Full text of Commercial and Financial Chronicle : December 2, 1943, Vol. 158, No. 4234, Section 1

View original document

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

<r*„
>

Final

ESTABLISHED OVER 100 YEARS

Edition

<«.,*•****.

4*,

f r**'

2 Sections-Section

,t,

1
I

\al and

ommetaaL

Chronicle
Reg.

Volume

New

Number 4234

158

•

High-Level Inflation

Not To Act On This Premise
Stock

Prices Not Too High

What Abe at

zation For Post-War

Cold?

Special Reference To Matters Pertaining To Reha¬
After War

bilitation Of Economies Of Other Nations

Utility and Railroad Shares

Public

By JAMES A. HOWE
By BENJAMIN GRAHAM

supplement rather than
underscore Professor Wright's very informing address.
Here and
there our thoughts will intersect and may even seem to clash^-but
such conflict will be more in appearance than in reality.
Mr. Rotnem mentioned my modest connection with the Treasury
Department.
I must point out, of course, that everything I have to
is

tirely

unoffi¬

en¬

ury

Depart¬

ment

the

Violates Maxim "United We

but
analyst

Stand, Divided We Fall"

to say a

word
with
respect
to the relation

J. A. White, of J.

Adopt Mis¬
taken View That They Are Helping Themselves

govern¬

ment bonds to

By Advocating Or Condoning Policies That
Are Destructive To Another Segment
Of Thdur' Industry
:

inflation, since
is

that

sub¬

A. White & Co., Cincinnati, Admon¬

ishes Those In Securities Business Not To

ject on which
Wright

Prof.

place, I agree
with him entirely

Benjamin

form

address

de¬
Graham
in
the
a meeting of the

Brokers in
Nov. 23, presided
Ralph A. Rotnem.
Biographical
regarding Mr. Graham and ex¬

York

over

material

City

planatory comment concerning
ences

and
the

the

was

paper

Customers'

Association
New

inflation

that

EDITOR'S NOTE—This
livered

Graham

Benjamiu

first

the

his refer¬

to Professor Wright
address will be found at

paper

latter's

conclusion

of the article.

(Continued

on page

Financial Chronicle:
I have noticed your various editorial and news com¬
ments about the recent action of the NASD regarding a profit
limitation, and the purported desire of the SEC for estab¬
lishing a profit limitation in one form or another. Although,
perhaps, not directly affected by either of such news, I have
endeavored to consider the entire picture presented by these
developments, and many thoughts come to mind.
In the first place, it seems obvious that there is a consid¬

Editor, Commercial &

erable division in the ranks

2217)

States,
are

together
as

peace

have in
war, they must
they

all

an¬

chored

e n

stable

Roger

Babson

cur¬

rency.

This

would

enable

these

countries

rather than to discour¬
the employment of capital:

encourage,

to. make

age,

*i s u m e rs

goods

James

Howe

(Continued

page

2226)

consumed

abroad—goods
which will not directly

create

ex¬

This
Issue

change which foreigners may use
PENNSYLVANIA SECURITIES
It will not be easy for
Europe to find the means of buy¬ section containing information and
ing all that it would like to/buy. comment pertinent to dealer ac¬
The pressure upon us to grant
tivities in that State starts on page
credits will, therefore, be intense.
'
Experience
has
shown
that 2210.
short credits due from importing
For
index
see
page
2228.
countries may appear to be self-

to pay us.

of the securities business over liquidating,

not

but

self-

project by the NASD and the SEC. Accusations liquidating in fact, if the import¬
constantly heard that the stock exchange houses are en¬ ing country owes far more on

this entire
are

of the

deavoring to increase exchange trading at the expense

United Lt. &

the

function

semi-

anufactured

c o

its

for
If

well

and

to reish de¬
pleted
work¬
ing
in v e ntories abroad,
1

most

goods
p

hold

the

and China

materials

and

lias touched.
'

other

and

which

Britain, Russia

foods,

and

re¬

ception

United

de¬
be

will

raw

give

best

use.

mand

goods,

which

return

which
goods
will enjoy the

the

countries

out

consume rs

ibf
securities,
(I would like

our

goods will be

post-war foreign demand for many of our
<$>great. Unfor¬
tunately,
the

strongest

repre¬

sentative,

unusual conditions that will then exist.

NASD Profit Limitation Decree

Treas¬

jiiot as

extension of foreign credits may be brought
it seems probable that special domestic or¬
ganization for foreign finance will also be desirable, because of the
The

Capital nat¬

post-war period.
gravi¬

urally

any, for the clearing and
into being after the war,

<s>-

cial. However,

Currency stability will be most
a maintenance of trade
and revival of business activity in
essential to

tates

——

offer

Roger W. Babson Says Pro¬
duction Figures May Mean
Gold Stocks A Buy

the

owned organization or organizations, if

Whatever internationally

What I shall have to say will probably

Copy

Suggestion For Organi¬

With

For Purpose—
Policy Advocated Calls For Exclusion of Bank Stocks and
Level

60 Cents

Price

International Finance

Over Next Five-Seven Years But Warns Investors

Says Present

Pat. .Office

York, N. Y., Thursday, December 2, 1943

Inflation Prospects and
Investment Policy V
Mathematical Odds Held Against

Rwy.

short

account than

its liquid

re-

the

chase

(Continued on page 2224)

(Continued on page 2220)

national bank

Common, W. I.
OF THE

United

Air

Light &Pwr.
Preferred

Dealt

the

New

York

Bond

Transport

Broaden your customer

Service

SECURITIES

Curb

Exchange

for Banks, Brokers

Members New York Stock
and

other

London

NEW

YORK 4, N.Y.

25 Broad
HAnover

INVESTMENT

Rep.

64 Wall Street, New

CHICAGO 3, ILL.

Teletype NY 1-210

York 5

Teletype CG 1219

Hardy & Co.

facilities

Members New York Stock Exchange

INCORPORATID

Albany
Buffalo
Pittsburgh
Williamsport

Troy

from

HUGH W. LONG and COMPANY

PHILADELPHIA
Syracuse
Dallas

BOSTON

State 8770

DEALERS

AUTHORIZED

SECURITIES

correspondent

MAY

FROM

OBTAINED

Established 1927

135 So. LaSalle St.

St.

2-0600

PROSPECTUS

R. H. Johnson &Co.

Exchange,

Exchanges

Geneva

service with Chase

and Dealers

Hirsch, Lilienthal & Co.

CltY OF NEW YORK

Brokerage

Members New

York Curb Exchange

New York 4

30 Broad St.

15 EXCHANGE PLACE

634 SO. SPRING ST

JERSEY CITY

LOS ANGELES

Member

Federal Deposit Insurance

Corporation

Tele. NY 1-733

Tel. DIgby 4-8400

Actual Trading Markets, always

BROKERS and DEALERS

Year-end

are

BONDS

BUYERS.

PREFERRED

MEMBERS NEW YORK

14 Wall st.,

C°

STOCK EXCHANGE

New York 5, N.y.

Oyer-The-Counter Securities

Security

45 Nassau Street
REctor

2-360Q

Dealers

Ass'n

New York 5

Teletype N. Y. 1-576

Philadelphia Telephone:

Phonograph

Enterprise 6015

Members New

York

Stock

CO.
Exchange

120 Broadway, New York 5,

Telephone:
Hell

REctor

Teletype

in on

7% Preferred
N. Y. Curb Exchange

Analysis on request

Bought—Sold—Quoted

REYNOLDS

INCORPORATED

Members

Emerson Radio &

Kobbe, Gearhart & Co.

Tel.

TELEPHONE-RECTOR 2-6300

Lighting Company

Dealt
.

BULL, HOLDEN

Long Island

COMMON

United Cigar-Whelan

—Net Prices—
■

Idaho Power

SELLERS—

N. Y.

HART SMITH & CO.
IRA HAUPT& CO.

Members
New

York Security

52 WILLIAM ST., N.

Bell

Y. 5

Dealers Assn.

Members of

Teletype NY 1-395

111 Broadway,

2-7400

1-635

New York

Principal Exchanges

HAnover 2-0980

Montreal

Toronto

REctor 2-3100

N. Y. 6

Teletype NY 1-1920

;

■saff""

^206

THE COMMERCIAL &
FINANCIAL CHRONICLE

Thursday, December 2,

1943

Z=ZZ.Trading Markets in:

Emerson Radio
United Gas

))

Improv.

Residuals

Maintain Active Markets in U. S.
FUNDS for

Preferred

Members

New

York

Goodbody & Co.

1920

Dealers

Security

115

Exchange Pi., N.Y. 5 HA 2-2772

Telephone

BROADWAY

mcdonnell &(b. Steiner, Rouse & Co.

BELL TELETYPE NY 1-423

Teletype

New

120

1-672

A Plea For A Free

Axton-Fisher, A & B

BROADWAY, NEW

Kearney & Trecker
Refrig. 5s, 72 & Com.
Pittsburgh Hotel, 5's, '62 & '67

Merchants

Editor, The Commercial
In

Seaboard Airline

title,

your

Oct.

"What

Can

the

thought-provoking analysis

operations in a free
economy; in fact,
better comparison between certain

would
of

processes

their

11
Members

Baltimore

120

Stock

Exchange

Broadway, N. Y. 5

Teletype

1 i t

state.

WOrth 2-4230
Bell

to-

reflect

ian

a r

this,

"The

said

fusion

MacMillen Co.

con¬

science

Common

the

Taggart Corporation

which
to

Preferred

York

■

Telephone

Curb

Bell

System

Pillsbury

ticed surgery as

Teletype NY

cine

when

lows:

are

system and
portant

puts

great em¬
necessity* for
prices that tell the
truth, that is,

6s,

1952

Johnson & Johnson

tem

(elsewhere

over

70%).

the

price

sys¬

says much
Unless they tell the

(Continued

Common

Preferred

H. G. BRUNS & CO.
20 Pine

Street, New York 5
Telephone: WHitehall 3-1223
'

Bell

Teletype NY

1-1843

2222)

page

Moxie

engineering

Co., Com. & Pfd.

Peoples Light & Power, Pfd.
Punta Alegre
Sugar

Time,

Inc.

ual

imposes virtually

additional burdens on individ¬
incomes and corporation nor¬

mal

taxes and

most

surtaxes,

deriving

Tel.
Bell

York

HAnover

Teletypes—NY

5, N. Y.

2-4850

1-1126

1127

$10,500,000,000 in new revenue,
Secretary of the Treasury Mor-

genthau

told

the

Senate Finance

serious

increase

The
be

made

amount

estimated
follows: $154,-

is needed to

help combat

inflationary dangers

ing the

bill's revenue

and

war

period.

the

dur¬

post-war

from

the

individual

excess

$1,201,700,000
cises

from

profits rate,

boosted

ex¬

so-called luxuries, includ¬
ing a rise in the liquor tax from
$6 to $9 a gallon; and

tion

taxes

more; higher
rates to yield
creased

and

raise

$1,100,000,000

estate

and

gift tax

$400,000,000,

new

1949

Chicago, Milwaukee,
St. Paul
Adj. 5s

and in¬

excise tax rates

2226)

page

Seaboard Air Line
&

Deb. 5s, 1963

Moxie Co.

FASHION PARK, Inc.
Common

Convertible Preferred

FASHION PARK, Inc.

& "B" Common

held

6s, 1952

Harriman Bldg. 6s, 1951

about

Securities;" the speaker
announced

John L.

will

Dealt in

WHitehall 4-4970 I

1-609

Simons, Unborn & Co.
Members New York Stock
Exchange

25 Broad
HAnover

St., New York 4, N. Y.

2-0600

Tele.

New

later.

Stock

Exchange

Frank C.Masterson &Co.
Members New

Clark, President
of

York Curb

WALL

York

ST.

Curb
;

Teletype/NY J-1140

Exchange

NEW

YORK

of the

Exchange
opinion

Seaboard Air Line

5s, 1931
Bonds and C. D.'s

Clark, of Abbot, Proctor & Paine,
York, made the statement
according, to the Associated Press,

Richmond, Va., where

and unionized workers."
The reelection of Mr.

Bought—Sold—Quoted

had

head

the

ferred to in
page

Clark

Association

was

as
re¬

issue of Nov. 25,

our

BUCKLEY BROTHERS
Members New York Stock
Exchange

63 Wall

Street, New York 5, N. Y.
WHitehall 3-7253

Direct

Wires

Philadelphia

Los

Angeles

Interesting Possibilities
Midland United

Company offers
interesting possibilities according
to

memorandum

being distribu¬

ted

2125.

by Bear; Stearns & Co., 1 Wall
Street, New York City, members
of the New York Stock

Chemical Bank & Trust
Situation Interesting

Exchange.

Copies of this memorandum

The current situation in Chem¬
ical
Bank
and
Trust

obtained

upon

request

may

from

Bear, Stearns & Co.

Laird, Bissell & Meeds, 120 Broad¬

way, New York

City, members of

the

Stock

New

Copies

York

obtained

this
from

Exchange.

bulletin

Laird,

may

Bissell

Galveston-Houston Co.
Jefferson Lake Sulphur, Pfd. & Com.
Jonas &

NY 1-210

Security Dealers Ass'n

Trinity Place, N. Y. 6
HA 2-2400
Teletype NY 1-376-377
r

Private

Wires

Detroit

Buffalo

Pittsburgh

Cleveland

St.

Louis

Situation Attractve
Long Island Lighting Company
an

pared

attractive

situation

memorandum

Ira

Haupt

Co.,

Broadway, New York City,
bers

of the New York

change

and

other

may

York

Ill

Corrugating

♦Analyses

upon

request

Stock Ex¬

principal

Finishing 7% Pfd.

U. S. Radiator Pfd.

pre¬

ex¬

changes. Copies of this interesting
memorandum

Pittsburgh Railways

U. S.

ac¬

mem¬

Nu-Enamel

Oklahoma Texas Trust
*

The 6% and 7% preferred stock
of

Naumberg

Lawrence Portland Cement

Meeds upon request.

cording

HAnover 2-9470

New

offers

Tr oster,Currie & Summers

Bought—Sold—Quoted

C/Ds

G.A.Saxton&Co.,Inc.
Teletype NY

will

Long Island Lighting Co.

Members. N.

170 PINE ST., N. Y. 5

third

FASHION PARK, Inc.

Preferred

Bonds

Indiana Limestone

Chicago & Alton :
3s,

5'/2% Debentures

Common & Preferreds

in¬

$166,800,000 amounting to
$2,500,000,000.
by increased postal rates on some
(Continued

Trading Markets

"Rail¬

The
Company
Treasury program call's for offers
interesting possibilities ac¬
$6,500,000,000 in additional indi¬
come
cording to a bulletin issued by
taxpayers; $616,000,000 from vidual
income; increased corpora¬
the corporation

800,000

Street, New

for

renewing his original request

in the
corporation wartime excess

Members N. Y.
Security Dealers Assn.

York, the speaker.

Firms, expressed the

Committee that much
higher taxes
could be paid now and
that this

Vertiente-Camaguey Sugar

37 Wall

meet¬

Nov. 17 that increases in salaries
of white-collar workers
would not
be
inflationary, but a return to a
"normal" level
in
salaries. Mr.

the revenue from
higher
postal rates, boosted excises on
so-called luxuries and an

profit levies.

&TeeueaaCompam}

1-1919

Central States Elec.
(Va.)
*5% &

and Illi¬

the

began consideration gone to
of
preside over the first
$2,140,000,000 House-approved tax measure when
Treasury meeting of the association's new
officials appeared before the
group to renew proposals for
$10,500,- Board of Governors.
000,000 in additional revenue. The
Senate Committee is
expected to
Mr. Clark stated:
reject the Treasury's
recommendations, calling for sharp rises in
"We believe that
income and excise rates and to
regulations of
enact a bill similar to
the one passed the
1942
by the House Ways and Means^
wage-stabilization
act
should be
Committee.
adjusted,
so that there
classes
of
mail.
The
alcoholic is more
The legislation
equality in the wage in¬
approved by the beverhge excise increases account
creases
of white-collar
House on Nov.
workers
24, by a standing for $458,000,000.
vote of 200 to 27

Aetna Standard

& Rust of New

Nov. 29

Securities," with Patrick B.
Pflugfelder, Bampton

The Senate Finance
Committee
the

present

Association

$10.5 Billion In New Taxes

Struthers-Wells

were
.

McGinnis of

truth about the
supply and de-

WHitehall 4-8120
Teletype NY

bankers,

Wages Not Inflationary,
Says Clark Of S. E. Firms

Broadway

Bell System

Rise In White-Collar

tremendously im¬

part

Com.

Light Securi¬

The first meeting was
road

Treasury Renews Request For

Common

30 days and will feature
"Munici¬

Indiana Limestone
;

ing.

pal

part of the price

PI. Pfd.

Power

Members New York Stock
Exchange
Members New York Curb
Exchange

"■

Edward A. Purcell & Co.

Exchange firm of JosephCo., discussed the "Out¬

Missouri, Arkansas

nois

The

■

stronger plea for a free econ¬
than Dr. Anderson's, as fol¬

"Wages

prac¬

the

upon

omy

Div Anderson

phasis

their

6% PI. Pfd.

specialists

from

I would not know
where to look

for

ation.

1-1548

studying

was

New York

Over seventy-five
brokers
and
utility

exist,

the

ties."

power

produced for them.

with

look for Power and

for, and to

pay

particular markets."

side line, with
as their chief oper¬

blood-letting

7-4070

of medi¬

barbers

Exchange

New York 5

COrtlandt

de-

ence

they will
it

thai

to know what
people want and

^industries,

with

Vanderhoef & Robinson
New

peacetime

associated

Stock

Gov¬

planning in

has got to be a
piecemeal job,
with particular
men, in particu¬
lar

comparable
the sci¬

Preferred

Nassau Street

Gas

Pfd.

Dumont Lab.

Hyde, who

obstacle

Serv.

exist,

million

have
"

velo p m e n t

United Cigar Whelan

Members

130

i cs,

not

what

seems

stage

the

mark)

great

securities,

American

Edward D. Jones &
Co., members
of the New York and St.
Louis
Stock Exchanges. Mr.

demand

and

company

Util.

speaker at the second of a series
of meetings here
sponsored

He says:

democracy

does

(save

e c o n o m

find

that the wisdom does not
and I may add that the

un¬

limited

supply

ernmental economic

still

holds- that
there

the

relationship.

When

have

1-1227

Hyde,

of the

some

hard

the

branch offices

New England P. S. 7%

MO.—W. Truslow
specialist
in
power
and

Re-; light

free economy and

equiva- $

lents

American

our

New England P. S.

LOUIS,

NY 1-1557

Orleans, La.-Birmingham, Ala.

Direct wires to

2-7815

Large Attendance
ST.

Dr. Benjamin M.
Anderson, under
Government Do to Promote Post-War

YORK

Efa Jones Go. Attract

Financial Chronicle:

issue,

employment?" presents

(Atl. & Birmingham, 4rs, '33)

REctor

St., New York 4, N. Y.

HAnover 2-0700

New

Meetings Sponsored By

Economy And
Supply Of Money

A Limited

25 Broad

Stock

Tel.

Elk Horn Coal, Com. & Pfd.

Members New York Stock
Exchange

Members

York,

Exchange
New York Curb
Exchange

...

NEW YORK 6, Nv Y.

BArclay 7-0100

Apco Mossberg, Com.

Walworth Pfd.

Members N. Y. Stock
Exchange and Other Principal Exchanges

Ass'n

Osgood, Common

Warren Bros. Class "B" & "C"

CANADIAN UTILITIES

KING

Birmingham Gas

Remington Arms

CANADIAN MINES

American Window Glass

Established

Alabama Mills

Botany Pfd. & Common

CANADIAN BANKS

American Barge Lines

KING

American Cyanamid Pfd.

CANADIAN INDUSTRIALS

obtained

from the firm upon request.

T. J. FEIBLEMAN
Members

New

Orleans

41 Broad Street
BOwling Green 9-4433

Stock

& CO.
Exchange

New York 4
Tele. NY 1-493

2207

THE

Number 4234

.Volume 158

COMMERCIAL and

The

CHRONICLE

FINANCIAL

Office

S. Patent

Reg.

B. Dana Company
Publishers

William

Vv>-Herbert

Seibert,'

are

Antilla Sugar

CHRONICLE

AND COMPANY

Public Utility

Est.

NOW IS THE TIME

and Industrial

TO SELL FOR TAX

LOSSES

PREFERRED STOCKS

Editor avxl Publisher
William

William

Seibert,

Dana

Riggs,

President

Haytian Corp. ofAm.

1943

December 2,

Thursday,

Published twice a week

Chicago—In charge of

Offices:

York Security

New

Broadway
NEW YORK 4

Representative,
Field Building
(Telephone State 0613).
London—Edwards & Smith, 1 .Drapers'

York,

1943

William

by
as

Subscriptions

PRUDENCE

at New
March

States

United

Possessions, $26.00 per year;
Canada,

BONDS

CORPORATION

and

$27.50 per year; South and
Spain,
Mexico and

America,

Mr.

PRUDENCE COMPANY

Street,

Wall

price—

the

New York

WHitehall 4-6551

Telephone:

of
o n

appeared

Publications

Semi-Annual

.................$35yr.
fluctuations
remittances for

30,
of

I Members New York Stock Exchange ||

NOTE—On account of the
in the rate of exchange,

foreign subscriptions and advertisements
mtlst be made in New York funds.

40 Wall

St., N.Y. 5

Bell

Teletype

WHiteball 4-6330

1-2033

page
Apropos

1304.

Newburger, Loeb & Co.

Sept.

cle"

Bought—Sold—Quoted

Record—Mth. $20 yr.
Monthly Earnings Record—Mth... $20 yr.
State & Municipal Compendium—

Bank and Quotation

have

letter,
dated Nov. 23,
lowing

Organized Efforts To Upset NASD
Profit Limitation Decree Inevitable
Since neither the

Board of Governors nor

the SEC has

inclination to rescind the NASD's obnoxious
profit limitation decree, the ire of dealers has been aroused
to the point where organized opposition has now definitely

developed. The New York Security Dealers Association in¬
tends taking appropriate action in the matter and the Secur¬
ity Traders Association of New York at their Annual Meet¬

issue
28,

your

Oct.

headed

Ghost

"The

leonic wars,

Interna

Reappears," b;
Professor Aaron Morton Sakolsk
of The City College, is likely t
prove so misleading to your read
ers that I take the liberty of pre
senting a reply.
J :

which will result in
conclusion that the
vast majority of their members will indicate their utter dis¬
approval of the profit limitation measure when they vote on
the subject in accordance with prepared plans.

Attempt To

of dealers' here and one
out-of-town are talking about forming a protective commit¬
tee to compel the NASD to rescind its profit limitation decree
and to fight any future action by the Association or the SEC
that is considered inimical to the interest of the securities
this, one group

business.

39 Broadway
New York '6,

N. Y.

Teletype NY 1-1203

HAnover 2-8970

Mo. Kansas

Pipe
"A"

Moxie Co.
&

Common

revised its currency
gold standard, H

Preferred

J.F.Reilly&Co.
Members

and went to the

tional Bimetallism

ing today will undoubtedly cast the die
their doing likewise as it is a foregone

undei

and what is equally im¬
portant, selling whatever is re¬
quired at the same price.
When England, after the Napo¬

article

The

INC.

Members New York Security Dealers Assn.

upon,

Brownell:

any

In addition to

Mr.

from

could not happen

of international
bimetallism, which is that several
important nations, especially the
United States and British Empire
should apply to silver the same
principle that has been applied tc
gold; namely, buying all silver of¬
fered, at a fixed price to be agreed

re¬

Information

Statistical

circulation.
But this

ceived the fol¬

QUOTED

LJ.G0LDWATER&C0.'

the modern theory

article,

SOLD

Complete

the program ad-

American Smelting
>e of bimetallism as the most suitency for the post-war world.
The
>
—-J
The chief point made by Dr
Sakolski is that under bimetallism
the market ratio of gold and sil¬
ver prices will diverge from the
mint
ratios, and thus what h
known as "Gresham's Law" will
drive one or the other metal oul

Sakolski

his

Sakolsk:

hairman of the

BOUGHT

captioned

Reappears,A. M.

took issue with

b y

expressed
r.

"Chronicle" ; of Oct. 28,
allism

views

the

CERTIFICATES

Burn

subject

the

TITLE COMPANY

■■

■

the »"ChroniOther

shown

Securities Dept.

Obsolete

...

Sakolski'

Repli

Brownell's

pamphlet

ALL ISSUES

Africa, $31.00 per year.

article published in

text

full

in Dominion

Cuba, $29.50 per year; Great Britain,
Continental Europe (except Spain), Asia,
Australia and

■

on in
week or so.

will be

taxes
the

g'un—and

now.

York Stock Exchange

tl
the "Ghost of International Binn
of the City College, New York C
vocated by Francis H. Brownell,
and Refining Co., regarding the
able standard of international cui
In

Dana Company

25, 1942, at the post office
N. Y., under the Act of

Central

1-832. 834

Article

Harrison 2075
Teletype CO 129

second-class matter Feb¬

3, 1879.

Board of Trade Bldg.
CHICAGO 4

DIgby 4-8640
Teletype NY

Biownell

Dealers Ass'n

London, E.C.

Reentered
ruary

Western

Gray,

the

Beat

Teletype NY 1-5

2-4300

Members New

STRAUSS BROS.
Members

Gardens,

Telephone HAnover

Cuba Railroad

(complete statistical issue—market quo¬
tation
records,
corporation,
banking,
clearings, state and city news, etc.)

earnest

Monday

and every

Other

for

and advertising issue)

(general news

Fred

New York

25 Broad Street,

Thursday

every

Selling1

Spencer Trask & Co.

Manager

Business

llCHTflWEin

B. S.

interested in offerings of

High Grade

Camag'y

Vertientes

3-3341

BEekman

Alegre Sugar

Punta

York 8

Spruce Street, New

COMMERCIAL & FINANCIAL

grains of fine gold tc
the
sovereign, but did nothing
about the current market price o

fixed

113

gold, which

continued to vary u]

New

Ill

Dealers

Assn.

Broadway, New York, N. Y.
REctor 2-5288

Bell System

Teletype, N. Y. 1-2480

(Continued on page 2214)

Establish The "5%

YEAR END SALES

Recognized Prac¬
tice Of Dealers In Securities

Rule" As A

Firm Bids On
Active

Inactive

Over-the-counter

KOLE
Years ago after elections, there were parades of citizens
many of whom wore a band around their hats with the
By A. M. METZ

Security

York

and EDWARD A.

Securities

HuilUbPilo.m

couple of NASD officials have taken the attitude that legend, "I told you so."
In that same spirit the writers approach this article.
170 Broadway
COrtlandt 7-6190
has misinterpreted the Association's letter
Bell System Teletype NY 1-84
to its members on the subject of mark-ups.
They say no During a luncheon within the month, they said, "The Securi¬
ties and Exchange Commission at its first opportunity will
ceiling has been put on profits but a "philosophy" has
use and quote the 5 % spread rule of the NASD as evidence
Pittsburgh Rys. Look Good
set forth that should govern the conduct of members with
of the established practices and customs in the securities
The current situation in Pitts¬
respect to mark-up practices. The Editor of the
business."
burgh Railways System, particu¬
was momentarily confused because he had read the letter
Lo and behold—it has come to pass! There is pending
larly certain of the underlying
advising members of the decree at least ten times. He
in the United States Circuit Court of Appeals for the Second
bonds, offers attractive possibili¬
not remain in this state long, however, after reading a sub¬
Circuit, the case of Charlqs Hughes & Co., Inc., petitioner, ties for appreciation, according to
sequent letter sent out by the Association to all
its Business Conduct Committees, but not to the whole mem¬ against the Securities and Exchange Commission. In this a study prepared by T. J. Feiblebership, which elucidated the subject.
It is necessary, appeal, a review is sought of a Securities and Exchange order man & Co., 41 Broad St., New
revoking the petitioner's representation as a dealer in securr York City. Copies of this inter¬
(Continued on page 2208)
ities. The Commission contends that the petitioner continu¬ esting study, which is available to
A

the "Chronicle"

been

"Chronicle"

did

members of

More Dealer

Comments On

NASD Rule

ally sold securities to: its customers at prices substantially in dealers only, may be had upon
of prices prevailing in the "over-the-counter" market request from T. J. Feibleman &
without disclosing that fact to the customers. These prac- Co.
(Continued on page 2219)

excess

DEALER NO. 69

issue of Nov. 18, you stated that at a recent meeting
Riter made it clear that come "hell and high water" the NASD
In your

Mr,

was

recent edict in

prepared to fight any organized opposition to its
respect to the limitation on profit. Manifestly, if there is any or¬
ganized opposition it would come from the members of
Is it Mr. Riter's intention to use the funds of the NASD to make
such a fight?
If so—at least in part—he would be using the money

National Radiator
Coca-Cola Bottling

the NASD.

members of the NASD who are
by so doing Mr.
themselves open
not only to considerable criticism, but also to a suit for the mis¬
appropriation of the funds of. the organization.
I am strongly of the opinion that the Board of Governors as
now
constituted is not representative of the majority opinion of
the membership of the NASD.
For instance, it seems an anomaly
to me to have an organization, which polices the activities of the
over-the-counter business, headed by a member of the New York
Stock Exchange and the New York Curb Exchange. 'The interests
of these
Exchanges are diametrically opposed to the over-the-

that had been

Pacific Goait

contributed by those

Panama

opposed to this edict, It would seem to me that
Riter and the Board of Governors would be laying

(Continued on page 2214)

Company

Co. of New York
j

Public National

Coca-Cola

Bottling Co.

Bank & Trust

Analysis upon request

;

Wyeth & Co.
*

Since 1893'

Hon Rose STrsster

LOS ANGELES

Members Los Angeles Stock

1914
Y. Security Dealers Assn.

Established
Members N.

NEW YORK

Exchange

Trinity Place, New
Telephone:

BOwling

Green 9-7400

Co.

York 6, N. Y.
Teletype:

NY 1-375

C. E.
'

Unterberg & Co.

Members Neio

York Security

Dealers Assn.

Broadway, New York 6, N. Y.
Telephone BOwling Green 9-3565
Teletype NY 1-1666

THE COMMERCIAL & FINANCIAL

2208

CHRONICLE

Thursday, December 2, 1943

SOLD

QUOTED

Deb.

3-5

due 1953

Consolidated Electric & Gas Co.

Coll. "A"

due 1962

Federated Utilities, Inc.

1st Coll.

5/4 due 1957

Jacksonville Gas

;

1st

New York Water Service

Corp.

1st

Seattle Gas Company

1st & Ref. 5

}

■

Southern Cities Utilities

Company

Telephone Bond and Share Co.

Growth

York

PUBLISHING CO.

Situation
Industry

Corporation
COMMON

Bought

Sold

Quoted

Analysis

request

due 1967

;

Public Utilities Consolidated Corp.

Interesting

CROWELL-COLLIER

American Gas and Power Company

Corporation

BOUGHT

due 1958

Deb.

due 1958

^Itason, Tenenbaum, Inc.

Members N. Y. Stock Exchange and Other Principal Exchanges'

BC-B'V'-

115 BROADWAY 4

due 1954

1st Coll.

Goodbody & Co. b

due 1951

5/4 due 1948

NEW YORK
TELEPHONE

105

WEST ADAMS ST.

7-0100-

BARCLAY

•

TELETYPE

Landreth

803

CHICAGO

Bldg.

ST. LOUIS 2, MO.
1-672

Teletype—SL 486

240

Organized Efforts To Upset NASD Profit
Incorporated

"v.

v/4.\'' V1-

Decree

":'T*

/■

Boston

New York

Milwaukee

Minneapolis

however, to quote just
was

underwriters

,
:

.•>

.4 •_

V-'

■

■,

•"

v•

■

•

Stik

Here it is:

interpretation of the decree

.BiBPV-^-B"•

Co.

SAINT LOUIS

"Isolated transactions where

5<>9 OUVE ST.
Bell

mark-up is in excess of 5% may warrant only
informal inquiry or a
precautionary letter but where prac¬
tice is established formal
complaint procedure is a recom¬
mended course."4
B
Those interested in this phase of the matter will want

•"

not incorrect.

spread

' ;

sentence from this letter to make

one

it clear that the "Chronicle's"
the

BB'-''

(Continued from page 2207)

•/

Chicago

v;B';B,BB

System

Members

Teletype—SL 80

St. Louis Stock

Exchange

to read the letter from Dealer No. 79 in this issue and the

and National Wholesale Distributors

article entitled

"Attempt to Establish The '5% Rule' As A
Recognized Practice Of Dealers In Securities," which appears
on
page 2207, for an insight into the meaning others have
placed on the NASD's letters relating to their decree.

for Registered Open End

Investment Companies

Oct. 28 issue

our

questioned the validity of the
mark-up
practice of its members and last week revealed that 25% of
the transactions
reported by one dealer had been consum¬
we

method used by the Association to determine the

having total
%

;

of more than

assets

mated at cost

$34,000,000

loss.

Now

find that when it

came

Wilson Of GM Urges
Conversion Plans Now
C.

Wilson, President of the

General

Motors

Corp.,

Nov. 24 that if the'
week

and

the

said

ended next

war

company

were

"turned loose" it could be produc¬

securities, the Association did not take the cost price ing some new cars in three
months
and
turning out many
percent of profit he took but within six months. He made this
rather the price at which that
statement
in
security sold on the exchange
testimony before the
it happened to be listed on.
Senate War Investigating
Com¬
B '
' 1
to listed

to the dealer to determine the

Hugh w. long

company

and

Exchange Place

Los

meeting of the Officials of District 13 (which

takes in the whole of New York State besides Connecticut
and New Jersey) on Nov. 16 it was

634 So. Spring Street

the

incorporated

brought out that during

Angeles

the last four years
only eight or ten complaints had been re¬
ceived from customers of dealers. This
being the case, it is

mittee,
man

headed

Senator

Tru¬

(Dem., Mo.). i;

From
advices

'
:
Press Washington

United
as

given in the New York

"World Telegram"
ther as follows:

quote fur¬

House

Group Contends 0PA And FDA'^^ J
B
Exceed Authority Granted By Law

The, special House committee investigating Federal agencies on
Nov. 29 charged the Office of Price Administration and the Food
Distribution Administration with exceeding the
law and asserted that these agencies were
using

authority granted by
the subsidy program,

the Lend-Lease Act and the needs of the armed forces "as

fuge to impose legislation
or

refused

to1

upon

the country which Congress had failed

Committee charged.

cattle.

Fred

ceilings"
It

was

Vinson, that "in¬
be

put

further

live

stated

"For all practical
Committee

said,

trol Act has been

sidy."

purposes," the
"the Price Con¬
repealed by sub¬

*'■

• ;•

these advices that the Committee
said that the FDA inserted two

the

clauses into Surplus Commodities

of Price Administration

"Your

'B>"B

Committee

recognizes,"
report stated, "that the Office

Mr.

Wilson

limitation decree

be accommodated in this issue.

as can

None

favoring the decree

was omitted. They start on page 2207.
received from J. A. White of Cincinnati
appears on
the front cover under the caption "NASD Profit Limitation

The

Decree
Fall.' "

Violates

Maxim

'United

Stand, Divided We
permission to publish this includ¬

Mr. White gave us

ing his

name.
The vicious NASD

and

all

were

price ceiling on an
agricultural product has been set

such

without

ment agency

consent

of the

Secretary

its

law

and, however laudable
purpose may be, no govern¬

the

his

think

that

people

will

and

household

over

shipping
materials

raw

machine

tools

once.

the

first

want

are

without

and

necessary

.said.

government

immediately,

availaWe at

new

things

when

this

automobiles

appliances,"

Wil¬

BBV' :%■ 'B:BBB':''BB'v. B

Mr. Wilson

country had

pointed out that the
18 months to
war before Pearl

about

get prepared for
Harbor

version
to

now

the

and

advocated

planning
reduce

be
far

that

con¬

promoted
as

possible

production lag v/hen the

war

ends.

recommended

Motors
lation, since

plants

war

son

Editor, Commercial & Financial Chronicle, 25 Spruce Street,
New York 8, N. Y.

predicated

the idea that he could

waiting for audits
orders, and that

one

profit limitation measure MUST and
on prices of live cattle without the
WILL be killed. Every dealer should use his utmost efforts
consent of the Secretary of Agri¬
culture, to whom the Price Con¬ to make this an accomplished fact. The "Chronicle" invites
trol Act gives exclusive jurisdic¬
other dealers to write in
giving their views on the subject.
tion over prices of agricultural
The names of those
submitting comments will be omitted
commodities, had the effect of
where requested. Communications should be addressed to
nullifying an Act of Congress, the

to the Economic Stabilization Di¬
direct

subter¬

enact."

