Full text of Commercial and Financial Chronicle : December 2, 1948, Vol. 168, No. 4756, Section 1

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DEC 3
3'IS.

in 2 Sections

ESTABLISHED 1839

-

Section 1

Reg. U. 8. Pat. Office

Volume

New

Number 4756

168

The Decline in

Continued Prosperity: Sloan
General Motors executive

;

despite what

says,

may

at

least

we are

tional

be
Adjunct

Users Conference in New York City on Nov. 30,
Chairman of the Board of General Motors Cor¬

Highway

Alfred P. Sloan, Jr.,

poration, assured his audience that they could with confidence shape
their plans on®
: "
■■
—
r—
>
L
basis of a two. going
into expansion, to bring
to three year existing
plants up-to-date.
As
continuation long as that continues—and I be¬
,

■

of

present

business

ditions.

con¬

forward to the

two

or

three years in
your

Mr.v

plans,"
Sloan

income—I

durable

goods

will

give

a

us

and

Concerning the effect
outlays, Mr. Sloan re¬

armament

<

-

•

••

"I

you can

EDITORIAL

two,

or

business at

a

are

we

assured of

high level, per-

very

think

it

would

be

wise for

very

that uncertainty
that many of the

to

us

recognize

high as we are enjoy¬ and the fact
but anyway at a high things that are sustaining our
level. When I try to find out what present high level are not recur¬
is likely to happen to the economy ring, considering these tremendous
in the next two or three years, I capital
investments, I think we
always look at the capital goods have got to look forward to the
industries. I think I have told you

time when those taper off or are
when we dis¬ reduced. I don't thin industry can
cussed these problems. Of course, continue to expand at the present
we
know that the capital goods high level.
industry has been running at a
"I think we should realize that
very high level. It has been flat¬
that means prudence and intelli¬

that

■

.

-

■

~

.

~^the failure of

depreciation
and

.

^

c

We See It

As

tening off a little, but I am quite
convinced that there is
a
tre¬
mendous volume of money still

and I only suggest, in the
analysis of our problems, that we

gence,
do
are

everything possible, while we
running at this high level, to

build

Brokers and Dealers

a

nomic

better

and

foundation

operate

on

stronger

,

h

similar
r

a

the "New Freedom" and

costs, and the

with his "advanced" ideas about

advane in g

question,

"break-even"

the like would/without

and stare were he able to return to this mundane sphere
long enough to observe the public policies and preachments
of this day. He would be able to find in Washington only
remnants of the American doctrines and traditions about

gasp

academician, wrote so persuasively; At the
moment one1 of the aspects of public affairs which would
strike him as • fundamentally strange is the stream of out¬

which

he,

as

givings, intimations and suggestions issuing from Washing¬
ton concerning the prospective policies and programs of the
new

Truman Administration.
Some of these

re-

placement

Approach Throughout

Even Woodrow Wilson

s '

g e

against in¬
come to keep

step with
The Wrong

doubtless

points
have

char¬

acterized
many

indus¬

tries.
A

of

grayish undertones, on the

these

part of both public and manage¬
ment, is having its influence in
the laudable conservatism of divi¬
distribution.

is helping

it

but

enough of them appear to have real substance to
leave no doubt of the trend of thinking. What is equally

spell

over

important, if not more so, is the evident fact that the
new Administration is much inclined in certain instances

low

are more or

Leland Rex Robinson

growing

realization

dend

less apocryphal,

which

for some years

hand,

before,

For Banks,

—

—-—

are

now,

men

,

"

imposed upon all this, the proba¬

naps not as

ing

".

—:

,

tmfTfhDiAt

,

year

since the first World War when net income

time in the thirty years

no

<S>—

for the

not,

have

as

There has been

-

concerned. of the country. So I think that all
last two or in all, we need not fear what the
three years, happened to feel that outlook will be for the short-term
position.
a depression was right around the
corner.
"Of course, there is a great deal
Quite the contrary. I feel
that whatever we may face from of
synthetic
influence on
the
a long-term position, for the next
present level of the economy.
I
conditions

nomic
I

Service, Inc.

reported by American corporations needed closer scrutiny than today. This circumstance is
of heavy due to several factors, notable among which are the current importance of inventory profits

ahead quite bility, or perhaps I had better say
courageously the certainty, of a continuing ex¬
so
far as the pansion of the government in re¬
armament to assure the security
general
eco¬

1

Economists' National

New York University; Vice-President,

Monetary Policy; Chairman, Bishop's

1

go

Alfred P. Sloan, Jr.

on

smaller companies, are feeling the squeeze of tighter earnings margins, despite
"padding" of earnings, by inflationary forces; (4) advancing break-even points
lessening net ratios, making them more volatile on the down side; and have constituted decisive ■•■■■
offset to inflationary factors.

are

so

tional income."

marked:

Economy,

of Political

(3) larger, as~well

goods
forth
high level of na¬

and

Corporate Earning fower

temporary and artificial

sure

am

"Then, of course, we have super¬

stated,
think

national

,

that the impact on consumer

_

"Looking
next

lieve it accounts for about 20% of
our

Copy

Dr. Robinson makes 30-year detailed study of corporate income, based on conviction that ratios of net
profit calculated, as return on all capital employed, rather than share capital only, is a truly realistic
gauge of business performance. From his data he concludes that (1) profit margins have been modestand secularly declining; (2) group performance is varied with greatest stability in "trade," "food,
beverages and tobacco," with volatility in "mining," "petroleum," "chemical" and other industries;

luncheon of the Na¬

a

Professor

Committee

assured of business at high level.
at

a

By LELAND REX ROBINSON

faced from long-term viewpoint, for next year or two,
In the course of an address delivered

Price 30 Cents

York, N. Y., Thursday, December 2, 1948

equities,

On the other

cast an evil

the market demand for

now

close to an all-time

if judged

continued

against the backon

page

28)

weight around" in an effort to get "obedi¬
ence" from this, that and the other element in the pop¬

to "throw its

ulation. It is

eco¬

saying in effect—or spokesmen

who appear'

(Continued on page 34)

for industry to

State and

in the future."

SOUTH AFRICAN

BRITISH •

Municipal

BELGIAN

AUSTRALIAN

DUTCH

CANADIAN

Bonds

R. H. Johnson & Co.'

SECURITIES

Established

1927

(Internal Issues)
INVESTMENT SECURITIES

Bought

Sold

—-

—

Bond Department
64 Wall

White,Weld&Co.
Members New York Stock

Exchange

Street, New York S

BOSTON

Wall Street, New York 5
Amsterdam

London

THE NATIONAL CITY BANK

HART SMITH & CO.

PHILADELPHIA
52 WILLIAM ST.,

Troy

Albany

Buffalo

Woonsocket

Syracase
Scranton

Harrisburg

OF NEW YORK

Bell

Springfield
Washington, D. C.

Bond Dept.

Teletype: NY 1-708

New York

Office:

26,

London,
Branches

Underwriters and

and

Kenya,

Reserve
The
f

NATIONAL BANK
OF

THE

CITY OF NEW YORK

Portland General

BONDS & STOCKS

Electric Co.

£2,000,000

OTIS & CO.
Established 1899

conducts every description
banking and exchange business

Trusteeships and Executorships
undertaken




(External & Internal)
+■

Inquiries Invited

Corporate Securities

£4,000,000

Bank

also

Toronto

CANADIAN

Municipal

and

£2,500,000

Capital
Fund

Distributors of

and Aden

Zanzibar

Subscribed Capital

Paid-Up

Bishopsgate,
E. C.

Burma, Ceylon, Kenya

in India,

Colony, Kericho.

Wires Connect

Montreal

SECURITIES

the Government in

Kenya Colony and Uganda
Head

1-395

FOREIGN

of INDIA, LIMITED
to

THE CHASE

HAnover 2-0980

Buenos Aires

NATIONAL BANK
Bankers

N. Y. 5

Teletype NY

Private

Wilkes-Barre

40

,

Quoted

(Incorporated)

of

CLEVELAND

Dominion Securities
SUTRO BROS. & CO.
Est.

Members New York Stock Exchange

Cincinnati

40 Exchange Place, New York 3, N.Y.

120 Broadway, New York 5

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

111.

Broadway, N. Y. 6

WOrth 4-6000

"

Teletype NY 1-2708

"'

New York

Chicago
Denver
Columbus Toledo Buffalo

CORPORATION

1890

Telephone

RECtor 2-7340

Bell System

Teletype NT 1-702-3

Boston

Telephone: Enterprise 1820

.

I

2

THE

(2278)

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, December 2, 1948

'

$

'•

Bird & Son,

Economic Outlook for Agricaiture

inc.

Professor

International Cellucotton

—

SOLD

—

QUOTED

Economics,

University

rearmament, the general trend of prices of farm products

120 Broadway, New York 5

Teletype NY 1-583

will likely be downward, but level much

the great

oil

pro¬

than

ducing areas of the world.

(2)

It

gross

is

edible fat and

feeding and exports of say
bushels, we will prob¬
ably carry over around €00 mil¬
150 million

shipments
of
rice,
the
greatest food cereal in the world,
were

farm

also about

war.

lion

The Orient tried to maintain

50%

its limited diet by

of

the pre¬

bushels

build

their

which

buying cereals

of

corn

a

Europe wants

now.

are

livestock
much

as

Request

to

the world
was
forced by short
supplies of European bread grains

much ill-informed American

and

ions

their

prices

are

ceding

McpONNELL&fO.
Members

the

re¬

early

New

York

Stock

Exchange

New

York

Curb

Exchange

except

NEW YORK 5

Tel.

REctor

2-7815

feeds,
These

past' and

for

lower

prices will, in part,
by very large marketings
resulting from our heavy grain
and

could not here put
stronger combination

a

Buying
exports,
which

our

American

taxpayers,

perhaps more than
surplus of fats and oils

considerable period of time as in

world market.

New York Curb

Exchange

Chicago Stock Exchange

in

Tele. NY 1-1610

DIgby 4-3122

Price declines have been

largely
grains and reflect primarily an
easier supply position rather than
.

basic

decline

demand.

If

situation,
should

Mining

Copper Canyon
Goldfield Deep

Mines

Kinney Coastal Oil
Reiter

Oil

Foster

Empire State Oil

to

in

bullish

level

easier

collapse in
then

a

be

ago we

in

both

of

supply
farmers

in

were

a

very

Western
very

a

bread

poor

grains and

potatoes.

They had to import
heavily in order to maintain even
a low level of consumption.
The
United

States

had

a

poor

one-fifth less than

crop:

AND OIL

STOCKS

normal

a

STEIN & COMPANY
Members Nat'I Ass'n of Securities Dealers, Inc.
27
1

William

St.,

N. Y. C. 5, N. Y.

Montgomery St., Jersey City 2, N. J.

Tel. DIgby 4-2190

Tele.: NY 1-1055

Ashland Oil & Refining Co.
Common

scarce

us

out

of the

damages,
had
a
large

Bought and Sold

stances.
in

of Uni¬

Mr. J. C. Faure

perhaps

the

Incorporated

the

the

world

best

posted

this

on

great

Bell Tele. LS 186

and

as

you'

1948,

In

.

harvested

Prices

crop.

here

break

began

will

both

the United

a

to

remem¬

Europe

and

States harvested large

as

a

far ahead

important
agriculture as

an

as

we

the International

Associa¬

the

gather,

short.

these

But

are

Grain prices

have,

down.

come

a> you

Wheat

is

know,
at

now

about the price support level; soy¬

slightly above; corn is
We will likely work off

are

below.

the

of

so

wheat

crop

as

empty places in

fill.

to

world

can

1948
many

Whether

*An

address

by

Prof.

Norton

again work off another big
in 1949 is more doubtful.
It

places.

in

crops

on

so

many

We will likely dispose of
of

our

soybean

from the 1948 crop.

step-up

as

far

as

products

Exports will

our

system

of

Europe wants
vegetable oils and protein feeds.
How about corn?

Association, University of Illinois,

1856

tion

at

Urbana, 111., Nov. 19, 1948.

Established

even

with

home will
some

Our consump¬
be large.

New

New

Curb

York
York

CANADIAN

Exchange
Exchange

Cotton

Commodity
Chicago

Exchange

Exchange,

Board

of

And other

increased

of

cannot

outout of

feeding

felt

be

until

the

Livestock

ratics

favorable

on

DAYTON HAIGNEY & CO., Inc.
75 Federal Street, Boston"
Private New York
WOrth

Telephone—

4-2463

Trading Markets

American Furniture Co.

Moore-Handley Hdwe. Co.
Dan River Mills

Scott, Horner &
Mason, Inc.
Lynchburg, Va.
Tele. LY 83

LD

are

bought at

period

a

high

too

surplus

of

grain the livestock feeder is likely
price advantage, even
though livestock prices decline.

Stix

&

Co.

to have the

INVESTMENT

SECURITIES

The

big problem is to hold inven¬
tory losses to a minimium.
All the above is in terms of

:

plies.
cept

military

OLIVE

STREET

sup¬

What about demand?

for

509

Ex¬

ST.Louisl.Moe

considerations,

foreign demand could be expected
to

decline

for basic prod¬

except

which

ucts

are

Members St. Louis Stock Exchange

urgently needed.

Of our products, exports of feedstuffs, both corn and protein meal,
fats and oils, and wheat may hold
up in the order listed better than
some

other products.

-

buy

-

But

What Will Happen to General
Level

of

u.

s.

Income

About the domestic market,
which absorbs the bulk of our

products,
will

savings

bonds

the

happen

of income?

question is what
to the general level

If business turns sour;

it will be reflected

in lower farm

prices; if it continues

the pres¬

on

ent

high level, demands for farm
products will continue good; if it
(Continued

on

page

Royal Bank of Scotland
Incorporated by Royal Charter 1727
HEAD

26)

OFFICE—Edinburgh

NORTHWEST MINING

CANADIAN

For

MINING

or

CANADIAN

BANKS

of

Immediate Execution of Orders

Quotes call TWX Sp-43

Exchange

A.M.,

Pac.

from
Std.

10:45
Time:

on

to

Sp-82

at

SECURITIES AND
SOUTH

AFRICAN

49

OFFICES:

Bishopsgate, E. C. 2

8 West

Floor
11:30

other hours.

BRITISH

LONDON
3

Smithfield, E. C. 1

Charing Cross, S. TP. 1

Burlington Gardens, TP. 1
64 New Bond Street, TP. 1

SECURITIES

STANDARD SECURITIES
N. Y. Cotton
NEW
CHICAGO

Exchange Bldg.

YORK 4,
DETROIT

GENEVA,

N. Y.
PITTSBURGH

SWITZERLAND




33

iTllllllllllllllllllllllllIIIIIIIIIIIIIIIIIII

current

a

SECURITIES

Trade

Exchanges

are

big increases in total
supply are not likely and the

effect

INDUSTRIALS

Inc.

New Orleans Cotton Exchange

SV^s, 1947

Branches throughout Scotland

We Maintain American Markets For:
Stock

supplies

However, because of
position of the cattle

industry
beef
full

Members
York

total

as

increased.

expansion in live¬

H. Hentz & Co.
New

Boston Terminal Co.

we

allocations permit.

at Conference of Illinois Bankers

downward
the cyclical

In

most
lAddress at

England Lime Common

The trend of livestock prices over
the
next
year
will
likely be

cattle

depends

tion of Feed Crushers Congress, Brussels,
Belgium, June 17, 1948.

priate time lags, declined sharply.
Weakness has already been shown
in cattle, hogs and butter prices.

prices.

On

I. can

oils remain

Illinois
of

Boston Edison
New

a
short crop is followed
large crop livestock prices
have, in the past, after appro¬

feeder

flax.

formation

in

one

Boston & Maine Prior Pfd

Boston Railroad Holding Pfd.

a

interna¬

larger crops of
soybeans, pea¬

cotton,

and

nuts

crop

now

Trading Markets

When

by

jpest in¬

oilseeds,

This is

are

offices

IllllllllllllllllllllllllllllllUlllilllllll

tional supplies of rice and fats and

raised

we

1951.

point

branch

likely to be
basis, but
there may be inventory losses in
breeding stock and possibly in

States

the

Incidentally, he
shortage of 20% under

our

Prospects of Livestock Prices

fourth quarter of 1949.

in

loan
can¬

see.

a

there are

1947,1

to

me

raised
than

the

which

overrun

hogs

the United States
corn
crop
59%
larger
1948, and in the United

Direct wires to

abundant

toward

back
the

crops,

most

over

once

wheat

tons below 1938, roughly 40%, and
1948
shipments at only 150,000

1st

Long Distance 238-9

of

acreage

Russia

Australians

beans

1938

Floor, Kentucky Home Life Bldg.
LOUISVILLE 2, KENTUCKY

notably

big wheat

group of commodities, estimated
1947 shipments at 1.8 million long

estimates

m BANKERS BOND ^

United

Rumania, began
to find small
quantities of grain to ship west,

tons

Standard Oil Ky.

the

planted, Eastern European

countries,

reflect

Situation

Grain

export market.
Argentina
only two rather than four bad
holding back supplies for highsupply positions.
It
is
worth
prices.
Added to these two diffi¬
cult situations, short bread crops noting that it has again been dry
in our major wheat" areas.
Se¬
in Europe and short feed crops
vere
drought has not cut wheat
here were two other factors: (1)
crops for over ten years—a very
World
shipments of edible fats
long period of adequate moisture
and oils were far below
prewar,
for our major wheat areas.
due to a combination of circum¬

man

Bought and Sold

States
wheat

farmers'

qribbed is marketed. - How
the price of corn can go much
above the loan level, unless we
have a short crop in 1949, is diffi¬

the

was

lever,

Stock

here and forced

in

opin¬

not be

'

corn

which is now approximately
three billion bushels.
This made
feed

without

ber.

1947

crop

MINING

into

work

level

true

Early in 1947 it became evident
that the supply situation was eas¬
ing.
The European wheat crop
was
coming through the winter

and

difficulty.

situation.

grain

of

demand

,

added,

Europe had
harvest

the

the

in for economic

A year

Central States Elec.—Com.

re¬

in

are

HADING MARKETS INe==

in¬

are

breeding stock

as

quired.

a

39 Broadway, New York 6

may

we

cult for

Easing

This will

considerable time

creases

New York Slock Exchange

our

Illinois

would

NY 1-1557

Birmingham, Ala.
Mobile, Ala.

of

contrary.

that

HAnovar 2-0700

Now Orleans. La.-

So far as corn prices in the
future are concerned, they

near

large part they must be converted
into livestock products.

require

Members

and

spite

look
as
though the
period of grain shortage is

ages.

poured all of our surplus of wheat

soybean crops.
These large
crops will affect cash sales for a

in

would

markets

were

and

shops

grain supplies rather than short¬

power

mainly -wheat and fats and oils,
was created by
the generosity of
the

the

to

It

one

bullish factors.

of
L. J. Norton

be offset

Joseph McManus & Co.

machine

and

acute

together

for

costs

still rising.

are

year ago

standpoint,

from

this year and,

120 BROADWAY,

a

Exchange

re¬

productive economy as are mines

potatoes, of United States
feed grains,
of edible fats and
oils, and of rice.
From a supply

peak

reached

Thus,

Stock

industries

passed

Farm

York

St, New York 4V N. Y.

part of the

a

from the West.

peak.

from

year

corn

earnings have
on

Members New

stock

World

gener¬

ally agreed, I
think, that
net

Steiner,Rouse&Co!
25 Broad

earnings more

Prospectus

Bought-^-Sold—Quoted

will lower net

earnings.

Bought—Sold-—Quoted

Louisiana Securities

This topic can be restated: What will
happen to prices of farm products and farm¬
ing costs? If prices of their products decline, farmers will have lower incomes. Since prices
of agricultural
products always rise and fall more rapidly than farm costs, declining prices

Corporation

Lonsdale Company

Alabama &

Illinois

of

above prewar average.

New York Hanseatic

BArclay 7-5660

Agricultural

Holding net farm earnings have passed peak and acute grain shortage no longer exists, Prof. Norton
looks for lower trend of livestock prices but, holds if business continues
good, some other farm prod¬
ucts will be favorably affected.
For longer term period, says, baring war or inflation caused by

Products Co.
BOUGHT

of

'

'

By L. J. NORTON*

Metal & Thermit Corp.

Goodbody & Co.
Members N. Y. Stock Exchange and Other Principal Exchanges
115 BROADWAY
TVJ*r»Hone BArclav 7-0100

.

NEW YORK 6, N. Y.
Teletype NY 1-672

TOTAL ASSETS

CORPORATION

£153,656,759

Members Standard Stock
of

Brokers

-

Peyton

Dealers

-

Underwriters

Building, Spokane
Branches

Kelloeer.

Exchange

Spokane

Idaho and

at

Yakima, Wn.

Associated

Glyn

Mills

Banks:

&

Williams Deacon's

Co.

Bank, Ltd.

Volume 168

THE

Number 4756

COMMERCIAL

INDEX
Articles and News

'

The Decline in

Agriculture—L. J. Norton

Economic Implications of
The Seeds of
British

New

..."

.

2

Don't Make Business the Whipping

6

Boy—Rep. Joseph W.Martin, Jr..

Focus

World

on

Teamwork—For
Truman

Finance—Robert

Better Tomorrow-—"Earl Bunting

a

Aldred

P. Sloan

Senator

Continued

Forecasts

Joseph O'Mahoney

Association
Our Most

■

3

r

Prosperous Year Is Ending (Survey by LaSalle Extension

University)
Reichart

.....Cover

............

13

.................................. v.................

Quits Underwritings for Mutual Fund Field......

Clayton Securities Corp. Offers Long Range Management Program

Bache

&

Co.

.!

Results

Will

Reinforce

Farm

L.< Maude Reports

Deposits

.:*.

...-..

Life Insurance Company Holdings

*'

"

to

Record

1949

gain

to

the

-

n

t i mate

tant

A

24

As We

See It

t

v..

(Editorial)

•

.

rj

•

Bank and Insurance Stocks
Business

Man's

Canadian

national

Bookshelf

18

8
8

Recommendations........^.......

Investment

r..........-.V.

10

Washington Ahead of the News—Carlisle Bargeron...........

Indications of Business Activity

NSTA

News About Banks and Bankers

Observations—A. Wilfred

*

Our

Reporter's Report

Reporter

23

on

Governments

Prospective Security Offerings.
Public

Utility

Railroad

Salesman's

Corner

security.

our

to

needs

be

backed

up

Tomorrow's Markets

(Walter

Whyte Says)

on

CONVENTION

NSTA

ISSUE

on

organization

the

that

there

might

Industry—E. L. de Golyer....

an

outline

of

the

fuil
to

of

account

be

Exchange Versus Counter Investment Practice—A. Wilfred May.

9

how

the

Nation's

10

fore

11

the

and,

'

The

and

COMMERCIAL

j

t*

' Reg. U. p. Patent Office
DANA

C.,

Eng-

by William B. Dana
Company

-25,- 1942,
York.
N.
Y.,

25 Park Place, New York 8, N. Y.

second-class matter

at

the

post

the

under

Subscription
Subscriptions

REctor 2-9570 to 9576

j

HERBERT D. SEIBERT, Editor & Publisher
WILLIAM

DANA

SEIBERT,

President

'

WILLIAM

D.

RIGGS,

Thursday,
Every

vertising

Etate

Chicago

issue

corporation

and

Other

December 2,

city

news,

Offices;

3,

111.

—-

market

news,

office

bank

S.

(Telephone:

Territories
Union

Canada,

Other

of

quotation
clearings,

and
per

Monthly
$25.00

,

Salle

State




St.,

0613);

include

to

margin-for. safety
unlike

but

with.

will

C., Nov.

per

Note—On

made

York

New

1-1434

Value at

low price

a

[.. Price about 55

—

$100

—

par

book value $197

Redeemable at $105 per share
■

i

■

■

r

.

i

COVERED ABOUT 3 TIMES

DIVIDEND

Attractive

participating feature

a

in
the

George Birkins Company
40 Exchange Place, New York 5
WHitehall

Tele. NY 1-1404

4-8957

Hence the plan'they offer
one that provides
every

technically
available
safeguard
against .any and all, foreseeable
threats.
In a word, they think of
the total resources of the country
as
potentially available for im¬
plementing the security effort,
The

economist's

definitelymold.
•can

4% preferred

be

must

i

A

have "to be dealt

in

cast

thinking
a

is

different
is: how

His basic problem

scarce

resources

be most effi¬

cultural life for the whole popula¬
tion.
Ideally his field .of. work
would

the

concern

(Continued

on

efficient

page

Pointers
For

for

on

Selling

clever, helpful hints

selling securities read
"Securities

the
man's

Corner,"

Sales¬

a

regular

every

Thurs¬

feature

in

day's

issue

of

the

"Chronicle."

ad-

30)

Act

We

of

States,

and

$35.00

are

The Public

interested in offerings of

New

March

U.

Members

High Grade Public Utility and Industrial

of

year:

&

8.

per

PREFERRED STOCKS

Winters

Analyses

Quotation Record—Monthly,
(Foreign postage extra.)

year.

year.

Record

(Foreign

account

of 4he

in

New

York

—

'Monthly,

Spencer Trask & Co.

Members

fluctuations

Stock Exchange

Members New York Curb Exchange

Street, New York 4

135 S. La Salle St., Chicago 3

New

25 Broad

postage extra.)

funds.

of

Bank

Company

New

York

&

Crampton

Corp.

year.

Publications

Earnings

National

Trust

in

per

$38.00

Tel.:

York

Tel.?

HAnover 2-4300

in

rate of exchange, remittances for for¬
eign subscriptions and advertisements must

be

Con¬

2-4930

the .engineer,

need

calculations

strains that

,

Teletype—NY

the
La

Like

the

Countries, $42.00 per year.

Bank

$25.00

Washington, D.

10, 1948.

Febru¬

at

Rates

United

Pan-American

Other

etc.).

135

Possessions,

in

Dominion

1948

Thursday (general news and ad¬
issue) and'every Monday (com¬

plete statistical

records,

Business Manager

Orientation

REctor

1948

as

ary

COMPANY, Publishers

E.

8,1879.

\

p',

B.

London,

Joint

QUOTED

-

Edwards' & Smith.

c/o

Copyright
Reentered

WILLIAM

!

Gardens.

[FINANCIAL CHRONICLE

:
:

Drapers'

National Military Estab¬

lishment

SOLD

Orvis Brothers &(?>

less

a

ference,
1

Weekly

their

hardly

structure,

Jail.)

feel

and

organized

provide

*

Twice

major

economy

and directed to ciently administered toward the
continuous flow of men ^attaining of specified objectives?
These objectives are stsps toward
and materials to sustain successattaining higher standards of con¬
*An address by Dr. Nourse be¬ sumption and a freer and richer

.................

8

Published

our

least, "the

Their

defense.

substantial

or¬

naval, and land action as
might be found necessary.
The
National Security Resources Board
elaborated that story into a rather

■

Split-Ups—0,:K. Burrell...

should

the pro¬
gram of military procurement and
logistics needed to carry out such

—

Securities Traders and the SEC—Paul Rowen

of

social

they

air.

vFinancing New York Port Development—Austin J. Tobin.......

Price Effects "of Stock Dividends and

the

From the Munitions Board
came

-

14 Wall St., New York 5, N. Y.

recently" at

science

ganization for planning

The Traders' Market—Edmond M. Hanrahan...................
J

of

bishop's garden party. Quite
properly, members of the military
profession are technicians in the

and

conceivably

BOUGHT

at the

larger

any

Utah Southern Oil

foundation

life

tary defense establishment was
likely .to find himself about as
popular as the well known -skunk

of the unified defense

against

Equity Oil
Mackinnie Oil & Drilling

paredness conference of the mili¬

need for

a

Empire State Oil

.

economist who strayed into a pre¬

by
and

productive resources would have
The Natural Gas

Until

•>

military
short notice. Against this

even

arise.

Section of today's issue.

Articles in Today's Second Section

the

cultural

than the political state, are lost if
the
system of military security

threat

30

9 of Second

page

or

.engineer, they have no means of
country against the stated danger knowing in advance the loads or

40

May's article

constitutes

which both the military and

social

premise 4s that the

explained

5

Washington and You

and

economy?

people is erected?

Kennan:s

Mr.

the

establishment in safeguarding the

The State of Trade and Industry.

—

economy.

very

functioning

36

.v...

the

imminence of the threat

and

—or

'See Mr.

the civilian

upon

of the Defense Establishment have

16

Securities Now in Registration

which

seen

22

..'

dollar terms
In other
words,- how would one or another
level of expenditure change the
production
and
income
system

se¬

21

Securities

Securities

Securities

be

physical

have-on

background, numerous spokesmen

,33

..........

it

that

recapitulate

action

38

Our

DIgby 4-2727

war.

possibility of

22

May.....

of

impressive' military power
that, even with diplomacy thus
buttressed, we have to face the

12

...........

Exports—I mports—F utures

1949

What

posed

say

international

and

requires

upon

macy

:14

.'

Notes

to

made it clear

33

.

Funds

Nourse

analysis of the Russian situation
why, as matters have
developed since VE-Day, diplo¬

7

'

G.

the point of view of its im¬

ture
to

Einzig—"Economic Planning Under ERP".....,

the dollar cost in

effects will military
preparedness in present or pro¬

.....

briefly,
this orientation program began at
the diplomatic level with the State
Depaitment statement of the na¬

27

.*.
;....,

Coming Events in the Investment Field

Mutual

curity

To

Securities

Edwin

hope

what I have

pact

10

Dealer-Broker

From

I

from

.".'.vl.."Cover

..

whole

national

the

now

tion:

will add
the completeness of your view.
full perspective on our problem

of

Regular Features

on

matters.

that
to

of

becomes my responsito
carry*, .'the
analysis
.through the logical next step and
direct yOtir thinking to the ques¬

in¬

impor¬

Now

New

It

and

these

21

Construction

Y.

Effects of Military Expenditure

•

to
-

minute

23

terms

itary preparedness—short

n s

formation

Predict

YORK 5, N.

possible in

21

and Labor

CO., Inc.

STREET

SUGAR

jand 1950 and thereafter of main¬

20

Back Orders

YORK

Raw—Refined—Liquid

taining the Indicated vscale of mili-

First National Bank of Boston Sees Drift Toward Collectivism......

Department of Commerce

the

as

Guaranty Trust Co. Soys Controls Would Stimulate Inflation

Danger of Bounteous Paternalism

NEW

brass

of these

i

Clinton T. Revere Warns of

[tacks, .by interpreting

to

or

20

Robert C. Swanton Looks for Reduction in

down

us

budget

down

.

WALL

This afternoon, Mr.

at¬

order

:

.

brings
in

as

of Corporate Debt..........18

(Boxed)

iWebb

r

imatter

presentatio

19
Kremlin

99

effort of industrial-

have

many

18

i.........

Companies
the

o

an

tended

,;17

c;.

I

*ome.

Leroy A. Lincoln Defends Private Placements Willi Insurance
Servants, of

(fully such

sized waiiare.

myself
,v.....

STREET, NEW

LAMB0RN &

group

and

i nt'.f

;

16

Deposits of Mutual Savings Banks'

on

m

.

of this

your

many years

Price

!

Raymond M. Foley Reveals Truman's Housing Proposals.
William

of-

country

16

'

members

more prolonged and difficult.
Says'
two-pronged danger of destroying free bargaining
and of lowering public morals.

-have been g'iVen an extraordinary
opportunity to prepare themselves as leaders of oitizen thinking ir.
this country.
Secretary Forrestal has arranged to bring you a very

fate

Market Predictions

on

Election

Holds

Supports

;

The

15

Max Winkler Comments

WALL

Telephone: WHitehall 4-6551

broad and authoritative "view of the complicated situation which
may
determine the
<S>-

15

for Investors

99

future government objectives
controls present

Address New York Security Dealers

to

SAVE TAXES

-

are
stepped up.
Concludes - rising military »expenditures,
though not indicating economic disaster, will make attainment -of

20

Prosperity......

but you'll

—

costs

II

Promises—Roger W. Babson

OBSOLETES

prices and higher taxes, accompanied by *more controls if military

9

,,

TO SELL THOSE

higher*

3

L. Garner

IT TAX COURAGE

patterns. Warns there is point in military expenditures beyond which
inflation and economic-dislocations can result ond sees both*

-7

"Surveying Business Conditions"—Maurice 1. Hart

AND COMPANY

President's economic expert reviews problems arising out of
heavy
military costs and their effects on price relationships and income

-5

,

Democracy—Paul G. Hoffman

3

licrasifin

B. S.

Executive Office of The President

4

Outlook-^ Augustus Slater.

Your Bulwark for

(2279)

Chairman, Council of Economic Advisers,

4

Industry in Changing World—Percy Ripley..-,..

CHRONICLE

By EDWIN G. NOURSE*

Military Preparedness—Edwin G. Nourse3

Enterprise—Earl 0. Shreve

FINANCIAL

Economic Implications
Of Military Preparedness

page

Corporate Earning Power—Leland Rex Robinson. .Cover

Economic Outlook for

&

aivoti?

_

Olenc FpU*

1-5
-

1

FINancial 2330

'

'

Scbenectflrtv

'

-

.

'
Wnfp«t*r

C. E.

available

on

request

Unterberg & Co.

Members N. Y. Security Dealers Ass'n

61 Broadway, New York 6,N.Y.
Telephone BOwling Green 9-3565
Teletype

NY

1-1666

4

COMMERCIAL

THE

(2280)

The Seeds of

FINANCIAL

&

CHRONICLE

Thursday, December 2, 1948

British Industry in Changing World

Enterprise

By PERCY RIPLEY

By EARL O. SHREVE*

President, Chamber of Commerce

.

of the United States 1

Mr.

of American economy from which he cannot be
from initiative, ambitions and incentives. Says Amer¬
ican free enterprise economy has become Atlas of world and must be preserved against communistic
and other atlacks. Urges revision of tax laws so seeds of enterprise may grow and bear fruit Contends
country is "under-invested," and lack of risk capital is hampering new enterprises. Lists advocated

Ripley states British industry is working within highly com¬
plex situation nullifying efforts at forecasting along orthodox lines.
Argues average Briton's philosophic attitude and good humor, not¬

Asserting the "enterpriser "though inextricably a part
removed, is

dynamo that receives driving power

a

changes.

tax

He has to be durable to stand the

He is the butt of vote-seekers, power-

poundings of his enemies.

the

and

of time

wear

•

made of durable stuff.

The American businessman is

grabbers, Communist conspirators, leftist slogan-makers

withstanding
progress.

,

checked

solely

with

increasing

man's

command

Other

sources.

United States.

about the

enterprise

factors

have

ers—monopol¬
ist, labor ex¬
ploiter, impe¬

the

system rather than the fruits.
My conviction is that we must

always

c o n-

verged

and

*

Hie
here he

is, busier than
piling

enormous

enterprise system. Counting
the farmers, there are some 10
million of these enterprise units
ican

dam¬

world

and

Earl O. Shreve

working

overtime

for

the tax collector.

Here

'

American strength.

enterprise
the

are

did

Never

stand out

the best answers to
business-baiters.

the

of

slurs

achievements

these

brilliantly as they do

so

Sumner H. Slichter of

"The American Econ¬
poses the question: "How

omy,"
good is the American economy?"

He answers, and I quote: "The

American economy

is a far better
most people real¬

than

economy

ize."

The enemies of America under¬
stand .this.

They

substance of United
is the

that

know

the

States power

strength of enterprise. Also

what ehterprise yields the Amer¬
ican people in the manifold prod¬
ucts of the farm, factory and
That

is

America

why

enemies

the

attack

their

center

mine.
of
on

business and attempt to single out
the businessman

from the American

apart

someone

as

will see the ab¬
surdity of trying to hang a catchy
detail
label

that the root

and
its "widely
diffused
sources of initiative, invention and
prise

control.

enterpriser is the dynamo
American economy. But he
is not easily describedX He is in¬
extricably a part of the American
people. You cannot remove him
the

American

American

of

texture

and the
destroy¬

economy

without

State

ing the texture.
Nor is

a

business

culine affair.
million

*

Address

Albany

There
in

women

wholly

a

mas¬

nearly

are

wise

freedom of western
depend
upon
the
strength of the enterprise system.
ica, and the
civilization,

fruits

of

American

enter¬

a

Commerce,

Nov. 24, 1948.

can

other

Who in his senses

systems.

would

trade

this

for

the

paper

promises of Communism and So¬
cialism?
You

-

can

.

.

read the current figures

productivity of American
enterprise in the news, the recordbreaking figures on crops, electric
power use, factory
goods, steel,
on

the

national

income, employment, re¬

tail trade.

Principles Behind System V
I

by Mr. Shreve before
of

are

They
know that the survival of Amer¬

business in the

Chamber

people

the business-baiter now.

be judged today in con¬
trast with the meagre harvest of

Enterpriser

interwoven

American

The
to

The

The

the

strength of America'

dynamic progress of enter¬

concerned

am

with the

here

mainly

principles behind the

terprise system.

I

am

en¬

here to talk

and

poured out their ener¬

their

for

risks.

talk

I

in

this

vein
the ground

elementary

by way of preparing

somewhat technical subject,

a

the subject of taxes and
of

the effect
government policy

and

taxes

enterprise.

upon

I turn to this issue

it

believe

is

now

because

of paramount

im¬
portance to the American people

I

is the

of

gies and
talents, because they
hoped some day to reap a reward

American business.

on

indulge in la¬
bels for motives of their own. The
enemies of America strike at the
businessman because they know

people.

of the

from

you

Business-baiters

prise
The

and

and women planted
enterprise, took the

men

and

the

to

world

in

a

critical

juncture in world affairs.
The

future

the

of

world—cer¬

larger portion of the world econ¬
than any one nation ever

omy

sustained

American

The

before.

Atlas must stand

and

imperative
today.

continue to
is the
that' faces us
That

grow.

need

source

that can protect the
for
That source is America
and the towering productivity of
American enterprise.
Moscow
knows
this, and the
strength

of

Moscow-directed Communist

con¬

spiracy works in devious ways to
cripple American strength at its
source.
The
Moscow
puppets—
invisible—are

and

busy

trying to smear American business
and
finance,
bore
into
labor

incentives to enter¬
prise and to worm into government
so
that they can pull the strings
to choke enterprise at its source.
kill

The Reds have been at this con¬

EATON MANUFACTURING COMPANY

for

have

10, Ohio

•

a

their

unassailable

own

should

and

years

been

opinion of the writer, less the
of
the
community,
al¬

though
tion

hold that

many

should

go

This

latter

by

ported
the

all.

But

"when,

the

of

servant

in Britain to¬

as

day, the State receives more pay¬
ment

than

serve,

who, then, if they perceive

the

would

fact,

it

those

do

wish

exists

to

receive

to

such ministrations?

Elevating the

Subsidiary

~

The

increasing control or di¬
rection of industry by the State

$2 Par Value
par

value

shares of Eaton Manu¬

common

the New
York. Cleveland and Detroit Stock Exchanges and
facturing Company have been listed

on

trading in these shares began Wednesday, Decem¬
ber

1, 1948.

Each
with

of
a

the

par

896,260 previously outstanding shares
value of $4 of the Company was divided

into two shares with

value of $2 each upon
the filing of Amended Articles in the office of the
a

par

a

many

to

exposed

.of
the

cleaning

business

November

30, 1948.

The

Company
now
has outstanding 1,792,520 shares with a par
value of $2 each. The Company has no other class
of shares authorized or outstanding.
on

further.

reform

Revision

acter have

ever

of

been elevated to

posi¬

unprecedented

Thus, the
being gently

the tax

impor¬
industrialist is

H. C. STUESSY,
December 1,

1948




Secretary

ulous and inefficient;

■

Will British

industry expand or
contract in the State hygienized
and yet more complicated air: and
it

increase

decrease -in

or

.Replies Curved and Straight
There

to

only

are

answering

two

question, if

a

ways

;

the

he

to

wish

you

either

of

these

excellent

But he is going to hedge

courses.
a

your

lose, is under no compulsion to

take

with something akin to a

little

lawyer's preamble.
Note

A

of

..

Unreality

The difficulty in

giving

forth¬

a

right reply to the inquiry which
has
been postulated lies in the
fact that there is

something unreal
British situation.
This element is not peculiar to
matters of industry: the complaint
that life is divorced from reality
is
heard
on
every
hand.
The
platelayer, doing his best to keep
the railway track sound in the
hope that travellers will safely
reach their physical destination is
one
in his puzzledom with the
in

the

present

prelate who is striving to keep in¬

No

is

must be consonant with the broad

policy

was

New

Deal

dominated

by the philosophy that the coun¬

try's ills were caused by over¬
production and under-consumption.
You
recall, perhaps, the
theories
about
over-production

•

doubt,

sists

on

page

25)

habit which per¬

the

arises from

of this feeling

some

the middle-aged and

among

elderly of still trying to take their
cue

their

and

the

standard from

ordered universe they once

little

knew—an order which has ceased

the govern¬ to exist. But perplexity is writ not
psychological only on the countenance of the
well-being neglected; for his mind elderly; the young also avow that
is kept always under the impact
the foundations are sapped.
And
of the written and spoken word,
it need hardly be
said, on the
designed to make him not only edge of the milder uncertainties, is
respectful,
but
also
gratefully the shadow of the atomic bomb,
Nor

ment.

of

his

is

conscious of the widsom that pre¬

vails

in

high

places.

penumbra at present, but slowing
moving (or is it not?) toward the

the

British

out

for

excessive

sums.

Nevertheless, humbly admissive
although the present writer is in
this respect, he can but recognize
that the State today is standing
on

the broad shoulders of individ¬

ualistic
and

achievement

best—a

very

at its

nice

latest

point

of

vantage from which to moralize.

'

,

X

Survival Value

industrialist

today; and it is the haze

civilization.

of

center

Change of Air

.

(Continued

the

of society, confess
themselves, to be, so to speak "at
sea."

with

economic

all in between these extremes,

various grades

by

expected to come
winged feet and overflowing
pocket; he is informed that what
he
does,
and what he
thinks,
rescue

made

early

,

,!of

reputation; the
first is by evasion, as is the timehonored practice of diplomats and
the second is by putting another
poser to the questioner, which is
the method
of the philosopher.
The writer, having no reputation
preserve

condition

reminded

collector of the

of the national finances—to whose

works

era.

Washington

years

what

be

predatory action, is
that the grandfather was unscrup¬

This, then, is the atmosphere in

Laws Need

During

for

tact the invisible lines of commu¬

process

Secretary of State of the State of Ohio at the close
of

reaping
justi¬

The

offered

nication with another world. And

for her through which he looks into the
It is a vapor
task—for the good of the Amer¬ future he cannot see.
so
we
are
informed by
ican people—for the safety of the which,
those
who
specialize in odious
West—the country needs a thor¬
ough study and overhaul of its comparisons, is suffused with an
etherealism and an altruism, en¬
tax laws.
tirely absent from the individual¬
In part, these tax laws are the
istic fog which once poisoned the
hangover of the New Deal years
land.
None would deny that the
of punitive action against busi¬
social air of Britain's great indus¬
ness.
Those were the years when
trial cities has now a salubriety
business-baiting was practiced in
that was lacking in the Victorian
high places in Washington and
era, when layers of soot so swift¬
enterprise-crippling laws were put
on
the books in the fervent zeal ly descended on dividend warrants
of

little

a

formerly subsidiary in char¬

were

To make America strong

The $2

do

account.

be

to

to

seems

between

point of view is sup¬
the declaration that

itself is

State

which

COMMON STOCK

to

own

fication

distinc¬

no

drawn

be

conception and the other.

one

A

the

Tax

one's

servant

cleansing light of publicity.
Now

Cleveland

the

tance.

them

is

right.
Since 1914, however, in¬
dustry in the Western world has
tended
to
become
increasingly
the servant of the State and, in

tions

spiracy

decide

and

m e n-

tality

in

to

were

undesirable

property of somebody's grandson
on

but; for

and
better description.
But in the early days of machine
industry
these influences
were
subsidiary and, upon the whole,
production and distribution could
be carried on as though they ex¬
isted

one

psychol¬

which

simpler

conquest.

unions,

though
the not

as

upon

will

ogy,

West against Moscow's hunger

visible

look

competitive power?

to

call

Ripley

of

has meant that the factors which

is only one great

There

s,
fi¬
politics

c

It is much

fashionable

postwar burdens and

develop

eco-

under heavy

up

exploitation
-

and what it is

the

tainly of the western democracies
—depends upon the progress of
the American enterprise system.
The American economy has be¬
come a mighty Atlas sustaining a

i

nance,

and

men

their

origin in
n o m

Percy

seeds

the

'

Mml

.

which

have
7V'

courageous

of

notably

scene,

those
/

women.

for

Study these fO million units in

Harvard,

in his book,

.

driving power from the initiative,
ambitions, the incentives to
work and invest and take risks of
those 10 million units of enter¬

the

prise.

now.

:V.

J

the result

are

thousands

of

efforts

risks

gets its

enterprise system

The

of American

achievements

of

sources

They

of countless risks and

These

root

the

are

mature.

and

in the United States.

'

The

men,

express

Many of the pro¬

long ago.

sown

est burdens of

i.,

ever-increasing quantity and
quality.
V".
The harvest of the' enterprise

ducing units of American business
have taken generations to grow

the

women

industrial

the

in

these business
the freedom, the
diversity of the Amer¬

Like

higher and
higher, carry¬
ing the heavi¬

aged

in fime

system now is the result of seeds

achievement

-

come

beauty shops. They are in finance,
office administration, insurance.

the records for

war

real estate of¬

run

women

fices,
restaurants, retail stores,
factories, ' transport
enterprises,

the fruits will

that

intruded upon

attention to the seeds so

pay more

businesses.

ever,

a

of sizes, characteristics and

range

rialist.
Yet

women

seeds of the

and

over

re-<$>

material

business-bait¬

And, like the men,
run through
a wide

behng

KENT, ENGLAND—It has never been possible over the last
years to study the evolution of industry by confining one's at¬
tention to the industrial field alone, by occupying oneself, that is,

by the^

names

unemployment

toward

by ERP.

150

He is called

and star-gazers.

barriers, is enabling nation to show marked

many

Contends- tendency

1

British industrialist is hu¬

The

he is not immune from

and

man

these

vacuities

common

forebodings.

and

Nevertheless, it can

truly be said of him that he will
strive to the utmost for the sur¬
both

vival

is to

some

hibiting

a

that

from

of himself

This attitude

nation.

vanced

and of the,

his part

on

degree instinctive, ex¬

behavior
of

other

no

different

and

less

ad¬

peoples when under stress

circumstance.

of

there

But
that:

all

it

is

is

more

still

true

modifications,

expediencies,

•

in
that

it

than

despite

underminings,

compromises

disillusionments

which,

and

willy-

nilly, the Briton has had to under¬

of late, he yet believes in the
of a British way of life.
There is no essential difference be¬

go

virtues

tween that way, save

in local

ex¬

pression, and the ideals and con-

(Continued on page 32)

Volume

Steel Production

...

...

The

'

New Outlook

'

1

Electric Output

-•

By AUGUSTUS SLATER

Carloadings

Manager, Research Dept., William R. Staats Co., Los

Retail' Trade

Stave of Trade

Commodity Price Index

Public misconception of relative size and functions

Food Price Index

Business Failures

J
industrial production was somewhat mixed
the past week with fractional increases obtaining in some industries
and being offset on the other hand by slight decreases in others.
The net result was that overall industrial output remained almost
The picture of total

preliminary expressions from industry and business revealing little of the fear
recently engulfed the highly sensitive security markets, apparently a wait-andattitude has been adopted momentarily at least by investors seeking to penetrate the
With

which
see

politico

the

but

country,

did not reflect any
for the most part

notwithstanding

two

these

Taxes,
labor

in some sections of

factors,

ties,

a very

in initial claims of close to 2% for the week ended

trade

Nov. -3.

fore,
e

Monday of the

under

mployment,

warked by the

are

running at
levels
higher

current week the 18-day dock strike along
members of the International

the Atlantic seaboard came to an end as

Longshoremen's Association, AFL, returned to the piers.* With

earner

ever

sion has been created that wage-

pre-

viously at¬
Physi¬

tained.

ship¬ depression

and all-out

war,

and

alike

consumer

are

constantly pitted against the un-

sciupulous

needs accumulated from long

cal

partisan interest of
Whereas the impres¬

polticians.

than

.

