical

:

candieye

new

usually

year

tax reduction.

a

bipartisan

ment and the average

realize that

a

the

of

It

govern¬

business¬

I

of the
country. But first the people of
the country must demand a re¬

no

liability. There is
way to prove it. It would be
to the delegates to make the

up

be

Meantime,

it

,

ration

a

>

ity,

income

tax

the

over

tion

Politics and Next Congress

preliminary to the Jan. 7
beginning of the new Congress,
Democrats,, after President Ei¬

ABA

I hear

President

ministration
'

and

bills

¬

excise

and

i

vigorous

<

sense

is

series

a

of

,■

the

and

as

from afar

see a

DR.

favoring are:

sputniks.
The Demo•crats also say the Republicans

National

on

defense

w

ill

j

policy.. However,

be

have

an

other

important
Domestic issues will |

proposals.

important

1958

place,

National

and

GRANT

the

The

Garfield Lightboime,

ivhonrotejo

be¬

to

businesses

and

forgotten by

ue arc not

is

election;

The entire House member- ;
ship and one-third of the Senate'

year.

Truly

a

sentiment to live with throughout the coming

Asst.

Chronicle Editorial

j

a

It

Office

Colorado Oil & Gas

As

Proposals the Association op¬
pose include the liberalization
of Federal-supported mortgage
insurance programs; extend the

growing

conviction

there is

in

a

ministration;
include pension,
profit and welfare funds quali¬
fied for tax exemption in re¬

than

some

eventually
the

become

Reconstruction

;

session to broaden the credit of
t

Senator J. William

Chairman of the
and Currency

Banking

an

amendment in the

new

the Small Business Administra¬

.

tion.

threat at
kill off the

in

number of new customers

~

-'

-

of

of

the agricultural

the

United

States

that

new

in

Pan

are

reserves

the

future

reserves

confi¬

will "be
in 1958.
include

will

the

submerged
miles from shore.
•

lands,

[This column is intended to re
fleet the "behind the scene" inter
pretation from the nation's Capita
and may or may not coincide ivitl
the "Chronicle's*' own views.]

re¬

is

TRADING MARKETS

Botany Mills
Campbell Co. Com
Fashion Park

...

-

Lone Star Steel

'

new

for

added

those

A. S.

Koehring Co.
;,J

authorities

and

Delhi-Taylor
'*

1,000,000

nearly

For instance, the economy

some

gions

Administration.

Business

Arkansas,

Senate

Fulbright

Northwest Production
f:

the

each year. The natural gas reserves in the United States are

The
;

Committee, is planning to intro¬

small

Anheuser Busch

that

estimated

now

increasing

big

Corporation which Con¬

nance

of

There appears no
the coming session to

Olin Oil & Gas

is

dent

Fi-.

gress killed a few years ago.

duce

-

.

bigger

quirements for registration and
reporting of welfare and benefit
plans: provide federal aid for

Stay

is

quarters in Washington that the
Small Business Administration
may

the Small

of fact

matter

a

Business Ad¬

life of

Small Business Unit to

Universal Match

reached

1,150 gas distribution companies
are serving about 30,000,000 cus¬
tomers. Of this total more than

raise the minimum wage.

qualified commission." "

House In¬
Committee

never

there.

Publisher

to

it

the

The bill was

It could very well die

the floor.

year.

Li

It

with

do

out of the
but

the

on

at this time what

Commerce

1957,

The

pur¬

the nation's financial system by

or

the

27,000,000 represent residences.

make 1

objective study 0f

on

producers.

might

terstate

ALEXANDER WILSON

;

an

guess

iii

as

preferred stocks, and

authorize

controls

gas

reported

friends

our

depressed communities in scat¬
tered sections of the nation, and

cause

federal

Congress

of Christmas is in the knowledge it

brings that

chase their debentures, bonds rir
common or

may

action

any

pending measure.

ize the organization of national j
loans

not take

anyone's

old "Chronicle" associate,

an

yesterday:

me

"The charm

Adminis¬

investment companies to

Congress

new

natural

voluntary

Veterans

U. S.

in the

WALTON*

guaranteed

the

gathering gas in the fields,
about
155,000
miles
of

and

lift

tration loan guaranty and direct s
loan program to expire: author- !

'

there

continue

permit

approaching session will

foreign

lines

me.

home mortgage credit program:

crisis,

'

and

insured

loans:

be marked with legislation and

discussion

_

Harris-O'IIara bill which would

--

- -

erally

American people that the U. S.
The

.

soared.v

the producers, pipeline
companies, the vast distribution
system
or
utility companies^
There are about 50,000 miles of

Free the interest rate for Fed¬

have been reluctant to tell the
is facing a great

expressed interest

dollar

overall

and

sales

may

busy with hearing early in
session.. Among measures '

tion have

Russian

star.