According
to Washington advices, Nov. 29, to
the
New
York
"Times," in its
third
intermediate
report,
the
Committee charged the OPA with
violating the Price Control Act by
setting maximum prices on meats
"that were not generally fair and
equitable" and by recommending
rector

pertinent to ask "who is it that is clamoring for a profit lim¬ answer on
itation measure if it isn't the public?"
B':;"-; clear his
We give as many of the letters received on the
profit machinery

orders

be
now

that

permitted
for

General

machine

place
tools

which it will need to produce au¬

has been authorized

tomobiles again. He pointed out
to impose such a
that
many
machines absolutely
condition." <
B'"'B
:
difficult situation
Ft the purpose of bringing to the
chases
for
lend-lease
and
the
in
its
endeavor
to
It
was
keep meat
noted
by Robert
E. essential to automobile production
attention
of
Congress
and
the
armed
forces,
one
ofwhich prices within a noninflationary
Smith, United Press Staff corre¬ have been transferred to the gov¬
people- of the nation instances
"amends existing law" while the
range without fixing a price ceil¬
spondent in a Washington account ernment and to sub-contractors
where
executive
other "enacts new legislation."
agencies
have
to the New York "World Tele¬
ing upon live cattle, but we wish
exceeded the authority granted by
because the corporation could not
The advices to the "Times" went
to emphasize the fact that what¬
gram" that the report, declaring
law.
No one devoted to demo¬
on to say:
ever difficulties may be encoun¬
that the "Constitution recognizes use them for war production;
cratic
The meat prices established by tered ill effectively
government
can
remain but one
administering
legislative body, namely
"Many of them were bottleneck
OPA, according to the Committee, the law, no administering agency unconcerned whenever such ac¬ the Congress," said:
machines
without
which
there
is
taken
resulted in continuing for non- should exceed the powers granted tion
by an executive
"When
an
executive
agency could
not be a
steady flow of
agency."
j
/ ^: -"'
processing meat packers operating it by the statute. - B
v
B
finds that it cannot perform its
In contracting for dairy prod¬
losses of H/2 cents* a pound.
civilian production," he said.
"The
Constitution
recognizes
f
4
functions
efficiently under
the
ucts for military and lend-lease
"The effect of the order," the but one legislative
body, namely,
authority granted it hy Congress
Committee reported, "was to fa¬ the Congress.
v;u.iV,vv purposes, *tbe committee alleged, it has but one
alternative; that
the FDA amended existing law
"When
an
executive
vor, foster and encourage mono¬
Profit Potentialities
agency
being to report the facts to the
polistic tendencies to concentrate finds that it cannot perform its by requiring producers' and man¬
The "Rock Island" reorganiza-i
Congress and request an exten¬
ufacturers
to
the meat-slaughtering business in functions
pay their employes
efficiently
under
the
sion of its powers."
tion' offers attractive profit po-;
the hands of the comparatively authority granted it by Congress, for .overtime work whereas the
Fair Labbr Standards Act speci¬
few large processing slaughterers it has but one
tentialities according to a detailed'
alternative,- that
and to destroy the much greater being to report the facts to Con¬ fically
exempts
processors
of Halbkat
circular on the situation issued by
WithSiccIo,
Simons
number
of
small
independent gress and request an extension of dairy products from its overtime
(Special to The Financial Chronicle)
McLaughlin, Baird & Reuss, 1.
provisions.
'
slaughterers who operate without its powers.
DENVER, COLO. — James E. Wall Street, New York City, mem¬
The same agency enacted new
"In this instance, by the pay¬
processing facilities."
Halbkat
has
become
connected
i The
bers of the New York Stock Ex¬
agency further violated the ment of a subsidy to those slaugh¬ legislation- by requiring contrac¬
with Sidlo, Simons, Robert & Co.,
Price Control Act by failing to terers who conform to the price tor not to discriminate against
First National. Bank Building. Mr. change. Copies, of this interesting,
take
remedial
action within 30 ceiling fixed, and by penalizing employes because of race, creed,
Halbkat was previously with Hal- circular may be had upon request
days after complaints were filed, those who do not, the act of Con¬ color or national origin, the com¬
mittee said.
the Committee said.
sey,
Stuart & Co. and Brown, from McLaughlin, Baird & Reuss;
gress has in practical effect been

Corp. contracts dealing with

pur¬

ing with a

was

deal¬

Agriculture.

"This

very

Committee

was

■"V'BB by

legislation

created

The

order

establish ceilings

nullified by administrative regu-

"Congress

has

never

enacted

Schlessman, Owen & Co.

upon

request.

2209

CHRONICLE

COMMERCIAL & FINANCIAL

THE

Number 4234

Volume 158

"Lei's Sum

Burlington's Credit
Improvement Possibilities

position of six

timing

of the

resume

roads

undergoing reorganization

Offered)

(Realistic Switch Suggestion
Copy of study

Circular

Algoma Steel

request

5s, 1948

available to Brokers and Dealers

Brown

Vilas & Hickey
New

Members

pflugfelder, bampton & rust

Exchange

York Stock

Members

49 Wall Street

New York 5, N. Y.

* ^

Telephone: HAnover 2-7900
NY 1-911

Teletype:

New

International Hydro Electric

Exchange

Stock

York

Broadway

New York 6

6s, 1944

Bell Teletype—NY 1-310

Telephone—DIgby 4-4933

•

Montreal Lt., Heat & Power
3

may be attributed
ination of the tax

Tomorrow's Markets

factor.1 But

coming in within the last week and a half, ^ have pretty generally
shown a sharp acceleration of the rate of year-to-year declines in net
income.
The results as compared with the like" 1942 periods have

Most of the conferences

By WALTER

WHYTE

terrific

which start off with a

tax burden of recent
months and, as a particular dis¬
tortion to October results, the ac¬
crual
of
retroactive
wage
in¬
creases.
Few roads had made any
orovision for the increases in ear¬
lier months due to the complete

has' taken

market

In my previous
column 1 wrote that a set¬
back
to
about 125-26 was
tinge.

new

expected sometime before the
middle
of
December.
The

confusing the domestic

What

day the averages sold
all these ^hings will lead to
by a small fraction
I don't pretend to know. At
and the long faces of market

under 130

times I feel the market must

their
give the answer; not in so
appearance. But despite the
many words, but in action
feeling that prices are headed
which will foretell if the de¬
began making

lower the market

action of the

velopments will mean less or
past few days seems to point more
pressure on business,
if not to higher prices then
and indicate this by either
to a base much closer than I
good or bad market perform¬
envisioned last week.
ance.
-

tjs,

offerings which

Certain

last

pressing for sale when
week's column was writ¬

ten

have

jfr:,

The trouble is that the mar-

were

either been pulled

■.

■

(Continued

on page

2225)

generate

broad de¬

Bought

WHitehall

generally favor¬

been' fairly

has

Nations.

United

While

have been thick it is

large amounts of

stock, but

potential buy¬
ing doesn't impress me -as
much as the quality., If that
was all I had to go by I would
have no hesitation in coming
out flatly and advise guying.

the size of the

But

with

what

conditions

they are,

certain other
must

considerations

being

also be

recognized.
*

shows

why selling has

and

new

Idmparisons

stocks of the Guaranty

have

and

Bank

Chemical

between

Trust Com¬

' Company,

Trust

Irving

pany,

Trust

Com¬

Manufacturers

and

pany,

Company, indicating the

Trust

relative

degree of improvement during the
past
and

Specific

decade.

recommendations

switch

made in the study,

over

this

the

basic

banking
the

purchase
are

which also dis¬

improvement in

industry as a whole

past

decade.

Copies of

interesting table may be ob¬

tained from

Goodbody & Co.

Van Tuyl & Abbe

bearing

(in reorganization)
Minneapolis

YORK

Pcslacr rociticn of

& St. Louis 6s 1932

St.

Minneapolis & St. Louis 4s 1949
Minneapolis & St. Louis 5a 1962

ac¬

Iowa
Iowa

Des

Central 5s

1938

Central 4s

1951

Moines

Louis, San Francisco
R. R. Bonds

& Fort Dodge 4s

1935

the probable further

WALL STREET

Minneapolis & St. Louis 5s 1934

cepted that decisions made, at this
meeting will have an important

New

discussion .sent

request

upon

duration of at least the European

phase of the war.

;

Frederic H. Hatch & Co,

speculative community con¬
ditioned to the theory (however
A

Incorporated
Wall Street
New York 5,
Bell Teletype NY 1-897

that railroad securi¬
inherently "war babies''

erroneous)
ties

are

naturally enough been inclined
adopt a cautious side-line atti¬
tude in the face of the possibility
in

that

removed. This is

spectacular

the

ceded

announce¬
immediate future.

one

the market.

sure

of any

the

real selling pres¬
way-idown is con¬

sidered in many quarters as pre¬

saging
once

fairly fast turn around
uncertainties are

the present

resolved.

the uncertainties

for

surrounding the probable further
duration

the

war,

one

It is

doubtful, how¬
psychology can
permanently influence the market
once the aggravating influence of
year-to-year earnings declines has
ever,

that

a peace

Teletype BS 259

2-7914

if the

European

war

be terminated

is year-to-year

the

better

soo
Minneapolis, St. Paul &
Sault St?. Marij Railway Co.
When,

ALL

bought "

and if issued

pearance

sold

quoted

Arnhold and S. Bleichroeder
INC.

New

St.,

Broad

WHitehall 3-9200

York

Teletype NY 1-515

earnings com¬

to railroad

earnings as a

whole, with others falling in line
in early subsequent months.
The more favorable early 1944

Mohawk & Malone

Railway

(Continued on page 2221)

3V2S, 2002
We maintain active trading

markets in:

"Rock Island" Reorganization

Guaranteed principal and

interest

by New York Central R. R.

SEABOARD 4s/50

Profit Potentialities

(Unlisted)

SEABOARD 6s/45
Circular on request

SEABOARD 4s/59

Mclaughlin, baird & reuss
Members New York

Stock

Exchange
,

ONE WALL
TEL.

STREET

HANOVER 2-1355

NEW

YORK 5

TELETYPE NY
.

1-1310

1. h. rothchild & co.
specialists in rails
120 broadway

COrtlandt 7-0136

5
Tele. NY 1-1293
n. y. c.

ISSUES

parisons . for a number of the
major carriers, giving a better ap¬

competent to say when they may
be resolved.

time—it is generally con¬
that

comparisons,
the picture should tend to im¬
prove
from here on for most
roads.
The distortion caused by
accrual of the retroactive portion
of the /wage increases will pre¬
sumably be eliminated in Novem¬
ber reports but the mounting level
of taxes will continue.
For the
balance of the year, then, earnings
in general will presumably run
materially below like 1942 inter¬
vals.
After the turn of the year
there should be a decided change

earnings comparisons, war optim¬
ism, and fairly steadily declining
prices has not been sufficient to
bring any.heavy liquidation into

0425

CAP.

N. Y. Telephone HAnover

shortly the
Pacific phase would take a further
extended period to wind up.
With respect to earnings trends,

the combination of poor

even

148 State St., Boston, M?ss.
Tel.

been

some

N.
"

particularly
true inasmuch as it is extremely
doubtful if the entire war will end

has

Lack

the

buying
desire to. lift its bids

up
a

exchanges,

table showing thirty-five

different

cusses
v.;

One reason

dried

Teletype: NY 1-2050

ST. LOUIS RAILROAD

rumors

generally

MINNEAPOLIS &

although perhaps not so spec¬
tacularly so as it had been. There
has also been the speculation on
the anticipated announcement of
a
meeting of the heads of the

able

that

principal

8-3450

The one en¬
couraging feature of the market is

issued

and

NEW

tively little volume.

other

Quoted

influence,

ing for prices to get down to
them, have been lifted. True,
the latter does not involve

Co., 115 Broadway,
City, members of the
Stock Exchange and

—

STREET, NEW YORK 5

WALL

should

York

Sold

—

LEROY A. STRASBURGER & (XL

cautious, and bids in
many instances withdrawn or ma¬
terially shaded, fairly sharp price
declines have taken place on rela¬

New

Specializing in

Registered

Leased Line Issues

of a highly
speculative nature. To this rela¬
tively unfavorable earnings pic¬
ture has been added, as a market

ment

Leading Banks

4s/88

Underlying Mortgage

With buyers

have been sold

RAILWAY COMPANY

Coupon

privately.
Certain bids which lay dor¬ Compared
Goodbody &
mant under the market, wait¬
New York

Toronto

& Pacific

securities

ticularly

of,

Four

1-395

Montreal

SEABOARD AIR LINE

Gen.

mand for railroad securities, par¬

ternational affairs., The war pews

other

habitues

culated

gress

equally-foggy. Con¬
with its eyes on 1944
to have relegated the

to the cloak room.

HAnover 2-0080

Teletype NY

New York

come

outlook is

war

St., N. Y. 5

Bell

Chicago,

earnings results /as they
along are hardly cal¬

The

have

uncertainty as to the
probable early future trend of in¬

seems

WILLIAM

Rock Island

uncertainty as to what the burden
would be.
,
' •

international pic¬

But if the
ture is

increasing

The reaction of the past few whoop-la and die aborning in¬
crease my dislike for the deep
days—a dull, draggy affairundercurrents
that
certain
was in line with the forecasts
elements in and out of Wash¬
made here last week.
But
ington seek to foster.
<
since that statement appeared
the

COl

HART SMITH &

gradual flattening out of the traffic curve which
had been expected in view of the near saturation point reached last
fall. To this has been added the<S>
:
—
—

ists.

5s, 1965

been affected by the

not this is

action points

Winnipeg Electric

October, which have started

railroad earnings reports .for

The

justified time alone
will tell. I don't, for example,
to a base closer to current
care for the picture of postprices. Foreign and domestic
war
planning I have seen
developments still dominate
painted by various word art¬
price levels.
Recent market

;

Vis, 1956-1963-1973

( Railroad Securities

enough
reason.
There is something else.: What
this something else may be is
a matter of conjecture.
Peace
talk is increasing. Whether or

Walter Whyte

Says

to the elim¬

isn't

that

Company

5s, 1959

Adams & Peck
63 Wall Street,
BOwling Green 9-8120
Boston

New York 5
Tele. NY 1-724

Philadelphia

Hartford

MARKETS

Dow Chemical Cum. Pfd. $4 Div.

"250 Shrs.

3.81

25 Flat

4.00

MUNICIPAL BONDS

101 & Div. 4.46

Gen. Tire & Rubber Cum. Pfd. 4Vz %

*500 Shrs.

$3 PREF. & COMMON

Yield %

Phila. Electric $1 Preference Common

500 Shrs.

PEOPLES LT. & PR. CO.

Price

105 Flat

Security

Amount

TRADING

3lA %
2.70%
Penna. Turnpike Revenue
3%%
Connect. Rwy. of Phila. 1st
4%

Lehigh Coal & Nav. Fund.

50 Dela. Riv.

BUCKLEY BROTHERS
Stock Exchange
Members New York Stock Exchange

Members Philadelphia

Philadelphia 2, Pa.

Walnut St.,

1529

Bell Teletype

15 N. Y.,

N. Y. DI 4-1527

Phila. RIT 4488

Bridge Comm.

Philadelphia Bank Stocks
Central-Penn National Bank
*

7- 1-1948

106.25

2.55

101.50

2.67

1-1970

107.00

2.96

103.75

3.26

25 Market St. Elev. Pass.

Ry.
4% .5- 1-1955
Coll. Tr.
4Vi'% 7- 1-1961
6- 1-1997
Lake Shr. & Mich. So. Ry. 3V»%

104.50

3.52

25 Phila. Company

105.75

3.80

91.00

3.90

4 % % 10- 1-1958

103.00

3.98

6- 1-1960

15 York

Corporation 1st
on

1-1966

Municipal Bonds
1421 CHESTNUT STREET

By WILLIAM F. MILLS

New York Phono

STREET

WALNUT

1528

PHILADELPHIA

of operation from the date of opening amply testifies to the economic
necessity of the bridge to the territory which it serves, to the ability

2-0790

REctor

after the

Pennsylvania Brevities

Teletype PH 257

1942—

sustained

Jacobs Aircraft & Engine

3,340,113.26

562,054.96

2,778,058.30

526,546.73

2.628.712.32

581,672.32

2.445,817.04

plan previously approved by the SEC and
consum-<S>of not less than a majority
of
mation,
outstanding common stqck. Since
U. G. I., in company with
there
are
23,252,005
shares of
other holding companies fight¬

1534

provisions of the Hold¬

fight

the

Inasmuch

is likely that the
will

decision

Northern Ohio

Ry. 5/45

Philadelphia Reading Coal & Iron
&

York

Corp. Common

213 So. Broad St.

|
I

Philadelphia 7, Pa.

Bell System Tel.

New York Phone

PHLA 591

WHltehall 4-2300

estimated, at $3.25 per share as,
of .Nov.
1.
Other
principal

forced

sales

result in-widespread

investing

American

the
to

Investment Securities
Sold

—

Quoted

Members

Title

PHILADELPHIA

Telephone

10,

PA.

Power

Bell System

Light

carried

stock,

Southern

City

The

will be made
to

fixed

acceptance

preferreds

and

Commonwealth

Co.

Gas

2.458,416.66

429,412.63

2,416,703.63

9,886,705

418.516.46

2.401.502.25

10,804,557

3,091,576.91

456,397.44

2,635,179.47

12,308,225

3,479,337,93
3,517,730.64
3,331,754.46
2,827,786.83
2,435,784.40

430,856.72

3,048,981.21

500,597.53
398,496.20

3,017,133.11

378,590.01

2,449,196.82

346,678.59

1,110,108.38

158.109.47

2,093,92L89
946,682.83

—

——

12,285,359

1930

1928—,

9,725,470

—

1927———;
1926

•

11,615,609

1029-

8,593,201

4,137,674

( Vz Year)——

interesting to
end of

from the

note that

volume

substantially
1932

and

sidered
years,
were

increased

traffic

each

the

year

generally

1933,

the

and

registered. Beginning with

1934,

traffic

however,;

increased rapidly to

volume

of
15,000,000 vehicles in 1941.
reduction in toll charges, ef¬
high

It is

reported that the manage¬
of

ment

will

favorable action

take

soon

of dealers and many large stock¬
holders to change

000

the

that

receipts
volume

year,

showed

but

gross

traffic

stock from

thus

value,

par

transfer tax and facilitating trad¬

Also under consideration

ing.
a

reduction

standing by

each

for

out¬

exchange of

new

the

PHILADELPHIA, -PA.

the
a

that

Nov.

was

one-billionth

the

had been carried

U.G.I.,

record date

Board

favorable

Nash &

PA.—H.

the

association

the firm of Frederick S.

with

of the

trading department of Hen¬

stock

bank and

business

Nash

Co. by

Philadelphia

present

of the United States of
America, of 16,25% of the face
1,
1941, amounting to $6.50 for each
$40 coupon hnd $3.25 for each,$20
coupon. It is further announced:.,
"Pursuant to the provisions of

15 th:

President:
Stroud &

Robert

Rowe,

Company, Incorporated.

after

soar

vote

1943

672,136

comparison,
were

the

will

the

if accepted by the holders
bonds and coupons, must
be accepted, in full payment of
such coupons and of the claims
for interest represented thereby/
"No present provision, the. no¬
tice states, has been made for, the
the

the

total

Decree

ment,

Co/

fares.

Presidential

the

the lines of the

1,125,000,000

rency

amount of the coupons due June

United States of Brazil, such pay-*'

passenger

Transportation

City of Porto Alegre (United
of
Brazil)
40-year
8%

States

annual election to be held Decem¬

ber

one

Alegre Bond Payment

deposited with them, sufficient to
make a payment in lawful cur¬

didates

announced

all-time annual high for

a new

Guaranteed

Serial

due Dec. 1, 1931, to Dec.

coupons

passengers

1, 1933, inclusive, but they should
retained for
future
adjust¬

transported in 1940. Despite

ment."

(Continued on page 2211)

Situation Interesting
Robt.

and

Special

Colwell,
Fenner

Teletype
PH 296
N.

and 297
Y.-Phila. Private Wires—Rector

Merrill

Lynch,

Pierce,

Secretary: O. J. Matthews,
Treasurer:

Bertram

Kid¬

M. Wilde,

120 Broadway
NEW
2-6528

YORK 5

& 2-6529

Governors:

Walter A.

Schmidt,

Schmidt, Poole & Co.; Alfred Put¬
nam,

path;

Raleigh & Gaston, and Raleigh &

1950 of
which
is pledged the Richmond & Wash¬
ington
Company Capital stock,

Augustas,

offer

Auchincloss, Parker & Redand E. F. Beatty, W. H.

Newbold's Son & Co.

the first 4s of

rather

according

Janney & Co.
9

purchase by the Re¬
Receivers' Certificates,

Seaboard Air Line, behind

&/Beane.

der, Peabody & Co.

INCORPORATED

South Broad Street

PHILADELPHIA

Chauncey

Vice-President:

Stocks

Obligations

123

the

With

Rowe

ceivers

STROUD & CO.

dealing in local and general
corporate issues.
He is
secretary of the Investment Trad¬
ers Association of Philadelphia.

market

of 1943, and sub-

(Continued on page 2211)

following slate of can¬
be voted upon at the

sented the

Mortgage Bonds

insurance

carried

sinking fund gold bonds external
loan of 1921, that funds have been

Equipment Trust Certificates

dricks & Eastwood, Inc., will sup¬

plement the

insurance

Seaboard Air Line

Fischer,

Jr., and that the firm will act as
correspondents for Frederic H.
Hatch & Co., of New York.
Mr. Fischer, formerly manager

Risk

pre¬

Railroad Securities

Co., 1421 Chestnut Street,

announces

result of

protection. The $32,000*-

War

The last quarter

Willi H, N. Nash £ Co.
PHILADELPHIA,

increased

Ladenburg, Thalmann & Co., as
special agent, is notifying holders

The
the

—

par
nominating
committee
of
stqck Philadelphia Bond Club has

that

the cost of mate¬

the bridge costs $38,400 alone.

Porto

Slate Of Candidates

stated

the

reducing

timated

war came

expense

the

of operation';

years

increase in

increase

Phila, Bond Club Sets

U. G. I. common

ratio of 1/20 share

operating
rials and

volume

traffic

Alio with the

the suggestion

By the year-end, it is es¬

sixteen

common.

system.

decline
then

the

reduction

into

entry

our

war,

over

slight

and

came gasoline rationing
periodic bans on pleasure
driving, resulting in the second

fective Feb/1, 1937, accounts for

Con¬

1942

With

con¬

when successive declines

vehic¬

1,700,000

approximately
les.

until

depression

"peak"

2.933.258.26

4>-

1927, the first

full calendar year of operation,

Reading

distribution, which

of Delaware to each share of

Gas

sumers

Co.

the

$16,463,014,

Teletype PH 380

F. S. Fischer, Jr.,

preferred,

and
&
Kansas

preferred

Power

Hudson

the next distribu¬

will be in the

Rittenhouse 3940

2.606,707.01

441.146.59

shares.

Delaware

holders.

Building

461,260.86

Stock

Power

452,810.03

2,899,563.25
2,846,116.26
2,820,018.71

—

1933

Niagara

amounts

common,

tion to be made to U. G. I. stock¬

Philadelphia Stock Exchange
Land

losses for the

protect.

will constitute

1923

only

public, whose interests

Delaware

books

KENNEDY and CO.

under

can

SEC, by statute, was created

common

Established

ap¬

properties

conditions

—

1931--———

cash and
Government
securities
of v$6,857,890, are comprised of sub¬

G.^,

circum¬

2,969,423.52
3,067,967.87

10,156,929
9,981,615

—

1932—

including

holdings

Company Act

individual

unfavorable

Bought

Su¬

•

1935-

2.516,613.49

12,293,129
10,614,475

—

1936

residual

the

private or public in¬
terest. Compulsory divestment of
large holdings of securities and

stances

Light,

Supreme

has long been

sideration

cerstley, sunstein & co

likewise

——

1937-..—

the value of Dela¬

Power

ware

stantial

Holding

something

of
regarded as a
typical example of the
"Thou
Must" philosophy of the Admin¬
istration. It presumes the premise
that all holding companies, as de¬
fined, are evil both in theory and
in practice and must therefore be
banished with scant, if any, con¬
The

1935

up¬

100,000 stockholders, the

Including

pealed.

5Yzs & 6s and When Issued

among

assets of U. G. I. common were

present,U.

outstanding

problem.
Physical issuance of the shares is
not expected before spring.
sent

the North

1940—

mechanics of the distribution pre¬

Court has not yet ruled
American case, it

preme

wards of.

its

carried

has

similar

under

Co.,

Court.

Akron, Canton & Youngstown

3,000,209.98

3,027,489.36

circumstances,

CAnal 6-4265

2,366,959.45

653,401.11

3,155,259.05

American

N. Y. Phone

$859,543.90

702,687.82

12,820,338

ing Company Act of 1935. North

Philadelphia 2

1500 Walnut St.

Net Receipts

-•

$338,225.26

14,185,835

catory

Teletype

Expenses

$1,197,769.16
3,069,647.27
3,653,611.09

13,378,235

orderly rearrangement of their
affairs, continues to challenge
the constitutionality of confis¬

Inc.

1S38

ing for the right to conduct an

Autocar—Com. & Pfd.

12,463,283

—1—15,638,687

1941

Gross Receipts

4,355,923

—-

OPERATIONS

1939—-

the company's voluntary
now
in the process of

All Issues

Co., ordering the divestment of nine public
utility corporations and nine non-utility companies.
The decision does not affect any of the proceedings covered by

United Gas Improvement

Philadelphia Trans. Co.

(Vz Year) —

1948

entered July 30/1941, and May 7, 1942, against the

two SEC orders

We Maintain Markets in

Traffic

Circuit Court of Appeals has unanimously

The U. S.

war.

TABLE

G. 1. Divestment Order Sustained

York Phone
HAnover 2-2280

W. H. Bell & Co.,

and to the high degree of earnings possibilities

of the management

Philadelphia 2

1477

BOwling Green 9-8184

July 1, 1944, will mark the 18th anniversary of the opening to
traffic of the Philadelphia-Camden Bridge.
A glance at the record

Co.

New

Phone

New York

Rittenhouse 2580

PH 70

Refunding Bonds

2039, Pfd. & Common

1421 Chestnut Street,

Teletype

Delaware liver Joint Commission

Yarnall & Co

H. N. NASH & CO.

PHILADELPHIA

Philadelphia

request.

Pennypacker 0300

jersey

A. Webster Dougherty & Co.

104.375 2.95

6-1-1948

Philadelphia Phone

Locust

2.35

3%%

Provident Trust Co.

Phila.

111.00

3%%

Philadelphia National Bank

3-6s

3.57

3-15-1951

12-

2% %

Phila. & Norf. Stk. Tr. 4%

Penna. Co. for Ins. on Lives etc.

Phila. Transportation

2.52

103.00

15 Phila, & Read. Terml. 1st

*Prospectus

Girard Trust Co.

103.75

1-1968

25 Penn. Glass Sand 1st

Nat. Bk. & Tr. Co.
Fideiity-Phila. Trust Co.

Corn Exchange

8- 1-1973
8-

15 American Tel & Tel Deb.

PH 265

—

1-1975/65 118.57

2.15

$100 City of Phila. Refunding

COMMON

Yield %

Price

Maturity

Rate

Security

Thous.

new

pennsylvania

Amt. in

SAFETY CAR HTG.&LTG.

Thursday, December 2, 1943

FINANCIAL CHRONICLE

THE COMMERCIAL &

2210

Co.,
City.

120

strategic

Broadway,

position,

Rothchild

New

York

Copies of the firm's inter¬

esting study of the situation are
available from them upon request,

2211

Number. 4234

Volume 158

COMMERCIAL & FINANCIAL

THE

CHRONICLE
WIRE

DIRECT PRIVATE

CLEARANCE

Brokers and
enced department for handling
transactions.
'v

Our

offer

facilities are of the

We have

FACILITIES
Security Dealers an experi¬
the clearance of

active market in
•

COMMONWEALTH OF

security

llu...*

due

is very moderate.

best and the cost

3%% Bonds

Turnpike Revenue

August 1st, 1968

Inquiries Invited
and in all

Pennsylvania Municipal Bonds.

PENNSYLVANIA COMPANY

THE
For

Insurances

Investment

Chestnut Streets

1518 Locusts

PHILADELPHIA
Federal Reserve

Federal Deposit Insurance

System

,'i

Corp.

•

■

Private telephone

(Continued from page 2210)
an equivalent book value of about
$300 per share. As of Oct. 31,1943,
dividends were in arrears .to the

19.4% drop in

months show a

100,000 miles of operation. Accidents
per
million
passengers
were
25.73% fewer, compared with the
corresponding 1942 period. Total
miles covered by P. T. C. cars and
buses is estimated at 109,222,170
of accidents per

for the year.
The

■

report of Philadelphia
Edgar W. Baird,

Treasurer

for

the

first

extent

City
Jr.,

Re¬

sequent years, however,

perhaps similar to
that offered the preferred stock¬
of American
seem

LocomotfVe

Foundry Motors
turn,

to be in

subsidiary,

principal

owns

will re¬

substantial saving in the
interest cost on the bonded debt
flect the

order.
Of equal interest is the 7% pre¬
ferred stock of Brill Corporation's
would

Co.

Car

10 months of 1943
from all sources of

share.

of $77.58 per

(Continued from page

classification,
holders

Philadelphia

Commission

American

Co., which,

the

bridge as

Transportation Co.

result of the

gross

point

ficient

penses

Hall-Scott Motor $1,500,000.
F. Motors Co. and quirement

Annual interest re¬
Car Co., A. C,
on the 2.70s amounts
Fageol Motors.
to $999,000, reflecting a saving of
approximately
$500,000, which
Philadelphia & Reading Coal & should more than offset presently
Iron Co., in the process of reor¬ foreseeable
increases in cost of
ganization, has asked the U. S. operation.
District Court for permission „ to
As to the ability of the Dela¬

cover

that

Philadelphia Real Estate

the

bonds.

that .they were
cover

only,

operating expense.

Bonds & Stocks

suf¬

operating ex¬
interest on the
bonds could be paid in full from
the
Reserve
Account for six
years.
The above table shows
how great a decline in revenues
would be necessary to simply

bonds in

of the 414%

for

interest on the

the

All issue*

Samuel K. Phillips 8
Packard Bldg.,

Philadelphia 2
N. Y. Phone

Teletype

REctor 2-0040

375

Co.

Exchange

Philadelphia Stock

Members

indication of the
economic importance of the bridge,
revenue $77,475,681 has been col¬
it is interesting to note that in
lected. This amounts to approxi¬
1941
the bridge's
share of all
mately 95% of the budget esti¬
cross-river traffic using facilities
mate of $81,816,000 for the entire
distribute
$1,710,979 among its
within ten miles of the bridge was
ware River Joint Commission to
year, and it is now apparent that bondholders and creditors.
This meet the interest charges on the 75.94%. In 1942 this percentage
the City Treasury should receive
followed a petition filed by a
rose to 76.62%. A post-war project
bonds,, for the duration, with¬
in excess of $84,000,000 for the 12
bondholder on Oct, 15 asking, that
vitally important to future bridge
out indulging in a guessing con¬
months ending Dec. 31.
traffic is the widening of the Vine
$8,000,000 be so distributed. The
test as to the length of the war
Street approach to the Philadel¬
company
states ,that the,. lesser
or
the future supply of civi¬
In mid-November, York Corpo¬
amount can be taken from work¬
phia entrance to the bridge. The
lian
gasoline,
one
fact
should
be
ration, manufacturers of air-con¬
Commonwealth of Pennsylvania
ing capital without impairing the
noted. Under the terms of the
ditioning and refrigeration equip¬
has provided the necessary funds
company's position.
In the 12
indenture relating to the $37,ment, sold $4,500,000 1st 41/4s, 1958, months through June, the com¬
and notices, have been served by
000,000 2.70s, the approximately
at 1021/2, the proceeds of which
pany
reported net income
of
the City Solicitor of Philadelphia
$6,200,000 surplus existing at the
were applied, in part, to the re¬
$735,565,jndicating a fixed charge
upon the owners and tenants of
time of their issuance, has been
demption of the company's 6% coverage of 1.25 times. The time
properties in the affected area,
placed in a "Reserve Account."
mortgage issue. There now exist for
filing
acceptances
to the
condemning the
whole in the
The Commission covenants that,
no
restrictions against dividends amended plan of. reorganization
name of the Commonwealth. With
until revenues from operation
on
the 962,046 shares of common
has been extended to April 9,1944.
the availability of materials for
shall amount to $3,300,009 an¬
stock outstanding. Net income for
road building after the war this
nually, the money in th£ Re¬
10 months of the fiscal year was
The court and trustees in bank¬
m^rovement should prc/ceed with¬
serve Account may be usetFonly
reported as $800,246, after all de¬ ruptcy have ordered the payment
out delay.
to meet deficiencies in funds
ductions and provisions for excess of June and December, 1943, in¬
profits taxes in the amount of terest coupons on York Railways
$933,000.
5s, 1947, thus bringing payments
up to date.
Previously,, payments
Growing in popularityamong had been deferred for the purpose
Pennsylvania investors are the of
property
improvemaking
common shares of Christiana Se*
ments.
Eric Johnston, President of the United States Chamber of Com¬
curities Co., chief assets of which
shows

Philadelphia

payment of
Thus, if
earnings should decline to

available

September with an issue of $37,000,000 2,70s. At the time the call
of the i 4!4s was issued, interest
cost amounted to approximately

refunding

2210)

PITTSBURGH

Baltimore

Refunding Bonds

increased strain on equipment
and personnel, figures for the first
the number

Street,

wires to New York and

Delaware River Joint

Pennsylvana Brevities
the

Securities

•
Member

Member

Stock Exchange

Members Pittsburgh

Kerner, Inc.

Rambo, Keen, Close &

Granting Annuities

Lives and

15th and

NEW YORK CITY

PENNSYLVANIA

further

have

continuing interest

Southern Advance

Bag & Paper Co.
Common

Stock

BOENNING & CO.
1606 Walnut

St., Philadelphia

PH 30

Pennypacker 8200
Private Phone

COrtlandt

N. Y. C.

7-1202

Idleness
Outlined By Eric Johnston Of U. S. Chamber

Formula To Avert Mass

outlined a formula to avoid mass unemployment
after the war, which he said could achieve the same four-fold unity
at home that theyMoscow agreement portends abroad.
This was re¬
ported in an Associated Press dispatch from Washington, on Nov. 30,
445,034, equivalent to $1.78 per
which
also
had
the
following
to
say:
is equal to more than 19 shares of share of common stock. This com¬
Asserting that despite conflicts^
duPont common, but the proceeds
pared with $1.45 so earned in
the
things that make manage- necessity for constantly lowered
from about 16 shares of duPont
1942, according, to John Ballancosts and greater efficiency; that
at the present market will buy
ment, labor, agriculture and Gov¬
tyne, President.
an economy of scarcity is an econ¬
ernment one "are a thousandfold
one
share of Chrisitiana and at
omy
of ruin; that a prosperous
the same time increase the return
greater
than
the
things
that
divide
PERSONALS
.
management and labor are essen¬
on
the divestment about 9y2%,
James T. Buckley, Chairman of them," the President of the United tial to absorb the production of
Chamber
of
Commerce
based on present indicated divi¬ the Executive Committee of Philco States
the farm.
added
that unity
among them
dends.
The fact that Christiana
Corporation, has been elected a
"Government must understand
offers an ideal medium to invest director of the Federal Reserve "will mean that we are on the
that you don't increase purchasing
America's greatest
in duPont at a substantial dis¬ Bank of Philadelphia to succeed threshold- of
power by taking a dollar from
count and on a more favorable Frederick C. Stouts'
development."
somebody and handing it to some¬
r To attain that unity, he said in
income basis, has increased public
body
else; that the individual
an
address to the Women's Na¬
interest despite its price per share
should be stimulated to his great¬
tional Press Club, the four must
(about $2,250). Number of com¬
est productive capacity; that there
mon stockholders
increased from
try in a spirit of cooperatioin to
should be revisioin of tax laws to
132 in 1934 to 2,409 in 1942.
map
the "areas of agreement"
W. H. Bell &
stimulate the investment of risk
among them.
.
PHILADELPHIA,. PA.—Joseph
Cash or equivalent in the hands
"Management, in this spirit of capital to give jobs to men; that
we
must
have the maximum
of the trustees of Pittsburgh Rail¬ E. Morley has become associated unity," he declared, "must under¬
amount of private enterprise and
ways Co. was reported at $12,657,- with W. H. Bell & Co., Inc., 1500
stand that labor unions are here
000 in November.
Net earnings Walnut.. Street. Mr. Morley was to stay; that we must have lower the minimum amount of Govern¬
ment regulation, consistent with
for the year, after depreciation, formerly in charge of corporation and lower profit a unit and bigger

3,049,800 shares of duPont
common and 85,000 shares Gen¬
eral Motors.
The current asset
value of one share of Christiana

are

net
income
of
Philco Corporation for the first
nine months of 1943 totaled $2,Consolidated

■

merce, on

Nov. 30,

Pennsylvania
and New Jersey

Municipal Bonds

Dolphin & Co.
Building

PHILADELPHIA 9
Telephones:

Philadelphia—Pennypacker 4640
New

Bell

York—-HAnover

System

2-9369

Teletype—PH 299

Phila. Electric

Joseph Morley With

Philadelphia Trust

Fidelity

Preference & Common

Public Service N.

Common

Scrip and Full
Bought

Sold

—

Quoted

E. H. Rollins &

Co.