Augustus Slater

On

of the give-and-take
our imperfectly developed
relations machinery, bul¬

by-product

production

rise to 2,290,000
,

the

-though

labor

*

*

During recent years the "profit
motive" has been maligned as a

profits and

magazine added, factory employment of 16,638,000 was almost half
a million above last September and "employment in the machinery

*

to

"OBSERVATIONS"

Corporate Profits

once

again

employment, according to "American Machinist," a
paper, broke all records in September when it hit 45,864,000
expectations that it will go higher before the year ends.
The

industry, including electrical, "showed a seasonal
but this was slightly below total of a year ago."

and

controls

are

Nonfarm

with

scarci¬
cost-of-

price

fully war¬

ranted

wages,

living

high level. Continued claims
dropped about 3% with a decline noted

continued at

for unemployment insurance

—
"\
ly above the 1920's. In fact over a
long period of years, from the he- by political uncertainties,,
stock averages are at a level al¬ ginning of this century, the divi¬
sion of the income dollar between
ready discounting severe decline
in earnings, dividends.
;

•while discretion is

haze.

legisla-

lation,

total output

noticeable decline, since employment and payrolls

eco-<§>——-—

-

nomic

unchanged from the high level of the week preceding.
From the standpoint of the nation's workers, it was found that
the number of layoffs and strikes turned upward

Angeles, Calif.

of corporate profits, fostered by partisans, poses

public relations job for management. Wages have led price parade since prewar. Chart showing infla¬
tion impact upon industrial earnings, dividends and stock prices for two postwar periods reveals wide '
disparity in low equity level.

Auto Production

and Industry

5

(2281)

FINANCIAL CHRONICLE

&

COMMERCIAL

THE

Number 4756

168

profiteer, few realize
S. corporations

that half of all U.

com-' suffered deficits in such years as

;

A. Wil¬

article by

week's

This

May, entitled "Exchange vs.

fred

Counter Investment Practice," ap¬

9 of today's Second
■ ■' ry
-v

pears on page

Section.

„

"capital"
temporary

and labor has, barring
dislocations, remained

related

remarkably stable.- These

suggest the inexorability qt

facts

which make

forces

system tick.

economfti

our

;

-

In view of the above

comparison

it would be difficult to make out

trucking activities taking on a more normal appearance bined with continued dynamic 1936, 1937 and 1941; or that the
an
honest case for an "excess"
York, the Pennsylvania Railroad took the necessary growth at home and devastation "unconscionable" profits of 1,200
Even an increase in
manufacturing
compa¬ profits tax.
steps to remove the embargo on less-than-carload freight deliveries abroad will take years to fill. There leading
the so-called normal rate from the
it imposed the past week because of the teamsters' strike.
On the have been no speculative excesses nies, last year and this, repre¬
present 38% to, say 50%, could
similar to 1919-20, and the banks sents a margin of only 7^-8 cents
West Coast, it was reported, much remained to be done before the
prove of greater harm in discour¬
89-day~old maritime tie-up could be ended, notwithstanding the fact are bulging with cash. But the fi¬ per dollar of sales compared with
nancial skeptic: sm and doubt which
that CIO longshoremen in the four major Pacific Coast ports ap¬
approximately the same figure aging investment in the additional
facilities which government econ¬
have dogged stock prices for two prewar.
proved a new contract over the week-end.
omists recognize are needed to
The strike on the East Coast was the costliest in maritime his¬ years have been renewed, with
The U. S. Department of Com¬
ping and
in

here

New

tory and is estimated to have delayed Marshall Plan cargoes
at $36,000,000 and not less than 300,000 bags of mail.
The

shipping companies was placed at $30,000,000 a day, or
$540,000,000 over the strike period.
*

valued
cost to

approximately

*

*

March in
reported.
dropped to 173.6% of the

Living costs experienced their first decline since last
the month ended Oct. 15, the Bureau of Labor Statistics

index

Its

prices paid by

of

consumers

from the record high of 174.5% set on Aug. 15 and
duplicated on Sept. 15.
The decrease was ascribed by the BLS to
substantial declines in retail food prices.
This factor "more than
offset increases in all other major groups" of consumer cost items,
the bureau said.
The Oct. 15 index figure is just below the July 15
level of 173.7%*.
As a result, no change will be required in the pay
rates of General Motors Corp. under its cost-of-living wage formula.
This provides for a one cent an hour quarterly
adjustment for

the

point fluctuation in the index.
*

a

controls.

.Highlights of the current situa¬
tion reveal that:

—corporate profits, although at
record

tion

levels,

to

smaller in rela¬

are

national

income

than

rate

estimates that total corpo¬

profits this year will amount

billion, after taxes, com¬
pared with $18 billion in 1947,
and $8.4 billion in 1929.
But the
significance of these figures is lost
without a comparison with the to¬
tal of all national income and its
division among various economic

to

$20

From this

nearly

dividends

employee compensation
times the aggregate

17

received

by stockhold¬

this year;

at the

highest dollar level in his¬

peak production

approximately 100% in¬
in commodity prices since

an

crease

(b) the corporate income
after taxes, is somewhat
lower than in 1929; (c) due to cap¬
prewar;

no

logical basis for

a

general excess profits tax;

share,

ital requirements, dividends paid
—wage rates have run ahead of
to stockholders have declined in
profits as
part of an economic program designed to eliminate the "seed germ living costs and commodity prices relation to national income, and
currently average less than half
of the next depression," adding, that these steps are necessary to
since prewar;
establish a "healthy domestic economy" for the day when armament
(d) em¬
—the basic price level, as after the available earnings;
expenditures and European aid will no longer serve as props to our
World War I, has undergone a ployee compensation is 6Y2 times
economy.
* v
the aggregate net corporate profits
Further demands on Congress made by Mr. Murray were that permanent upward shift which at
the government allocate, ration and control inventories so that essen¬ that time was reflected in indus¬ and nearly 17 times total divi¬
tial materials get to the "proper people at the proper time."
Included trial earnings, dividends, and dends-at present rates; (e) despite
among them were an undistributed profits tax, a minimum wage of
the ballyhoo over gains made by
stock prices;
at least $1 an hour, Federal support of farm prices, an "all-out
.—the backlog of industrial ex¬ workers during recent years, their
attack" on monopolistic practices, a broad program of plant expan¬
collective share of distributable
sion and low-cost public housing.
Murray also urged that 25,000,000 pansion and consumer needs is
in his annual report to
the 81st

on

Profits constitute the incentive to

savings and the investment there¬
of in

er

demands

are

a

sizable

order

for the

new

Congress

and

Encouraged by seasonal promotions and early holiday displays,

their purchases slightly during the past week.
Although retailers in some areas reported the start of Christmas
shopping, generally the season was not expected to begin until after
Thanksgiving.
Although total wholesale order volume in the period ended on
shoppers increased

Wednesday of last week declined fractionally, it was sustained near
previous high levels by the pre-holiday demand for foods and gift
items.
Good quality merchandise at moderate prices was in large
demand, while order volume for apparel and textiles fell very
slightly.
,
'
,

.

Just

have

U.

'30's.
ness

.

Compensation of employees-_
Farm

Profits

taxes

60.4%

personal living expenses
so also has the

increased,

cost-of-living"
advance

since

shown

the

late

Profits reinvested in busi¬
have less than half the pur¬

chasing power of the prewar dol-

(Continued

on page

24)

International Petroleum Co.

Standard Oil of N. J.

Dividends

second

8.4

11.2

33.4

15.1

1.6

13.0

9.6

20.4

9.2

6.6

8.0

3.6

21.1

24.2

35.6

steel

16.1

$87.4

100.0%

$221.4

100.0%.

Bell Teletype NY

more

steel ingots

were

DIVIDENDS

Kingan & Co.
McGraw

Nothing

(F. H.) & Co.

American Maize Products Co.

than

of

Bought—Sold—Quoted

FREDERIC H. HATCH t CO. INC.

made.

Established 1888

though total steel, ingot output is slightly .lower than it was a few

(Continued

on

page

27)

more

the

the

when

MEMBERS N.' Y.;
83

Wall

SECURITY DEALERS

Street. New York 5, NV Y.

-

ASSOCIATION : '
Bell Teletype

"

'r

NY IS97

helpful

Monday Issue

"Chronicle"

dividends

is being made in finished steel shipments even




Toronto

Time Inc.

*

More of the ingot is being processed than ever before.

Montreal

New York

quarter rates.

output in the past several weeks means that the

record

1-395

GALORE

fantastic 10 years ago, according to "The Iron Age,"
weekly.
More important are new estimates for finished steel shipments
this year.
They will break all records in steel history.
"The Iron
Age" estimates that more than 65,700,000 tons of finished steel will
be shipped to steel users this year.
This is 88% more than the
prewar^ear. of 1-939. And it is 4% more than was shipped in 1944
new

HAnover 2-0980

5.9

5.8

Total national income——

18.5

8.4
.

HART SMITH & CO.
52 WILLIAM ST., N. Y. 5

6.5

1.4

after taxes

on

Percent

$133.9

9.8

<-

Other income groups

•Based

58.1%

Billions

5.7

Corporate profits before taxes

Corporate

Percent

$50.8

income

have appeared

ago.

the

$15,000.

nearer

*1948-

-1929-

national metalworking

years

is

prewar

$6,000,

AND ITS DIVISION

S. NATIONAL INCOME
Billions

industry will turn out about 88,500,000 tons of steel ingots this year.
This is only a million tons less than the war year record made
in 1944.
Had it not been for the coal strike this year the industry
would have surpassed 90 million tons of ingots—a goal which would

The

as

industry
about

today

similar

LEVEL THIS WEEK

*

in

to

"corporate
a

STEEL OUTPUT SCHEDULED TO SET HISTORICAL RECORD

.

pursuits.
Whereas
investment per work¬

engaged

amounted

^income has increased only slight-

excise greatest in history;

Jack consistency and vision on Mr. Murray's part.

!when much

business

the average

regulatory character.

taxes be removed except those of a

Higher

measure.

revenue

a

as

of

than

requirements,

value

Congress to roll back prices and curb excess

individuals be removed from the income tax rolls and that all
These

ductive

comparison it will be

(a) national income is

tory, due both to
and

handle the nation's increased pro¬

amount

groups.

noted that

—total
is

merce

in

1929;

—there is

Philip Murray, head of the Congress of Industrial Organizations,
the CIO national convention on Nov. 20, called

public mind
inspired

delusions

political cam¬
paign. will become basis for re¬
newal of unsound governmental

ers

*

*

in the

whether

during the heat of

1935-39 average,

each 1.14

question

now

declared

payable

for

and

coverage

'

(2282)

<i

THE

COMMERCIAL

FINANCIAL

&

CHRONICLE

Thursday, December 2, 1943
second,

help
They
txiemselves' to in¬

and

themselves,

to

each other back1 to recovery.

Your Bulwark for Democracy

have

pledged

crease

Administrator, Economic Cooperation Administration

•

,

I

was

advised
that

he

free

.

the

going out under

make

1

Act.

to

from

money

pro¬

voters

:

took

taxpayers

our

and

on

for

courage

any

administra¬

ex¬

tion to propose this, and for any
Congress to vote it.
The benefor
fits we get out of it are, of course,
this cooperation
which has not, frGrnenfious- Kut thev are deferred.
tremendous; but they are deferred,
only been helpful to me person- jQn
range benefits,
ally, but has also been of great
press

ap¬

my

preciauon
preciation
,

,

,

service to

,

.

,

,

nation.

our

{

.

Dollars Doing Double Duty

continue to 1
Perhaps the most novel and
support if youjgtriking feature of our aid to Euunderstand what we are doing and
rope under ECA
is the way in
full

your

,

why

The only

doing it.

are

we

which

dollars

are

question is whether I can make

double

complex and unique operalion as ECA clear in a one-half

tant

hour talk.

are

made

to do

operation.

sueh a

Act of

1948,

a

I

this

be

think

it

understood, for

heart of the ECA

would

be

helpful to
an
understanding of the way our
dollars, work if you recall the situation which prevailed in most of
the European nations when the

wholly
foreign

type of American
economic policy came into being.
new

It is highly impor-

duty.

that

it is at the very

With, the passage of the Foreign
Assistance

That Act, for the first

time, gave
formal recognition to the inter- > Marshall Plan was first proposed,
dependence of the U. S. economy j Prospective buyers, even though
and the economy of Western Eu- j they had an ample supply of local
rope.
More importantly, while j currencies, were unable to pur-n
recognizing this interdependence ; chase the food, raw materials, and
proposing substantial further, machinery needed for rehabilitagrants and loans to the nations tion
because
these
essentials
of Western Europe, the Act spe-jcould
be obtained only in the
cifically directed that our dollars Western Hemisphere and only for
be so employed that the nations dollars and dollar exchange was
would
become
self
sustaining not available. Governments faced
prior to the termination of the J another kind of dilemma.
They
aid program
on
June 30, 1952. were unable to carry on desper-.
That is the really startlingly new ately
needed
recovery
projects
element in this program of for¬ because they did not have either
the dollars or the local currency
eign assistance.
"
'
' j
and

-

,

Between

II,',

we

I

War

World

World War

to

and

gifts and loans to foreign

tions.
War

II,
not

than

more

shores.

our

$20

rency

solvent

their

basis

own

program
our

so

way.

on

lars

Assistance

our

dol¬

at

the

same

time—that

of

the

prospective
buyer,
needing
dollars, and that of the govern¬
ment, needing local currency.

agreements

in

phenomenon

new

are

field

the

of international economic aid.
could not get along

without them.

They have given us the legal right
to follow our dollars, to see how

I

these

clear

it

make

to

want

agreements do not

in foreign currency

that

give

us

they could pay
Rather, our gifts

paid for
normal

be

ECA

are

bought

at

prices and through normal

business

receive

by

channels

by

those

who

them, whether they
manufacturers, or
agencies. ;But pay-

or use

consumers,

Industry, New York City, Dec.1 government
1 ments

are

in

foreign

to

istrator

ECA

of

ward

agree

useful;

are

contributions

desirable

and

For

recovery.

to-j

dollar,

each

for

Eu¬

foreigners
equivalent amount of their

needed

recovery,

ropean

dollars

only

to which

use

in

results

produces
of

terms

what

is

our

is

concern

maximum

I

recovery.

currency

while

Thus

S.

U.

have

dollars

as

in¬

vestment bankers, but our success
will

measured

be

of

number

not

dollars

we

by

the
paid

are

paid Italian lira,
back but by the degree of recov¬
government fund that has;
ery that Europe attains.
It is our
been
used
by
agreement
with
task
to
invest
your
dollars so
ECA to rebuild railroads, to drain'
wisely that recovery will become
marshes, to build bridges, to refit; an
accomplished fact by the tar¬
ocean liners, and so on. Liikewise,
get date of June 30; 1952.
French
franc counterpart funds
The bilateral agreements under
have been released in agreement
with ECA for the construction- of; which we are operating have en¬
abled us quickly to .shift from re¬
power
plants and electric lines,!
lief to recovery because they have
and for modernizing coal mines.
have

a

enabled

The

tion

counterpart fund, in

to<

addi¬

making our dollars do
in the work of re¬
has other important ad¬

double

duty

covery,

vantages.'

;

(

One. advantage, is that by keep¬
ing the counterpart fund out of
circulation, or by using it to re¬
tire public debt, a direct attack
be

can.

made

inflation, in any
Another advantage, is

country.

on

that

people who have to pay out
their own
hard-earned cash -for,
things only buy what they reallyneed.
If gifts were being passed
around, .10-ton tractors might find
their

five-acre

to

way

to

its

use

Marshall

Plan

dollars most

intelligently there is
added the healthy frugality of the
average European businessman in
handling his own money.
Bilateral

Agreements
of

on

Use

their

!

Another. feature

of

ECA's

is

the

series

of

formal:

op¬

bilateral

agreements that govern the
U.

S.

aid

countries.
Tn

in

the

Marshall

*

tnese

use

of

Plan

^

;

;

agreements, the Euro¬

countries

that

receive

our

pledged themselves both in gen¬
and specific terms to do all
that
is possible,
first, to * help
eral

est

help each other to the great¬
possible extent.

To aid

50

nual

think

countries,
we
have
missions in each of the

country

participating countries except
Switzerland. Each missioiris well
staffed and advises as to how the
dollars

available

be

can

used

head

known

gratified
cause

the

but

to

not

know

we

are

You

while

that

overall
are r

we

insisting

are

financing

those

only
programs. If

studied
gram

of
it

upon

programs;

recovery

we

segments

have

we

of
not

the overall recovery pro¬
a

their

with its
own
money as well as with its
ECA dollars, we in ECA cannot
be. sure that we are
spending
going

to

do

Conversely,
if we have studied and approved
a carefully prepared overall pro¬
gram,
it actually doesn't make
your

wisely.

dollars

much

difference

which

program we

with ECA dollars.

r

sions,

maintain / the

we

*

-

Special Representative W. Averill

Harriman, with William C. Foster
Deputy. The
United
States
could-no
in

war

have fought the
exclusively from

more

Europe
without




op¬

headquarters

a

command

on the
fighting front in
Europe. And at the head of ECA's

command in Europe we have men

less able than those who

no

in

manded

during the
Our
with

the

office

works

known

closely

Organization for

Economic

pean

com¬

theater

war.

Paris

the

European

Euro¬

Cooperation,

by its initials, the OEEC.

The

OEEC

aid

aspects

carries the responsi¬
bility of coordinating the mutual

ironing

of

composed

the

and

program

conflicts.

out

OEEC

is

representatives

of

of

cooperating
governments,
by a substantial staff.

aided

with

the

people

seg¬

finance
■

,

•*

governments

thinking of

of

with

but

Europe.

We

are

in terms of

recovery

the income of the people and, al¬

though it-may be oversimplifica¬
tion, we nevertheless propose to
measure

progress
in the per capita

In

1947, the

income
as

by the increase
income.
capita

average per

in

Europe was only $347
compared with more than four

times that in the United States. If
after

four

years the average
of the European can be

come

creased

to

$500,

we

will

in¬
in¬

have

achieved the kind of recovery we

thinking

are

difference

about,

namely, the
living at or

between

below subsistence level and

living

decently.

Country "A" wants to finance
How
is
the
program
getting
machinery imports along? We have
recently received
fulfilling a total program and an official
report from the OEEC
arranges for us to finance its im¬
which estimates probable produc¬
ports of food, that is quite all tion of certain vital materials
in
right with us; or we would be the Marshall Plan countries
for
just as happy to have it the other the fiscal
year 1948-49, and com¬
way about. The important thing
pares production during that pe¬
is whether the total program adds riod with production during the

its

necessary

in

up

to recovery and whether their

calendar

announce

tons

that

1947.

year

OEEC

esti¬

that during the fiscal year

of

1949

the

J. MADER

charge of

our

coal,

1947.

which
tion of

Marshall

Plan

metallurgical coke,

the produc¬
steel, OEEC believes that
a

total production of

million tons,

32%.

,

power,

increase of 14%

an

In

is essential to

there will be

us

In

the

the

or

an

field

in the

63 Wall Street

New York 5, N. Y.

rogenous

indicated

fertilizer,

important to the
ropean

increase of
of

is

As for nit¬

which

recovery!

agriculture,

electric

increase

Crude steel

should be 50% higher.

Adams & Peck

.

Trading Department
December 1,1948

head¬

as

43

in

DOYLE
him

_

.

quarters in Paris, headed by U. S.

8% in kilowatt hours.

associated with

*

In addition to the
country mis¬

If

Public Utility Bond Department

is

caliber—at

various countries.

nation and do not know

is

has become associated with

general business in

A.

are

with which they have
acquired a comprehensive knowl¬
edge of
the
economies
of
the

rot

understand the impor¬

can

tance of these plans if you realize

pleased to

HENRY

Investment Securities

JOHN

We

you.

surprised—be¬

speed

over

Teletype:

a

missions, most of whom

our

well

are

countries will produce 420 million

We

N Y 1-115

to transact

country

now

New York 4, N. Y.

DIgby 4-2420

each

bring

about the
greatest contribution to recovery.
We are proud of the men who

mates

Tatro Company

Telephone:

to

to

programs

recovery programs.

the formation of

Broadway

*

in the task of helping

us

individual

ending

Edwin L.

discus3

While
we
of
necessity work
have complete an¬
from all the. par¬ through governments in Europe,
because that is the only effective
ticipating countries and we will
soon
have
complete
four-year, way to work, our real concern is

plans. We

ment of that

eration which should be explained

countries

Plan

the

that

problems through and re¬
their thinking to written

duce

too

Aid

insist

to

us

Marshall

what

farms.

Thus, to the sincere desire of each
nation

to

(2) to make a realty
pledges. European nations
given us to work together

erate

We conceive of ourselves

cotton,
grain,
petroleum
and
machinery to Italy, for example,
those Italian citizens buying these
products

like

Washington than could ECA

other nation.

any

been used to finance shipments of

into

would

the

and

dol¬

our

happen to believe that our eco¬
own'
nomic system, on the basis of its
into a government fund:
record, - is the
best system
on
that is used exclusively to speed
earth; but that does not give me
their national recovery.
the right to attempt to force it on

an

pean

announces

Conversely,

our

Our

business.

pay

commodities

for

currency,

L. TATRO

with

do

we

then, that the U. S. Government; whether the
pays
out, mostly to Americans,: lars is
put

aid under the Marshall Plan have

EDWIN

business.

their

of

We

thej

holding;
equivalent—the counterpart—!

the

The goods that are shipped and

a

1,1948.

Act,

able to meet both of these

are

needs

*An address by Mr. Hoffman at
53rd Annual Congress of American

by imposing ; taxes
reviving industry
by them.

that

onerous

Foreign

aimed a<

debtors

cur¬

Under the wise provisions of the

billion

Mi'nd you, I

saying

fully conceived
helping to put

except

They could not

the needed local

would be crushed

that these loans,
gifts and grants should not have
been made, but they have not been
part of a comprehensive, care¬
am

even

so

na¬

Since the end of the World

have left

for them.

pay

obtain

sent billions of

dollars out of America in the form
of

a

meaning a national lund

We feel that we can

expect

bilateral

they are working, without raising
government concerned in what ist the question oi invading national
called
a
"counterpart
fund,"; sovereignty.

paid

people who are not
innour own democracy. It

spending it

a n c e

I want to

planned

is held by

ind tnis currency

I

Now

have

them.

among

of the dollars;
the right to dictate to nations as
American producers for to. their form
of economic organ¬
the goods shipped under the ERP.'
A
second
ization.
As long as they remain
unique feature of
These counterpart- funds are avail-:
ECA's operation is its completely
free nations, with a. free ballot,
able to the governments for pro-!
the kind of economic organiza¬
unpolitical nature.
We do the
jects which they and the Admin-i
tion under which they operate is
extraordinary
thing
of
taking

Foreign

Assis t

dollars are

our

a

not need our further assistance.

consideration,
had
given
complete
en¬
dorsement

a

help the Europeans
help themselves that they will

to

after extended

the

on

gram so as to

be¬

NAM,

cause

made

been

gencies.. This time

e

offer

to

have

spot basis to meet recurring emer¬

me
11

f

loans

and

Chamblin

interchange of gooas and services

i licbe

April 9 of this year when I was catapulted into my present position as ECA Admin-;
istrator, I received a telephone call from Walter Chamblin, Washington representative of
NAM, offering full cooperation of the National Association of Manufacturers in the task
undertaking.

Meeting Our Responsibility

cur¬

rates

program and

|

On

which

our

briefly how we are going about
meeting our responsibility (1) to
assist each
of
tne
participating
nations in developing and carry¬
ing out its individual recovery

Western European nations and thus preseryed'democracy. Warns success of plan should be measured
by degree of recovery Europe attains and not in dollars paid back.. Says World War III can be avoided,
if, as free people, we plan, work and stick together.

Mr.

and

j trade, and toward increasing the

and accomplishments of European RecoverytProgram, Mr. Hoffman stresses
intangible gains to this nation and to world'. Points out program has saved France
Italy from communism and has stimulated and maintained economic and political cooperation of

and

Stable

maintain

maximum

are

exchange, to balance budgets,
tp maintain internal financial sta¬
bility, and' to work with otner
Countries toward breaking down
j the public ana private barriers to

both material and
*

ana

Of

In describing purposes

'

production, to stabilize

rency

By PAUL G. HOFFMAN*

efforts

contribution the minimum.

an

is

so

of Eu¬

increase of

27% is indicated, and I might add
Boston

Philadelphia

Hartford

that this

would

(Continued

represent a
on

page

35)

50%

Volume 168

THE

Number 4756

From

COMMERCIAL

k

that

seriously

•

being

fears

the

indication they would have come under

ex¬

disastrous

this

business in¬
in mind
directing their fire against increased corporation
taxes, and after a skirmish or so against restora¬
tion of an excess profits levy,, giving away and
accepting it in the view it would be easier to get
rid of subsequently. There is, on the other hand,
considerable opposition in Congress to the excess
profits tax on the ground that it works a hard¬
ship on new businesses.
.Senator
Walter F.
George, who will again be the powerful Chairman
of the Senate Finance Committee, holds to this
score,

view, but he

parenthetically,

have
Carlisle

Bargeron

be prevailed

may

is

the

fact

that

profits

excess

them, because management
in

salaries,

with

Dewey's

election.

in office to

what

He

are

we

likely to get

got rid

now.

of Wallace.

of Ickes and

You'll

amazed

be

at

the number of subordinate Leftists he got out of the government.
He never got any support, in return, from the Conservatives,

They gave no evidence of their appreciation, if any, for what he was
doing. And, of course, the fact is that in trying to do as little work
as
possible in the Presidency, he was floundering around in a sea
of conflicting advice and conflicting decisions.
The Conservatives
roundly denounced him for saying industry could raise wages without
increasing prices. At the time, his most conservative advisers were
deathly afraid of a depression.
There

the

came

time

when

he

became

determined

win

to

opera¬

the

the

of

hundreds

of

thousands

of

smaller enter-

prises
throughout
the
country
which
mine

deter¬

the

en¬

tone
and quality of
ergy,

Hon. J.W. Martin, Jr.

business

our

.

structure.

American

too vast, too

business

is

widespread, too com¬

plex to be guided and controlled
by
or

any

central bureau of thinkers
in far away Wash¬

planners

„

-

The

opposition party in this
country today is stronger numeri¬
cally than at any time in the last
16
years.
In several important
States, the decision in the elec¬
toral college was by a majority
of less than Vz of 1% of the total
vote.

In

'■

'

«'•.

several

States the final

vic¬

the Administration was
determined by a number of votes
considerably
smaller
than
the
total of
the/federal employees
tory

are

type of

new

for

new

American

same

elements

of

prosperity
is
through
voluntary cooperation among men
of

life

Business and Government

the

much

are

will.

good

in every section of the coun¬

The

really

practical measures
welfare, in

try, especially if we gauge those
aspirations by the sentiment of

which advance human

the

seldom the inventions

business

Wher¬
of business

you find a group
people gathered together

fortunate
find

Continent,
and

men

gether

in

the broadest

community.

ever

there

wise

and

tested

the

you

banded

women

ditions

•

We must not forget that modern
science- has narrowed this little
is but

a

which

we

live.

few hours by

terially

to

Nation.

There is

the

I

ma¬

of

are

one

mon

this

people united in

We

com¬

a

to work out here in

purpose

hemisphere

political

a

and

economic order where there shall

liberty,

con¬

happiness

perity for all
less of what
cupy

*An address by

our

andpros¬

people, regard¬

position they

con¬
economic

the

little patience with men

undertake

make

business

whipping boy for all

our eco¬

complish

an

sharing in that adversity.

reasonable

of

to

nomic stresses and strains.

our

increasing ex¬
change of goods and services be¬
tween all our people. It is becom¬
ing more and more evident that
no
section can progress without
that progress having a stimulating
effect in every part of our coun¬
try. Conversely no section can be
adversely affected without all of
us

the

ultimately only under

have

who

plane from

unifying

are

abundance.

Florida

New York. Radio contributed

who

material prog¬

cur

of the. peace which can

and

ress,

flower

in

flowing,

real authors of

coop¬

inspira¬

or

It is, rather,

who keep production and

men

commerce

to¬

progress.,

world

of the word, are

sense

tions of government.

this

on

eration for peace and constructive

structive, forward-looking states¬
manship in the House and Senate

Speaker Martin
before the Southern Association
of
Ice
Cream
Manufacturers,

;—

tained

energy,

Fundamentally, the aspirations
of

think of Washington

may

—

strengthened by

be

the

we

1

within that State.

I Finally,

taxes.

man

vision and determination through¬
out the entire South.

it

day-to-

y

ington.

•

I, for one, think the
country owes him a debt of gratitude for trying to return the gov¬
ernment of this country back to. the people.
He didn't get any
support from the Conservatives on this, and instead, came to be
despised in the radical left-wing group that was dominating the
Democratic Party.
He took an awful political licking for keeping
such men as Snyder around him. You have only to recall his break
with Bob Hannegan.
It was because he was turning his back on the
see

a

re¬

that

tions

expense

You've got to look back to Mr. Truman's first four or-five months

Leftists.

is the
d

life,

fact

mains

seems

bonuses,

serious doubts that business will not be better off than it would have
been

the

business

new

national

economic

taxes

inclined to be
" accounts
ventures, anyway to get rid of the money with¬
out giving it to the government.
An excess profits tax can, in fact,
prove quite a boon to the unorganized white collar class.
V*
;
'
However, I am not advocating it or any other form of taxes.
But this is the way the wind is blowing.
y;
On the overall aspects of Mr. Truman's reelection, I have my
freer

toward

the center of^——■

our

appeal to. those who don't have to.pay

an

on

that he is always thinking
Business must look forward at all
times, because it is the decisions of

as

to listen to

upon

depression will depend

cod^y which make the substance of tomorrow. However much

counsels.

There

Whipping Boy!

distinguishing mark of the American business

about tomorrow.

fluences with whom I have talked, have

wiser

It is the

Republican Ad¬

a

ministration.
On

the

7

Speaker Martin decries policy of making business the whipping boy for all our economic stresses and
strains and points out America's great economic power is due to its delicate and complex economic
mechanism which moves goods swiftly from
produrtion to consumption. Defends aid to Europe in
combating communism and foresees higher taxes if national budget is increased. Says good times or

pressed in many business circles over the reelection of Mr. Truman
are justified.
Very likely there are going to be higher taxes but there
is every

(2283)

Speaker of House of Representatives

of the News
:

doubts

CHRONICLE

By HON. JOSEPH W. MARTIN, JR.*

By CARLISLE BARGERON

correspondent

FINANCIAL

Don't Make

Washington

Ahead
This

&

may oc¬

little

advancement

for

the

We ac¬

national

by lashing

out po¬
or that as
adversity. It is
true that many people do not real¬
ize fully how much they owe to
the
business
community — how

litically at this
the author of

much

flow

they

group

all

for the

owe

food and

of

regular

supplies to

our

great cities—how much they owe
for the conveniences and labor-

saving deyices which they may
buy' at the nearest store—-how
they owe businessmen for

much

the assistance they give in com¬
munity projects such as the Com¬

munity Chest, welfare work, as¬
sistance to education, to charity,
to public welfare and local enter¬

prises of every sort. Close down
our
business enterprises—if you

in life.

(The longer I live in Washington,

can

imagine such

a

step—and most

.

Presidency in his
tled

him

own

said

and

.

right, mainly because

he

couldn't

it.

do

In

people belit¬
desperation—or in

many

so

his

retrospect it may have been the calm calculation of a small machine
politician which is his background — he began * to advocate any
and every proposal
that would insure votes.
He resorted to the
small politician's practice of accusing the opposition of everything

Miami Beach,

Fla., Nov. 23, 1948.

the

more

convinced I become that

of this

country would be without

(Continued

the true path of progress and sus¬

on

page

and

embarrassing it at every turn with impossible demands and
promises.
He stooped pretty low in catering to the racial minority
votes

the Republicans stooped just as low. The indications are
Negroes, sympathizing with the predicament he got into in
the South because of his Civil Rights
Program, supported him over¬
whelmingly.
•
•
4
but

that the

10 #

The thing to do now is to seek to appraise the real Truman.
He is

a man
of-average ability and he knows it. He
experience in the political game, plain down to earth
he has gotten to be pretty good at that. He showed it
paign.
' 1 ;
'•:
..
.

he

But

-

t

is

Americanism.
connection

deep-rooted
In

his

with the

in

Americanism

his

has had long

politics, and
in the

Middle

—

Western

Rights appeal his only sincerity was in
Negroes and not the racially conscious, radical

NEW YORK

The Global-Minders, a lot of whom come
from our best
families, are probably in for the greatest shock of their lives.
Likely they are going to find a tapering off in the nonsense of throw¬
ing away billions to save the world and additional billions to sup¬

the

brass

hats.

Bob Taft in his

The

thinking

fact

that

is

is

Truman

closer

much

OFFICE

to

this stuff than he is to Vandenberg, and
to the crowd that prevailed with Dewey.
on

Summarizing, I believe
the

international

would

racket

have from

Cn

the

will get

we

under

a

Dewey.

home

A

Civil

ones.

port

OF

OPENING

THE

cam¬

*•

more

continuation

realistic
of

thinking in
than

Truman

we

WALL

35

STREET

1

front, the reform in the Taft-Hartley Labor Act

is not likely to be any more than the Republicans were

Telephone: Dlgby 4-4141

prepared to

give, or any less than the political-minded labor leaders, after
asserting themselves and impressing themselves upon their constitur
ents, really expect to get. Their whole attack upon the Act has been
a sham and they know it.
The "reform" will erase the Taft-Hartley
label and they can say: "See, what powerful men we are."
The
ban against the closed

employer
Truman

and
has

shop will be removed in instances when both
employee want it. This will be the major change.
illusions

no

about

He has worked with them for
their
can

ways

move

But

in

on

far
on

better
him

It

did

food

than

labor

leaders

and

their

Dewey.

I

doubt

seriously

that

for these

fuel, in

of increased and

Here

we

return
the

for votes.

people

broader

on

a

as

So-you
National basis and in the form

-

New York Stock

have

machine.
giving them
will find him pressing

r

San Francisco Stock

SAN

FRANCISCO

BAKERSFIELD

•

NEW YORK

•

EUREKA

FRESNO

•

Exchange

New York Curb Exchange (Associate)

Exchange

LONG BEACH

•

*

..

security, flood control and reclama¬
housing benefits and the like, aid to the

well also accept the fact that

-

our

RIVERSIDE

•

SACRAMENTO

*

SAN JOSE

Private wire system

people
;

'

have
'

'

•

SANTA ANA

LOS ANGELES

MODESTO

•

social

definitely to expect and demand these favors.




-

MEMBERS

the product of a Kansas City political

tion projects, of health,
farmers, aid to this and that.1

We may just

^

4

spending, it is another matter.

as

favors to

Wolsioii.lloffman & Goodwin

they

favors for people, such as paying their rent and

and

come

bellicosity.

long time and knows their racket and

and toss him around at will.

domestic

to think of Truman

a

«

connecting all principal offices

STOCKTON

OAKLAND

•

*

VALLEJO

34)

*'

COMMERCIAL

THE

(2284)

CHRONICLE

FINANCIAL

&

"Surveying Business Conditions"
By DR. MAURICE I. HART*

developments and weighs forces aligned with

;

,

***

Dealer-Broker Investment
Recommendations and Literature

Chairman, Department of Banking and Finance, School of Business, Fordham University

Dir. Hart reviews recent economic and financial

Thursday, December 2, 1948

against
continuation of present level of business activity. Concludes there is evidence downward movement has
begun or will shortly begin and will become marked in first half of 1949. However, looks for no deep
or

It is understood that the
send

to

firms mentioned will he pleased
the following literature:

interested parties

recession.
Current

It would be rather easy

for me to attract and, for a period at least, to hold your atten¬
by stating categorically that we are ab3ut to slip into a deep and prolonged depresThat I have no intention of doing, for though I have learned quite recently of several

tion
lon.

Developments—Leaflet

—Hannaford
fornia

&

Street,

Talbot, 519 Cali¬
San Francisco 4,

Calif.

informed

tification for which is to be found

lentlemen

in the decision to increase arma¬

who hold such

ments and

pessimistic

a-

stockpiling as the cold
continues. Not only is there

war

view, I do not.

contemplated

bj e c t
permits of the
widest
possi¬

American

My

s u

of Western

examine

continue

with

effects is

our

beyond question.

present situa-

is

$oir

will

by

re¬

viewing what
may

said

be

I.

Hart

considering the
contracting de¬

factors, then
undermining or

or

terminants.

re

conditions

business

characterized by considerable

bscUrity
rastf

confusion

and

the

to

everal

in

outlook

One

years.

in

con-

the

past

of the

encouraging signs is the high
income

onal

its

to

original pur¬

of aid of

a

for

a

surplus disposal, as
English and other European
peoples cynically viewed it origi¬
nally. The Secretary of Agricul¬
ture has already shown signs of
worry lest vested interests seek
to exert pressure in this direction,
though there is nothing in the
support and

Currently
'

held

be

restored and healthy
economy, or will the Economic
Cooperation
Administration
be
translated into an agency for price
ing

ing influences

What

record,

most
per-

presently

tolding at a level of $215 billion.
:£ere however, a change has oeurred, with the wage and salary

competition and narrow¬

ing profit margins in many fields.
Great reliance has been placed,

officially and otherwise, upon the
stimulating effect of the Economic
Cooperation Administration.

the

President's

record

which

would

indicate strong

opposition to join¬
ing two portions of his present

Sev¬

eral

things must, however, be kept
The recovery in Western
European countries has been so
in mind.

character suited
marked
the needs of those nations fight--

to
Maurice

accompanying

its

important, is whether it

more

pose

be sustain¬

will

Plan

Marshall

creased

to

as

"Frank

to declare that aid next year

be smaller.

borne

be

in

mind

States to date.
are

"those

cannot

that

High

not

borrow

of

dollars

the

the borrowers, that some of them
at least, may balk at incurring

such obligations next year.

Neutralizing

Credit

Expansion

Living

—

program

Chart

dividends—First

and

When
of

loans is

the

increasing

ever

insurance

company

added, the sustaining ele¬
impressive.

ment is

Further

for

reasons

optimism

aire to be found in

of industrial

the major fields
activity such as steel,

automotive and construction. The

backlog in these industries is so
We& known as to require no com¬
ment and the year end extra divi¬

dends of Republic and Bethlehem

disclose

no

evidence of pessimism

the part of their directors.

Importance of the Budget
It is important now, that I call
your

attention to

all pervading

an

influence that has for

some years

past, and will undoubtedly in the
immediate future, make itself felt
in all segments of our economy.
Governmental
potential

"hade in

budget

plans, actions and

actions

countless

loom

decisions

large

in

must

be

that

the business world., The
now

in

preparation

will

call for

expenditures of approxi¬
mately $45 billion. This sum is

more likely to be increased than
deefeased, and when we compare
it with the current flow of reve¬

nues,

an

practically
a

unbalanced
a

budget is
certainty. This means

further injection of

a

stimulat¬

ing element, the supporting jus¬
*An

forum

address

of

New

by

Dr.

York

National Institute of
York

available

Also

John

on

Hart

at

Chapter of

Credit, New

City, Nov. 23, 1948.




B.

Calif.

memoranda

are

Stetson

and

Warner

William

Time, Incorporated—Analysis—
A.
Fuller
&
Co., 209

South La Salle

Implications of the United States
Election

Oils

on

and

Milner, Ross &
Co., 330 Bay
Street, Toronto 1, Ont., Canada.

Utah Power & Light—Write for
data

attention

Edward

L.

&
Co., 160
Street, Salt Lake City

& Co.,
Street, New York 5, N. Y.

1, Utah.

Shares—Memorandum

1 Wall

Analysis—C. E. Unterberg & Co.,
61 Broadway, New York 6, N. Y.
Also available is an analysis of

Winters
Oil

on

position—J.

R. Williston & Co.,
Broadway, New York 6, N. Y.

115

H. Burton—

of R.

Burton

South Main

Market—Leaflet—Cohu

Street, Chicago 4,

111.

Metals—

Also

available

is

special

a

re¬

Crampton

&

Corp.—

Miles Shoes, Inc.

view of Anglo-Canadian Oil Com¬

Ltd.

pany

Woodall

Industries

Inc.—Anal¬

ysis—Straus & Blosser, 135 South
Outlook
Stocks

for

Fire

Circular

—

Insurance

La Salle

Street, Chicago 3, 111.

Laird, Bissell
Broadway, New

&

Meeds, 120
York 5, N. Y.

—

COMING

What's Ahead

for

Commodities

EVENTS

Earlier I spoke of the expansion

In

turning

Volume

on

M. Byllesby & Co.,
Exchange Building, Phila¬
delphia 2, Pa.

Company.

Field

Investment

-

—

tions.

Strawbridge & Clothier—Mem¬

power

—Special study—Bache & Co., 36
together. Even the an¬
of credit by way of bank and
Wall Street, New York 5, N. Y.
ticipation of such an action will
insurance
♦
♦
*
company
loans.
But
go far to sustain the high level
ward.
there are indications of contract¬
City of Philadelphia Bonds—
"arm income and with it, the high
Inventories should be an early
ing developments which tend to Valuation and appraisal—Stroud
level demand for goods.
indicator of change, but September
neutralize such loans. The sharp
& Company, Inc., 123 South Broad
The weight of governmental ac¬
cwand a new peak of over $53
post election reverse in the stock Street, Philadelphia 9, Pa.
billiSon worth held by American
tion, however, is to be felt in
market, undoubtedly occasioned
Also available are a valuation
other areas as well. The attitude
business. There have been sharp
by fear, certainly will cause the and appraisal of Railroad Equip¬
of the Administration
with re•eductions in many fields which
market for new capital issues to
ment Certificates and price-earn^
have experienced consumer re¬
-pect to labor and the Taft-Hart- be unfavorable for some
time to
ings ratios and yields on 123 Pub¬
sistance but the overall figure is
'ey Act is well known. With the come.
Greater caution in bank lic Utility common stocks.
mposing evidence of the under¬ election results for encourage¬ loans is discernible and the poorer
lying confidence of businessmen ment, labor in moving for fourth risks are being denied or induced
Commonwealth
&
Southern—
round increases and shorter hours
in general.
to reduce their obligations where
Leaflet—A.
M.
Kidder
&
Co.,
will have the benefit of official
Turning to the field of finance
1 Wall Street, New York 5, N. Y.
possible. Renewed buying of U. S.
support, while management, with Government bonds
We find that bank loans are con¬
may be only a
one eye cocked on Congressional
Coral Gables Tax Participation
tinuing their upward movement,
temporary condition, but if pro¬
revision will likely not resist too
more sharply in September than
Memo
Buckley Securi¬
longed, will indicate an expected Notes
oi aUy corresponding period in the vigorously any settlement within
ties
contraction of commercial loans
Corp., 1420 Walnut Street,
reason.
Since this will contribute
and a desire on the part of the
past year, reaching a total of over
Philadelphia 2, Pa.
to demand, it joins with the other
$47 billion. Again, this may be
banks to keep their surplus funds
forces moving in an upward di¬
reasonably interpreted as a sign
Imperial Oil Ltd. — Circular —
employed. The pressure to keep
rection.
of the bankers' unshaken belief
funds
producing
has
been, of Charles King & Co., 61 Broadway,
in the solidity of existing condi¬
New York 6, N. Y.
vastly increased by the
Federal Reserve Bond Purchases course,

increasing, but farm
modestly down¬

ornponents

ncome

memo¬

orandum—H.

Company, 300 Mont¬
gomery Street, San Francisco 20,

of

part

card

a

on

California

obtain grants," showed so
on

of

Cost

showing relative purchasing

has

to the

response

do

reluctance

great

43%

Finally, while other
quite receptive to

grants-in-aid, the
rule,

that

outside of the United

New

Stock

Furthermore, it must

been spent

countries,

could

Street,

Ginberg Says"—Market

Ginberg & Co.,
Street, New York 4, N. Y.

30 Broad

Mr. Hoffman

cause

Also available is

comment—Frank

imports, at least

period, spells in¬

Europe.

the

That

to

proceed

This increase in
for the short run

Pine

70

5, N. Y.

Central Arizona Light
& Power Co.

percentage.

of

lend-lease or gifts of
equipment to outfit the new forces

shall

I

but

military

treatment

ble

and

smaller

somewhat

also

expansion

an

armaments,

substantial, amounting to almost
40%, while at the same time im¬
ports have risen, though by a

Inc.,

randum

Well educated
md

Co.,
York

action

Federal Reserve Bank

purchases
of government obligations, in an
amount approaching $10 billion in
the past year, has been one of the
most
potent inflationary
influ¬
ences and by far the most impor¬
tant of the multi-legged straddle
policy of this important institu¬
tion.

While it is within the realm

of

possibility that such
might be altered in the
ture, such

a

policy

near

fu¬

contingency becomes
light of renewed
borrowing by the Treasury prob¬
ably necessitated by the unbal¬
a

less in the

even

anced

budget.

The normal corrective action of

declining price, following the at¬
tainment of

oversupply condi¬
products, has been
substantially mitigated
by
the
farm price support program of
tion

in

an

farm

the government.

Farm purchasing
power will be sustained and this
in turn will assist in
the total effective

constitutes

portant
future

one

keys

can

the

more

as

part of

im¬

on

these factors, one
a

feeling

I intimated in the opening
my

address, there
a

in

Reserve

raising member bank
requirements, thereby im¬
mobilizing $2 billion worth of

reserve

are

de¬

different charac¬

so

The
1947

far

portrayed.

export

Several members of the Federal

Reserve

their

Board

view

indicated

have

that

insurance

com¬

panies should be included in the

forthcoming
control

action

confirmed
between
company

by

the

seems

to

be

consultations

Treasury and insurance
officials. Again, instal¬

credit

ment

legislative
credit
and that some

program

will be taken

controls

are

notice¬

ably and adversely affecting dis¬
tribution in
able

goods

the

consumers'

peak

has

been

from

the

steady and

Central

Railroad—Spe¬

Co.,
Street, Boston 9, Mass.

State

area,

many

less

persistent demand. I need
hardly mention to you the results
of the latest survey of

mercantile
York Credit

credit

by

men.

Let

its

the New
it suffice that

findings

dences

among

we

list

the other evi¬

of contraction.

—

Speculative
Dillon
&

Co., 15 Broad Street, New York 5,

basis

near

for

believing

future.

that

a

possible in

I believe that the

steel

industry is one of the main
keys to the future, but I also be¬

the

in

Hawthorne

the

casual

observer.

Also available is

study of cur¬
developments
in
Wabash

rent

a

Parker House.
Dec.

(Continued

on

page

15)

the

a

Association

Traders

and

Detroit

dinner
of

(Detroit, Mich.)

1948

2,

Securities

annual
the Prince
Edward Hotel, Windsor, Ont.

of

Dinner

Fall

Michigan

Party

at

(New York City)

1948

Dec. 3,

Security Traders Association ofYork annual
meeting and

New

election of officers.

Dec. 5-10, 1948

(Hollywood, FU.)

Investment Bankers Association
1948 convention at the

Hollywood

Beach Hotel.

10, 1948 (New York, N. Y.)
York
Security
Dealers
Association Annual Dinner at the
Dec.

New

Waldorf-Astoria.

1948 (Seattle, Wash.)
Traders Club of Seattle

Dec. 10,

Christmas

Annual

Ballroom

Junior

in the
Olympic

Party

of

the

Hotel.

14, 1948 (New York, N. Y.)

Dec.

Investment Association
Annual

York

Railroad.

Missouri Pacific Railroad Co.—

Memorandum—Sutro Bros. & Co..
120 Broadway, New

Refractories

American

Northern

States

Power

Com¬

Minn.—Special write-up—
A. C. Allyn and Company, Inc.,
100 W. Monroe Street, Chicago 3,

pany,

Illinois.
St. Louis-San Francisco-Railway
Memorandum—Vilas

&

Hickey,

Street, New York 5, N. Y.

Schenley

Distillers—Analysis—

the

at

(Colorado

5-9, 1949

Springs,

Colo.)
National

North

of New

ginning 3:45 p.m.
Oct.

York 5, N. Y,

Company—Analysis—Marx & Co.,
44 Wall Street, New York 5, N. Y.

Meeting

Club, 63 Wall Street, be¬

Lunch

Security

Annual

sociation

As¬

Traders

Convention

at

The Broadmoor Hotel.

Sen.