ALFRED

the American Bankers' Associa¬

urgency" at the meeting. The
think the Republi¬
cans are in hot water over the

in¬

many

up

braces

the

Democrats

chalked

Power

the

that

show

transmission lines

ing committees of Congress will
be

song

joy

—REV.

W illiam

to

Federal

the

has

revenues

Flatbush-Tompkins Congregational Church, Brooklyn

pending

interest

of

thousands of new customers and
that

Mv Christmas message to you this year is best expressed by

marked

of

as

expansion is concerned.

dustry

in¬

be

of

,

a

opposi¬

will

nation

favorable year

another
as

Records

-

again in heart;

young

For all that Christmas does to

banks of the country. The bank¬

his ad¬

"no

showed

The Natural Gas Industry has

had

Thank God whatever else may he—

Legislative Proposals

There

conference

with Republican and Democrat¬
ic leaders at the White House,
the

me

And thrill with

to stir

said

spell,

a

I think of friends and human needs,

Senator Ilarry

of

ing of the
creased.

Meantime, politics has begun

-recent

charm, it casts

warmth I cannot tell.

long to give where pity pleads,

F. Byrd
of Virginia, that the debt ceil¬

final decision^

senhower's

during harvesttime.

There is also the possibil¬

tax.

drought, hur-

as

excessive, rainfall

The Natural Gas Industry em¬

that

' appears

such
and

Commission

It makes

Congress will extend in 1958 for

candidate

twice- defeated

might

a

It melts the years with magic art,

economy

another year the existing corpo

'

v.'^

Indian Head Mills

United States Envelope *.

American Sulphur

Morgan Engineering
National Co.

Old Ben Coal

Carl Marks

Bought—Sold—Quoted

&

Ho. Inc

Riverside Cement

Flagg Utica

'

r" FOREIGN SECURITIES SPECIALISTS

SCHERCK, RICHTER COMPANY
Member Midwest Stock'Exchange-'

Bell Teletype

'

320 N. 4th St.

'•I 456

St. Louis 2, Wo.

^

;

t-i




M

>,

.

20 BROAD STREET

,

•

TEL: HANOVER 2-0050

;,.

NEW YORK 5. N. Y.

LERRER g CO.

TELETYPE NY
Investment

I
,

™

GArheld 1-C22a

.■

.

:

indirectly affected by the

rks«es

far

tax reduction

way.

A

weaves a

It shares

duction.

However, Mr. Stevenson
stoutly maintains that he is not
a candidate for the presidency.

an

Busi- ;

to

The Natural Gas Industry

their minds that a tax cut
Was necessary for
the better¬
ment

sponsor

the Small

to

cultural communities that have

There's something Christmas does to me.

to prevent

of

they will

say

Administration

been

Bring the candles, light the tree,

However, most

students

Sena¬

disasters

after-

year

their

provide
credit to the implement dealers
and others in business in agri¬

a

crisis

on

ness

A (FliHstnms Message

;

emergency.

crops up

banks

some

payments

amendment
-

up

would-be

several

are

who

dates

a

new

make

sippi

fit«

•

could be obtained, if a majority
of members of Congress made

friends of the former Governor.
Democratic

a

and

Senator Fulbright and

:

tax cut, be¬
As it
has been pointed out here be¬
of

man

wishful
of the

-

providing

cause

fore,

prophet of gloom and doom..

to

the prospect

session faces

of not

and

loans

outstanding. As
many small

tor James O. Eastland of Missis¬

As it appears at this time the

Republican j
speechmakers called Stevenson j
the

campaign

the

on

notes.

"

new

to

there 'are

businessmen

The Tax Outlook
"

money

that would like for the farmers

con¬

a

result

a

however,

hope,

us

hanks

the

notes they have

structive session."

J

.because the Russians have dra-„

Let

will prove to be

it

of that

use any

the implement dealers, and

pay

coming session is shaping up as
a mean one," said he.
"Frankly,
it looks like a rough and tumble

jibes at the Republicans

the prophet

able to

Representative John W. Byrnes,
hard-working young Republi¬
can
from Wisconsin, probably
j
summed up the opinion of many
members of Congress, the other
morning as he; drove from his "...
suburban Virginia home to his
office
on
Capitol Hill.
"This

j

the Democratic

of

party In referring to
a

,

the

as

However, the farmers are un¬
.,

a

Department. recently ;

State

the

a

planting operations for 1958.

early.

'

Agriculture to finance their

of

will

politics

Therefore,

$5,000 through the

for elec¬

up

"Rough and Tumble Affair"

more

on

comes

Sec¬

and

of obtaining loans up to
Department

process

membership

WASHINGTON. D. C.—Vice-

Eisenhower

retary of Agriculture Ezra Taft
Benson. Therefore, many farm¬
ers have been able or are in the

JL

y

-

'

.

V

Securities

11 Post Office Square, Boston 9, Mass
-

felcohflii,

-

HUbhard 2-1990

Teletype
BS 69