Sons

Incorporated
Pennypacker

1528 Walnut
New

York

San

St.,

Boston

Francisco

0109

Philadelphia
Chicago
Los Angeles

Philadelphia "of¬ and bigger volume of sales; that our complicated modern economic
Pay On Brazilian 8s
>
York & Co. high wages are important if based society."
Dillon, Read & Co., New York,
Prior thereto he was with Horn- on. a correspondingly high level of
blower & Weeks and Yarnall & production; that monopoly is
a
special agent of the United States
Co.
In the past he was a part¬ sissy way of doing business; that
of Brazil, announce that interest
is no good reason for a continu¬ ner in Morley, Wood & Co.
,
the umbrella of monopoly is only
was being paid Dec. 1, on United
ance of the trusteeship.
To come
held up. over the heads of those
States of Brazil 20-year external
who are frightened by their own
put of receivership without reor¬
PHILADELPHIA, PA.—Bioren
loan 8% bonds, dpe June 1, 1941,
inefficiency.
ganization would enable the com¬ Empire Sheet & Tin Plate
& Co., 1508 Walnut Street, mem¬
pany to retain the benefits of its Situation Attractive
"Labor, in this spirit of unity, bers of the New York Stock Ex¬ at the rate of $10 for each $1,000
must remove any acts or policies
present very favorable tax base.
The first mortgage 6s of 1948 of
change, announce that Walter D. bond and $5 for each $500 bond,,
which restrict or retard produc¬
Larzelere has been admitted to or on the basis of 25% of the dol¬
Empire Sheet & Tin Plate Co.,
Brill Corporation 7% preferred
tion.
Labor organizations must
offers attractive possibilities ac¬
general partnership in the firm.
lar amount payable, in accord¬
presents an interesting study to
be more free, more democratic,
cording to a memorandum pre¬
That Mr. Larzelere would be¬
investors with an analytical turn
more socially minded. Labor must
ance
with the provisions of De¬
pared by Hill, Thompson & Co.,
of mind. Indications are that 1943
clean
its
own
house of those come a partner in Bioren & Co. cree-Law No. 2085 of March 8,
Inc., 120 Broadway, New York
earning^ will equal if not exceed
abuses which have crept into some was previously reported in the
City,
Copies of this interesting
1940.
the $36.84 per share recorded for
of their organizations.
"Financial Chronicle" of Nov. 11,
memorandum may be had upon
1942. Net current assets are ap¬
"Agriculture must recognize the
request.
proximately $175 per share with

Federal taxes and
Trust Certificates,
will approximate $4,000,000. Many
owners of the minority-held out¬
standing securities believe there

provisions for

securities in the

service on Car

fice

Warren

Admits
Larzelere As Partner

Bioren & Go

2212

THE COMMERCIAL & FINANCIAL CHRONICLE

Thursday, December 2, 1943

Scrapping Of Hew Deal
Is Debated HI Forum
The

UTILITY PREFERREDS

New

Nov.

denounced

was

John

of the

member
of

Deal

OFFERINGS WANTED

Flynn,

New York

Board

Higher Education, as a venture

direction

the

fascism

interested in

are

large

small

offerings
blocks

Real Estate Securities

and

extolled by Max Lerner, po¬
litical economist, as a democratic

was

base

Paine, Webber, Jackson & Curtis

which

enduring

the foundations of
peace

Seligman, Lubefkin & Co.

being

were

built, according to the New York

Incorporated

"Times" of Nov. 26.

ESTABLISHED 1879

Members New

Mr. Flynn, former Chairman of
the America First Committee, ar¬

York

Security Dealers Association

Broad Street, New York 4

HAnover 2-2100

gued

affirmatively on the ques¬
tion, "Should the New Deal Be
Scrapped?" at the Town Meeting

Public Utility Securities

Standard Gas & Electric Plan Modified
The Utilities Division of the SEC

the

from

Air, broadcast
Hall

Town

York

New

City. Mr. Lerner, columnist

recently released its "proposed

would

each $1,000

bond will now receive
about 2714 shaies of new Standard
Gas
23

indicate

might

obtain

$12,000,000—$(.3,000,000
sale

proposed.

originally

estimate

offhand

Oklahoma.

proceeds

that

around

from

the

Possible

Louisville

stock

common

appear

Standard

the

in lieu

stock

class

and

are

sale

difficult to guage but might be in

dend

the

strengtnened by making it
non-contingent on earnings—the

after
the

original plan would have made it
cumulative only if earned.
The

the

balance

neighborhood

$3,000,000

retiring the Class A stock of
sub-holding com¬

Delaware

pany.

Standard Gas probably has

about

$6,000,000—$7,000,000 liquid
assets, in the parent 'company
treasury. The sum of these three

common

stock, aesignated as class B, will
share in dividends equally with

continuation

would

the

mean

growth of the. national deficit to
"astronomical

class A stock has
had its 85 cents preferential divi¬
the

Moreover,

theory of continuing unbalance of
budget and the crowding of pri¬
vate
industry
by
government
"partnership in business." He said
its

"You
for

figures."
socialism,

New
is

Deal

cialism

and

long

so¬

form

keep going only
keeps the country

can

debased

capitalism. It
so

form

state of crisis."

amounts, together with some $5,Mr. Lerner countered that the
satisfied.
In other words, the A 500,000 obtainable from sale
of New Deal was ready to stand
receives 85 cents, the B 85 cents, Standard's investment holdings of upon an unbalanced budget when
and then both share equally in 200,420 shares of Pacific Gas & that was
necessary, but "only so
additional payments. (Class B can¬ Electric
might aggregate about long as necessary."
He said it
not receive dividends,
however, $27,000,000, as compared with the would not be necessary always.
"The New Deal came in being
during the life of a proposed col¬ amount of $29,601,000-fequired to
lateral
bank
loan.)
While
the pay $500 cash per bond on Stand¬ as a receiver in bankruptcy for a
complete text of the staff report ard's six bond issues. This would-f nation in the chaos created by an
is not yet available, the data con¬ almost avoid the necessity for the economy of greed," Mr. Lerner
tained in the press release appears proposed
$21,000,000
three-year said. "Ask any ordinary Ameri¬
the A stock after the-preference is

indicate that the $7

prior

collateral

loan, and would
simplify the problem of
system simplification under Sec¬
tion 11.
>

pre¬

greatly

ferred stock will receive 6.7 shares

new

preferred

current

little difficult to estimate

outstanding, could also be avoided.

seem

of about

514

stock.

earnings

because of the

the

basis

new

numerous

changes

by the plan. However,
pro-forma
consolidated in¬

proposed
the
come

year

the

for

account

the

basis,

new

reported,
$635,000.

increase

Applying

this

about

some

the

loan

bank

the' Moscow

Deal

into

not

being in

Pact?
It

over.

economic

amount

net loss

There
of

over

parent company in¬
which
only
a
small

would

recouped

taxes.

about

The

net

loss

the

earnings

Deal had been

paralleled by

pre¬

and

economic

technique "a nice,
pleasant, pretty form of

polite,

centering more powers
Washington, taking more pow¬

was

the

from

ers

vesting
dent

individual

more powers

States,

in the Presi¬

and

stripping Congress
much of its authority.
Mr.

per

stock

Germany and Italy. He called

Lerner

declared

that

of
the

to preserve the

that

indicate

Oklahoma

might, be

sold

the

Gas

ap¬

possibility
&

Electric

Standard

Gas

cents

dated
a

parent
on

company
a

consoli¬

basis, which would not be

serious factor

compared with
of, the dividend em¬

the

lifting
bargo. It seems probable that the

within the next few months, while j SEC would also favor more rapid
a
sale of Lousiville Gas & Elec-!sale of the properties than was
trie might also be consummated, contemplated in the original plan.
A

plan for "readying" Oklahoma
has already been submitted to the

Summarizing, under the plan as
devised, Standard Gas $7 pre-

SEC, providing for the usual ad- ferred

appears

selling

national economy
after the blow dealt it by the
preNew Deal economic collapse and
that

had

COMPANY

Some

Vilas &

Hickey, 49 Wall Street,

New

York

City, members of the

New

York

Stock

with

Exchange, have

study

Burlington's

improvement

possibilities,

brokers

and

available

are

dealers

upon

sugges¬

re¬

over

was

v/.

$60

bond

per
:

Oct.

Terrace

Co.

times

contrasted

system

with

ratio of 2% based

earnings

$12.92

earnings,

the

present

recent share
on

the

pre¬

ferred.

Members New York Stock Exchange

Dlgby 4-8500

CHICAGO: 135 SOUTH LA SALLE STREET—Slate 0933

If the Louisville and Okla¬
homa properties are sold and
pro¬
ceeds can be used in lieu of the

proposed

bank

loan,

would be nearer 5.

Victoria.

This

of¬
the

was

stock

with a $168 a share bid—•
$14 per share in dividends
this year.
The plan provides an
exchange of a $200 debenture with

paid

fixed

interest

tional

$15

7%,
shares of new

held.

will

Stockholders
100%

ownership

$19.89

per

still

hotel.

earned

was

ended Dec.

originally

was

plan of reorganization

basis of two shares for each

Creation of a

$1,000 bond held.
debt

funded

probably

once

considerable

result

will

retain

the

the stock for the year

addi¬

and

totaling

value stock for each share

par

now

interest,

earned, plus

tax

stockholders.

savings for the

ft.

JjJiWJMI-fl

•

Ill
Ic3

about 100% rented at

are

MARKETS

TRADING

present time. Earnings have
improved considerably under the
new
management.
Bondholders
should benefit
if earnings con¬

REAL ESTATE

SECURITIES

extra interest pay¬
payable in June. There
several points in accrued in¬
as

are

terest due

these bonds.

at 3%

fixed

are

plan

by the management

the

are

real

some

issue

v'
Apartments in the London

1944.

and

might

interest

accrued

pected June
43-43%.

SHASKAN & CO.

Bonds

Members New York Stock Exchange

at least 1%

Members New York Curb Exchange

ex¬

40 EXCHANGE PL.,N.Y.

Current market

Bell

Olgby 4-4950

Teletype NY 1-953

Those interested in real es¬

Utilities

West

Halsey, Stuart & Go.,
Offers $23,000,000

and

offering was made Dec.

& Co., Inc.,

Halsey, Stuart

other investment

banking

$25,000,000 Central Pow¬
Light Co. first mortgage 3V8S
due in 1973. The issue was priced
&

at 99

V2, to yield about 3.15%. Pro¬
will be used

ceeds of the financing
retire

company's

equal" amount of the
3%% first mortgage

bonds.

About

pany's

revenues

of electricity,

sale

the

offering

ice

are

sale

southwest
the

com¬

derived from

19%

from the

and

from

the

concern,

sale

water.
Revenues

cording

the

prospectus,

increased from
to

ended

12 months

Aug. 31, 1943.

last three years

additions

ac¬

have

$9,514,000 in 1940

$12,148,000 for the

net

Associated
A.

and

74%

Texas;

houses of
er

ice service in 46

south

counties

Central Pr. & Lt. 3Yss
1

Co., supplies elec¬

tric, water and

the

and eight months
the

company's

are

Allyn & Co., Inc.; Blair &

Inc.; Lazard Freres & Co.;
Otis & Co., Inc.; Phelps, Fenn &
Co.; Wertheim & Co., Bear Stearns
Co.,

around

bonds

interest

are

their

property

plant

and

account,

request

Bear, Stearns

1943,

31,

the

return

interesting switch

quest.

STREET, NEW YORK

emer¬

Burlington's Credit
Improvement Possibilities

Oct,

Public

to
on

its

phases must be Viewed in
the light of the
emergency, he said.

tion, copies of which

Memorandum

gency

credit

MIDLAND UNITED

preserved democratic

institutions.

issued

ONE WALL

...

Government's

basis, and 23 cents

Last week

holders should receive a minimum

fered

The stock'

but its most important
phase has just begun, building the
for
an
enduring
peace."
/
Mr. Flynn said that the build¬
ing of roads and schools and other
vast
public works by the New

have

issued in

foundations

gency,

and

31,1942.

yesterday went up
news of the plan.
A letter from the Manage¬
of the Savoy Plaza Hotel
that for
the
first quarter

earned

emer¬

values

Both

below

merit.

from 58 to 65

ending

earnings.

new

recently

10%, and should the same relative
earnings continue through the re¬
mainder of the fiscal year, bond¬

book

Co.

considerably

sold at 72 and

The

vast public works
projects had been made necessary

Bonds

offered.

also

came

might be in the neighborhood of

pears

sinking fund).

thus

States

both

ments

$700,000

United

Guarantee

selling

aid

build¬

due Jan. 1, 1944,
have been tendered a plan under
which they may exchange their
debentures for $300 in cash and
$800 in new 4% debentures pay¬
able Jan.
1, 1950—an alternate
privilege of accepting $650 in cash
for each $1,000 principal amount
bentures,

tinue good

will

these

Gorge A. Fuller Realty Corp.,
guaranteed
by
United
States
Realty & Improvement Co., de¬

Deal

year
as

Holders

would have to be ap¬

plied

Realty & Improvement Co. 6%
sinking fund debentures and 6%

fascism" and added that the New

earnings

Title

Hotel

this

about

report

better

financial

ings.

said

New

the

bondholders

him

dicated market price of 514 would
be equivalent to about 3.8 times

staff

section

the

000

the 4,854,802 class A and
shares.
On this basis, the in¬

the

obtainable

ment

lease

commer¬

buildings, and if higher rents

wants

jto scrap social security. Ask
if he wants to scrap lend-

There is

rents for

presumably be only about $735,000
(although earnings up to $2,000,-

However,

cial

in any income group, if he

can,

difficult to get.

are

ceiling

war

come,

fices

would

increase

$1,446,000 in 1942 from the
to
be
liquidated,' and

interest

($6,050,327) results in estimated
earnings
of
$6,685,000,
which
equivalent

might

securities

would

there

remains

loan

of income from this arrange¬
ment
since
Standard
received

to the net income reported for the
12 months ended June 30, 1943

amount

the

loss

calendar

compared with $5,647,637 actually

while

However,

1942 indicated net income of

$6,283,0c0

$1.37

avoided, the

for

value

...

If the loan could be

At the current price

provisions in the plan prohibiting
dividend
payments, on class
B

new

It is

$6 prior
and the $4

35Vz, this would

indicate

the

5.8

preferred .21.
of about

the

common,

bank

little space available and,^
besides, because of priorities, tele¬ tate securities might do well to
phone equipment and materials look into the stock, of Lawyers
necessary for equipping new of¬
Mortgage Corp. and the Home

these.

none

degenerate

very

We Hear That—

Bullish for downtown office, buildings, is the rumor that
tenants whose leases expire May 1, 1944, have been told that in
order to renew their leases they will have to pay
considerably more
rent.
A couple of years ago, because of so much space
available,
these tenants were able to get their offices at very low rentals per
square foot.
Now the landlord has the advantage because there is
...

are

for

argue

communism, or for capital¬
Mr. Flynn continued, "but

ism,"
the

can

the

newspaper PM, took the negative.
The
following
regarding
the

findings and opinion" on the voluntary plan submitted last March by speakers' remarks, on the domes¬
Standard Gas & Electric for simplification of its capital structure. It tic aspects of the New
Deal, was
had been surmised in the Street for some time that bondholders reported in the "Times":
might receive recognition of their demands for a larger proportion of
Mr. Flynn charged that the New
the new. common stock'issue, and this has been recommended in the Deal was based on an economic
staff report. In addition' to $500 *cash, 5 shares of California Oregon justments
and 2 shares of Mountain States, split-up.

Real Estate Securities

WJZ

over

the

ratio

Co.. Inc.; Baker,
Fisk &
Sons, Inc.;'Gregory & Son, Inc.;
Co.;

against which
were

issued,

ceed

$3,600,000.

Burr &

Lilienthai

Co.,

were

reported to

first mortgage on

sidiary of the Central and South

1953

annual

will operate to

by a

property

owned by the company.

& Light, a sub¬

ex¬

substantially all

and permanent physical

others.
Central Power

additional bonds

The bonds will be secured

Weeks & Harden; Harvey

Hirsch,

Beginning

sinking

fund

retire the bonds.

2213

Number 4234

158

Volume

THE

COMMERCIAL & FINANCIAL

CHRONICLE
ADVERTISEMENT

Public and Private Investment

And Private Investment

To Achieve

After the War

Economic

necessity of

The

Public Investment
Stability And Full Employment

Calls For Program Of

General Price Inflation Unless General
Demand Outruns Supply

Sees No

undertaking a

Over-All

constructive compensatory

of the

and

public investment designed to achieve
employment was stressed on Nov. 23 by
special economic adviser to the Board of Governors

Federal Reserve System.

of the National

Speaking before the 255th meeting
Conference^
Board at the First,

Industrial

—

address on "Public and

program

public

balance

in¬

100, 300,

wheel

our

econ¬

but can
and
enlarge pri¬

omy,

also

Alvin

fact that the subject was likewise
(the forum session on Nov. 23 of
the meeting in New York of the National Industrial Conference
Board) by Alvin H. Hansen. Mr. Terborgh, who is Research Director
of the Machinery and Allied Products Institute, undertook to state

ment

nities,
give us
ahead

hensive

I should like to

been used in

cannot

opportu¬

and
lies

levels of income

had such a program
the 1929 depression

small

duce a

that

tremendous decline in

in¬

employment"; citing
the $15,000,000,000 drop in private
capital outlays from 1929 to 1932
as inducing a decline in consumer
expenditures
of
$30,000,000,000
and the fall in national income of
$45,000,000,000.
With respect to inflation, Mr.
Hansen expressed the belief that
"unless the general over-all de¬
mand outruns supply, there will
be no general price inflation" in
the post-war period.

come

and

bility and full employment.
I shall consider first the transi¬
tion
run

period, and second the
aspects of the post-war

longprob¬

lems.

h a ve

ysis or rebut¬
George Terborgh
What I
wish to do ininstead is to discuss the basic doc¬
of

school

the 'mature economy'
set forth in the writings

in the camera

years

not

two

arisen,

ideologies that
emerged
from it. I refer especially to the

nomic

doctrines

omy"
friend

edged

come

synonyms

the

"mature

econ¬

school, of which my good
Dr. Hansen is the acknowl¬

It is a

American leader.

for products manu¬
indus¬

factured in their respective
tries. And, you
a

will frequently hear

housewife mention a well-known

trade

tric

name

when discussing elec¬

refrigerators—without actually

meaning that particular

ago

have

and

phonograph fields, there are
names which have virtually be¬

in the

age, are

In
our

make.

through common us¬

fast becoming general.

number of sections of
particularly in the
and west, the term Bourbon

quite

country,

south

has become almost synonymous

with

whiskey—-American whiskey. In the
far west, you

rarely hear the word,

whiskey. You hear two
Bourbon for American

words-

whiskey, and

as
tribute to the brilliance and ef¬ Scotch for foreign.
principal adherents." "Inci¬
fectiveness of his leadership that
On the eastern .seaboard, by the
dentally," he" noted, "these doc¬
it is impossible today to discuss
trines have nowhere been more
same token, the term Rye is used
the
role
of public investment,

of its

period can be
divided into: (1) the partial war
demobilization in the interval be¬
tween the defeat of Germany and
the defeat of Japan; (2) the crit¬
ical
war
demobilization period
after the defeat of Japan (6 to 12
months), and (3) the post-war
The

transition

deferred demand boom.
this

this question
for the
simple reason that it would not
have occurred to anyone to ask it.
Now it is the central issue, thanks
to the depression and to the eco¬

tal.

trines

responsible for common usage.

These names,

few

would

pared no anal¬

be doubted"

said

ment?"

Terborgh,

"and.

sake, in order to make good
deficiency of private invest¬

own

therefore pre¬

"a relatively
fall in investment will in¬

Hansen

to undertaken

mapped out
developmental
program of public investment de¬
signed to achieve economic sta-

that the
decline in private capital outlays
would have been much smaller.
Calling attention to the great
importance
of investment, Mr.
"it

Mr.

focus your atten¬

tion, therefore, on a single ques¬
tion:
"Will it be necessary after
the war to have more public in¬
vestment than we want for its

compensatory and

employment."

He said that

War," has so many ram¬
that it defies compre¬
discussion in 30 minutes.

is largely

tionary, and advertising

ifications

constructive and well

expanding economy with

high and rising
and

will be necessary

open

revitalize enterprise
in the generation that

and deflation)

Investment

is greatly respond

words entering our dic¬

new

For instance,

Private

and

"Public

After the

state-

sen's

Common usage

sible for

<?>•

in his remarks

Another

or even 500%.
that we shall

Synonyms

War,"

George Terborgh referred to the
dealt with on the same occasion

tions, inflation

vate invest¬

Hansen

view

CORP.,

YORK

NEW

Be Because

Private Investment After the

automat¬ ment." "I have
had
opvestment
can ically move smoothly into a high not
level of prosperity lasting for 10
p o r t unity to
provide
not
to 15 years. Finally, there is the see this state¬
only
a
com¬
ad¬
pensatory and view which I myself hold that (if ment in
stabilizing we are to escape turbulent.condi- vance," said
of

De¬

series.

SCHENLEY DISTILLERS

"A Scarecrow."

ous

This is number nine of a

Terborgh Anent Doctrines of "Mature Economy"
clares Supposed Dearth Of New Securities

the view that that he did not
Waldorf
As¬ though we may succeed in holding imply that his
toria Hotel in the -price line fairly successfully remarks
New
York during the war, we shall inevita¬ "should be
City, Mr. Han¬ bly experience, either in the im¬ con sidered a
mediate post-war or in the long- direct answer
sen contended
Dr.
Han¬
that "a vigor¬ run post-war, a price inflation of to
there

will be

Insufficiency of Private Investment After War Will Not
We Lack Technological Opportunity

developmental program of
economic stability and full
Alvin H. Hansen,

space,

article which we hope
of interest to our fellow Americans,'

there will appear an

After The War
A. H. Hansen

this

NOTE—From time to time, in

deferred

shall

demand

Following

problems.

Temporary

than in Dr.
before the post-war

Economic

National

Committee."

Terborgh "Dr.

According to Mr.
Hansen

and

his < disciples

appear

of private
investment as an abnormal and
post-war
transitory condition in defiance of

boom,

face the long-run

effectively presented
Hansen's
statement

regard a sufficiency

without

or otherwise,
debating the theories he

veloped- and
To

has de¬

disseminated.

theories and
the post-war pe¬
within the limited time avail¬
discuss

these

their bearing on

instead of Bourbon
onym

—

again

a syn¬

for American whiskey.

Surveys have proven
who asks for

that

a man

Bourbon in the west, or

Rye in the east, is not

necessarily

able this evening

conscious of the grains

which are

predominant ingredients in those
whiskies. He just mentions Bourbon,

riod

is so formidable
assignment that I have some

doubt

of its feasibility.

Dr. Jor¬

the laws of nature." Mr. Terborgh
dan has assured me nevertheless
transition period, is it^
or Rye, because of common usage of
added that "the decline of invest¬
that'he wants a debate oh funda¬
true that we shall inevitably ex¬
ment for expansion which char¬
those terms in their respective terri¬
mentals,
and
Dr.
Hansen
'and
I
perience a violent price inflation? acterizes the ; 'mature' economy
have agreed to proceed accord¬ tories.
Many have held that by reason of
thus
precipitates chronic over¬ ingly. I hasten to add that Senator
the huge holdings of cash and war
This writer has frequently heard
saving, and ushers in an era of O'Mahoney is in no way affected
savings bonds, together with the
secular stagnation and recurring
by this agreement, but will exer¬ people say in the east, I like that
accumulated deferred demand, the
crises fTom which
there: is m) cise the pregorative of his posi¬ XYZ
Rye, and in the west, I like
public will rush out and spend
escape except through the inter¬
tion to say anything he pleases.
that XYZ Bourbon. And yet that
their savings in one grand buying
vention of government. In short,
I do not imply that my remarks
spree,
giving us a tremendous the private economy has become
should
be. considered
a
direct particular blended whiskey has
post-war inflation. Such a buying a
cripple, and can survive only answer to Dr. Hansen's statement neither Bourbon nor Rye dominant
In

spree

the

would obviously sooner or

by reliance on the crutches of of this evening. I have not had flavor characteristics. It does have a
*
opportunity to see this statement flavor that appeals to the American
dismal pros¬ government support."
In looking at the evidence re¬ in
advance, and have therefore
pect is at all necessary or even
taste, because of skillful blending .of
futing the doctrines of the "mature prepared no analysis or rebuttal.
aged by price control and ration¬ likely, granted even a moderately
a number of whiskies which may,
What
I
wish
to
do
instead
is
to
economy,"
Mr.
Terborgh
pointed
ing.
These controls should be sensible program. To begin with,
out that "one melancholy refrain discuss the basic doctrines of the basically, be Rye or Bourbon, or both.
if
the
war
in
the
Pacific
should
removed as soon as supply catches
in
the writings of the 'mature "mature economy" school as set
If you have found a blended whis¬
up with demand."
He expresses continue for some time after the
economy' school is what they con¬ forth in the writings of its prin¬
the view that "the fear of a sus¬ defeat of Germany, a gradual de¬
key
that makes -your particular
adherents.
Incidentally,
tained
post-war
inflation has mobilization from war to peace is ceive to be a present dearth of cipal
taste buds happy, ask for it by name.
been
enormously
exaggerated." in prospect. Wartime controls in new industries of major impor¬ these doctrines have nowhere been
If you merely say, "Give me a Rye,'*
tance from an investment stand¬ more effectively presented than
Likewise, he says "the percentage this interval would facilitate a
of bonds available for spending gradual readjustment.
A part of point." Mr. Terborgh further ob¬ in Dr. Hansen's statement before or "Give me a Bourbon," your dis¬
served:
the Temporary National Economic
has been enormously exaggerated. the most pressing needs of peace¬
penser will take you literally be?
"Capital formation is a tree with Committee, of which the Chair¬ cause he always tries to give you
"Nor do I think it reasonable to time industry could be satisfied.
man
was the distinguished Senator
suppose," he states, "that the pub¬ Some new automobiles to meet a thousand roots. The great bulk
just what you ask for. If you ask
who shares this program.
lic will cash in these bonds at once the urgent needs of workers, for of its nourishment comes always
for blended whiskey— you'll get it!
Dr. Hansen and his disciples ap¬
and engage in a wild spending example, could be produced. Some from long-established industries,
.
The ne¬ pear to regard a sufficiency of
spree." According to Mr. Hansen raw materials could be released not from new ones.
And, apropos of blends, a friend of
"the high post-war boom, for in¬ for rebuilding inventories, some cessity for a spectacular 'new' in¬ private investment as an abnor¬
ours recently asked, when we were
equipment for civilian dustry for the support of private mal and transitory condition in
dustrial equipment is likely to needed
ease off rapidly
as after the last production could be supplied. All investment, if it ever existed, is defiance of the laws of nature. discussing this subject, "You know
The important Formerly youthful, vigorous, and the greatest blend of all?" He an¬
war.
Thus, after two, three or this would help to ease the final definitely past.
•
■' • thing is the total flow of techno¬ expansive, our economy has be¬ swered his own question. "It ia
four years the deferred demand transition problem.
boom is likely to end in a slump
The critical demobilization pe¬ logical development, not its con¬ come "mature," with symptoms of America—a blend of the cream of
chronic debility.
The frontier is
unless we do something about it." riod after the defeat of Japan will centration.
the crop of many nations."
He adds:
"With the expansion of indus¬ gone. Population growth is taper¬
indeed present difficult problems
And who can disagree with that?
"The answer is to push up con¬ of adjustment. Millions of people trial research technical progress ing off. Our technology, ever in¬
struction to a volume of 15 to 18 will be thrown on the labor mar¬ is not only accelerated but made creasing in complexity, gives less
MARK MERIT
billion dollars per annum. I do ket from the military forces, from more even in flow, thus eliminate and less room for revolutionary
of Schenley Distillers Corp.
not know of any other way to pre¬ the aircraft,
ship building and ing the gaps between major in¬ inventions comparable in impor¬
vent the impending slump follow¬ munitions industries. This demo¬ ventions which affected the con¬ tance with the railroad, electric
ing the re-stocking boom. Total bilization crisis will, however, be tinuity of investment opportunity power, or the automobile in ear¬
these savings accumulate inexor¬
lier times. The weakening of these
investment must be held at a high quickly followed by a large de¬ in an earlier day."
ably, unaffected by the attrition
level and construction will be the mand for inventories, for consum¬
The declaration was made by dynamic factors leaves the econ¬ of
investment opportunity, and
only field left for stimulation."
ers'
durables,
and for
certain Mr. Terborgh that, "if we have an omy with a dearth of opportunity
pile up as idle funds for which
for private investment, which is
Mr. Hansen's address follows in kinds of equipment;, there will be
insufficiency of private invest¬
there is no outlet in new physical
full:
increasingly confined to the mere
a huge net export surplus of food¬
ment after the war it will not be
capital, their accumulation setting
Public and private investment stuffs and other materials for re¬
because we lack technological op¬ replacement of existing capital as¬ in motion a downward spiral of
sets
after the war cannot be considered
upon
retirement. This re¬
lief and rehabilitation; we shall portunity. This is one respect in
income and production.
The de¬
apart from the pattern of the
which the situation will be almost placement, and such limited ex¬ cline of investment for expansion
transition from war to peace. In experience a general all-around
as
remains,
can
be
fabulously propitious.
The sup¬ pansion
It will be a
this transition period, what may re-stocking boom.
largely
financed
from
depre¬ which characterizes the "mature"
posed dearth of new industries is
ciation
accruals
and
the
retained
we reasonably
expect?
economy thus precipitates chronic
turbulent, spotty, uneven pros¬ a scarecrow."
earnings
of
business
enter¬ over-saving, and ushers in an era
Widely divergent views are cur- perity. There are likely to be imThe following is Mr. Terborgh's
prises, hence absorbs little or no
( Pni-ifinnorl
address in full:
rently held about the post-war
The
subject of the
evening, personal savings. Meanwhile,
prospect, both from the short-run I Portant
later collapse.

"Special
areas
of temporary
scarcity," he says, "can be man¬

I do not

think this

...

and

the

long-run

standpoints.

depressed regions and

(Continued on page 2218)

2214

THE COMMERCIAL *& FINANCIAL CHRONICLE

independent dealers in securities operating outside of the realm of
v,
■ v..
' ;
j
*.
'•:, 1
Frankly, both the SEC and the NASD are accomplishing very
little towards eliminating the unscrupulous, dishonest
dealer, and on
the other hand, are making it
increasingly difficult for an honest per¬

Organized Efforts To Upset NASD
(Continued from
business.

counter

This

page

is demonstrated

Thursday, Decembers, 1943

the law.

2207)

to remain in business.

son

by the efforts of the Curb

■

Browned Replies To

The ultimate result of such

course

little question as to its outcome.

and

to extend trading privileges to many unlisted issues.
I

the

NASD

ascertain

whether

management as now constituted.

and

better

dealers

smaller

representative

become

organized

What is needed
How

management.

the

bring this about, I am
frank to admit, I don't know.
Probably one of the greatest ser¬
vices you can perform is to offer a solution to this, problem.
P.S.—If you publish this letter, please do not use my name
as
I have already protested by letter directly to Mr. Riter,' Mr.
Fulton

and

•district

written

can

Theis.

Mr.

The

latter

the

representative from this
add that I have
Chicago "Journal of Commerce" stating that,
in my opinion, the series of articles by Mr. Ayers, which it recently
published, were unfair and not in accord with the facts.
the Board of

DEALER NO. 74

I might also

Governors.

letter to the

cial and Financial

Chronicle," dated Thursday, Nov. 18, 1943, and

actly

sincerely believe that

have summed

you

rule

could

Let's

with

surely

the

"free" United

bill

should

States

passed

SEC sponsored
unconstitutionality?
no

savor

the

equity

':v.

bill could

ponder

such

and

even

lawmakers

our

restrictions.
If

tainted

have

agencies,

(sip)

such

any

heading—to that condition where there
will be no securities or anything else of tangible or intangible
value deft to John Citizen.
If, by accident or otherwise, such a
it could be that the NASD

Governors

might .recognize that its membership is not entirely wrong in
present vociferous but
unheeded objects to be ruled "out
business."

its
of

".V

Surely Congress has spent time in considering bills less vitally
important to the abolishment or preservation of the freedom sup¬
posedly guaranteed to law-abiding and ethical business men under
Constitution

the

United

States.

DEALER

Especially

was

clearly expressed'their opinions of the NASD
in respect to "write ups" of transactions and
heartily concur in most
of these opinions.
so

Due to the fact that I
too

small

one man

office, I feel that I

are

opinion that the end is not yet here as it appears that the member¬
ship is constantly shrinking, which will automatically make for
increases

time

goes

commissions

on.

;

were

definitely of the opinion that membership in the NASD

very

is constantly becoming of less value to the
average member, moreover
I feel that comparatively few dealers have little
or no need for these

NASD rulings and I will predict that

sooner

will make the Association crumble under the

later these

weight of its

policies

own

short

sightedness.
I do

want this letter

published over my name for the same
reasons as expressed by those dealers whose
letters you have pub¬
lished.
However, I do want to register my feelings in these matters,
hoping that you will keep the crusade going. >
"
,

DEALER NO.

Inasmuch

NO.

the coin, the coin
became, to
corresponding extent, of token

value.

not

was

until

1844 that

pence per ounce.

The Bank of

,You are certainly to be congratulated for putting into
print the feelings and reactions of the host of securities dealers who
make

honest

career

members of the NASD

we are

in the

the

ing in 1942 the writer similarly pointed out the unfairness of such
discrimination in limiting the profit for individual initiative while
permitting units in other industries to make mark-ups, in their prod¬

England had little

difficulty

in
thus
pegging the
Once its policy was known,
it rarely had to
buy or sell any
very great amount of gold, since

price.

selling investment securities.
we are bitterly
disappointed
timidity shown by the organization In leading the fight against other nations
SEC's attempts at discrimination towards our
industry. At a meet¬ large
While

and

the

market

accepted the price

and

serious

effort

made to break it.

settled

was

even

The

price, thus
change for 90

pegged, did not
proportions. We, the dealers, who marked clearly
years,
when
the
United
States
a test are shown to have averaged profits of raised it to
$35 in 1934.
5%. But the SEC not being satisfied with this house cleaning is
asking
The price of gold, pegged in
for further concessions.
The results of the NASD's investigation is
1844, remained absolutely con¬
based on the successful trades but how about the trades we
ucts

fabulous

labeled

merchandise, by

failed

to complete because the customer checked
prices and got it
cheaper elsewhere despite the fact that the salesman or the house
spent a lot of time in digging up and presenting the information? It

takes

long time to build

being merely located on a
getting its business from the traffic that passes its location
is permitted mark-ups from 50% to
100%, on merchandise that is
blind and can't be checked by the consumer.
How many industries could be canvassed
today or any other day
and

tare

and show their houses to be in

Tt is

good order

the securities dealers?

known fact that many companies,
having their first taste of

;

stant,
that

notwithstanding

greatest
world has known

supervision through the OPA, have thrown up the
admitted that they are violating the laws and just can't
anything to avoid the situation. We have had almost ten years of

The

annual

production of gold
greatly from time to
gradually increasing from

time,

less than
to

2,000,000
25,000,000

over

make

publicity has thwarted several malodorous
SEC gestures which have found their
way to the bottom of the scrap
basket..;
'•
■
••

increasingly evident that those directing the affairs of the

NASD have been trying to crawl in bed with the
SEC.
been

openly expressed from time to time

fear complex that if
will crack down on us

the

don't

This thought
always met with

and

do this and

that they

(the SEC)

constant

fluctuations

any

impossible.

ratio could

:
You are, of course, to be
commended for carrying the lance for
the bulk of the country's investmest dealers in the various
injustices
which have been heaped upon
them;' or more correctly, directed at
them. The power of your

has

level

Pegging the price of silver and
continuing a pegged price of gold
price

DEALER NO. 76

in 1933,

last- year of the $20.67 price.
But the price, being
pegged, re¬

mained

supervision .and instead of being slapped on the back and
congratu¬
lated, we are to be subjected to further regulation.
Carry on the
fight, Mr. Editor!
:i"

in 1844

ounces
ounces

the

throughout.

It is

thereafter

varied very

■

were

South

sponge and

A'AA""'

the fact
gold fields the

the

discovered—California, Australia,
Africa, Alaska, Canada, etc.
busy thorough-

the customer's faith in the salesman and

the house yet the retail store

crease

either

changes

happen because of in¬

decrease

would

metal.

have

production

Gresham's

Law

opportunity

work.

Sakolski airily dismisses all

Dr.

thought of

international agree¬

ment
to
adopt bimetallism, as
equivalent to "an attempt to con¬

trol

weather

conditions

movement

the

and

waves

winds."
Great Britain alone was
completely.
A deplorable, that in a Nation which has been built by courage able to peg the price of gold. Cer¬
and daring and largely
Great
Britain
and
the
through speculative channels, to find a group tainly,
of men who have devoted entire careers to
States together can
the investment business, United
peg
herded now into .,an organization which
quivers and appeases. Now the price of silver, for the United
It is

it is the

not

...

entirely too small, but have always en¬
deavored to play safe with all my customers which I
scarcely ever
lose except by death.
my

bullion

England finally solved this dif¬
basis commensurate with that situation.
As far as ficulty
when, by Act of Parlia¬
profits are concerned, we see no reason for a ceiling, regardless of ment, the Bank of
England was
what that ceiling
may be.
This thought is prompted by our belief directed to stabilize the price of
that good business dictates
sound, sensible profits and, as said before, gold, which it did by buying all
the large majority of investment dealers are
good businessmen, who the gold that was offered, at a
realize that excess profits as a result of wide
spreads and large mark¬ fixed price
(equivalent in our
ups in time can do nothing but "kill the goose that lays the golden
money to $20.67 per ounce, de¬
egg."
"• •.
livered to a United States
mint),
We wish to express our sincere thanks for the
publicity you are and selling whatever gold was re¬
giving this situation and hope that it will prompt every investment quired at the same
price, plus the
dealer to use every effort to resist this
small
deadly type of regulation.
handling charge
of
3Vz
business

incidentally, I have been told repeatedly, by various wholesalers
that

sold

community in whicfi they live and who conduct themselves and their

almost

be of much

consequence in this controversy, however,
when I think of the recent heavy increase in the annual
dues of the
NASD I feel that I am getting very little in return and am of the

further

ex¬

governmental

/> i'

NO., 71

I interested in the various letters from the vari¬

dealers who have

ous

the situation

and

dealers

would at least know where

fail to be passed

it exists, that the large majority of over-the-qounter houses
operated by men of "ability and integrity who are a part of the
as

down

went
into hoarding and
disap¬
peared from circulation. When the
gold value fell below the value

beyond comment,

DEALER

governmental

en¬

Bravo!