O'Mahoney to

Address NY Dealers
Joseph C. O'Mahoney
guest speaker at the

Senator

will

be

the

annual

23rd

dinner

of

the

New

Dealers Association
to be held in the grand ballroom
at The Waldorf-Astoria on Friday,

York Security

Goodbody & Co., 115 Broadway,
6, N. Y.
Also
available
is a
study of
Railroad Income Bonds, leaflets of

A. Searight, Aetna Se¬
curities Corporation, Chairman of

Switch recommendations, and leaf¬

The dinner will be attended by

New York

lets

on

Oils,

American

Light

&

Traction, St. Louis, San Francisco,

Standard

Stoker

memorandum—G.

Dec.

10,

it

was

A.

Co.

—

Card

Saxton

&

announced

by

George

the

committee.

dinner

some

1,000

the Association's
guests, including
the
Securities
and

of

members

and

members

and Super Heater.

An

oversupply situation already exists

Room

N. Y.

representative

downward trend is not

the

Pacific

possibilities—Eastman,

49 Wall

of
the
metals industry, is cited perhaps
more frequently than any other as
the

Missouri

dur¬

parts of
which had already become un¬
stable due to full production and

escape

decline

53

(Boston, Mass.)

2, 1948

Boston Securities Traders Asso¬

•

ciation annual meeting and

Bond

ter, which cast shadows of vary¬ lieve that here, upon closer ex¬
ing intensity upon the bright pic¬
amination, will be found signs that

ture

Maine

cial report—A. G. Woglom &

earning funds.

Steel,

optimism is the result.

terminants of

Board

Federal

the

immediate

our

hardly be blamed if

of roseate

But,

to

demand which

of business.

course

Reflecting

of

maintaining

of

—

Dec.

of

Exchange Commission and repre¬
sentatives
of
the
banking and
sprnritips business.

Volume 168

THE

Number 4756

&

COMMERCIAL

FINANCIAL

CHRONICLE

(2285)

0

dollar holdings of the other coun¬

Focus

exports. It seems clear that Un¬
less there are further changes in
Vr
long can this go on? For¬ the tariff level and in the tradi¬
eign owned gold and dollar in¬ tional American attitude towards
vestments are-near the bottom of imports, the balance of trade in
future is more
the barrel, ana it seems unlikely the
apt to be

World Finance

on

tries.

By ROBERT L. GARNER*
■*

Vice-President, International Bank for Reconstruction and Development'

Pointing out because of preponderance of U. S. resources, our economic and financial policies aifect
whole world, World Bank executive sees urgent need for balancing our trade with rest of world. Says,
however, task is difficult, and looks for
To find

a

focus

that

focus

to

with

The

States

the

amounts

effect

world finance

on

wage

and

of the

price'

level,
be-

judgment is of over-riding impor¬
tance—the
relationship
between

infla¬

what

the
t

tug

w e e n

tion

trade

the

Federal budg¬

et, the rates of
capital
sion

expan¬

all

of

and

a

—

these

multitude
other
have
sive

of

*

In

.

bring

to

order

in

sake of

and

home

at

abroad.

*

Let

take

us

look

a

it, using round figures for the

at

both

However,

and

part

Rcofcrt L. Garner

deci¬

impact

of American

course

is

tional security.

factors
a

and what it

buys

foreign
parcel of the
developments in domestic economy
and in foreign policy; it will have
a
vital influence on recovery in
Europe and on the rate of eco¬
nomic development in Latin Amer¬
ica and the East; it ties into na¬
The

taxa¬

and

America

my

sells abroad.

tionary
and
d e f 1 ationary

forces,

question which in

one

There

a

of

manner

world

a

things

short

all

of

bought

$19%

a

reached by a drastic reduction in

will

the $17

billion of exports than by
in the $10 billion of
imports. VM approaching a bal¬
ance at a high figure rather than
a low figure would
appear to be

pro¬

kind

the

now

the

in

and

be

being furnished.

in the interest both of the

struck,

United

States and the rest

are

balance will

increase

an

only three ways that
balance between
what America buys and sells can

tongue.

world.

Let's take

and in practice the
probably result from

look

a

of the

at Amer¬

now

ican exports, the second factor in
the trade balance. We all say that

combination

of all three.
The
increase in American
imports, both goods and services,

should increase its pro¬
No disagreement on that.
Also, we agree that Europe must
assets and liabilities must some¬ from the rest of the world.
The increase its exports. Do we real¬
how balance.
In 1947 the balance second is
by a decrease in Amer¬ ize, however, that at least for the
was arrived at by other countries
ican exports. The third is by the near-term,
such an increase in
turning over to the United States flow
of
United
States
funds production will reduce the amount
$4V2 billion of their gold and dol¬ abroad.
Let us consider each o± of American exports to Europe?
a

can't balance 8 against 19,

You

and

lar

assets

and

these.

lqans from the United States

in

the
In

of $6%

amount

duced to the

and

about

is

it

1948,

United States

to

receiving

billion.

First

that

exports will be

re¬

still

but

gap

to

as

American

American

lower

imports.

gobds

tain other

supplied

being

from

Garner before billion of American goods and balance against 17. The deficit is
the
53rd
Annual
Congress
of
services, .whereas the rest of the being covered primarily by ERP
American
Industry, Waldorf-As¬
world sold to this country only and other foreign aid, and by the
toria Hotel, New York City, Dec.
$8V2 billion. This $11 billion gap liquidation of further gold and
1, 1948.

I

ican

the

•

neighborhood

this

is still

a

$10

of

is

billion

to Amer-_
these

keep

to

beginning

now

to

produce

(Continued

long way from the 17 of

28)

page

on

$51,450,000

Stale of New York
4%, 2Vi%, 2Vi% and V/4% Housing Bonds
(General Obligations of the State of New York)
Due $1,050,000 each December I, 1950-98, incf.

Dated December I, 1948

Redeemable, at the option of the State, at par and accrued interest, on December I,
thereafter, all bonds then outstanding, or all bonds of a single maturity beginning

1988, or on any interest payment date
in the inverse order of their maturity.

Principal and semi-annual interest, June 1 and December 1, payable in New York City at the Bank of the Manhattan Company. Coupon bonds in denomination of $1,000 each, exchangeable
denominations of $1,000, $5,000, $10,000 and $50,000.
Registered bonds are not rcconvcrtiblc into coupon form.

'<■

Interest Exempt from present Federal and New York State Income Taxes

„

as

for bonds registered as to principal and interest in

1

other States and for Savings Banks in Connecticut and Massachusetts

Legal Investment for Savings Banks and Trust Funds in New York and certain

Acceptable to the State of New York

security for state deposits, to the Superintendent of Insurance to secure policy

holders, and to the Superintendent of Banks in trust for Banks and Trust Companies

MATURITIES, COUPON RATES AND YIELDS OR PRICES
(Accrued interest to be added)
Yield
Rate

Rote

Yield

1950

4%

.70%

■/;%
2Z?

1956

1951

4

.80

1957

1952

4

.90

1953

4

1.00

1954

4

1.15

1960

1955

2'/2

1.25

1961

The above Bonds

are

Yield

2'/2%

1.65%

1971-72

2V?/o

1.95%

1981-82

1963

2/2

1.70

1973

2.00

1983-84

1964

2%

1.75

1974-75

1/2
2%

2.00

1985-88

1965-66

2 '/2

1.80

1976-77

2/4

2.05

1989-93

1967-68

2'/;

2 Va

2.10

1994-98

1969-70

2V5

2'/4

*1.45

1.50

ii

-.j

*

1.85

*

1978-79

1980

1.90

by the Attorney General of the State of New York. Interim Certificates will be delivered in

offered when, as and if issued and received by vs and subject to approval of legality

Barr Brothers 4 Co.

Blyth 4 Co., Inc.

C. J. Devlne & Co.

f

+

,

,

,

.

.

'

-

.

''

/,

+

•

t

-,

Ladenburg, Thalmann & Co.

Salomon Bros. 4 Hutzler

R. W. Pressprich 4 Co.

*

2%% 2.20%
2% @ 100 (price)
2%
2.30
2%
2.35 (to maturity]
1% ' 2.50 (to maturity]

the first instance pending preparation of Definitive Bonds,

Bank of the Manhattan Company

|

Hallgarten & Co.

or

Price

2.15

"\

,

The Chase National Bank

Kuhn; Loeb 4 Co,

Rote

1962

,

1.40

*

....

Que

Yield"

Rate

,

1.60

Hi

1959

Due

1.55

2

1958
;,

~

Yield

Rate

Due

1.35%

Due

Due

WC.

Chemical Bank & Trust

of Buffalo

,

Equitable Securities Corporation

Bear, Stearns & Co.

.

.

Mercantile-Commerce Bank & Trust

Hornblower& Weeks

•

Moseley 4 Co.

Laurence M. Marks & Co. Chas. E.

Weigold & Co.

A. G. Becker & Co.
Incorporated

*

,1

Albany

'

Chicago

Schmidt, Poole 4 Co.
Philadelphia

J. G. White 4
.

*

Company

Chicago
Chicaao

Whiting, Weeks 4 Stubbs

Philadelphia

Boston

*

The Public National Bank & Trust

Julien Collins 4 Company

Gregory 4 Son

The Commercial National Bank 4 Trust Company
of New York

Blewer, Heitner 4 Glynn

Ernst 4 Co.

Wood, Gundy 4 Co.
Incorporated

,

•

(Incorporated)

Cleveland

Folger, Nolan, Incorporated
Washington, D. C.

Corporate Securities Company, Inc.
, %

Otis 4 Co.

Hayden, Miller 4 Co.

Incorporated

'

Company

of New York

*

Sf. Louii

Edward Lowber Stokes Co.




Green, Ellis 4 Anderson
Green, Ellis 4 Anderson

Incorporated

Cleveland

.

Incorporated

Company

Chicago

Arnhold 4 S. Bleichroeder, Inc.

Maynard H. Murch 4 Co.
New York, December I,. 1941,

Loeb, Rhoades & Co. W. H. Morton & Co. Swiss American Corporation

Incorporated

Detmer & Co.
Detmer 4 Co.

R. L. Day & Co.
4

Company

First of Michigan Corporation

Adams, McEntee 4 Co., Inc.

Weld 4 Co.

National Commercial Bank 4 Trust

William Blair &

Company

Incorporated

Newark

Weeden 4 Co.

Ceo. B. Gibbons 4

Allyn and Company
Incorporated

Fidelity Union Trust Company W. E. Hutton & Co. Carl M.

Albany

Paul H. Davis 4 Co.

A. C.

l.:>.

of Albany

State Bank of

Schwabacher 4 Co.

Company

Buffalo

: White,

d
Incorporated

Reynolds 4 Co.

Shields 4

Company

*

B. J. Van Ingen & Co. Inc.

,

Harris Trust and Savings Bank

N

Manufacturers 4 Traders Trust

Kean, Taylor & Co.

,

'

Hannahs, Ballin 4 Lee

Darby & Co.

Company

•

,.

Schoellkopf, Hutton & Pomeroy, Inc.

L. F. Rothschild & Co.

Incorporated

C. F. Childs and

^

.

'

Incorporated

_

F. Jf.

,.

E. H. Rollins 4 Sons

Company

St, Louis

Estabrook 4 Co.

*, •

'

-

.

The Northern Trust Company

Manufacturers Trust Company

The Marine Trust Company

Kidder, Peabody & Co.

Blair & Co., Inc.

Company

■

.

""***'"

;

..

\

Gintber 4 Company
"

*"

Cleveland

s

Paul Frederick 4 Company

Harold E. Wood 4 Co.
St. Paid

a

surplus of certain types of goods

this figure of 10

But

year.

advantage

things at home, but this country

indicated, probably be in

have

equipment is in excess

of the supply, it may be

spending of tourists, the

increased

is

does not value of American imports will, as

10

now

agricultural implements and cer¬

greater

tariffs,

supplies of foreign goods and the

Address by Mr.

New Issue

Likewise, do we realize that in¬
creased European exports to other
countries
will
replace
certain

Increase?

This country is now at its highest the United States? Currently, when
level of prosperity.
Because of the domestic demand for steel,

imports will increase

The

duction.

.

Will Imports

neighborhood of $17

$10 billion.

narrowing,

grants

indicated

Europe

first is by an

yet we all know that the total of

billion

simplicity.

1947,

every

over

in the long run a

represented the "dollar shortage"
which has become a byword in

I shall today deal

bear,

of

world

point in world finance one naturally gravitates to the strongest, finan¬

every¬

United

Government

S.

continue

provide extraor¬
dinary assistance to the rest of the

power—the United States. Because of its preponderance of resources—financial and
economic—the effects of its policies and actions radiate throughout the world and influence
where.

-

tracted period to

cial

events

U.

the

should

or

equilibrium in U. S. foreign trade in foreseeable future.

no

:

How

,

•■•V

•

J*,''

THE

(2286)

10

Thursday, December 2, 1948

CHRONICLE

FINANCIAL

&

COMMERCIAL

Economic Planning Under ERP

Bank and Insurance Stocks

By PAUL EINZIG

LONDON, ENG.—Paradoxical as it may sound, Britain's progress on the road to eco¬

A

m

i

e r

European*integration, the ad¬
newspapers cerned to adopt planning, willing¬ justment of customs tariffs would
on
innumer¬ ly or otherwise.
All governments have been the principal weapon.
able occasions are
required to elaborate Four That weapon will undoubtedly be
that

the

United

States

were

pared

pre¬

help

to

Britain and
Western

Eu¬

but
in
they

rope,

return
were

pected

ex¬

to

ap¬

proach more
closely the
Paul

Dr.

American way
of life — by

Einzig
J

which it
on

this

meant that countries

was

side

of the

Atlantic

were

discard control and
favor of unfettered
free enterprise stimulated by profit
expected
planning

motive.

to
in

Later

were

wish to interfere with

our

domestic

policies, and that countries which
adhere to democratic political sys¬
tems
And

tion

would

receive

assistance.

it appears that the adop¬

now

of

higher degrees of plan¬
ning has actually been made the

condition of

assistance

under

the

Marshall Plan.
Even

though nothing is said to

Congress or in the bilateral
pacts
concluded
between
the
by

States

European

and

the

countries,

trend of the

Western

the

whole

policy of the United

States

inexorably
forces
the
countries
toward
beneficiary
planned economy. In the case of
Britain
the

this is in accordance with

wishes

of

the

Government.

Ever since the Socialist

victory at
the general election in 1945, it has
been the official policy to pro¬
gress toward planning. The rea¬
son
why in spite of this British
economy is still largely unplanned
lies in the inadequate efficiency
of
the
government in pursuing
its aim. In the case*of other West¬
ern

long

European countries there is

a

certain

compelling

toward

way

them to intervene in ecnomic life,

it

for

is

impossible to make any
forecasts that are of any use if
full freedom of
production and
trade
is
maintained.
The only

of dollars is if it makes
that actual

ensure

terests

a

short of the
business in¬

matter of chance whether

the actual figures come any
the

near

target figures.

national

of

Four

Plans

Year

will be

it

government
the
to

step.

To that
for each

necessary

to

in

reduce

to

agree

production in

some

others.

increase
lines and
will

It

divert

for them to

be
ex¬

ports from some countries to other

countries,

nor

in

means

the

will

cir¬
be

not

the desired end,
most
important
have

methods

to

order to achieve

employed in

of

exports

equipments,
British

British

for

more

French

sell

importers would find the
by
American
or

prices

quoted

or
Belgian firms more to
advantage, .in spite of the
absence of duties on British goods.

their

import

is needed in order to

What

able

crease

,

British

the

of

increase i of
the allocation of raw materials,
fuels and
labor, on the under¬
standing that the surplus output
would

be

the

exported

done
over

through a very ad¬
degree of economic plan¬

in¬

to

increase

an

through

output,

could'possibly be attained other¬
than

to

the
export
of
certain
goods to certain countries

obtain

to

en¬

Government

its undertaking

out

carry

is

British

the

It is inconceivable that this result

wise

it

their t>utput;to
South America; or quite possibly
to

tries concerned.

vanced

find

to

This

the

coun¬

only be

can

b,y means of drastic controls
production as well as foreign
In itself the control of the

trade.

of exports would not
sufficient, for if the producers

be

find

prise

produces

the

kets

and

the
most
profitable markets. Business firms
cannot be expected to reduce the
output of certain goods merely
the

exports

ground

to

that

it

inconvenient

to

export

to

prescribed destination they
would be at liberty, in the absence
of
production
controls,
to
sell
their output in the domestic market.

1

V

.

the

Even/if

Government

in

•'

r-'-

present
Britain

.

-

Socialist
were

to

such

goods, be replaced by a Conservative
though
marketable
in
Latin Government pledged to free en¬
America, are not wanted in West¬
terpriser under
the
compelling
ern Europe. Nor can
they be ex¬
forces of Western European eco¬
pected to transfer their ,purchases,
of their own free will, to Western nomic integration it would have
on

European countries, merely in orr
to

assist

these

their
can they

countries

Nor,

in

in¬

expected, in
inter¬

the absence of government

to

maintain

a

high degree of

con¬

trol.-^ It is true, the ultimate end
is

to

a

high degree of planning..

It is the need for the
of

Western

integration

put
of

an

end to the difficul¬

countries,

European

and

vention, to export their goods to place them in a position in which
Western Europe even if shipments
they can afford to resort to free

European

p^ofUs

[ rj| in*'the

old

markets °ffer
days

an

attempt

economies had been made, to achieve West-

approaches it is probably a good
which are fundamental in the

1948

econ0mies'

the

road

to

that

end is fated to lead in the direction of increased

planning.

idea

*

factors

the

insurance

stocks.

to

current

-

Of considerable importance in this connection because of its re¬
lationship to premium volume, capital requirements and underwriting
results is the matter of fire losses. While only about 50% of the net

premiums written by most fire insurance companies is straight fire
insurance, it remains the most important single item of business.

steadily since 1942.

Fire losses have been increasing
been

number of factors

a

There have

responsible for this but probably of most

As the value of goods
property has increased, the insurance companies have generally
a greater liability when losses have occurred.
This same factor
has also resulted in an expanding;, volume of premiums, but because
importance has been the inflationary trend.
and

had

have

losses

risen

unprofitable

on

In recent

.

ing

down

sharply, underwriting operations have been

more

statutory basis for the past several years.

a

months, however, there has been a considerable slow¬
the rate of increase in fire losses. For October the

in

National

of

Board

estimated

Underwriters

Fire

that

losses

totaled

$51,845,000, 5.64% below October of last year. Year to year com¬
parisons are of more significance. For the first 10 months of the
current year losses are only 2.76% higher than last year, whereas for
the first 10 months of 1947 fire losses were 24.9% higher than in the
same
period of 1946.
If the present trends continue through the
rest of the year fire losses for 1948 should be only slightly higher
for last year.

than

When

these

'/

facts

•

.

,

,

considered

along with the adjustments
which have been taking place in the relationship of property values
and
premiums and the recent increases in insurance rates, the
reason for the improvement in (the loss ratio for the first six months
of 1948 compared with the similar period of last year becomes ap¬
parent. These same general trends are still present and as a result
favorable
underwriting operations are indicated for the current
are

year;
Whether

or not the trends existing within the fire insurance in¬
dustry at the present time will continue through 1949,. is difficult to
predict. The forces of inflation and deflation which have been so
important to operations for the past six years at the present time
appear to counterbalance each other. Additional time is required for

these forces to work

themselves

out.

Nevertheless, currently it appears that some decline in the
present very high level of business is likely for the months imme¬
diately ahead. In addition, prices on some products have declined
from recent highs and others may soon follow.
While another general increase in prices could be harmful to
underwriting operations, some readjustment in business, particularly
in prices, would be beneficial. Inasmuch as replacements and repairs
could be made at lower costs than are now possible, a considerable
further improvement in underwriting operations could result.
Also,
decline

in business activity would tend to result in premium
leveling off and this in turn would remove the pressure on
capital' funds.
•'
;V ':vy-"i v
some

volume

Another important factor in appraising the current outlook is
possibility that Congress in the next session will increase taxes
the income of corporations.
Whether this will take the form

the
on

of

or a higher normal-rate is not clear at this
however, the position of fire insurance com¬
panies is believed to be relatively favorable.
-

profits tax

excess

an

In either event,

time.

-

Of

ties

to

adopt

for

of

of

destination

ning and the application of dras¬
tic control.
Free private enter¬

whatever appears
the most profitable to produce; it
imports from the cheapest mar¬

end

some

outlook

possibly

quite

firms would

profitable

electrical

the

review

Much

future.

near

effective

more

be

the

even

from some
countries in preference to others.
to

be

they too have to

the only means to

existing

it

But

cumstances.

It

Four Year Plan.

ropean
end

first

the

deed,

the

is

has to be
followed by the integration of the
national plans into a Western Eu¬
only

are

under

in

also

to

Swiss

y

trade.

Nevertheless,

where

this all. The elaboration

Nor is

balancing

States.

effort to

allowed free hand it is

are

purely

an

production and

export does not fall
targets.
If private

erland and

Marshall Plan,

resorted

The removal
in which a government can immediate results.
honestly state that its production of customs duties in France, for
and export of certain goods will instance,
would not necessarily
amount to so and so many millions result in an adequate increase of

der

Belgium, for instance,
fully as keen on unfettered
enterprise
as
the
United

ern

way

degree of reluctance to
adopt planned economies. Switz¬

free

con¬

This alone should go

Year Plans.
a

countries

the

forces

necessary

that effect either in the Act passed

United

that

told

that,
after all, the United States had no
we

This Week—Insurance Stocks
As

c a

statesmen and

JOHNSON

E.

By H.

planning has become accentuated and accelerated beyond expectation as a result of
American influence. Ever since the negotiation of the dollar loan of 1945, it was stated by

nomic

effect

will

be

wartime

The

if

course

an

determined

,

profits tax is enacted

excess

a

great deal of. its

by the base which is adopted
the

used

normal.

as

earnings

of
earnings were favorable.
At the
same time the return on the large capital funds of some companies
was
relatively .low. As a result few fire insurance companies had
any liability under the wartime excess profits tax.;
1936-1939

In

revenue

during

measure

which

average

base

period

the event the normal tax rate is raised, certain other consid¬

erations should mitigate its effect. First of all a considerable portion
of "the investment'income of most major companies is tax exempt.
This announcement appears for purposes of record. Contracts, negotiated by the undersigned,
have been entered into for the purchase of these securities by certain institutions for

investment. The bonds have not been, and

are

not being, offered to the

public.

Only

the

This

for

fact

should

investment

For

years.

most

1948

enable

income
some

companies

yields

on

same

levels

level

losses

and

common

number of

companies

com¬

state

government,

and

maintain
few
investment income

level

favorable

of

improvement in
With an increased

to

the 'past

amount

of

in¬

a

is
off

10%-15% higher than in 1947.

time dividend payments

with, few

there

While

of

a

larger volume of premiums written, higher
most bonds, and a generally larger amount of dividends,

At the

First

preferred

on

insurance

the

assured.

investment income may be

tive

fire

near

further

is

vestment funds due to

Transcontinental

received

dividends

panies also have considerable holdings
municipal bonds which are tax exempt.
their

$143,000,000

of

15%

stocks is subject to income taxes and in addition

still
or

increases: being
some

decline,

to stockholders could

pressure
a

made

result.

Mortgage Pipe Line Bonds,

conserva¬

in the past few
funds,

capital

on

liberal

more

•

have continued at

years.

should' fire

distribution of earnings

.

<$>-

3%% Series due 1968

•

BANK & INSURANCE

Joins

Walston, Hoffman

(Special

to

The

Financial

Chronicle)

SAN

STOCKS AS TAX
«&■, t~

i"

•

s

LOSS SALES

•

FRANCISCO, CALIF. —
Wilbur 'E. Figueira is with Wal¬
ston,

Hoffman

& Goodwin, 265
Street, members of

Montgomery
the New

York and San Francisco

Stock Exchanges.

Laird, Bissell & Meeds

White, Weld & Co.




Stone & Webster Securities

Members

Corporation

120

Telephone:
Bell

(L.

York Stock

Exchange

BROADWAY, NEW YORK 5, N. Y.
'

,

New

A.

BArclay 7-3500

Teletype—NY

Gibbs.

With Henry Swift Co.
(Special

SAN

Charles

to

The

Financial

FRANCISCO,
N.

James

is

Chronicle)

CALIF.
now

—

with

1-1248-49

Manager Tradine Dent.)

Henry F. Swift &
fornia Street.

Co., 490 Cali¬

Volume 168

COMMERCIAL

THE

Number "4756

-

FINANCIAL

&

CHRONICLE

teamwork

Teamwork—For

Better Tomorrow

a

No

all

thd

stand

men

isimmensely
greater than

d i f fe

any

ences

r-

any

—

No

these

all groups and
all
opposing

iota. '

t

i

mount

:

ure

public in¬

terest

the

as

American

freely
of. the

of

man¬

than

more

the

cars

peopleuse^ almost

Where business is most

even

human,
top-flight
management—definitely including
the most successful

responsibil¬

is

supercilious toward those in charge of operations in
who. haye yet to any area—are not only permitted,

as

those

as

how

in

as

water, represent 57%%
world's total.
More than

as

half of all the radius in the' world
in

those

all

hard

it

is

to

but actively
encouraged, to take
part in the affairs of their com¬

save

munities.

*

/

*

who

J Let
actively
participate
me
touch
on
one
even
get the. full impact of, what hap¬ broader phase, of effective under¬
pens and how it happens*
.
standing and teamwork through
direot participation. k
Metamorphosis in Management

/ Processes

Three Flaws in Economy
metamorphosis has
Three flaws
that
the. whole
come
about
in
management's American people want corrected
thought. processes.
are:
(1) inflation, (2) insecurity,
Remember the boiled-shirt re¬ and
(3) the fact that today's; thrift
serve. of the old style annual re¬
is inadequate for the tremendous¬
port; which few stockholders and ly expanded needs .of the Ameri¬
even fewer employees could un¬
can ' people
in the renewal and
derstand.
And contrast it with
expansion of productive equip¬
the efforts, made .by the. conscien¬ ment.
And to start whole new
tious
corporation
executive
to industries.
-A

,

terrific

.

V

'

verities

are

one

'

:

•

by

now

-

1

with

—

the

.

put

work

earn

first
!

all

own

Money and to invest- it wisely.
I don't know why it is, but only

throughout the world.
The
million telephones which the

35

never worked.

critical

as

their

one

thrift
learrf

Use-

altered

not

of

tw the commun^^ and to
workers where
the highest
degree of autonomy has been es¬
tablished by local managers to
participate in local affairs.
ness,

labor

American homes, • and are
being supplemented with the
widening use of television. Many
Capital and' Labor a Unit V
other electrical
appliances have
supply both his investors and
Capital and labor would be lost become almost as much a
Saving,
for future occasions,
part of employees with a clear account
without each other. Capital is a
and future opportunities, can be
Americans' household equipment
of the operations of their part of a substantial means
primary factor in increasing the as doors
of checking
.and windows.
the enterprise system. 7
volume and value of the workers'
inflationary pressures on prices.
A start toward understanding This: is
output.
Only where
there
is 1 The process which achieved
especially true at a time

We call upon

to

have

economic

represent

cars

three-fourths

v

"isms"

posing

conflict3.,

forces

expanding ger

product 6f Americans'
goods and services.
:
Regardless of the kind of gov¬
ernment, work must be performed,
Ability must be exercised, capital
must be saved and ventured., Op¬
total

of

ities.

com-

Uals who contribute to

critical

as

is

one

shoulder

an

ground
upon which

is

agement as those who do not

impressive and deeply human occasion. > We hold it true that for mankind
to reap the harvest of human progress the people of the world must learn to live together.
Our Congress of American Industry is dedicated to this ideali It is dedicated to the belief
that the

under¬

the

one

No

Calling on capital and labor and other/segments of nation to work together with teamwork and under¬
standing, Mr. Bunting stresses our economy requires incentives to all groups. Points out American
progress has besn due to investment and enterprise as well as inventions and. improved techniques and
finds flaws in our economy requiring correction ar2:
(1) inflation; (2) insecurity; and (3) inade¬
quate thrift for industrial expansion.

mon

that

of

those who have

as

By EARL BUNTING*

This is

born

standing.

Managing- Director, National Association of Manufacturers
-

11

,

Earl

^ara-

one,

Bunting

of all that

we

are,

do, or

or

i ever

hope to be. /
.'
this Congress of American
Industry we shall concentrate on
four great areas for heartfelt co¬
operation. These are:#
Teamwork between nations;
Between industry and governAt

;

f

ment;
Between

ff'}

and

labor; and
Between

Jactor in production can

industry and the great

is

the total

those

to

needed

country in which proper in¬

understand

But

Our

and

participate in it.

forefathers

•

is

America

centives have resulted in the con¬

lived

stant

workers,

expansion which has made

continually

greater

31

individual

.••

possible^
all

around

it.

the

and

million American passen¬

the

as

citizens.

effective
a

that

united

teamwork

there

long, straight road for

same

increasing

part

every

know

we

today is the superb result of the

in which

we

already

are

individual

extend

of

Soon,

ation of all business

j

(Continued

crucial

r

And

areas.

a

full

ing or afternoon session of this
Congress will develop the great
new ground for united effort into
which this morning's speakers will
blaze

the

This

on page

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

any

of these securities.
;

■

....

■

*

j

*

*

under-

Transcontinental Gas Pipe Line Corporation

'

'

offer to sell

an

NEW ISSUES

.■

with

comes

is neither

The

way.fi"

Teamwork

announcement

morn¬

standing.
This understanding is becoming

difficult to achieve
the face of opposing ideologies

increasingly
in

have

—which
sion

even

in

the

world

created

confu¬

torn

asunder and have
our

$26,500,000

land.

6% Interim Notes, due May 1,1951

Mariy of the conflicts which di¬
mankind, where understand¬

vide

j

Payable

ing and teamwork-are most des¬
perately needed today, serve no
one's interest.
They stem from
the confusion wrought in human
minds by mass migrations from
economic reality.
•
•
:
Yet economic reality is as deep-

$3 Series, at rate of

-

K

Offered in
• r

disguised "and momentarily
evaded. It iS^hievei escaped."
: /
Many,
perhaps most,
people
throughout the rest of the world
today
are
pathetically
striving
for a way of life which will fairly
and creatively divide the product
of their toil.

,

\

"7

-

:

\

are

American

Americans

courage.

The

has

millennium

not

ar¬

I

' '

■

:

-

'

•

represented by the 6% Notes and

will be transferable only asunits^
'

•

'

;
•'

Price $52.50

Plus accrued interest

on

per

'

*

•

•

"

'1!

strong, positive incentives
for productive work, ability, thrift
and

until October 1, 1949

'7' i

mean

•

shar?)

l

?■...■

creatively." These
no
mystery - to the
people.
By fair, and

distribution

creative

per

units, each consisting of 6% Interim Note ($50 principal amount) and one

'

'

"Fairly and
terms

(Par Value 50 cenfs

share of Gdmmon Stock. The securities will:be

^

-

1
'

and

■

maturity by delivery of; Cumulative Preferred Stock,
one share for each $50 principal amount.

530,000 Shares Common Stock
'•

rooted in human affairs as human
nature itself, lit is often concealed

at

unit

;

'

6% Interim Notes from November I, 1948

.

.

I

■
'

'

'

Copies of the Prospectus may be obtained in any State in which this announcement is circulated
from only such of the Underwriters, including the undersigned, as may legally offer
<
these securities in compliance with the securities laws of such State.
7 •7.
:';i v
■'
•; ■ 7 ."- ' - ■
• . ■
•
.

V- ;

■<

-

rived.

Inequities and imperfec¬
tions
require valiant efforts to
correct.
But—by whatever yard¬
stick success may be measured—
'where
in the world
today — or

day—has labor, ingenuity, in¬
tegrity, or the exploring mind,
any

*

found

The
those

environment

an

ducive to

so

who

against

to

came

poor,

them.

■

;,{

\

,

'

:

'

,

;

..

'

= ■.

-

...

..

'

■

^

Blyth <Sl Co., Inc.

they

Glore, Forgan & Co.

Goldman, Sachs & Co.
'

There

our

are

strikes

started

Kidder, Peabody & Co.

.

Merrill Lynch, Pierce, Fenner

strong, personal, com¬

rewards

that

Lehman Brothers

operate

in

& Beane

land—for all of the individ-

*An address by Mr. Bunting at
Opening Session of the 53rd Con¬
gress of American Industry, New

York City, Dec. 1,

1948.




.

Ripley
Harriman :orporated & Co.
Incorporated

free!

pelling

^

Eastman, Dillon & Co. " The First Boston Corporation

America

with many

But

„

con¬

success.

overwhelming majority of

started

Stone &. Webster Securities Corporation

White, Weld & Co.

Smith, Barney & Co.
December 2, 1948.

Union Securities Corporation

of

effec¬

coopera-

enterprises in

have "the ' great

shall

I

privilege of introducing to you the
four keynote speakers in these

are

tive and deserve the full

avail¬

American public whom we serve.

i

prices.

ownership

government securities

the benefits to the busi¬

able of

pressures on

Treasury Department efforts to

Outstand¬

function.

ing examples

supply,

into the stream of demand—thus

holds true for full
by

short

employment is con¬

is stantly pumping purchasing power

man¬

V.

agement to travel.

7 The

and when full

purpose

They management in every community

they were doing,

America

still

achieve

to

when goods are in

The way is open.

been, made-.

investors, participation

management,
and

to

They

participated

Understood what

us.

words

no

process.

They

consumers

,

is

The evidence
The

apparently it has

baffling

who do not

And

increased.
one

completely

the

product available tor rewards be

shares

\
management

.

this is complex and

strong incentive for each essential

*

meas-

32)

12

CHRONICLE

FINANCIAL

&

made effective Jan. 21. Under the

Philadelphia Port Expansion Urged

PARTICIPATION
NOTES

PHILADELPHIA—According to press reports, a $91,000,000 plan
modernization and improvement of the Philadelphia-Camden
port area has been submitted to the Delaware River Joint Commis¬
sion. The report,, ordered by the Commission last April, was pre¬
pared by the New York firm of$
—:—-J-——-——
—
Knappen, Tippets, Abett Engin- opening a
Baltimore office to
handle the .clearance and transfer
eering Co,
or

Mtmo on

Request

BUCKLEY SECURITIES

CORPORATION
Walnut St.

1420

44

Wall Street

New York 5

Philadelphia 2

WHitehall 3-7253

PEnnypacker 5-5976

Private Wire System

are

rec¬
the construction of

securities.

present the Philadelphia
exchange has 200 members and

York

New

Angeles

Los

and

new

the

Philadelphia Transportation Co.
Pfd. &. Common

H.N.NASH&CO.
Street, Philadelphia 2

PMla. Phone

New York Phone

Locust 7-1477

exchange,
of 35,

The Baltimore

with

membership

a

trades in 41 listed and

substantial

number

a

"unlist¬

of

ed" securities.

Marine

Camden

fully listed and 381

*
*
*
of
a
motor truck terminal with a daily
Pittsburgh Railways' Trustee
capacity of 1,000 tons, and the
PITTSBURGH — C. Randolph
unification
a n d
operation
of
Myers, referee in bankruptcy, has
waterfront facilities now operated
set Tuesday, Dec. 7, as the date
by
the
Philadelphia
Beit-Line for a
public hearing on petitions

Stocks

Chestnut

and

Terminal;

Bank & insurance

1431

deals in 75

"unlisted" issues.

piers

Philadelphia

3-6s 2039,

bridge
South

Philadelphia,

WHitehall 4-2400

Teletype PH 257

establishment

President's letter

stated

the

that

law, the P.U.C. can delay effec¬ price offered was slightly less than
tiveness
an
additional
three the stock's net quick asset value
months if its investigations have as of Oct. 1, 1948^ and very sub¬
not been completed during the stantially less than its indicated
book value of $60.33 on the same
first deferred period.
In

asking

which

16% and add
500,000

higher

for

would

taxes,

At

major six-lane suspension
between Packer Avenue,
Philadelphia, and Glouces¬
ter, N. J., estimated to cost $43,000,000; the lease and moderniza¬
tion of Philadelphia's municipal
a

between

of

Among the larger projects
ommended

Thursday, December 2, 1948

Mr. Hanks together
postpones until at least July 21, per share.
1949, the application of new rates with other members of the board
which
the
company
asked
be own about 20% of the stock. The

Pennsylvania Brevities

CORAL GABLES
TAX

COMMERCIAL

THE

<2288)

an

average

J.

♦

Income after

Chesterman,

•

•

Warner

—

Company's
declaration
of
a
year-end dividend of 35 cents

president, stated that total
operating costs are today "near¬
ly two and a half times as great
as they were in 1940."

its

on

Dec.

the

of
began to decline two
years ago and that return on its
plant investment is now. at its

of

15.

declared

the past,

lowest ebb since 1920.

to be

of

25

The

payable

accompanied

was

declaration

Jan.

stock,

common

15,

dividend

said the company's rate

earnings

In order

*

PHILADELPHIA

com¬

pany

He

*

Warner Company

estimated $14,-

to annual

F,

date.

rates,
about

bar

quarterly

a

cents

payable
which has

stock,

irregular dividends in
be considered
a $1.00
annual basis;

may now

on

plus such year-end "extras"

to meet requirements

as

earnings may warrant. Earnings
telephone users, it was pointed
for the current year are esti¬
out that $150,000,000 in new plant
mated at over $4.00 per share.
equipment must be provided in
*
*
*
the next few years. New capital
Railroad.
and answers in the matter of the must be
' Lukens Steel Co.
provided, the major por¬
Also recommended in the re¬ removal of W. D.
George as Trus¬ tion of which "must come from
The
stockholders
of
Lukens
port, but not likely of accomplish¬ tee of Pittsburgh Railways Com¬
investors, not from telephone sub¬ Steel Co., Coatesville, Pa., have
ment, is the acquisition of the pany and Pittsburgh Motor Coach scribers' bills." It is held that the
authorized
the
management to
Tacony-Palmyra and Burlington- Company.
new rates are necessary to main¬
borrow $4,000,000 from Penn Mu- ;
Bristol bridges at an estimated
The petition for removal was
tain the company's sound finan¬ tual Life Insurance Co. at not 1
cost
of
about
$5,000,009.
Both
filed by the Securities & Ex¬
cial basis.
over 3% %. Proceeds will pay off
spans were sold last October for
change Commission on June 17
$3,500,000 in bank loans - and the
Following
announcement of
$12,400,00 to a newly-created Bur¬
and answers thereto were filed
remainder added to working cap¬
the Public Utility Commission's
lington County Bridge Commis¬
by Citizens Traction Co., Penn
ital.
action, Mr. Chesterman
said:
sion in a hasty deal which the
*
*
*
Street Railway Co., the City of
"The telephone company is con¬
State of New Jersey is endeavorPittsburgh, W. D. George and
fident it will be able to prove
Philadelphia Electric Co.
!ng to have nullified.
Jules Guggenheim, et al. A later
the need for the new rates when
Anticipating a steady increase
The
plan recommends that
supporting
petition
filed
by
they are investigated
by the
in the demand for electricity in
legislation
be
submitted
to
Jules Guggenheim, et al. was
of

*

.

-

Recent Memos

on

Commission.

Strawbridge & Clothier

Pennsylvania

John B. Stetson

lish

a

Warner Company

H. M.

—

which

District

Teletype

Burlington,

cen¬

The
com¬

Pensnylvania

and

Camden,

May counties in New
*

P.U.C. stated

The

the years ahead, H. B. Bryans,

would be set down

stockholders

advised

against ac¬
ceptance of an offer made by Fred
fares will be Dec. 20 unless the
Weiland and Joseph H. Hoodin to
P.U.C.
defers the date pending
purchase a majority of the com¬
public hearings.
pany's outstanding stock at $34.25
The
Railways Company re¬
effective

Jersey. .•'
*

case

hearing 'as early as pos¬
City
sible.' "
Pittsburgh has instructed its
*
♦
*
solicitor, Miss Anne X. Alpern, to
oppose the
schedule of fare in¬ Taylor-Wharton Iron & Steel Co.
creases filed
by Pittsburgh Rail¬
G. R. Hanks, President of Tay¬
ways Co. with the Pennsylvania
lor-Wharton Iron & Steel Co., has
Public Utility Commission.
The

Gloucester, Salem, Cumberland
and Cape

PH 73

RIttenhouse 6-3717

in

that the
for

of

prise Philadelphia, Bucks, Mont¬
gomery, Delaware and Chester
counties

answered by W. D, George.
Fare Increase Asked—The

Com¬

body.
would

Mercer,

OFFICE

Stock Exchange-Bldg., Phila. 2
Telephone

Joint

the

administrative

proposed

Byllesby & Company

PHILADELPHIA

Jersey

mission would become the

tral
★

New

Delaware River Port Dis¬

trict of

—

and

next spring which would estab¬

ceived

*

date

a

of

increased

the

schedule

of

fare

President of Philadelphia Elec-*,
trie

Co., recently told a meet¬
ing of the New York Society of

Security Analysts that the com¬
is raising its sights in re¬
spect to necessary expansion.
pany

He said the program

be

to

extended

added

to

would have
1953 at an

expenditure of $87,000,-

000, bringing the total of a 7-;
year program started in 1947 to

i

approximately $322,000,000,> V

in¬

last January, which, the
claimed, was
"jammed"
through without sufficient pub¬
creases

Exchange Merger Discussed

tV Cambridge Bldg; 3s 1953
Pittsburgh Hotels 5s 1957

Philadelphia Stock Exchange and

Phila. Warwick; Common

Alan Wood Steel Common

lic

;hat of the

Lehigh Vy. Ry. HY.4%s 1950

does not have the power to deny

Baltimore

,

5s 1954-64-74

are

Philadelphia Stock Exchange

Atlantic City

Merchants
Nor.

being continued by commit¬
exchanges."

,
'

The

if

it

P.U.C.

rate in¬

or

establish

can

that

subject Utility is unable to

fair return on its capital
investment.;' On this basis, it is
believed that the Present, appli¬
cation
will
be
approved
al¬
earn a

,

though probably not before tes¬
timony is
publicly submitted
and considered.

*

*

*

Telephone Rates Deferred

physical

At

Elec. Com.

Distilling Com.

Ind. Pub. Serv. Com.

Phila. Elec. Co. Common

Incorporated

^

^

Convention

Annual

SECURITIES TRADERS ASSOCIATION

The Securities Traders' Association is

Valuation and

Security Traders' Association and is

of E. H. Rollins & Sons,

Appraisal

officers

RAILROAD EQUIPMENT CERTIFICATES

,

Chicago-

of

National

the

'

OF DETROIT, MICH.

a

an

affiliate of the National

trade organization of long
H. Terry Snowday,

Valuation and Appraisal

are:

Other

is President of the local organization.

Vice-President, Charles C. Bechtel, Watling, Lerchen &

Co.; Secretary, George J. Elder, Geo. A. McDowell & Co.; and
urer,

1528 Walnut St., Philadelphia 2
Boston

1948

standing in Griswold Street financial circles.

PEnnypacker 5-01 (ft)

New York.

the

Philadelphia Stock Clearing Corp. telephone rates filed by the Bell Minton M. Clute, of Straus & Blosser, is Chairman of the Program
would expand
its facilities by Telephone Co. of Penna. This Committee and will be assisted by Gregory Bader, Jr., Chas. A.
Parcells & Co.; Harry Buckel, Carr & Co.; Roy Delaney, Smith,
Hague & Co.; and Ray Kupfer, Smith, Hague & Co.

Bought—Sold—Quoted

L H. Rollins & Sons
\

of

—

Available Publications

■

close

Security Traders Association (completely covered in a special sup¬
plement to this issue), it was announced thait the 1949 Convention
would" be held Oct. 5-9 in Colorado Springs at the Broadmoor Hotel.

Roberts & Mander Common
*

the

r

arrangements
would
HARRISBURG
The Pennsyl¬
Approximately 200 investment security dealers are expected to
probably include the installation
vania Public Utility Commission, participate in the annual Fall Dinner Party of the Securities Traders*
of a direct private telephone con¬
Association of Detroit and Michigan, scheduled to be held in the
by unanimous decision, has sus¬
necting the two trading floors and
pended for six months the effec¬ Prince Edward Hotel, Windsor, Ontario. Thursday, Dec. 2, 1948.
the
printing of 1 quotations and
tive date of a schedule of higher
Festivities are scheduled to start at 5 p.m. with dinner at 7:15 pjn.
^ales on a. combined ticker.
The

Richmond Cedar Wks. Com.

•

it

it:"

NATIONAL SECURITY TRADERS ASSOCIATION

.

*

Should the merger be effected,

COrtlandt 7-6814

PH 375

creases

tees of both

N. Y. Phone :

?•

•

has
been
reached.
the past few months

consideration.

applications for fare
the

..

agreement
Studies' of

Packard Bldg., Philadelphia 2
Teletype

Ex-

Resident of the Baltimore group,
?tates:
"A
substantial
area
of

Samuel K. Phillips & Co.
Members

Stock

hange is under active discussion.
A
joint statement issued by
William
K. Barclay, Jr., Presi¬
dent
o£ v the
Philadelphia Exhange, and J. Dorsey > Brown,
,

Lehigh Valley Coal

t

City

A merger of the business of the

Ed J. Miller, Andrew Reid & Co.-

Charged.

.

Guest tickets

may

Trea|sf

A guest fee of $5 is being

be obtained from Minton Clute, 1546

•

Penobscot Building, phone WOodward 2-7866.

CITY OF PHILADELPHIA BONDS

BOND TRADERS CLUB OF SEATTLE

Trading Department" Active

Price-Earnings Ratios and Yields

on

123 Public

to

Utility Common Stocks.

Copies

Issues

on

j
1

CHAPLIN

and

STROUD & COMPANY

COMPANY

Incorporated

Members
h

| (*
;

New York Curb Bxch. ' Assoc.!

0th Floor, F—plea ih.

j I PITTSaURGH 22, PA
L-;.

123 SO. BROAD STREET

Pitts. Stock Bxch.

Gjesot 3H0

„

k

W

■*

NEW Y0»*\ N. T.
.WHiieb»tt J-4p06

Bell System Teletype;—PG 473




-

120 BROADWAY

PHILADELPHIA 9, PA.

NEW YORK 5, N. Y.

PEnnypacker 5-7330
Allentown

Pittsburgh

WO.rth 4-8400
Lancaster

'

Scranton

of Seattle,
Friday

on

Cocktails will be served in Parlor "A" from

The tariff this year

those

Direct Wire to New York City

Olympic Hotel

?

with dinner and entertainment to follow.

5 to 7:15,

Request

? 1

1

be held in the Junior Ballroom of the

evening, Dec. 10, 1948.

jj Western Pennsylvania
li

The annual Christmas party of the Bond Traders' Club

.

in

will be $ 10

per

plate.

-

It is requested that

planning .to attend make reservations with, or forward check, if

convenient, to Ken Easter, 1221 Fourth Avenue, Seattle, Wash.

With Prescott, Wright Co.

With Paul A. Davis & Co.
(Special
-

to

MIAMI,

Comstock

The

Financial

.

Chronicle)

FLA.—William
is with Paul

S.

(Special

B.

A. Davis

to

The

KANSAS
V.

Creek

is

Financial

CITY,
now

Chronicle)

MO; —Robert
connected with

&

Co., IngrahamBujlding. He was
formerly associated "with Clark

Prescott,

Davis

Baltimore Avenue.

Company.-

....

-

-

-

^

,

Wright, Snider Co., 916
.

„

.

.

-Volume 168

THE

Number 4756

COMMERCIAL

&

CHRONICLE

FINANCIAL

cates that investors

are

soon as

doubtful

Our Most Prosperous

present

have been made up.

profit

level

tinued.