Perhaps "The Chronicle," in its sincere. efforts to help the
membership lift, before it succumbs to, the ukase of the Gover¬
nors of the NASD, could have a real fighting Congressman—one who
possesses knowledge: of the NASD 5% rule—sponsor a "bill to limit
profits" on producers, wholesalers, retailers of any and all com¬
modities and merchandise, real estate brokers and subdividers and
let it include limitations on doctors' and attorneys' fees but specifi¬
cally to include members of the NASD.
A precedent
has been established by one of our so-called

sovereign exceeded its face
value, the coins were either melt¬

the "Commer¬

titled, "Need Does Not Exist for Forced Limitation of Profits on
Transactions in Securities," the sense and logic of your discussion are

DEALER NO. 70

democratic

with supply and de¬
When the bullion value of

the

With reference to your article which appeared in

does represent

the views of the
membership.
If it is found that it does not, then the Board of
Governors should "either rescind their edict or resign.
I might add, that with all due respect, that I doubt whether
Mr. Fulton is the proper man for his job,
He has always been
'associated with the bigger investment houses and hardly can have
the viewpoint of the smaller dealer.
To summarize, I believe that the root of the trouble with the
NASD lies in its

down

mand.

firmly convinced that the Board of Governors should
send out a questionnaire immediately to the entire membership of
•

Bim

(Continued from page 2207)

leaves

and

profits limitation plan, probably an appeasement to the bid
disclosure plan of the SEC. All of these rules and
reg¬

asked

ulations

which

have

come,

with

the

New

Deal

start

off with

some

phrase which would lead you to believe you are a criminal
headed for trial. Dr. Benjamin Anderson sounds a note of
courage when he says we can do without the
SEC; that where good
conduct and fair dealing are
lacking, a strong penalizing power

being

States has done it alone for

some,

When we have seen
"tripartite monetary agree¬
past.

years

the

ment". of 1936 adopted by a num¬
ber of leading countries, when we
read

.of

the

current

negotiations

representatives

among

na¬

practically all of our business is in municipal securi¬
ties which are exempt from SEC
supervision, we resigned from
NASD and withdraw our registration several
months ago.
We are, however, in hearty accord with
your view and feel that
the restrictions on dealer's profits is unfair
and further feel that if

should be

such

DEALER NO. 77'".
' ; ''A ■■
V
seeing figures sometime ago to the effect that of the obviously baseless. After all, what
is the international gold standard
people who trade the market, 4% do so
profitably, 4% break even
and the rest lose. The
figures were supposed to have been compiled itself but an implied agreement
by some insurance company*. My quarrel with the
among leading countries to buy
percentage was
that they were to liberal on the
and sell gold at a fixed price?
side of those who

is made that it would only be a short
time before regu¬
municipal dealers is also effected. We are definitely against

move

lation of

such

any

move

for any dealers.
DEALER

With

reference

Limitation

Profits

members.

NO.

editorial of Nov.
the NASD through

your

18,

the

subject of

degree issued to its

many
more

members of
from

members

year

this

to year just what value

in return

for

received

the

period of time, where a 5% profit does not
suffice considering the time and effort
required in particular cases
and extraordinary services rendered.
limitation
its

own

cases, over

Consequently,

profits will, in my opinion,

purpose.

over a

arbitrary

period of time defeat
.

small dealer who has been in business for
quite a nombe1
increasing burden to file the many reports
required by various State and Federal
agencies/and
a

of years, it is becoming an

trend

even.

continues, I'm afraid there

are

going to be

frankly, if this
large majority of

commentary

all of

am sure,

that

this

;

the

must

is appreciated by all of

fear

be.

reprisals

Your

valiant

tions

tary

stabilization,

the White

the

remember

There

many in and out of the securities business who
I thought that the solution to the
problem was study

now

dealer

,....

the

mone¬

when

long

period

Latin

Professor

with the solution. All one needs to
join
percentage of those who trade profitably is to have
his profits.
There is the result of the mental

publish

use

medium.

want to

join—not

member

has

member

even
ever

the

name

refused, to

makes,

terms

of the

problems.

NASD, never was. and don't intend
is changed.
Incidentally qo NASD

trade

member.

with
-

because

•

non-

coins

countries
are

paper

now

money

return

circulation, to

^fter

the

ually

increased

circulating

war.

wi'et

Europe

and

in the throes

inflation

to the

tallic
less

I do think that the dev¬

monetary unit, and there will be

astated

international bimet¬

metal

Asia which

not

mistakenly

concerned

was

allism solely with the

centuries.
I wonder if this intellectual
result was SEC
Here's the solution to all our
problems, social as well as
financial.
Let each one disclose what
he
am

Sakolski

that I

assumes

my paper

;

the NASD

inspired.

and

profit and break

were

me.

and increase the

plan for

in
Monetary Union
functioned in Europe, Dr. Sakolski's pessimism on this score is
which

us.

V:':;.-

trading without emotion.

effort

recall

Comes
the

contributions anonymous,

our

Association, have found myself

An arbitrary limitation on profits in the
investment business is.
in my opinion, an impossibility.
No two accounts are alike and there
many

sad

championship, I

and

financial outlay they are re¬
quired to make for the assessments levied each
year, and frankly, the
two have never seemed to balance out.

are

make

agreed with

I, like
wondering
individual

invoked.

use

hard

will
me¬

monev,

However, regard¬
metal

coins

act¬

cor^t'tute the bulk of

a na¬
thought that one answer to our problems was to put some, tion's circulating
medium, the res¬
^uts into our abdominal
cavity, and to develop the reasoning power toration of stable monetary con¬
f 1he 'organ that occupies our cranial
cavity. Carrying that thought ditions, requires that all countries
a
bit further, it seemed to me .to.
be logical to try a program of have adequate reserves of
r.I had

mone-

(Continued

page 2216)

(Continued

on page

2218)

Volume

THE

Number 4234

158

(Continued from page
and recur- ;
which there is no
escape except through the inter¬
vention of government, which must
stagnation

secular

prosperous than
with high rates of increase,
less

general

practice,of these writers to.ex¬
plain the vitality of private in¬
vestment in the past by refer¬
ence to some so-called "new" in¬

2213)

dustry

then

2215

CHRONICLE

COMMERCIAL & FINANCIAL

After The War

Public And Private Investment

in a phase of rapid

tomobile

industries,

satellite

and

plus the investment in highways
and in petroleum production and
distribution which can reasonably
be credited to the influence of the

the post-war era

with an unprece¬

dented accumulation of new ma¬

terials, new. techniques, and new

create

will

that

products,

hun¬

industries and revo¬

dreds of new

lutionize scores of old ones.

I can

period
growth. For the early decades of
the investment in all these cur¬ even see several industries that
themselves were the nineteenth century they cite
the next decade or two
rent and former leading indus¬ within
in earlier stages of their develop¬ turnpikes and canals; for the re¬
tries was less than 20%
of the may rival the much-touted bell¬
ment. Until they can supply some mainder of the century, railroads.
either expand public investment
wethers
of the past in the oppor¬
total
capital
formation of the
real substantiation of their lamen¬ For the early years of this cen¬
or tax out of existence the excess
country. This illustrates the gross tunities for investment they open
tury
it
was
the
electrical
indus¬
tations, the "maturity" economists
savings which are poisoning the
up. Aviation is one. Prefabricat¬
would do well to give us a rest tries; for the post-war period, the oversimplification and exaggera¬
economy.
In short, the private
tion inherent in the bellwether ing housing is another.
Each of
automobile.
others

ring crises from

has become a
survive only by

economy

and

can

This

tual

nical

Frontier

emphasis is

imposing concep¬

erable part of the
new capital
ginal propensity to consume, the
marginal
efficiency of capital, formation in this country during
the nineteenth century was inci¬
liquidity preference, the multi¬
dent to the conquest of the fron¬
plier, leverage, leakages, the ac¬
So what? Are we to infer,
celeration principle, and so on. tier.
The mathematicians follow hard with the mature economy theo¬
rists, that because the geograph¬
on the heels of the theorists with
their still more puzzling lingo of ical frontier has disappeared we
coefficients,
correlations,
func¬ confront a dearth of investment

icize

the

Although
doctrine

this

citizen to crit¬

mates

counter to

beliefs,

long-established

his

reliable esti¬
capital forma¬
tion in this 9cpuntry since 1879.
The
record sshows
no
evidence
that the passing of the frontier
reduced
investment
even
rela¬
tively. The first three decades of
this
century showed about the
same ratio of private capital for¬
mation to national income as the
last two decades of the preceding

fortunate in having

implications

may

the

layman is eventually constrained
to
accept what the experts tell
him. That the experts are divided
this

other questions he

dimly aware, so ably and
aggressively have the champions

disseminated

philosophy

this

their views in recent years.

While

bril¬
must
in justice add that they have en¬
joyed almost exclusive use of the

compliment them on the
liancy of their campaign, we
we

and propaganda
of the Federal Govern¬

educational

vast

resources

been

has

their success
sweeping that their

In any event

ment.

have

.views

ceptance

The effect on public

men.

frontier

opinion

the country
its own power

that

has come to distrust

economically, or even

advance

survive, without continuous

and support from
is

vanishing

half century after

the

Dearth
One

New

Industries

melancholy refrain in the

writings of the "mature
school
be

what they

present dearth of new

dustries of major
an

economy"

conceive to

in¬

importance from

investment standpoint. It

is the

periods with which they are so
glibly identified, hut it is easy to
exaggerate their importance. Cap¬
ital formation is a tree with a
thousand roots.
The great bulk
of its nourishment comes always

industry theory.
The

you,

necessity for a spectacular

I am sure, can name

becomes
and

complex.

diffused

elaborated
Increasing Importance of Depre¬
becomes

highly

Progress

ciation Reserves

innova¬

thousands

This is perhaps the most ex¬
consequence*individ¬
not from new ones.
Even in the ually but with cumulative effects traordinary item in the catalog
of
sorrows
that constitutes the
periods of their greatest relative just as dynamic, and just as stim¬
contribution,
the railroads, the ulative of investment, as the sin¬ theory of the "mature economy."
Let me introduce it by quoting
electricals, or the automobile com¬ gle revolutionary invention in a
society.
The important from Dr. Hansen's testimony be¬
posed only a minor fraction of simple
fore the Temporary National Eco¬
the total current investment, and thing is the total flow of techno¬
nomic Committee:
were
dwarfed by the single in¬ logical development, not its con¬

long-established

from

industries,

dustry of building construction,
one of the most ancient of all out¬

tions of less

"When

centration.

society

has

find

This announcement is not an

unpalatable and dis¬

the

expansion

offer to sell or a

The offering

solicitation of an offer to buy these

securities.

is made only by the Prospectus.

However, when we are
an
economic system
which
the
country has

tressing.

that

told
under

;:.

and prospered for 300 years
suddenly contracted in these

$25,000,000

grown
has

days an incurable disease
and must hereafter subsist on the

later

extraordinary

stimulant

ernment

investment,

right

every

doctors

nosis
Let

who

assume

gov¬

Power and

have

demand that the
this diag¬
the burden of proof.

advance

look at

the evidence.

Light Company

Bonds, Series A, 31/8%

First Mortgage

Declining Rate of Population

Due November 1,1973

Dated November

Growth

possible to present a theo¬
retical argument that a reduction
in the rate of population growth
tends to diminish the opportunity

1, 1943

It is

■Price 99J/2%

and accrued interest

private capital investment. It
possible to argue also that it
tends to reduce the volume of say¬

for

ings that have to be absorbed
such
investment, hence that

in
it
The Prospectus may

presents no problem. Without us¬
ing the limited time at my dis¬

be obtained in any State in

which this announcement is circulated from only
lawfully offer these securities in such State.

such of the undersigned

and other dealers as may

posal to review these contentions,
merely point out that there is
no
real historical evidence that

the

tapering of population

HALSEY, STUART 4

growth

economic stagnation. The
relative increase in population in
this
country began to fall off
shortly after the middle of the
last century, and had been re¬
duced by more than half before
1929.
Do
we
find evidence of
increasing economic stagnation as
this decline proceeded?
On the
contrary, the first three decades
of the twentieth century showed
a
more
dynamic and sustained

CO. Inc.

than the last three
decades of the nineteenth. More¬
over,
if we look
outside the
United States we find no cred¬
ible evidence that countries near
their population peak have been
prosperity

•!

brings

A. C. ALLYN AND

BLAIR 4 CO.,

COMPANY

INC.

p •

-di1

LAZARD FREftES
.

& CO.

- \ > .

incorporated

PHELPS, FENN 4. CO.

OTIS &. CO.

WERTHEIM 4 CO.

(incorporated)

BEAR, STEARNS & CO.

HARVEY FISK 4 SONS,

December 2,

1943

accumu¬

of indus¬ lated a vast amount of capital
trial research technical progress is goods, it is evident that the mere
lets for capital.
The
railroads
expanded their not only accelerated but made expenditure of depreciation al¬
lowances provides wide scope for
investment after 1900, when they more even in flow, thus eliminat¬
continuous improvement of plant
were
supposed to have yielded ing the gaps between major in¬
The larger the
ventions which affected the conti¬ and equipment.
leadership to the electrical indus¬
amount of capital equipment, the
tries, more than they had done nuity of investment opportunity
in an earlier day. When we recall larger will
be the depreciation,
prior to that date. The electrical
expenditures for industrial depletion, and obsolescence allow¬
industries in turn increased their that
ances
which are available each
research
are now three times 1929
investment more during the al¬
and twelve times 1920, we must year
for capital outlays.
Fre¬
leged leadership of the automobile
than during their entire previous acknowledge that we have a new quently large portions of these
are
available
not
and potent engine for creating in¬ allowances
history.- But this is not all. More
vestment opportunity on a whole¬ merely for renewals and replace¬
money was invested in railroads
sale
basis, the implications of ments but even for new and addi¬
during the era tagged "electrical"
tional equipment.
The expendi¬
than in the electrical industries which the Jeremiahs of the ma¬
ture
economy
have
failed to tures from depreciation and de¬
themselves, while more was in¬
pletion allowances may often have
vested in electrical lines during grasp.
This already accelerating pace no relation to any specific wornthe era tagged "automotive" than
out machines. Newly built plant
in the automobile industry. More¬ of technogocal advance has been
and equipment will not need to
stepped up tremendously by the
over, the investment in railroads
be replaced for many years and
and electricals together during the impact of the war, which has in
sometimes even decades, yet the
many
cases
telescoped
into
a
few
"automotive" era (the decade of
annual depreciation allowance on
the Twenties) exceeded by a wide years what would otherwise be
(Continued on page 2216)
the progress of decades. We face
margin the investment in the au¬
With

aid
Government.

deny the truth—
truth—merely because

candi¬

dates of his own.

If we have an insufficiency of
support of
private investment, if it ever ex¬ private investment after the war
isted, is definitely past. In a prim¬ it will not be because we lack
itive economy a single invention technological opportunity. This is
like the steam engine can have one respect in which the situa¬
a
revolutionary impact, but the tion will be almost fabulously pro¬
chance for
such sensational ef¬ pitious. The supposed dearth of
fects diminishes as the technology new industries is a scarecrow.

"new" industry for the

futile to

if it is the
we

support a gloomy view
of the. future of private invest¬
ment is to rattle dry bones.

event

and insidious* It
small measure to this

revelation

new

To invoke the

product.

has been subtle
is due in no

and if anything a higher rate
growth in the real national

business

among

private

one,

widespread ac¬

won

even

is only

ago.

passing created an investment
vacuum,
surely we would have
heard about it long since. We are

its

refute.

vanished fifty years

tier

beyond the abil¬

ity of the ordinary

The western fron¬

opportunity?

tions, regressions, and parameters.
All this creates an impression of

investment

is ra¬

apparatus and a special tech¬
jargon. We read of the mar¬

esoteric wisdom

interpretation of economic

history
reminds me of one
Nietzche's aphorisms: "The man

is
laid on the
opportunities opened a thinker; that is to say, he makes
up by the development
of new things simpler than they are." No
one
will deny that these indus¬
territories such as our own West.
tries stimulated investment in the
No one will deny that a consid¬

tionalized by an

Passing of the
Great

support.
This defeatist philosophy

For this same

automobile.

than they

this theme.

cripple,

reliance
government

crutches

the

even

INC.

BURR 4

COMPANY, INC.

GREGORY 4 SON
incorporated

BAKER, WEEKS 4
HIRSCH,

HARDEN

LILIENTHAL 4 CO.

2216

THE COMMERCIAL & FINANCIAL CHRONICLE

(Continued from page 2215)
.such equipment will be available

year

for expansion.

year

"Obviously,

here by assuming
in the

•

ital

society with large

any

reveals

statement

This

false

alarm.

Declining

of the

they are used up by the

that

there

will

depression to explain
unparalleled calamity.
ill

that

resembled
a

his

than

severe

that he cannot regain

assume

health
time

and

future

again.
If

panies and other industries have

why did
time

always had companies,
most prosperous

our

pe¬

pneu¬

may

have

never

not

The

before?

occa¬

him,

anything

less

much

commensurate with the

gravity of
The doctoring was. in¬

the attack.

classic

the

into

v-:- :;' r
continue the figure,
he get pneumonia this

and

with

riods, that have grown almost en¬
tirely from internal sources, Ford
-being

turn

permit an adequate
discussion of this question, and I
shall* simply indicate my belief
that the illness
did not signify
anything
fundamentally ' wrong

when they are expanding too fast
for their available internal funds.
have

cold

sion does not

Enterprises absorb outside funds

even

that

decade

time, under

bor¬

reprieve from

its predestined fate. Time does not

permit

analysis of the factors

that

are

this

sword

said

have' suspended

Democles

for

of natural

era

opportunity
ment

will

future.
It

private

://.,//./■!/'/'

the

always easy, in retrospect,
to identify the principal elements
in the capital formation of
perous

pros¬

period, and always possible

point out that if they had not
been
present there might have
been

that

prosperity.

this

factors

to/ Each

That

enumeration

the

twenties

all

special

amounts

wave

prosperity has
its own combination o! elements,
differing sometimes sharply from
the preceding one.
For this rea¬
son it is absurd to
predict a dearth
of investment opportunity in the
future merely because we cannot
envisage a repetition of the pat¬
tern

the

last

This

boom,

sort

forecasting has been indulged

intervals for

with

results

hundred

years,

that

have
always
proved laughable. The exponents
of the-"mature economy" are the

example.
We
others, the Amer¬ expert, treatment Was tardy and -modern
exemplars of this pro¬
and
Telegraph inadequate,
complications
were
phetic tradition.
Company for instance, that have allowed to develop,
and
what
resorted more or less continuously might have been simply an attack
Post-War Investment
to the capital market. Still others of
grippe went into pneumonia.,
I come now to the goal of this
have absorbed outside funds in a I am sure that the seizure was
discussion, public and private in¬
sporadic and highly irregular man¬ not due to the four horsemen of
vestment after the war. One con¬
ner.
This pattern has not proved the "mature economy."
clusion is obvious: if private in¬
in the past incompatible with the
Declining population growth? vestment, together with normal
absorption by business enterprises
Changes in population growth public investment, fails to support
collectively of a sufficient volume rates are
glacial in movement, a satisfactory level of production
of personal savings. Has anything
a
statistician's dream of orderly and employment it will not be
changed recently to convert the gradualism.
Why should a trend because the economy has become
internal funds of business into a
that had proceeded harmlessly for "mature."
It will not be because
menace?
\ • three-quarters-of a
century sud¬ of population factors, or for lack
It is sometimes argued that the
denly turn malignant in 1929? of a dynamic technology., Noth¬
systematic accrual of depreciation The
vanishing frontier? A tired ing in the purely economic or
allowances by business enterprises
ghost, exhumed from the grave of technical situation indicates that
which has become almost univer¬
yesteryear/ The death of new in¬ private investment will have' to
sal: since the enactment of thedustries?
Why was the supposed be propped up byr; public invest¬
income tax, has augmented their
dearth suddenly manifest in 1929, ment not desired for its own sake.
internal funds relative to business
without warning, on the heels of a
Indeed, the situation is so fav¬
capital formation, and has there¬
vigorous investment boom? Surely orable for a boom after the~ in¬
fore diminished the share financed
the rich and varied technological evitable
transition
period
that
from personal savings. Before the
progress of the twenties did not
have always had
ican
Telephone

financial

success

was a

lowances
and

were

highly

sometimes

variable

in amount,
nonexistent, but

even

remember

must

frequently sporadic

that

the

in¬

ternal funds of industry include
not only these allowances but also
retained

back
was

income.

plowing
in this period
I know of no

earnings

very

credible

The

heavy.

evidence that

since

1913

industry as a whole has financed
any larger fraction of its capital
.formation

from

internal

funds

than it did under comparable con¬
^

ditions before.
Dr.
ural

Hansen
increase

refers
in

ciation accruals
national

ital
that

the

nat¬

business, depre¬

expand the

stock

goods'.
these

many

of
a

depreciation reserves?

loss to

see

do with the

these

anything

factors

fail

explain
collapse of 1929-32, they fail
halting and
half-way recovery that followed.
Why did we stand in 1939, seven
years after the turning point of
the

also to account for the

ital investment?

There is

rea¬

to think so, unless we assume
that the "mature economy" is here.
son

Certainly

cannot

prove

it is

business

mendous

deferred

tre¬

demand

for

most

business to trade as an indi¬
of the NASD'ers—who is a member of
the

one

ex¬

mocking fruits?
Was it Our capacity in
of
declining population frustrate and inhibit business
growth? Our labor force had ex¬ pansion obviously called for
panded by almost

6,000,000 since

1929, the number of families

5,000,000,

increases
it

dearth

inven¬

tions?

funds of

business enter¬

economic and technical factors has

DEALER NO. 78

entirely with the reasoning in your article
and, in
addition, we feel that the policy discussed has a further
shortcoming,
in that it totally disregards the
value of the service rendered
by a
dealer; in other words, whether or not a security is
agree

presented after
the expense of research and professional
study, all of which has quite
a bearing on the value of the
services provided... A doctor's
charges
are based on his
ability as a result of

expensive study, whereas

prove

DEALER NO. 79

;

I refer you to a letter from
dealer No. 64 in the
issue, paragraph 5.
'■
From reading the

article, I

make

can

A sound

public investment pol¬
icy for post-war should be based
on
the premise that private in¬

proper

can

load.

again

from

his sale price
locally have interpreted it, and
they claim it's
national, it is 5% above your cost, which makes a few cents
difference
on a
low-priced transaction, but it amounts to
something on a highThe way the NASD

priced transaction.

We tried to tell them

we never heard of
anyone
showed them that, for
example,
nWe j0ugh* ^ block of bonds from a corporation at par, and they
allowed us a 5%
commission, we would buy the bonds
actually at 95
and not 95/4.
We had quite a little
discussion on this item, as all
dealers have always
figured they could make 5% on the actual sales
price and not 5% from their actual
cost.
While I don't see where

doing business

they

this

correspondence, do not quote me or the town
they will certainly know where the whole
thing came from.
DEALER NO. 80

we;arf. becoming

more and more disgusted with
This organization has
innumerable possibilities for con¬
structively
assisto^
profession but their efforts have been de¬
voted, for The most part, to the
promulgation of restrictive rulings,
+
°^riirm sta!}ds .ready to make an initial contribution of $50
towards the
the NASD.

and

organization of an association which
will truly
represent
the best interests of
the. unlisted security dealer, We
otber readers who are in
a mood similar
to

defend

ours

,1. :.y0u ^ bhey wish to join their contributions with ours. If a
5+en^nT er respond our names can be released to a responsible
tn
-"Si ltiien put in motion Plans for an organization
to n'orr
qualify under the
Maloney Act.-

r^uest that
an

until you have
obtained

name

DEALER NO. 81.

carry

This does not

s?ized by we, who are members
as a stepping stone to make our "last ditch
elimination of the SEC itself in this nation.
You

5' and us.ed

and force

may quote me.
I have been in
business
Portland and 22 years in
Chicago.

for

Portland, Ore., Nov. 17, 1943.
/.,///y"

HEALER NO. 82

years—18 years in

F. B. ANDREWS. '

i'-

The SEC and the NASD are
dominated by IBA minded men in
the business and have no idea of
the business as it is carried on
by
the small dealer.
I am
rendering a service to a class of customers
who are not the sophisticated class.
Most of them

buy for investment
and income and are not bothered about
the price or what the profit
is.. This business has been built by years of work and
acquaintance
with my customers. I have established
myself locally and am not
thought of as our trade association would lead one to believe after
reading
I

of their outbursts.

some

not

strong enough to incur the wrath of the SEC or the
NASD and therefore request that you keep
my name anonymous.

activity.

Appropriate timing
substantially
to

contribute

stabilization

that

can

itself,

the

production (and
It does mean, how¬

employment.
we

should not seek

permanent expansion in the role
pose

investment for the pur¬

supporting

should

the

economy.

uneqqivocally the demonology of the "ma¬
ture economy," with all the in¬
renounce

cantations and exorcisms appurte¬
nant thereto.

But

this

though

'■

act

essential,

its

mean

sions

which

tervals

least

revolution

trial

'■

renunciation,
not eno'ugh.

afflicated
economy

since
are

coming intolerable
must

the

at in¬
indus¬

rapidly' 'be¬

politically^ and

substantially alleviated
if the system is to survive. ;The

disregard fluctuations

economy

private

have

private enterprise

was

our

Ihn S onJ.IOn fould J5e

and

battle

gitimate public investment should

third of the total for the twen¬

you withhold publication of

indication of others' sentiments.

such funds in the thirties
a

actually laid

that the timing of useful and le¬

only

basis, and

down this law, nevertheless the local NASD
advised us that that is the
strict interpretation of the
rule. However,
I have yet to see the
ruling in print.
As in my previous

prises had excluded personal sav¬
ings from investment? The total of
was

Thursday, Nov. 25

he believes that a retail house
to his client. That is incorrect.

assume

genius, and may If we have 'eyes to see we must
equal to the occa- recognize that the severe depres¬
,,

vestment'

druggist simply fills the doctor's prescription.

amounted to pure

only slightly" again
previous dec¬ sion.

group

■

of public

the

for

the part of the Securities

■

new method of
joining the ranks of the financillay independent. Those who would like to have
my account please
get in line, on the left.
GIMME A NUMBER.

ever,

knowing

considering liquidating

makings of

because

Tantalus

Why waste

categories of durable goods,
very heavy volume of ex¬
ports—-these are potentially the
and

me!

liquid

enterprises,

play them well.
recent years to

internal

opportunities for further cap¬

in the cards if

prosperity

the

that

accumulation

funds in the hands of individuals

elusive

they will be larger in relation to

mean

wor¬

depression, • with
10,000,000
unemployed, still reaching for an

the

ade.- Was

amount, does this

dynamic movement.
I do not imply that we will neces¬
sarily and inevitably have such a
movement, but simply that it is

More patents were issued
the thirties than in the twen¬
ties. Was it because the increased

lute

dented

and

case.

accruals

and will continue to grow in abso¬

that this had

below those of the

grown

are

abruptly reach a stalemate at that ried about how to control it than
point, The increasing importance about a depression. An unprece¬

of productive "cap¬
What of it?
Granted

have

economists

■

First World War depreciation al¬

profit disclosure

invest¬

inadequate

obtained by

judgment they

prosperity/or that

for
be

be
,

naive

can

decade, but in

do not support the inference that
the twenties represented the last

full

every
in the

may

been tremendous.

will

that

contracts

monia.

vigor,

lived

How

result

profit.
/
*
■
deep in the second decade in the securities business.
My
education was entirely in the field of economics and
finance. Until
the present, I did not know that all that was
needed to achieve
I

they

They conclude that

desired

dealer's

that discovered the

We must not

cold.

the

vidual with

maturity?

of,finance.

mental effort when the

ment to

rowed

strong man who had never
life had anything worse

(Continued from page 2214)

field

been

defy the slow doom inherent

attack of pneumonia

the

Dealer.

its

depression, namely that it

prosperity but not as to
depression. The vigorous ac¬
tivity of the twenties has always

assume, enjoyed one of the best
decades in its history. Why did it

lit

of the

develops. The expansion of
one enterprise from internal funds
may
stimulate
expansion
else.where from external funds, and
thus provide indirectly the outlet
for personal savings that it fails
to
provide directly.
The Ford
Motor Company absorbed no per¬
sonal savings after the first few
thousands of dollars, but the out¬
lets which its development and
.activity opened up in other com¬
as

Organized Efforts To Upset NASD

education

to the

the unfavorable trends which

the

during

deny,

Twenties

something of an embarrass¬
them, and they have been
impelled to find special reasons
why the economy, in the face of

the thirties none can
is undeniable that this
out of the picture, to stagnate in illness was the gravest and most
inactivity. Nothing could be more prolonged in its history. To the
unrealistic.
There is no fixed or prophets of the "mature econ¬
predestined
volume
of invest¬ omy" it represented the first sud¬
ment opportunity to be divided up den onset of a chronic malady
between
the
internal funds
of destined to leave the system with
business
organizations and the a permanent functional deficiency
disposable savings of individuals. to be made "good by continuous
Investment is a dynamic and cu¬ injections of government invest¬
mulative
process
which creates ment, like the insulin of a dia¬
opportunities for other investment betic. I have a different theory

personal

investment

the

for

savings. The latter are shouldered

Prosperous

the

That the American economy was

outlet left

great

expenditure of funds reserved by
business enterprises for deprecia¬
tion

frustration

depression, with the possible

Thirties

population

and

fear

the

The "mature economy" theory
explains neither the great depress
sion nor the
prosperity that pre¬
ceded
it, a fact that has been
tacitly admitted by its proponents

of the process
of capital formation and invest¬
ment. It implies that the invest¬
ment
opportunities available in allowances—these are the four
horsemen of this new apocalypse.
any given period are a fixed and
predetermined magnitude, and They are spectres, conjured from
the

rea¬

nations

growth,
the passing of the geographical
frontier, the dearth of new indus¬
tries, the increase in depreciation

curious conception

not for these

was

had the poorest recovery from

The

■

The Depression

that among the great

in¬

rather than one of its
As a generative factor it

causes.

very

from

economy,

tapping

equipment without
new savings."

financed

formation

No, it

sons

j exception of France.

ternal funds would presumably be
one of the
effects of the mature

depreciation and depletion allow¬
ances can modernize and improve
its capital equipment in produc¬
ing continuously new technics and
even at times expanding its plant
and

that it is. A rise
proportion of business cap¬

ties.

Thursday, December 2, 1943

admission that the collapse
not due to the

does nht

of 1929

maturity, of the
erase

the event

make its repetition any
It merely avoids

acceptable.

mistaken

diagnosis.

lem remains.. I

The

prob¬

convinced that

its solution cannot be achieved by
industry single-handed, but only
by the enlightened and friendly
collaboration of business,
labor,
and

government.

N. Y. Stock Exchange
Weekly Firm Changes
The New York Stock

has

announced

the

Exchange
following

weekly firm changes:
Donald

M. White, member of
Exchange, retired from part¬
nership in Hackney, Hopkinson &
Sutphen, New York City, effective
the

Nov. 24.
Mrs.

from
cere

Sincere

will

retire

special partnership in Sin¬
& Co., Chicago, on Dec. 1.
*

Charles

Tifft,

Exchange, died

member
on

Nov., 14.

the

Volume

To my mind the pur¬
diversified group of

inflation.

and

Inflation Prospects

stocks at

common

supply this
bination of advantages.
As

Dr.

common

(Continued from first page)
would

bad thing both

very

typical investor and for
typical business man; and

the

for
the

effort

its

period, if is clear that we
shall have a very large potential

Savings Bonds.
Wright raised

ary

existence

the

whether

tion

large
amount
of
Treasury securities

redeemable
Will not con¬

inflation

during a pe¬

tribute to

not consider

me,

there

aware,

all

account.

into

fear is somewhat contradictory,

did fare considerably better than
the

For

scribe

themselves

during

States Government has been able

$50,000,000,000 of new
during a single year of
"war, it will have no difficulty in
meeting whatever problems grow
put of the replacement of some
securities by others during any
raise

"inflation";

title

the

.der

The

well

authorities

for

eventuate

—

will

result

net

this context I
rise in living
levels which
the purchase of

inflation

•mean

that degree of

■costs

from

present

warrant

would

in¬
select.
•The investor that I have chiefly
in mind is an individual (or in¬
stitution)

the

otherwise

would

vestor

than

securities

■different

ordinary

under

who

have
all his
funds invested in bonds and lim¬
would

•conditions

fixedrvalue

ited-income

securi¬

ties..
How

cost

change in policy by such an in¬
What I have in mind is a

vestor?

50%

rise

present level.
If that
should happen, we would have an
overall
increase
of just
about
the

from

100%

figure
vance

1914

1939

the

World
If

1926.

the

equal

closely
after

average—a

ad¬

I from
investor ex¬

War

pects this or more to

happen he

/would want to rearrange his pro¬
gram so as to be able to count on
a higher income than he now re¬
ceives from bonds exclusively—
and also to increase the value of
his

principal in terms of depre¬

ciated dollars. We are thinking,
of course, of a plateau of higher

prices
continuing
for
several
.'years at least, and not of a mere
speculative upsurge followed by a
quick collapse.
Let us noW consider our first
question, namely, "What are
.arithmetical chances of
inflation

taking

the

high-level

place

over

period of years to come?" In my
;view, there are three necessary
conditions for such inflation. You

multiplication of
power;
secondly, a
relative shortage of goods; and
thirdly, an absence of determined
first,
purchasing

need,

•efforts towards

governmental con¬

the

That

continued.

that

count

one

intangible

depres¬

even

witnessed

kind

the

wants

The third equal possi¬

bility is that an advance in prices,

in buy¬

elements

of
our

cash
total

higher cost of living for

of the probabili¬

chances

are

substantial
crease

inflation

correct,

the

maintained

cost

the

against a

two to one

and

that

report
reached

item

living.

other markets, potential buyers
have been deterred from effect¬

ing their normal operations. by
recurrent peace rumors.
as

terest in the high grade

invest¬

security

gener¬

ment

many

As soon

uncertainty is removed,
should
be
renewed in¬

this

there

class

ally.

Montreal

the

U. S. Trust Co. Joins

City

Committee has at last

N. Y. Clearing

debt

House
the

admission

The

agreement with regard

situations.

United

New York City,
to membership in the New York
Clearing House Association was
announced on Nov. 29.
The deci¬

States Trust Co.,

indirect claims upon
the wealth of this country.
Com¬
mon stock ownership, if properly
assumed and administered, repre¬
sents a relatively tangible inter¬

Mont¬
real, as in the post-war period
it has possibly greater prospects

Even

Alberta has if any¬

thing more at stake than

development than any other

Canadian province.

During the past week, the mar¬
failed once more to exhibit

ket

the long expected renewal of ac¬
philosophical sense it would
tivity! However, large blocks of
wise for the investor to
various City of Toronto issues, and
put his affairs in such shape so
also
a
considerable amount of

appear

that he owns' both direct and in¬

number of years.

ties

repercussions.

welcome

Another

at best

Cash and bonds represent

in the

of
vast inflation

which will continue and maintain

If my division

which,

ing and unexpected

economy.

goods, will set off a
a

matters,

market

whole, there are a few signs
of increased activity but, as in

cases, are of a petty nature, but
which sometimes have far reach¬

and bond

est in the national wealth.

itself in

With regard to the

reduction

caused by the relative shortage

these

actual

yield
than
Assuming

will be followed shortly by a cor¬

these

its

Foreign Exchange total.

In the meantime,

bonds.

multiplication

rective recession

working arrangement is evolved.
the U. S. share¬
holders
of International
Nickel

reorganization plan, to
be submitted to the City Council.
from The rate of interest involved is

possibility.
A second is
that we may have quite a specu¬
lative upswing
in prices, which
33 % %

sion

govern¬

reference

—•

controls

governmental
be

Provincial

little

value, as the volume of transac¬
tions in the free market represents
less than 1% of the U. S. Canadian

he said to be 3%% and the plan pro¬
in vides for repayment of the whole sion to join the Clearing House is
overall dividends Will'occur under of the debt by instalments over a understood to have been influ¬
enced by the increasing volume of
inflation
which
is
certainly period of. 35 years.
the company's banking business
plausible—he is protected from
As previously mentioned, both
and by the numerous operating
the start against a 50% increase
in the case of the City of Mont¬
advantages
which the Clearing
in his living costs. ,
real and the Province of Al¬
House provides.
As a further reason for diver¬
berta, the nearer we approach
The
announcement further
sification of investments between
the end of the war, the more
stated:
bonds and stocks, there is the un¬
urgent it becomes to reach a
"The United States Trust Com¬
balanced state growing out of the
satisfactory settlement of these
could

in¬

against our tangible,
productive facilities.

direct claims

There is

like to

add

final
to

reason

justify

I would

longer

term

Brunswicks

Scotias, New

Nova
and

Manitobas

established in 1853 with
which was
$2,000,000. Dur¬
ing its 90 years of operation the
company has accumulated a sur¬
plus of $26,000,000 and undivided
profits of $2,196,941. As of Sept.
30 the company reported total re¬
sources
of $155,595,111 and total
deposits of $123,321,090. Dividends
to stockholders have been paid
regularly since organization with
total disbursements over this pe¬

pany was
a

capital of $1,000,000

later increased to

"The

is headed by
Pell, President, who
Director of Great North¬

company

changed hands. These transactions
were
the largest since the com¬

Williamson

of the Fifth Victory
Loan drive and indicate that one

ern

recom¬

mencement

mendation of stock investment as

$67,000,000.

riod in excess of

is also a

Paper

Insurance

Co.,

Atlantic Mutual

Co., and the

Greenwich

the mathemathical part of the investor's program— of the principal causes of the mar¬ Savings Bank, New York City."
is
that
sound
common
odds
are
against our having a which
ket apathy is the lack of supply in
The admission of the United
high-level inflation over the next stocks, bought at sound prices, are any interesting volume.
States Trust Co. brings the num¬
five to seven years.
always good investments.
They
Apart from this activity, there ber of member banks of the Clear¬
are
good investments not only
Coming now to the second por¬
was little to record
in other sec¬ ing House to 21. In October, J. P.
when
you are afraid of inflation,
tion of my subject, I shall state a
tions of the market.
Direct Do¬ Morgan & Co., Inc., was admitted
but also when you do not have
conclusion in apparent contradic¬
membership—the first new
minions were mixed and in most to
inflation particularly in mind.
I
tion to the first.
For even though
cases quoted slightly lower.
Na¬ member bank since 1931; this was
think
the underlying stability of
inflation may not be probable I
tionals were
dormant and vir¬ reported in our issue of Nov. 4,
stock values is shown in an as¬
feel
that
the
prudent investor
tually unchanged. There was little page 1800.
will take the possibility of infla¬ tonishing degree by the market's turnover in Ontarios and Quebecs
behavior in the last three years—
tion into account and adjust his
but the undertone was still firm.
a time which has offered
an un¬
investment
policy
accordingly.
Scattered demands for British CoWe specialize in
challenge to our na¬
For that view there are a number paralleled
lumbias.
Nova
Scotias,
New
tional life and institutions.
of reasons.
Brunswicks and Manitobas caused
Most
of
you
may
be dimly little variations in the price level,
It seems to me that it is always

other

words,

desirable

not

risky decision
a

course

risk.

have

that
is

not

investor

make

nation

that

you

avoids

can

there

tinue

hold

would

flat

course

follow
for the

determi¬

will be

100%

substantial

necessary

flation and hence that he

folio.

make

in¬

can con¬

bond port¬

logical

which will pro¬

well know, the first two vide some protection if inflation
are now present.
But comes and at the same time need
third condition — absence of not involve loss should we escape

As you

conditions
•

will

the

Executive

standard

period, either be¬
cause the unemployment problem
will make
for deflation
or
be¬
cause

who

investor

higher

50%

in the

even

representa¬

ments will be called in as soon as

ing sound common stocks is that
the investor obtains from them a

reconversion

to follow

trol.

all,

each

One obvious advantage

will have no seri¬

inflation

ous

1920-1921.

great an advance in the
living would warrant a

maintained

tives

inflation.

will
the

general.
That may well sound
like a fairly coherent and well- tionary or at least moderately de¬
connected program for an address, flationary. \
My own opinion comes down to
.but I am afraid that my answers
this:
It seems to me that the
will not be merely as straight¬
divide
themselves
forward
and
consistent as the probabilities
rather evenly in three directions.
questions themselves.
One is that

has

It is understood that

play it safe both ways and be pre¬
pared either for inflation or no

infla¬

highly

the

for

op¬

as
to what
that is, whether

fashion

posed

will be avoided.