Year Is

Ending

that

the

is

generally
high
to be con¬

going

To restore the normal re¬

lationship

between

share

price

earnings per
share, eitner
earnings must be greatly reduced
or
prices
must
be raised much
higher than they have been at any
and

per

tjhe war-created shortages

Price

trends

excellent

Other

similar

t

show the

constitute

barometer

register the
the supply

13

(2289)

for

be

one

general
indexes
trend, and should

same

considered in

with

connection

the evidence that total production,

they

total

relative strength 01
and demand factors

sales,

individual

output-in

and

lines have

many

been stead¬

moving
upward
to
higher
These ily
significant in levels.
determining future trends because
Are Pipelines Being Filled?
time in tne postwar period.
So they are basic and widespread. In
sustaining factors help keep activity high. Changes in general busi¬
far
the
prevailing opinion
has the long run they are likely to
Inventory building has been a
ness conditions likely to be slow and moderate.
been 'that
the
balance
will
be be even more
business stimulant throughout th£
powerful than pol¬
achieved by having much lower
[Reprinted from the December issue of the "Business
icies of government, business, and postwar period, although the
Bulletin," issued by the LaSalle Extension University
earnings. Profits may be reduced labor which receive so much pub¬ amount involved has been only i
in many ways even while volume
(A Correspondence
Institution), Chicago, Illinois.]
licity, and which often distract small percentage of total produc¬
remains high. They may be cur- attention from the
major control- tion. Those inventories, have nov.
Continued high demand for goods is still one of the most signifi¬
tailed ..by
high labor costs, by lhig forces in the economic system. reached a new peak of $53,300,cant aspects of the current situation as business enters the last month
000,000 which represents an ~ in¬
of the year in high gear.
During the holiday buying season, retail taxes
acom°f the str« '^icators crease of $7,000,000,000, or 15%
sales are expected to establish a new peak in dollar volume and may
bination of all
during the'
during the last year. During thi.
come very close to doing so in the$
last three years, the rise has beea
physical quantities of goods sold, situation.
It has helped prevent become too severe*
tnc result will aboW
close to 85%. The recent increase,
aii
*„
The demand for goods is strong, some of the speculative excesses
he rieeidedlv unfavorable in
the modlJy PrloesAll the price ln- as well as those throughout the
be
deciaedlv
unfavorable
in
tne
not only from consumers whose which
have
characterized
most
dexeJ reached their highest points
period have been greatest in the
incomes are higher than ever be¬ previous booms, especially those i
some time
g
ago.
Both the Bureau
retail field. Some of the increase
fore, but also from business which induced by such powerful forces;
Profits are needed in order to of Labor Statistics index of 28 has been due to
higher prices
is spending large sums for new as the enormous supply of money! raise the capital required tomam- basic commodities which are most
but a substantial- part of it is the
plants and equipment.
Although which was built up during the tain and expand plant capacity, sensitive to changing conditions,
machinery, and equipment.
Re- and the Dun & Bradstreet index result of greater physical quanta
demand from
abroad has fallen war financing.
ties.
It has been fairly
placement costs in all these fields 0f
evenl|
off somewhat, it is still large and
similar
commodities
in
the
As a result, business is in many
divided
among
raw
materials
the reduction has been more than iesucua
M1CMaicu
AW
respects
better- prepared
for have s°ared du/in8 the last three wholesale markets reached their goods - in - process, and
finished
offset by increased governmental
changing conditions than it usual-1 yearf* F?r most corP°fatlons> they peaks last
january. since that
o+ thf viiffti
nf
I are far in excess of the amounts time thev have declined 13% and goods, with the trend rather deff
expenditures
for
military
pur¬ l, i
initely
shifting
toward
larger
poses, As, long as demand remains
amounts of finished goods,
^ j
high in all these fields, production but not so high in ramparison lo™nces„™
Although stocks held by manu¬
^
U[lleis industry is
kept
and trade will be maintained not with current sales as
they have well
equipped, with adequate low- in July and in retail markets facturers, wholesalers, and retail¬
far from current high levels. Ac¬ been
at many times in the past.
ers are the largest ever held ant
cost plants and equipment, a high
cording
to
shortiy aftrward. The decline in
present
indications, Hign costs may prove extremely
are
steadily increasing, they art
level
of
production
cannot be wholesale markets since then has
most trends will remain favorable difficult whenever the situation
not yet out of line with the nor|maintained and business activity been
14% and the prices there are
throughout the remainder of this becomes such that they cannot be
mal relationship to total current
will
be
curtailed.
The
widely lower than last
year and probably well into the passed on to the consumers in the
year. In the retail
sales. In many fields they are still
prevalent
attitude
of
hostility markets, the decline in prices has
new year.
form of sales prices.
Many signs
low in comparison with current
toward corporation profits is one been small and
foods there are
indicate that situation is coming
demand.
As long as high salefe
of the major adverse factors in
1948—A Year of Great
still higher than they were a year
nearer
in many lines.
The warvolume is maintained, even largef
i
the
current
economic
Achievements
situation, ago.
' ■
created shortages in them have
\
\
,
■ ,J ' inventories can be handled withf
Accomplishments during the last been largely eliminated and pro¬ although the effects of it may be
Even
the
broader
and more out
difficulties, but if sales should
deferred for a long time.
12 months have been outstanding duction as well as sales is
being
slowly moving index of wholesale decline
substantially, the large
The
immediate
and have surpassed all previous
prospect
for prices prepared by the Bureau of
geared to the demand for current
amounts of goods on hand would
records.
Business
has
produced needs only. The result is that con- business, however, is * quite fa- Labor Statistics, which includes
^oon
become
burdensome
surf
goods and services amounting to ditions
are
gradually
changing vorable.
Thq tot&i demand for industrial prices as well as raw I pluses. Therefore, the trends ih
well over $240,000,000,000 as com¬ from a seller's to a
buyer's mar- S°°ds is holding up well and it materials,
farm
products,
and sales will be watched with special
pared with less than $100,000,000,- ket which means increased com- *s
ce{"tain to remaifi strong for the foods, reached its highest point interest during the next few
€00 in the best prewar years.
In¬ petition with greater resistance to durable goods even if it should in September. It was, then about
weeks, and especially after the
dustrial production has fluctuated
high prices. Some of the more slacken in other lines. Expendi- 1% above the previous peak in holiday buying is over.
f
between 87 and 95%
above the important
fields in which this
es tor durable goods which in- May, 1920. It has since declirfed
prewar
average
and about 5% slowing down has taken place are elude the amounts spent by busi- 4%, although it is also above last
Debts Are Increasing
higher than in the preceding year. textiles, leather products, some! ness
ne^ equipment, the vol- year. These .recessions in prices
Expanding debt is another charf
In very few periods have the fluc¬ lines
of
clothing, shoes, rubber i
construction, and spending have continued longer than any of acteristic of a boom period which
tuations in the general average
products, furniture, many house-! for these types of goods by con- the prevoius set-backs which took has been predominant during re¬
.been less than they have during hold
appliances, radios, and
a sumers are being made at the an- place
during the long upward cent years. It is a trend which
the last 12 months.
This stability number of luxury ^trades.
These Pua\
° over. $57,000,000,000 trend which has continued for cannot be .continued, indefinitely
In
has not been due to normal set¬ soft
1939, .these items- amounted many years.
spots in which supplies are
They indicate the and deserves careful considera¬
to" around
tled conditions but to the fact that
$15,000,000,000.
Even strong probability that a funda¬
tending to run ahead of demand
tion in any appraisal of, the cur¬
though production has greatly in¬ mental shift has already taken
evidently operations - have been have so far been more than offset
rent business situation.
One as¬
maintained at very close to capac¬ by continued
creased, it has not caught up with place. If they do not extend too
strong demand in
pect of it which will require re¬
demand,, and the unfilled orders far they will be constructive as
ity,- both
in
terms iof
plants other lines. As long as these shifts
adjustment later is the fact that
equipped
to
produce
and
the are limited in number and can be are not only large enough to keep they will help to bring prices of not all of current production • is
number of available workers.
made gradually, they are likely to operations at high levels for some various
commodities into better
being paid for either by con¬
time but are also becoming still
balance.
Those prices which rose sumers or
While
business
and ' industry have little ^effect on the general
by industrial buyers.
have been maintaining high oper¬ average
of all production and larger in many lines,' They will most have also declined most. '
Consumer credit of all kinds has
go far in making up any slowing
ating levels, little has been ac¬ trade., Any -business recession will
While prices have passed their been
rising steadily at a rate
dowri.iri other fields due to exces¬
complished in remedying the un¬ be -quite limited and hot of loiig
equaled
and
has
peak, other indicators show simi¬ never before
sive supplies, high prices or con¬
balanced conditions and the un¬ duration;.
"
reached a new peak of well over
lar trends.
A ' weekly index
of
sumer
resistance.
They help as¬
certainties as to future policies
business activity prepared by the $14,000,€00,000, or close to three
Caution is further indicated by

Record-breaking demand from nearly all sources keeps business
high. Many indicators at the postwar peak, others lower. Powerful

in

the

situation.

current

factors will be most

SBu1nes'Cmay°face
th<4

fit

r^oZTon *** X-esuUwiU

(

i»j

'

ove^ Se S hi

.

•

.

„

,

„

S*iiWS

p."" Si SSK Si
butbtno?nso1 Wgh'Tn^compari^n!

._caPAta! year~;gV~Food"priceTin whole"-

^1* iLr'kets reacii^the "peak

■

^

•

»■

.

s

.

either in the

ternational

domestic

fields.

the

in¬

many;

re¬

or

In

spects those difficulties have been

becoming * more disturbing
and
appear
likely to remain so in¬
definitely.- Governmental policies
with

regard

to

such

significant

matters

as price
control, business
regulation, taxes, and labor will
not be - clearly established
until

the

new

Until they
are
businessmen
will
have
year.

known,

sure

the

conservative

purchasing poli¬
being followed in

which

are

more
thanusual
difficulty
in If retail sales this month are as
planning their operations. These large as they are expected to be,
uncertainties
are
not
new,
of the present retail inventories will
course, and business activity has be reduced to a still better rela¬
already made enormous strides in tion to current trade volume.
-

a

recession

in

business

such

spite of them. That fact well dem¬

of the

strong reasons for expect¬
ing future trends to be favorable.

'

'

i

'

-

'

Indications of Caution

items

and

in

trends

the

in

general

lines

most

have
though the
prevailing attitude throughout the
postwar period has been one of

been,

favorable

average

even

caution.
The
feeling has been
quite general that such extremely
high levels—far above normal—
would

not

be

initely

but

that

primarily
and

that

to

they

nearly

be

normal

due

factors

later

or

would

indef¬

were

temporary

sooner

adjustment
more

continued

re¬

a

made

levels.

.

to

On

carloadings,

as

steel

will affect trends
during the future. Never before
has our economic system kept up
account as they

high rate of output for so many
without any serious, major
Another
indication
of
wide¬ interruption.
The long-term, av¬
spread caution is the extremely erage, annual .rate of growth has
low
level
of
security prices in been about '3% a year. That aver¬
comparison with the current, very age covers both prosperity and
high corporation earnings.
The depression with an expansion of
sharp reaction in prices after the around 10% a year in periods of

but 'it

This

is

beeh

has

under

securities

no

for

or

as

an

to

a reflection of this un¬
expanding business and reduc¬
certainty which is not likely to be tions of that amount in periods of
relieved even if prices should rise declining business activity.. If that
to the levels that prevailed a few
experience is a reliable guide as
months ago. The market valuation to what future trends may be, it

of

stocks

tion

to

share
30
in
are

the

considered

as

profits

or

is

in

rela¬

currently
years and possibly the lowest
history.
Industrial securities

later.

amount which

lowest

earn

ratio

this

was

reached in 1920.

on

In 1929 it

long-term

was

was

greater

16.

growth,

expansion

The next

which

has

this

about the

>

at

a

ex-

rate

securities
NEW

place

the

consumer

credit

credit

The amount

years

after

aspects of

the




business

of

(Continued

construed

to

buy, or

an

as

as

a

page

on

offering of

*16)

v

these

solicitation of an

in

this

State.

December

ISSUE

Georgia Power

2,

1948

First

average.

Mortgage Bonds

3%% Series due 1978
Dated.December 1, 1948

Price 102.38%

securities

are

ly

some

Usual¬

extensive declines

Due December 1,1978

~

and accrued interest

be obtained from any of the several under¬
only in States in which such underwriters are qua ified to act as
in securities and in which such Prospectus may legally be distributed.

Copies of the Prospectus may
writers
dealers

\

Corporation

The First Boston

the

been

has

any

The

have

earnings;

This situation indi.vi

v

within1 a ^ very

major" wars

and

*Cohu&Co.

Robinson-Humphrey Company

Sterne; Agee & Leach

few

:

as

»'Jit it »I.M <1 fi

White, Weld & Co.

Beane

Merrill Lynch, Pierce, Fenner &

Varnedoe, Chisholm & Co.
incorporated
?• '• \v->'
1-

structive

con¬

out¬

is large but neither current

u

taken

most

amount

$12,000,000

the

than

although

year

same as

been

years

many

considerably'

the average

year.

8.3

Production

panding for

selling at from two to four times

the

total

buy, any of such securities.
The offer is made only by
means of the Prospectus.
This is published on behalf of only . >.
such of the undersigned as are registered dealers
in

re¬

adjustment will probably be made

selling at less than eight times

they will

considerable

that

indicates

earnings per
the lowest in

has

of

the

on

years,

Many -individual-

one

a

offer to

a

the whole this attitude of caution
been

buying

placed on
few months

standing.

be

offer

years

restrictions

has apparently had but little

effect

{

definite.

circumstances

sale,

ago

of three

amount

instalment

production, electric power pro¬
paperboard production,
and
lumber
production reached
its highest point last January. The
falling off has been small and it
has not taken place in all these
lines

the

The

ago.

duction,

election is

Upward

times

"Times" and including

New York

-

onstrates the strength and vitality
of the economic system. »It is one

*■

should

that

activity start it will be
kept from becoming serious. Also
many industries. For many Weeks
important will be increased gov¬
the National Association of Pur¬
ernment spending lor armament
chasing Agents has been report¬ and for
shipment abroad.
ing that their members are buying
ahead for short periods more so
Peaks Passed in Many Lines
than they were last year.
For¬
While elements of strength are
ward commitments of department
significant and are likely to pre¬
stores, according to figures com¬ dominate
during at least the early
piled
by
the
Federal
Reserve months of the
year, other consid¬
Board, are 13% below a year ago. erations must also be taken into
cies

I tTfi ITI I I'll* rs-f f-f I'

'.{

K".'

-

y

„

W

x/>• s»

a

14

COMMERCIAL

THE

(2290)

&

FINANCIAL

CHRONICLE

Thursday, December 2, 1948

method of investing, they enthusiastically render real
convincing the prospects that the mutual fund is a
safe and simple way of investing in American industry."
with this

new

assistance

in

Administrations

Democratic
"Investors

made
your

investment dealer,

It

from

request

The

NATIONAL

RESEARCH

SECURITIES

&

CORPORATION

120 BROADWAY, NEW YORK 5, N.

Y.

than

reasons

more

public recently by Keystone Custodian Funds.
the

"Based-on

50-year record of the Dow-Jones Industrial Av¬

quoted from a letter written by
Millis F. Fordham to the Philadelphia office of Calvin Bullock:
• >
"It is my considered judgment that a far greater acceptance of
investment funds would result! if the industry, through its associa¬
following paragraphs

are

all-out educational campaign to reach the smaller
investor.
The larger individual and institutional
investor is in a position to discover the greater benefits to be had
from owning shares of investment companies.
They are buying the
shares in ever increasing numbers. This class of investor has access
to financial publications, the metropolitan newspapers and such, and'
is regularly solicited by securities salesmen.
'
V
•
",'Tn contrast, the smaller investor,-as a general thing, knows very
little, :if anything, about the new way of investing. -He represents
a
vast potential of business that the industry should and could, I
believe, have now, These people, I find, are quite susceptible to thp
idea of mutual investing. In large part they are retired farmers, pro¬
tion, adopted

iHUSlMtiU

Innw

an

medium-sized

and

*

Pays to Advertise

from

or

for

one

By HENRY HUNT
upon

Republican

vs.

headache

a

following the surprise election on Nov. 2 which kept the Demo¬
crats in office for another four .years, may find solace in a study

securities series
Prospectus

with

who'awoke

fessional

business

small

and

thousands of dollars.

"Some of them

men,

;"

as

well

widows with

as

a

fevy

.

.

few individual stocks and bonds, in many

a

own

cases not suited to their requirements.
But, the large majority de¬
pend in large part on bank- savings - account interest for their
livelihood.' Not a few have been forced to use a part of their prin¬
cipal during these past few years. In the past, such income was
adequate for their needs.- Now, with a return from bank savings

of

Sim"1

.

u

H0Viuifus
St

t0'

lBV,S'«,,a"cWo4

2500 R"ss

than

more

no

to 2% !these folk

iy2%

hard driven to get by.

are

The banks take the best of the real estate mortgages which

altogether
segment of the investing public victims of the present
monetary order.
*
/
"This •group, as a rule, does not read the metropolitan news¬
this

leave

papers

does it have the same means of learning about invest¬
surprising number know nothing ;at all about investment

nor

ments—a

Now

Lunds.
are

he is

then

and

more

a

salesman

discovers

them,-but the chances

interested in selling individual securities for the con¬

tinuing business he sees. Not all securities salesmen are,' in my
opinion, adapted-by experience or temperament to present properly
the investment fund way.
' r\
"Very few of them practice the idea of selling a complete pro¬
gram, as I believe they should. A great many salesmen do not have

Fundamental
Investors Inc.

an
appetite for investment funds, due in larg^ degree to a lack of
knowledge of what they represent. Very often the employer is at
I think the retail distributors should giVe more attention to
organizing their staff of salesmen along the line of the insurance
companies and get away from the hit and miss or dog eat dog

fault.

methods.
on

'Know

Investment

Funds'

should

salesman's desk.\

every

"What
education

I

would

started

like

on

be

placarded

and

put

to

would

see

be

an

companies

all

and

out

the

campaign of
they

services

'arge
ilarly
that

the

market

HUGHW. LONG & CO.

iO.

WALL

men

mutual

fund

shares

is

away

be sent into

about investment

companies. However,

once

they become acquainted

CTREET, NEW YORK 5, N.Y.

*NG»US

Dow

Averages—and thus what they

future.

-

•

"With

the

each Admihistration

years

of stock market rises and
during the entire life of the
reasonably expect in the

may

•

.

the

Republicans in office from 1897 through 1912, the
Democrats from 1913 through 1920, the Republicans again from 1921
through 1932 and the Democrats since that time, the two Republican
'in' periods totaled 28 years, the Democrat periods 24 years.
The
Republican Party
of

office

in

was

for

total

a

of

In

months.

338

188

these

months,; or 55.6% of the time; the ,Dow-Jones Industrial
Average showed a net monthly gain. The Democratic Party was in
office 280 months.

In 162 months, or 57.8% of the time, the Average
monthly gain. During all four periods there was an
amazingly consistent pattern of .market ups and downs—a cyclical
net

a

succession

of

tration

can

'bear'

highs,

were

take

nor

more

markets

credit

for

'bull'

and

need either find

market lows."

\

,

greater number

a

of

for being in office while

excuses

.

Adminis¬

Neither

markets.

having influenced

/

;

:

,

:

■

N

.

Attracting Funds of Trustees
trend

of state legislation and court decisions is facilitating
purchase of the mutual 'company shares by trust funds. In the
absence of specific authority, trustees are governed in the investment

the

of trust funds

by the laws of their state. The statutes of most states
have in the past severely restricted the number and type of securities
trustees were permitted to buy,; but in the last 10 years a
number of commonwealths have recognized the inadequacy of these
which

restrictive laws and have taken

CHICAGO

show

have experienced . in the way
declines under the two Administrations

"The

the

off to

vestors

anyway.

should

marked

areas

from the

less-populated areas
to build good-will and spread the gospel of mutual
group investing.
\ very great many of these middle class
investors go to 'their local
banker for, guidance in investment matters.
I know from personal
experience that-the average small-town banker knows very little

INC0t"O»A1|0

48

for

centers, for the present

"Trained field

Protp«<tus from your Investment Dealer or

"With

has been in office projected over a 50-year chart of the Dow-Jones
Industrial Average, the study offers a graphic picture of what in¬

there

agreed

and that the stock market has behaved in almost

fashion under both Administrations.

same

market

Dffer.

.arge

of years

number

the

showed

\ o

investment

the investment-company study shows that since 1837 the
Republicans and .Democrats have been in -office about - the same

erage,,

a

liberal attitude.

more

"Altogether, 17 states now permit trustees to operate under the
Prudent Man Rule, long in force in Massachusetts, which allows them
1

American Business

„

•much greater freedom in the selection of investments.

"Court action has imparted flexibility to investments by trustees.
trustees were not prevented by law from purchasing the

Where

Shares, Inc.

Keystone
Custodian

,

Prospectus

deemed
upon request

INVESTMENT COMPANIES

improper delegation of the trustee's authority. It was
might be subject to criticism on the grounds that
in buying the shares of the mutual companies they would be turh'-~
ing. their trust funds over to someone else for investment, rather
than investing the funds themselves, v
'
'
•

felt

trustees

.

incorporated
New York

Chicago

—

New Orleans

—

Los Angeles

different

instance

Participation in

question

by courts during 1947 in three
York and Massachusetts—and in each

passed

was

states—Ohio, New
court upheld the

the

trust shares by trustees.

could

Certificates of

an

that

"This

Lord, Abbett & Co.

Funds

shares of mutual companies, there has for years existed considerable
reluctance to buy stich shares on the grounds that it might be

find

no

on

propriety

purchasing

of

investment

As expressed in the Ohio decision, the codrt

distinction

between

the

purchase of investment trust

shares by a trustee and the purchase of the stocks of

INVESTMENT FUNDS

banks, insurance
companies or of industrial, companies that have investment portfolios.
"Another important factor which is stimulating the purchase-of
.

investing tkeir capital

SHARES OF CAPITAL STOCK OF

IN

mutual fund shares by professional investors is the current inflation.
The expenditures by the government during the war enormously in-

BONDS
(Series B1-B2-B3-B4)

Lewis J.

Whitney Jr.
With Oempsey-Tegeler

WELLINGTON

PREFERRED STOCKS

FUND

(Series K.1-K2)

LOS

COMMON STOCKS.

76th Consecutive

(Series S1-S2-S3-S4)

prospectus from

local investment dealer

Distribution

Tke

share

Keystone Company
of Boston
50

Congress Street

40

(approximately

cents

15

per

cents

from

Prospectus
your

may

be obtained from

local investment dealer,

or

Boston 9, Massachusetts




of

THE

PARKER

CORPORATION

ordinary net income and 25

cents

CAL.—Lewis
asso¬

Dempsey-Tegeler

&

Co., 210 West Seventh Street. Mr.
with

dividend

with

Whitney

or

This

ANGELES,

Whitney, Jr., has become

ciated

Quarterly Dividend
fmtr

J.

and
of

formerly associated

was

National

Series

prior thereto
Butler-Huff

&

Distributors

was

off'cer

an

Co.. of

Cali¬

from net reblized securities

fornia.

profits) is payable, in cash or
stock at election of shareholders,
on

R. J. Steichen Adds
(Special

December 29, 1948, to share¬

holders of record Dec. 13, 1948.

ONE COURT STREET. BOSTON 8. MASS.

WALTER

Philadelphia

L.

MORGAN

President

.

to

The

Financial

Chronicle)

MINNEAPOLIS, MINN.—Robert
F. Mack has been added to the
staff
D

n

of
nlr

a

R.
D

J.

Steichen

&

Co.,

Volume 168

Number 4756

THE

COMMERCIAL

creased the money supply of the country and this has been reflected
in a substantial rise in prices.
At' the same time, the control of

FINANCIAL

CHRONICLE

Walsfon, Hoffman Co.

interest rates, by the government has kept the return on .high grade
bonds and preferred stocks at low levels. The result has been that
in the case of portfolios" of fixed-income
securities,-not'only has the
total income declined as compared with prewar
levels, but the pur¬
chasing power per dollar of income has dropped even more. In con¬
sequence; anyone dependent on income from high grade securities
has experienced a substantial decline in his standard of living.

&

Walston, Hoffman & Goodwin,

.

members'of the New York Stock

of

means

perferfed stocks, all have a certain portion of their funds invested
in equities. Experience has shown that a diversified list of common
jstocks of good quality provides as satisfactory protection against
or

inflation

be found."-r-Written by John L. Hopkins for
November issue of "Exchange," published by
New York Stock Exchange.
•
article

as

in

can

the

an

the

the

no u nc e

opening of

an

office in New
Y

o r

kr

Wall

Street.

The Business Outlook
"TUe

*

election

the outlook for

of

Administration

Democratic

a

been admitted

'

.

alter

not

does

continuing large volume of business. On the other
hand, it has clearly been a shock to investment sentiment, which
may be expected to have repercussions in. financial markets; and
perhaps in the willingness of business to go forward on capital ex¬

penditures.

a

The latter factor seems likely to be largely offset bfv

increased government spending with respect to the

and

gram

aid.

European

In respect

armament pro¬

the election,

to

it should be
that the Democratic Administration has tended to be infla¬
rather than deflationary since 1932."—Quoted from The

recalled

tionary

general

a

will

and
in

be

charge of the
newly estab¬

The

office

lished

r

<S>-

Mr. Tabell

Edmund

cost

squeeze

a

in

which

many pro¬
search for
cases

many

achieved by a shift from

be

can

oh

e

forced

have

economies

Tabell

was

associated with Shields & Co. He

railroads to trucks. Shduld freight

out and call

For Mutual Funds

n

Reichart

b

1 i

Street

for

16

addition to safety of principal
a good
return, you've got to

The

principal offices of Wal¬
give, it real marketability — not ston, Hoffman & Goodwin are in
the kind that is tied to the va¬ New
York, San Francisco and Los

pendulum
again swinging away from "Big
Money" and in the direction of
"Little Money."
e

Wall

gained considerable
recognition as an investment ana¬
lyst and writer.

2nd

And this time,

it.

on

e v e s

garies and uncertainties of sta¬
bilizing and supporting opera¬

Angeles.

tions.

The firm conducts

That's

where

Investment

Company shares come in as the
ideal thing to handle today. And,

Joseph A. Reichart, President of
to me, three of the big advantages
&
Company, Inc., 135
Broadway, New York, underwrit-;.;?£
to little money are:
prs
sinrp 1924
his
fi^st, they stick^to yOU and. youf
ers since 1934, nnnniinppc thnt his
announces that
firm once they become sold on
firm is discontinuing entirely its
you; second, they buy over and
activity in that field and center¬
over ; again;
third, they become
ing its whole attention oh the dis¬
your
'big money' customers of
tribution
of
Investment
Com¬

12

in

Offices

other

maintained

are

cities

in

California.

general

in¬

including
curity underwriting.

se¬

vestment

a

business

•

.

v

tomorrow.

shares:
think

"I

'said Mr.

ognize

has

come,"

Reichart, "for us to rec¬
the pendulum has
again to where it

that
back

swung

when

"waS

time

the

'business

first

I

back

this

entered

1920.

in

Looking
back, I realize I didn't know very
then.

ness

to

the

about

much

securities

busi¬

Perhaps that was all

the good.

I had spent most of
my business years learning how
to merchandise things, cash regis¬
ters, motor ears, etc. The times
were ripe for applying merchan¬
dising principles to the invest¬
ment business.

World War

I

was

Industrial

Dow-Jones

The

over.

their way down
a year later.
'Big
money' was scary; the so-called
investor kept his tightly locked
up.
So here's what we aid.
"The
investment
House
with

Averages were
from 120 to 65

which

I

on

associated

was

at

that

time (and which f subsequently
headed) simply took a leaf out of
the experience of our government

World

during
the

Wjar I.

We copied

idea — small
amounts from many thousands of
small
investors.
Concentrating
our activities on the sale of 'baby'
Liberty

Bond

bonds

($100 pieces), we left the
'big money' of those days severely
alone. If it wanted to stay in hid¬

ing, that
Didn't

right with

all

was

have

we

-

millions

—

us.

and

"One

thing," concluded
Mr. Reichart, "in building a 'little
money' clientele we have to forget
more

about 90% of our Wall "Street par¬
lance.
It just scares they away.
Just talk the

language of our cus¬
tomer.
And above all, don't be
superior or up-stage. Take a les¬
son
out of the campaigns of the
two principal
candidates in the
recent

elections.

You'll

Just

much

get

'folks.'

be

that

further

way."

i-j—'*

P o w

e r

reoffered today (Dec. 2) at 102.38
to yield 3.25% to maturity.
Proceeds from

the sale will be

to reim¬
in part for ex¬
penditures
made
for
improve¬
ments., extensions and additions to
oompany

burse its treasury

its

utility plant.

munities in Georgia.

planning,

investment

search, investment ad visory
ice

and

custody,

re¬

to

The

Financial

first $50
am

of

personal fi¬

million—just the

way

I

describing.

"Now, it seems to me, we are
again to the same kind of

of the Mercantile Commerce Bank

Trust

Co.,

we

Now World War II

the 20s.

is

much restricted

a

replacement

lated

sources

that

no

pares

past three years, approximately
50% higher than the general fac¬
tory rise. Consumers have been
overexploited and an export con¬

cipitate- the long overdue down¬
ward readjustment.. This export

construction

the
has

been

industry
steady decline

a

through the past few months

contraction is due to continue

new

a

agement
function of bank

to

increase

to the trend in the same
period of last year. This is true

and

not

broker

vestment advisor and

administration

details

only in the housing field but

also

that

in

struction

industrial

of

con¬

of

huge quantities
been in constant

where

steel

have

demand.

Weighing

executives

small

of

of

"Of

will

an

taxes will be retained very large¬

(Special

to

MIAMI
F.

The

Financial

in the first two weeks of Novem¬

as

probably sink

little

lower and

narrow

a

the base

of

ment at more realistic levels

the fabulous and fantastic

which

to

the past

going to be changed by
present administration; de¬

cided

increase

to

for

their

depreciation
an

taxable




have been carried in

three years.

the

Snowden

staff

of

has

been

Daniel

F.

added

Co., Roney Plaza Hotel.

Rice

rather

& McKinnon
(Special

extra dividend.

ST:-

President Truman has indi¬

If

cated

orthodoxy

an

more

about

one

than another, it is with
a

balanced budget. He

to

The

C.

Beil,

37 Wall Street,

by

to

New York 5, N. Y.

Whitehall 3-8140
Nov. 26,

1948

been

McKinnon, 340 Central Avenue.

PER SHARE

Orders executed

FLA.

Jr.", has

added to the staff of Thomson'&

"

PRICE $1.00

Financial- Chronicle)

PETERSBURG;

Frederic

HENRY P. ROSENFELD CO.

and

-

With Thomson

account

course,

tomers'

we

thah

heights

not

COMMON STOCK

Chronicle)

begin,
in the

that

VIDEO CORPORATION OF AMERICA

BEACH; FLA.—William

marked

they are and many industries ber. It will
not, I believe, be a
have
been
anticipating; a
sharp or deep recession but rather
possible new lease of life from
a relatively reasonable readjust¬
that quarter, will
ly

300,000 SHARES

Daniel F. Rice Co.

-

are

ac¬

accumu¬

don't expect 'little
walk into your cus¬
room.
You've got to go

will shortly

or

become

of the utmost im¬ first half of 1949. An indication
portance. In the face of a defi¬ that this may be so is the depart¬
nitely-unbalanced budget excise ment store sales volume decline

where taxes

account

appraisals of

the

downward'movement either

begun

at its current market

Thii.k of it!

to

a

and

tax and

and

then

wjth due respect for the evalua¬
tions of others, it appears to me
has

every¬

carefully

forces aligned on either side and

that

Question of Taxes
business

To

so ease

in¬

and

specializing

develop a diversified portfolio,
provide safekeeping custody of all
securities and maintain complete

billion.
This com¬
with about $45 billion at the,

money'

Japanese production
the burden of. occupa¬

tion eosts.

trary

respect to

NEW ISSUE

as

governmental influence is exerted

con¬

develop¬

investment man¬
service combining the

ment of

$160

end of 1929.

small measure, to the wage
of almost 60% in the

Corooration

Securities

of Boston has announced

'savings in this country total

around

.

industry continues

increases

pro¬

by Life

Insurance

/

textile

brokerage

to

value, assis¬
tance in preliminary estate plan¬
So why not tap the great reservoir
ning and personal consultation
of 'little money' that's all around
privileges at any time.
us? It has been estimated
'Big money' again is scary.

over.

The

business.
Clayton

ses

in

/

Locust-Eight-St. thing

Charles.

permit farm income to be

equivalence of supply and demand traction of three-quarters xof a
in that most unbalanced of" in¬ billion yards has
helped to pre¬

than declare

LOUIS, MO. — Holland F.
Chalfant, Jr. has joined the staff

one-third below

dependent upon government

subsidy.

accounting records. The
service includes quarterly analy¬
faced—and solved—

back

conditions

Chronicle)

ST.

&

serv¬

less

would follow, which releas¬
ing substantial quantities of steel
to the automative industry, could
bring about rather quickly an

reserve
(Special

next year

ness to

gram

the

With Mercantile Commerce

gram

tatoes

that of 1948 may signify a willing¬

in

increases,
expansion and

were

For Investors
Clayton Securities Corporation of
Boston, in providing complete in¬
vestment se/vice, has added pro¬

programs.

rate,

operations. The directors, of
transportation and heating ser¬ U. S. $teel may have read the
vices in AQfinta and transporta¬ election returns and concluding
tion in a number of other com¬ that the present depreciation rules

management
and helping him achieve the maxi¬
nance
companies we started in
mum return compatible with ade¬
that way ; are now, I believe, the
quate protection of principal.
largest of its kind; listed on the
Tb e services
are
equipped to
Big Board.
It got its start—its
chain

-nationwide

30

munities in Georgia and furnishes

Management Program

in

we

Nov.

company supplies' electric,
service to a large number of com¬

Offers Long Range

replacement

.

actually
counts.
This program is designed
got millions — in 'little money;'
to
relieve
the
investor
of
the
$100;, $500, $1,000; available? The
period of time

over a

Co.

a

by the

ex¬

to be one of the weakest compo¬

there

banking group headed
by The First Boston Corp., an
issue of $12,000,000 first mortgage
bonds, 3%% series due 1978, on
its bid of 101.45%.
The bonds are

used

be

can

corporate expansion aftd

on

nents and I believe this to be due,

wage

In

Group
DffersGeorgia Pwr.Bds.
Georgia

increase

rise, and the ICC refuse further

,

The

mm

fects

dustries.

First Boston

awarded

such

pected, with its accompanying ef¬

decline,
and other costs continue to

Reichart

pany

crease in corporate and individual
income taxes is inevitable. Though

cap loadings continue to

in

been

years and has

Quits Underwriiisigs

an

lieve

-

has

Broad iStreet Sales Corporation's "Letter."

expendi¬

that to offset these, either
excess profits
tax or an in¬

of

ducers

here, i

formerly

such

to

tures

As we search here and there to
prosperity which has
Ted to an expenditure of a billion uncover other unfavorable signs.
dollars ori new equipment in 1948, The Secretary of Agriculture has
far exceeding the investment of
shown his concern lest the price
the
previous year. Freight car support program get out of hand
loadings, however, have been de¬ as surpluses mount. His action in
clining, albeit not seriously as yet. setting the support level for po¬

degree

to the firm as

partner

week.

the railroads loom large and they
have been experiencing a relative

has

Tabell

8)

page

committeed

personally strongly inclined to the
former,, his advisers may succeed
like
Worthington in Convincing him that there is
Pump and Machinery are either more to be gained from increas¬
laying off men or shortening the ing the corporate rates and I be¬

Among the big user^ of steel,

Edmund w;

is

manufacturers

work

35

t

a

(Continued from
industrial consumers
of steel; producers of such items
as*stoves, refrigerators, electric
irons, machine tools and much
farm machinery. Even industrial
machine- production
and
sales
show signs of weakening and some
among many

offsetting these adverse investment influ¬ Exchange and one of the largest
investment firms on the Pacific
ences has been found in the purchase of investment
company shares.
an¬
JWith- the exception of those Mutual Funds that specialize in bonds Coast,
"One of the

Surveying Badness Conditions"

Opens New York Office;
E. Tabell Res. Partner

15

(2291)

16

THE

(2292)

COMMERCIAL

&

FINANCIAL

Our Most
Securities Salesman's Corner
tute

One of the axioms of successful security sales¬

Keep it simple.

manship is to reduce complicated technical data into terms that the

expected

unpaid balances consti¬
large a percentage to total

nor
as

retail

sales

vious

they

as

about

have

Credit

periods.

now

26%

pect's mind

a

that you

for instance

Assume

bringing

•

.

are

discussing the possibility for

list of holdings into your own statistical department for

a

The only way that you are going to obtain
this list of holdings is to impress your prospect with the necessity for
the purpose of

analysis.

now

estimated

over

5%

total

as

bring home the importance of the annual
review you have to show why certain securities have depreciated in
value. You have to show your prospect the sore spots. Not only do
you have to show him these sore spots but you must also show him
"why" this trouble arose in the first place.
You take the list in your hand after you have obtained it from
your prospect and you look it over and then you say, "You know,
Mr. Smith, you have some securities here that are in the A class, and
some that are in the B class, and unfortunately there are some that
are in the C class.
Now when you bought these securities it is quite
doing this.

In

order to

were all in the A or the B class and only later on
of them fall down into the C group. Our statistical depart¬

likely that they
did

some

has

ment

after many

discovered

bad all of

goes

years

experience that no security

Of course, the first hint that you had that

sudden.

a

probably when you stopped getting your
dividends. But in reality those securities that are
now in the C class began to have trouble several years ago, and it
took quite a while for the real underlying situation to develop.
something
interest

wrong was

was

or

your

trend

please believe me, I am not criticizing you; or even the
man who sold you these securities.
Probably at the time you bought
them you both thought they were excellent. It is" our job to watch
over these securities and spot trouble before it happens whenever
that is

What I am going to do now is to take this entire list
statistical department. Over a period of time we are
going to try and make some suggestions to you. We may not be able

back

possible.

to

my

to do much with some of these C stocks at least for

possible that

of the B stocks back into the A group

ally

we may

a

while, but it is

suggest' some changes where you can put some

we can

where they belong, and eventu¬

be able to move the C stocks into others that can move
group.
After my statistical department makes their

into the B

up

study I will come back and place it before you. I am sure that we
can help you the same as we have many other customers of. our firm."
By all means do not discuss any proposed changes or individual
securities during this first interview, regardless of your prospect's
desire to do

Wait until you come back

with a definite plan and
program. This type of presentation completely eliminates all compli¬
cated discussions but it gives your prospect a clear picture of what
he can accomplish toward putting his list in better shape;
so.

Expansion

!

>;

•

,

of

reached demand will fall off

Market Predictions

on

Editor, The Commercial and Financial Chronicle:
Wilfred May for presenting, and the
"Chronicle" for publishing, his penetrating and illuminating analyses
of the fallacies incident upon "predictions of things to come" in the
securities markets—predictions which are based
largely upon a
variety of bar¬
twice a day."
ometric de¬
However, sooth¬
vices concoct¬
sayers and fortune tellers are here
compliment

A.

to

statisti¬

in

ed

I

stay, because,
phrase employed,

laborato¬

cal

shops?

be

who

able

m o v

fooled; therefore, let them be

fooled."

presume to be

of

me¬

im¬

12, 1948

by

means

plements, may
be right occas

i

o

n

a

which in

1

i

Or.

Max

Winkler

y,

turn,

may

account for

large following who do not
to

appreciate

be

a

the

operation of the economic

constructive factor

very

a

the

stopped

seem

dictum

that

clock

is

right

Dealers, Inc., announces
the following have been elected
take

Board

Maine Central R. P.
proposes

a

$7.40

divi¬

dend
is

rate on 5%
preferred, which
selling under 69. Stockholders'

committee

ask

$9.25

a

dividend

rate.

Our

having

been proposed, District No. 13 of
the National Association of Se¬

to

Company

latest

consistent
railroad

analysis

illustrates

earning

power

over

in

sys¬

tem.

of

than

more

7%

above that of

a

In

1941, the a'verage
daily production was slightly over
3,000,000 barrels.
year

ago.

The expansion of debt owed by
and industrial buyers is

business

indicated
dustrial

by the

commercial, in¬
agricultural loans of

and

the member banks of the

Federal

Reserve System.

These loans made
by the reporting member banks
in leading cities have been rising
steadily although at a somewhat
slower rate than earlier this year.
The
increase* over
last year
is
about

and

10%
while

even

has

the

total

become

less
has

amount

been

rising.
These
figures are
probably fairly typical of what is
taking place throughout all parts
of the
country.
A; considerable
portion of these loans represents
needed

money

to

inventories and

finance

the

larger

need to meet

the requirements for

work¬

more

ing capital than is needed to
business

under

oper¬

higher

price

of debt have

risen.

Both city real

and

farm

expansion

might

also

estate mort¬

mortgages

of

long - tym
continued for

be

time

the

are

without

the

but

quences,

harmful

debts
long

a

conse¬

general

trend

toward increased debt is one indi¬

cation

of

toward

possible tendency
over-expansion at a rate

which

cannot

a

maintained.

be

At

permanently

the

current

rate

national

income, total private
debt, even at the peak, is much
smaller in comparison with the
amounts people havd available to
pay their debts than it has been
at previous high points in busi¬

industry, and

peak loads

are

reserves

low in

very

parts of the country.

a

24-year

of

the

this

office
of

Jan.

on

14, 1949:

Governors:

James

Lee, Lee Higginson Corp.
District

Committee:

of

Dillon

&

Co.;

Stanton

M.

Weissenborn, Farker & Weissen-

period.

1944.

in

October

&

Co.

53 State St., Boston 9, Mass.
LAfayette 3-8344

»,

Tel. BS 189




to

tons.

about

5%

last year, but

in

or

was

the

close

to

largest

8,000,000

ever

pro¬

single month either in

a

peace.

Prospects

are

for

still higher production next. year.
Even though tho output is large,
it

is

not

enormous

enou

gh

demand

to

meet

and

shortages

of many types of steel are
down

the

holding

production in several lines.

Construction, especially of resi¬

Jains R. H. Johnson Staff
(Special

Incorporated

was

be

Output of the steel mills

was

duced

dential

A. G. Woglom

88,000,000

will

slightly below the wartime peak
in

born, Inc.

Special report upon request

about

amount

higher than it

war

Raymond
Securities

D.
Stitzer, Equitable
Corp.; Allen C. Du Bois, Wertheim
k Co.; D. Frederick Barton, East¬
man,

That

and

J.

The

Financial

Chronicle)

NEWPORT, MAINE—Julian K.

ing
of

up

new

month

buildings, has been hold¬

is now working on
large expansion program
involve

several

little

income

likewise

lower

livestock
has

products
higher than last
while that from grains has

year,

10%

declined

last

livestock

and

been

4%.

Total

income

for

will

farmers

probably not equal
record total of over

year's

$30,000,000,000. Dividend pay¬
ments are higher but they have

force
and

many

in

the

a

very

which

dropped

Co. of New York

total number put up

below

this

the

The

year

is

Price

expenditure of
dollars within a

field

of

Supports

Bache & Co. looks for extension
of

inflationary political and

mon-

-

policies to shift trend of
commodity prices.

eiary

construction

help maintain general
In
a
special
study
entitled
business
activity.
Much of this
expansion is being financed by "What's Ahead for Commodities,"
Bache & Co., one of the nation's
new
security issues and about
40% of the new corporate securi¬ largest investment and commodity
ties issued this year have been by brokerage firms, said today that
continuation of the present admin¬

public utilities.
An

evidence

istration and election of

the

of

a

Demo¬

increasing
cratic Congress indicates extension
difficulties facing business is seen
of inflationary political and mone¬
in the number
of failures and the

amounts

,

of

liabilities

Throughout

the

involved.

postwar

period
these failures have risen steadily
the

and

increase

in

numbers

has

though

the

percentage increase
has declined. Monthly failures are
almost

times what

ten

they were
in 1945 when the figure was ex¬
tremely low. Although the trend
is upward the total number is not
yet nearly so large as it was in
the prewar years. The amount of
liabilities in each failure is, how-

considerably higher.
Fail¬
can
be" expected to increase

over,
ures

becomes * keener

competition

as

when
The

goods

more

current

for many
ures
will

available.

are

trend

continue

can

months before the fail¬
be

large as prewar
either
in
comparison
with
the
larger number of concerns now in
business

with

or

number of

The

as

automobile

tinues

the' previous

businesses failing.

industry

con¬

be

to

handicapped
by
of materials, especially

second

largest number of passen¬
and trucks in its history,

ger cars

the

peak

5,358,420

year

1929

was

trucks

and

cars

when
,

were

produced in the United States and
Canada.

This

expected

to

year

the

is

slightly
above
larger
percentage

5,000,000.

A

than

of this total

usual

total

be

will

are

that

this

considerably

will

during

be

has

abroad.

The

number

is

Trends

and

in

incomes of

have

many

varied

of

the

more

In the study

while

there

pre-election period
expectations of lower

were

operations,

this

commodity

markets

is

"It

also

have

been
"most

turned

results

that elec¬

and

probable

continuations

favor

reinforcement

of

agricultural price support pro¬
grams and possible expansion of
government sponsored export ac¬
tivities."
Bache

The

that
prices has
particularly pronounced,
however, because "of the bearish
supply situations which prevail
for
many
domestic agricultural
products."

the

survey

noted

in

trend

upward

not been

;

"Some

hogs,

markets, in fact, such as
and butter have con¬

lard

tinued

tendency to work lower

a

which

evident

was

election and
was

which, in
in

seasonal

study

before

the

some cases,

character,"

the

added.

From'

supply

a

point of

view,

the study said, the 1948-49 picture
for
most
domestic
agricultural
commodities
over

the.

mand

greatly improved
From a de¬
of view, it added,

point

continued
a

is

past year.

possible

increases

high industrial activity,
fourth round of wage

sored

and

government

spon¬

export programs should be

offsetting

factors

to

the

supplies.

large
\

A. <J.

Bright Elected

Dir. of Blair & Co.
are

pronounced. Total

Blair & Co., Inc., 44 Wall Street,
New

York

City,

to

about

than it did

has

announced

the election of Albert J.
a

.director,
as

Bright

as

and also his appoint¬

of the United

year

has
and

expected

tion

ment

this

2

higher."

viduals,

more

belief

since Nov.

reversed

the incomes received by all indi¬

10%

the firm states that

the

in

different

variations

amounted

senti¬

futures

price support levels and reduced
government spending, for export

considerably

income, which represents

has

in

commodity

markets.

slightly

less than last year.

groups

the

the

About 8% of total pro¬
been sold for export

next year.

duction

percentage

in

ment

shift"

definite

"rather

con¬

sist of trucks just as it has during
the last three years.
Indications
reduced

has brought a

policies, and

tary

greatest in the last year al¬

national

has

Will Reinforce Farm

will

dwelling units started each

point reached in May.

Holds Election Results

for

relatively short time. This spend¬
ing will be a powerful, sustaining

becoming

high

^

but

Farm

been declining due
prices which have been
only
partly offset by
the in¬
creased
marketings
from
this
year's larger crops. Income from

the

billion

well although the number

Croxford is with R. H. Johnson &

City.

be

to

greater.

The indus¬

try

will

been

gages

of

in demand has been much greater
the increase in the capacity

than
of

record

No additional candidates

a

curities

"Even

has

one of the leaders in
pushing
output higher. Average daily
production of crude petroleum is
now running at the
peak of over
5,600,000 barrels daily, an increase

Elects to Office

Nov.

or

chanical

industry

been

its

recent

has
to

pacity and total output this year
will establish
a
new
peacetime

New York, N. Y.

ements

solely

over

NASD District 13

Bernard, Winkler & Co.

price

largely

well

shortages
sheet
steel, and irregular work
stoppages at key points which in¬
ness activity.
terrupt assembly schedules. Out¬
put has been increasing in spite
Trends in Some Leading
of these difficulties, however, and
Industries
the industry is moving
steadily
The^steel industry continues to
toward the goal of turning out the
operate at well above 95% of ca¬

MAX WINKLER

fore¬

to

cast

a

I believe, by
Horace, "Mundus vult decipi; ergo
decipiatur—The masses want to

ries and work¬

Those

borrow

to

be

or more.

a

higher than they were a year ago,
although only the mortgages of
city real estate have reached a
new
peak.
Farm mortgages are
relatively low but they are in¬
creasing more rapidly than at any
time in the postwar period.
The

compliments A. Wilfred May on his
of fallacies of stock market barometric
devices.

May

as

levels.

'

Max Winkler

analysis

last year by 25%

surpass

has been

Similar growth to new peaks
constituted a much smaller per¬
larger portion of current incomes has been
made
by the public
will be required to meet past ob¬
centage of corporation profits and
utility industry. Weekly produc¬
also of national income than in
ligations and to liquidate the debt. tion of
electricity has risen to
Less
purchasing power will be
previous years. Lower dividends
5,600,000,000 kilowatt hours, an
and smaller returns on invested
available to provide a market for increase of well over
10%, an in¬
current production.
capital tend to make more diffi¬
One effect of crease of
11%
during the last
credit is to intensify both the up¬
cult the raising of money to fi¬
year.
In 1941 weekly output av¬
nance business expansion.
swings and the downswings, but
eraged slightly under 3,000,000,when it is properly handled it can
000 kilowatt hours.
The increase

Other forms

Comments

into account.

credit
stimulates
business while it is taking place,
k>ut
when
the
peak
has
been

ate

Letter to the Editors

is

favorable

later must be taken

,

"Now

Although the com¬
so
far, the
significant and sooner or

years.

is

corresponding period
The rate of increase
gradually slowing down
weeks, however, and is

year ago.

are

fore they would represent as much
of retail trade as they did in the

parison

the

during
a

in

The

prewar

over

close

very

establishing
a
new
record.
Other forms of construction have

total
will
with
36%
in
1941.
mentioned that we would bring compared
Amounts
outstanding could in¬ $18,000,000,000.
method of placing in your pros¬
crease
another $5,000,000,000 be¬
The
petroleum
picture of what he should be accomplishing with

clear

well

come

also gained and in most lines will

lay mind can grasp. Last week we
before you an effective and proven
his investments.

to amount to

900,000 and will
to

pre¬

in

sales

the

of

Thursday, December 2, 1948

Prosperous Year Is Ending

(Continued from page 13)
sales

By JOHN BUTTON

CHRONICLE

vice-president in charge
States Government

bond department.

-

Volume 168

.

Number 4756

THE

Reveals Truman's

COMMERCIAL

struction

Housing Proposals

FINANCIAL

during the

past .three

families

have

been

increasingly

priced out of the market by the
persistent rise in housing costs
and prices. This trend not only
must be reversed if the

.

The following statement, announcing the plans thus far

CHRONICLE

years,- a
large
proportion
of
middle and. lower-middle income

.

Raymond M. Foley,, Administrator of die Federal Housing.and
Home Finance Agency, says recommendations made to 80th Con¬
gress will be renewed, and; nationwide concerted effort made to.
enlist cooperation of builders, lenders, labor and other interested
groups in getting maximum results.

'

&

industry is

to serve this great segment' of the

formu¬ Ration's housing need; it must be

lated for legislative and other action to stimulate a large-volume of

reversed if the industry is to con¬
housing at lower prices and rents, was issued on Nov. 24 by Raymond tinue long to produce at the high
M. Foley, Administrator of Housing and Home Finance Agency:
rate, required to meet even the
After

con~<£

though failing to reach

with

Presi¬

the

Truman,
Housing

his

the
and

Home

Fina

nee

Agency is
moving for¬

Administra¬
tion's

long-

floor of

the

a.

vote On emphasized by the

Some

House.

of

aids

Principal Recommendations

tye

/

tb

be. submitted are:

oh

(1) Declaration of a national
housing policy.
(2) Authorization for renewal

sive

housing

program which wbuld establish

a

munities

come

.

basis for steady progress
meeting the challenge of the;
nation's housing need. These are
(1) Preparation of legislative
proposals for submission., to, the
Congress after
it convenes in
January*
The
first
proposals will be
based primarily on major recom¬

low-income

in

War II.

mendations

housing

of

the

President

for

housing legislation which the 80th
Congress
include

a

housing

failed to enact. .They
declaration of national

policy,

Federal aid for
housing,
slum
clearance, and farm housing, and
low-rent

public

balance

the

of

the

housing/

re¬

search program. Since these pro¬

posals have already been' the sub¬
ject of extensive committee hear¬
ings in both the Senate and the
House

bf

action

on

Representatives, early
this legislation will be

sought in Congress. Further pro¬
posals will result from studies
underway.
(2) A nation-wide concerted
effort throughout the coming year
to enlist cooperation of builders,

lenders, labor and other interested
groups in getting maximum re¬
sults from the parts of the Presi¬

dent's program already-enacted;
This

includes concentrating on

lower-cost private production of
both sales and rental housing. Ft

veterans

>

'

be

yiear

a

Townsend, Dabney Go.

by past performance. Our goals
should be set on the basis, of the
needs of today and
the years

or,

real

be

built

on

lower-

of:

program,

a

the

WV;

program

miracles "but

re-use

can

values for

accomplished simply by- con¬
to a greater degree^ on
mass,

low-cost market.

Much

be

meetings of all elements of the
hpusing * industry to seek * their

or public. redevelopment
accordance with local plans*

in

;

Agriculture to farmers for con¬
struction of adequate farm-dwell¬
ings where the farmer doesr not
have

the

resources

or

credit

demolished, For this task

need even

mPre

than

tq provide necessary

we

legislation
aids, in the

areas in housing. We
must have a concerted effort on
the part of industry* labor and
government to cut housing costs
and to broaden the effective

to

finance independently. Under cer¬

provision also

would be made for minimum re¬

1

farm

"

.

Dabney & Tyson,
Ine., 30 State Street, members: of*1
the New York

Exchanges.

H. Y.

previously

Sattley & Go.

and Boston

'Mr*

,

Mr.

Bolton has

a

B.S.

degree

in Finance from the University of
Detroit

did

arid

post-graduate
work in! the same field at Wayne

University.
rities"

He entered the

Barr Brothers & Co., 40 Wall
Street, New York City, announce

secu¬

investment business in 1934,
been

Moore &

Co.

associated

the

in

arid Ryan,; Suther¬

land &" Co. of Toledo,
Mr. Bolton enlisted in the Navy

iri- December, 1941, .arid went

qn

iiiactive duty December, 1945,; as
Lieutenant U.S.N.R. He is

a

mem¬

ber of the Bond Club of Detroit
as; the -Securities Traders
Association of Detroit and Mich¬

as - well

Marache, Sims & Co.

,

priced houses, aids- to prefabrication, and other existing incentives

the

to; lower price or rent.
'Leadership in this effort will

codes and materials.)

provi¬

,

!

John H. Gertler

that JohnH.

Gertler

nicipal
bond
department.
Mr,
Gertler was formerly a partner in
Gertler, Stearns & Co.

With Spencer, Swam Co.

BOSTON, MASS.—Frariqis
Dpwns formerly was manager of
the trading department for Bart- Booth
has joined the staff
ling & Co. and for the Los Angeles Spencer, Swain & Co., Inc;,

be

;

taken

by

the

Housing

and

Finance Agency and field
activities largely will 'center in
Home

the Federal
tion.

Housing Administra¬

assistance will
sought from. other agencies
represented in the National Hous¬
ing Council.- The FHA- will in¬
tensify especially an • affirmative
Appropriate

be

Office of Carter H. Corbrey & Cq.

Post Office Square.

building

standardized
,

addition1 to preparing legis¬
lative proposals in these prin¬
cipal categories, the Housing and
Home Finance'Agency is studying
possible, need for further legisla¬
tion to assist increased produc¬
tion of-low-cost private sales and
rental housing, and to complete
In

the transition

already under way
permanerit peacetime
/
campaign? of assisting cooperative credit aide for housing. •
housing groups with technical ad¬
Legislation must be coupled
toward

.

vice and assistance.

sistent

with

President's

the

re¬

peated -calls for enactment of
comprehensive
legislation
arid
Housing Agency's record
of" working closely with private
industry.. It is a further step in
the
Agency's effort
to secure
greater production of houses in a
lower price range.
-

with the

...

With the

approval of President

legislative pro¬
posals we are preparing- will be

Truman, the first

primarily on recommenda¬

based
tions

in

„

with participation of the housing

.

#

These two approaches' are con¬

his housing message ;

to

Congress on Feb. 23,; 1943 which
were riot enacted by the 80th Conr

industry, in the broadest sense. It
is. the position of the Administra¬
tion

great bulk of the
housing job .can be done by pri¬
vate enterprise, with such Federal
assistance as is necessary and de¬
sirable.

Consequently,

we

have

recently conducted a series of
meetings 'with all phases, of the
housing industry in all sections, of
the country to acquaint them with
the.

new

aids

contained

in

ference

with

national

representatives
veterans'

of

organiza¬

tions

apd others of the consumer
recommendations in
that Message were: substantially interest, groups.
We now propose a frontal at¬
supported in the final report of
the Joint Congressional Commit-, tack through cooperative efforts
tee on Housing, in .March,: were of industry and" government on
incorporated in housing- legisla¬ -the^ number- one-problem- con¬
tion which .passed, the ^Senate in fronting .the.
housing industry,
April and approved by a majority today—high production cost and
gress.

The

PORT OF

Proposals for qil of

NEW
none

AUTHORITY

YORK

of $7,000,000 of Port of New York
.

Authority MARINE TERMINAL BONDS of the FIRST SERIES,
Due

1978, (First Installment), will be received by the Authority

at 10:30
must

be

A.mTon, Tuesday, December; 7,. 1948,
accompanied by

amount of

the

Housing Act of 1948, and enlist
their participation. In Washing¬
ton, we have- held similar con¬
the

THE

that, the

or

a

certified check

at its office. Each offer

cashier's check in the

or

$140,000; The Authority' will announce the acceptance

rejection of bids at or before 6:00 P.M.

on

that day.

Copies of: the prescribed bidding form, of the Official Statement
of

the

Authority arid of the resolutions pursuant to which these
to be

issued* may be, obtained at' the office of the Treasurer

bonds

are

of the

Authority, 111? Eighth

Avenue, New York 11, N, Y.
THE PORT OF NEW YORK AUTHORITY

,

/

HOWARD S. CULLMAN,

.

of the

Committee

and Cur¬

House Banking

rency

in

June,




prices. Despite the substantial

al¬ pansion- in--volume of housing

ex¬

con¬

is now as¬

sociated with the firm in - its mu¬

authorized by
Act of 1948. was

Housing

limited to

was

Treasurer of Ballou,

research* program

the

Stock

DETROIT, MICH.—H. V. Sattley,&.Co„ Ihcf., .Hammond Build¬
ing* announce the election as VicePresident' of Frederick J. Bolton.

Cecil J. Downs Joins

ing projects, yield insurance, the

fully

Morrison

Adams & Co,

and- has

95% 30-year insured loan on low-

using

sions for aid to cooperative hous¬

;.y

past .with Crouse <&, Co., McDonald,

would be operated in cooperation ir| rental housing. We propose also
with
private industry and use to
step up our efforts to help the
existing- private and public re¬
homebuilding industry produce
search and testing facilities.' (The

involves

;

with Townsend,

igan, Inc.
\
of presently substandard
housing.
try and labor.
i (5)
Authorization for Federal
We
also
plan to lay before
sponsorship and coordination of a
lending institutions, builders, and
long-range program of housing
other sponsors the practical prob¬
research. Aimed, at reduction of
lem of securing more moderate
housing costs, it would deal with
(Special" to The Financial Chronicle)
rental housing. Specifically, we
study of development of more
LOS ANGELES, CAL.—Cecil J.
propose an affirmative effort to
efficient homebuilding techniques^
Dpwns has become associated with
secure broad participation in the
methods, arid new materials, and
new
programs of
insurance of Marache, Sims & Co.* 458 South
development of
adequate eco-.
njomic
and
statistical data on mortgages on cooperative housing Spring Street, members of the Los
Angeles Stock Exchange.
Mr.
needs arid markets. This program projects, and of direct investments
pairs

James A. Morrison

mar¬

ket.

carrying out a practical pro¬
g-am of producing lower-priced
housing.: Tq succeed, this must be
a voluntary nation-wide program,
in .cooperation with the national
and -local governments, by the
men who plan, build and finance
hbuses. Noting some recent de¬
velopments in the industry, we
ate confident, that such local prograriis can secure the indispens¬
able voluntary support of indus¬

a: id

,

(4) Authorization of financial
assistance by the Secretary of

tain circumstances,

be

voluntary cooperation in devising

and with the locality sharing the
;
?

net cost of clearance.

priced for the mass market. Much
old housing is so bad it. should

can.

accomplished by using
(3> Authorization of Federal fully the additional credit aids
loans and capital grants to assist njow available, which were recom¬
communities carrying out slum mended: by the President as in-'
clearance projects, initiated by- centives. for production of lowlocal agencies, so that the land cost housing.
,
when cleared, may be sold or
j We therefore plan to request
leased at sound

We have a shortage now.
Our population grows. Not enough
of.
our
housing
production
is.

if problem

centrating

World

of

within

creased productivity. A' lot

private

£

Jas. Morrison Joins

.

only' on a multitude of minor
savings achieved through closer
figuring;, better-planning and; in¬

families, with preference to

sound

a

cannot

aid' to com¬

low-rent

for

achieved

priced housing. Suchj

projects, initiated by: local agen¬
cies, for occupancy by low-in-

g

lower

lenders, industry, labor and gov¬
ernment are willing to go to work

The principal recommendations

.

comprehen¬

u

toward

for

of Federal financial

o

months

providing tptalj housing starts. Large redjict
private- tions iri -housing costs to the pub¬
housing, were contained in legist lic iEari probably be made only
lation the President obtained from; gradually.
We are
nonetheless
the recent Special Session; i '
f cpnvinced! that sizable results can
credit

h t
objective of a
s

Raymond M, Foley

past; few

of the

trend

recommendations,

further

ward imme¬

diately on two
fronts, to ac¬
complish the

more housing for Negro and other
minority groups.
From present indications, hous¬
ing production this year will be
around the record high level of
(Special to The Financial Chronicle)
937,000
dwellings produced in
BOSTON, MASS. —James A.
1925. This is a creditable showing,
but it is time to stop judging the Morrison has become associated
adequacy of our performance in
housing by mere numbers, alone,

lbwery estimates of need. This is ahead.

sulfation
dent

if

(2293)

■

November 80,1948

»

CHAIRMAN

ot

10

-

COMMERCIAL

THE

(2294)

18

&

FINANCIAL

CHRONICLE

Thursday, December 2, 1948

f'

Reports Savings Deposits'Gain Reduced

Henry J. Mader Heads
Adams & Peck Dept.

Canadian Securities

William

Adams & Peck, 63 Wall Street,
York City, announce that

During the next decade spectacular expansion of the Canadian
West is likely to mark a notable era in North American history. In
the past for geographic, political, and economic reasons Western

development in Canada lagged in comparison with
direction

progress in

this

border.^

the

of

south

are

There is
now increasing awareness of
thej
enormous
virgin natural reSources of Alberta, the Northwest
Temtories, and the Northern dis-.
tricts of British Columbia, Manitoba and Saskatchewan. Hardly a
are

natural

of

origin.

as

increase

new!

recent discoveries

of

con-

are

mentation of U. S.-Canadian stra¬

state

continued

internal

external and
the

bond

in the

inertia

of

market

sections of
and

price
changes
were
negligible.
Free
funds were steady and offerings

in this

direction

therefore

anticipated

The establishment of this, rail link
the northwest would have the
dramatic influence oh Can-

Now

With Schafer, Miller Go.

Exchange,

an-,
nouncestbat

the

firm

as

tions..
the

Before

war,

Boggs

Mr.
was

anager

of

I

Wm. H. Boggs

Baltiand prior to that

was

with

He served

attached to the 3rd Marine Air
Wing at Okinawa.

Municipal

Correction

,

•

,

In the ^Financial Chronicle" of
Nov. 25 it Was reported that Blair
F.
a

YJ-; ;

Claybaugh & Co. had opened
branch in New Haven, Conn.,

under

the management of Chan-

cey W. Hulse.
This was in errqr;
Mr. Hulse is a sales representative

CANADIAN STOCKS

for the

Haven,

firm, working out of New
but

no

Governors

and

District Committee No, 8 to

suc¬

the

to

Board

of

actual branch is

Howard E.

Chicago of Hornblower &

at

ner

INCORPORATED

Standard Securities Instals

Weeks, and Sampson Rogers, Jr.,
partner of McMaster Hutchinson
& Co., Chicago, have been named

Y.

Committee
in

1945

No.

and

8, having served

1946.

logg,*' Idaho and Yakima,

■f?.y

•IT *■'

/

4-2400
•'

f

'

«

NV1-I045
'•

J S

±

"

^branches. 1 The" firm? actsersi iU<
•

'unlisted^durities;^

..Mi ccr'i 1 CTOiwri




is

he is serving as Chairman in 1948.

Those elected to membership on
the District Committee
liam

D.

whereas

?of

916:

KCrr,

at

months of 1948 has been at

three-fifths

As

a

that

the

rate

of

result, the
amounts deposited

withdrawn

ago.

year

ably

a

in

narrower

down

.15%

than

as

are:

Wil¬

opening of 1947. Investments in
corporate and municipal securi¬
ties increased by $11,000,000, also
to a new high. Holdings of U. S.
Governments declined $96,000,000
and of cash $41,000,000. Since the
close of 1947, the savings banks
have added $567,000,000 to their
mortgage portfolios and $400,000,000

their

to

porate

investments

in

cor¬

and

municipal securities,
while they have reduced holdings
of IT. S. Governments by $317,000,000.
'

L j

Capital Distributors s

and
in

During the first 10 months
1948, deposits in regular ac¬

counts Were

$102,000,006.

by

a

1947.
of

loans

This is the greatest gain recorded
for any single month since the

gap

consider¬

is

1948

mortgage

com¬

*

CHICAGO,

ILL.—Capital Dis¬
tributors Corporation is engaging
in

a

securities business from' ofr

fices

at

135

,

South

Street.

Officers

Curtis,

President

J. G. Alther,

Salle

La

Kenneth

are;

ahd Treasurer;

Vice-President; F. R;

Hanson, Secretary, and A. Lucille

White, Assistant Secretary.

economic situation that the nation

faced in recent months, es¬
pecially since the midyear. De¬
spite the maintenance of national
income at record levels, people
are finding it harder and harder

John A. Dawson Adds

has

both

make

to

ends

meet.

The

figures cited show that they are

(Special

to

The

CHICAGO,

Chronicle) ...r

Financial

ILL.

—

Louis

-

<

D.

Blocksom has been added to the
staff
1

of

John

A.

Dawson & Co:,

North La Salle Street.

Bacon,

partner,

Corporate Debt Holdings bv Insurance GosI
Life Insurance

Companies report at end of third quarter of 1948,*'
18.5% of holdings in corporate securities against 17.6% in U. S.
government securities.

For the first time since 1942, life insurance investments in the
securities of business and industry represent the largest block of

policyholder funds at work, the Institute of Life Insurance reports.
This is shown in the third quarter report on 1948 investments of
Co., Kalamazoo; all U. S. life companies.
and Herbert
B.
The life company holdings of securities of this type were $18,White, Peoria.
Mr. Manley is serving as Vice538,000,000 on Sept. 30, up $2,794,000,000 since the first of the year
and 80% larger than similar investments prior to the war.
Chairman this year.
Pridr to 1942, corporate stocks .and bonds had always exceeded
Each office is to be held three
U. S. government securities in the life company holdings; since
years and the terms will com¬
1935 they have exceeded mortgage holdings.
mence on
Jan. 15, 1949.
At the
Third quarter purchases of the business and industrial secur¬
January 1949 meeting of District
Committee No. 8, officers for the ities were $934,000,000. In the first nine months of the year such
purchases were $3,327,000,000.
These purchases average $44 per
year will be selected after the
new
Committee
members have policyholder, an indirect extension of capital funds to the national
economy by those owning life insurance.
been installed.
'
Life company holdings of U. S. Government securities, largest
investment unit of -these companies since 1942, were in second
place in the third quarter; they still total $17,642,000,000 arid rep¬
resent 32% of total assets.
The third quarter purchases of $513,000,000 of the U. S. Government securities were more than offset
by maturities and replacements, net holdings of this type decreas¬
i
Edwin L. Tatro, who has been ing $1,016,000,000 in the quarter.
The investment report follows:
H'.
associated
with
Hoit,
Rose
&
(000,000 Omitted)
;
* It
Company for the past 20 years,
-Acquired—
—
——Holdings——

Edwin Tatro

Company
Opens in New York

.

.

.

announces

Edwin

of

a

formation of the firm
Tatro Company to
general business in in¬

Sept.

The

new

firm

New York.

U.

Railroad
Public

ciated with the Tatro organization

department.

in

the

was

I

L.

(U.

S.)__

All

World Bank Bonds
Farm

Chronicle"

of'

.

1947

$17,642

8

188

162

2,906

$20,538
t W8

156

181

1,286

1,340

7,932

103

120

1,691

1,212

6,248

34

162

257

<•

Sept. 30

Sept. 30

6,283

.

24

5

234

42

4

240

187
39

53

Securities

and

Real

Real

Estate

Loans

265

824

1,283

66

327

423

1,156

€53

115

1,112

1,022

6,074

5,300

Mortgages— $821

$709

$6,064

$49,165

$45,625

$7,726"
.

,

—

'.fi:

t

1

j

"

—

33

14*

21

—

-

i
-

37

961

2,050

180.

802

624

1,730

22

Estate—

Other

226

40

"

113

—

—

Farm

13

104

—

1,359

1,899

9

4,197

1,452
v792

20

Mortgages

Total

1948

3935

3

^

Mortgages

Other Mortgages

•

1947

2

Foreign Securities—

t
„

—

Mi^c. Bonds (U. S.)

Policy
v:

S.)

9 Mos.

1948

$1,449

1

and

(U.

9 MOS.

$123

13

—

Vet. Administration Mortgages:

Tatro

previously reported

"Financial

-^j Nqy. 18.
-'■r:

Edwin

S.)

Utility Bonds

Industrial

Stocks

F.H.A.

Formation, of

(U.

State, County, Munic. Bonds (U. S-)

.

John A. Doyle has become asso¬

in its trading

Bonds

Securities^

1947

$256

5

S. Government

Sept.

1948

L.

will maintain offices at 50 Broad¬

Wash.,
Company
deal-;
a

balances

their

about

accounts

Schneider &

as

mining'^stocks end listed

dad

Buhse

Mr.

completing three years as a mem¬
ber of the District Committee and

Jones' ticket service in their Kel¬

:$VORTH

upturn,

pared with the same period of
to the Board of Governors to suc¬
1947, whereas withdrawals were
ceed L. Raymond Billett, Kebbon,
up 8.2%.
McCormick & Co.. and Walter E.
In commenting on the report,
Kistner, A. C. Allyn and Com¬
Mr. Maude said, "The trend of
pany, Inc., Chicago.
Mr. Rogers
savings bank deposits reflects the
is a former Chairman of District

way,

SPOKANE, WASH. — Standard
Securities Corp., Peyton Building,
members of the Spokane Stock
Exchange, have installed Dow-

TWO WALL STREET

v

Buhse, resident part¬

vestment securities.

A. E. AMES & CO.

seasonal

During the first 10 months of
1948, mutual savings bank de¬
posits increased $524,000,000, or

of

whereas this

During O ct o h e r 'the sayings
banks increased 'their holdings of

The decline in

of

savings banks,

nevj money only
for one-half the gain.";

$4,-

amounts

pletion of their terms.

transact

maintained in that city.

NEW YORK 5, N

the

between

ceed members retiring upon com¬

H.

during the war as commanding
officer of the Service Squadron

'• ;

CHICAGO, ILL. —An election

ceed

dealer rela¬

Co.,:

corporation

Elects Governors

credited

past accumulations, ac¬
for
three-fourths
the

year

withdrawals did.

Co., Rockford, 111. They will suc¬
Howard E. Buhse, Hornblower & Weeks, Chicago; Milton
A. Manley, M. A. Manley & Co.,
Detroit; Elwood H. Schneider, E.

manager of

provincial

Cf

of

their

growth in the regular deposits of

a

000,000 in reg¬
ular deposits.

Co., Lansing, Mich.; and Paul E.
Conrads, Proprietor, Conrads &

government

'AN

offset

drop

^hippie & Co., Chicago; Gilbert
Si) Currie, £aftner, Croupe & Cp.,
Dqti;bit^ Neljson JL filbert, .VicePTesidenti'- Donovan^ .Gilbert, <Sc

Alex. Brown & Sons.

:■

than

more

opening of the year. For the same
period of 1947, the gain was $834,000,000, or 4.96% of the year's
opening balances. The increase in
total deposits during the first 10

more.

'(

counted

which

2.95%

Fi 'B. Cahri &

CANADIAN BONDS

District No. 8

NASD

has been held in District No. 8 of
were readily the National Association of Secu¬
absorbed as fresh U. S. oil and rities
Dealers, Inc., comprising the
mineral
investment funds
con¬
States of Illinois, Indiana, Iowa,
tinued to flow northwards.
The
Michigan, Nebraska and Wiscon¬
Canadian stock markets with the
sin. Members have been elected

trading
department of

.

special pur¬
accounts

pose

usual

redemptions

the

-

on

bond

m

>.,■

tinct from the dividends

in connection with the November

tegic plans for Northern-'ohemfcsphefle defense. TA^alfroad con¬
Boggs-b^'be^^li!
necting this country With" militarr
come''
^
ily isolated Alaska is long over¬
ciated
with
due, Early constructive develop¬
be" confidently

and

similar

William L. Maude
"the twentieth century be- charge of its public utility bond regular de¬
longs to Canada" will be consid- department.
posits reflects
the fact that amounts deposited in
ered as not merely idle rhetoric.
During the week there was a
such accounts failed to show the

_

ments

Christmas

Club

great Northern Empire will have

playing a notable
fdle'in the development of CanSchafer, Miller & Co., 15 Broad
atltfS Northwestern Empire per¬
Street, New York City, members
haps the greatest stimulus to of the New
western and northern expansion
York
Stock
Will be provided by the imple¬

elut

a gain
$15,000,000

in

ing up to civilization of Canada's

William H. Boggs

Although these economic

Sfcferations

saving less and drawing upon
savings accounts more fre¬
quently. Concretely, in the first
10 months of 1947, the net nevjr
money received from depositors
above their withdrawals, as dlsr

resents

The open-

shape along its route.

notably of uranium which give
farther zest to prospecting activ¬ exceptions of the Western oil and
ity, The greatest stimulus to ac¬ base-metal issues were generally
Western oils
celerated economic progress of the dull and inactive.
Canadian West however, is cur- have now clearly established mar¬
rfehtly provided by the important ket leadership and have replaced
repeated oil discoveries in the the golds as the popular specula¬
Province of Alberta. The estab¬ tive investment medium. Despite
lishment of the Leduc field placed the generally lower market sev¬
Canada
in
the
world
oil-map. eral new highs were established
Drilling results in the Redwater by oil shares including Angloarea gave
confirmation of Can¬ Canadian, -Atlantic Oil, British
ada's emergence as a major oil- Dominion,
Coastal
Oil, Davies
jproducer. U. S. and Canadian in¬ petroleum, Home Oil and Pacific
terests are now pressing further Petroleum.
north, with confident anticipation
of" making equally significant dis¬
coveries.
*
^

years.

their

rep¬

prospect- ) that

penetrate its previously unexplored northerly areas. Formeriy ignored rich base-metal depos¬
its4 which were disregarded in fa¬
vor of the more glamorous gold
are how in course of rapid exploi¬
tation.
Critical
world-shortages
hrid urgent stockpile requirements
of this country spur on the efforts
to, bring into production these now
precious metals: In the actual preOidus metal category there have
ors

also been

previous

Newark, New
Jersey.
The

worldwide repercussions surpassing by far in economic importance
the Californiaii and Yukon gold
Henry J. Mader
rushes of the last century. Then
month passes without; additional perhaps the challenging statement Henry J. Mader, formerly with
evidence of the almost incredible of
that great French-Canadian Tucker, Anthony &,Co., has be¬
mineral wealth of the fabulous Statesman,
Sir Wilfred Laurier come associated with the firm In
Pre-Cambrian Shield

increase in

Institution,

however

now

Maude, President, National, Association of Mutual
says deposits increased $524 million or 2.95% in
months of 1948, representing only three-fifths of rate of

Deposits of the 532 mutual savings banks of the nation increased
$11,000,000 during October to a total of $18,283,000,000,, according to a
report issued by William L. Maude, President, National Association
of Mutual Savings Banks, and President of The Howard
Savings

compel-, adian economic progress as the
ling causes which should operate' epic event of the linking of the
to bring about a rapid transforma-| Atlantic and Pacific coasts by the
fion of the Canadian western Canadian Pacific Railway. New
Jcene.
I mining, agricultural and indusMany of the motivating forces trial centres would rapidly take
There

first 10

New

By WILLIAM J. McKAY

L.

Savings Banks,

4.

:

29

204

'•302

132
'

249

63
I 952
2,023

85
710

.

,

1,908

Volume 168

THE

Number 4756

COMMERCIAL &

Defends Private Placements With Insurance Cos.
Leroy A. Lincoln, President of Metropolitan Life Insurance Co., in
memorandum to New York Joint Legislative Committee opposes
limiting privately purchased securities to an amount or percent of
total. Denies insurance companies are engaged in banking.
In

an

elaborate memorandum submitted

containing

CHRONICLE

We believe it

the

new

be well
almost ' all

can

which

were

beneficial both to the

Lincoln, President of the Metropolitan Life Insurance Company, to borrower and the investor. We
the Joint Committee of the New York Legislature on Insurance Rates agree, however, with the view of
and Regulations, he took exception to proposals to limit the growth the examiner referred to, to the
economic^

and

of

power

larger
ance

nies

the

insur¬
compa¬

and

de¬

fended private
loans
p

1

or

a c e m e

with
ance

nts

insur¬

compa^

nies

as

eco¬

nomical

and

sound meth¬

ods

used

in

extent that it would be desirable

should be free to diversify in the
manner
it feels. most desirable.

sidered

Leroy A. Lincoln

For

query

"Should

Private Loans

Placements Be Limited

or

Amount
There

as

to

Percent?" he stated: )
is no fundamental dif¬

or

ferences between investments ac¬

quired by an insurance company
through private placements and
these ""acquired
through public
purchase. Private placements have
become an accepted, simple form
of
financing,
advantageous
to
both the borrower and the lender
and

do not affect adversely, the
public interest.
The making Of
private placements is not limited
to insurance
companies, but is
open to, other institutions and
funds with money to invest. If
restrictions are placed upon life
Insurance companies the result is
that they will be placed in a
strait-jacket when seeking these
,

investments, while their competi¬
tors will be free to act as,they,

advisable.
Further¬
more, there is no more reason for
attempting to force borrowers to
raise their; funds, publicly, through
the investment banking fraternity
than there, is to require borrowers
desiring bank credit to negotiate
the loan-through an intermediary
who .would then choose. the bank
which would extend the credit.
Private placements represent one
means by which investments may
be acquired, just as purchase of a
public pffering is another means.
ipfcreht chanact^r and
*
ity of the investment should not
be, confused: with the method of
acquisition.
1
may

deem

Normally
amount

.or

sound

vate

-t
some

fifteen years now,

pri¬

placements have

useful

in

purpose

well

economy, as
ficial to the

as

being bene¬

life insurance busi¬

It is felt that

ness.

served a
the national

a

brief review

of

their
advantages
from
the
points of view of the borrower,
lender and public interest, would
to

serve

demonstrate

the

ness of the conclusions

sound¬

just stated

in regard to possible limitations.
It might also be helpful to review
of the

questions which have
been
raised
regarding private
placements by one of the examin¬
some

of

ers

the

New

Department.

■» ■ <

^

York

Insurance

■1

Private

placements are cur¬
rently taken to refer to invest¬
ments made

cial

by one or more finan¬
institutions In * corporate se¬

curities

through the* medium of
direct negotiation1 with the issuer;
While there have been a few in¬
stances where4 purchases of pre¬
ferred, stocks.have been made in
cases

the

form

of

sizable

in

practically

investments

are-

debt obligations.^
percentage of the

investment bankers act
or

as

all

in^ the
-

In: a
cases,

agents

financial advisorsr to the; bor¬

rowing

corporation and <are in
such cases normally paid for their
services by the borrower.
Such
transactions

are

in many ways an¬

alogous to" real estate mortgage
loans, which

are made by direct
negotiation with the owner,; or in
some, .instance^,; through the:, jn
termedlary services of a real es¬
tate mortgage broker.

vestment statutes are for the pur¬

tion

pose of diversification and .to pre¬
vent undue concentration in one

definite5 advantages

type of security, witness, among

The- advantages

on

the amount of

life insurance assets which may be
Invested
in mortgages, housing
and income
Were

such

producing real estate
limitations to be ap¬

plied to corporate securities, they
might, be applicable to the per¬
centage ofassets to he invested in

to be split between the borrower

and the lender.
.

(1) Lenders feel that, generally
speaking, they can obtain better,
that is to say, more effective pro¬
tective provisions in such issues;

(2) As indicated above, gener¬
ally speaking,

a

better yield is ob¬

tained because of

the

sayings in

involved.

expense

(3) In periods such as we have
been going through, when, sound
investments have, been difficult to
obtain, private placements have
provided a sound and attractive
channel for investment.

:

in

has, certain

this. manner

borrower and the

to; both

the

to borrowers
might be said to consist particu¬

larly, of the following:
(1) The ease with which direct
negotiations
between, borrower
and lender

can

be carried out.

to diversification of this char¬

terms

is

beneficial

both

to

the

the lender and the borrower. Practi¬
judgment of- the appropriate of¬ cally speaking, no such -adjust¬
which is now left to

ficials and directors of theJnsur-

ments,

companies, -should, continue
to rest there... Attempts te control
matter, of this sort -by? legislation
should not be made. Management

which

anee




(5) Are not private placements
less liquid than public issues?
The broad answer is "no."

Many
private placements provide for
exchange
into ; thousand-dollar
bonds, which could be sold as
readily as any public issue of
similar

character.

this is not the

Even

can

has

be made in

been

an

issue

publicly dis¬
tributed, the only available pro
cedure; beings one? ot calling .the.
original issue : and refunding ■ it
.

where

countenanced

common

stock

I know of no evils in

investment.
the way of

domination

or

control

which could be cited with regard
to private placements.

(2) Might control be exercised
through resort to the security of a
private placement?
.

insurance

No

loan

a

foreclose.

If,

company
ever
that it expects to

through

economic conditions

or

changed
other cir¬

cumstances, it does become neces¬
sary to foreclose
to protect its

it is true that the in¬
might through
reorganization become temporar¬
ily the oWner of some equity in¬
terest.
This, however, is equally
true whether the security origi¬
nally purchased is a public issue
or a private one.
Under, the New
York Law, the insurance company
is compelled to
dispose, of its
common
stock holdings" as soon
as it prudently can.
It may not
hold such issues as permanent in¬
interest,
surance

company

.

occasion,

case,

been done in the

past)

If the credit

standing of the issuer
deteriorates, there would be the
same difficulty of disposing of a
block of bonds that is experienced
with

public issue!
When; the
standing of a company; is
substantially lowered, the market
a

credit

for its obligations dries

very

up

quickly and that is true whether
the obligation has been publicy
issued or placed privately.
As a matter of fact, there* is
little
marketability for sizable
blocks of bonds in periods of
stress anyway,

speaking,
the

so

because, generally

many

when

time

try to sell pi
buyers pre

few

available.

,

v

The

really important point in?
volved in this question is thai the
business

insurance

is

not

which requires liquidity of
anyway.
able to
,

State

one

assets

It* would seem reason?
expect* that such United

Government bonds

as

Life

Insurance Companies may hold as

vestments.

.

,

.

-

■

term investments. In either event

should

From the nature1 of their busi¬

In a

free economy, management
have the right to make its

choice.
As a matter of fact, our Com¬
pany does not go out to solicit
such loans, but it is well known
that

we

them.

are

prepared

We look

on our

to

make

borrowers

A sound investment depends more

Furthermore, should conditions
limitation on the amount of any change at a subsequent date, ap¬
particular security in which a life propriate
adjustments may
be
insurance company may desire to made in the indenture terms by
invest when it is acquired di¬ negotiation. It goes without saying
rectly versus acquisitions through that the representatives of the in¬
an investment banker? A limita¬
surance company would be quite
tion upon the method of acquisi¬ as diligent in protecting the insur¬
tion' would be entirely novel as ance company's interests in any
well as unsound. This is not in¬ change in the indenture, as they
tended to be an advocacy of limi¬ had been in negotiating the terms
tations on the percentage of assets of the original investment. Over
invested
in
particular
indus¬ a period of years, situations often
tries. Our feeling is that decision develop under which a change in
acter,

not

.

private placement method.

lender.

loans
/

if the char¬
trol does not rise.
Were life in¬ acter of a security remains top
surance
companies permitted to notch, the chances are there would
buy common stocks such ques¬ be little difficulty in disposing of
tions might be raised, but the the obligations to one or more
New York Law very properly has sizable purchasers.
This" has, .'op

,

the situation at the time of issue.

as

mortgage

,

advantage of being of assistance
to them aS well as making sound

irrespective of the method of ac¬
quisition.
Is there .any reason
why. there should be any different

estate

.

(3) Flexibility—terms are ne¬
gotiated on a tailormade basis to
fit the particular requirements of

concerned,

Companies.
Since private placements in prac¬
tically all cases are in the form of
debt and carry no voting rights,
the question of domination or con¬

real

made.

.

applicable to the total investment
classification

or

to New York

as

the

permanent
investments
would
provide all the liquidity necessary,
(3) Should
not
all security
(6) Would it not be desirable to
issues be registered with the SEC?
This question was considered require private - placements to' be
(1) The
insurance
companies
at the time of passage ; of the act. amortized at some specific rate
invest the savings of many mil¬
<
The purpose of the act was to during the life of the loan?
lions of policyholders,
most of
As a matter of fact, the bulk of
protect the inexperienced investor
whom are people of modest in¬
by public disclosure ofvall per¬ private placements are made with
come.
These
people
are
not
tinent facts, and no attempt was substantial sinking funds. .This la
trained in investment :matters but
made' to * channel the - flow of all true particularly of the industrial
are accumulating savings through
private credit through, a Federal loans. Incidentally, these .amor¬
personal sacrifice.. Surely, if any
Government bureau. Since insur¬ tization payments do provide >ah
group in the Country is entitled
added source of liquid funds. To
ance company investment officers
to have their money, invested with
are
experienced in investment try to legislate' on such ia matter;
maximum security and the best
matters and capable of ascertain? however/ would be; a great: mis¬
possible interest rate consonant
interfere : with ;. the
ing all /pertinent facts for them? take: and
with safety, it is this group of life
selves,. specific exemption from proper responsibilities of. those,
insurance company policyholders
the registration requirements Was determining the- indenture provi¬
who, have: endeavored
.through
sions.
It is extremely important
thrift to miake provision for .their very properly made for private
that such matters be discretionary
placements.
*
families and their own old age;
so that indenture provisions- best
(4) Are insurance companies
(2) Industry: has demonstrated
suited to the particular case jnay
its desire for this simple and ef¬ doing ' a; banking: business- in-in¬
be provided.
.V.
vesting in private placements? It
fective means of obtaining ; its
In purchasing private place¬
has not been clearly' stated- as to
long-term, capital ' requirements;
ments of life insurance companies
It should continue- to have avail¬ whether "banking business" means
are performing the same function
able to it the alternative routes commercial banking or investment
as they do when purchasing bonds
of handling; its financing/ There banking, but - in either event, the
underwritten by investment bank¬
answer is "no," except insofar "as
are times when industry may well
ers and sold publicly. That is to
prefer a public issue, and other the personal relationship referred
Say, they are merely-making longtimes when it will
prefer the to above is concerned.- <'■■•>

the* standpoint of the pub¬

From

much

the

'no"

rarely dispose of either the
corporate securities purchased of

lic interest, the following may be
noted:—

(2) The speed with which bind¬
ing commitments can be entered
Particularly in periods of
the oU industry, the public utility into.
industry or some other industry, fluctuating markets this has con¬
but in this, event they should be siderable appeal to borrowers.
in

domination

control is exercised? The answer is

makes

From
the
standpoint
of the
lender, the advantages include the
following:

which

by

means

U

and

.

this ^manner,,

Private placements- are no dif¬
ferent in character. or security
limitations
as
to from publicly offered issues; but
percentage in the in¬ the carrying out of the transac¬

other limitations

method of advising

very

roads'.

to the

some

investments.
We
(4) Savings in expense which
change in their credit includes both registration and is¬
standing which took place with sue costs, as well as underwriting
the introduction, of private auto¬
and distribution costs.
Such sav¬
mobiles, Ibuses and hard surface ings might normally; be expected

of

answer

devise,

all know the

their funds. In

investment

to

the supervisory authority, that is,
clearly that the Insurance Department, when
the credit standing of a particular indenture changes are made.
We
industry may change radically believe, however, that this should
over the years.
For example, at be the subject of departmental
the turn of the century,'loans to regulation and that legislation on
interurban trolley lines were con¬ this subject is unnecessary.

History indicates

(2295)

vate placements provide the sim¬
plest and most direct route.
demonstrated - that
The following questions have
raised
changes in indenture provisions of been
regarding private
private placements made subse¬ placements:
quent to the time of. the original
(1) Do they not provide the
one

,

terms.

issue (and there have been many
of them) have been for purposes

Nov. 22 by Leroy A.

on

with

FINANCIAL

as

a

bank looks

on

its de¬

positors and its borrowers.
endeavor to

problems
this

view their financial

constructively

manner

We

and

in

there is the mutual

investments for our policyholders.
on

character and ability of those

charged with handling the affairs
of a company than any other fac¬
tor.
The negotiations leading up

commercial banks- must he
highly liquid to meet withdrawals

ness,

oil short notice. As a consequence,

their assets
to

finance

such

as

are

the

customarily used
short-term needs,

seasonal

or

temporary

loans, of business. The life insur¬
ance
companies obligations are
long-term commitments with little
need for liquidity, and their in¬
vestments are customarily long?
term
in character.' Commercial
banks are banks of deposit where
individuals or corporations may
deposit funds subject to with¬
drawal the bulk of such deposits
being withdrawable ,on. demand,
the lesser portion on some limited
.

companies
such function.

Life insurance

notice.

perform no

Commercial banks also

.

they must appraise the security
and judge for themselves whether
the interest return obtainable ap¬

propriately

measures

the

credit

I:

risk.

conclusion, we . submit that
ho Weaknesses have developed in
In

the private

placement procedure,

but, on the other hand, there are
strong advantages to all
con¬
cerned. Under these circumstances,
we do not deem it desirable to

place

limitations

amount

either

percentage
form of investment.
or

I,

as
on

to
this

o

Grafton

Wiggins

Rejoins Paine, Webber

can cre¬ !'
Paine; Webberj Jackson & Cur¬
in the form of deposits tis, 25 Broad Street, New York
by making loans and crediting the City, members of the New York
proceeds to the borrower's deposit Stock Exchange, announced, that
account, a function not* possessed Grafton Wiggins will join the
by the life insurance companies. firm's New York office as a reg¬
route.
The investment officers of Both institutions do lend funds, istered : representative
handling
the life insurance companies have one customarily on a short-term investment trusts accounts, effec¬
the major responsibility as to the basis, the other customarily for tive Dec. 6.
security of the investments made. long terms, but here the analogy
Mr. Wiggins previously was as¬
They should continue to make use ends.
sociated with the firm from 1931
If the reference is to investment to .1941. -He leaves Albert Frankof this method of personal investi¬
gation.
These y." savings
of the banking,- no close - analogy is Guenther Law,? Inc.;. which*he
people- are not static—they must present either.^ * Their,biiainesa;is joined early in 1947, following;
be invested ' ami : reinvested In the, to underwrite- writs
Release: flOmthe Army.-Birv
safest, most -expeditious manner they»make> as?-:p«wupGPHW/#P0f; gins served as ? a: lieutenant
possible to afford the "greatest- w? sible,-whereas»tife'inaua*a««rrCO(mr Cqidhef- in HteiArmy^Air fekto
turn consonant with security. Pri-. panics - are^ lo«g-tenn.fc infefctors feomro*! tu l946A
^* V»*/.^'.

private placement give the in¬
company's
investment
officers an opportunity to study
the management and its detailed
operations in a manner seldom
offered through the public issue

to

surance

ate money

.

.

20

THE

(2296)

COMMERCIAL

FINANCIAL: CHRONICLE

&

Thursday, December 2, 1948
Labor and Farm Policy

Servants of the Kremlin

Truman Promises

"The

By ROGER W. BABSON

President Truman's promises of higher
and lower consumer costs, holds
only way they can be kept is by subsidizing key employers and
making taxpayers meet the bill. Calls on President to make some
statement to revive business confidence.^
support for farm prices,

wages,

promises. They were so sure that Mr. Dewey would win that
didn't bother to read Truman's speeches during the campaign/

order

t.

Truman's

Democrat

promises.
lieving

with

if

4
\ W

-

iii

1

1

1

I

:

read
Mr.

1

take

f/W?

BeMr.

,

more

his

in

stock

1

promises than

I

in those of his

distinguished
predecessor.

k

s

unable

been

have

I

businessman

find

to

Republican

—

a

or
*

■

out¬

The

i

standing

pro¬

-

plans not

-

ranged

~

improvements to machinery, ma¬
terial stockpiles, etc. This back¬

log should keep gross * business
fairly good during 1949. Net earn¬
ings and dividends, however, are

/

1

-

with

radical

or

possibly a return to the Wagner
Act.
Although the revised Act
will
give employers
the same
rights to talk to their wageworkers

that

labor

leaders

now

have, yet most of the changes Will
be mudh to the advantage of labor
in getting their fourth round of

increases. Talks with

wage

some

labor

leaders indicate they
are
willing to agree to the Communist
provided it applies also to
employers.
test

Mr. Truman
that

continued

also

he

..

.

tude regarding the

stock market:
"Eliminating
the
possibility of
more inflation, it may be wise to
take profits at the present time.
A few safe- common stocks, how¬
ever, are
a good hedge against
inflation along with sound educa¬
tion for your' children, producing
real estate/ good furniture, rare
diamonds, and solid gold neck¬
laces, even although the quota¬
tions for all of these things may
decline during the next two or
three years."
v
r;
' •

price supports and

all

other benefits which farmers now
have.

So

far,

good. But Mr.
step further. 'In

so

Truman

went

addition

:

a

to

promising

higher

wages and supported farm prices,
he further promised lower retail

prices
«this

to

is

Of

consumers.

much

like

course,

promising*. to

^make 2 and 2 add
^Truman

up to 5. As Mr.
time to think 'this

has

corporation.

a

This

are
P. J. Munn, President
Treasurer; Edna K.-Jackson,
First Vice-President; Florence T.
NoSworthy,
Second
Vice-Presi¬
dent, and G. R. -Griffin, Comp¬

■/

over,

promises—to

His

consumers.

trusters

labor,

farmers

New

brain-

Deal

tell him that this
can
be
done
by reducing the
profits of corporations, but ,-of
may

this would tend to reduce

course

production.

Itwould

"sinking the
Tats."

/»;

ship

be-- like

to clear it*of
;

f

,

policy used in many industries
during the war. It is "beating the

dfevil

around

the

bush,"

consumers

considerably

but' in
price to
more t in

dollars than the subsidy amounted
to. Pit the other hand, as in the
case

of

potatoes, there

stances

where

it

was

in¬

were
a

terrible

and

Co./ and
Bay City
office, will also join the staff of
Miller, Kenower & Co. ; "I r; J ■

consumers,

throw one more gift to certain
manufacturers, so that production
Of
taxes.

course, this means higher
All subsidies
must
ulti¬

mately be paid by the taxpayers.
I, therefore, would expect to see
,

an increase in corporation taxes,
and possibly in personal income

taxes
*

to

care

of

these

sub-

sidies which would be in addition
to

our

for

a

tremendous

armament

"peace"

.

take

at

abroad.

tremendous

yell

against

be

.deficit budget would require the
issuance

of

more

and

bonds.

This

would surely mean further infla¬

tion.




people

as

economic

mandate

a

in

on

the

fourth

showing
who

are

also has
does

-

birthday. He was
pictures of the twins,

adorable children.
one

raise

luscious

Ask him

too.

Jack

older chikLHe.sure
for

strawberries,

his formula!,;

Now Woolfolk & Shober

?

ideas that have

significance

-

business

ORLEANS, LA. — The
of Woolfolk, Huggins
Shober, 839 Gravier Street,

&

>

name

.

members

Stock

of

the

New

Orleans

Exchange, has been changed

to

Woolfolk &

no

other

Shober.

change.

There is

collec¬

protection of fhe public interest
in disputes that threaten health
and safety.:
Unless these mini¬
needs

are
met, it is to be
labor-management re¬
will
become
again the
drag on enterprise that

they unquestionably

'

were

under

•

>

"Agricultural policy wyas nob a

clear-cut issue in the pre-election

campaign.. Both major Presiden¬
tial

candidates favored

tion of the practice of
farm

prices and there

continua¬

supporting

seems to

be

to suppose that Federal

reason

' policy in this respect will be sub¬

a

stantially different from what;it
have been if a change of

would

/

administration
Some

.had

since

reports

the

occurred.
election

have suggested that

a flat support
parity may be
urged in place of the sliding scale
provided for in the present law.

at

price

90%

of

offi¬

no

cial confirmation of these reports
and it is to be

hoped that no such
The great¬
change will be made.
est virtue of the existing law, as
compared with its many predeces¬

1

sug-

is

sors,

clearer

that it is based
recognition of the

or

not, it is clear that

on

a

neces¬

those

to

affairs,"

who

states

Anti-Inflationary Measures

j

"Among, the questions of most

immediate
Events

is

concern

to

combat
to have

seem

that

of

inflation.

proved that

the

proposals
prospect

ous

done its worst

may

or

by

un¬

already have

damage.