They are
definitely less suited than stocks

express

diametrically

themselves

laws

between the

of protection.

avenues

there

yet,

and

known;

room

against it, assuming we
.shall have it; and fourth, to con¬
sider inflation safeguards with re¬

with

connected

the prompt

the Dominion.
Conversations are now being held
Department of External Affairs and the State Depart¬
ment, with the object of negotiating an agreement whereby double
taxation in respect of death duties^
——-—

Duty

have recently received a circular
obligations.
At present relative letter which
explains how Cana¬
yields these are clearly preferable' dian inheritance duties can easily
to high-grade corporate securities.
be avoided. Not only should such
As alternatives to buying com¬
action allay the fears of share¬
mon
stocks the investor has the
holders in this country of Can¬
choice of commodities, real estate,
adian companies, but it is also
jewels or works of art. There are indicative of the proper concern
special
problems
and
hazards of the Dominion Government in

period we have in
mind is quite short, certainly not
more
than two years; the facts
that will confront us are pretty

himself

portion

congratulated

they have given to the question of United States
liability for inheritance taxes under the Succession

which

shareholders'

invested in U. S. Government

illustration

striking

stock

the

portfolio.
In my opinion practically all
the bond component should best

unscientific nature of eco¬

nomics.

sec¬

programs

attention

his total

sion and deflation.
Here

to follow that program
normally put somewhere
25%
and 50%
of his

into

funds

this there is the other
possibility that with the shutting
down of war plants and conse¬
quent
unemployment we
may
have a relative business depres¬

of the

By BRUCE WILLIAMS
The Canadian authorities are to be

between

Against

ondly, to consider whether or not
we shall have it; thirdly, to indi¬
cate how an investor can guard

lation to investment

would

in -the price of commodi¬
ties. and ins the cost
of living.

'period after the war.
Of that I
am absolutely certain.
Now, with respect to the pro¬
gram of my address, I have four
things in mind. First, to tell you
iwhat I am going to talk about un-

categories is

in the bank or in the
of bonds only.
An investor

wishing

upsurge

money

stock

between

money

form

purchasing power and a continued
shortage of goods.
If that is* so,
we may well have a
very sharp

United

the

that

insist

would

influation

funds

logical than the holding

far more

their

and

bond

the

period

sub¬
view

reason

against

division

of de¬ gent schools of thought on that
pression bond redemptions are subject. One emphasizes the pos¬
more
likely to. counteract defla¬ sibility of a sudden withdrawal of
tion than to cause an active infla¬ governmental controls at a time
when there will be very
large
tion. But, more fundamentally, I
because

conventional

that

the

that for those who wish to guard

are

you

Toronto & Montreal

Canadian Securities

who held only bonds or

man

cash.

two very diver¬

are

New York 5

Wires to

selected particularly good stocks)

full civilian
production is restored.
There
remains
the
relatively
short reconversion period to take

depression.
It seems to
in the first place, that such

Direct Private

necessarily the shrewd buyer who

tion will begin after

riod

14 Wall Street,

ly that in the European inflations
diversified stockholder (not

met; and hence I do
that an active infla¬

will not be

the ques¬

Prof.

Incorporated

quite clear¬

the

supply of civilian goods.
There¬
fore, the second condition, of a
relative scarcity of merchandise,

inflationary money into
the'form of much less inflation¬

Wood, Gundy & Co.

But his fig¬

disaster.

do seem to show

ures

version

Department

such

Obligations

External & Internal Payment

be immune to the adverse effects

Looking forward to peace times
completion of the recon¬

tential

the pres¬

large scale inflation at

and the

convert high-po¬

present,

Direct & Guaranteed

withstand the im¬

of high-level inflation.
I
agree with him on the whole that
one
cannot
put his
money
in
stocks and be sure that he will

ent time.

and for all of us

to assist the Treasury

not

Canadian Government Securities

has indicated,
stocks have only a lim¬

pact

why we do not have

and that is

that, if at all possible, it should
be prevented.
I want to insist
that one of the best means to pre¬
vent it is for you

control—is

mental

govern¬

com¬

Wright

ited capacity to

efforts

determined

below pres¬

will

levels

ent

Policy

Investment

chase

2217

FINANCIAL CHRONICLE

THE COMMERCIAL &

Number 4234

158

aware

that the industrial averages

closed

today at exactly the same

CANADIAN

but

was
registered on the
broke out in September,
1939.
You
may
not be equally
conscious that the maximum vari¬

price

day

and Albertas

again a little easier.

slightly
with the free ex¬

Government

Internal issues also were

under pressure

war

ation

Saskatchewan

were

change market once more erratic
on
a
small volume of offerings.

Municipal

Corporation Securities
•

price in those 3% years It is possible that end year factors
less,
percentagewise, are now exerting their influence
than for any similar period of to a certain extent, and during
time since 1895, except the rela¬ this period this market is likely to
tively eventless years of 1910 to be difficult to follow. As previ¬
been

has

1914.

have

had

advance
'

(Continued on page 2219)

pointed out, the unofficial
quotation of the Canadian dollar
ously

H. E. SCOTT
49 Wall

St., New York

WHitehall 3-4784

CO.
5, N. Y.

Tele. NY 1-267S

THE COMMERCIAL & FINANCIAL

2218

last

Aftei The War
(Continued from page 2213)
with considerable un¬

not

that the wide¬

agree

spread holdings of cash and bends
inevitably produce an ex¬

must

price inflation once the war
While there will be short¬

treme

over.

certain areas
consumers' durables, for
in

ages
I

(food and
example),

the general
demand will

think ' that

not

effective

ever-all

prodigious capacity of
produce

outrun the

the American economy to

supply.

adequate

Unless the

general over-all demand outruns

supply, there will be no general
price • inflation. Special areas of

scarcity can be man¬

temporary

ration¬

aged by price control and

These controls should be re¬
as soon as supply catches

ing.

moved

up with demand.
The fear of a sustained

post¬

inflation has been enormously

war

exaggerated. This fear is based on
very
crude and indefensible
quantity theory of money. It is
based on an exaggerated notion of
a.

the

holdings

cash

liquid

general mass of consumers.
To
begin with, while the volume of
currency in (circulation has risen

$19,000,0010,000,

forget

we must
not
national income

the

that

has doubled and that the currency

the

needs

various

for

have

country

increased. More¬

reasons

recent survey indicates
$55,000,000,000 of privately
demand
deposits,
only

over,

that of
cwned

$14,000,000,000 are held by indi¬
viduals, the rest being held by
units and corporations.

business

$14,000,000,000 held by in¬

Of the

dividuals,

some

considerable

amount is held by

amount

The

the well-to-do.

demand deposits,

therefore, which the general mass4
cf the public hold is relatively
small. Moreover, of $160,000,000,€00 of Government bonds, nearly
$100,000,000,000
tutions such

savings

are

insurance

com¬

Government

trust

banks,

and

panies

held by insti¬

commercial banks,

These institutions

funds.

not

are

potential spenders. Only $25,000,-

€00,000
the

form

which

some

debt is

the public
of

bonds, of
considerable fraction,
savings

third, is held by the
Thus the percentage
cf bonds available for spending
lias been enormously exaggerated.
certainly

well-to-do.

Nor do I think it reasonable
suppose

in these bonds at
in

that the public will cash
once

and engage

wild spending spree.

Follow¬
ing the last war, in 1919 and 1920,
the savings of individuals reached

all-time

cash

high. While

their

bonds,

some

will

many

are

likely to add further to their nestegg of savings.

Finally, and of utmost impor¬
tance, let us not forget the tre¬
mendous .safeguard against a ma¬
jor price inflation inherent in the
prodigious capacity of the Amer¬
ican economy to produce a vast
supply of all kinds of goods. The
war has taught us how vast is our
productive
power.
Any nation
capable of- producing $200,000,€00,000 of goods and services in a
single year is in great danger of
not finding adequate markets, but
riot in much danger of inflation.

widely

spread

would

have

alysis, to show that unless we do in the enormously important field gram of public investment can
something about it, we can be of urban redevelopment. The re¬ provide not only a compensatory
certain that any postwar invest¬ building of the slum and blighted and stabilizing balance wheel to
After World War I, these stim¬
our
economy, but can also open
ment boom will again end in col¬ areas in our towns and cities ob¬
ulating factors
petered out in
viously presents one of the major and enlarge private investment
lapse.
about 18 months. They are likely
revitalize
private
Confronted
with
the
serious areas for private investment out¬ opportunities,
to last longer, perhaps twice as
problem of violent fluctuations lets in the generation that lies be¬ enterprise and give us in the gen¬
long or more, this time. Yet it is
eration
that
lies
ahead
an
fore
us.
But
expand¬
nothing will happen
in the rate of investment, what
quite clear that the demand for is the answer? Tnere
unless
we
develop a program, ing economy with high and rising
are, I think
automobiles, for example, can be
such
as
that
provided in the levels of income and employment.
essentially two solutions to this
thoroughly
saturated after say
No modern society can endure
Thomas and
Wagner bills, now
problem: (1) a compensatory pub¬
three or four years.
Inventory
lic investment program, and (2) before Congress. If we are to have for long the shock, the strains and
accumulation and relief require¬
an
expanding economy, we must stresses of serious deflation, de¬
a
cycle compensatory tax pro¬
ments will run out in perhaps two
search
out
public
development pression and unemployment.
In
gram. I am not able to develop a
or three years. The high post-war
the 70's, 80's, and 90's of the last
compensatory tax program in this projects which increase the pro¬
boom for industrial equipment is
brief time at my disposal. I would ductivity of the community, raise century we^. could tolerate them
likely to ease off rapidly as after
because we were then largely a
merely suggest that we now have purchasing power and real in¬
the last war.
Thus, after two,
rural, agricultural society. Highly
at our command, thanks to collec¬ come, and open new private in¬
three or four years the deferred
urbanized and highly industrial¬
vestment opportunities.
tion of income taxes at the source,
demand boom is likely to end in a
ized
societies are extremely vul¬
The question is always asked:
a powerful and effective mechan¬
slump unless we do something
nerable
to
economic
instability
ism for a compensatory tax pro¬ Does not such a program mean
about it.
vand economic depression. We can
I
gram that can have a tremendous¬ the end of private enterprise?
The answer is to push up con¬
no longer take a laissez-faire atti¬
ly stabilizing effect upon our econ¬ do not think so. A well conceived
struction to a volume of $15,000,tude toward these problems.
We
investment program will
omy. I am compelled for lack of public
shall get no place if we relegate
000,000 to $18,000,000,000 per an¬
time to limit myself to the public enlarge the opportunities for pri¬
num.
I do not know of any other
the role of government to a do
investment aspect of a compensa¬ vate enterprise. The role of gov¬
way
to prevent the impending
ernment under such a program nothing policy. We have not even
tory cycle policy.
slump following the re-stocking
would be a marginal one. It would begun to adopt a positive and vig¬
Consider how a compensatory
boom.
Total investment must be
orous compensatory and develop¬
operate in a small but important
held at a high level and construc¬ public investment program might
area
in the whole^ economy—an mental fiscal program. The spend¬
tion will be the only field left for have been used in the 1929 de¬
area
which could riot be under¬ ing program of the thirties was
pression. The $15,000,000,000 de¬
stimulation.
taken effectively by private en¬ nothing more or less than a sal¬
cline in private capital
outlays
We need now to plan to insure
terprise. The government would vaging process. We salvaged the
was unprecedented in amount, ex¬
an adequate construction program
not enter the general field of pro¬ banks, we salvaged the railroads,
to offset this impending
slump. ceeding anything ever before ex¬ duction at all.
It would make we salvaged agriculture, we sal¬
The
decline,
once
For example, there is much that perienced.
those basic investments without vaged the 17,000,000 unemployed
started, proceeded in a cumulative which
we can do to insure a large private
private enterprise would with work relief. We need a posi¬
house building program.
Unless manner, each decline inducing a find its opportunities limited and tive program to prevent depres¬
further
decline.
As
income
and
we do plan for a large construc¬
restricted.
A public investment sion, to maintain high levels of
tion program long ahead, we shall employment fell there was less program can and should be de¬ employment and income. Yet we
and
less inducement to
invest.
again be forced to improvise boon¬
signed to stimulate and enlarge are making right now no adequate
doggling relief works to take care Suppose the government had been the volume of private investment.
preparations. We have done noth¬
prepared
with
an
adequate
com¬
of unemployment.
us any
The question is often asked, if ing so far which gives
pensatory
investment
program—
assurance whatever that we shall
We are discussing tonight public
the public can economically make
useful public works and
devel¬
not again get caught in a devastat¬
and private investment after the
these investments, why may not
opment projects—to counter the
ing depression; and let us not for¬
war.
Why do we concern our¬
decline. Had this been done,
it private enterprise itself do so? get that under modern conditions
selves so greatly with the rate of
The answer is that only the gov¬
cannot be
doubted
that private
the national income can fall to
investment? The reason certainly
ernment can take the larger view
capital outlays would have fallen
is not that expenditures on capital
of the whole impact of a basic de¬ substantially low levels within a
by much less than $15,000,000,000,
few
months.
Our utter
unpregoods occupy any large part in the
velopment
program
upon
the
perhaps by no more than $6,000,paredness for such an event is a
total economy. They do not. Per¬
economy as a while. The Tennes¬
000,000 or $7,000,000,000, and con¬
shocking revelation of utter irre¬
see Valley development has dem¬
centagewise by far the greatest
sumption
expenditures
would onstrated
already its profitable¬ sponsibility. We shall remain un¬
part of our productive activity—
have fallen not at all. Thus a rel¬
ness
from the standpoint of the prepared until we are willing to
over 85%
in fact—is devoted to
atively small amount of public in¬
a
positive compensatory
the
whole economy. It has opened up adopt
production
of
consumers'
vestment
and developmental fiscal program,
outlays,
quickly and new
goods.
Yet. investment outlays,
private investment outlets in
We may fool ourselves by new era
boldly
thrown
in,
could
have
held
while relatively small, are of ex¬
that area, it has raised productiv¬
the line and prevented the ever
talk. Brit some day there will be
traordinary importance.
This is
ity and purchasing power, it has
a rude awakening.
widening
breach
which
brought
true first because it is new invest¬
contributed to an increase in the
us close to a national bankruptcy.
In the November issue of "For¬
ment that makes possible a rising
national income. It may not return
We need, however, not only a 100 cents on the dollar to the Fed¬ tune Magazine" there appeared a
productivity and higher living
standards, and second because the compensatory public investment eral Treasury, but the repercus¬ supplement devoted to reorgani¬
zation of governmental machinery
level of income and employment program but also a developmental sions
of
the
project upon the
investment
program
in economy as a whole make it worth necessary to carry out a rational
is peculiarly determined by the public
order
to
insure
an
expanding manyfold the public investment fiscal program. The program there
volume of new investment.
Private enterprise cannot suggested may not be the best, but
Let me illustrate this from the economy. Let me illustrate in the made.
international
field. Everyone is undertake a development which it points the way to the kind of
great depression which began in
that there is scope for does not offer an adequate direct problem we ought now to be
1929. The essence of that depres¬ agreed
That way lies
The
government alone wrestling with.
sion, as indeed of all depressions, great industrial development in return.
economic statesmanship. I am per¬
can be
quite simply and plainly China, for example. Such develop¬ can look beyond the direct return
sonally encouraged by the fact
stated.
There occurred a decline ment, however, requires, in the to the Treasury to the benefits
instance, a basic develop¬ accruing to the economy as a that I find more and more business
from 1929 to 1932 of private in¬ first
leaders who are realistic enough
vestment outlays from the annual ment program including railroads, whole. If we are going to have an
to face these problems.
port facilities, power expanding
rate of $17,000,000,000 in 1929 to highways,
and
progressing
$2,000,000,000 in 1932. This de¬ development, and the like much of economy in the decades ahead,
cline of $15,000,000,000 in private which involves public investment. we must search out useful and
public
development1
capital outlays caused unemploy¬ Without this basic development productive

(4) expenditures

equipment, and
on

employment.

Thursday, December 2, 1943

that now at in these areas. In other parts of opment, irrigation projects, flood
country
we
have
only control, reforestation, soil conserperpetual the
prosperity. I observe again now scratched the surface. The Arkan¬ vatiori, rural electrification, inter¬
national
loans
and
sas Valley and many other areas
a good deal of new era talk about
investment,
the postwar. Yet we have a hun¬ offer wonderful opportunities for and finally investment designed to
raise the productivity of our hu¬
dred years of experience, not to development.
A vigorous pro¬
We have done almost nothing man resources.
mention convincing economic an¬
had

Public And Private Investment

industries,

CHRONICLE

consumers' durables.

heavy
goods
industries and in turn induced a

program a general program of in¬
dustrialization becomes quite im¬

consumption expendi¬

possible. Basic development proj¬

and

essential in order to open

real

all

ment

decline

the

$30,000,000,000. Thus the
fall in investment had a magnified
tures of

effect upon the
a

fall

income

economy

not

causing

$15,000,-

000,000 but,of $45,000,000,000. The
national

income in

fact fell

from

ects

are

projects which can open up new
private
investment
opportunity
raise

the

productivity

Brownell Replies To

and

income of the community

the whole wide area of indus¬ a whole.
All
the
available
evidence
try, manufacture, and trade on a
large scale. Much of this basic which I have studied and ex¬
development can be, made only by amined, points to the conclusion
that we shall need, after the war,
public investment.
up

(Continued from page 2214)
tary metals so that they can settle
their
balances
of
international

payments, and thus prevent their
currencies from depreciating in

the foreign exchange market.
investment out¬
Since the United States today
lets for about $25,000,000,000 to
holds some 70% of the monetary
000,000 in 1932. Had investment numerous illustrations of the fun¬
of savings.
In¬ gold of the world, other countries
been maintained at $17,000,000,000, damental importance of a devel¬ $27,000,000,000
cluded in this figure are the sav¬ do not
In all lines we have tremendous we can be sure that there would opmental public investment pro¬
possess the metallic re¬
ings of individuals, net corporate serves needed to stabilize their
productive capacity. This is true have been no decline in consump¬ gram. In the early part of the last
savings,
depreciation
reserves,
tion expenditures.
Here we see century we undertook a huge in¬
not only of agricultiire
currencies on a firm basis. The
but also
and other funds for replacements
cf our heavy goods indris'tries, and the great importance, therefore, of ternal development program. This
adoption of international bimetal¬
involved the building of canals and renewals.
investment.
A

$85,000,000,000 in 1929 to $40,000,-

Our

own

history

past

affords

to find each year

(

our

general.

consumers' ^industries

scarcities,

yes;

but by

relatively

There will be temporary

and large

fall

investment' will

small

induce

and other internal

tremendous decline in income and

Later

Investment occupies,

sidies

the American economy can swamp employment.

for

improvements.
sub¬

granted

enormous

the

construction

transcontinental

railroads.

of
And

prospective demand with a indeed, a relatively small part in
more
recently we have built a
prodigious supply of goods ade¬ our economy, but it is a dynamic
and
vital
part.
Unfortunately, nation-wide network of free pub¬
quate to prevent price inflation.
however, as the record of a hun¬ lic highways involving vast out¬
The post-war deferred demand
dred years shows, the rate of in¬ lays
of public funds. We have
boom immediately following the vestment is a
highly uncertain made a beginning in resource de¬
demobilization crisis is likely, to and
undependable quantity.
It velopment. In the Pacific North¬
be fed after this war, as was true rises and falls and creates thereby, west, in the Tennessee Valley, we
have already opened up private
after World War I, from: (1) out¬ through its magnified effect, boom
investment
and depression.
opportunities
that
lays on inventories, (2) net export
You will remember the new era could not have developed except
for
the
basic
surplus, (3) outlays on industrial talk of the twenties. The belief
public investment
any

Never in the

past have we suc¬

ceeded, except for brief periods,
in
finding sufficient investment
outlets to maintain continuously

income
and
employment
levels. We shall not succeed now
unless we revitalize our economy

high

well conceived program of
expansion fed and sustained by
public
development projects.
These involve public investment
by

aspects
slum

of urban
clearance,

redevelopment,
terminal

transportation facilities, river
1

c%\r

rPfsOllTOP

and

val-

rfPVfil-

lism by
ment

inter-governmental agree¬

would

provision
reserves

vastly facilitate the

adequate
the

monetary

nations

the

world, since this country does not
hold materially more
the

world's

ply at this time.
the

Hence, I believe

advocacy of international bi¬

metallism is
to

than 50% of

monetary silver sup¬

the

cause

major contribution
of

sound

monetary

conditions in the post-war world.

2219

COMMERCIAL & FINANCIAL

THE
Volume

158

Number 4234

CHRONICLE
such

Attempt To

Establish The "5%

Inflation Prospects

And Investment Policy

(Continued from page 2217)

program

protection

against inflation.
Of course,

that

stocks

there is a possibility
will
decline
from

level of about should shun trading on margin. present levels, and as usual after
The supposed lightening of debt a recession there are many people
from this level
burdens through inflationary con¬ in Wall Street who expect fur¬
of "about 30%.. That has been the
ditions is more than offset by the ther weakness in security prices.
limited degree to which the mar¬
ket
values
of
securities have unexpected complications that are But I would like to point out how
certain
to
be
met, and under minor this question is in the light
changed due to the extraordinary
conditions
that we have lived which debt might well prove an of long-term investment policy.
(Continued from page 2207)
Suppose, a 10 or 15% decline in
through.
This means,
in turn, embarassing handicap.
In our common stock selection prices from this level is a fair
that the real values of common
tices, the Commission
it would seem logical to empha¬ possibility,
what
sense
would
stocks must have varied over an
ceit. We quote verbatim from the
size the possession of large tangi¬ there be for the true investor to
even narrower range.
"The importance of fair price as
ble assets in relation to the price take that into account?
In the
The fact that the stock market
paid, as distinguished from "good first place, there is still a substan¬
transactions between securities
itself, the institution which you
will," which in Wall Street means tial chance that it won't happen
tomers is evidenced by the rules of the
represent, has acquitted itself in
the expectation of high earning at all, and, in the second place,
such a stable and common-sense
tion of Securities Dealers of which
was a
if it does happen, there is a still
power under normal conditions.
fashion during these critical years
We
don't know what new cir¬ greater chance that he will put his
ber at the time of the transactions in
is a persuasive argument in favor
cumstanced
will
affect
the
estab¬
buying orders too low and miss
rules provided at part III,
as
of the inclusion of a group of com¬
"
lished trend of earnings if we his market. All my experience in¬
Tn
"over-the-counter" transactions,
mon
stocks in the portfolios of
have inflation. I do feel that the dicates that the proper method to
substantial investors.
By "sub¬
"listed" or "unlisted" securities, if a
ownership of assets considerably buy stocks for a particular pur¬
stantial
investors" I mean not
own account from his customer or sells for
own
in excess of the price paid might pose is to buy them at once, un¬
Only well-to-do individuals but
turn out, under inflation, to be less you have a definite reason
to his customer, he shall buy or sell at a
also
the
non-profit institutions
more advantageous than the pay¬
to believe that the price level is
which have large capital funds,
fair, taking into consideration
ment of a premium above assets too high—which I do not believe
and which have been facing the
including market conditions with
for
the
past
earning
power is the situation today.
problem
in
recent
years
of
at the time of the transaction, the expense
The second point for the in¬
coupled with normal expectancy
whether or not they should devi¬
of increased future earnings.
vestor is that as long as he be¬
the fact that he is entitled to a profit. . .
ate
from their long established
"
This preference would mean a lieves there
'42. It should be noted that the
js a definite possibil¬
and sound policy of investing ex¬
tendency to emphasize the selec¬ ity of inflation he must consider
clusively in bonds. My own con¬
used by petitioner contain a
tion of the secondary issues, many himself bound to hold his stocks,
clusion
has
been, in the case
face that ::A11 transactions shall be subject to
of which today combine both sub¬ even though the price may have
where I was consulted, that such
stantial asset value and adequate advanced to levels which ordi¬
tions and usages of the New York
or
a
deviation
is justified under
earning power—as compared with narily would have been a signal
Exchange or market where executed
present conditions to the extent what
That is the real risk he
might normally be a more to sell.
and for the reasons I have indi¬
recognized customs and practices
exclusive
interest
in
earning must run to gain protection
cated.
in securities." '
The quoted rule of the NASD
power alone.
During the last few against inflation— the surrender
Now coming to the question of
of the opportunity to sell out at
years, such emphasis on the sec¬
forth one of the recognized practices of
what types of stocks should be
ondary
issues has
been much a high level in the expectation of
ties.
'•
■
•
purchased, I am afraid I am go¬ more
profitable than the conven¬ repurchasing at a considerably
"A recent study of the mark-ups over the current mar¬ ing to disappoint you by not hav¬
tional
devotion to the market lower figure.
ing anything of great value to
ket actually taken by members of the
leaders. I rather feel that if you
The relatively shrewd investor
offer. I listened with great inter¬
consider
inflation as an important
of Securities Dealers shows that 47% of
may wish to retain
freedom of
est to Dr. Wright's historical dis¬
development to guard
against judgment and action so as to de¬
were effected at a gross mark-up over the current
tinctions between the behavior of
there would be good reason to termine whether a rise
in the
one
kind of stock and another.
of not over 3%, and 71% at not over 5%.
See
continue
such
a
discriminating stock market really anticipates
My own study of the matter leads
'Times,' Oct. 26, page 31."
procedure.
inflation or is only a repetition of
to the conclusion that it is not ad¬
Now I turn to the fourth sub¬ the usual cycle of speculative ad¬
visable to make advance selec¬
It did not require the vision of Nostradamus to
vances
and collapses.
Such an
tions or predictions with respect ject, which is that of inflationthat this would come about. Those familiar
hedge policy in its relation to investor might be wise to take his
to the relative merits of different
cue
from
the
bank
borrowings
and
of the Maloney Act and the setup of the
stocks
under
inflation,
except general investment policy. Al¬
though inflation forces add a rea¬ inventories of the typical manu¬
that the National Association'of Securities
was
within very obvious limits.,
son, and a
good reason, to the facturing and merchandising com¬
It is clear, of course, that if
tended, and is playing Charley
to
normal
justification
for stock panies. If you have a rise in com¬
you
are
seeking
protection
against
and Exchange Commission's Edgar Bergen.
buying, they also add complica¬ modity prices and stock prices,
loss <of the purchasing power of
tions as regards
the selling of accompanied by an expansion of
says either directly or by
a
money, you
would not invest in what
inventories and bank loans, then
you have bought. Under or¬
represents the custom and practice
bank stocks.
For these represent
dinary
conditions,
a
bona-fide the investor who wants to belong
counter securities has done so without proper
or un¬ primarily the ownership of money stock
investor can deal with stock to the shrewd class rather than
capital.
It is also clear that you market fluctuations quite success¬ to the conservative class would
derstanding of the facts.
should not purchase railroad or
We criticize the citation by the Securities and
fully. He can follow the policy probably be well justified in sell¬
utility shares; because of the rel¬
of buying securities when prices ing out. his securities.
For almost
Commission of the NASD rules and studies as
ative
inflexibility of their rate
are not particularly high (or pref¬
regardless of inflation, the age-old
cause in our opinion that only tends to confuse
structures.
But in the field of
law
that
a
speculative
fall
follows
erably when they are definitely-*
manufacturing,
producing and
unless direct evidence is introduced showing how these
low) and he can sell them later a speculative rise is almost certain
trading companies, I am not at all
are arrived at and what safeguards are employed to
when they do appear to be def¬ to be operative under such dan¬
convinced that the performance of
initely high in accordance with gerous business conditions.
correct results in these so-called "studies."
groups
of issues shown in the well
established
principles
of
What I have said could be sum¬
We believe these rules to be an inspired and
European inflation of a number of
value.
But if inflation is a real marized by referring to a rule
years
ago
would
necessarily
be
tured product which do not reflect the
ex¬
possibility, then there is no longer basic to bdth the stock market
followed under the conditions of
a
well-defined selling range for and business—which is that buy¬
isting among dealers and in direct
inflation
we
might conceivably
stocks.
The investor must hold ing right is more than half the
United States Constitution because they constitute an
face.
even beyond the level
at which battle. If the investor follows the
My own inclination would be to
delegation of legislative power.
ordinarily ■ he would be impelled invariable principle of not paying
emphasize rather the diversifica¬
We believe there is no necessity for a limitation of
to sell—and by holding he must
higher prices than are justified
tion of holdings among a variety
run a serious risk of missing
an by the underlying statistical facts,
profits of any kind nor a duty
upon any
of manufacturing enterprises, and
excellent opportunity for profit.
• he will be in a relatively good po¬
dealer to disclose prices. There should be no compro¬
even
companies in wholesale or
This drawback is an unavoid¬ sition whether we have inflation
retail trade.
The advantage of
mise. There is nothing in the past practices, customs or
or
whether we don't.
Further¬
oil producers is quite evident, and able one under the given circum¬
trade usages of the industry that would make this pro¬
To deal with the prob¬ more, he can forego his opportu¬
this is shared—perhaps to a lesser stances.
cedure mandatory.
degree —- by
sugar,
metal and lem generally I venture to submit nity to sell at the right time with¬
a
few concrete suggestions.
The out courting disaster, because his
What is to be done about all this—you will ask. Drastic other raw-material enterprises. I
is that the investor who underlying position will always
do not believe that you can be first

Rule" As A

Recognized Prac¬

tice Of Dealers

from

present

the

15% and a decline

In Securities

concluded, constituted

fraud and de¬

Commission's brief:
the foundation of
dealers and their cus¬
National Associa¬

mem¬

petitioner

question.

paragraph 4,

Those

follows:

whether in
member buys for his
his
account
price which is
all relevant circumstances,
respect to such security
involved, and

confirmation forms
specific statement on their
the regula¬
StoclfeExchange other
and/or subject to the
of brokers and dealers

clearly sets

dealers in securi¬

National Association
the transactions
market
New York
'
prophecy
with the history
NASD well know
Dealers
in¬
McCarthy
the Securities
.Anyone who
implication that 5% profit; spread
of dealers in over-thesearch

Exchange
authority be¬
the courts,
rules
attain

manufac¬
practices actually
contravention of the
illegal
*

incumbent

surgery! Amputate the dread which the average dealer has
of the supervisory power of the Securities and Exchange
Commission and the NASD. The many letters received criti¬

certain,

phasis
than

greater em¬
category rather

laying

one
another, to
on

of substantially

assure

yourself

different or better

protect himself against
buy only at prices
which do not include payment of

premium for the infla¬
tion hedge.
I believe this can be
done at the present levels for most

ing

wants

inflation should

any

extra

sound

Brokers
ice

can

one.

You

Customers*

render a great serv¬

clients by emphasiz¬
in your own
those people who wish

to your

this

principle

asking in each instance that the writers
advice to
results.
striking testimony of a fear character¬
to function as common-stock in¬
I would agree with Dr. Wright
common
stocks.
Hence today's vestors.
istic of the existence of an "OGPU" or "Gestapo."
that
the
investor should
avoid
I have nothing to say on the
In the last analysis the courts are a'rafuge and courage common stocks with heavy prior prices appear to me to be quite
suitable for pqtting into effect subject of stock speculation, ex¬
debts,
in the same way as he
must characterize business if it is to survive.
cept that,fnam skeptical of the
A spineless industry is a lost industry.
Men must have
possibility, qf success. But I do
the courage to protect their rights. Hiding behind anonymity pressive instead of merely regulatory that they be completely wish to %xpress my unalterable
will make the cause a lost one. Bureaucracy will continue its deleted. There is urgent need for renaissance in the security opposition to that most costly of
all
financial
self deceptions —
encroachments and by gradations democracy and free en-' field. The regulators are becoming more of a problem than
namely, calling oneself an in¬
the regulated.
terprise in business will die.
.
*
An organization truly representative of the vestor and acting and thinking as
This is the time for courage. Fortright, unrelenting cour¬ over-the-counter dealer fighting endlessly in his interest is a speculator.
The menace of in¬
flation, while it underlines the
age. Pure pragmatism dictates This because to many it must the immediate vital need.
logical justification of commonbe courage to-fight for rights or death, that is, commercial
Our Editor asked Messrs. Metz and Kole to read the
stock investment, will tend to in¬
death.
•
•
crease
its psychological hazards.
recent issues of the "Chronicle" containing letters from
We believe that over-the-counter security dealers should
It will take intelligence and selfdealers anent the NASD's profit limitation decree and to
control on the part of both in¬
organize forthwith to protect their interest. Such organiza¬
write this article reflecting their views on the course of
vestors
and
their
advisors to
tion should be militant and proceed at once to combat the
action they think dealers should take in the matter.
withstand these risks.
If you as¬
efforts of the NASD in their relations to the over-the-counter
sist your investor clients to re¬
The CHRONICLE invites comments on the views expressed
main
common-stock
investors,
if
in the article, or on any related phases of the subject under dis¬
security business. Proper safeguards should be exercised so
cussion.
Comments should be addressed to Editor. Commercial
(Continued cn page 2220)
that the activities of supervisory forces are kept within strict
and Financial Chronicle, 25 Spruce Street, New York 8, N. Y.
constitutional limitations and where those forces become op-

cal of those powers
name

be withheld are

2220

THE COMMERCIAL & FINANCIAL CHRONICLE

Undoubtedly, there

Thursday, December 2, 1943

people, in the securities
Inflation
advantage of their clients/Un¬
doubtedly,
there
are people in this business of whom, or at
"United We
And Investment:
least of whose practices we are ashamed.
Undoubtedly, the
(Continued from first page)
(Continued from page 2219)
vast majority of the dealers would like to see these
people,
over-the-counter business; that the "big houses" operating
this fringe of undesirables, removed from our midst. But let you discourage them from chang¬
on a narrow margin of profit are seeking to increase their
ing over into - stock speculators,
us be
practical. The end may not justify the means. Assum¬ you will act. not only in their in¬
volume of business at the expense of the
little fellow, who*
ing that it is possible to eliminate these undesirables, one terest but your own—for this pol¬
operates on a much wider margin of profit; that the cor¬ should consider
gravely any means of doing so, lest he intro¬ icy will pay you and them the
best dividends over the long. pull.
porate business, both listed and underwriting, wants to see duce a
remedy worse than the evil.
the municipal business subjected to the same regulations suf¬
Note—The Professor Wright re?
As a practical matter, one should realize that neither
ferred to throughout Mr. Graham's
fered by the corporate business; that it is the small portion of
"conscience" nor morality can be
legislated. Improvement article is Dr. Ivan Wright of
the business that operates on the "ragged edge of scrupulous¬
in ethics comes from within the
business, not from without, Brooklyn College, whose address
ness" that causes all our troubles and should therefore be
or above it.
Consequently neither a profit limitation of 1%, at the meeting is not given at this
eliminated somehow, anyhow.
'
time since his views on the sub¬
5%, or 10%, nor a "bid and asked disclosure rule" will im¬
In short, there is, and has been for years, considerable
ject of inflation were covered

NASD Profit Limitation Decree Violates Maxim

are..some

Prospects

business who take undue

Stand, Divided We Fall"

Policy

prove on conscience or ethics.