"How many of the

-

./

;/

recommen¬

dations -proposed by the President
last summer will be repeated at
the next session is

an

The situation

tion/
in two

the

bpen

has

ques¬

changed

important respects.

First,

the

time

"•

;

"With

Outlook

Fiscal

The
/

respect

to

fiscal

policy,

is that the

outstanding fact

President's

possibilities,

will

consideration.

difficult

to

receive
would

It

think

of

worse

a

anti-inflationary device

than an
excess:
p r of i t s
tax,
with
its
tendency to reduce production and
its

almost

down

policies,

/

■

effect

on

infinitesimal
the price

pricing

potential

level through

policies

of 'corpora¬

-Direct price control broke

disastrously

in

the

early

postwar

period because it re¬
stricted output and created black
markets and thereJs every reason
to believe that it would be even
more

unsuccessful now,

in the absence of wage

which has not been

posed.

Much the

especially
regulation-,

seriously

same

pro¬

is true of

rationing; it is most unlikely that
the ^people
could be induced to
submit to it in

they

were

peacetime,

even

if

convinced that it would

to which

extent

might

tions.

given new
seeable
emergencies

enactment;
even t more

the

character. Fortu¬

accord and, un¬
force by unfore¬

little

leave

would

and

prospect that the system could be
maintained over a long period. /

gerous

destructive

own

realistic

lem and .all of which contain dan¬

the

.

seri¬

Program
Administration
now
being
re¬
"Despite changes in the situa-- turned to office has never shown
tion, there is ample reago# to fear a real determination to reduce the
that at least some of these meas¬ cost of government or an adequate
ures, most of which have no basic appreciation of the gravity of the
Here, again,
relation tp the inflationary prob¬ existing tax burden.

ing with,superficial remedies of,a
painless
but
really

supposedly

their

beer

any

the
The

be

program.,
If this is
the case, it would be better to face
it squarely than to continue toy¬

of

question seems
pertinent toady.
../

serious

is not prepared to
rigors ahd perils of a

have

The

the 'country

the

would

made if there had been

sliding scale of the present law is
questionable, but a flat 90% guar¬
antee would
be completely un¬

have-/been

different election

certain.

All that

the

outcome
can

essential

a

un¬

reduction

no

in

clear
non¬

expenditures or
recognition of the need

Federal

of official

for

by
is

be said with

confidence.is that^There is

prospect / of

outlook

changed

encouraging the flow of ven¬
capital into industry.
/

ture

,

expenditures for national
defense and foreign
aid; almost
certain to continue at high levels
"With

for several years at least, the ne¬

cessity

for

divisions

is

a

less

*

of

economy
in other
the Federal budget

great urgency.
substantial budgetary

matter of

Un¬
sur¬

pluses can be achieved at present
levels of national income without
further increases in the already

load of

crushing

taxation, there

little likelihood
that further inflationary increases
in
the
national debt can be
avoided over the long term."
would seem to be

proposals were
made, the wholesale price level
had risen almost steadily for about

NEW

firm

/•

.

Guaranty Trust Company of

measures

at

..

labor

of

of

sity for price flexibility as a re¬
apparently regard the vote flection of the supply-and-demand
broad political, social
situation. Whether adequate flex¬
guided Federal policy for the last 16
ibility is permitted even by the

Guaranty Survey," its
monthly ^review of business and
financial conditions, published today.
1
\ :
'

Nov. 20 when his twins celebrated
their

In

a t i o n s/to
-labor and marlagement alike, afid

V;

policy.^
-7-*
// ■■ /
as set forth
by the President and had last summer.
It was widely
other officials, have taken on a doubted at that time whether all

laxing of its

town

ap¬

in favor of the

the current aspects of that

sound

man

forms•

the Wagner Act.

of injurious economic
a ruthless foreign

Whether this interpretation is correct

years.

Building,. Seattle, Wash.,
busiest

"extreme

more

serious
.

v

V.

-

*•

however, is
contemplated.

not

"The victors in the national election
the

less

the

amendment,
mistake.
This,

lations

servants of

are

'

of

Jones,
President * of
Hartley Rogers & Co., 1411 Fourth
was

of

corner

retutn

a

feared that

/

/./•;:

substi¬

a

Act, without majbr
would be a serious

'

not

consideration, despite fact that
gested proposals would merely worsen situation.

E.

such

increased taxes but otherwise the

«

<

nately, recent trends* suggest, that
inflationary pressure may be re¬

Twin Bill

expenditures
home
and

There v/ould

they

inflationary

& Co., 115 Broadway,
New York City,-members- of the
New York Stock Exchange, will
admit Rudolf E. Knepper tb part¬
nership on Dec. 15.
r

Jack

**-

*

of controls will receive serious

Avenue

will not be curtailed.

v

,

vigorous and thoroughgoing anti-

Admit j

Waller

-

was

small

one

face

labor,
he will

;

v

who

as

that

certain

application
tive-bargaining obi i g

'

'

*

emerges

is

monopoly,

Says Controls Would Stimulate Inflation

P/Breeri arid

fice of Marxer, Jones &
Norman D. Lamar of the

(

:;

-

later will have to be cleaned

"The

to

*

-

It

There seems to have been

conduct

farce. It really means that in ad¬
dition to thnowing favors te
farmers

sooner or

New York in the current issue of

Waller & Co.

*

•

im¬

possible substitifte
legislation, t h.r e e requirements
stand out: safeguards against the

dictator.

new
r

DETROIT, MICH. — Following
death of George Marxer, the
of Marxer, Jones & Co. is
discontinuing business," Harry H.
Jones, has become associated with
Miller/.Kenower & Co*, and will
operate a branch in Saginaw' ior
William

<

"

.

but

discloses

firm

firm.

—

*

4 *.

merely, advocates

nonsense;

,

h

not

are

Ross McAllister of the Detroit of¬

>

The only way that these three
prmises can be kept is by sub¬
sidizing key employers. This .was

many cases it reduced the

Miller, Kenower

suit

the

thht

/;

Only One Way Out

-

-

Join

/

and

*

<;,•*.

primary

the framing of

The communists in this country for the most part /.'

cers

he will realize that it will
be very difficult to keep all thfee

*1

or one

thoroughly.

up

Offi¬

•

"

Guaranty Trust Company of New York, in its monthly "Survey,"
holds despite changes in inflationary situation, President's
program

and

troller.

/V

t >

union officer

a

"mess" which

BOSTON,- MASS. — Jackson &
Co., 31 Milk Street, is now doing
as

'

•

of

to the Wagner

no

\ Jackson Co. Incorporates

business

*' ❖ '

•

'

trical Workers Union suit.

for

work

,

question

parently

juncture of world affairs such a
risk is too dangerous to be run in our atomic energy
program."—Government brief in CIO United Elec¬

promised the

would

.

"At the present

.

farmers

':

.

new bill

a

based

on
the
proposals to Congress

of law

tute.

mum

atti¬

amendments

■

loyal to
the interests of the United States could precipitate
a strike actually in the interests of a
foreign power,
but avowedly for legitimate trade union purposes
and accepted as such by the tinion members.
/

Truman made

prevent

*

•

•

,

"Thus

Dewey are now crestfallen and
discouraged.
President
Truman
was that the Taft-Hartley Act will
certainly should make some state¬
"be repealed. Only a coalition of ment to revive the confidence of
Republicans and Southern Demo¬ businessmen or else the present
crats could prevent this, and I decline may run into a riot.
am sure that even they could not
Now, as to the New York
Roger

/

.

all pepped up to go ahead
expansion programs under

were

j

.

mise that Mr.

Babson

.

'

membership/may-be usfcd to halt production in the / /
interest ofaforeign power.*// /:;// /r
r :
"< - V.• *'

^

off. Businessmen who

sure to fall

sort

,'

experience/ notably in* the strike in the
Milwaukee plant of the Allis Chalmers Company
in the interlude between the Russo-German pact of
1939 and the German attack on/Russia in June,
1941, teaches that labor unions under Communist,
leadership, however/ innocent the rank and file

*

drafted,

Hartley Act is repealed, but what

;

"Past

who is going ahead

—

new

"The

,

already ar¬
for before election. Of
Truman
is
course, there are great backlogs
honest,
they in industrial building, new homes,

I
1

to

about

being

portance is not whether the Taft-

to

f

of

it is reported that

in January, 1947.

■

-

back

I

atomic energy

on

The Pres¬

consistently stood for
the. Taft-Hartley Act,

President's

agents of a foreign power, even at the risk of severe
criminal penalties. ■
'
.
*/

requests for$
copies in What About Business Confidence?

r—

is

prove

disclosure of restricted data

Now
being beseiged by

the New York "Times" and other newspapers are

and

labor-management

less clear.

are

has

repeal

their faith by deeds where
opportunity affords, notably in the unauthorized
ready to

ever

analyze Mr. Truman's
they

Leading businessmen are now trying to

ident

foreign power. As the recent report of the Cana¬
dian Royal Commission bears witness, the party
and 'fellow travelers' in sympathetic affiliation are

-

with respect to

relations

history of the last decade records in con¬

vincing detail the prompt and faithful adherence of
the Communist party to the aims and policies of a

Mr. Babson, commenting on

"The implications of the election

really be an effective anti-infla¬
tionary
measure. ;
Compulsory
allocation, inventory control, and

five

regulation
of
commodity
ex¬
changes would involve dangerous

Joins Hollev,

interference

Dayton & Gernon

months,

trend has been

since

whereas now the
as steadily down¬

late

September and
the level is the lowest since early

ward

Second, the recommenda¬
tions, if repeated at the next ses¬
sion, will have a much- better
chance of acceptance than they
May.

.

mechanisms

with
and

free:

market

managerial

dis¬

cretion; and regulation of
modity exchanges is without

comx

theoretical

anti-

inflationary

merit

weapon.

as

an

(Special

to

The

Financial

Chronicle)

MINNEAPOLIS, MINN.—Frank

even

.

A. Warner

is with Holley, Dayton

Rr
.

"RanH

(Tprnnn

Tower.

Volume 168

Number 4756

THE

COMMERCIAL &

Drift Toward Collectivism
"New England Letter/'
Says for nearly two decades government has been operating pincers
on industry so that corporate income has fallen short of meeting
fresh capital requirements. Sees similarity of current governmental
philsopoby and fiscal policy to those employed by totalitarian powers.
"There must be

a change in our concepts of money and wealth,
adopt sound policies in keeping With our economic

must

we

capacity,

or

shall continue, our drift down the road to collec¬

we

tivism," says The First -National Bank
New England "Letter." Continu-^

ing the bank says, "This is the
price that is to be paid if the

of Boston

in

its

current

———

-——-

facilities over the next few
But

this

years.

is

only the beginning.
industrial
American people permit them- The
application
of
selves to be bamboozled by siren atomic energy and other scientific
voices into selling -their 'birth- advances will constantly open up
further opportunities forexpan1 right for a mess of pottage.'
"Generous promises of benefits sion.' So we are presented with
; were made
to nearly all major a dilemma' of trying, to eat our
groups, during the recent Presi- cake and have, it, too.
*

r

'
,

cluded
.

Federal

clearance, aids to shools, liberal¬
ized social

.

i

v

These items in¬
housing,;
slum

security,'health

insurr.

expansion -of - public works
projects, government support of

-anee,

.

farm

prices,

higher

;

for

wages

teachers, Federal ^employees, and
factory workers,'and the like. On
the other hand, practically no
.

-

mention

made of

was

stagger¬

our

ing outstanding obligations, how

"Suchi

disregard of the true
nature of profits as characterizes
the cdrreht suggestions toV'soak
,

a

the rich'

and

penalize successful

business

enterprise is a ' short¬
sighted, policy. It "Is like f iring a
shotgun into the crowd. In the
long run such a policy jeopardizes
all interests,

rich

and

As
a matter of fact, it is the worker
who is the most severely pen¬
alized

since

lack

of

poor.

commitments

would

be

seed money

means

this

process

this period,

over

would

be

carrying

the

country

corporate income, despite its cur¬
rent high level,
has fallen far

doWn the road to dictatorship. We
have, already gone a long way in

short of meeting the fresh capital

The current gov¬

requirements for plant expansion,
new equipment, and the develop¬
ment of new processes. The funds
used for this purpose are known
as

'seed money' since the proceeds
increased

for

used

are

through

ernmental

philosophy and fiscal
this country bear a
striking similarity to those em¬
ployed by the totalitarian powers
policies

past and present."

distributed

Fred J, Armentroot

With Pragh, Combesl
(Special

governmental

channels,
which is urgently needed for the
-development of our productive
facilities, is equivalent to eating

'the seed corn.

"It is true

in

produc¬

tivity to take care of the growth
requirements of the country ' and
ever-higher living standards of
nut; people.
To use money * siph'oned off by taxes and

that direction.

to

Tie

Financial

KANSAS "CITY,

MO.—Fred

J.

Armentrout has. becpme associated

not so much a

matter of
flation

or

de-

f 1

o

t i

a

even

a

cialism

t

rd So¬

ow a

and

Communism,
but ari/exam1 e of the
driving force
of mounting
bureaucracy
p

currently running at record
high levels. But as we have pre¬
viously pointed out in our 'Let¬
ters,' this is an abnormal period
and the profits, of m.any, industries
may prove to be illusory.
Any

j

tasies.

•material,

and taxes

has .been

Sharp: that many firms must
ate

at

a

level

before the

war

1 If
WnM

oper¬

"as ", high

twice

so

as

"Now, with
the

Clinton T. -Revere

last elec¬

tion

a

instead of

memory

litical

anticipation,

sider

some

of

about

double

,

the

period

prewar

wheteas the deductible, deprecia¬
tion

allowance

purposes

is

for

based

Federal
on

tax

original

coats. In consequence, the reserves
that can be set aside, for obsole¬

Fred. J. Armentrout

.

have-been

terminologies, alien in spir¬
it, have crowded upon us for con¬

of

we

look upon some

the

legislation* and executive
directives, with their inevitable
consequences of mounting debt
and menace to national
solvency,
new and
ugly spectres have in¬
truded upon our uplifting dreams
of a destiny hitherto decked out
with a divinely inspired freedom.
"What.are these strange shapes

ance?

They probably

recent

was

not
or

of

Armentrout

was

McDonald & Co.
was an

& Co,

effect, of

was

the contempt

have

created

the

greatest deficiency in capital fa¬
cilities,

ever

message to

known.

In his annual

Congress last January,

President Truman stated:

'We

are

today far short of the industrial

capacity

need for

growing
future. At least $50 billion should

be

we

invested

prove

a

industry to im¬
and expand our productive
by




to

The

CHICAGO,

Financial

block for the

H.

La

held

were

forth

as

a

lure

Further wage

dangled before the

of the workers, and now, as
evidence of their arrogant as¬

eyes

A.

become associated

Paul

was

increases

Chronicle)

ILL. —Richard

Wernecke has
with

to have been

officer of John J. Seerley highest bidder.
Although farm
prices literally were at record
heights, the bait of still higher

.(Special

replacement. On the other

in which

national character seemed to
be held. The nation's suffrage al¬

for the rural voter.

_

al¬

our

levels

hand, during the past decade and
half obsolescence and physical

toward

mounting: bu¬

formerly with most might be said
In the past he put on the auction

aqd^repair, without penalty R. A. Wernecke Joins
rulings of the Treasury are
wholly inadequate to cover the Paul H. Davis Co/Staff

deterioration

election, by

trend

a

under

a

be given

Communism,

scence

cost: of

can

many names, but here they are in
simples—Socialism and Commun¬
our

an

sumption of

power,

some

of

our

labor leaders propose the "purg¬
ing" of lawmakers who dare vote

Salle

South

Davis

&

Co.,

10

Street, members contrary to their demands. Hither¬
and Chicago to, only one man had ventured to
exercise the "purge" against those
Stock Exchanges.
Mr. Wernecke
who opposed his will.
Was formerly in the trading de¬
"Disheartening as this spectacle
partment of the First Securities of decadence
may appear, it should
Company of Chicago and prior not be construed— at least not yet
of

the

New

York

thereto with Brailsford & Co. "

—as

a

inquire for a key to the
of bur problem, we will

the appeals

Of historically ^dem¬

onstrated failures."

in¬

Other

sideration. As

we

.

po¬

a

question of whether
Democracy or a Republic.

a

its

Of: safeguarding bttr
America with its lessons and its
the urgency

might con¬
reactions by

to ponder the

sing
with Prugh, Combest & Land, Inc.,
1Q16 JBalt tmor e Avenue.
Mr.

and what undoubtedly isotir

we

the

which the results

this is

"If

solution

practically identical in the appeal
they offered. Also deeply distres¬

'

groups have no

scheme.

aspirations, instead of yielding -to

lacies are exploded.

vere:

groups.
Promises there were, ad
nauseam,
by -the two; leading parties, but

in order to break

just a moderate decline
in operations would slash profits.
Finally, replacement costs are
even, so

a

not of America.

These odious twins possess tory,

peal:

reaucracy and the driving -power
of self-seeking pressure

■

seeking pressure
place in such

But they finally pass into
the shadows bf time -as their fal¬

nicious
•i'

we

ing groups.
Says Mr. Re¬

though perhaps no less shameful.
In that early November
plebiscite,
what we witnessed was the per¬
-

What

and self seek¬

tion

wages,

——

Communism.

certain amount of vitality that; appointed destiny, holds before
derives from a quasi-religions ap¬

Socialism

sharp decline in prices would copvert black figures into red. ^Fur¬

thermore, the rise in costs,

;

or

.

a

is presumed to carry
these imports.
"No conclusion could be more
absurd and shallow. The implica¬

is

freedom, backed up by
honesty and the honoring
of contractual obligations. These

They are
They stem from
alien weaknesses, leaning for cen¬
Polybius called 'an appetite for turies on
the grudging. grmite
gifts' to come from a paternalistic
wrung from totalitarian arrogande.
government.
This phenomenon
A free people has no need of. a
differs from Socialism or Com¬
paternalism
that degrades
the
munism in that, it has none of the
spirit of its beneficiaries and takes
top-lofty -pretensions of idealism
far more than it gives. Our, his¬
that characterize these t#o fan¬

far too many,

corporate income

The funda¬

is

courage,

have witnessed, in reality, is the
sordid shame of catering to what

n, or
trend

cialism

v,-"—;——

—-■

in¬

ism—and

,

thai

It means la
revival df,

are
the tools
of progress, not
merely material progress, but that
Spartan quality of
the spirit
where the soul, instead of the
exchanges, in a recent circular, entitled "Cotton and Other Prob¬
belly, exerts its supremacy over
lems," published by the firm, finds in the national election outcome the
character of a nation. Self-

that crpwd upon our vision of na¬
tional well-being and world guid¬

Chronicle)

a

Cliiiton T. Revere, partner of Laird, Bissell & Meeds, members
of the New York Stock Exchange and other securities and commodity

s

of

ment

and driving
of self-seeking groups, who, instead of seeking own welfare,
desire bounteous paternalism.

'killing the goose that is
terpreted. By way of parenthesis,"
financed, or the need for increased laying *the golden eggs,' with i:he
we might state that this is ng time
productivity which is the only consequence that potential jobs for
prediction of "boom or bust "
primary source that can provide are destroyed.
or prosperity or depression as an
"But the master planners will
these betterments. It would seem
outcome of what happened at the
that it waspnly a matter of com¬ say
that the
government can
polls on November 2. The ques¬
mon sense to give some thought furnish the necessary funds.
So¬
tion before us transcends the mere
cialized credit and other govern¬
to our outstanding commitments
materialism of prospective infla¬
and our capacity to carry a larger ment subsidies, however, are nar¬
tion or deflation. It rises far high¬
cotics that dull personal initiative
load.
'
/ /<
er than one of food, housing, "se¬
and stifly enterprise.
What ap¬
'Tor nearly two decades the
curity/' etc., etc. All these things
pears like 'manna from heaven'
government has been operating a
may be essential, but they can
would in reality be a drug like
pincers on industry by promoting
come as a permanency
only if we
opium that would make the peo¬
and abetting measures that have
know the answer to one Mighty
ple prostrate and helpless. While
artificially greatly increased costs
Interrogatory — Where Stands
the people were lulled by the
—particularly wages and taxesAmerica? Where does America go
while on the other hand, attempts 'benefits' of the vast outpourings from here?
of their own money from taxation
have been made to place a ceiling
"We need hot pause at this time
and borrowings, relentless forces
•on industrial prices.
As a result

ihe? mew

of national character.

Return to, or at least
the American way.'

rather the pernicious effect Of mounting bureaucracy
power

21

find it in the Overriding element

Clinton T. Revere Of Laird, Bissell & Meeds, says recent national
election should not -be construed as surrender to Socialism, but

.

dential campaign.

(2297)

Danger of Bounteous Paternalism

First National Bank of Boston, in current

and

FINANCIAL CHRONICLE

definite surrender to So¬

The railroad bond market had a severe

test last week and came

The largest offering of new bonds, to reach
the market in well over a year attracted bids from two investment
banking groups. Considering the experience with the $30 million of
Louisville & Nashville mortgage bonds at the mid-year, there had
been considerable difference of -opinion as to the probable public
reception nf $40 million of Chesapeake & Ohio Refunding & Improve¬
ment bonds.
When the bonds were offered, however, they wefe
quickly sold out. In comparison with other rail issues of comparable
caliber, and with Other series of the same mortgage, the 25-year
maturity was very attractively priced to afford a maturity yield Of
through successfully.

*
Despite the success of the financing the company's stock con¬
It was unique among the major
rail equities in selling down to a new 1948 low last week. The low
of 32 lfe was the lowest price at which the stock had sold "since
1942 and compared with a high of 45 % earlier this year. At the
recent low level the stock affords an income retutn of 9.2% on the
basis of the regular $3 dividend rate.
This regular annual rate
has been maintained since 1940, with -extras in most years. Recent
action of the stock, long regarded as one of the prime investments
in the rail field, suggests apprehension in some quarters as to;continuation of the $3 dividend rate* Most rail analysts are of the
opinion that this concern is unwarranted.
Measured by general standards within the industry the longrange dividend policies have been far from conservative.
For the
10 years 1938-1947 cash dividend distributions averaged approxi¬
mately 80% of reported earnings. In addition, common stock holders
received -Us extra dividends the company's stock holdings; in the
3.83%.

.

.

.

tinued under considerable pressure.

highly profitable Pittston Company and New York, Chicago & St,
Louis. The latter was not an income producer for Chesapeake *&c
Ohio because of large preferred dividend arrears. The merger of
this property into Chesapeake, & Ohio, as had been
would, however, have improved the parent company's

ture

materially,

•,

.

.

contemplated,
earnings pic¬
'

.

„

cash dividend distributions, and distribution of stock
holdings that might much better have been retained, or which might
at least have been sold for "cash, obviously did not leave much over
for capital expenditures.
This condition was aggravated by the
use of cash to acquire New York Central common stock ((so far hot
an income producer) and to reacquire and rehabilitate the Green¬
brier Hotel. Property and equipment needs, including-a large num¬
ber of passenger cars, were heavy. The net result of these various
forces was that the company's cash and equivalent had dropped
below $33 million and current liabilities exceeded current assets by
more than $9 million.
There was no-alternative but to resort to
The large

public financing to replenish the treasury.
One

of the

reasons

for bearishness "toward the

•

,

Chesapeake &

Ohio stock has apparently been a feeling that a substantial part of
the money spent in recent years has not been justified. In particular,
the purchase of New York Central stock and the Greenbrier have
been cited. There has been some question as to the advisability of
heavy expenditures for passenger equipment, and many

innovations

road that is not a large passenger
high passenger operating
ratio of Chesapeake & Ohio has also come in for considerable adverse
comment. What has hot been stressed to any great extent is that

in

the passenger

carrier.

business, by

a

In this connection the particularly

expenditures have represented only a fraction of
extensions into new coal
fields, improvement of yard facilities, etc. carry potentialities for a
vast improvement in the company's earning power.
Regardless of the adverse psychological results of publicity given
to certain aspects of the Chesapeake & Ohio picture there can be
no denial of the fact that fundamentally it is still a sound operating
such questionable

the whole and that major outlays for line

,

property. It is still able to maintain a transportation ratio consider¬
ably below that of the industry as a whole. Its earnings this year
will cover the regular "$3 dividend requirement by a considerable
margin. New line extensions should result in the development of
important new traffic sources. Improvements at yards and terminals
should result in substantial operating economies.
AH in all, it
appears that the pessimism toward Chesapeake &
carried to ridiculous extremes. This'is a normal
any
or

broad change
not.

On

Ohio has been

characteristic^ of
in. sentiment, whether the change is warranted

fundamentals the

have been oversold.

'

stock at current levels appears

to

COMMERCIAL

THE

(2298)

tZ

FINANCIAL

&

CHRONICLE

Thursday, December 2, 1948
Telephone
and

of

Pennsylvania

Philadelphia Savings
Society.

Fund

News About Banks

of

Co.

the

*

#

*

Following the acquisition of the

CONSOLIDATIONS

Possible Effects of

Higher Taxes

ington,

NEW OFFICERS,

Utility Earnings

on

Citizens National Bank of Wash¬

NEW BRANCHES

and

ETC.

REVISED

Pa., by the Mellon Na¬
tional Bank and Trust Co. of Pitts¬

Bankers

burgh, the

CAPITALIZATIONS

factors in the stock market decline following
the election was the apprehension over a possible increase in Federal
^Income taxes imposed on corporations. Such an increase would, it was
assumed, prove necessary to keep the budget in balance and provide
for increased military expenditures plus continued heavy expendi¬
tures by other departments. There was considerable conjecture inthe press that the excess profits tax might be revived, and it was
pointed out that Representative Dingell of Michigan had already
(within the past year) introduced three bills for such a revival, and
»qw plans to try again.
It is extremely difficult to forecast the possible results of any
new excess profits tax law on the earnings of utility companies, even
though the provision should be modeled closely after the 1945 statute.
Reasons are: (1) possible choice of two bases for an exemption under
the old law—average (adjusted) 1936-1939 earnings, or the capital
i>ase; (2) the innumerable exceptions, qualifications, and special
Treasury, rulings*,which make it almost impossible for the laymen to
understand the workings of the law; and (3), the fact that few of the
basic working figures were made public.
In 1945 many utilities were able to reduce their taxes consider¬
ably by special charge-offs due to refunding operations—but this re¬
funding program is no longer available, hence the burden would be
much heavier than in 1945 for these companies, under the same law.

the

One of the principal

,

Moreover, reimposition of EPT would lead to highly irregular earn¬
ings trends, depending upon the benefits which individual companies
through their bookkeeping records on file with the

could obtain

Treasury Department—which records may differ radically from those
reported to stockholders or to regulatory commissions.
An increase in the regular corporation

rate

(now 38% normal

general,

President

dividend, it is added,

Gazette"" of Nov, 22, from which

"will be posted on the 28th Janu¬

the following is also quoted:
"Ernest
M.
Furbee,
formerly

rants for the

J. Ficken .was appointed a VicePresident, and Frank C, Schell
was appointed an Assistant Secre¬

ary, next. At the 30th September,
last, the bank's investments stood
in the books at less than the mar¬
ket value on that date and all

tary. Mr. Ficken came to Savings
Banks Trust Company in 1942 as
Assistant Treasurer with a back¬

Vice-President of the Washington
bank, has been appointed, VicePresident, and manager of the

Washington and Ciayville offices
of the Mellon National, John M.
Scott, who also was a Vice-Presi¬
*
*
*
dent pf the Citizens National, has
F. J. Andre, President of Shef¬
been named manager of the Bur¬
field Farms Co., Inc., has been
gettstown office.
elected to the board of trustees of
"Frank R. Denton, Vice-Chairthe Excelsior
Savings Bank of
man of the Mellon National, said
*
*
*
New York, it was announced on
Albert J. Allison, formerly Presi¬
Guaranty Trust Company of Nov. 25 by Reginald Roome, Pres¬
dent of the Washington bank, will
New York announces the appoint¬
ident of the bank. Mr. Andre also
serve on the Advisory Committee
ment of R. T. Tupper Barrett, is a director of National Dairy
for the Washington office, and
formerly Manager of the Com¬ Products Corp., Milk Dealers As¬
Advisory Committees also have
pany's Paris Office, as Vice-Presi¬ sociation of Metropolitan New been named for
the other new of¬
dent in charge of the European York, and Commerce and Industry
fices. Formerly a member of the
Offices, and the appointment of Association of New York, Inc.
Mellon Bank Corp., the Citizens
%
£
#
5

ground of 27 years' experience iri
foreign and domestic banking.
Mr. Schell, who also joined the
the staff of the Trust Company
in 1942, was previously engaged
in both banking and general ac¬
counting work for 23 years.

Maurice G. St. Germain

usual and necessary
have been made."

provisions

Man¬

as

c-

National Bank had total

ager

tional Bank of Commerce iri 1922

Barrett
was
representing
the
equities would be hurt the. worst. Companies of the New England
former abroad. In 1937, Mr. Bar¬
type with a relatively large common stock equity would probably
rett was appointed Joint Manager
cuffer least, since the proportion of taxes to common stock earnings
of. the Paris Office. He returned
would be smaller.
/
to the United States in 1941, be¬
coming associated with the Bank¬
POSSIBLE EFFECTS OF HIGHER FEDERAL INCOME TAX RATES
ing Department
of
the
Main
ON SHARE EARNINGS OP SELECTED UTILITY COMPANIES !
Office as. a Second Vice-President;
RecentShare

Earn'gs

Operating Companies:
Commonwealth Edison

amount;

$1.73;

He

Share Earnings

Adjusted'to.
Higher. Tax Rates

of

45%

50%

Rate

$1.51

$1.35

$1'50

Recent

Price

Approx,
yield

26

5.77%

22%

7,03 1

Consolidated Edison„___

2.29

1.98

1.76

1.60

Consolidated

4.21

3.67

3.29

,3.60

59 ;;

2.98.

2.65

2.41

2.20

im

1.20

2oy*

5.92

m

■■-i,

Gas (Bait.)

Cleveland Electric

~

Detroit Edisqn

1.41

1.28

1.19

Northern States Power--

0,89 '

0.77

0.69

2.03

1.80

Pacific Gas & Electric—

1*2.36

2.00

m •'
5.71.;

,

i •

6.341

311/2

1.98

1.64

1.44

1.20

17%

6.75

$1.37

Penn. Power •& Light

Virginia Electric

returned

to

Paris

to

resume

: *•

The

new

Branch
Bank

Madison

New

banks

class

57th Street.

and

of Nov. 20, which added: /
/
"Charles C. Reed; President of

Williams &*Reed, Richmond,, has
been re-elected by banks in the

Chase

$L2l

$1.10

1.20

14%

'

8.20
V

Holding Companies:

t'/v'-

American Gas &, Electric

4.27

3.61

3.28

§2.40

Central & South West—

If 1.33

1.15

1.02

0.80

10%

General • Public Utilities-

1.91

1.69

1.53

0.80

tm

New England Elec. Sys.- **1.35

1.22

1.13

1.00

8%

11.94

New England Gas & Elec. ffl.33

1.19

1.09

0.80

ioy2

7.62

North American Co

**1.85

1.64

1.49

1.00

15%

6.56

3.50

2.89

2.44

1.00

38

,

6.32
7.53

6.96

;

Iri

1945.

1942,
commissioned;

Mr,

,

.

the/ Reserve

Each; director

uary

:

1,1949."

for

a

to begin Jan-

'

directors-

The

class B
j Bank.

.chosen

was-

term of three years

Barrett

.

group to serve as a

same

director/ of

Arthur

Kunzinger; Second-Vice-President, is in charge .of the branch."
was
a
Lieutenant
S. Allen Pippitt, Second
ViceColonel in the army and assigned.
President, Robert Li Herd and
to overseas duty, later; being pro?
Thomas C. Moore; Assistant Mar^
moted to Colonel^ Mr.;, .St, G«rr
agersr and John E. Buckley, Mani-1:
main, a native of the United
aggrv.of: the Chase Safe Deposit
States began his banking career,
Company's branch vault, cpmplete
with the Canal Commercial Trust
the official staff,
' - '
and Savings Bank of New Or¬
#
*
*
leans/In 1921 he joined; Guaranty
Charles Pratt, President of Prritt
Trust Company and iri 1922 was
appointed Assistant: Secretary at Institute, was elected a trustee of
the Brooklyn
Savings Bank of
La. Havre Office. Two years later
he was -* transferred to the Paris Brooklyn, Ni Y., at the' most re¬
cent meeting of the board of trus¬
Office as Assistant Secretary. In
1928. he returned to La
Havre tees, it is announced by Gilbert C.
Office as Manager, and was made Barrett, the bank's President.; Mr.
Assistantf Manager of the Paris Pratt is a trustee of the New York
Public Library, Brooklyn Public
Office in 1930V
/
Library, " Brooklyn Institute
of
*
*
*
Arts & Sciences, and Brooklyn
Cable advices received by the
Trust Co.
New York Agency of Barclays
of

'

*

Reserve Bank of Richmond, it is
learned from the Baltimore "Sun"

office in New York City—opened
for business on Dec. 1 at Madison
Avenue

%

'

has been re-elected
by
in; Group 1 to serve as a
A director of the Federal

more,

Avenue

York—28th

...

*

Chase. National

the:

of

of

-

*

James D. Harrison, president of
the First National Bank of Balti-,

*

*

*

vember,, 1947.

family for which Liv¬
ingston Street in Brooklyn and
Livingston
Manor
in Sullivan
County, N. Y., was named. Mr.
Livingston was a descendant of
Philip Livingston, a signer of the
Declaration of Independence.
:

rrispurpes

$32,000,000."

*

William J. Copeland has been
appointed Assistant/Trust Officer
of Peoples First National Bank
and Trust; Co. of Pittsburgh, Pa.
The Pittsburgh "Post Gazette". re¬
ports that Mr. Copeland. became
associated with the bank in No¬

ber of the

••

than

more

■.

charge of Paris Office at the end

Div.

branches at

become branches of the Mellon
of dividend payable in British cur¬
bank.
The acquisition was ap¬
rency of seven shillings per share
New York, announces that at a subject
to income tax at the proved by the stockholders of the
Citizens Bank on" Nov. 19, it was
regular meeting of the Board of United Kingdom standard rate of
indicated in the Pittsburgh "Post
Directors held on Nov. 19, George nine shillings to the pound." War¬

Ihlefeld,

August

companies which have shown the largest in¬
as a member of the Foreign De¬
crease in earnings in recent years would seem the'most vulnerable
partment. At the time of the
to higher taxes if EPT is revived. If the regular tax rate is increased,
merger of the Bank of Commerce
the. effect is more largely influenced by capital leverage. This would
with the Guaranty in 1929, - Mr,
mean that some holding companies with relatively low common stock
many

its

Savings Banks Trust Company, of

.

In

and

Burgettstown and Claysville have

of the Paris Office, succeed¬
Philip Livingston, Vice-Presi¬
taxes if this really proves necessary.
The accompanying table at¬ ing Mr. Barrett. Mr. St. Germain dent of the Security Trust Co. of
was formerly an Assistant Mana¬
tempts to estimate the effects which a 45% or a 50% tax rate might
Miami,
Fla.,
died
in Jackson
feave on the earnings of a few Representative utility companies. Such- ger of the Paris Office. Mr. Bar¬ Memorial
Hospital,
Miami, on
graduated
from
the Nov. 24. Mr. Livingston, who was
computations are fairly, simple, involving only the following: steps:: rett .was
(1) compiling the latest amount of the Federal income tax payment, University of Virginia in 1919. 37 years of age, was born in New
plus any amounts charged "in lieu of income taxes," (2) multiplying Associated successively with York City and located in Florida
the totals by 18.4% and 31.7%, reflecting an increase in the tax rate Portalis, & Cp„ Ltd.; the Royal a year or more ago. He had for¬
from 38% to 45% and 50%, respectively; (3) dividing the latter Bank of Canada (New York Of¬ merly been Assistant Treasurer of
results by the number of common shares; and (4) deducting the fig¬ fice), and the National City .Bank the Central Hanover Bank & Trust
of New York, he joined the Na¬ Co. of
ures from the recent share earnings.
New York. He was a mem¬
plus surtax) would seem much the simpler and fairer way to increase

Washington office of

Citizens

of

the-Peoples

Bank of Cumberkand and the Lib -

erty

\ Trust

Cumberland,

Oaf

Md.,t have. approved plans for 4he
merger of the two iristitutions Un^
der the name and charter of the

Liberty
from

.

Trust. This is. learned
Cumberland newspaper

a

which states that the stockholders
are to act on the proposals in. December
Bank

—

on

those

of.

the /Peoples

Dec. 10—while the- Lib¬

erty, Trust stockholders. will act
Dec. 13. The paper from which
we quote also said in part:

on

"The-total capital .stock, under
proposed
merger,
would
'amount to $600,000 represented by
the

60,000 shares of stock of the par
of $10 per share.
At the
Herbert T. C. Wilson, President present time the Liberty Trust Co.
of the Melrose Savings Bank of has capitaLstock of $400,000, rep¬
Melrose, Mass., and a former Vice- resented by 20,000 sharesiOf a par
President
of
the
First
Boston value of $20 per share^^anfi -the
Corp., died on Nov. 26, according Peoples Bank has present capital
to the Boston "Herald," which also stock of $200,000, represchied. by
said:
8,000 shares of £ part vktufilOf]$25
"A native of Maiden, he was as¬ per share. The combined present
sociated for many years with the capital stocks of the, two, banks
Old Colony Trust Co. of Boston. thus amount, to $600,000, which is
When that bank merged with the the same amount of capital stock
First National Bank of Boston he proposed for the merged institu¬
•

West Penn Electric^
*Ratc

i5y8

■

6.61

not

yet initiated, may be 60-70 cents.
tOn shares now outstanding (on
shares, $2.47). tBefqre dilution due to stock offering,
§Includes $1
cash and 9/100 shares of Atlantic
City Electric; HPro forma after stock offering.
••Pro forma consolidated.
ttBefore sinking fund requirements
equivalent-to about

•verage number of

18 cents

a

share.

-

■

Issue accorded
_

_

The offering

heavy demand from investment sources.

on

Tuesday of a new issue of $51,450,000 State of
2%%, 1%% housing bonds by a group headed

by-The Chase National Bank met with a very heavy
demand, accord¬
ing to the bankers, with the result that all of the bonds were
sold
out of the group account on the same
day. The 1950 to 1982

maturities

priced to yield from .70% to 2.20%; the 1983-84 maturities
offered at a dollar price of 100;. and the 1985
to 1998 maturities
priced to yield from 2.30% to 2,50%.
are

are
are

The bonds are redeemable, at the
option of the State, at par arid
interest, on Dec. 1, 1988, or on_ any interest: payment date
thereafter, in the inverse order of their maturity. They are interest
accrued

exempt from present Federal and New York Sta^te income
taxes, arid
legal investment for savings banks and trust funds iri New YoRk

are

.and certain,other states and for

.

<

Savings* banks 'in^Connecticut rind

JdassachuseRsf{r^ ;
.understood that.
Ne^ Yori£/State*wi|l selllrioJmore bonds
Air at
least

six

Dominion, Colonial and
Overseas), state that directors of

the bank have recommended final
dividends of 4% actual on the A
stock

and.

income

951,450,000 New York Stale Bonds Marketed
.

Bank

months and probably not for




a

yehrv^Yiv:

on

tax

in

the

B

each

shares
case

at

less
the

standard rate of 9/- in the pound.
These dividends are payable on
Dec.

31, 1948, and are for the
period April 1, 1948 to Sept, 30,
1948, making 8% for the year.
Barclays Bank (Dominion, Colon¬
ial

and

Overseas),

which

is

af¬

filiated to Barclays Bank Limited,

London, maintains branches
seas

over¬

in South Africa, East Africa,

West'Africa, Egypt and the Sudan,
Mediterranean, Palestine, British
West Indies, Eritrea, Libya and
Somalia.

became
Boston

an

officer

of

the

First

Corp."

Mr. Wilson
*

elected

tion.

./

;

*u*V if

'The

was

54 years of age.

'

Geoffrey

value

S.

*

$

Smith

the seventh

has

been

President

of

surplus account of ithe
merged institution will amount to
$600,000, which is an increase of
$75,000 over the combined present
surplus of the two banks.. The
undivided profits
account' will
amount to approximately $175,000.
The total capital, surplus and un¬
divided profits accounts in the
merged institution will approxi¬
mate. $1,375,000: ; Under, the plan,
shareholders of each bank/will re¬
,

.

112-year-old Girard Trust Co.
*
*
*
of Philadelphia, succeeding James
The New York Agency at 67 E> Gowen who becomes Chairman
Wall Street, of the Standard Bank of the board. Mr. Smith, 47-yearof South Africa, Ltd, / announced old attorney; is a member of the
law firm of Barnes; Dechert, Price,
on Nov. -26 the receipt of advices
from: the bank's hqad office far Smith & Clarke He was graduated
from; Harvard_ in /1922.. and; re¬ ceive 2.1428 shares of the' stock/of
Londonjtotheeffect
ceived his law. deg3cee;.at the Uni¬ the- par value of $10 per-share x>f
:
rectors ^iiie-bank"
yesolvqd versity" vof Pennsylvania,
Mr.~ the.* merged^ institution and vfor-to pay- the shareholders an'interim Smith; is a director of the Belt each share now^ owned 4>y' them

di¬

the

Volume 168

THE

Number 4756

COMMERCIAL & FINANCIAL CHRONICLE

(2299)

V

in The Liberty Trust Co. and the
Peoples Bank."
It

is

stated

further

the

recent

ler,

President

tional

the

that

election,

P. P. But¬ pated inventory losses. Extreme
of the First Na¬ conservatism is the order of the
in Houston, Texas, day.
■

Bank

combined assets of the two banks,

based

tor and J. R.

of Oct. 31, ex¬
ceed $21,600,000. Charles A. piper,
President of the Liberty Trust Co.,
will continue as President.
\It is
added that the present members

.

Our

has been elected a, class A direc¬

figures

on

as

Of the boards of both banks will
constitute the board of the merged

institution, and it is expected that
employees of the

all officers and

separate banks will also serve
with the merged institution.
■

■

*

/

.

La

*

*

Street

Salle

the

1949. Mr. Butler has been active in

few

ago,
the reflected
field for the past 20 views on future market conditions
years. From 1928 to 1944 he served are most pronounced. It might be
successively as Executive Vice- expected that forward commit¬
President and President of the ment policies would broaden to
American National Bank of Beau¬

he

has

been

Since May 1, 1944,
in

active

the

man¬

of

agement
Milam

was

institution

the
now

President.

of
Mr.

engaged in the bank¬

,

/
*

*

meet

threats

the

and

of

government

fourth

a

of

wave

increases. The reverse, how¬

wage

ever, appears to be true.

opening of the
Detroit, Mich., in

j

*

In

a

created

by

The bot¬

scarce

com¬

in

siderable funds will be available for investment

be

seems

the

were

im¬

side

market"
^current

are

sales

aluminum and steel,
resulting in higher than published
market prices for end products,
copper,

have been

month.

On

more

Other

down

'.i"

pf the City National Bank & Trust

of

view

"in

the

time

before

elapse

necessarily

that

must

the

bf,Kansas City, Mo., as Presi¬ amendment will become effective,
dent, pf the Missouri Safe Deposit plans for the offering must be
of

Ci$y, was
made
kno'wh" in the Kansas City "Star"

changes in market and other con¬
ditions."
If the amendment is

of Nov. 23.
'I-.
. •
(

adopted by stockholders, the letter

.Jefferson

*

because

possible

indefinite

in

*

:jj

points out, the additional shares
will be available to be issued from
Board of the Federal Reserve time to time without delay inci¬
Bapk; of Dallas, announced on dent to further amendment of the
NOV" " 23
that,
as
a
result of articles.
_

Jj

fe. Parten, Chairman of the

•

Looks (or Mjclion in Back Orders

Swanton, repotting 'for BusinesSSurvey Committee of, <
National Association of Purchasing Agents, [ %ayj, .though 'election-/

•

•'

had little effect
to

on

in evidence this

than

side:

declines in back orders.

volving
construction,
capital
equipment expenditures and sales
September promotional campaigns appear to
and
October be hesitant, awaiting clarification
continued and of the rules under which industry
established

in

reports show
p r o d u ction
-

high,
b

is to operate.

c

executives * is
Robert C. Swanton

that produc¬
tion will fall

off

Except

stronger trend to de¬
cline.
It is pointed out that many
commodities
are
selling below

off, with

during December and, possiblyj Jdnua'ry, and back orders

their

will decline

tion.

further. A combina¬

tion .of ;factors

is

reported

re¬

sponsible.
Many industries- that
are normally subject to seasonal
variations in activity, but which
have continued twelve-month

items

wise, there is a strong tendency
toward softening.

ca¬

pacity operations since the war,
now-finding the return of sea¬
sonal
fluctuations
influencing
sales and
production schedules.
The uncertainty of government

Inventories
The

are

policies

is

a

programs, for

be

in

revisions,

limiting

factor

on

management must

position^ to make quick
if

necessary;

Luxury




to

.

limits

workable

con¬

The monetary authorities in

building

the floating debt
doubts about their
ability to refund maturities, when due at whatever rates they
may set.
If greater controls should be needed to carry but
these operations, there seems to be very little doubt about their
being obtained from the Congress.... Nevertheless, it is believed
in some quarters that this drive for economy in refundings can
be carried too far, and the idea that what is cheap (low in cost)
is sound, should not be the major factor in working out future
refundings of the Treasury.
.
During the coming year, exclusive of bills and certificates, there will be callable : $4,404,000,000 of taxable bonds, the "three little sisters," the 2s due
1949/51, and $2,277,000,000 of partially-exempt obligations, the
in

the

current

.

.

refunding

seem

to have

up

"

no

.

.

*

.

,

«

•

.

.

,

tion! 4 intq either ..Jong-term higher coupon bond? or loan?, in j>rdei?
to,; maintain ^inconie.
The squeeze,: on reyenuesVof the deposit

work schedules.

fundings sihte tfte4ippingo^ cash

4

LOWER BANK EARNINGS
The

considerable in interest charges by
refunding these obligations with one-year maturities carrying 1%'%,
or 1%%, but again more than $6,600,000,000 would be added to an
already sizable floating debt,
The bulk of the callable bonds is
owned by commercial banks, Federal and other investors, and no
Treasury

could

save

.

institutional

the

.

holders

.

wotfld

the

take

short-term

lower

coupon

.

.

.

would

banks

be

^tightened b£ 'a continuation of ldw itibome

re¬
hsis already1

reserve requirements

immobilized large; amounts of funds that the banks could be using
Canada-

to

Production and back orders

are

Thiele With Goodbody Co.
(Special

to

The

Chronicle)

Financial

,

help keep earnings in
It

is believed

pace

that

with increased operating costs.

the

,

.

.

future

refundings of the Treasury
should give the deposit banks an opportunity to replace at least
a part of their higher income issues with obligations that bear
somewhat near the same coupon rate as those being called. ...
For instance a 2% bond, offered in exchange for part of the 2s
with

along

*

(<r

l%s should, work out well, and at the same time

there would be

an

extension of maturities.

...

There would be

already large floating debt *
would not be increased.
If the partially-exempts were to be: V
replaced with bonds that would be suitable for non-bank in- t
vestors, there could be a further moving out of maturities with r
a

saving in interest charges while
.

.

an

.

.

CHICAGO,

ILL. —Sherwin

C.

some

saving in debt cost....

J

,V.'

t

Thiele

is

now

connected

with

^

RESERVES
Mr. Thiele

was

previously

with Riter & Co.

to

(Special

The

Financial ^Chronicle)

has

staff

the

joined

of

Baldwin, White, & Co., 30 Federal
members

Street,
Stock

of

the

He

Exchange.

.

consideration
reserves.
reserves

.

.

as well
ast some form
the member banks income

of "Special Deposits"
on

funds tied up

as

that

required

Some feel cash reserves should be lowered and

.

increased,

so

special
that the power to restrict lendipg would not
''
4'
' *
F"

restrict the earnings of member institutions.

Boston

was

pre¬

viously with I J. H. Goddard & Co.

With State Bond & Mtg.

With Herrick, Waddell
(Special

to

The

Financial

(Special to The Financial

Chronicle)

NEW

CHICAGO, ILL.—Fred M. Lm-

L. W.

;

question of increased powers for the monetary authorities
over reserves of member banks, is bringing up the. point as to how
they should be applied, when, as and if obtained by the money
managers.
Special reserves, such as suggested by Marriner Ecclea
of the Federal Reserve Board seem to; be coming in for greater
would give

BOSTON, MASS.—John J. Mahoney

"•

The

..

With Baldwin, White & Co.

kogel is now connected
with
Herrick, Waddell & Reed,. Inc.,
332 South Michigan Avenue.

Phillips Forming

with

Anderson

is

Mortgage

Co.,

nesota

Chronicle)

ULM, MINN.-—Elmer Mk
State Bond &

26V2

North

Min¬

Street,

BOSTON, MASS.-r-L. W. Phil¬

and

ganizations,' substantial reserves
are being set up to cover antici¬

.

.

manyrmanufacturers to stock pile
thti; finished ''prOducW is Reported
td'be influencing fempldyment knd

tancy about the future, shortened
buying range, and falling back¬
logs, some liquidation of inven¬
In many or¬

.

issues offered in exchange for the larger income obligations
they currently own.
,
However, a further decrease in earnings of
the commercial banks would result, which would force these institu¬

lips

♦

'

.

doubt

In line with hesi¬

tories is in evidence.

.

.

manufacturing
operations,
and
work-in-process
moves
rapidly
into finished goods. Reluctance of

Own Investment Co.

policy to reduce inventories

lowest

tinues in force.

^

In general, high employment is
being maintained throughout the
country, but there are soft spots
developing.
An increasing numter report small to substantial lay¬
offs and shorter working time.
Reduction of backlogs shows up
first in a curtailment of initial

are

being offered at reductions. While
current markets are spotty price-

cleared up, probably after the turn of the year. ;.

are

3M»s due Dec. 15, 1949/52 and the 2^s due Dec. 15, 1949/53.

a

postwar highs.
Fabricated
developing keen compeOverstocked shelf goods are

ago

purchasing appears to be in the making, without too '
moves in either direction, until some of the uncer¬

tune times.

,

Street.

Commodity Prices

with

k orders

few weeks

...

Employment

Goodbody & to., 105 West Adams

for the movement in
declining. The nonferrous metals, both open and
consensus
of "outside" market, the price situa¬
purch a s i ti g tion shows a continuing leveling
a

a

A fair trading market with

...

.

.

oil, lumber, lard oil, lubri¬
cating oil, soda ash.

Reporting the composite opinion of purchasing agents who com¬
holding about the same as last
prise the National Association of Purchasing Agents' Business Survey month—high. Prices static, but
Committee, 'Chairman Robert C. Swanton, Director of Purchases, some indications of softness. In¬
Winchester Repeating Arms Corporation, reports the election had
ventories down. Employment good.
; very little ef-^
Some seasonal layoffs.
Buying
feet
on
No¬ lines, wearing apparel, and capital
policy the same as in the States.
vember indus¬ equipment seem most affected at
trial- business. this time.
Long-range plans in¬
The trends

fear of

extreme

December-January refunding of the Treasury, which in¬
creases the floating debt of the government, has many in the money
markets wondering whether this policy of adding to the short-term
debt will be continued during the coming year, when fairly sizable
amounts of bonds, both taxables and partially-exempts, become call-*
able. :
To be sure, the redemption of higher coupon obligations,
through the sale of short-term low interest-bearing issues, will
cut the debt burden.
However, in the past such programs have
turned out to be unsound, and have caused some very embarrassing
periods for those governments that have allowed the floating debt
of a nation to assume too large proportions. .
History^ strange as
it may seem, has that habit of repeating itself at the most inoppor¬

fuel

November industrial business, production is likely

fall off in next two months, with large

strength, the

The

Cd.

Association, at its recent meeting

on

to have abated somewhat.

tainties

•

Boos

...

REFUNDING POLICY

'

The election of Joseph J.

..

market

reported.

lead,

a

pronounced

of

copper at
quotations
Conversion deals irt

sellers

selective

commodities registering
price advances this month. "Out¬
portant

over

month and

Although the government bond market is not expected to
move too far on the up aide, because the monetary authorities will

Specific Commodity Changes
zinc

.

due 1960/65 continue to be under accumulation.

Lead

and

this

goodly amount of the called bonds will find their way into the higher
coupon eligibles.
The partially-exempts, particularly the 2%%

the easier-to-get materials.

*

*

letter to stockholders Nov.

.

,

.

tleneck

modities holds back commitments

these, com¬
modity prices remain static with a
Bishop, Manager of the Burbank tendency to lower.
branch; Edwin S. Crawford, Man¬
Reported Up: Diamond powder,
ager Vernon branch, and Frank L.
dies castings, dyes, engines, felts,
Humphrey, formerly head office
gasoline, machinery, China wood
Assistant Vice-President.
oil, paint, rosin.
I

the

for

coupled "with somewhat expanded volume has im¬
proved prices of Treasury obligations especially the bank issues.
«
Although the market is still tinged with professionalism investor®
have been nibbling away; at the higher income eligibles, because
earnings are still very important to these institutions. . .
A con¬
structive attitude is held by many dealers and investors toward the
longest bank 21/fes and the 2*4s due 1956/59, despite the apparent will-*
ingness of Federal to hit bids.
It is being pointed out that con¬
...

controls

Alcohol, used
City Bank of
15, directors of California Bank of cars, botanical drugs, coal, corn¬
January are in progress, accord¬ Los Angeles, Cal., asked consent starch, cotton, cotton twine, food,
formaldehyde, friction tape,
ing to the ^Detroit "Free Press" of of stockholders to amend the arti¬
gummed tape, lumber, lard oil,
Nov.; ,21. The same advices state cles of incorporation to increase
that Leonard N. Simons, partner the authorized capital stock from paper, wastepaper, pitch, radios,
in Simons-Michelsoti Co., Detroit the
present 260,000 to 400,000 rubber, silver, soap, many textiles.
The hard-to-get list remains the
advertising firm, has joined the shares. It is the present intention
Aluminum, lead, copper,
group of organizers of the bank, of the board to give consideration same.
Joseph F, Verhelle announced on to an initial offering to stockhold¬ zinc, nickel, steel, cadmium, ce¬
ers of rights to subscribe to 40,000
ment, coke, nails, tin.
Nov, 20.
1
:j;
$
sji
shares: "However," the letter says,
In easier supply: Alcohol, coal,
Plans

By JOHN T. CHIPPENDALE, JR.
A better tone

.

months

the banking

business during the early
years of his career, but for the
singing of
members.
past 40 years he has been serving
*
*
«
in an official capacity with the
As of Nov. 17, the consolidation Cooper Co., Inc., a large whole¬
sale grocery concern, and has been
was
effected
of thq Merchants
National Bank of Indianapolis and its> President for 10 years.
*
*
*
the Fdiintain Square State Bank
The Los Angeles "Times" of
of that city under the charter and
corporate title of "The Merchants Nov. 19 reported that the direc¬
National Bank of Indianapolis," tors of the Security-First National
with
common
capital stock of Bank of Los Angeles have named
$2,025,000, divided into 202,500 as new Vice-Presidents: Ray M.
shares of the par value of $10 Bartee, formerly head office As¬
each, and a surplus of $2,100,000. sistant Trust Offices; James O

>

now

day" commitment range. Com¬
pared with 88% in this bracket a

ing

$ioo;6oo;.

are

within the "hand-to-mouth to 90-

a

the

after dinner program

Fountain Square State Batik was

cent

per

class B di¬

of

which he is

TJie Merchants National before
the consolidation had a capital of
$l,250,000 w.hile the capital of the

Ninety-eight

bank, each for a
three-year term beginning Jan. 1,

has been re-elected
rector

gather at the Cordon Club, Chi¬
cago, for their annual Yuletide
Party on Dec. 8, at 6:15 p.m. The

will include
Christmas carols by

Reporter oil Governments

Buying Policy

Milam, President of
Cooper Co., Inc., Waco, Texas,

mont, Texas.
will

Women

23

has

formed

L.

W.. Phillips

Company with offices at 201

Devonshire Street to engage in the
securities business.

viously
Inc.

an

He was1 pre¬

officer of Carver & Co.,

With B. C. Ziegler Co.
(Special

to

The

Financial

Kahpan & Co. Adds

Chronicle)

MINNEAPOLIS, MINN.—T. Or
Heggen

has

with B. C.

till; Bend, Wis/

-

become

associated

Ziegler & Co. of West
*

fin-:

r,;*

(Special
..

to

The

.

Financial Chronicle)

ST-t :PAUL;t MINN.—Joseph W.

Elsinger is with Kalmah &
'Endi cbtf' Buiiding/

Co^,

24

COMMERCIAL

THE

(2300).

productive capacity. Furthermore,
technologies and
war-ac¬
quired know-how have advanced

New Outlook

new

the

(Continued from page 5)

lar,

while

distributed

should bear the

For the second time in this cen¬

relation to

dividends

tury a permanent upward shift in
the basic price level has occurred.

same

the

price level if the stockholder
is to be fairly compensated for his
own rise in living costs.
If new
venture capital is to be made
available to industry cognizance
must be given to these factors.
Furthermore, the current level
of corporate profits is overstated
by the fact that plant depreciation
charges, based upon original cost
under U. S. tax rules, are totally
inadequate to replace worn out
obsolete
equipment
at
today's
prices; and inflation has produced |

As

a

War

result of wage gains during
I

prices were increased an
average of about 50%.
Affecting
not only manufactured
articles,
food, and similar elements in the
cost of living, basic changes in
the price level are inevitably re¬
flected at any point where the
dollar is the yardstick of current
income,
expense
or
property
value.
In short, the "50 cent dol-

lar" permeates the entire economy
and does not simply stop at the
in many cases illusory inventory wage level.
It is a delusion to
believe that wage rates can re¬
profits.
main flexible, on the upside* with
Wage Spiral
Agitation for higher wages since prices and profits nailed down and
full production maintained
the close of the war has repeatedly
been based upon the rise in living
costs since that date.
This is a

accompanying chart the
effect, of inflation upon commodi¬

statistical

ties,
industrial earnings, divi¬
dends, and stock prices for the
war periods is shown.
During
post War I earnings, dividends
and stock prices were affected in

fallacy since hourly
in. 1945 had already been

wages

In the

hiked 69% above pre-war* where¬ two

commodity prices were, and
rents still are, under OPA control.
In the following comparison it
will be seen that wage rates
as

of

use

plastics, synthetics of

types in the rubber and
petro-chemical industries, alumi¬
many

television
and
develop¬

plywood,

num,

electronics.

Thursday, December 2,. 1948T

FINANCIAL CHRONICLE

&

All

these

ments involve both industrial

ex¬

pansion and increased activity in
supplying newly created markets.
Despite this record
breaking

total of

ahead, the nation,

work

full

its

at

of

limit

plant, and materials, this year has
been able to devote no greater
share of its total productive en¬
ergies to it (the balance going into
non-durables such as food, cloth¬

ing, services, etc.) than in the lat¬
1920's

ter

when

dwindled to
cance

backlogs

the

physical needs of today.

1929

Consumer durable goods
New construction

(autos, etc.)

trends

currently

6.2

6.0

8.3

their future.

77.2

82.1

76.9

100.0%

100.0%

considerations,

character;

(b)
during the
short but
severe
depression of
1921, stock prices remained above
any further wage hikes do not the pre-War I highs, reflecting the
result in "pricing goods out of the effect of inflation on stock prices
market"; (b) profit margins are even in a period of contraction.
not so squeezed, through absorp¬
During the past two years in¬
tion of wage or tax increases, as
dustry and trade have- been un¬
and

cause drastic curtailment of ex¬
dergoing piecemeal readjustments
pansion plans; and (c) the politi¬ to
buyer's markets and ire-estab¬
cal approach to intricate problems,
lishment
of normal competitive

to

which exist in the national

scene

1940*.-

Ill

1941—.
1942—

121

105

108

140

117

122,

1943—

158

124

128

1944—

168

12-3

129

1945—

169

128.

131

margin to reflect the current gain

1946—

178

139

150

in

1947—

201

159

189

and earnings.

175

210

221

1948—.
Source:

T7.

S.

both

chart for the War II

volume of

mm

~

80

110

123

124

128

212

168

210

„

1945

100

125

256

214

,

.

—

1947-

-

1948
U, S.

Source;

Bureau

and stock prices;

of Labor Statistics: Standard
Moody's dividend rates on 125

Whether or; not stock prices are

correctly discounting a drastic de*
cline in the earning power
of
American industry as measured in
terms; of the 1948 dollar, only the
fufure will tell,
Certainly there

the fact that

litical tampering

represents

and Poor's—earnings
industrial stocks.

and

po¬

atmos¬

an

phere; unfavorable to business psy¬
chology. were responsible for a
state: of continuous
depression
prior-to. War II.

But consider this. That depres¬
sion, characterized by subnormal
production of durable goods,, was

new

than

homes per year for the

next five years; of all autos now

in,

old, or
and at present rates of pro¬
55%

use

over;

are-8

years

keeping
pace with the obsolescence factor;
the electric power industry is in
the midst of a four-year $6 billion
expansion program; the petroleum
industry is investing a total of $4
billion in additional facilities dur¬
duction

we

are

barely

steel has
the longest, and severest in the
had to be earmarked for urgently
nation's, history and was succeeds
needed freight cars* and railroads
ed by fotir years of complete stop¬
are
in process of "dieselizing"
page of; all but.necessitous, civilian
throughout; natural gas transmis¬
goods*: Meanwhile the population sion line construction will be
lim¬
both, continued to grow and mi¬ ited
only: by the availability of
grated en masse to the West and
pipe, during the next few years;
South (according to U. S. census
agricultural machinery demand is
data, 25. million persons moved
largest in history. All these needs
from one County or State to an¬
other, 1940-47). Many major in¬ converge on the steel industry*
dustries. as a result have backlogs which in turn is further expand¬
of expansion to accomplish and ing its facilities. The rearmament
ing the next two

years;

,

-

to

needs

consumer

practically

assure

fill

which

high level

pro¬

program
pose

and aid to, Europe im¬

additional

burdens

our

on

w

5%

figure

:

-•»

/I

/V
«

226

i

/

records

set

l

*

RE-WAR] z

>

/

./

m

mL

160

/

I

^

)1VIDE^DS

\ /

A*
,'v^c,

V—

/

For

■

which

it

T
/#.a\

I9i

0'

'*

*19 4*

19




,4

"

'

# 0,

of

now

will,

appears

almost

oyer

;

$1. billion—or
the total for 1948.

crease

•

39

•

y»
41

•

i

«

1945'

».•
■

the

over

total

for

half of the increase

in

due

largely to substantial

advances in hospital and institu¬
b uild i n g s.

tional

♦ESTIMATED

|

about

925,000 units, of which not
than 15,000 will be publicly owned, In the estimate for
1949,
of course, no allowance.

more

be

could

46-

for

made

,

>
,

„

further '

any

residential construction that

might result from ^possible future :*
housing legislation.
.

In

addition, certain specific as¬
sumptions have necessarily beenmade.
The
more
important of
these are as follows:
;
,

.

(1) It is assumed that no gen- '
1949.

increase

these

sources

the

(3) It is assumed that construc¬
will average
5% above tjhe average for '

tion costs during 1949
about

September, as measured by the
Department of Commerce Com-

a n

d

in

4%

the

above

first

9

months

for

sumption

little change

construction——:

i

Nonresidential building

—

—————-—-—

The

buildings,
social

Hotels

and

Public utility

are

Other

Total

an
✓

owned

.

178

275

155

miscellaneous—

200
450-

500 :

il————— 1——-

2,750

2,535

———————————

350

350

public utility-———4

m

Residential building

„——

1,510
1,510

1,675
5,000

Educational.——————

recrea¬

/ 970

.

.Privately

'

public utility construction

•

700
375

245

300-

150

175

1,550

.1,700

105

*Jxrint
Labdr.
'

550

450

Miscellaneous public service

construction—__—
enterprises
.Conservation and development——-4All other public construction------——
cf

estimates

fFirst

10

months

'

'

-

125

600
-4

750

150

175

rce - and
the Department,
Department ' of. Coxnmei
actual^ Idst 2 estimated. *' JExcludingfarm.

the

'

\

-1,375

525

Sewer and water

•

6%. decrease in in¬

.

200

.

Military and naval construction———
Highway construction
———-

"

150

65

-

Hospital and institutional——————
Otner nonresidential building———-

churches,

; 725.

.

'4,040

—

public construction_______—-—-

latter

is expected to reach $2.75 billion,

325-

325

.

115

.

only partially offset' by

construction,

1,300

—

buildings. These expected

expected

450

1,000

•

215

Railroad
—-——
Telephone and telegraph———

private

and

4,050
1,300

245.;

Farm construction

:

6,500*
:

230

1

over

building results from

:

960

Social and recreational-i-_———

$4

.

.

910

Educational

construction are
expected to increase. Private non¬
residential building in 1949. as a

::: 13,750.

3,600 ;;

Other nonresidential building——

i

private

increase of 12%

1949-

350

Hospital and institutional—————

and

implies

$18*750

1,380

.

includes

year

from current, levels.

—v—r-———

Aside from residential building,
most of the principal components

>

as¬

next

Warehouses,' office and. loft buildings
Stores, restaurants and garages—

'Industrial

billion for 1948.

building.

the

the

7,100
-

--i—

Religious

classification

for

1948,

; 13,735
;

——

mate, however, represents a de¬
cline of more than 8%, in com¬
parison with the figure of $7.1

an

average

of

fl948

^Residential; building

.

'

,

posite Index; were already some :

NEW CONSTRUCTION ACTIVITY IN 1948 AND 1949

Total private

largest

new

1948. Since costs

in

24 %~

single component of
construction and, at $6.5 bil¬
lion, is expected to constitute
about 35% of the total* This esti¬

of

from

seriously

affect

$17,775-

new

..

demand

in
to

the volume of materials available

.
/
(Millions of dpllars)
Ty#e of Construction-*- - , ■ .
\
v

.

be

non-farm- residential
construction will continue; to. be

gains

;

1

8%

public construction, is due to an
anticipated 42% increase in pub¬
lic-non-residential building, to a
total of $1,375 million — an in¬

Private

an

{

,

the entire year

Almost

public construction: ip 19,49 is es¬
timated; at $5 biliion, an; increase

tional

m

«

reached in the present year. New

2CKS

'

dollar

a

total of $13% billion, ap¬
proximately the, same us. the total

hospitals

i

',

in

value

/a

120

_

owned* with the number of, pub- :
licly-owned units to be started in, (
1949 estimated at only about, 30,;
000, largely in purely State and municipal programs and in military installations. It now appears ,
that
the .1948
volume will be *

.

construction,

outlook is; for

educational

PRE-WAR AVERAGE *100

'

private

new

1949

dustrial
m-

and

of

1948.

15 % increase in- com¬
mercial construction and 35% in¬
crease in "all other"' private non¬

140

W

"

the 192Q's
;

residential

/■

~T
/

in*

all of this total will be, privately-

estimated

200

~/•

V

in

1942.

the

rise

a

in prospect for 1948.

Physical volume of construction
in 1949, however,
apparently will
be- about the same as in 1948, and
thus will remain appreciably be¬
low
previous
physical
volume

dential

•.

..

COM MODI T

k

increase of more
the $17:8 billion

the probable total for 1948. This
increase* in total private non-resi¬

/

r

over

now

billion,
240

t"

an

whole is estimated at just over

-■m

started

for domestic construction.

Nov. 29.

on

The expected total of $18.75 billion, a joint estimate of the Depart¬
ments of Commerce and Labor;&

years.
In our Pacific Coast Letter
of March, 1948, analysis of hous¬
ing requirements revealed that, a
market will exist for IV4-IV2 mil¬

lion

$18.75
dollar-volume record for building activity, the

billion, setting a new
Department of Commerce announced

duction for the next four to five

Where Now?

is.no gainsaying

130

*

-about 875,000. new per¬
dwelling units/Practically

on

manent

cient

New construction in 1949 is expected to reach a value of

>

>126.

will* be

foreign aid will not expand sub¬
stantially above present levels,
and that there will not be suffi¬

building

at $18% billion, compared with $17.8 billion
for 1948, New public projects estimated at $1 billion.

Dividends

100

189

1941-

Earnings

100

108

Average

100
131

1935-1939

Stock
Prices

1949

thai,

estimate

an

on

construction

(2) It is assumed that expend!- ;"J

Joint estimate of Departments of Commerce and Labor fix dollar-

Industrial- -Per Share

Prices

con¬

tures for national defense and for

period are as

Commodity

of residential

case

based

are

in

follows:

•Include? farm products.

which

struction, the figures for value of "
work to be put in place next year

Predicts Record 1949 New Construction

Data shown on the

of Labor Statistics

Bureau

forces

operating to. affect

eral business recession will occur

disbursements

dividend

known

are

.

In view of these

the prospect is for continued high
level employment provided
(a)

98

Price?

and

In the

100.0%

100

Index

-

considerations of the

9.0%

1935-39=100

•Wholesale
Commodity

of Living.
v

construe* '

new

1949, presented in detail
in the accompanying table, is de-

5.8

Per Hour

Industrial
Wage Rates

-

in

4,1

conditions. This process will con¬
same
degree as were com¬ will
give full cognizance to the tinue, although some
types of
modity prices by the upping of fact that this
country's prosperity businesses are more vulnerable
wage rates under the influence is its main defense in
the cold war. than others due to labor
costs,
of labor shortages, union activity,
Obviously, uncertainties exist break-even points, price relation¬
and
political
sponsorship.
In which will
be dispelled only by ships, and basic demand factors.
fact, the average level of each of
the unfolding of political events Generally
speaking, common stock
these
elements
from
1919-25
during the
next few
months. selections at this time should be
(eliminating yearly variations)
While security markets may re¬ confined to essential industries in
experienced
approximately
the
main on a touch-and-go basis, it is
which labor
costs
are
low
same rise of some 50-60%.
This
or
significant to note- in the chart
phenomenon is happening to an
where backlogs will sustain op¬
that
(a) industrial stock prices
even greater degree—except that
have been discounting unfavor¬ erations for a considerable period
stock prices have failed by a wide able developments of a severe ahead.

Cost

This outlook for
tion

7.8%

etc.)

—.

public

expected to ap¬
pear in conservation and develop¬
ment, up 25% to $750 million in
1949;. highway construction, up
10% to $1,700 million; and sewer
and water construction, up 22%
to a total of $550 million,.

7.8

Producers' durable goods, (machinery,
Nondurable goods and services

Other

in

are

present level of the various types
of
construction,
their .recent '

1948

the

which, conditioned by labor pro¬
ductivity: per hour, determine the
cost of "making things" have led
the price parade.

increases

rived from

1937

construction.

-

construction'

9.1%

—

-

with

compared

as

had

educational

important

point of insignifi¬

a

GROSS NATIONAL PRODUCTION

DIVISION OF

Total

manpower,

Volume 168

Number 4756

THE

COMMERCIAL &

FINANCIAL

CHRONICLE

tax structure to help revive

TheS eeds of Ente
(Continued from page 4)
and

under-consumption

and

the New Deal efforts to stress

con¬

sumption at the expense of

pro¬

.

duction
Out

It

of

is

time

of

to

plant

so

that there will be

enterprise

more

seeds

effects Of the penalties on enter¬
prise
are
on
new
enterprises.

harvest of jobs and >goods for
the nation's rapidly growing
pop¬
ulation, so that America can ful¬

a

of

that

celebrated

period

formula

the

came

for

political

success; spend and spend, tax and

fill

tax, elect and elect—and

Here

lot of

role

other lend-spend-borrow phrases.
Those were the years enterprise

vote-catcher,

—work

tax

and

the

on

penalized

save—was

theory,

. propounded
in
that >the American
economy had became so produc¬
tive the country no longer could
consume the products of industry

Washington,

and agriculture.

The theory went like this—with
machinery, American industry is

the

as

a

tures

are

borrow-spend-

the
was

must

build

never

a

More of the accumulated wealth
consumed

in

World

For

fore government should undertake
to balance mass production with

taxes less than 50 cents.

consumption
and
use
its
and taxing powers to in¬
crease consumption.
This theory was put into action
in various ways.
One of these

mass

ways

the elaborate tinkering

was

years.
The tax tinkering hit
enterprise system in a vital

war

the

at the sources of venture
capital.
Any business is a risk. Espe¬
cially risky is a new business. In
some ventures, great sums of capi¬
spot,

tal

must

hope

of

ment

before

risked

be

any

return on the invest¬
be realized. "Long time,

a

can

see" is

cryptic phrase of in¬
vestment which applies particu¬
larly to modern business.
Re¬
search, the development- of new
industries and new products, re¬
quire the courage to risk large
no

that

dollars

The

into these

go

risky ventures are the seeds of
enterprise—seeds that may grow
and bear fruit
in the shape of
living
standards,
jobs,
taxes, and, perhaps, some reward
for those who took the risks and
higher

the

Among

seeds.

the

planted

first to benefit from these invest¬
ments

those

are

get jobs

who

in

enterprises and draw wages
long before the in¬
vestors
have
any
chance of a
new

salaries

and

return.

"

■

Anybody who has tried to start
new business, and to bring into
it risk: capital, knows how hard
it is to raise this type of capital.
It

still

is

more

difficult

raise venture capital
of

imposed

taxes

now

to

with" the kind
risk-

the

on

takers.

debt.

New

the

Deal

years,

of the theorists thought the

should strip the fruitbearing trees in the business or¬
chard and neglect the seeds and
the replanting.
Taxes on upper brackets of in¬
come were raised so high that the
country

incentive

to

save

and

invest was

drastically
reduced
or
killed.
Moreover, these confiscatory taxes
dried up a

chief source of venture

capital.
The capital gains tax was judged
so that it became a "heads-I-wintails-vou-lose" tax. The only win¬

juggling was the
collector—that is, temporarily
in

ner

tax
a

this

tax

winner.

For, after the tree has
stripped of fruit, and the

been

The

$250

billion

national

debt

largely represents wealth that
shot

away

struction

terms,

the

on

in

consumed

the

of

was

battlefieldswholesale
In

war.

price

the

de¬

monetary

for this
wastage is inflation—inflation plus
the heavy taxes that have beep
piled on top of the prodigal tax
we

pay

structure of the prewar years.
These years of high-level busi¬

activity we have had since
1940 mainly have been years of
ness

spending and postwar replen¬

war

ishment of depleted stocks of con¬

goods.
Many billions

sumer

dollars

of

also

spent on capital goods,
improvement and expan¬
sion of productive facilities.
But
what is being spent for capital
purposes, for new
enterprise, is
NOT enough. The scale of capital
investment, large as it is, is in¬
adequate for a country of nearly
150 million people arming for de¬
fense against the Russian threat
the

and

committed

to

help western
Europe against this threat.
The

housing

shortage is only
one symptom of the lag in invest¬
ment during the last 15 years of
depression, war and postwar crisis.
is

It

the

with

same

commercial

industrial

and

building, schools,
electric power plants,

highways,

pipe lines,
refineries and manufacturing
plants.
Above.all, the country, in order
to develop and grow, must have a
steady flow of risk capital into
new enterprises—the kind of new
enterprises that grow up like the

industry,

radio,

or

or

elec¬

trical equipment.
These and other great

industries
got their start, and developed, be¬
cause the risk-takers were willing
to plant the seeds, in hope of re¬
ward, and because the managers
of these enterprises could go to
the market place for equity capi¬
tal, or could plow back profits
in hope of larger reward in the
long run.
Now there is

a serious shortage
equity capital. In order to get
capital for urgent replacement or
expansion needs, many enterprises
must go into debt and take on a

of

capital load top-heavy with bonds
loans.

and

On

hand, the Federal Gov¬
imposes
taxes
which

one

ernment

dies, the harvest ends ^unless
there are new trees coming along

force business concerns to finance

to

equity

trend

in

will

Country

The

argue

and

in

is under-invested.
policies have result¬

country

Federal fiscal
ed

now

Under-Invested

Is

over-production

under-investment

of
of

money

capital.

Tens of billions of dollars in

investment

are

stock.

cize

needed

in

new

manu¬

facturing industry, public utilities,
oil and gas pipelines, transporta-




the

On

other

for

!

the

risk-taking

of

hand,

for government

business

debt

not

rather ' than

debt

capital

spokesman

It

prices.

that we
have over-production and under¬
consumption?
Who

through

tract

increasing

its

load. '

is

a

of

case

the

right

hand

knowing—or caring—what the

left hand does.
Business spending for plant and

tax

New
new

business

high.

New

up

and

largely out of cash

reinvestment of earnings

deprecia'tioh,

borrowings.

Only

together
a

small

with
per¬

Usually

takers—to stockholders.

will

see
how essential is equity
capital to enterprise in the earlier
growth and development stages.
When a business approaches ma¬
turity, or has established a high

of its

rating, it

along out
by borrow¬

may get

own resources

or

ing.
It is the new, the young, the
growing enterprises that are hurt
most

which" rule out
equity financing. The present tax
structure discourages risk-taking
through equity financing for sev¬
eral

taxes

by

These

reasons.

in¬

reasons

clude the following:

to

take

risks

indi¬
or

kill

the

of

venture

capital that

into equities.

goes

Secondly,
structure

the

first,

through

come

tax,

the

takes

part

does

on

divi¬

-

r.

:

the

Thirdly,

in¬
the

through

income ^ax

dends.

tydce:

corporate

then

and

individual

earnings

tax

not

of
but
permit
proportionate
write-off of capital losses.
'/
Fourthly,
depreciation allow¬
ances*

too

are

in

low

relation

to

plant replacement costs
forcing business to draw upon re¬
present

reinvest

to

and

serves

an

over-

large part of current earnings.
result, dividend
equities suffer.

a

payments

lag

credit regulations

Moreover,
discriminate

against

the

market

equity financing.
may be technical points
Yet they are highly important for
These

enterprise

for

and

the

develop¬

ment of the country.

of

capital,

your

you

write

can

against capital gains, if
'

any.

If the

as

a

gains tax
capital levy

recognition

a

primary

of

time-proven

The
take

and

driving

to

urge

chances

force

ad¬
is

a

busi¬

of

it is of life generally. Give
the risk-taker at least a fifty-fifty
ness as

chance of reward and he may go

along

with

Take

you.

most

of

his

winnings and he'll balk.
Many of the erstwhile

risk-

takers have been taxed out of the

market.
No

Others

playing safe.

are

there

wonder

is

dearth

a

of

risk capital for new enterprises.
After two decades of depression
and war,

the country is ready for
of development. Popu¬
growth alone requires an
increased rate of capital invest¬
ment and new enterprise.
And, indeed, all signs of the

a

great

era

lation

times

point

the

to

fact

that

are

of

even

year

a

record

peacetime

any

productive

in our history—a
production indices

force

has

And

Dealers
as

of

were

won't tc

once

expand

normal

of

this

is

the

but

in

adventure

govern¬

beginning

which

all

of

people will participate and all will
Some

say that we are entering
electronics age.
Others speak

are

infants.

industrial

trial giants.
To television alone,
one
of many new

Yet

both

which is but
fields being

electronics, goes
plaudits for expanding production
in

Then, if the company pays divi¬
and you are in the upper

a

by

up

new

well

have tc
dividend

income brackets, you may

80 or 90%

of

every

dollar in taxes.

studying these risks and
nenalties, you may end up by nut¬
After

ting

your
say

field.

boom

Business

try has a
during the war years—when ma¬
terial, as well as men, were ex¬
pendable.
Too, regrettable

though it is,
to

need more money

we

spend for more expendables—
materials

more

war—that

of

we

defenses against

may

rebuild

threats from the outside.

our

It is evident,

then, that to

heavy debt and

our

carry

defense

our

well as to develop our
the country needs new

as

economy,

of

sources

sources

revenue—new

of

jobs and income. The best way
these new sources of income
is by encouraging capital invest¬
ment and new enterprise—money
to get

productivity are synonymous.

What

the

in

the

collected

tax

might

temporarily through revision
tax

structure would

come

in

the

long

seed will

The

run.

itself

repay

the

in

times

many

fruit of the harvest.

is

This
nature.

elemental

an

industrial

enterprise

as

of

truth

It applies just as

much to
farm¬

to

ingThe

Great

Depression

—

the

enterprise holds

new

meaning for

western civilization.
Let

plant

us

seeds of

Then

now.

look forward to

can

the

nourish

and

enterprise

we

harvest of

a

continued prosperity, security and
■

* -

t

With Geo. R. Miller Co.

provide the answer to stock¬
upon our metals and

conservation needs in

(Special

for¬

our

to

Sheahan

Our

era—whatever it

new

may

be called—will move toward ever-

frontiers—frontiers

extending

research—of

scientific

of

scientific

adventure.

Financial

with
81

Geo.

Sheahan
B.

Miller

R.

Euclid

was

B.

associated

become

has

South

Chronicle;

CAL.—Robert
&

Co.,

Inc.,

Avenue.

Mr.

previously with John

Dunbar &

Co.

and

R. F. Ruth

& Co.

Out of its vast

laboratories will

products to enrich our
new modes
of living.
The roll call of the ma¬
terials which
will serve us is

come

The

PASADENA,

new

L. J. Reese

lives—new ways and

(Special
.

to

The

Opens

Financial

Chronicle)

SACRAMENTO. CAL.—Llewel¬

in

is

a

famine of

in

consumer

goods

man

with Capital Securities Co."

before it masters man.

has

reached

a

new

Enterprise

en¬

needs

greater access to equity financing

sale of stock.

and

changes in the

•,

era

we

are

to

enter—if

industry can be free to move for¬
to

produce

and

With Cumberland Sees.
NASHVILLE,

TENN.

—

L.

A.

Johnson, formerly with Nashville
Securities

Co.

is

with

now

the

sales department of the
land

Securities

Fourth

Cumber¬
Corporation, 206

Avenue, North.

pro¬

vide for the American people.

stage

enterprise should be

must rely on

the

•

sonar,

Supply has ward—free

demand in many lines.

capital investment in new

couraged.

living.
For all, of
prosperity, this coun¬
heavy debt incurred

freedom."

radiant heat,
equity capital for enterprise.
newspaper facsimile, jet propul¬
In plain words, this is eating the
sion, man-made weather—mech¬
fruit of enterprise and neglecting anized
farms^ mechanized factor¬
to replenish the orchard and to ies,
mechanized homes—produc¬
tivity, good living, leisure—that is
plant seeds for expansion.

forms of

of

current

our

plastic industry, by its con¬

Radar,

where

standards

already endless.
Atomic energy, lyn J. Reese is engaging in a se¬
something alone, may well change our whole curities business from offices at
government bonds daily routine—if it is mastered by 1812 J Street. He was previously

capital

Meanwhile, there

The

we

pile demands

dends

nay

jobs, in order to stabil-,
ecohomy equally as much
need
them to raise our

our

as

servation of wood and metal, may

expansion,

esoecially under present condi¬
tions.
T^e corporate income tax
takes 38% of the profit.

and those

ize

as

ests.

for

Production
means
jobs.
jobs mean money to buy the
things we all produce.
And we need that production,

the beginning of £ decade of business-baiting with its
plastic age.
Perhaps both opin¬ tax and
money
tinkering—aire
ions are correct. - Certainly, both
gone.
The
world
is
changed.
electronics and
plastics are al¬
America has risen to a role of
ready influential factors in any
prophecy of things to come. Both world leadership; and American
today

to

earnings

bring

can

And

an

the

of

find good.

have to build up reserves and

invest

know-

our

back to the Treasury several-fold

with

threat

risk—without

use

want.

lose

below

mental hindrances—we know that

successful, the chances are it will
be some years before it can pav
dividends.
The
company
will
re¬

We

can

things to
them that they have not, even as
they can bring things to us that
we need.
Ana here at home, the
area
for expansion is broad.
There is no limit to the things
that our people not only need, but

and

Now, if given the freedom to go

an

of

how,

total
only

Utopian goal.

a

ahead—to

The

enterprise happens to bp

us

60 million millenium to which the

look to

Europe

south

that

our

fluctuated

and

above

that

double

period.

prewar

slightly

most

almost

been

labor

now

year

whose

have

nearing the
which is to set a

the

as

Industrial

goal."

pur

And the countries to the

burdens

We.

For the fu¬

be very clear.

development, is

we

ture.

end

cauSe for such fears.
can

will not

we

will find no

we

new

entered that new
of productive adven¬

era

only hope that

can

ture

already

era—an

■

centage has been financed by the
'''

is

off opened

for tax purposes only a small part
of the loss

capital

give promise of becoming indus¬

yourself in the position of
investor considering the risks
a new enterprise.
If you lose

Put
an

the

I

hesitate—and that

needs it.

of income.

fundamentals.

of

for

maxi¬

a

an inflationary period.
What these proposals amount to

As

and

to

during

New

capital gains
the winnings,

taxes

operates

year

tax

present

taxes

Revise
which

the

on

part of investors who in the past
provided
new
enterprise
with
much

of 50%

have

First, steeply graduated
vidual income taxes reduce
incentive

mum

venture

Study the development of the
motor industry, the electrical in¬
dustry, the mining industry, or
any other great industry and you

buying is leveling off.

reserves,

at-

not

are

overtaken

been financed

and

capital to develop.

credit

into enterprise.
For example:
End the double tax on divi¬

enterprises

reserves

equipment, for replacements and
has

ven¬

Industrial Development
Is Our Goal

changes in the tax struct¬

would heip greatly to stimu¬
the flow
of equity
capital

late

Limit income

proven,

So

A few
ure

-

;

dends.

Business

expansion, the last few

years

squeeze

as high
established concerns.
they have to look to the risk-

as

somes safe,

criti¬

the

their credit ratings

gas

tree

replace the old.
The
present tax
structure, I
submit, takes too much fruit from
the growers and doesn't encour¬
age enough replanting. One indi¬
cation of this is the inflationary

.

have been

for

motor

in

Back
some

The dif¬

added to the national

was

railroads, oil and

a

II.

dollar spent in World
II, the Treasury collected in

ference

a

amounts of money.

War

every

War

credit

with the tax structure in the pre¬

formula

living off abundance accumulated
in
previous generations of work
and saving.

productive it outruns the capac¬
ity of consumers to buy. There¬

so

as

American people as a whole.
On
the contrary, it was a formula for

was

of

The risks of

raising living standards of the

.or

where

Risks

stronghold of

Whatever value it has had
formula

is

really hurts.

western freedom!

a

its

long-range development
the country, the most serious

25

placed by government,and by the '
misunderstanding of the people
themselves.

Tax Changes Advocated

For the

kinds.

various

equity

financing.

tion, construction and services of

.

.

(2301)

There
to

this

are no
new

natural boundaries

era.

Yet it is to be

Merrill
(Special

to

Lynch Adds

The

Financial

Chronicle)

LOS ANGELES, CAL.—James
industry
might
hesitate—driven by- a feeling of E. Rice has been added to the
insecurity—by the fear that un¬ staff of Merrill Lynch,. Pierce,
natural
boundaries might
be FennerJi Beane, 523 West Sixth
r' '■'
: '7
placed
short of
the horizon- Street. ^

expected

that

26

THE

(2302)

COMMERCIAL

Thursday, December 2, 1948

CHRONICLE

FINANCIAL

&

1920-1940
of
unfavorable and let' your customers come in
prices, farmers now insist that a and ask for funds to aid in this
What you call your good
part of the price risks in agri¬ process.
culture
be socialized, i.e., borne customers probably have the funds
to do these jobs.
But in every
by the public through the gov¬
ernment by some system of sup¬ farm community there are some
able young men who are short oi
port prices. Both political parties
are
agreed on the desirability of capital wnp 20 years from now
these.
The only issues are in con¬ will be your top farmers.
You
nection with the details.
This is ought to have a program to go oui
not solely a U. S. A. trend.
It and find these men and help thenr

from

Economic Outlook for Agriculture
(Continued from page 2)

„

^

works higher, some farm products
will be favorably affected. If you
want

farmer's view

a

neld

fects pricewise be different than
in the past when large stocks held

the mat-

on

would the ef-

reserve,

a

as

part of commercial reserves
have tended to depress prices? I
doubt it. Very likely some of the
ernmental expenditures.
Gradu- heavy government buying of
ally various soft goods lines are wheat in the current season has
turning sour—shoes, cotton goods, been influenced by the desire to
.woolen goods, etc.
But the ad- build up stocks abroad,
ter,

high

of business
activity rests on our construction
boom and our high level of govour

effects

verse

ridden

level

those

of

are

as a

over-

Farm

by the huge level of con-

struction

demands

and

for

price

will tend

supports

to check downward movement in

new

prices.

Professor

will

Case

dis-

exists all

from

the world.

over

My only

Don't expect too much

comment:

it,

if

sharply

demand

de¬

clines.

Regardless of the level of prices
to farm so as to preserve
the soil and to get good yields of
crops and livestock.
Your morn¬
it pays

automobiles

and

and

by

high level of government expenditures. How long the present
construction boom will last, I do

government expenditures
continue and if we expand

level of farm

While

military expenses, as appears
likely, they will increase.
I do
not see the long looked for crack-

our

in

We. have

differences

building

system

livestock

a

up

may provide features which yoi
do
not consider orthodox.
Yet

they

months.

be

illustrated

asked

was

and

hesitated

know

fessor.

Perhaps

commenting

my

on

conclude
think

and

for

the

that

about

next

may

not

decline

•vj

Then you

don't

I

.^5!in
P prices& of manufactured

Brice

property taxes is always

trend

following

know

something

else

minutes.

But

few

of

period

a

mtlatl0n-

,

So with a trend toward lower

Prices and steady-to-rising costs,
net farm income will decline,
is This will be felt first by marginal
I (less productive areas).
Bankers

farmers,.and sometimes their
bankers, have to make long-time
decisions

The

if

even

murky

the

"

future

'

.

trend of prices of
products
will
likely
be
general

|hould'watch the}f farm loans,

Some of you may be surprised to
"nd ou* who some Of your
years.
The supply situation is marSinal operators really are.
easing.
The export markets will
In one respect farmers are in a
be at a lower level.
Overall agri- better situation to stand lower
cultural production is nearly one- income than after World War I.
third
higher
than
in
1935-39,' Debts have been drastically cut
while our population is up some-, although
they have turned up
farm

downward

what

the

over

less than half

substantial

part

much.

as

this

of

few'

next

A

increase

in output based on better technical
methods—better
varieties,1

fertilizer,

more

ter

feeding

likely
since

look
of
or

at as

the
for

high gear
of

end
a

areas,

bet-1

will prove to be
Finally, it is not1
our
entire economy

that

run

some

—

permanent.
can

adequate

more

mechanization in

the

it has

as

So

war.

I

somewhat lower level

prices for farm products.
War
droughts could change this esti¬

Focus

.

again in the last two

There

years.

individual cases of heavy
debt, but the industry as a whole
has used its wartime income to
reduce debt rather than to increase it as during World War I.
This reflects a recognition of the
inherent risks of capital investments in agriculture, a recognition which did not exist in 1920
are

because 1920 had been preceded
by 25 years of rising prices and
land

values.

But

in

another

agriculture

spect,

requires

a

doing the job.

in

farming will pay better
farming even though

Good

than

and oper¬

landowners

sound

poor

price levels

is

much-

re¬

more

One may

register two

reserva¬

to

lower

incomes.

is the higher level

This

of fixed

come

Sending Funds Abroad*

willingness

American

The

to

help less fortunate peoples abroad,
as
evidenced particularly by the

Program,

Recovery

the

whether

policies

foreign aid

justified on the grounds of
American
security involves po¬
litical

military

and

should

matters

on

speak as an
officer of the International Bank.
which

I

shall

I

not

merely

that in

say

my

opinion ERP is a measure of in¬
telligent self-interest and that no
one should expect this country to
continue

bear

to

involved

dens

in

heavy bur¬

the

foreign aid

ex¬

the people believe that it
protects and promotes their own
well-being — their economic and

cept

as

their

and

interests

financial

se¬

curity.
However, I do wish to empha¬
the' practical
necessity
of

working out
nance

(Continued from page 9)
and

reduction in foreign de¬

any

will

mand

welcomed

be

not

by

those who have such goods to
In

fact,

sell.
already seeing evi¬

we are

of

funds* to

attempts

use ERP
surpluses,

to

these

absorb

both

agricultural

whether

United

States

industrial,
what

are

from
the
speed its recov¬

most

needs

Europe

and
they

not

or

to

feRP

ery.

was set up with tax¬
dollars to give Europe a
to get back on its own

payers'
change
feet.

makes

It

dollars

these

to

sense

no

for

except

criticisms

the

dis¬

of

.

instead

luxuries

of

food

for

and

much less than it sells. The differ¬

We can't have it both

equipment.

No

in

Balance

Foreseeable

have

realistic.

us

discriminate or, to put it

to

trade

in

the

exports

sometimes take precedence over a

American

new

car

wife

as

or

that

claim

mink

a

well

they

criminated

coat.

the

as

the

It

is true that the

in

finance

the

achieved with

last

some

will

tend

exceed

to

imports.

substantial

any

time American

At the best,
increase in the

do

is' not

States

to

.

the

more

sell

or

much

less

or

of both.

some

Increased imports will compete
some of the products which
you make, and at least in the short
run may adversely affect the busi¬
ness of some of you.
On the other
j

with

dollar of additional
purchased in this country
from foreigners means that they
have another dollar to spend for

hand,

imports will probably be gradual.

goods

relative bal¬

trade

To force
in

century

was
con¬

balance

a

by drastic cuts

American

exports would prob¬
ably have a substantial effect on
the economy and be resisted by
ture

labor.

and

A

complete clos¬

ing of the gap in traple^in a short
period may prove to be both eco¬
nomically undesirable and politi¬
cally unfeasible for the United

trols.

Great

every

American

Now

to

consider

■<,

the

third

method by

which foreign trade is
long as a gap con¬
tinues, it must be covered either
by extraordinary assistance from
the U. S. Government or through
balanced.

So

So

a

as

group

American industry

believes gen¬

high volume and com¬
petition.
Probably the greatest
good for the greatest nunibrr lies
in approaching a balance of trade,
not at a low but at a high level.
erally in

If this is

States.

goods.

will probably benefit.

you

people in industry, agricul¬

many

and

minimum of

a

other

any

much

so

much com¬
country or

being dis¬
Similar ne¬

international

of

to

that for

has

present high volume of American

cessity faces the countries which
today have many needs'and de¬
sires and relatively few dollars.
If they are to move towards, bal¬
ancing their trade, particularly in
the dollar area, they must selec¬
tively control, that is discriminate,
as
to what they buy and where
they buy it.
ance

pared
area

funds

give
away
great
products of its
fields and factories, it must ap¬
proach a closer balance of its for¬
eign trade.
It can either buy

may

furrier

are

against.