Let

therefore direct

our

rather

extensively in two articles
bickering and fighting in the business itself... If this situation action toward a
which were written by him and
goal that is attainable.
continues it is likely to'be the means of the elimination of
Cannot the NASD ferret out
singly the culprits in the published in the "Chronicle.".
freedom for all of us.
It would seem to be the better part of
These papers, bearing the cap¬
business without
setting
a dangerous precedent of a profit
wisdom for all of us to consider the problems, not just of our
limitation on all the business? Cannot the SEC eliminate the tions, "Managing A Business For
Stockholders Through The Vicis¬
particular phase of the business, but the problems of all of us,
long profit offenders, without punishing the entire business situdes Of Inflation" and "When
and act as a whole.
United we may stand, divided we will
with such
Inflation
Comes, Deflation Cannot
impractical, needless and expensive regulations as
fall.
As Sam Pettengill so well put the situation, in an ad¬
Be Far Behind," appeared in our
a "bid and asked disclosure" rule?
It would seem possible,
dress before the Bond Club of Chicago last summer: "That
issues of July 8 and July 22,1943,
and practical, for either such
body to ascertain the people in respectively. Ralph A. Rotnern,
is the great weakness of our free enterprise system. United,
this business who are
likely to act without "conscience" or who presided over the meeting of
'one for all and all for one,' it could defeat the enemy on
without ethics, and eliminate them—to the
the
Association
of
Customers'
great relief of the
every field.
Dis-united it loses one battle after another."
Brokers, is Chairman of the Asso¬
rest of the business, let it be
emphasized.
Any
such
action
Let us look at the record.
First, perhaps, were the rail¬
ciation's Educational Committee.
against a particular person, would be based on a consider¬
Mr. Graham is, a former Lec¬
roads, who lost their freedom to the ICC. Next, perhaps, was
ation of the particular circumstances
surrounding the par¬ turer in Finance at Columbia Uni¬
the radio, which has lost its freedom to the FCC. Then, in
ticular case in hand, and should, therefore, in no
way injure versity, is author of "Security
our own field, the
corporate underwriting houses lost their
Anaysis," President of Grahamor embarass
reputable
dealers.
battle to the SEC.
Then, the stock exchange houses lost
Newman Corp. of New York and
;
Such a procedure in individual cases may not eliminate
theirs. Next came the over-the-counter corporate business.
is connected with the Treasury
all bad practices, but
any practical person will admit that all Department as Associate Director
Next on the program is the municipal business.
During all such
practices will not be eliminated in any business. More¬ of New York State War Finance
this development, did we ever present a united
opposition?
Committee.
;
over, from a broad social viewpoint, it should be realized that
Unfortunately, we did not. Did we ever in fact, all even ap¬
unscrupulous people without a sense of ethics will likely act
preciate what was happening to our associates businesses?
without conscience wherever
they are, so that if they are Acts To Protect
Apparently, we did not.
driven from the securities business
they will probably prey
Likewise, were the utilities left to fight their battle
White Collar
alone—and they, too, have lost. Let us but look around at upon the public from some other business.
Nevertheless the aim of all of us, it
In a move designed to protect
the groups that are waging a lone battle
seems, should be to
against bureaucracy remove from our
midst the unethical
and socialism. The medical profession is faced with social¬
contemporaries, not be¬ the salaries of the large white
cause
they make a profit of over 5%, or over 10%, but be¬ collar class, employed in the New
ized medicine, and, although there is not one of us who would
York metropolitan area, against
cause
they are no credit to our business. But who is to decide
not be directly affected
the
effects
of
the
by such a panacea, there is not a one
prospective
what the standard of ethics will be? In the
of us who is going to the aid of the doctors. The insurance
long run, compe¬ abandonment of the Little Steel
tition will weed out the unethical dealers and
salesmen, as it formula, Thomas Jefferson Miley,
companies right now are fighting their battle against govern¬
more
quickly weeds out those who take excessive profits. Secretary of the Commerce and
ment control—alone. For
years the banks of this country
Industry Association of New York
There is no more powerful force than
have been crying out
competition in leveling on Nov. 9
against the deadly competition they are
telegraphed President
profits in all business to a degree proportionate with the risk.
fighting from government subsidized credit—but their cries
Roosevelt, the Economic Stabili¬
Likewise competition will
zation
Board, Office of War Mo¬
eventually set the standard of
go unnoticed. What help will we, as
citizens, give to the ethics as it sets the
standard of profits.
Of course, there will bilization and the National War
newspapers and the Associated Press in their fight to
pre¬
Labor Board requesting an oppor¬
always be some customers who will not appreciate the value
serve even the freedom of the
press?
tunity to present the Association's
of dealing with a house that
The plight of the stock
practices good ethics. These cus¬ views before any new policy is
exchange houses, of the cor¬
porate underwriters and of the over-the-counter business as tomers among the public are as much a disadvantage to soci¬ adopted.
Mr. Miley, referring to a state¬
ety as are the unscrupulous dealers, because without this
a whole is unfortunate.
But the solution to their
problems
ment by William H, Davis, Chair¬
does not lie in
inflicting the same plight on the entire securi¬ non-discriminating "fringe" of public, the unscrupulous man of the NWLB, that the Little
ties business, and
pulling the entire business under the thumb "fringe" of dealers could not exist. The "Greatest Show On Steel Formula may have to be
Earth" was built on the premise that "There's a sucker born
of
abandoned, wired: :
:
bureaucracy. Rather should the entire business work to¬
"If a new formula has to be
every minute." Until we eliminate the "suckers" among the
gether to remove the shackles already
placed on those of our
associates who were left to
investing public, we are not likely to eliminate those dealers adopted whereby > rates are re¬
wage their battle alone. Nor
vised upward this will still fur¬
who will take advantage of the suckers.
should such a battle
ther increase disparity between
against bureaucracy be confined to the
In the third place, the
securities business alone.
thing that is to be most regretted take-home pay of white-collar
,

Wages

Recent election returns

is the low estate to which

our

business has fallen when

give strong indications that the
many dealers are afraid to speak openly. The fear of re¬
spreading tentacles of bureaucracy have clutched
enough prisals has caused one writer after .another
to request that
people that the citizens of; the
country are sufficiently
aroused to throw off this
you not divulge his name nor the identity of his firm.
Are
yoke en masse. Thus, we need no
these people—and they
appear to.be quite numerous—afraid
longer resign ourselves to the belief that
governmental con¬ of
trol is
reprisals from the NASD, or from the SEC? In either
coming in ever increasing doses, and that there is noth¬
event, it would seem that we have lost the courage even to
ing for us to do but make the best of a bad situation.
On the
discuss our own problems
amongst ourselves.
contrary, the people seem sufficiently aroused that this
ap¬
What has happened to the
pears an opportune time to resist with all the
government of the people,
power we, as a
by the people and for the people—that the people are afraid
group, can muster against the forces that are
destroying free¬ to
dom of
speak? Have we built a Frankenstein that will destroy
enterprise in America.
all who raise a
The familiar maxim of "Divide
finger in objection? If such be our frame of
and conquer" works as
well in peace as on the
mind, we are indeed in a sorry plight.
battlefield. Not
only have we in the
Unless we freely and
securities business, but we as
openly discuss these, and other
citizens have been divided and
we have been
problems, we shall not only not solve these problems, but we
conquered in most battles against
bureaucracy. shall be faced with others of even
Unless we close our
greater import. With a
ranks, we shall lose again, and
again, and fervent belief in the value of
sincere debate, I
again. The immediate task for
sign this letter
us, therefore, is to join
together
the entire securities
openly and with a reliance upon the similar good faith of
business for our common
good,
rather those who
than pull apart to our common
may disagree.
destruction. The
larger task
is for us all as free men to
Finally, I want to congratulate you for pointing out so
join together for a united program
fearlessly in the "Chronicle" the broader aspects of this ques¬
against bureaucracy.
In the second

tive
Not

means

being

cuss

place, it seems to me that the most effec¬
combating excessive profits is competition
member of the NASD, I do not feel free to dis¬

their recent pronouncement

regarding profits. More¬
in the municipal business in which
my firm engages
solely, profits run far less than 5
%—probably
they average
less than 1% even on
purchases entailing considerable risk
But, do not be deceived in thinking that these
profits are
under 1% because of "conscience."
The
margin of profit is
low because
competition makes it so.

tion. For many years I
the entire capitalistic

have felt that it is to be regretted that
system did not have more defenders
with the courage, and
foresight that the "Chronicle" has
shown

many

occasions during its hundred
J.

over,

Other letters received

ing

the

subject

year

history.

AUSTIN WHITE.
appear

in this issue start¬

3.
Further comments are solicited by the Editor on the
NASD profit limitation decree or any related phases of the
subject.
They will be published anonymously if the writer does not wish his
on page

name

revealed.

Communications

Commercial and Financial

New York.

should

addressed

Editor,

Chronicle, 25 Spruce Street, New York 8,

and

production employees.

"Such

result would have seri¬

effects

ous

this

upon

The

area.

whole

of
management
ol the
United States is theLNew

York

metropolitan

center

are

area.

employed here.
urge that

while,

"Strongly
limits

Great

white-collar workers

numbers

set

the

take-home

pay
of
production
employees,
nevertheless, consideration should
be given to the lower take-home
pay of office and professional em-*

ployees and a sliding scale adopt¬
ed to prevent distress among this
class."

Discussing the relationship of
subsidies, Mr. Davis re¬
cently said he believed it was
clear to everyone that increases

wages to

the cost of food will immedi¬

higher

wages

demand

that

and

scale
would
the

result

ately

undoubtedly
to

abandon

wage

formula.

necessary

Little

Steel

Mr. Davis told

for

nation-wide

press

conference

that while he believed the Roose¬
velt Administration's stabilization
program
was

had worked thus far, it

entering

riod."

This

the

was

"doubtful

doubly true,

pe¬

indicated, if Congress managed to
forestall the

developing food-price

subsidy program.

.Volume 158

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4234

""Because of the' importance of
the subject and the interest evi¬
denced in it" at the open meeting
of the

affected

be
and

the

are

special road

district

road

supported by an unlimited
valorem, tax, bonds issued to

were

Municipal Securities Com¬

the

situation.)
After reciting
of the

"for

case

pursuant to the offering; only one
was made for the to¬

the

with

all

which

of background, it should
Supreme

way

interests

counties

had

the

which
these

with

counties,

able

are

counties under

contract

with us, who purchased his bonds

prior to the Supreme Court deci¬
sion (June 16, 1943) and who paid
a
premium therefor in excess of
the total interest which has ac^
his bonds from the date

his

purchase io

the

date

call,

shall be permitted to ex¬
change his original bonds for a

dealers

familiar

not

are

and

who

with

it,"
states that while

be noted that the Texas

the

tion

was

recommended." Mention

the municipal bond house of B.

is made of the suit recently filed

contesting

Texas,

Green
an

the

efforts

Tom.

County, Texas, to refund

Effect." According to the bond
house, the "court held that cer¬
tain

and

benefits

the

limited

amount

"covers

bonds

Texas

outstanding."

mary says:

dated

Court
and

was

such

many

of the

shock to dealers;

that it was felt necessary,
after studying the decision to de¬
termine whether or not it might
possibly affect any other bonds.
W. P. Dumas and John D. McCall,
both nationally known municipal
bond attorneys of Dallas, studied
neys

the matter

and reached the con¬

clusion that other classes of county
bonds might possibly be affected,
under

strained

construction

the law and have rendered opin¬

ions expressing these views. They
considered that the bonds directly

affected

as a

result of the decision

original voted issues for the
following purposes:
are

Courthou^-and jail,

2. Homes

schools for depen¬

dent and delinquent

girls,
County
farms,

4. Bridge
•

states

Supreme

municipal bond attor-;

boys and

houses

and

construction,

Maintenance of public roads.

"The bonds

which may possibly

the

Aug.
as

bonds

class

pamphlet,
last, further

follows:

recently

security

dealers Jn the State to the effect
that this decision may make re¬
deemable unlimited tax special
road

bonds of counties and road
districts and refunding bonds is¬
sued
to refund original
county
bonds covered by the decision. We
do not know the purpose behind
this publicity but the effect is to
raise

serious question as to the

market value of these bonds with
the result that those who sell such

bonds

them
Our

now

will be forced to

below

.;V:

•

• •

their

normal

attorneys advise'

their

opinion,

bonds

and

(Continued from

earnings comparisons
to

stem

parable

are expected
nearly com¬
deductions.
At the

from

tax

present time heavy excess profits
taxes
a

are

year

the

being accrued, whereas
a large proportion of

ago

roads

still

was

sheltered

such

unlimited

early months

attorneys
question.

literature of the
ful sponsors,

the time arrives, as

1943,

when

guage

cess

year

profits

comparisons

will be

and presentation.

were

men

year-to-year

even

number of examples of

income

begin

expect that when

compari¬

earnings
to

Selected
tional

Investments

distributor

Co.,

na¬

value.

special

and

opinion

other municipal bond
who have studied the

We, therefore, strongly

urge the present holders of these
bonds not to sell them at de¬

Prospectus

Shares, has prepared a
simple little folder entitled, "Four
Freedoms

Investment."

DISTRIBUTORS

Fea¬

tured by its

eye-appeal and read¬
ability, this little folder lists the
following freedoms toward which

GROUP#

Incorporated

important contribution to the

investor:
1.

investment
deemable

Freedom from detail.
Freedom

Freedom from risks
normal

States.

from worry.

pany

(of ab¬

character).

companies
shares

peaks,

and

"A Brief Description of Dividend
Shares," is another example of ef¬
fective simplicity of presentation.
Here are a few of the points made
in the folder:

"Incorporated in 1932, Dividend

Shares, Inc., is one of the largest

Send fir

Prospectus

June

10,

1940 to

value

set

Raymond "& Co., 148 State St.,

tained

quest

from

post-war

the

Copies
may

firm

period the Dow-Jones
Industrial and Composite Aver¬
ages rose 25.29% and 30.63 %, re¬
spectively, ..."
"Dividend Shares—a low-priced,
the

same

organization,
one

and

combining

security to a high degree

features

in
tbe

market-,

protection,

preciation opportunities—is an inr

Republic
Investors Fund, Inc.

vestment security unusually

well

(Continued on page 2226)

Distributing Agent

W. R. BULL MANAGEMENT CO. Ins.
40

Exchange Place, New

York

Keystone
T.'JJJUJU

NGTON

Custodian Funds
Certificates of

Participation in
Funds

new

posi¬

this

be ob¬

upon, re¬

follows*.

Prospectus of this MutUal

series

Investment Fund available

B-l, 2, 3 and 4 in bonds.

through
dealer

your
or

investment

from

the

dis¬

tributor

Louis, San Francisco

interesting discussion

36.35%.

increased

investing their capital as

St. Louis-S. F. Ry.

bonds.

Sept. 30, 1943;
share net as¬

Dividend Shares' per

ability, satisfactory return and ap¬

Post-War Postion Of

St.

high-grade, dividend-paying se¬
curity, tested over 11 years; sub¬
ject, to Federal regulations; man¬
aged by an experienced research

FUND

40,000

assets
.

■,

better

securities will be generated

Railroad

re¬

United

approximately

$44,000,000.

Trust

tion

with

the

On Sept, 30,1943 the com¬

had

stockholders
than

/' .
4.
Freedom from inflation fear,
"Dividend Shares Has paid an
"One might mention still others," aggregate of $22,089,907.21 to its
in quarterly
divi¬
concludes the folder, "Freedom to stockholders
dends
since
incorporation
(of
obtain up-to-date information on
which $7,993,160.24 represents div¬
the company's policies ^nd port¬
folio at any time; freedom from idends derived from net profits on
sale of securities). -In the 11 years
duplicate estate taxes; freedom to
1932 to 1943 the return from.divi¬
liquidate promptly if he (the in¬
dends paid each fiscal year, on
vestor) needs his money, In these
the basis of the offering price pre¬
ways Selected makes,an important
contribution to an investor's free¬ vailing at the beginnipg of the
respective s fiscal, year, has f averv
dom."
;«
*
*
s
aged 5.55%*-,.. .
'
j ' •
"From
the Dunkirk
lows of
Calvin Bullock's revised folder,

again.

the

york

63 wall street—new

Selected American Shares makes

though the earnings will be

Bequest

Selected

speculative attitude! towards rail¬
road

Group Securities, Inc.

stability,

display

below the wartime

a Class of

American

year-to-

net

In the

this trend.

correspondingly improved.

Many rail

sons

the

Low Priced

mailbag this week, for instance,

corresponding

taxes,

r——-

—

definite

trend toward simplicity of lan¬

it will in early

the

—

success¬

sell

that, in
refunding

this

reveals

When

1943.

discussion

that

Investment company literature
in recent years, particularly the

and started accruing
profits tax liability in

tax

flavor, intelligent men will strive to achieve the

1942

excess

the

der the terms of this statute

understand

loss of strength or

"virtue of simplicity."

their entire deductions by the

end

Boston, Mass., have issued

held by

"Bureaucratic Washington" is concerned! Put wherever it is
important that ideas be transmitted without confusion and without

carry-backs. A fair proportion of

the

■

the larger tax-sheltered roads used

road bonds issued under the
gen¬
eral laws are not redeemable un¬

CHICAGO

208 So. La Salle Street (4)

"Virtue of Simplicity"

2209)

page

BOSTON

10 Post Office Square (9)

A letter received this morning from a dealer in the Mid-West
closed with these words: "Hope some day Bureaucratic Washington
will realize the virtue of simplicity." A rather forlorn hope as far

months in each year include ex¬

publicity has
given by certain

been

Railroad Securities

now

The

17,

"Some

;

poor

only

municipal

considered." Continuing, the sum¬
decision

bonds

which are held to be redeem¬
able under this decision repre¬
sent approximately 1%
of all

the;
bondholders
when

which may be derived from it are

"The

tax

matter of law,"
to state that the

as a

original
voted courthouse, jail, road and
bridge, juvenile home and poor
house bonds, and that the total

points out, "the litigation will re¬
quire time, but certainly it should;
while

goes

decision

another issue of bonds in the

worth

county

optional

are

Federal Court and, the summary

well

Co., Houston,
issued a pamphlet

Cochran County,
Texas, Decision—Its Cause and

original issue of which was sold
by the county on a "contract
which
specifically
stated
the
bonds
would
mature
serially
without option of prior payment."
In addition, it is said that plans
are also being made to file suit

has

so."

entitled "The

issue of courthouse bonds, the

Christie

Broadway, New York (5)
-

Investment Trusts

follows: Any holder of

principal amount of refund¬
Court ruled on June 16, 1943, that ing bonds on the basis of par for
summary
cer¬
Cochran County, Texas, had the1 par or, at our option, shall be paid
a cash sum equal to the excess of
tain
members
of
the
Texas
right to call for redemption in ad¬
premium over accrued interest.
Group accepted the decision of
vance of maturity certain of its
"The refunding bonds bear in¬
the Texas Supreme Court as
outstanding bonds, notwithstand¬
terest at such rates that they ob¬
final and have proceeded to ef¬
ing the fact that no such option
viously can be sold immediately
fect such refunding contracts
was contained in the bonds at the
at premiums which, together with
with counties which they "con¬
time of issue.
The court ruled
the interest previously collected
sidered advisable," there are,
that the statute pursuant to which
on the original bonds, will, in al¬
however, "a large number of
the bonds had been issued permit¬
most
all cases, return the'full
Texas Dealers who continue ag¬
ted the county to exercise the re¬
gressively with their plans to
demption option and, as a conse¬ premium to the investor. In fair¬
ness
to us and those customers
exhaust
every
possible legal
quence, the State Attorney Gen¬
who have expressed an interest
avenue to overcome the damag¬
eral was directed to approve the
in the refunding bonds, we must
ing
effects
of
the
Cochran
refunding bonds proposed to be
know at once what bonds are elig¬
County decision." These dealers,
issued by the county. The effect
the summary says, have recom¬
of the decision, naturally, was not ible for adjustment on this basis
in order that the necessary amount
mended
against surrender of
confined exclusively to Cochran
of refunding bonds may be re¬
bonds "in accordance with the
County, but was also applicable to
for
call" in the belief that during
exchange.
Eligible
the various other counties in the served
holders
the "next year" decisions will
are, therefore,, urged to
State having outstanding bonds
send
us
at
once
a
full
be rendered on many questions
description
that were issued under the statute
of their bbnds, including the num¬
raised by the Cochran County
in question.
As a result of the
decision, "which, in our opinion,
court ruling, a considerable num¬ bers, maturities, date of purchase
have not yet been
ber of other counties-have-issued and price paid.
;
*
•.
settled/'&
"This effort to prevent loss of
The
summary
then
observes calls for redemption of various
premium
paid
by
holders
of
these
bonds
that there are many questions still
coming within the orbit of
bonds is voluntary on our part.
to be settled, "even on the bonds the decision.
Our contracts with the counties
In connection with the sub¬
directly" affected by the decision
do not in any sense require us to
and, therefore, additional litiga¬
ject, it should also be noted that
bondholders

120
LOS ANGELES
634 S. Spring Street (14)

when called for redemption. Our
method of accomplishing this pur¬
bonds

SERIES

NATIONAL SECURITIES & RESEARCH CORPORATION

prevent. or minimize losses by
holders of these particular bonds

pose

INTERNATIONAL

Prospectuses upon request

State

several

SERIES

FIRST MUTUAL TRUST FUND

successful in

were

hold

PREFERRED

STOCK

LOW-PRICED COMMON
STOCK SERIES

outstanding bonds of

this class.

$1,786,000 refunding bonds
offered.)

bondholders'

part and because of the contracts

crued

were

believing

be better protected if re¬
funding contracts were entered
into prior to the court decision,
we attempted to secure contracts

tal

and

could

of the offers
that

brief history

the benefit

BOND SERIES

optional

that

original voted

City early in November, a 'a special act of the Legislature.
summary of a report on the Coch¬ The question of the decision af¬
ran County, Texas, bond redemp¬
fecting these other, classes
of
tion matter is being sent to air of bonds cannot be settled without
the members of the IB A, accord¬ direct test cases, and it is antici¬
ing to an announcement by Dud¬ pated that test cases will probably
ley Smith, Municipal Secretary of be brought at an early date on a
the IBA.
The report itself was number of these issues,
"A notice to bidders has re¬
presented at the open meeting by
P. B. Garrett, of Garrett & Co., cently been issued by El Paso
Dallas, who explained that the County. It is quite possible the
analysis was that of the Municipal notice may bring about a contract
Securities Committee of the Texas Which may result in the various
Group of the IBA and said that issues being tested in the courts.
he was presenting it at the re¬ The date for receiving the El Paso
quest of W. E. Knickerbocker, County bids is Nov. 23,. 1943, and
chairman of the group's commit¬ what will happen remains to be
tee, who was unable to attend the seen." (Editor's Note: The county
meeting. (Further below,, we give rejected the two bids submitted
<

LOW-PRICED

mentioned in the Cochran County

issues

the

York

regarding

SERIES

Court would hold that the bonds

above specified, and certain nonvoted county bonds authorized by

Association during the course of
the latter's convention
in New

Texas,

INCOME

SERIES

Supreme Court.
"Anticipating that the Supreme

are

refund

the views of B. V. Christie & Co.,

EOND

decision of the

case

mittee of the Investment Bankers

Houston,

any representation that they may
be redeemable under the recent

which

issues

prices brought about by

pressed

Municipal News & Notes

2221

Series

K-l, 2 in Preferred

S-l, 2, 3, 4 IN COMMON

W. L. MORGAN & CO,
Real Estate Trust Bldg.

Philadelphia

Stocks

series

STOCKS

Prospectus nay be obtained from
your local investment dealt" or

The Keystone Corp. of
ct»ppt

Boston

nnsTON.

MASS*

2222

THE COMMERCIAL

DIVIDEND

NOTICES

Allied Chemical 8C
61

Economy And A Limited
Supply of Money

Dye Corporation

Broadway, New York

Chemical & Dye Corporation

share on the Common Stock of the
Company, payable December 20, 1943,
stockholders of record at the

December

of business

1943.'

10,

KING, Secretary

W, C.

the

labor

market, unless they are flexible
in making adjustments to chang¬
ing conditions, we shall have ap¬
palling rigidity and appalling
delay in making transitions and
a wholly unnecessary volume, of

per

situation

unemployment, with, of course,
a very big reduction in the an¬
nual income of labor and in the

dom

says

this

Bank Note

Company

Common Dividend No. 135

involved, although

(llA%)

the Preferred Stock for the

quarter ending December 31. 1943, and
dividend of 20$ per share on the Com¬

dends

payable January 1, 1944, to

are

holders of record December 9,1943.
stock

The

O'CONNOR

November 29,1943

Secretary

No. 135

the

there

war

ominous

are

We can have
gigantic
unemployment
and
chronic unemployment just as
England
did
in
the
1920's,
through wage scales held too
high in the union policy."
The

ahead.

obvious

question

con¬

nection
with
this
buck-passing
proposition is: Does Dr. Anderson,
in suggesting the passing of wagerate problems over to labor lead¬
ers
really intend this as a solu¬

the

post-war

wage-rate

been declared
mon

the

stock of this

December
of record

outstanding

is this suggested

possible solu¬
tion brought forward to serve as
alibi

The final dividend for the year 1943
of sixty cents (60$) per share has
com'

Company, payable

those
useful

selected
for
a
pattern
(1921-23) were part of a much
longer effort that resulted as dis¬
astrously as any similar episode

years

Following this statement of

when
wire

called

up,

things shall have

gone

and
hay¬

employment,

he is

aid in

bringing about

read¬

wage

Since the

authorizing limitless

currency

from

December, 1913, we
managing our limitless

have been

supply of currency just 30
When
level

the
was

240%

years.

price

pre-war

attained in 1920

had

had managed money seven years.
In
this quotation Dr. Anderson
"boom

collapse" to the 140% level.
Then he proposes to take the re¬
covery period of the years 192123, as he says, "for a study of what
our policy ought to
be when the
present war ends."
We

are

thorough accord with

Dr. Anderson upon the desirabil¬

ity of studying price

movements^

but

significance

there

in such

little

movements

over

short

period as two years. We have,
therefore, had reproduced a chart
showing commodity prices over
20 yhars,-from just preceding to
somel 15 years after the Civil War
a

and

World* War
curves

produced

the

for

from

are

1925

Borden

Company

distance.

something directly

get
who

revisions

rates

wage

real solution is to return to

free economy for the money
of the trade also.
We kid

side

ourselves
free

think

;

what

■■■'

testified

this

never

member

demand

customers

for

from

currency,

point

about 1928:

(Bold

face ours.)

This, testimony shows that
of

these

the

Do you think that

Federal

Reserve

none

officials

fixing prices
yet, there

contemplated
price levels/and

can

question that

the funds with which prices were
maintained at around the 140%
level for eight years, were made
available by the Federal Reserve

System under the policy outlined
in the previous paragraph.
If we
think

delegate

authority
provide
money or public credit
at its discretion, and still enjoy
prices that tell the truth about the
supply and demand situation in
commodity and labor markets, we
are just shutting our eyes to real¬
ity.,- ■. '
to

can

banking

system

limitless

E.
St.

S. PILLSBURY.

Louis, Mo., Nov. 22, 1943.

" '

German Peace Rumors

Dismissed By Hull
Rumors

that

Germany might
making a peace bid
discounted by Secretary of

possibly

State Hull
tempt

Nov.

hinder

the

Board

at¬

Allied

war

effort by creating over-confidence.
In response to a question

"Question:

but

alternative

give it to them.

were

Strong

of the New York Federal Reserve
Bank

matter

and apply to us for it, we have

■

Governor

of Fed¬
a

has

power

ap¬

Reserve

issuance

because

practically

with managed lim¬

economy

itless money..
Here

have

pow-;

free

not for the price and
wage-rate side of the trade only,
but

that
have

their

The

economy;

at his'

conference, as to whether
had any information "to sup-

press

re¬

arranged
Industrial Con¬

1930

1921 has been

just

nearly di¬

reasonable

wisdom

could

direct

that very object." ->

human

it
-

toward
v

;

ing

over-confidence

Allies
a

carrying

the

among

the

war

successful

conclusion, and in
way
impairing the whole
vigor of the war situation on the
that

Governor Strong is quoted by
Irving Fisher in his work, "Stable Allied side."
• :
Money" (this work contains the
Widespread reports from Europe
testimony herein reproduced) to have been current as to German

PERIOD

Wilmington, Delaware; November 15, 1943
The Board of Directors has declared this day a
dividend of $1.12 x/2 a share on the outstanding
Preferred

Stock, payable January 25,

stockholders

of record at

the

this

150%

January 10, 1944; also $1.25 a share, as the
''year-end" dividend for 1943, on the outstand¬
ing Common Stock, payable December 14, 1943,

stockholders of record at the close of business
November

22, 1943.
W. F.

peace-feeler negotiations—most of

"Fixing the price of wheat or them emanating from Swiss news^any other price is far more dif¬ paper sources.
ficult than fixing the-general
The
Swiss newspaper
"Basler
level of prices, just as it is far
Nachrichten"
first
reported
on
more
difficult
(impossible, in Nov. 25 in a dispatch from the

business

effect:

1944, to

RASKOB, Secretary

fact) to fix
surface of

little
mill

wave

the

pond, than to

regulate the,level of the whole
pond."
•
.

THE ELECTRIC STORAGE BATTERY CO.

These
over

Directors have declared

The
from

Accumulated

the

Sur-

•14 plus of the Company a final
[ySr dividend for the year 1943
of

Cents ($.50) per
Bhare on the Common Stock, payable De¬
cember 21, 1943, to stockholders of record
the

1943.

Fifty

business

December

Checks will be mailed.
H. C. Allan,

Secretary and Treasurer.

Philadelphia, November 19, 1943,

The

broken

shows

that

New

Board

York,

December
has

Directors

1, 1943.
declared
a

quarterly dividend of Three Per Cent, on the
Capital Stock of this Company for the quar¬
ending
December
31, -1943,
payable on
January
3,
1944
to
stockholders
of
record
ter

December

1943.

MATTHEW

MURRAY,

Jr.,

Secretary.

level

DUNKIRK,
is

engaging

Y.—Albert
in

securities business from offices at
136

West Second Street.

War

from

to rise.

the

and

war

time

they

The solid line of

also

with

the

outbreak

World War I; that

65%

they went, say,
higher than during the pre¬

vious war; that the decline in lieu
of being gradual over a decade
was taken in two
jumps, the first

100% of

say,

general

chart

the chart shows that prices started

the

Myers

this
Civil

after the

years

of,

Myers In Dunkirk

the

commodity prices declined rather
evenly until they hit the pre-war

started

The

line

after

1877

prewar

second, eight

years

about 50% of

These

eight

credit

later, of,
prices.

prewar

years

of commodity

prices, maintained by

cial

prices and

manipulation

money

and

artifi¬

level, in between two\abrupt

declines of about 100% and 50%,
respectively,
of prewar
prices,
were years of wonderful booms—
the
the

farm
bull

land, Florida land and
market

collapsed

booms

within

To the farmer

all

came

The

and

over-all

years

than

was

period,

from

when

the

modity

Germany and the Allies.
Oh the
ney

date Senator Dow¬

same

(Dem.) of California, said he

had

received

;

information

elements

enormous

that

enter

price of a single com¬
the price index, is it
undertake to stabilize

safe, to
existing price level?
".

leave the nation in the
a

was

depths

depression that is still kind of

nightmare to workers dependent

employment for the support

from

;;

A report was

possibly

circulated on Nov.
high German personage,
Franz von Papen, the

German

Ambassador

28 that

was

to,

Turkey,

visitor to the Vatican.

Talk

'.an

ous

the stabilization of prices

doubtful, not to say danger¬
experiment," Mr. Norris

concluded.
Dr.

Goldenweiser,
a
Federal
Reserve Expert," testified to the
following effect:
.

1921,

upon

into

consider the

administrations

of
a

number

production
century.
of

between

the

our

March

mediation

•

dis¬

most

Harding-Coolidge

Hoover

dating

this

result

the

mission11'

■

period, for it cost him,
probably for all time, a large part
of our export trade in wheat and
cotton,
lines that had
been, a
growing factor in

hearings, which extended

several years, show that Fed¬

Swiss border town of Chiasso that

Pope Pius XII had undertaken

Norris'; "Unusually well-informed" sources
Philadelphia Federal Re¬ that influential Germans are at¬
serve Bank, for
example, testified tempting to Open negotiations for.
thus:
their
country's
surrender,
and
"I am personally prepared to that some United Nations leaders
agree that stabilization of price expect a- collapse
of the Reich
levels is a desirable thing—but about Christmas.

astrous

for

eral Reserve Officials were afraid
of price fixing.
Governor

GUARANTY TRUST COMPANY OF NEW YORK

1872

1867

1862

could, as a matter of^fact, sta¬ port rumors that a German
peace;
bilize the price level to a greater move is afoot either
through the
extent than they have in the
Vatican or other channels," Secret
past by giving greater expan¬
tary Hull replied:
sion to market operations and
"I think 1 would be same
ip
restriction
or
expansion
of
authorizing you to quote me en-r
credit facilities?
tirely in the negative about sucb
"Governor Strong: I person¬ rumors
at every day's conference
ally think that the administra¬ until I
notify you to the contrary.
tion
of
the
Federal
Reserve
They are evidently put out most
System since the reaction of of the time with a view to
creat¬

200%

& Company

What is the real solution?

chart

E.I.du Pont de Nemours

him.

support

seriously.
removing obstructions and
greasing the ways, for capitalfine, but a long way from solving
the problem.
As

rected

(Mm

labor

for existing is his

excuse

The

too idealistic to be taken

cember 7, 1943. Checks will be mailed;

E. L. NOETZEL, Treasurer

suggestions are
they go, which is a

those

ward

;

Board.

far

short

two

expect him to lead off in down¬

respectively.

of Figure

National

ference

1943, to stockholders
the close of business De*

The

other

very

to study first the 1920-21

proposes

These

with

they will unless labor leaders

sure

law

1921-23.

pur¬

20,
at

history.

our

the

used,

banks

grasp

The

fact,

been

the implications of a
commodity price curve over a
couple of decades that the two

for

Federal

eral Reserve notes. As
of

We have shown to any one who

ability

very

the

disapprove the

may

Bank

three

pened during

stituted for free market processes
for which he has been contending,

another oct

the System has

plication of

Let the labor leaders do it.

aid in bringing

readjustment problem, to be sub¬

.COMMON DIVIDEND

policy, in

Board

trend

of currency through the provision that the Federal Reserve

■

1923.

(b)

difficult

to restrict the excessive issue

government

economy,
he makes
pretty definite suggestions:

when the present war ends."

dates

how

free

leader's

about wage re¬

unem¬

ment."

pose, Dr. Anderson devotes much
of his paper to showing what hap¬

tion

TfonUntS

in the period of
full
employment

our

tell

determine what
is developing at

Governor Norris,
casion, said this:

years

it is to

"promote post-war reemploy¬
After a strong plea for a

can

crash

point of departure for the study
of what our policy ought to be

themselves

prove

adjustments,
can
move
rap¬
idly in eliminating unemploy¬
ment as we go through our post¬
war readjustments.
If they try
to hold up war-time wages after

Preferred Stock

1920-21,

the

will make

Since these 10

given moment."

any

good merchants, study
markets, see what these
markets can afford to pay, and

things

January 5, 1944. Checks will

and
to

kind

would

however,

(a) Follow the pattern of 1921-

Government

recovery

pany, payable February 1, 1944, to
stockholders of record at the close of

will

their

be mailed.

men¬

the labor problem:

country

Convertible 4% Series A of the Com¬

business

if the labor leaders of the

NUMBER

Cumulative

have

fails

most important of all
Furthermore, we also
the following by Dr. Ander¬

meeting of the Board of Directors
held November 29,1943, a dividend of
one dollar ($1) per share was
declared
the

Here

going to try

years

picture of

THE ATLANTIC REFINING CO.

mar¬

trends.

never

nearly a decade.
conclusion,
Dr.
Anderson

an¬

find

Secretary

DIVIDEND

look at

now

markets.

J. P. Treadwell, Jr.

PREFERRED

Anderson

Dr.

six

started

really the

transfer books mill remain open.

November 24,1943

too

that took place from August of
1921 to the spring of 1923. The

son

Stock have been declared. Both divi¬

mon

for

We will

this

we know what
to
ten million

ployed for

policies
which many are proposing for
the Federal Government today,
I want to exhibit first the poli-v
cies employed by the Federal

the money market, which is

tion

quarterly dividend of 75$ for share

that he

concede

1930,

have

figure

writer.

is what he says he is
to do:

prices
truthfully reflect the supply

kets
to

himself.

from

ever

one

can

Prior

enough unemployment for a
enough time to create the

long

"In contrast with the

and demand situation in the

Preferred, Dividend No. 151

other task he has outlined.

free economy—wages and

that

for

much

families.

need for statistical data upon un¬

of wis¬

measure

The reader

out

wages.

Probably there is no stronger
argument than Dr. Anderson's for

American

which

much for the

real income of labor."

had

employment.

justments with
possessed.

their

Thursday, December 2, 1943

depression Uncle Sam had

(Continued from page 2206)
mand

has declared quarterly dividend No. 91
of One Dollar and Fifty Cents ($1.50)

to common

A Plea For A Free

November 30, 1943
Allied

& FINANCIAL CHRONICLE

of. German

was

viewed in Washington on Nov.
the Associated Press

that

cating

launched

said,

leaders

Nazi

30,

indi¬
have

propaganda offensive

to counter the expected

big news

from

President

conference

"Only the short-term fluctua¬
tions in the price level are felt
by the public, and not the long

overtures

peace

Roosevelt, Prime Minister
chill

and Marshal

Stalin.

Chur¬

Volume

THE COMMERCIAL &

Number 4234

158

The Securities Salesman's Corner

Royal Bank of Scotland
Incorporated by Royal Charter 1727

The other evening a

Bishopsgate, E. C. 2

what is the most

WestSmithfield, E. C. /

Charing Cross, S. W. I
of

Burlington Gardens, W. /

64 New Bond Street, W. t

£108,171,956

He
Associated Banks:

Glyn Mills & Co.

After all,

1817)

Fund

Reserve

£8,780,000

—

6,150,000
8,780,000

—

—..

of Prop.

Reserve Liability

K.B.E.,
.

South Wales Is the oldest
in Australasia. With over
in all States of Australia, In
Fiji, Papua and New Guinea,
it offers the most complete
banking service to investors,

•The Bank of New
*

and largest bank

M30 branches
•

Zealand,

New
.

•and

London,

and

efficient

Threadneedle

Street, E. C.

throughout the (J. S. A.

NATIONAL BANK
;

a--

,•• •

...

FULLY PAID CAPITAL

FUND

RESERVE

.•;: principal
EGYPT

£3,000,000

in all the

Branches

the

and

;

,•

;

SUDAN

Head

26, Bishopsgate,

Trusteeships

and

description
business

Executorships

Offer Possibilities
Utilities

involves

cap¬

stock

20%

present stockholders,

be about

current earnings, will be substan¬

tially as follows:
Common stock
Undivided

Undivided

Book Value

$127,558,000
Deposits .——
—$2,385,685,000
Deposits to capital funds—
18.7
Total

per

20,000

$267

Dividends

the

10,000 shares

during the past three years have
been at the annual rate of $8.00;

7,558,000

profits

—

share—

Number of shares

60,000,000

Surplus

$5,343,190
$134,652,220
25.3

capital funds——

Total

Deposits
Deposits to capital funds

$60,000,000

$2,000,000

——

;;
—3,000,000
profits
343,190

Surplus

follows:

stock

Common

capital funds.—

that the January
will
rate of $6.00.
Number of shares.
1,800,000
Book value per share
$71.00 Final action with respect to the
It will be noted that actually no stock dividend is dependent on no
unfavorable changes by Congress
new capital is being furnished the
on
the tax status of stock divi¬
bank, and that the so-called in¬
dends/
■*"/" '/
crease in capital and surplus is a
First National Bank,
Chicago,
bookkeeping increase, yet one that
will result in the bank's paying also proposes to increase its cap¬
out 20% more of its earnings as ital shares through a stock divi¬
is

expected

dividend

the 20,000 shares

the

again.

might sell her once, but very seldom
Successful securities men know this too. >

L Company

are

will you do

annual

dend, provided the tax status of
dividends is not upset by

such

this year.
The latest
sheet of this bank, dated

Congress
balance

Undivided

tion of

R. J. Thomas, President

Nov. 19, 1943, ap¬

proved the issuance of 5,000 new
shares
of common stock
to be

To Be Held In N. WM

member of the National War La¬

par

value of $100 per share, on

the

basis

the

ers

bor

United

Automobile Work¬

(CIO); Van A. Bittner, labor
Board

and

Assistant

management President of the United Steel
problems of conversion, sponsored Workers (CIO); Dr. George B.
by the Society for the Advance¬ Bewkes, of the War Manpower
ment of Management, will be held Commission;
Donald Davenport,
tomorrow and Saturday (Dec. 3
Department ■ of
Labor
official;
and
4)
at the Waldorf-Astoria George
W.
Romney,
Managing
A

conference

York City. The con¬ Director of the Detroit Automo¬
ference will cover various aspects tive Council for War Production,
of the conversion problem, includ¬ and Paul
Smith, Manager of the
Hotel in New

offered present

stockholders at the

each two shares
also

common

held.

5,000

through

for

There will

issued

stock dividend
mon

new

one

additional
a

5,319,000

profits

Its

different character.

stockholders

Managem'l Conference
r.

Utilities Situations
Missouri

dividend

increase in

investment

ence

also undertaken

proposed

italization

;■// .•■■■//>' v'-'/ /^///'

talking about, you

Ceylon, Kenya
Zanzibar

Fund--,-—___£2,200,000

Bank
conducts - every
banking and exchange

The

Oct. 18, 1943, shows the following
when he said, "You either have it or you don't."
Another Chicago bank, Amer¬
items:
do—you don't need a policeman to stand over you every
ican National Bank & Trust Co., Common stock ($100 par).
$30,000,000
time you sell Mrs. Jones ten shares of stock—because Mrs. Jones
Surplus
50,000,000
also knows that unless you have that personal integrity we have been announces a change in capitaliza¬

Capital—.__£4,000,000
Paid-Up Capital———._£2,000,000
The

L. A. Gibbs, Manager

Subscribed
Reserve

doesn't recognize that

Teletype—NY 1-1248-49
Trading Department)

Bell

Approximate Market 107lA bid—llOVi asked

And if you

London, E. C.
Branches in India, Burma,
Colony and Aden and

Telephone: BArclaj 7-3500

$84.17

share—

per

BROADWAY, NEW YORK 5, N. Y.

friend was right

the

Office:

Book value

Exchange

Stock

York

New

Members
120

1,500,000

shares——

securities.
dividends, since the directors state
Retailing is where you meet the public, sit down with them, that the current rate of $2.00 per
hear their problems, gain and keep their confidence, and help them share semi-annually will be con¬
find investments to fit their needs. It is where you learn that our tinued..
■//.''

Government In
Colony and Uganda

Kenya

..F

Request

Laird, Bissell & Meeds

$126,258,000
—$2,385,685,000
18.9

funds

capital

Number

f'-- •?/'•/'■ //
concerned
to provide
officials of
the Commission must be selected from those who have had at least
five to ten years experience in Abe securities business—and in the
writer's opinion some of this experience should be in the retailing

of INDIA. LIMITED
to

profits

Bulletin

50,000,000
26,258,000

___.-i_______.____

Total

might be a very helpful procedure for everyone
if some day Congress amended the Securities Acts so as
that at least a portion of the enforcement and executive

NATIONAL BANK
Bankers

Company

$50,000,000

stock

Deposits

Surplus

are

without .suspicion.

Towns

that

Bank and Trust

plan

capitalization. The
dated Oct. 18,

1943, shows the following figures:
Common

It is such an obvious fact to anyone who knows the

business,

Chemical

latest balance sheet,

the bulk of the industry can be put upon its own
resources and that most of the successful, responsible people engaged
in the business can be trusted with fairness and can be dealt with,

William Street, E. C.

King

1943, to vote

17,

to increase its

position that

AGENCY

LONDON

and

such a handsome
integrity, as does

Dec.

—-

com¬

individual salesmen.

£3,000,000

„

jackets

1 Cairo

would think of as
Yet, each one of us
securities business

placed around the operations of individual firms and
No differentiation between the wheat and the
chaff is ever made by the Commission.' It has never taken the

Cairo

Office

Head
Commercial

largest

bank, have called a spe¬
meeting of shareholders for

cial

opportunities for inordinate profits. Yet the SEC continues to look
for every opportunity of restricting the industry as a whole. Strait-

of EGYPT
,}■

Chicago's

mercial

This may be an unfair charge, but based upon the record

doubt it.

securities

.arrangements with Banks

Agency

Illi-<s>—

Trust Co.,

Bank &

e., one additional share for each
difficult to conceive of anyone not
five held; and a transfer of $20,realizing that out of all the businesses that exist today, there are few
000,000 from undivided profits,
instances where personal integrity, fundamental honesty, and sound
The
capital
set-up
after
this
ethical business principles pay such large rewards as does the secur¬
change, including an estimated
ities business. In other words, only the damned fools, the floaters,
$1,500,000 credited from current
the fly-by-nights, and those who don't know any better, are the
earnings to undivided profits,'will
ones who abuse customer confidence and take advantage of fleeting

Berkeley Square, W. X

which

Continental

National

nois

and if you

and supply it,

strange that by this time the SEC

this is true.

OFFICES:

changes'by banks in Chicago will be reviewed.

proposed capital

Directors

Deposits to capital funds—

countries.

LONDON

and

do these things with the
earnest purpose of MAKING CUSTOMERS AND KEEPING THEM,
it is academic that you will prosper and build up a substantial and
satisfied clientele. '
://';//./,,

interested in thess

travellers

and

traders

group.

Undivided

NEED

A nationwide trend

Strengthen the ratio of capital funds to total deposits seems to be
starting.
This column discussed on Oct. 7, 1943, changes in capital
funds already instituted during the year by Bankers Trust, Chase
National and New York Trust, of New York City.
This week recent

judgment that is
sound, if you know security values, if you can sell the right type of
security at the right time to your clients, if you know what your
clients

Seattle

280

world.

Things are stirring in the banking

in the
have passed
personality-plus boys,
and conservatively.

doing even better than that.
probably no other business that pays
reward for knowledge, based upon a foundation of
the investment securities business.
If you have

JL.

By E, A. VAN DEUSEN

that those who have stayed

There is

SYDNEY

Office: George Street,

and some were

£150,939,354

SIR ALFRED DAVIDSON,
General Manager

Head

„

San Francisco
279

This Week—Bank Stocks

{

the stormy years we

recognize as the type that many laymen
typical "Wall Street Stock and Bond Salesmen.
had been making a substantial living out of the

30th

Assets
1941

Sept.,

when you go back in your own memory and think of
who have come and gone among your own

ever

£23,710,000

Aggregate'

WIRES

Bank and Insurance Slocks

The sort of

who, when they speak to
their sincerity is genuine and
,

Chicago

TELETYPE

None of us
would qualify as outstandingly gifted talkers, nor were there any
of us who would get a second nod from a Hollywood talent scout.
We were just plain, ordinary, average individuals that no one would

new south wales
(ESTABLISHED

FRIVATE
New York

men;

through, have not been the outwardly brilliant,
but those who have built their business solidly
This was obvious right in our own little

baniTof
-

'
inherent personal integrity.

acquaintance, it can be proven
business and have weathered

Australia and New Zealand

Pald-Up Capital

(P. C. T.)

7th St., Los Angeles

210 West

individuals

the

all

agreed.

referring

thing that is part and parcel of some
you, impress you with the fact that
that the things they say ring true.

Bank, Ltd.

Deacon's

Williams

was

Dealers & Brokers

CALIFORNIA

course,

rest of us experts

COMPARED

BUTLER-HUFF & CO.

successful as a salesman of securities.

essential if you wished to make a success
AND STAY IN THE SECURITIES BUSINESS. H'You either have it
or you
don't; and if not, you might as well bow right out of this
business." So said our own version of Mr. Clifton Fadiman and the

ASSETS

TOTAL

should have

important personal asset that anyone

particular was absolutely

Quoted

—

Orders solicited.

Inquiries invited.

when a group of old-timers get together, a number
observations can be made upon this subject With the help of
elusive half-bottle of Scotch, we finally decided that one thing
Of

Sold

Trading daily 7 a. m. to 5 p. m.

securities

few of us who have been selling

in order to be consistently

—

REVIEWED

Special Bulletin and Booklet Service to

long enough to remember a few things which might better be forgot¬
ten were discussing a most interesting subject. The point at issue was

OFFICES:

LONDON
3

Bought
ANALYZED

throughout Scotland

Branches

Insurance & Bank Stocks

Success

Personal Integrity Is The Foundation Of
In The Securities Business

OFFICE—Edinburgh

HEAD

2223

FINANCIAL CHRONICLE

50%

the 10,000 com¬

currently outstanding.

Deposits
Deposits
Number
Book

$85,319,000

capital funds.

Total

———_$1,969,006,000
capital funds.
22.8

to
of

shares——_

The

300,000
$284.40

share—

value per

Approximate

market—.-376 bid—381 asked

proposed stock dividend, if

authorized

stockholders

at a

special meeting late in December,
will be 66%%,
the bank's
to

thereby increasing

capital from $30,000,000

$50,000,000.

from

Funds will come^

surplus and reserves. The re¬

common
stock offers interesting
At
the
same
time
the present vised balance sheet items after the
possibilities according to a mem¬
$600,000 of preferred stock will be proposed change, and assuming
orandum discussing the situation
ing manpower utilization, plan¬ Buffalo War Production Board.
retired. The balance sheet for the approximately $500,000 credited to
contained in the current issue of
ning techniques and cost reduc¬
Tickets for all meetings of the
third quarter of 1943, showed the undivided
profits from current
''The Preferred Stock Guide" pub¬
tions
for
the post-war
period. two-day conference will be avail¬
lished by G. A. Saxton & Co., Inc., Prominent
following items: t
representatives
of able to the public.
earnings, will be about as follows:
70 Pine Street, New York 5, N. Y.
Preferred stock ($100 par)
$600,000
Common stock ($100 par)$50,000,000
management, labor and govern¬

Copies of the "Guide" containing ment will take part in the con¬
quotations on public utility pre¬ ference, which will be the, third
national meeting sponsored this
ferred and common stocks may be
year by the Society in an effort to
had upon request from G. A. Saxdevelop plans for all phases of
Ion & Co. Also available are in¬ management's
conversion prob¬
teresting

memoranda on Utilities

Securities Company
and notes, 6s of 1981; and

employees
bonds
the
of

preferred stock
Mountain Power Cor¬

$6 cumulative
Green

poration.

lem.

Senator Harry S. Truman

Mo.),. Chairman of the
war
investigating group,

(Dem.

Senate's
will be

Common stock

National Radiator Company

Undivided

and

profits

—

capital funds

Deposits

offer

Deposits to capital funds—

attractive

cording

possibilities ac¬
discussing

circulars

these situations prepared by

Unterberg
New

York

value

Aher

Copies of these

changes

(com.)—

(common)

Undivided profits

sheet

the
are

items,

proposed

credited to undivided

Number of shares—

Book valyw per

The

bank

capital dividends

effected, the balance
assuming

$90,500,000

capital funds_—_

Deposits _______——$1,969,006,000
Deposits to capital funds21.8
—

500,000

•

$181

share—___

$424

Approximate market ——327 bid—337 asked

Broadway,

Co.,

City.

C. E.

Number of shares
Book

$4,843,190
$134,652,220
27.8
10,000

—i—40,000,000
___——_
■„
500,000

Surplus

Total
Total

Public National Bank & Trust Co.

principal speaker at the dinner circulars
may
be had upon re¬
meeting on Dec. 3. Among others
scheduled to address the confer¬ quest from C. E. Unterberg & Co.

the

1,000,000
2,500,000
743,190

($100 par)_

Surplus

Attractive Situations

expected

shares.

pay

the 500,000 shares at

the rate of $8.00 a year,

$100,000 with $12.00

profits from

per year on

compared

the 300,000

THE COMMERCIAL & FINANCIAL CHRONICLE

1224

them,

Suggestion For Organization For
Post-War International Finance
(Continued from first page)
also been shown, liquid resources

It has

sources.

that long-term

credits, of such unwieldly size that they cannot be
in

serviced

ated

the diffi¬

materially to

add

will

our

The

period of recession.

culties of any

The amount of the means by

which importers may pay us, cre¬

of some stress,

times

already available

importers abroad.

then current imports.
of truly sound

amount

When such weaknesses are known

long credits collectible on the in¬

slight reaction in gen¬
eral trade activity checks further
liberal extensions of credit, leads

stallment

exist,

the

im¬

natural

investments,

equity

general pulling in of horns,

which

basis

porters may be able to sell to us.
4.
The
amount
of
profitable
re¬

andjinally sources, or other property abroad
leads to crisis and default.
The paid us in exchange.
5. The amount which we
are
sale of exports against unsound
credits of any type has not proved willing to give away knowingly.
It is desirable first to determine
to be advantageous in the end.
accelerates liquidation,

considerations

business

Usual

probably cannot govern all aspects,
of our immediate post-war for¬

extend

are

would

probably* compete with

at home. It is

liquid resources,, baU
ance
should be restored' by ad¬
justment of exchange rates, or by
extensions of long credits, and (4)
long credits should be extended
only to the extent that they are

even

porting interests

unlimited.

favor

too

the

interests

best

serve

always likely

are

extensive

credits.

will,

gifts and

however,
of

all

be "to

pre¬

of the proper

sense

rela¬
matters, and not

tivities in these

flexibility of the financial struc¬
ture, and tending towards-a .re¬
duction of the penalties on busi¬

instead of closing the door

further progress,
of

vistas

the existence of which will in the

fundamentals

this

liquidation and
Such events always follow
produce

extension

without

credits

consideration of the means
of paying them.
The
instrumentalities
through
which

the

credits

less important

are

extended

than the under¬

enthusiasm

and

carry

realistic

international

limits.

organization

organizations designed to clear
credits, and to ar¬
range and pass upon intermediate
and long credits could be capable
of great service as a central point
at which the necessary informa¬

has

trary,

international

increased

travel

or apparent purpose can change,
overcome or disregard toe^ under-

tative

own

I lying realities , without disaster,
success of any financial m1 stnimentality lies m its slull: in

possible, to avoid further
famine.
Aid could also be given

soon

the credits will not only be

cause

the capacity of the imto pay immediately, but

beyond

porters

means

exports over im-

ence

could be of great value.

it will

realities, and not in any

succeed

.But

only if 'it follows

in turn will depend

partly

This

the

who manage it. It seems rea¬
sonable to assume that the man¬
men

|« ffgug

Sta!f.s> fay reason of its creditor
position, ultimately is found to
a very large proportion of
.

deposits of the clearing or-

1 gamzation, but the assets of the

organization are obligations due
chiefly

from

other

agement of such
would
and

organization

experienced

their

able,

and

would

acts

sound,

nations,. the

them,
the

have

from

clearing nation to get out of
balance, or permit it to commit
any nation to extend intermediate
or
long credits, which
fundamentally sound.

Whether

are

not

comes

standards

fully

them

frozen
un¬

overorganization,
restrictions, cartels,

unnecessary

There

high degree of decentralization,
enlarge the opportunity for
creative ability, and to maintain
a high degree of flexibility.
Re¬
duction of the 'tax penalties on
to

success,

economic

our

from time

a war.

able to

fectly
the

use

time

get out

especially when
Unfortunately, we

see

onlv

means

of pure

the nature

what

provided

say,

interrelationships,

adjustment,

-me

proper

not such

is due in part to,

ex¬

structure

balanced credits,

and

adjustment
the multitude of factors in

among

that

—

there

into

sell abroad in

social

by creation of excessive and

fast

satisfying them

changes in the tax laws
the installation of

encourage

equipment

new

obsolesence

hasten

and

of '

old

the

machinery,
promote the discov¬
the products of. our industry as a ery of. new-and less expensive
whole, provided they can be made! ways to build, and measures to
at the right price, and labor can stimulate rather than to repress
be
fully
employed in making the floyrof equity capital into in¬

be done to

to refuse to

for

very imper¬
of statistics, or
economic theory,

these malad¬

justments may be, and what may

an organi¬
being, we will
gain little from a large accumula¬
tion of unpayable credits due from
foreigners, or from further exten¬
sive additions to our gold stock,
which will earn us nothing. There¬
fore, it would seem reasonable for

zation

Im¬

demand

devised.

been

faster rate than in the past,
do not allow our economic

risen
of

and

before.

limit to the domestic demand for

there is

and

because

than

time is spent

the

means

even

seems

can progress

trusts, and other excessive regula¬
tion, but seek rather to preserve

ever

demands have

which

due

has

become

the conveniences with¬

low1 the

amounts

con¬

travel

has

than

decreased

not

especially if the design of the in¬
stitution does not permit it to al¬
each

or any other monetary

will have been created

by which payment may be made
in
the
future.
Huge so-called
"favorable" balances of trade in

body on long credits and
monetary matters.
Its influ¬

all

realistic and sound policies.

unit if the
ports, if a large proportion of the amounts owed by it to each parexports
fall into
the category ticipating nation vary by more
which does not produce the means than
small amounts from the
of paying for them, supplies an amounts due to it by each such
unsuitable basis for credit, be- Participating nation. If the United
excess

interna¬

ing the limitations of the under-

aMjty to disregard them by mgeruous devices. It cannot so disavailable for export, and the lim- regard them with success merely
ited means of Europe for making because it is large, national or in¬
payment, it will be necessary to ternationa in its scope.
An inextend aid with the best practical I ternational clearing arrangement
combination of economy and ef- W'U "f1 work successfully merely
An

status

interpreting, applying, and obey¬

by making available our "know;
-how" on many problems. Because
of the limited supply of goods

ficiency, if the Job is to be well

the

' travel

provements in the construction of,
and facilities within homes haye

populations
to
recover
productive power by
such methods as sending them
seed and other supplies which will
enable them to raise enough, as
their

easier, and far
in

On the

the amount

time

less

caused

spent in travel.

not

success.

future

the

tressed

ness

allow

various nations could 'be collected,,
and as an advisory and consul¬

wuuauu

For

great distances in a mere fraction
of the time formerly required, but

without caring,
credits,

dis-

assist

to
i/v

larger

opens

be done.

housing

measurers

thing

extremes which do not take, a suf¬
ficient account of the practical

gifts,,

are

tion

lutaouivio

from savings, thus increasing the

tional balances of accounts of the

clude

law

progress

covery,

The

law of acceleration/ Each dis¬

tality, however appealing in name

VIUUIC:

graduated

likely that

proper

already planned to in¬

by debts connotes heavier
taxes,
or: in
other

nanced

words, increased penalties on sue- -J
Debts to finance such en¬
possible, there¬ cess*
fore, that the exports of our latest terprises increase the inflexibility
types of machinery, and their use of the financial structure, and de- ;
by cheap foreign
labor, might crease its power to adjust itself
have an adverse effect on employ¬ to change.
The net effect of this
ment
and
wages
in
industries sort of approach to the problem
sound and can really be serviced. other than the machine tool in¬ is either negligible, or in the di¬
It is probable that the American dustries.
The policy of becoming rection of retarding business ac¬
people will want to give some¬ a large lender and exporter to for¬ tivity. This is shown by the small y
thing towards the relief of post¬ eigners and a large owner of for¬ size of the demand for new capi¬
war
distress in Europe, and that eign resources would, therefore, tal by private industry in the en¬
they will be willing to supply necessarily and inevitably connote tire decade before the war, and
more help in exchange for certain
policies as to imports not likely by the low level of interest rates
assets abroad, and in exchange for to be acceptable to much of our which then pertained—a clear in¬
a limited amouiit of credits. Those
labor and domestic industry.
dication of a lack of vitality in
in this country who benefit per¬
It
seems
The ideal
probable
that
this the business situation.
sonally from the sale of goods country will gain more by devot¬ solution would obviously be to
which we will give away, or send ing its attention primarily to the find enterprises which can be self- '
abrqad in exchange for such as¬ development of domestic industry, sustaining, and which can be fi¬
sets or credits, will surely favor as in the past.
The possibilities* nanced even in depression by sale
such transactions.
In fact, ex¬ within the country are still almost of equity securities, or directly
their

ceed

lying realities, and no instrumen¬

tended

our

manufactured goods, not only
in the markets of the world, but
own

example, improved transportation
has
made it
possible to cover

crisis.

aid to be ex¬

the

and
then

but also to create unsound

and some semi¬
manufactured
goods.
But
the
available supplies will necessarily
fall short of the needs, and the
means
of foreigners to pay for
them will fall still shorter.
For
reasons,

restrictions, and

to it that the credits which

see

they

supply

material,

these

to give away,

mean

only those which
can
be liquidated
according to
their terms.
To go beyond these
limits is not only to make gifts
without immediately realizing that

all the denuded
working inventories of Europe. It
can help by supplying some food,
some other consumers goods, some
raw

what

eign trade policy completely. Con¬
sideration-will be given to foreign
relief. But the United States can¬
not
feed the world, because it
does not have enough food.
It
cannot

what
with

(3) when the international

short-term obligations of any na¬
tion and its nationals begin to ex¬

Thursday, December 2, 1943

them.

overcome

This

the fact that such

unchartable matters

styles, in¬
dividual preferences, customs, the
as

progress of, research,
are
involved.
The

can

determined

only by the in¬
"experience" or "judg¬

tangible

dustry

are ' among
the
things
which may be done to encourage

forward
If

action

by central policy*
technological
creates jobs and better

realize

progress

that

pay,
instead of creating unem¬
ployment, we will have laid the

foundation / for

Thus'
the automo¬

recovery.

the jobs in

all

were

bile industry, and all those in col¬
lateral

activities, created out of
nothing in a little more than. 25
years—jobs which simply did not
before.

exist

mands

rise

Standards

fully

and

de¬

the

fast

means for satisfying them are de¬
and weather vised, and speeding the discovery
answer
with; of ways and means of satisfying

respect to many such matters
be

•

measures

them

abundantly and more
the
mainspring
of

cheaply

the

towards

progress

abundant

It will, nevertheless, be de¬
organiaztion will be illiquid, and change for an undue amount of ment" of men who have spent life.
will
unable to meet its obligations on either of these types of
assets, or their lives in particular special¬ sirable to continue price controls
constitute a gift to the extent that
demand or short term, when it is even of foreign natural resources ized activities, or by the process and rationing of products, the de¬
they represent the sending abroad
of trial and error in actual prac¬ mand for which will be entirely
subjected to any strain. It will bt-i or other foreign assets.
of physical merchandise in ex¬
come a frozen institution.
tice. For this reason, overall "con¬ out of line with the supply for a
Clew¬
If the United States is to be¬
change for credits which will not
trols"
and "planning" are suitable brief period after the war.
ing accounts should be clearing come a lender to
In no
be paid.
foreigners on a
They will even be in
only for general and rather crude other way will it be possible to
accounts, and should not be classi¬
small part a gift, when they are
large scale, and is to obtain the
fied as such when they are actu¬
They produce befc-i prevent unwarranted temporary'
benefits of owning large resources adjustments.
exchanged for gold which earns
ter results than the ordinary oper^ increases in prices, and the crea¬
ally illiquid, and therefore long,
us nothing.
abroad, she must realiez that a
To create a mass of

the immediate post-war years

credits of poor

character will not

deceive ourselves, but will
preate conditions which will ulti¬
mately prove to be detrimental
to trade conditions throughout the
only

The only approach which

world.

What

in fact long-term obli¬
should also in name and

are

gations

obliga¬
tions. 'Therefore, the clearing or¬
ganization should be liquid with-

provisions

long-term

:n the limits of seasonal and other

short

very

time

variations,

and

effecting a
if there is any tendency for short
really satisfactory solution is one
credits to become illiquid by rea¬
which is realistic, takes off the
son
of their Unbalance, balance
rose colored glasses, and does not
should be restored by arranging
exaggerate the possibilities.
It for
long credits to maintain bal¬
offer any hope of

can

must have

some

Churchill

similarity to the

promise

"Blood,

exchange
sufficiently to bring about
balance.
If it appears to be im¬

ance,

changing

rates

Tears," rather than
supply everything
possible
to
restore
balance
by
to everybody at somebody else's
either of these methods, then it
expense.
It must face the fact will be
entirely impractical to ex¬
that
any
so-called
"favorable"
tend long credits in the disguise
balance
of trade, to the extent
and

Sweat,

the promise to

that

financed by

uncollect-

To the ex¬
that such exports are gifts,

able credits, is a

tent

gift.

they can be properly financed
only by the Government.
demand

The

need
may

eral

not

for

paid

goods
for,

which
which

be bought against over lib¬
payments,

will

be' almost

of short credits.

We arrive thus at the general
principles that (1) what cannot be
exported against imports, sound
credits, or in return for other val¬
uable
assets
abroad,, should be
supnlied as a gift, or not at all,

(2)

that credits extended to for¬

eigners which have

without limit. The practical limi¬

turity

tations

fact

the

sum

our

exoorts

should

of the following:

1. The amount of

internationally

ume

should

short

ma¬

kept liquid

by not permitting their volto

sources

exceed

which

are

the

liquid

re-

available to pay

major change in other policies is
unavoidable.

payment

She

unless

become

theory

receive the full

benefit of natural

abroad,

obtain

large amount of

any

foreign credits,

cannot

resources

she

liberal

willing to
importer.
In

the extension of

dustrial system to

owned

our

in¬

industrially

un¬

developed areas
offers
a
very
great market for our machinery
for a long period. This would give
employment
in
our
machinery
manufacturing industries.
But if
we

are

adopt this

policy, we
cannot
receive
payment of the
long credits on which such ma¬
chinery would have to be sold if
it is to be sold in

quantity, unless
we kre
willing to accept imports
in payment. All the imports would
not necessarily have to be goods
manufactured

which

had

the

machines

exported.

They
might
be
tea,
natural
rubber,
chromium, tungsten, or anything
else that
But

the

do produce ourselves.

quantity

materials that

imports

do not produce

ourselves, and would like to imoort, would probably be limited.
Therefore, the products of the ma¬

chinery

that

had

.exported

ation

unrestrained

economic: tion

unsound

forces when the interrelationships

inventories

of supply and demand are

will

thrown
very far out of line by war, but
they are inferior to the operation
of ordinary economic forces
in

credits

against
prices, which'

at• such

later

produce
difficulties,
at least a temporary
period of readjustment and stag¬

losses,... and
nation.

such

But

restrictions

normal

times, because they are should be continued only with re¬
insufficiently sensitive, and do not spect to those commodities in
marked. degree of un¬
permit
individuals
to
express which a
either their desires

ties freely.
Success
mestic industry lies

their abili¬

with
not

do¬
much

our
so

in grand

attempts to plan the ac¬
complishments of our industrial

geniuses, which cannot be plan¬
ned, as in avoiding the creation1
of unsound credits

unsound fi¬

nancial programs which

result in
financial and

periods

business

confusion, and in pre¬
freedom of opoortunity

serving
for

great

creative

schemes

for

effort.
public

Grandiose

construction,

and undue reliance upon

ation

the

cre¬

of indebtedness,

public and
private, are not likely to produce
the kind of results that are hoped
for, because many
Government
enterprises compete with private1
enterprise, and many are not self-!
sustaining, if all costs are taken!
into

large

account.

The

make-work

creation

projects

exists

balance

mand

the

and

between

supply,

should be removed
of

state

soon

de¬

they

unbalance

marked

the

has

Thereafter, business

disappeared.

will be able to lay their plans

men

basis

the

their

not

the

and

their knowledge
industries, and will

own

have

guess

what action is

going to be taken by central plan¬
Then

ners.

they

can

proceed

con¬

fidently with their plans.
The

course

cannot

fully

our

foreign trade

planned,

it desirable that it be
because

nor

planned,

much will depend upon

events at home and abroad which
cannot
can

possibly be forecast.

determine the demands which
will

make upon

foreigners in
for lend-lease or other
but,, in this connection, we

payment

aid,
must

also

consider

what

fi¬ willing to import in- payment,

are

Volume

2225

& FINANCIAL CHRONICLE

THE COMMERCIAL

Number 4234

158

what

exports

willing to

are

tions

which it

can

which

attitude

towards German

after the last war—
what sounds and is

morally just, but what is not prac¬
tically possible-—thus creating a
condition of unbalance in the ex¬

ultimately

will

which

changes

We may
determine that it is impracticable
to ask for any return from leaselend, except what may be obtain¬
able in the form of concessions for
constrict trade for years.

air

bases,

certain

amount

possibly

abroad.

sources

re¬

taining

specifically what we are
to give away for the relief of Eu¬
rope.
We' may take some part in

termine

clearing

international

some

that it will

be advisable.

ar¬

In any

know that there will
state of great unbalance in
international
accounts
of

event,
be

the

which

under

law

and

months

pvill

naturally,

handled,

syndicate that
nation¬

prepared itself for
wide distribution.

has

It will serve, moreover,

amount of
short credits and current funds
due from this country and its na¬
tionals to each foreign nation and

to start
the current month off properly
from the dealers' point of view

its

nationals, and the amount of
short
credits 'c and
current
funds due to this country and its

tions which will demand work in

the

marketing.

between

from

nationals

many

that
not

the

such

since

However,

nationals, provided
in determining whether or
such a balance, exists in the

since

of last month, deal¬

had

have

veritable

offerings, until

new

the middle
ers

propor¬

market

the

experienced

dearth

business

the

had

foreign na¬

and' its

tion

nations, including our own.
The demand for various commodiites which enter into international

degree

reasonable

balance

decide

finally

largest single offering
in the new issue field in recent

corporation
would
be
set up
would require that such exchange
rates be set with a view to main¬

We may also de¬

rangement,

The

bankers
as

ample

opportu¬

The

the

third

from

our

credits, arising
international activities,

unsound

exactly as price ^control and ra¬
tioning will be necessary for some

in the
of some domestic commodi¬
There may be certain other

time for the same purpose
case

ties.

the

time

operations.

menced
4. In

corporation

event

the

balance

it is in the

ligations when these are available.

that

closer

between

Central

the

current funds due from or to any

Co.'s

through bilateral or multilateral
tariff arrangements.
But in the
main we have cited the only prin¬

groups on

advantage.
Unless

./-v

are

to leave the ex¬

(a) Alter the buying and

sell¬

ing prices in dollars for the cur¬
of any such .nation, pro¬
vided that such nation is not on

rency

the full gold

standard basis.

;

(b) Suggest to the Secretary of
the Treasury that the Stabilization

Power

Central

The

in which we can plan cer¬ nation and its nationals, it shall
tain aspects of. our foreign trade take such of the following actions,
and
international business rela-. and in such degree, as it shall
tionships
for a
time,
such as deem advisable:
;
ways

cipal ways in which our foreign
trade can be centrally planned to

huge

the cor¬

oublic interest to restore

degree

latter securities

of the

scale, there is nonetheless a dis-r
position to seek out corporate ob¬

;

poration believes that

com¬

Power

Latest

out in

from

the

And

mitted

re¬

One

unit.

Clears

lower

indicates

quently both

SEC

are

prices. Fre¬
right at the

A farm bloc clarrn

time.

oring for higher commodity
prices should mean the re¬

With its refinancing plan, as
amended, having passed muster at
the Securities and Exchange Com¬
mission, subject to certain condi¬
tions, the Utah Power & Light Co.
should
be
sending out a call
shortly for bids on its projected
new offering.

newal of inflation fears with
the market

for

all

know

acting

these

mirror

as a

fears.

Yet

that

despite Congress*
willingness to give certain in¬
what they f seek the
This deal involves the sale of terests
$42,000,000 of new first mortgage market has refused to budge.
bonds which will provide funds
Attempting to analyze all the
necessary to finance, the retire¬
known factors and applying
ment
of'
.

$32,187,000 outstanding
them to market forecasts seem
bonds of the company
and $11,813,000 additional of sub¬ only
to stir up air already
sidiary company obligations.
muddy pool.
^
^

mortgage

Commission qualified its

The

approval of the program to the
extent that the company must
agree to eliminate alleged write-

Based

equity

capital

stock.

only.

Dealers

vs.

Underwriters
who

have

may

main¬

finding that such associations
paying big dividends these

are
are

underwriting
out

without such approval.

that

been

rest

dealer

pointed

firms have

hit nearly

the

not

and

hard by the

war

have

the

larger

ganizations.

si*

leader

S. Steel

any

new

the

market

will

anywhere either. So I advise
buying U. S. Steel between 46
I

48.

know this

means

lower

draft and other consequences of

the

sale would be per¬

particular

houses

Big Steel can't go
anywhere, I don't think the

phase of the investment set-up,
an official of one of the largest

the

move.

this

mouthful.

I still consider U.
as

■'/;/i;

Discussing

get indigestion.
❖

working affiliation
with well-established dealer firms

tained

Don't take

You may not be able to swal¬
low it, and if you can, you

'"V:

Underwriters

enough to warrant a
nibbling; but nibbling

little

adjust its
one class of

and

subsidiaries,

action

act well

involving $32,000,000 in accounts
of

market

alone, however, certain stocks

and other inflationary items

ups

winning bid and that made by

such credit

exceptions)

part of the market may indi¬
cate higher prices, while at
indi¬ the same time another part

same

Issue

act

for the

sources.

Another

Light

spread between

fuses

last night
were moving

reports

vestment,

banking

three

(Continued from page 2209)

satisfactory manner to in¬

days.

Monday.

Whyte

ket (with rare

The

between,

97.259

pay

Savs

cated that the bonds

99 V2, brought

yesterday at
bids

out

came

issue.

$25,000,000 of first mortgage
3 % % 30-year bonds, offered pub¬
licly

97.139.

bid

bidder

offering

Light

Walter

winning

nity to work off unsold balances
temporarily, case of any foreign nation, the
of
other
issues
and
their
far beyond the supply available corporation might, if in its opinshelves are literally bare,
for export, and far beyond the 'on in the public interest, disre¬
Meanwhile behavior of most re¬
volume
of
liquid resources of gard all or any part of any excess
of such short credits and current cently marketed public utility is¬
many importers to pay for them.
funds
due
from
this
country
to
This will reflect itself in a great
sues suggests a receptive market.
unbalance between the demand such foreign nation and its na¬ Institutional investors have been
for and the supply of dollar ex¬ tionals over the amount of such hard put to find outlets for their
change, and will require measures short credits and current funds funds, except, of course, in Gov¬
for temporary control designed to due to this country from such for¬ ernment loans.
While they have been buyers
prevent the erection of a large eign nation and its nationals, at
of

own

regards the market and

lowest

•

Tomorrow's Markets

tender yielded
the company a price of 98.269
and was a full 1.30 points above

trade will be, at least

mass

their

have

i Vin '.ii'ii -iff

111,

prices.

the

sent

indicates

competitor

that

REPORT

international organization.

limited

natural

;

determine daily
official
exchange rates
(buying
At least two and possibly three
and selling) for all other curren¬
large syndicates are expected to
cies, not on a gold basis, in terms
seek the Illinois Power Co. (for¬
of the dollar, which rates would
merly Illinois-Iowa Power Co.)
be the rates to be paid or charged,
$65,000,000 of first mortgage and
as the case may be, by all banks,
collateral trust bonds when bids
banking houses, and others in the
are opened next Monday.
United States, to the extent that
This undertaking will repre¬
such power is not delegated to any
2. The right to

repara¬

tion payments
demand

carry

third

ideas

REPORTER'S

to en¬
out its functions

necessary

French intelligently.

the shortsighted

may

able it to

be made would be to

repeat

OUR

facts concerning our
financial transactions

any
other
foreign

give up so that we may be paid.
To demand payment, but to refuse
to take
it in the only ways in

the

and

with the United States,

fiiir

""I

or¬

prices, but that's what
expect.
I have some other

stocks

Consequently, he said, whereas
the bigger firms have lost many
of their active salesmen, usually

other

mind

watch

week

but

them

before

would

for

an¬

recom¬

6. The powers and duties of the the younger fellows in an organi¬ mend them.
other fund that may Securities and Exchange Commis¬ zation, and thereby their direct
be voted by Congress for the sta¬ sion with respect to foreign loans contact- with many investors, the
More next Thursday.
tion of some type, which seems
bilization
of
foreign
exchange would be transferred to the cor¬ dealers, on the other hand, mostly
—Walter Whyte
hardly likely, or entirely to our rates be used for this purpose.
poration; but no loan ' partially older men and long in the busi¬
Government, there will be a place
[The views expressed in this
ness,
are
still
able
to
go
out
and
guaranteed
by
the
United
States
(c)
Suggest or approve the
for a domestic organization''de¬
do a real selling job.
I V article do not necessarily at any
'
granting or public sale of inter¬ would have to be registered.
signed to take a part in our post¬
time coincide with those of the
mediate or long-term credits in
7. The corporation would be re¬
war 'international
financing, and
Chronicle.
They are presented as
the United States, provided that
quired by law to consult with the
to exert an influence in the di¬
those of the author only.]
it believes that such credits are following with respect to all such
rection of preventing the erection
suitable for investors in this coun¬ matters as shall be appropriate
of a
large volume of unsound
try. In the event that it finds that for such consultation:
credits, while at the same time
no
lenders are willing to extend
(a) The Secretary of State.
approving
credits
which seem
such credits, and that no under¬
(b) The Federal Reserve Board
LAMBORN & CO.
likely to be advantageous either
writer is willing to sell them in or a Federal Reserve Bank.
directly, or because of their con¬
A memorial service in honor of
the United States, or it believes
99 WALL STREET
(c)
The
Secretary
of
the
Treas¬
tribution
to
international trade
the members, partners and others
that such credits involve an un¬
ury.
■
'V
<
conditions in general.
It is to
NEW YORK 5, N. Y.
of
the
New
York
Stock
Exchange
due risk for investors, it may sug¬
(d) Any international organiza¬
this aspect of the problem that
community who have made the
our
attention
is
primarily di¬ gest that the borrower apply to tion for the clearing of foreign
the Secretary of the Treasury for
transactions, or the granting of supreme sacrifice in the war will
rected.
Under the extraordinary
be
held on
Dec. 7
in Trinity
a
guarantee of a portion of the foreign
credits, ' in
which
the
conditions likely to exist for some
SUGAR
'nterest and principal of the pro¬
United States shall be a partici¬ Church, Wall Street and Broad¬
years
after the war, the risks
way.
The half-hour service will
posed credit.
This power would pant.;-;;
-/'/'■
would be
minimized by provi¬
Exports—Imports—Futures
commence at 8:45 o'clock a.m.
be exercised by the Secretary of
8.
The
sions for a limited profit corpora¬
corporation would be
the Treasury within such limita¬
Prayers will also be offered M
tion of the kind hereinafter de¬
sustained by a system of charges
the solemn service for the 5,632
tions, and for such purposes as
! to underwriters for examination
scribed, which we call for con¬
Stock Exchange' associates, who
Congress would by law prescribe.
DIgby 4-2727
of
venience, Federal Finance Cor¬
applications to sell foreign
are on the far-flung battle-fronts
It is assumed that the proportion
credits
in
this
poration, or ^simply the corpora¬
market,; and to
of the world. The service will be
of the principal and interest of
others granting long credits not
tion,
with
a
nominal capital
conducted
by the Rev. Father
any loan to be guaranteed would
owned by commercial banks en¬
offered through underwriters, and
Donald H. Morse, and the Rev.
be selected by the Secretary withby a system of charges on all for¬
gaged in foreign finance.
Dr. Frederic S. Fleming, Rector
'n the range of 25% to- 75%, as
This
corporation
would
be the particular case might require. eign exchange transactions within of the Parish of Trinity Church,
Established 1858
the United States in which both
semi-public
in
character,
and
will deliver the memorial address.
(d) If necessary to prevent the
of the currencies involved are not
might have nine directors elected undue accumulation in this coun¬
Emil Schram, President of the
on a full gold standard basis, but
by its stockholders. Four of such try of balances due to any foreign
Stock Exchange, invites all mem¬
directors
might be officials!* of country or its nationals, the cor¬ so limited as to provide the., cor¬ bers,
partners and employees, a*
r
Members
-•
• •
1
commercial banks, four might be poration would have power to im¬ poration with no more than a rea¬ well as members of the financial
New
York
Stock
Exchange
representatives
of
commercial pose restrictions on capital move¬ sonable reserve for.future oper- •community. generally, to attend.
New
York
Curb
Exchange
ating expenses and a reasonable
concerns engaged in foreign trade,
New
York
Cotton
Exchange
ments towards the United States,
return on its capital.
%
and cne an official of one Of the
Commodity
Exchange,
Inc.
through rules and regulations ap"Let's
Sum
Federal Reserve Banks.
Up"
Chicago
Board
of Trade
In .addition,
changes. in
our
olicale to banks, bankmg houses,
New Orleans Cotton Exchange
Pflugfelder, Bampton & Rust;
Legislation would be required md others engaged in foreign banking set-up should be made
And other Exchanges
such that gold movements will no 61
to g've the corporation the fol¬ trade and finance.
Broadway, New York City,

tension of
ers

our credits to foreign¬
international organiza¬

Fund

any

•

H. Hentz & Co.
#

„

lowing powers:

right to require reports
from banks, banking institutions
and others giving such informa¬
1.

tion

The

as may

be pertinent and nec¬

to enable the corporation
to know the status of balances due
to and from each foreign country
essary

and

its

nationals

their

rela¬

5. The

corporation would have

to approve all long-term
credits
(maturity more than 18
months) granted to foreign coun¬
tries or their nationals by any

power

longer change the volume of re¬
serves
of banks which are 'mem¬
bers of the

Federal Reserve Sys¬

thus remove an
ence which may, under the
ordinary
conditions
with
bank, or financing or financial
institution in this country, and all we are likely to be faced,
eomign issues offered by under¬
in this market, and no

writers

tem,

fere

and

with

the convenient

tion of domestic monetary

members of the New

Exchange,

York Stock

have prepared an in¬

influ¬ teresting review of rail reorgani¬
extra¬

which
inter¬
execu¬

policy.

zation.

Up."
be

cases

entitled

quest.

from

Bldg.

Y. Cotton Exchange
NEW

YORK 4, N.

"Let's Sum

Copies of this circular may

had

the firm upon re¬
i

CHICAGO

DETROIT

GENEVA.

PITTSBURGH

SWITZERLAND

2226

THE COMMERCIAL & FINANCIAL

(Continued from page 2206)
After presenting the Treasury's

tax
boosts,
Secretary
Morgenthau was questioned by

proposed

members

Committee

merits of

the

sales tax. He reiterated

the Treasury's position that

Corporation Taxes

recommending

■; Present
corporate normal
surtax rates are retained. The

and
ex¬

profits rate is increased from
to 95%, The present 80% over¬

cess

was

believes "it

but

tax

type

any

least

the

desirable of all methods of raising

additional

ex¬

the

Only

Changing values in money bring
personal hardships.
They
also
disorganize and retard all
economic progress.
In the hesi¬
tancy of the investor, in the un¬
certain moves of business, in the
fear

labor

and

the

ineffec¬

new

credits allowed

are

House bill "falls far short even of

Morgent.hau's renewal of
the Treasury recommendation for
tax

which

shift

levies

come

about

the

persons

off

would

lowest

allowed for

excess

profits taxes is

from $5,000 to $10,000.
corporate tax changes are
9,000,000 expected to yield $616,000,000 more
brackets than present law.
lift

increased

in¬

All

accompanied by the assertion
that this ""group would pay out

was

about

$1,000,000,000
excise

creased

through

prompted Chairman George to
sert

the

that

sources

pressure on

"It

figure

showed

as¬

the

of the inflationary

some

These

in¬
This

levies.

prices.

excises

would

in¬

creased, yielding an estimated ad¬
ditional $1,201,700,000:
Distilled Spirits—From $6 per

100-proof
gallon
$370,000,000.
Beer—From $7

$9;

yield

value
of

dollar

dollar.

our

worth 75

now

system

values, today's

pre-war

cents.

very

pulsory savings
"That is

was

unchanged.

correct," the Secretary

20%, yield $72,500,000.

replied.
"If

are

to step up

taxes, in

view of the already rapid step-up
that has been made, then the com¬
mittee

25%; yield $20,000,000.
Jewelry—10% of retail price to

probably

would

want

take the view that all methods of

Fur

Articles

Fur-Trimmed

and

—10%

retail

price

25%;

Luggage,
etc.—10%

Handbags,
Wallets,
of manufacturers' sale

Randolph Paul, General Counsel
Treasury, also appeared be¬

Toilet
retail

fore the Senate group on Nov. 25,

ooo.

testifying in opposition to several
phases of the House-approved bill.

etc.

Preparations

10%

—

price to 25%; yield, $51,400,-

their currencies.

Good money and

sound

boon

trade

Poor

are

and

money

companies.
that

fear

even

when the British

present

Victory tax

fer

higher normal and surtax rates
for
corporations
to
the
excess
profits tax rate increase voted by

and

domestic and

10% to 15% for in¬

ternational; leased wires, 15% to
20%; wire and equipment service,
5% to 7%. Yield, for local tele¬
phones $48,900,000, for all others

the House.

$48,800,000.
'
Transportation of Persons—10%
Nov. 2.4 for passage of the $2,140,- to 15%; yield $75,000,000.
000,000 revenue measure was led
Transportation of Property, Pres¬
by Representative Do ugh ton ent Rates—3% in general, and 4
(Dem., N. C.), Chairman of the cents a short ton for coal re^
Ways and Means Committee, and tained, and applied also to fourthby Representative Knutson (Rep., class mail. Yield, $4,500,000.
The

debate

the

House

Minn.), ranking minority member
of the Committee.
the

A reference to

bill appeared in

issue,

page

our

Nov. 25

2125.

A summary of the
$2,140,000,000
tax
bill adopted by
the House

follows, according to United Press
advices:

Admissions—General
from

admissions,

cent for each 10 cents

one

the American dollar

gold standard.

were

Then they were

frightened,

came

this

its

own

ness

for

Cabarets—From

charge

to 30%; yield, $91,300,000.
Club Dues and Initiation Fees—

yield, $5,100,000.
Alleys, Billiard and

Bowling

pro¬

vision of existing law is repealed
to make up the revenue derived
from
the
Victory tax.
A
few

slight changes also

are made in the
surtax schedules to effect the in¬

tegration.

The

changes result in

slight decreases

taxes

due

Pari-Mutuel Wagers

present

total

wagers;

yield, $27,500,000.
Postage Rates
First
ounce

Class —From

cents

for local mail to 3 cents (no

change

out-of-town

mail);

World

gold.

Bank

dependents,

$4,000 for
two

$154,800,000.

order,

our

can

rise in

may

with

currency.

restrictions

respect

return

made.

value in

present

are

manpower

materials, after the

People

Want
it

war

there

currency,
which
used in order

rence

best

ore

rating

support of Arab tribesmen.

repeated
General

itself

Mark

in Africa with

whose

double

price of $35.

it
the

mean

actual

conditions,

National

Corp.

463

Oct.

31,

1943

were

series

<—October 31—
___

Low-priced bond series
Preferred

stock

series

series___
__

1943

1942

$6.73

$5.95

5.96

4.97

6.46

5.50

4.28

3.61

stock

common

series

International series

2.89

2.08

13.73

10.82

by this folder.
ACTUAL

charges
be

One is that

"times

earned"

figure

approximately 5.60

compared with
REPORTED
2.53

fixed

for

all

railroads this year will

times.

times

coverage

The

approximate

other

only

that

the net working capital position
of
the
railroads
is
now
ap¬

proaching $2,000,000,000, or
enough to pay all fixed charges
for nearly three years.

folder

and

illustrated

the

attractively pre¬
major points are
means of colored

Massachusetts Distributors' lat¬
Brevits

est

contains

interest¬

ing "definition" of Massachusetts
Investors Trust, the "granddadcly"
of

the

common

investment

'stock

funds.

According to a recent survey of
shareholders,
"There
are
over
1,770 trust' accounts located

MIT

in 42 States in the Union in which

of Massachusetts Investors

shares
Trust

are

held, including some 640
are
acting as trus¬

contains

discussion

"Advantageous Security Transac¬
tions from Tax Standpoint."

The
abatement, the "anti-wind¬
fall" tax, capital gains and losses
75%

and other features of the present
laws are discussed.
.

tax

banks

tees for individuals

estates.

Grade Labeling

Step
Against Free Enterprise
L. R. Maxon Declares
Grade labeling of canned goods
represents the first step toward

eventual destruction of the Amer¬

of free enterprise by

ican system

government standardization and
regimentation of goods and serv¬
ices, Lou R. Maxon, head of the
advertising agency bearing his
name and former Deputy Admin¬
istrator of the Office of Price Ad¬

ministration, said
the

before

talk

Club,

Nov. 23 in a
Executive

Sales

New York.

Maxon

Mr.

"Grade labeling, in my sin-

said:

cerest

estimation, presents a seri¬
to American industry
and our way of life because it is,
without question, the spearhead
in the drive to eliminate brands,
trade marks and eventually free
enterprise."
threat

His further comments are taken

follows

from

the

New

York

"Herald Tribune" of Nov. 24:

Mr. Maxon declared that college

professors,
ers"

ity

were

bureaus
influx

leftists

and

"dream¬

still in the great major¬

the staffs of government
despite the recent sizable
business men in key

posts.
"A

strong part of this group,"
said, "believes that the manu¬
facture, standardization and dis¬
he

The current issue of Investment

Timing

tribution of all essential products
should be

placed under the arbi¬
control of the government
not just during the war, but per¬
manently. And grade labeling, in
trary

estimation, is the keystone of

their effort."

Declaring that the OPA favored
Keystone Corporation has reis¬
sued its "Planned Investment Pro¬

gram"
the

as¬

National Securities

I
Bond

Research

that total net

year
ago.
The following
comparison of net asset values is
given:

Two amazing facts are brought
out

$6,225,339 compared with $3,669,-

States

clear-cut, simple language.

ous

Securities &

announces

years

ago."

sets of its six

Series

two

25 years

was

000.
*

the

over

Low-priced

necessity of

informed

sential

for

presented

and explains
management and
careful supervision will be as es¬
why

amount, to 10 to 37 cents cents;
yield, $21,000,000.
Registered Mail—From 15 cents
to
$1 an article, depending on
value, to 20 cents to $1.35; yield
$4,500,000.

are

diversification pattern geared to

Income

Charts

weighted in wrong industries, ex¬
perienced a difficult period de¬
spite the generally rising market.

further monetary in¬

interesting

diversified account, or an account

our

This strengthens

Mail—From

The bulletin concludes:
"In November of 1918 a
poorly

landed

selling

United

wide variation in per¬
between
these
two

where

groups.

today is shown by the price of
gold in the Bombay and Cairo
markets

show

formance

His¬

and

question

makes

World Warl

bag of gold. Gold
talk when no other

always

comparison between the market
action of "war" stocks and
"peace"
stocks during and after the First

the

when

Clark

today.

This drives home the

win

this

addition, shares are held by some
1,200 institutional investors, in¬
cluding 296 associations, societies
and lodges, 72 banks and trust
companies, 110 churches, 455 cor¬
porations, 111 homes and hospi¬
tals, 53 insurance companies and
100 schools and colleges."

the

Abstracts

gold, not
Colonel Law¬

Bonds?"

answer

with

Lord, Abbett's current issue of

Gold

Value
to

where

was

out

New purchases should be
confined to
producing

vestors

depending

payments

only

interna¬

Investment Trusts

ounce; yield,
Class—From

the

prove

(Continued from page 2221)
adapted to the needs of many in¬

proposal looks

cents

may

through which

over-all cost of production is rea¬

additional

with

Mail—From

gold

sonably low.

of the 25 United Nations' govern¬

In World War I

charts.

time in

companies

This

a married person with
dependents.
In
all,
the
changes are expected to yield an

person

Air

cents

greatly

on a

basis; in fact, gold

stocks.

a long period
requiring member

the

sets

100 years.

cents
an
article, depending on
cents to 8
value, to 10 to 70 cents an article;
$11,000,000.
yield,
$6,500,000.
Third
1 and IV2
C.O.D. Mail—From 12 cents to
cents for each 2 ounces (accord¬
$1.20 an article to 24 cents to $2.40
ing to type of mail) to 2 and 3
an article;
yield, $5,400,000.
cents; yield, $74,400,000.
Total postage yield, $166,800,Money Orders—From 6 to 22

some of the lowest
brackets, and
slight increases in brackets start¬
ing at about $2,500 for a married

re¬

earning
power to the gold industry. Cer¬
tainly it is no time to sell gold

over

any

Insured

yield, $44,000,000.

The

Group Securities invested
high-yielding railroad bonds.
The
folder
is
entitled,
"What

The

should

None at

—

the

distribu¬

pared

lifted

ments.

would

000.

operating

are

Furthermore,

The present 5% Victory tax is
Pool Tables—From $10 an alley belief that international curren¬
integrated with the normal income to 20% of
charge, and from $10 cies, including our own, will be
tax; technically, the Victory tax per table to
further reduced in
value.
This
$20; yield, $27,000,is repealed, but the normal income
tax rate is raised from 6 to 10%
and the earned income credit

down.

total

class of

pro¬

and

best.

almost

shut

mines

Total

duction in United States and Can¬
ada is less than at

terms

Unquestionably a bank
plan will be worked out with most

OWn

have

Thus, gold

The

currencies.

moment the White

tory

shortage,

had

Distributors Group has issued a
new folder on Railroad
Shares, a

producing before World War II.
During the war gold is subordi¬
nate in importance to nickel and
copper
and to the products of
many other mines.
In view of
manpower

Funds

investors.

Class I

are

tions, regular and special, since
inception of the Funds, amounted
to $16,100,000.

other stocks.

any

stocks

pro¬

stabilization

tional

gold-mining
companies which were profitably

tional

Keynes
idea is highly inflationary. At the
the

Funds

the 10 Key¬

$64,000,000, owned
by 34,000 individual and institu¬

the

System,
profitable

will

yield,

From 11 to 20%;

Personal Income Taxes

countries
up

favor

medium

private busi¬
goods • in transit.

authority, have both
plans

large credits

put

than

Custodian

assets

Measures

Federal Reserve

our

posed

long-term basis, however, I

trade,

account to

cover

it might prove a highly
and useful enterprise.

money

would

any

"Interna¬

form of money is effective. That
a natural demand for
gold exists

20%;

cur¬

stone
net

After the war, when all efforts
are
turned to stimulating world

tional Bank" could guarantee any
loans.
It could also make loans
on

reduced

exchangeable for a definite
amount of gold of a definite
weight and fineness.

boxes, from
$163,500,000.

ulti¬

Watch Gold Stocks

maining

tied to

fraction thereof to 2 cents; leased

form

More money has probably been
lost through, speculating in gold

Africa

pound and

radio

the

should

restricted

were

this, and the

which trade and industry advanced
the most both here and abroad
were

stances

regular month¬

10 of the various

Custodian

if the circum¬

States, Canada and South

ing

with the regular income levy and
also said the Treasury would pre¬

to 25%; telegraph,
cable, 15% to 25% for

20%

we
some

even

60%. of the

of time without

criticized

get

nearly

phone,

particularly

United

the House's formula for integrat¬

Paul

Hence,

mately have in

which

attempt

The most

panic.

White plan favors an actual gold
fund.
The
Keynes plan favors

Mr.

shape.

All

used in this program.
As of Nov. 1, 1943,

form of managed
be in the worst

will

currency

yield

ly income.

Keystone

will

times and the period in

waste and

causes

Telegraph,
Radio,
telephone, 10% of
charge to 15%; long distance tele¬
Local

—

some

now

will become less valuable

money

international

Telephone,

which

Dr.
rasing taxes ought to be left open, price on luggage only to 25% of
Harry D. White of our
even though you don't
agree," Mr. retail price on all; yield $53,400,- Treasury Department and John
000.
Maynard
George said.
Keynes,
the
British

of the

Countries

along with

program to

gold

our

managed cur¬
rency, I can visualize in the next
five or six years a dollar worth
perhaps only 35 cents.

yield $54,800,000.

which

freely circulate as a medium of
exchange will be the best off.

a barrel to $8;
clear," he said,
"that if these 9,000,000 people are yield, $70,000,000.
World Bank Coming
spending anything like $1,000,Wines, Still — Under 14%, 10
I doubt if gold soon circulates
000,000 in excise taxes, that you cents a gallon to 15 cents; 14 to
are close to the inescapable con¬
21%, 40 cents a gallon to 60 cents again as money. I believe, how¬
clusion that there is a tremendous a gallon; over 21% $1 a gallon to ever, that a world-wide bank or
pressure on prices in that group." $2; sparkling, 10 cents a half pint gold corporation may be organized
Senator George asked whether to 15 cents; other wines, 5 cents with actual gold in the form of
it was Mr. Morgenthau's position a half pint to 10 cents; total yield, coin or bullion as its capital. Pri¬
that the Treasury was not recom¬ $18,000,000.
vate capital will then be encour¬
Electric Light Bulbs and Tubes aged to finance post-war trade
mending any type of sales tax
and that its opposition to com¬ —5% of manufacturers' sales price and business.
If such capital be¬
seems

exchangeable for gold.
Thus, I
predict that our present managed
money system is on the way out.

the

prosperous

Excise Taxes

World

monetary

terms

$5,000,000 to $10,000,000; 5% on
an
After the last war, during the
attempt to meet our fiscal $10,0000 to $200,000,000, and 4%
needs in a realistic and courage¬ on more than $200,000,000. Present '20s and '30s, the business interests
ous way."
rates, on the same amounts, are in Germany, France and Central
In Associated Press advices from
Europe were paralyzed because of
8, 7, 6 and 5%, respectively.
Washington Nov. 29 it was stated:
The specific
exemption credit the rapid changes in the value of
Mr.

even

legislation, we see con¬
tinually growing signs of distrust

tiveness of

present

The

after

inflation fol¬

rency

inflation increases and under

tax.

Countries

Answer

of $5,000,000, for purposes
calculating the excess profits

rise

consumer

inflation.
Gold

excess

the 8% for the* first $5,000,000; 6%

that

opinion

the

pressed

also

revenue.

lowed

(Continued from first page)

Thursday, December 2, 1943

and

War II of

great

all ceiling with'respect to cor¬
of porate normal, surtax and excess
sales tax and that its opposition profits taxes is retained.
to
compulsory savings was un¬
A new schedule is adopted which
changed. Mr. Morgenthau said he reduces the invested capital credit
had no "phobia" against the sales with respect to invested capital in
not

flation

What AM Gold?

Treasury Renews Request For $10.5 Billion
In Hew Taxes But Opposes Sales Levy
-

CHRONICLE

schedule which facilitates

setting

investment

impractical
sound

said

theorists

business

young

men

experience,

professors

were

he
con-

Volume

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4234

158

sidered most desirable because of

Declaring that he was not op¬
posed to grade labeling if it was
instituted as a descriptive selling
device, Mr. Maxon said:
"No

objects to honest de¬

one

scriptive

that gives the
complete
information
about the contents of a package.
No one objects to the pure food
laws
designed
to
protect
the
labeling

health of the nation. No

one

ob¬

"There

is nothing wrong with
grade-labeling idea as such.
iBut once grade labeling becomes
effective the next step is for pres¬
sure to be put behind the second
very
natural
question
of why
<

the

should
more

are

Grade A product cost
than another Grade A? They
one

both Grade A,

aren't they? So,
logically, why not a flat price to

the grade?
"When that flat price is set low
enough—and it will be set low
enough—that will be the end of
competition in the food business,

cover

Security Flotations
Proceeds—To

CENTRAL

POWER

Central

Power

LIGHT

Light

CO.

has

Co.

mortgage bonds, Series A, 3Vsf/o,
1'

filed

Co. in the principal sum of $292,168.
Bal¬
ance will be added to working capital.

statement for $25,000,000 first

due Nov.

Registration Statement No. 2-5253. Form
S-l.

1973,

Address—120

North

Chaparral

Utility

public

com¬

will

supplied

PENNSYLVANIA

public will
post-effective amendment.

together

Company

from

applied

amount

face

first

town,

Series

effective

statement

the

can

end

beginning

end

free

of the

brand

and the

press

end

names,

offered

Dec.

Halsey,

Stuart & Co., Inc.,
and int.

5:30

1943,

definitely

they

say

want

grade

labeling so they can have flat
pricing, there is no doubt about

AUTOMATIC

many

ing

support¬
were sincere

groups

consumer

labeling
independent,

grade

and

nevertheless

stated that much of the organized

agitation for such legis¬
lation is Communist-inspired. He
quoted a Dies Committee report
consumer

to bolsteri his contention.

Labor also
Maxon

was

for

its

censored by Mr.

endorsement

grade labeling. He declared that;
grade labeling was against the
best
interests of labor and, if
carried to its logical conclusion
of complete standardization of all
products, would curtail produc¬
tion and inevitably result in wide-'
spread unemployment.

Mr. Maxon called for

imme¬

diate awakening of industry to the
ineed for making the public aware
of

its

great

American
said the

contributions

standard

the

living. He

public must be informed

through the press, radio and

now

creditably
do

continually,"
match
the

the

publicly

and

continued,

"to

its actual achievement for,

against

man

common

glowing

promises

the

political

TENN.

MEMPHIS,

formed

has

Stern¬

Avenue, -Commerce

Building, to engage in

a se¬

curities business. Mr. Sternberger
was

formerly

the

investment

business in Memphis.

P.M. Eastern War Time

Several

distribution

blocks

securities, according to

esting
Shields
New

brochure
&

listed

of
an

inter¬

prepared

Company, 44 Wall St.,

York

City, members of the

this

booklet

may

tained from Shields &

ob¬

Company.

obtain

enlist

ex¬

5.10%

delivered

5.10%

Series

Series
share

one

in cash.

stock

4.40%

Any shares

not

deposited

offer

will

expire

o'clock

noon,

Nov.

27, 1943.
Purpose—To

effect exchange of stock.
Registration Statement No. 2-5248. Form
S-l.

(11-4-43). '

Registration
EWT.,

CONSOLIDATED

registration

statement

first

mortgage

1968,

and

bonds,

40,000

preferred

stock,

statement

Nov.

and

20,

CO.

for

effective

$100

p.m.,

offered

Securities

state¬

for

due

Insurance

sale

BONWIT
Bonwit

tion

Offering—Prices

the

from

the

issue

series

due

the

be
the

use

the

and
por¬

sale

common

stock,

Jan.

1944,

to
the

20,

first

mortgage bonds, 4-%
outstanding in the face
amount of $36,000,000; to> redeem the en¬

1963,

issue

for

serial

notes,

due Aug,

at $110 per share, the entire issue
6% preferred stock, par $100, per

share,

stock

registered,

conversion,

which

fund

the

preferred

present

rate

vary
certain

Fifth

York

New

Avenue,

City.

United

large

specialty

stores

the

preferred

and

Co.,

stock

both
will

underwriter for
stock.
and

common

supplied by amendment.
The
offers
the
35,565
shares
of

and

chased

Steel

Co.

Atlas

indirectly,

stockholder

Corporation, directly
been
the controlling

has
the

since

company

its

or¬

ganization.
will go

to the selling

stockholders,

Statement No. 2-5245. Form

(10-29-43).
ZONE

PROPERTY

CORPORA¬

20,000

out¬

are

voting

Form

State
has

Delaware

been

for

oil

gas

trust

for

the

of,

purpose

and

used
all

for

erty

drilling expenses and payment

Nov.

26,

1943, to defer

The

Jan.

voting

duration
The

duration

than

trustees
of

51%

the
five

voting
stock
de¬

the

upon

Central

Corporation.

F-l.

agree¬

action

liquida¬

Zone

Prop¬

also

may

by action of
the holders of
representing 80% of the stock

thereunder.

COMPANY

27,

effective 3

p.m.,

1943.

filed

PRODUCTS

CORPORA¬

common

stock,

cumulative,
par value $50 each, and 500,000 shares of
common
without par value which are re¬

dairy

served

the

and

the

pre¬

Business

42nd

St.,

New

York

—

Processing

and

distributing

value,

working

(11-18-43).

City.

cumulative

and

debentures

income

Business—Company
an

principally in
distribution
of
of

and

its

valves

and

engaged
sale

pipe

named

Proceeds—Of

applied

standing;
of

the

to the retirement of the 61,912
6%
preferred stock now out¬

$2,943,500 to
outstanding

4%, bonds

imbursement

the

first

re¬

such

for

moneys

ex¬

bonds

and

for

Form

(11-13-43).

Insurance
a

SECURITIES, INC.
Securities

registration

ing by the company.
Address—6499

Incorporated
statement
for

has
820

(*'.'>

63rd

Street,

Chicago,

111..

Business—Manufacture

ing machinery.

31, 1973;
stock, $1 par

metal:

work¬

LaSalle

Street,

Chi¬

111.

Business—Business

consists

generally of
manufacturing and selling asphalt roofing,
and related products, wallboard

selected

suant

amount

Proceeds—The

registered and to
be offered are being sold by certain stock¬
holders of the company who will receive
proceeds

holders

from

the

selling

sale.

The

stock¬

and number
Henry P. Isham,

group

being sold are;
individually, 2,000; Henry P. Isham, trus¬
tee, 366; Henry P. Isham, trustee, 366;
Henry P. Isham, trustee, 366; Elisabeth T.
Isham, 796; John I. Shaw, nominee, 1,597,
and
Rudolph W. Glasner,
14,509.
The

from

credited

for

offer,

the

capital

sum
sur¬

capital

ac¬

26,

1943, to defer

VERMONT PUBLIC

SERVICE

CORP.
Central Vermont Public Service
Corp. has
filed a registration statement
for 197,954
share sof common stock, no
par value.

West St.,

Rutland,

Vt.

Underwriting—Shares are to be sold at
competitive bidding pursuant to Commis¬
sion's

Rule

writers

U-50

will

for

the

and

stock

public

will

company

purchase of

common

names

under¬

supplied by amendment.

Offering—The

195,000

offering
supplied by

invite

bids

the

price

the

and

Proceeds—Sale

integral

Twin

post-effective
Public Service

cash

pursuant to.
Commission some

the

issue

with

stock

common

will

rate

the

sale

will

000;

and

the

registered,

sell

privately

price
received
will
be
amendment.
Proceeds from

by
of

the

of
as

pay

prior

equal

debentures
5%

lien
$110

due

for

$150,24,550

Twin

agreement
share

per

piiis

acquire

Dec.

debentures

provide

of
of

stock

merger

bonds

and

loan

holders

dividends;

bank

cash

provided

amount

stock

common

pay

shares
State

its
in¬

and

used

that

will

$500,000 in face amount of
mortgage bonds. Series C.
The

terest

000

Co.

Vermont

with

the

for

providing

Electric

Contemporaneously

company

stock

common

plan

Central

filed

ago.

the

Gas

into

plan

time

part

State

merged

$40,000 of
1956, and $8,-

subsidiaries

and

additional

working capital.
Registration Statement No. 2-5250. Form

A-2.

(11-11-43),

Amendment filed Nov. 26,
date.

1943, to defer

effective

DERBY GAS

ELECTRIC

CORP.

Derby Gas & Electric Corp., a subsidiary
Ogden Corp., registered 91,577 shares

of its common stock without par value with
the
SEC.
This
stock
is
already issued

and outstanding, and the shares are not
being offered by or for the account of the
company.
They are to be sold by Ogden
Corp., as part of its plan to dispose of its
public utility
investments
in
accordance
with

the

Public

City,

One

—

Holding

Exchange

Company

Place,

Jersey

Business
and

Utility

1935.

Address

The

—

sale

the

engaged
distribution

company

generation,

electric

and

energy

manufac¬

gas.

offer

commission

for

ment

proposals for the purchase or

later.

Offering—Terms will be filed by amend¬
ment

later.

Registration Statement No. 2-5213. Form
S-l.

(9-15-43).

Amendment filed Nov.

the
pur¬

of
of

the

basis

income

PACIFIC
CO.

$100

for

each

cumulative prior preference

statement

states

St.,

standing,

issue

two

stock. The
that
the

certain

stock
presently out¬
stock purchase warrants
holders in the aggregate to

common

price to be announced later,
shares of common, and

additional
and

sell

such

Purpose—The

principal

common

stock not taken up by the warrant holders.
The company also proposes, under certain

one

the

Is
in

called

plan

tion

and

affecting
Co.

held

it.

objectives

with

agreement

Pacific

However,

the

securities

the

reinsurance

the

Spring

office,
Cal.

places no lim¬
of the committee

powers

connection

Angeles,

Los

insurance.

vote

and

per

Insurance

main

them

ance

SEC

par

Life

Mutual

the

mittee

stock,

agreement

the

upon

vote

filed

the

for "'508,200

— Of
issuer, 626 South
Angeles, Cal.
Executive

Business—Life

and

common

entitling the
purchase, at
208,446

under

Pacific

Leslie
Share¬

have

with

certificates

California.

Los

and

Mutual

Committee

West Sixth St.,

523

INSURANCE
Rand

Pacific

commbn

statement

trust

"of

share,

itation

the

voting

Co.

Protective

registration

for

LIFE

CALIFORNIA

Balch,

Waggener

com¬

condi¬
tions, to issue to the holders of the 625,340
proposes,

company

MUTUAL
OF

Address

debentures

stock

common

11, 1943, to defer

effective date.

exchange.

debentures and shares of
on

registration

sealed

underwriting of these shares.
The result
of the bid opening will be filed
by amend¬

right to exchange such shares for the

others

■„

dealers

Offering—The
company
offers
to
the
holders of the outstanding 67,373 shares of
its 6%
cumulative prior preference stock

stock

by amendment.

$100

each

deducted
and

sum

For

date,

CENTRAL

holders

deposit of shares of preference stock

income

supplied by amendment.
Offering—Price to public to be supplied

vari¬

Underwriting—Paul
H.
Davis
&
Co.,
Chicago, is named principal underwriter,
or
dealer manager and company will pay

mon

and

products.

new

products, boxboard

gypsum

other

ous

the

Amendment filed Nov,

deposit for 67,-

cumulative prior prefer¬

Address—120 South
cago,

Underwriting—Bacon,
Whipple
&
Co.,
Chicago,
head
the
list,
with
names
of

SATURDAY, DEC. 4
INSURANCE

stock,
$1
par
value.
The
shares registered are
already issued and
outstanding and do not cover new financ¬

and

stock.

ence

and

CORPORATION

common

the

Registration Statement No. 2-5254.

MACHINE

Clearing Machine Corporation has filed
registration statement for 20,000 shares

mort¬

and

company

pended in acquiring
working capital.

retirement

20-year

$619,120 will

proceeds,

CLEARING

and

fittings

steel,

iron, bronze and brass.
It
now
manufacture
sapproximately 50,000
different items of valves and fittings.
Underwriting—E.
H.
Rollins
&
Sons,
Inc., and Paine, Webber, Jackson & Curtis
are
named principal underwriters.
Others
be

SATURDAY, DEC. II

subsidiaries

integrated
unit
the manufacture,

pursuant

account

effective

shingles

constitute

exchanged

represented by such share.
Registration Statement No. 2-5241. Form
S-l. (10-27-43).

Oct.

due

certificates of

shares of 6%

373

products.

capital.
Registration Statement No. 2-5257. Form

S-l

registration

134,746

Underwriting—Dean Witter & Co.
Proceedis—For plant site, plant equipment

stock.

East

has
statement for $6,737,-

(subordinated)

Angeles, Calif.

con¬

Corp.,
after
the
registration becomes effective, will publicly

Corporation

300

preferred

conversion

Products

tures

Address—Los

plus

invite

Certain-teed
a

will

tured

filed

1955.

stock

retired.

issued

primarily

statement

Nov.

Creamery Co. of Calif, has reg¬
istered $350,000 5V2% sinking fund deben¬
due

and

Underwriting—Ogden

CALIF.

Knudsen

issue

count

trust

(10-26-43).

Registration

S-2.

Act of

present voting

renew

CERTAIN-TEED

CO.

the

debentures

agreement

agreement.
The
without

dissolution

EWT.,

CREAMERY

1944.
of

expires Jan. 2, 1944.
Registration Statement No. 2-5238. Form

KNUDSEN

reduced

each

common

made

TION

filed

Address—60

terminated

company

(11-18-43).

the

which

Proceeds will

part of the obligations of the
incurred in development work.
Registration Statement No. 2-5256. Form

stock

Building.

representing

the

Purpose—To

proceeds go to issuer, sub¬

less

voting

deposited

ject to cost of sale of issue.
be

under

terminated

procure¬

shares of preference stock will be
the capital of
the company

will

1944.
of

years.

certificates

drilling

Offering—Price $35 per share.
Proceeds—All

Zone

dated

initial

not

wells

the

15,

for
of

the

tion

not

New York City.

Central

period

shall

ment

the

exchange offer being de¬

preference
and

subject to extension by action of the

holders

the

retired

unpaid

Street,

Nov.

agreement

and the operation thereof.

engaged

and

for

common

share.

per

Wall

maximum

posited

Underwriting—None named.

convertible

ferred

about

years

stock.

common

Property Corporation,

Business—Owns

provides

CORP.

OIL

certificates

Zone

value of $1

(11-13-43).

for

trust

21,165

trust

less

stock offered will consist of shares

furnished

George E .Roosevelt, Henry R. Hayes and
Frank, New York, as voting trus¬
tees, have filed a: registration statement

The

unless

not

effective bv the company.
proceeds to the company
income debentures and shares of

the

first

than

and

senior

new

upon

issuance

Registration

Underwriting—None named.
Offering—Proposed offering
Form

the

Proceeds—Proceeds

for

stockholders

clared

Corporation and its subsidiary Rotary Elec¬

A-2.

exchange

holders

and 20,000 shares of com¬
amendment.
New England
The shares are presently is-.1 Co7
has "agreed" to purchase the"balance
'of
outstanding and are being pur¬ 2,954 shares of common stock
at $16,25 per
by
the
underwriters
from
Atlas
share.

stock.

sued

and

date

commitment for the purchase of
stock not subscribed for by

preferred

mon

tric

offer

Address—121

common

preferred

the

Business—Operating public utility.

prospectus
5%%

the

common

tingent

Offering—The offering price to the pub¬
lic

de¬

the

York

New

serior

new

indebtedness

the

States.'

Underwriting—Allen &
City, is named principal

the

other

certain

common

sale

may

event

outstanding

Full text of Commercial and Financial Chronicle : December 2, 1943, Vol. 158, No. 4234, Section 1

FRASER