So

America

much and produces so

another way, be selective in our
personal trading habits. Grocery
bills and repairs to the house must

by

for

by the govern¬
pockets of the

to

of

amounts

future.

foreseeable

Economically,

United

the

continue

most

Most of

the

of

taxpayers.
If

be

out

ment

However,
even
assuming the
prudent foreign buying in
To American ears the word* dis¬ American markets, it seems hardly
crimination
has
an
ugly sound. in the cards to expect an abso¬
Theoretically
at
least,
opinion, lute balance of American foreign
But let's

paid

being

largely supplied

Future

favors nondiscrimination in trade.

is

ence

ways.

pur¬

Discrimination

for

Bases

objectives of U. S. for¬

eign policy. How it is done will
crimination
are
contradictory.
I •greatly affect conditions in this
recently read an article which be¬ country and the course of events
gan by complaining bitterly that overseas.
certain
European
countries
are
How to summarize. The United
discriminating against some Amer¬ States is selling abroad a tremen¬
ican goods.
A bit later on the dous volume of goods, due to the
author
complained
that
these preponderance of its own produc¬
same countries are spending dol¬
tion and to abnormal postwar de¬
lars
furnished
by America
for mands. It is buying from abroad
of

Some

■

„

basic

the

ported by American opinion.

those

things most essential to this
pose.

use

solution to the bal¬

a

of foreign trade and fi¬
along lines which are in
accord with and not contrary to
ancing

This was largely because
Britain, the dominant trad¬
cash costs.
Farms were operated ing. nation of the world, found it
tions on'this.
First we may get
to
her interest to promote im¬ the export of private American
into war.
The first impact of war, jn *920 to a large extent ^with
In the past, wealthy na¬
home-grown horses which were ports as well as exports and to capital.
may be to lower prices because of
send
a
tremendous
and
steady tions have exported capital and in
These
difficulties in connection with for¬ fed on home-grown feed.
flow of capital abroad. The inter¬ general they have received sub¬
did not represent cash costs.
If
eign supply lines.
In the past,
national iinancial and economic stantial benefits.
wars have raised prices.
But the grain was cheap, so was horse
vulnerable

mate.

together.

lower.

are

World Finance

on

+

safest course
the longer-term

you

"

vou

outlook is to hesitate.
can

costs

a

?,nd/ tank% Prices of
manufactured goods always lag
?n a °.wn'ward price trend. The

"You

waTa ^lege

he

that

said*

know

Thank

don't know
ured

,7

I fig-

He

don't

vmx

\

closer

size

dences

i0wct

a

Any

country.

process

ators

a

It is not enough to sit back

bankrupt is

p c?" „,in w dnnS
S°0aS will be supported by defense activity- Basically/there is
! no^ muc^ difference between a

sliehtlv

or

not

connec¬

^

A mam

Industry in Chicago
the Argonne Laboratory.
I

the

Question of Lower Farm Incomes

expe-j

an

istic

allow

to

*

whether the Museum of

me

Science

in

by

I had last summer.

nence

in

and

level

wa^ down the economic

a
r0

Farming is a
long-time business.
Perhaps
one's point of view on this can
best

costs

when agriculture was

a

this

built

aid

and

this

in

and

are

the kind of loans whicl

are

smart banker will find out how tc

communities

active

an

program

to
go
back to prewar
levels.
Certainly, anything like
the situation in the early 1930's

dTort-tem'situation'for'the

12

next

considering

tion.

in

demand

rural

have

passive

prices

time passes.

been?

should

in

must

imports

ports

springs from generosity typical of
this country. But generosity alone
can wear itself «out.
The question

Every

capital.

of

sources

are

banker

overall

Longer-Time Outlook

rather

may

.continue to pay^for ex¬

ports, the volume of American ex¬

European

capital problem. Loam
improvement of land or foi

Banks

in this job?

banker's role

the trend of prices

downward, I think the level
be high when compared to
prewar years.
We have too many

some of

as

prices.

amounts

for

the support level

will

our

getting thinner

prices

be

high level of business
activity in the near future.. But
the supporting factors are
up

Two comments:

below

be

may

Heavy
will

these.

cuss

Unless public funds in large

with their

capital¬
period o
It takes time to get in¬
ing program was devoted to this waiting.
when market conditions will not
general theme and at the insist¬ creased income out of the added
hold prices up to this level; witence
of
your
own
people.
In capital in farming as well as else¬
not know. All such booms have ness corn orices at this time
Be¬
So, on loans for these
many parts of Illinois, to accom¬ where.
come to an end in the past; so
will; ginning in 1950, the price supports
plish these objectives much cap¬ purposes repayment schedule!
thfa one. It is probable that it will wm be lowered on the basis of
ital must be involved in improve¬ must be comparatively
light a'
continue in 1949 although it will our
present law.
So price sup¬
ments to land and buildings and first and heavy later on. The op¬
begin to thin out around the edges. ports will not present a lower
in added livestock.
What is the portunities
are
large and
t'm
houses

the

present

the

of

trade

of

balance
size.

achieved, it

not only

may

help to maintain our prosperity
here, but it will assist the rest of
the world to regain financial and
economic
stability.
This is my

justification for treating the trade
balance of America as a focus of
finance.

world

-

next

war

will involve

controls—price
and

a

hold

and

a degree of
otherwise—

tax level which will tend, to

prices

reservation

down.

on

The

other

the matter of lower

prices is on the effects of our
developing a rearmament econ¬
omy.
Since this will not be war
and controls are unlikely in such
a period
because the public will
have a peactime psychology, it
will be inflationary. There is im¬
portant economic

opinion in this

inflation.

lated

into

This
an

might
active

be

trans¬

policy

of

products.

If such

reserves

definitely segregated
commercial

from

supplies




were

ordi¬

and

farms

purchases of

plemental

operated

are

fertilizers

feeds

and

smoothness

to

balance

be

the
sup¬

at

ran

to

with

enable

sufficient

a

obtained

place. Unfortunately,
today no such natural balance ap¬
pears in the offing.
The damage
and dislocations from the

mobiles

peace

in

place

buggies, electric
of keroserfe
crease

are

of

in place
All these in¬

expenses

"break-even"

the

and

make

and

point

higher.

a modest change in farm
in relation to. costs will
difficulties for some farm¬

even

cause

ers.

this

In the
will

of many farmers
cushioned by large

case

be

cash reserves.

Whether it

is this higher

background

of

two

lack

der
seems

decades

war

and

real

a

for

necessary

which

short

are

of

countries

dollars

arbi¬

trarily to limit their dollar pur¬
chases to essential goods they can¬
not buy elsewhere and in amounts
for which
they have dollars to
pay.
Call this discrimination if
you will, but it is no greater than
that

which

customs
or

of

postwar
have been so great that un¬
existing, circumstances
if

tariff

area

which

would

union

level

of more or less fixed cash costs

the

the

from

power

lamps.

cash

horse

practical
through

market

higher
levels; physical standards of liv¬
ing are also at higher levels with
better roads, schools, with auto¬

So

heavy stock piling of agricultural

nary

Now

which holds that our
underlying trend is for more prices

country
basic

feed.

with purchased power machinery
and
purchased fuel.
Likewise,

machine

or

accompany

a

preferential

within Western Europe,

seems

to, be ardently

sup¬

We
see

in

International' Bank

the

many

projects, particularly in

the

underdeveloped areas, which
would be attractive to private in¬
vestment

and

if

the

purposes

one

Our

vestment,

of

act

as

The

own resources pro¬

a

capital

is
however,
for private

can,

trail-blazer

through helping its
countries,, put their eco¬

and,

member

nomic

Bank

and

more

stable

mate

in

financial

basis

which

may prosper.

affairs

promote

such

W'th Merrill Lynch

on

a

a

(Special

flow

However, I must say

abroad

decade will not

during
cover

a

expected

the
gap

The

Financial

Chronicle)

LOUIS, MO.—Frederick B.
Swarts has become associated with
Merrill

Lynch, Pierce, Fenner &
Locust Street.

511

Beane,

past Mr. Swarts
Bro.

&

Co.

and

was

In the

with Francis,

Festus

J.

Wade,

Jr. & Co.

cli¬

investment

ican capital which can be

to

ST.

Walston, Hoffman Adds
(Special

that the amount of private Amer¬

to

Chronicle)

Avenue.'

our

vide only a small part of what
needed.

Waddell

Financial

CITY, MO.—Bruce D.
McDonald is with Herrick, Wad¬
dell & Reed, Inc., 1012 Baltimore

im¬

principal
is to stimulate such in¬

and

The

to

KANSAS

political

climate should

economic

prove,

general

With Herrick,
(Special

next

in the

LOS
V.

to

Priest

staff

The

Financial

ANGELES,
of

has

been

Walston,

Chronicle;

CAL.—James
added

to

Hoffman

the

&

Goodwin, 550 South Spring Street.

Volume

THE

Number 4756

163

COMMERCIAL

&

FINANCIAL

CHRONICLE

bushel

The State of Trade and

Business

That is

Afford

Company-Wide
of Industrial

Understanding

Communications-

ton of ingots pro¬

no
noticeable softening in pressure on the mills has developed.
In
fact, lack of steel is restricting manufacturing operations, last week
for instance, Briggs Mfg. Co. and Chrysler Corp. being forced to
oper¬

ate

curtailed schedules because of

on

Section, Department of Economics
Institutions, Princeton
University, Princeton, N. J.—pa¬
per—$2.00.
:

crease,

and' Social

t

/Economics of the Money Supply,

The—Report of the. Committee on
Economic

Policy—Chamber

Commerce

of

of
States,

United

Washington 6, D. C.—paper.

.J

-

a shortage of sheets.
So pressing
requirements, demand for conversion ingots is on the in¬

trade

are

an

of the market where

area

develop.

• -.

*

>

.

Whatever faint

>

v.

slowing in demand wilF first

a

under which

voluntary allocations

are

/ The American Iron and Steel Institute announced

of this week the operating rate of steel companies

Swedish

Iron

and

Steel

A

—

;

ity for the week beginning Nov. 29, 1948,

gren

0.9% above the preceding week.
rate was 98.9%.
/
'

Survey—Gunnar LoweSvenska Handelsbankeri,
Stockholm, Sweden — paper — 4

cr

Swedish Kroner.

The scheduled rate
record which

FIG Banks Place Bebs.
A successful

offering of two is¬

Intermediate

Credit

made Nov. 17

Banks

tons

in

by Charles R. Dunn,

will

be

month

a

capacity

was

Monday

capac¬

increase of 0.9 point,

an

A month

of output this week

ago

the indicated

will set

12,600 tons larger than the

one

year

1940, highest

ago

1,710,000

and

ago,

tons,

and 1,281,210

prewar

over

affected

botn the

Pacific

Volume

was

large part of the winter wheat belt last

a

Wheat from farms to markets

of

movement

new

crop.

of

trading in grain futures on the Chicago Board of
Trade increased sharply last Week to 226,392 busnels, from 173,941 in
the previous holiday week.
Livestock receipts were sharply curtailed toward the latter part
of the week due

largely to heavy snowfalls

wide

over a

area.

Hog prices turned upward following an extended period of
successive declines in which values sagged to the lowest level
since May.
'
•

.

Cattle prices were steadier for most classes and grades although
dressed beef in the New York market showed a further drop of $1

hundredweight.

per

than

Lambs and

sheep finished moderately higher

week ago.

Lard prices were irregular and trended slightly
lower during the week.
a

all-time

an

previous peak

97.7% of the old

or

tons for

the

average

last week.

range

Prices again edged slightly higher in moderately

active trading.
1

.

week

year.

,

Mill

demand, chiefly for forward shipments,
price-fixing were the principal supporting factors.
further

A

influence

the

was

foreign

and

continuing heavy movement into

the government loan stock, indicating a tightening of the free supply
of the staple as the season progresses.
Spot market activity increased
with reported sales in the

reported in the week beginning Nov. 29, 1948.
This week's operating rate is equivalent to 1,804,300 tons of
steel ingots and castings against 1,788,100 tons a week ago, 1,782,600

Federal

of debentures of the

sues

,

on

having 94% of

the steel-making capacity of the industry will be 100.1% of

Historical
—

snows

hindered the

hut they were very beneficial to the

set up.

.

>

cents per
were

Cotton prices were irregular and continued to hold in a narrow

hope

These extensions are
in addition to those previously approved for three national defense
programs. •
'

j..

ports, demand for the cereal

Heavy
week

,

existed in consuming circles for a larger
supply of "free" steel early next year, it vanished last week with ex¬
tension of five current voluntary allocation programs for a
period
of six months beyond the Feb. 28 expiration date of Public Law 395
a

strikes in

by

27

stimulated by a sharp
increase in flour bookings
gs mills protected buyers against two
advances aggregating 20% per hundredweight.

coal wage impasse, steel to
than 92 million tons.
Out¬

hardly likely that such a rate could be held indefinitely.
But more capacity is being brought in.
Coal quality is better. Scrap
is more plentiful—temporarily at least.
And workers' efficiency
appears to be slightly better.
No break in light steel supply conditions appears in sight, accord¬
ing to "Steel" Magazine. Demand continues as strong as ever despite
reported easing in manufacturing operations in some lighter durable
goods. However, whatever slack appears is quickly taken up so tha

Helen Baker—Industrial Relations

the

per

It is

tons.

Live

to

by the steady upturn in prices and

put this week, the magazine states, is on an annual basis of 94 million

Relations Policies—

in

Study

finished steel is being made

Barring a steel labor strike or a long
be turned out next year may reach more

Better?—Lowry Nelson—National
Planning Association, 800 Twentyfirst Street, N. W., Washington 6,
D. C.—paper—500.

A

more

duced.

Bookshelf
Farmers

why

a week ago and corn and oats rose about
While government purchases of cash wheat

over

bushel.

and Atlantic

(Continued from page 5)

Man's

Can

Industry

(2303)

against

in

169,000

the

corresponding week
Nov.

11

amounted

10 spot markets

previous

totaling 286,700 bales,

as

holiday

week and, 369,500 in the
Loan entries during the week ended

a year ago.

to 324,400

bales, against 315,200 a week earlier.
during October averaged about 280,000 bales per week. Con¬
sumption of cotton in October, according to the Bureau of the Census,
totaled 690,000 bales, or a daily rate of 34,200 bales, as compared
with a daily average of 34,400 in September and 36,400 in October a
Entries

year ago.

,-r.

Business in
week.

Recent

well

was

keen

the Boston

,

wool\market

fairly active last
brisk demand for woolen type noils and scoured wools

maintained.

competition

raw

was

Australian wool markets

at

reported

was

stronger.

/'*■';

.

firmer, while

were

London

the

sales

with

prices

.

New

York, .fiscal agent for the
financing consisted of
$23,630,000
IV?%
consolidated

banks. The

debentures dated Dec. 1, 1948,

due
May 2, 1949 and $32,040,000 1.60%
consolidated

Dec.

1,

Both

issues

The

dated

debentures

1948,

tfue

Sept.

1949.

1,

placed

were

at

par.

proceeds

together with $21,.410,000 cash in treasury were used
to
retire
877,080,000 debentures
maturing Dec. 1. As of the close
of business

Dec.,1, 1948, the total
amount of debentures outstanding
was $480,135,000.

ELECTRIC

OUTPUT

SHOWS

DECLINE

FROM

HISTORICAL

RETAIL AND WHOLESALE TRADE

RECORD IN WEEK ENDED NOV. 27

distributed by the electric light
and power industry for the week ended Nov. 27, was 5,373,597,000
kwh., according to the Edison Electric Institute. This was a decrease
of 253,303,000 kwh. below output in the preceding week, but an in¬
crease of 390,158,000 kwh., or 7.8%
higher than the figure reported
for the week ended Nov. 29, 1947.
It was also 925,404,000 kwh. in
of the output reported for the corresponding period two years

excess

ag0-

'

/ ' ;

V-

/

-•

/V*

./

CARLOADINGS DROP 1.6% IN LATEST WEEK

Loadings of

Tollner & Co. has

ties

City, to engage in
business.

a

Partners

Consumer

Tollner and Edythe B.

Nat

(Special

The

to

.

Financial

Production of

,

to

This

With J. M. Dain&Co.

cars

and

Chronicle)

Co., Rand Tower, members of the

units

90,039
week's

from

(revised)

120,718

units

the

previous

drop

production

in

■

attributed

was

to

;

*

the

weekrlong Plymouth shutdown.

a

to

The

Financial

Chronicle)-

ert J.

Rugen is

Lynch,
301

now

Pierce,

with Merrill

Fenner &

The

to

Financial

Lowe

with

is

—

of

Otis

&

industrial

failures

fell

to

the

twice

were over

*

■

Middle

almost twice

as numerous as a year ago

/■

:

Atlantic

and

Cp., First

numerous

as

little change.

was

.

Pacific' States

less

The

to

Financial

Chronicle)

FLA!—Frank

L. Eden-

for

Nov.

;■

as

last year,

;

/
^

while in other

has

Paul

A.

Bldg.

Davis

He

affiliated

Sc.

was

23

Co.,

there

with

Ingraham

previously

with

Cohu & Co. and Clark Davis & Co.

during the week were wheat, corn,

hams, bellies, coffee, potatoes, hogs and lambs.
Declines oc¬
barley, beef, butter, cheese, cottonseed oil, cocoa, eggs,
currants, prunes and steers.
■
oats,

(Special

MIAMI

to

The

BEACH, FLA.—Charles

rill

Lynch,

Pierce,

Fenner

Beane, Lincoln Bldg.




&

re¬

moderately in the week.

turkeys

generally higher than

was

on

Commodity price fluctuations in the past week continued to be
The Dun & Bradstreet daily wholesale commodity price
in a narrow range and closed slightly higher at 272.79
Nov. 23, as against 271.10 a week earlier.
On the corresponding

date

a

year ago

Grain

it stood at 297.49.

*

prices in both the futures and cash markets showed addi¬

tional strength last week.

a

a year ago,

considerable

'■/■■'
seasonal

volume

of

furniture

than in recent weeks.

the

in

for

demand

There

heating

and

equipment

housewares

was

continued.

The

fractionally lower

slight dip in the consumer interest
Electrical appliances were purchased in larger numbers
previous week.
While the purchases of small model
was a

sought in
novelties

slightly, television sets and console model radios were
increased volume.
The demand for toys and holiday
slightly.
'

an
rose

Retail volume
a

was

estimated to be from 3%

below to 1% above

year ago.

Regional estimates varied from the corresponding 1947 levels
by

following percentages:
New England and Northwest,
East, down 3 to up 1; South, 0 to up 3; Southwest, down

the

0 to up 4;

3 to 0; Midwest and Pacific Coast regions, down 4 to 0.

Total wholesale order volume in the

period ended on Wednesday
fractionally below that of the preceding week, but
the level of the corresponding pre-holiday week
a year ago.
Re-orders for gift and other seasonal items continued
in substantial quantity.
The number of buyers attending wholesale
markets was estimated to be about 10% below that of the comparable
of last week

was

remained very near

1947 week.

Department store sales

on

a

country-wide basis, as taken from

the Federal Reserve Board's index for the week ended Nov. 20, 1948,
decreased by
with

6% from the like period of last

year.
This compared
preceding week.
For the
1948, sales decreased by 5% and for the
to date increased by 6%.
a

decrease

of

9%

recorded

in

the

four weeks ended Nov. 20,
year

Here in

New

York

retail

trade continued the

decline

expe¬

rienced for several weeks with sales volume the past week fall¬
a year ago

by

were

a

sizable

given

as

important factors in the decline.

index moved

Cohan has joined the staff of Mer¬

was

More men's furnishings were purchased than

areas.

margin. Unseasonable weather and price resistance

irregular.

Chronicle)

While the
slight seasonal expansion in

ing below that of the corresponding week
COMMODITY PRICE INDEX CONTINUED IRREGULAR IN

Lynch Staff

Financial

a

poultry also sold well and consumer interest in meat
slightly. Shoppers bought more fresh fruit and vegetables,
goods, confections and table delicacies than in the previous

retail

curred in rye,

LATEST WEEK

Joins Merrill

apparel fell,

raincoats, overshoes and heavy underwear

Other

The

price index

rose

Commodities that advanced

become

areas

*

slightly to $6.38, from $6.37 a week earlier.
The
current figure represents a drop of 9-6% from the $7.C-3 recorded a
year ago at this time.

'

field

failures

Food prices in wholesale markets continued their irregular move¬

Edenfield With P. A. Davis

fractional in¬

were

skirts, blouses and sweaters.

,

reported

ments last week and the Dun & Bradstreet wholesale food

(Special

when 20

FOOD PRICE INDEX SHOWS SLIGHT UPTURN IN WEEK

National Bank Bldg.

MIAMI,

holiday-

than in the'ftrevious week, but in both these regions' casualties were

R.

There

coats.

of

radios dropped

in

101

Retail failures declined sharply to 45 from 58 in the preced¬

occurred.

Chronicle)

men's

in the retail volume of women's

noted

that

in

week.

1939.

ing week, but

Har\*ey

and

24, respectively, but they were less than the 264 in the same week

The

(Special

declined,

declined

than

week ended Nov. 25 from the preceding week's high of
126, reported Dun & Bradstreet, Inc.
More casualties occurred than
comparable weeks of 1947 and 1946, when there were 72 and

Beane,

Lowe With Otis Co.

apparel

despite the increased cost, housewives purchased

in hardware.

,,

shortened

Montgomery Street.

DENVER, <• COL.

but

output

Ward's added.

rose

volume.

in the

,SAN FRANCISCO, CAL—Rob¬

were

than

The retail price of

baked

a year ago was 80,201 units.
consisted of 63,573 cars and 20,306 trucks
made in the United States and 6,160 untts made in Canada.
This is" the first drop below the 100,000 mark since September,

week's

This

Commercial

(Special

winter

and

Stimulated by the approach of Thanksgiving Day, retail food

BUSINESS FAILURES FALL IN HOLIDAY WEEK

Joins Merrill Lynch Staff

of

for

some

volume

Minneapolis-St. Paul and Chicago
Stock Exchanges.

volume

ported in

SHUTDOWN

Output in the similar period

R. Bambenek is with J. M, Dain &

fall

*

the demand for

the0 demand

trucks in the United States and Canada

Thanksgiving Holiday plus

MINNEAPOLIS, MINN. —John

of

in the previous week.

PLYMOUTH

HOLIDAY AND

week, according to "Ward's Automotive Reports."

'■

dresses

in

creases

AUTO OUTPUT ADVERSELY AFFECTED BY THANKSGIVING

declined

Tollner.'

mmmmmmrnrnrn-J.

It also represented a decrease of 45,170 cars,
corresponding week in 1947, but an increase of
or 6,3% above the similar period in 1946.
year.

under the

50,899 cars,

buying

Sharper decreases

1948,

retail

securi¬

are

and brand.

ing week this

with offices at 50 Broadway, New

York

last year with decreases in unit volume reported in many
sections, Dun & Bradstreet, Inc., reports in its current summary of
trade. Many consumers remained selective concerning quality, price

suits and

5%,

Dollar

week

totaled 857,492 cars, according to the Association of American Rail¬
This was a decrease of 14,185 cars, or 1.6% below the preced¬

or

formed

been

week.

slightly last week.

roads.

Tollner & Co. in NYC

holiday promotions, retail dollar vol¬
fractionally during the period ended on Wednesday
volume was slightly less than in the similar

increased

last

of

/

,

As shoppers responded to

»■

ume

.

freight for the week ended Nov. 20,

revenue

SHOWS LITTLE CHANGE

FROM WEEK AGO

The amount of electrical energy

Cash wheat advanced about six cents per

Federal Reserve Board's index, department
City for the weekly period to Nov. 20, 1948,
declined by 8% from the same period last year.
In the preceding,
week a decrease of 12% was registered over the similar week of 1947.

According

to

the

store sales in New York

For the four weeks ended Nov. 20,
over

that

by 4%.

of

last year and for

the

:

1948,
year

a

drop of 5% was recorded
date volume increased

to

28

COMMERCIAL

THE

(2304)

The Decline in
(Continued from first page)

latter these extraneous factors do

I

im¬

have R direct and sometimes

ground of earnings and of actual
Despite vast out¬

other

another angle it seems
wise not to omit such earnings as
accrue to borrowed funds in com¬

tends

to

light

of

would

come

appear

of

measure

From

the percentage of

puting

gros3
coming through in the

revenues

form

of

Only by taking
all capital employed
term
maturities
are
becoming can the long-run capacity of en¬
Somewhat dimmed by the compe¬ terprise to attract and wisely util¬
Tp the ex¬
tition of banks with other (mainly ize savings be tested.
tent that capitalization assumes
Institutional) lenders.
the form of debt, net income on
From the standpoint of the in¬
share capital alone must reflect
vestor, the business man, and the
the upward and downward lever¬
banker the crucial question in con¬
nection with any undertaking is age effects of prior lien fixed cost
Its capacity to convert gross in¬ capital, thus distorting and mag¬
come
into net profit on capital nifying any true picture of the
employed. This capital includes ability of business to increase
both borrowed capital and share earnings during good times and its
tendency to drop them during bad
capital, and gross income com¬

"from selling goods

"Net profit" as used
in Table I and the charts, differs
ordinary
sense of earnings on share capital.
"Net

profit" as here employed is
up by adding to "net income"
(after deduction of all taxes) all
Interest paid by the corporation

built

or

write-ups,

unfunded debt.

Profit to Gross Income

is evident that ratios of net

profit to gross income (where net
profit is taken as earnings, after
taxes, on all capital employed,

Result

net worth have

of

directly affect the ratios of
ings

to

gross

income.

earn¬

With

than

proved

more

er¬

earnings expressed in

^

.O

,

.*

"

income

Industry Group—-

Leather
Rubber

and

its

clay
and

1946

1947

179

175

30

30

13.1

118

115

26

8.9

26

25

12

12

6

6

"

"

ports, and to group these corpora¬
tions into the same, categories as

received).

those which are presented in the

The results

Of

sober¬

are

ing, but not lacking in
for the long run.

assurance

thing

one

we

be

certain: thats "inflation¬
ary" pressures create^ for pusiness
far more problems than can be
may

solved by any easy

reliance upon
hypothetically increased earnings.
For instance, with a

I,

glance at

at the charts»visualiz¬

or

pacity of the '30's

1928.
to

the

In

1938

or

ten

the

*at least of

from

years

average

was

including the deficit

of 1931 and 1932; it was 3%0,

years

excluding them. The comparable
figure for the five war years (1941
to 1945) iyas

porations which do give the nec¬
essary data in their current re¬

Federal figures.

feasible to

tions

trickle

of

shrank

net

In this

way

it is

the fluctua¬
net profit to

compare

ratios

in

of

two series.
The,: results
of this
study are
spread out in Table I. The aver¬
age number of representative com¬
panies in each group
and the
average percentage which their
gross income bears to the gross
income for all corporations in each
in the

income

gross

corresponding category, as set
forth in the Statistics of Income,
are shown in Table II.
The

data

sented in

in

Table

I

are

pre¬

graphic form in the fol¬

lowing charts.
there will tee

In all the charts
noted

a

substantial

degree of conformity hi the move¬
ments of the ratios of both series
in the

period from 1918 to 1945,

the latest year for which complete
Federal statistics have been made

available.

In

certain

of

these

the conformity is so close
that the ratios of net profit to
gross income for all corporations
may be forecast with a reasonable
degree of assurance by bringing
up to date the ratios for individual
representative corporations in the
same categories.
groups

>.

5

;

2.7

•'

15.4
63.6

,

7

4.5

.

;

9

io

and

glass products:
their products-,,

41

:

29

—

.

24.8

<
.

:

7.3

V

9

5

5

35

6.1'

8

9

2.0

4

TABLE ITotal—

191t)

1919

1920

All corporations,—

6.5

6.5

<4.0

0.1

Representative

9.5

8.5

7.9

2.6

'

corporations

1922

1921

1923

While

the%» sta¬

rial should not be overlooked/ In

sion

Ratios

1924

real estate,
stockbroking, and holding com¬
pany, included therein); "trans¬
portation and other public utili¬
ties"; "construction"; "forest prod¬
ucts"; and ' "service-professional,
amusements,
hotels,
etc."
The
figure for "all corporations"—both
for representative companies and
corporate activity as a whole, as
,

reflected in Statistics of Income—

is

made up, therefore, of all the
categories except those omitted as
above
mentioned.
And, finally,
"grdss income" is itself a less
than perfect guide, as gross re¬
ported by many corporations is
made up partly of net items.

Conclusions
V The

following further observa¬
tions now suggest themselves from
an

examination of the charts and

tables.

1

/

•

In the

first place, profit margins
the past 30 years appear on
the whole to be modest, and to
represent fairly consistent trends,
group by group. Abrupt breaks
appear in 1921 in most groups;
and even more precipitate declines
are registered, with some excep¬
tions, in 1932, when business as a
over

whoie, and in most
conducted at

a

loss.

groups,

Rapid

was

recov¬

eries occurred after both of these

years, business

quickly recaptur¬
ing its ability to operate on some¬
thing
approaching
the
formermargins.
Nineteen thirty- eight
generally marks another, milder
break, also followed promptly by

proportionately mild recovery.

•

number of cents emerging

net

profit on each dollar of
income . naturally
varies
greatly from group to group. This:
gives us in itself no valid basis for,
comparing actual earnings'on net
worth, because capital employed
bears no fixed or generally typical
relationship to~v©iume;bf business
or to rate of turnover.
However,
as

gross

^

computing earnings of "represen¬
tative corporations" for 1940-1945
incompleteness and non-compara¬
bility in such figures as "provi¬

are

by far the most

Statistics

of

Income

it

has

been necessary. to develop serie§

30

,

filed by nearly 500,000 active cor¬
porations revealed that almost
two-thirds of them incurred def¬

com¬

34

31

■

banking,, insurance,

The

It should be borne in mind that

con¬

eral

9

activity is not typical
agriculture); "finance"
(be¬
cause of wide diversity of noncomparable activities, such as
corporate

of

a

plete and accurate available, they
are, nevertheless
two
to three
years late in publication.
There¬
fore, in addition to using the Fed¬

f

9

culture and related industries" (as

bases
of .comparison are
icits.- What we have here, there¬ three
fore, is. an over-all performance valid; (.1) degree. of " regularity
of certain corporate grbups as re- from?-year to year within each
!
*
group; (2) relative regularity from
The principal source of figures ported ;to. the Bureau of Internal
Revende, The Representative cor¬ group to group; and (3) trends for
oh American corporate income is
corporations " i nt
porations, being generally among representative
of course the annual volume on
the leaders in each category, make each group against the background
Statistics of Income published by
of performance for all corpora¬
a better showing.
the United States Bureau of In¬
tions in the same categories.
Other limitations in our mate¬
tistics

7

7

4.2

6

in favor of net

In

Over-All Picture

less than 4 cents, and

ternal Revenue.

'

13

manufactures-,,,,,.

.Trade

:

Representative
—Corporations—

53.3

tobacco

products

Metals

Number of
->

of Group

1918-1945
12.0

Paper, pulp and products,,
Printing, publishing and allied industries1
Chemicals and allied products

Stone,

to; Gross for

Corporations '

120

products,

great

prices—by setting net profits (as
above) against gross in¬
come
(made up largely of sales
volume multiplied by prices re-

defined

years.

'

38

187

beverages and
Textiles and their products.,

•

AH

1918-1945
—

—

Food

-

Number

Mining and petroleum-,
Total manufacturing,,

the

on

Aver. Pprcftntflo-fl nrneii

Average

Total'

that

fact

pick out a substantial number of
leading and representative cor¬

—

greater volume of sales. Hence in-

-

'

the

of

Figures made up of 'book sistently f ro m year- to year these percentages of net to gross,
outstanding, stock plus throughout that period, •■•'•-'./- - built up from aggregate figures
surplus, or othefv capital-account;
This modest net earning power -of the corporations in each, group-,
have not kept pace* with the infla¬
during active hostilities reflects include deficits incurred by many
tionary rise in prices and the in part the pressure of the excess companies. Thus in 1938 returns
values-

the

;

,

son

sales.

TABLE H

,

whose

at least during

earning power

these times of soaring costs and

profits tax, in effect for the war
However, it does not ap¬
pear that later removal of the ex¬
Average Number of Corporations for Which Individual Returns Were cess
profits tax boosted the ratio
Analyzed and Average Gross Income as ,a
for 1946 and 1947, above or even
Percentage of the Gross
Income of ..All-Corporations in the Group
Represented;.
?
toy its earlier heights.
V

.

corporations

published reports may be utilized
tor this purpose is limited by rea¬

lishing figures of gross income.
However, it has been possible to

or of -the

percentages of gross income,

The number of individual rep¬
resentative

have not been in the habit of pub¬

about 2%^,

ings expressed in percentages of

profits as reported.
utilizing categories of corpora¬
tions given in Statistics of Income,
there have been discarded "agri¬

For these reasons, we gain the
better perspective on industry's

1929

Of late years, especially, earn¬

ratic

proportions

surplus

have caused them to be by-passed

comparable corporate statistics
analyses of the returns
of individual corporations.

replacement majority of American corporations

existing

in the ten-year stretch from 1919

(taken

borrowed and share capital, do not

the

in

understated

be

reflection of

write-downs,

tal

in

a

Income Overstated As Inflation

istic gauge of business perform¬
ance than are ratios of net income

alterations

cost.

on

of

based upon

costs.

to

share, over the
Indicated period) are a more real¬

as

based

is

moreover,

much

as

latter.

both borrowed and

as earnings on share capi¬
only). With the former,
drastic changes in interest rate
levels, or in capital structure, such

write-offs

only are net earnings over¬
stated, but the capital account

items, par and stated values and the better years among the '30's.
depreciation policies. There, is a
The Secular Decline in Actual
degree of arbitrariness and nonEarning Power
comparability in statements of
Thus "all corporations" in the
capital and in changes therein
which does not appear in most aggregate grouping averaged
of net
figures of gross income, despite slightly more than
limitations in the accuracy of the profit for every $1 of gross income

The More Realistic Ratio of Net

It

by." inadequate

ing its figures, we come upon the
startling fact that no industrial
established or prospective earn¬ group represented appears to have
ing power as it is of funds actu¬ succeeded during or since the war
ally at work in the business.
In in" restoring its capacity of the
'20's to convert gross income into
view of the devices of modern ac¬
counting and the confusion of net profit. Only one or two groups
legal with economic principles in seem to have recovered their ca¬
Capitalization,

.from "net income" in the

funded

picture, dilated
depreciation - or

Not

Table

sometimes

sand services.

on

on

times.

prises interest and dividends re¬
ceived and profit and loss turn¬
over on securities owned, as well
revenues

net.

earnings

lines between shorter and longer-

This is the ob¬

of the income

to gross in¬
the better
business efficiency.

from year to year.
ratios of net profit

lays from reserves and earnings
in reconverting, modernizing "and
extending plant and equipment
since the "V" days, the near stand¬
still in public demand for new
stock issues (coupled of course
with very low interest rates and
availability of loan funds) has
greatly pushed up corporate bor¬
rowing.
In fact, the dividing

^ts

computed on net worth tends

to be overstated.
verse

upon

Thursday, December 2, 1948

CHRONICLE

Corporate Earning Power
come

such ratios
In other words,

effect

portant

distributions.

FINANCIAL

&

1925

(Per Cent)
1926

1927

1928

of Net

Profit to

and

wartime

for

"reserve

for

contingency"

„

So, ip the second place, we con¬
margins in "trade" and
products, beverages, and
tobacco," form a more regular,
clude that
in "food

albeit

modest,

other

groups;

in

than

pattern

that

and

"mining

(Continued on page 29)

renegotiation"

•

Gross Income
1936

1937

1942

1944

1943
3.9
" 3.9

1930

1933

1934

1935

1938

1939

1940

1941

5.3

4.5

5.3

5.3

4.6

5.3

5.6

2.5

-0.3 --2.8

1.3

2.7

3.6

4.4

4.1

2.2

4.3

4.4

4.8

9.0

8.7

10.0

10.0

9.5

10.5

11.1

7.2

3.6—0.7

4.3

5.7

7.1

8.6

8.0

5.0

7.3

7.5

6.5

4.6

—4.0

4.1

2.8

715

8.8

4.3

7.1

9.1

2.8 —6.0

-7.5

-4.6

5.2

4.6

6.7

8.6

2.9

5.3

5.9

7.3

5.8

5.4

1.8

9.5

8.6

9.1

12.8

12.8

7.8

13.0

15.6

7.2 —3.7

.0.7

-4.2

6.4

10.1

11.5

13.3

7.7

9.1

10.3

12.3

8.5

7.8

8.0

8.3

0.5

6.9

6.9

6.0

6.9

7.0

6.0

7.0

7.6

3a

0.7

-2.7

2.3

3.6

5.3

6.1

5.6

3.1

6.1

6.2

6.3

5.0

4.4

3.8

3.2

3.3

8.6

9.6

9.2

io.o

10.0

10.7

10.9

11.7

8.5

5.4

-2,5

5.1

6.1

7.7

9.5

8.2

4.9

8.0

8.4

1947

1946

1945

1929

5.1

8.4

y

1931

1932

,

4.1

3.4

30

33

4.4

4.8

3.8

53

6.5

Milling and petroleumAll

corporations-,,

Representative

9.3

•

4.9

6.5

corporationsRepresentative corporations
All

12.2

7.5
8.3

7/7

•

*

2.0:

-

corporations-—,—

4.5

3.6

3.5

4.1

4.2

4.6

4.8

4.2

3.2

2.5

3.9

4.5

4.5

4.7

3.3

3.4

6.4

4.1

•4.8

•3.4

3.3

29

2.8

corporations

8.6

8.3

8.5

9.2''

9.5

8.5

8.4

9.2

10.1

10.6

"7.7

7.3

6.1

.6.7

7.3

7.0

6.1

4.5

4.2

4.0

38 H

4.2
3.7

■

2.3

1.1

4.4

-i—1.5 "

8.6

4.5i £•4.0

4.7

6.6

3.6,

10:3

10.3

.

<

?'

(

'

5~6l--5~2

•»

corporations,,
Representative corporations

6.4

9.6

3.1

2.5

7.1

6.7

2.7

4.5

2.3

4.3

3.2

2.6

-3.1 —4.0 —6.4

2.7

0.8

1.6

3.1

1.7—0.2

2.8

2.9

4.5

3.9

3.4

3.4

3.5

10.7

—

12.0

9.7

7.0

7.2

9.1

'2.3

3.8

6.4

8.4

8.7

7.5

-1.1

—9.0

6.0

1.4

1.7

4.6

1.9 —2.9

4.0

3.4

4.3

4.1

3.9

3.6

4.0

Leather and its manufactures-

—0.7

_

lili'^ifi
;

All

corporations,
Representative corporations
Rubber products—

5.4

-1.5

—2.5

5.0

3.0

3.3

3.5

3.2

4.3

3.4

2.7

-1.2

-2.6

—4.5

2.7

2.0

3.3

2.6

1.6

0.6

2.6

2.5

3.5

4.1

3.8

2.9

3.3

5.0

9.1

7.7

8.7

8.6

7.7

9.7

8.7

8.4

7.3

7.1

5.6

7.4

6.6

6.3

6.2

4.6

3.4

4.9

5.3

4.8

3.9

4.3

3.7

3.7.

8.8

0.3- -11.6

4.4

4.7

5.8

9.5

4.6

5.0

2.0

3.4

-1.5

0.0

-1.9

2.8

4.4

4.2

5.4

4.2

3.2

5.7

.5.3

5.5

4.0

3.9

3.2

9.9

5.2- -13.9

7.9

7.1.

9.4

10.7

5.0

8.9

2.3

5.8

-0.2

1.4

-0.3

5.1

4.6

4.5

7.3

4.6.

5.0

6.1

5.5

4.8

3.9

3.3

2.9

2.9

5.7

5.1

4.8

ri

■. •

2.5

9.2

--

2 8

7.3

7.4

,_I

8:4

7.9

__

4.4

4.0"

; 4.4

'

t

All corporations
Representative corporations
Paper, pulp and products—

—

5J

1.6

1
•

All

corporations—
Representative corporations

6.7

9.0

10.0

0.4

6.3

4.7

11.4

4.9

—

7.6

.6.8

4".9

8>.8

7.4

6.4

7.5

15.3/ 10.5

11.0

Printing, publishing and allied industriesAll corporations

Representative

.

corporations

Chemicals and allied products—

-5.3

corporations
l
Represen tative corpora r ions
Stone, clay and glass, productscorporations

-3.2

2.2

9.6

•6.9

7.8

5.5

1.3

9.3

J

6.5

7.8

6.4

7.8

7.7 *

8.6

10.2

8.2

9.9

9.0

10.5

11.4

7.9

7.7

9.1

8.8

9.3

15.5

16.3

16.5

11.3

;

7.5

8.3

7.2

11.5

8.8

2.4 —2.4

4.0

7.3

3.3 —0.2

3.4

7.0

3.4

0.1

2.9

14.6

10.1

-I-?

—1.4

6.0

3.7

2.8

3.8

6.1

5.9

6.3

7.1

3.5

5.4

7,8

8.4

6.1

5.1.

5.1

5.0

3.7

5.3

4.5

5.3

4.9

6.5

6.8

6.4

3.6

5.7

6.1

5.8

3.8

5.3

5.2

4.1

6.9

7.0

7.6-

6.3'

5.2

3.9

5.6

6.3

6.7

3.8

6.4

7.7

8.2

10.0

4.1

6.0

6.8

5.7

3.0

5.4

9.3

7:1

5.4

7.0

7.4

7.1

19.5

20.6

20.0

15.2

6.8

9.6

7.9

5.0

15.0

5.6

*

8.8

9.8

6.4

15.4

15.5

12.1

12.4

14.3

8.4

9.6

8.9

4.6

9.9

12.4

10.5

10.6

10.3

8.3

11.3

11.8

14.4

20,2

22A

18.8

16.8

8.'8

9.9

7.6-

-1.4

7.6

7.9

7.4

8.3

8.9

Representative corporations,,—

29.7'

All

Trade— - • •»

7.6

8.1

7.0

—

Metals and their products—

corporations
:
Representative corporations,,'

7.4

7.8

-

5.4

■

7.3

9.3

7.1

6.0

12~4

133

8.3

"'7.7

-

All

All

6.3

+

;

Textiles and their products—
All

119

5.6

6.6

4.6

products, beverages and tobacco-

Representative

103'

.

All

Food

12.3

6.7

•

7.3

19.5

corporations,,

Total manufacturing—

5.5

-

15.6

17.9

19.2

15.7

8 9

8.4

3.9

19.0

17.2

16.1

7.0

8.2

9.1

4.6
9.5

s

13.5

15.4

15.5

-1.6—11.6i« -1.0
4.2—19.3

15.6.
4.3

-3.3

8.2

8.2

-1.6- -12,2 ^—0.9

"3.3

6.6

-

-6.1
"

7.7'

16.7

.

16.5

3.6

9.0

12a:

9.9

8.7

8.6

9.9

8.2

63,

4.9

4.3

4j2.

12.9

8.7

10.9

12.1'

9.8

6.6"

6.0

5.9

5.2

*7

3.4

7.1

8.2

74

5.4

4.5

3.7

2.9

,~~

9.0

8.6

8.6

6.3

8.5

9.7

9,0

10.4

x1.3

11.2

12.1

1-2,8

-8.8

2.t

4.8

8.1

10.2

:93

.4.2

8.4

9.1

6.7

4.4.

3.3

3.3.

;

5.7

5.0

' 2.0

0.3

2.9

3.3'

2.7

2.9

2.5

2.6

2.8

2.2

0.5 —1.1 —2.t

0.4

1.4

1.6

2.1

1,3

1.1

13

2.0

2.4

23

2.4

23

6.1

6.5

3.2

1.0

6.8

7.0

6.7

6.9

6.6

7.0

6.7

5.6

3.9

1.7

3.1

4.6

4.4

4.9

4.3

3.8

4.6

3.9

3.2

2.7

2.8

2.7.

-

4.5

4.2

-53,

63

'

/

All corporations,
Representative corporations^:




3.5

'2.4
2.8

' 4.0

4.6
•v

«•

"r

.

Volume

168

Number 4756

(Continued from page 28)

petroleum," and "chemicals and
allied
products,"
"metals,"
and
"stone, clay and glass," are among
those showing greatest irregular¬
ity, and a corresponding capac¬
ity to make the most of "good

times";

that,

and

as

rule,

a

the

larger companies (which make up
the "representative corporations")
fluctuate more than the total (in
ratios of net to gross) but provide
more liberal
profit on turnover.

a

Thirdly, a
tendency
appears
for the spread to narrow in earn¬
ings margins between representa¬
tive

companies and the inclusive

groups of

which they are a part.

Here Table II is useful in explain^

ing discrepancies in the two series,
closer

as

approximation

is to be
when, as in
"rubber
products" and "mining and petro¬
leum," the- representative com¬
panies account for half or more of
expected

income

for

their

respective
possible
that the charts also reflect a rising
concentration in giant companies,
with drawing together of margin¬
al earnings lines merely visual¬
izing the growing extent to which
""representative" companies may
gross

industries.

It is of

course

reflect the fortunes of their entire

industries.
'

Be

this

it

as

leveling ' of
years,

the general

may,

the

lines

recent

in

compared with the 20s
30s, points up the increas¬

as

and the

ing difficulty of converting rising
gross income into profits.
While
ascending rates of normal corpo¬
income taxation through the

rate

years

be

to

seem

consumer, this
true of excess

Finally,
that

to

the

course

not

shifted

of

was

profits taxation.

evidence

accumulates

advancing
"break-even"
in industrial costs make

points

difficult

more

"peacetime"

than

earlier

in

the translation

years

of

mounting gross income into
progressively higher rates of net
profit. This ability has accelerated
the' upward sweep of earnings in
prewar years of prosperity, and.
of course, produced the opposite
effect
in
periods
of
economic
doldrums. The impact of higher
costs,

both

fixed

and

exacting its added

current,

is

toll upon the

dollar's

journey from gross to net.
Although the ratios of net profit
to
gross income have generally
risen

in

1946

and

might have been
tirely—it Would
have
-

been

if

1947, this rise
eliminated En¬

mpst

-

cdrt&inly

substantially reduced

removal 5 of

the 'r

'

excess

profits tax had not for a time
greatly improved the earnings pic¬
ture.
It is probable that ratios of
net to gross will be little higher,
if indeed

as
high, in this year of
earnings. This probability

record

becomes almost a certainty on the
assumption that adequate depre¬
ciation and depletion charges will

time

some

have to

be

made, and

that proper adjustments are pro¬
vided for inventory profits, which
will
ultimately be
inventory losses.

balanced

by

In brief, cumulative forces en¬
hancing
costs,
raising, "break¬
even"
points
and
temporarily

"padding" earnings, which accom¬
pany what is popularly known as
"inflation," do not carry their
own

automatic remedies for busi¬

in.

ness

terms

of

consistently

greater percentages of earnings on

and larger gross. On the
these disturbing forces
may be likened to the enlargement
of his bicycle wheels (and not in
even
ratio!)
while the rider is
larger

contrary,

pedaling.

Let

us

will redouble his

hope

that

he

pedaling, for his

higher center of equilibrium may

require even greater speed if he
is

to

hold

his balance!

Acknowledgement
(Note: The author has had the
assistance of Florence

Clark Beal

of Washington, D. C., in the sta¬
compilations, and grate¬

tistical

fully

acklowledges her prompt
cooperation, which

and painstaking

has made possible
so

soon

Federal

going to press

after release of the 1945
statistics of income.)




THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

*

COMMERCIAL

i'HE

(2306)

30

FINANCIAL

&

CHRONICLE

Thursday, December 2, 1948

*

Having completely confused think that this column "is a
collect
brokers'
a condition that comes device wt6
Now
if
the
naturally to me, I'll go on to commissions."
you,

Tomorrow's

answer

Markets

Walter

Whyte

*

my

cite

obvious.

where

stopping of the second
at about the levels
the first break took

them

has

*

instance,

one

me

"every

to

task

a

be¬

of the re¬
taken." I'm
sorry, Mr. Anonymous, but
that's why stops are there.
If
they weren't the losses
might be greater.
Inciden¬
tally I'm flattered ho end to
cause

cent

Two-pronged lows causing
speculation of a new turning
point. Action, however, too

#

takes

reader

By WALTER WHYTE ■

<

corre¬ brokers could see it that way,
this paper would get a lot
more
ads and I'd get a lot

stops

decline

started

tongues

More next

Economic

cation of men and materials.

so rare

that

having stuck my

and

having it handed to me, I re¬
fuse to do it again..
*

Before

❖

me

*

rests

impos¬

an

array of statistics to prove
that various companies with

ing

tremendous

backlogs and un¬

assailable financial positions
cannot

(Continued from
in

sumed or,

There

head, out only recently

help but be worth a

and

expressed

underutilized facilities.

The

and

As

the
was

stated in several successive Eco¬
nomic

Reports to the President to
Congress, the practical prob¬
lem to be met in-successfully"
.completing the catching up proc¬
ess would have been to adjust the'
.several
relationships of prices*
wages, savings, taxes, and invest-1
'ment one to another so that the
the

however,

is,

a

on
whijch the
and the businessman

ground
nan

omist

and

can

must

common

ground

field

decision

of

common

military
or econ¬

meet.

This

is likewise the
on

which

the

page

t

The New Price. Relationships

!

military

production,

though

we

3)

never

the

the employment of
and factory
tion of bankers and the Federal'
guards. The last two years have got up a healthy sweat.
Reserve and the economic pro-1
When President Truman pre¬
given us a fuller measure of the
'gram of the government. All;
productivity
of
our
resources sented his defense message to the together these economic adjust-'
when aggressively used. We were Congress last March, we had had ment
processes
would have to'
not staggering under the load of two years and a half of'vigorous work out a new and
internally
reconversion.
During consistent set of
$11
billion
for
our
protective postwar
money relation¬
forces, and the rise in this item this period we were still feeling ships which would realistically'
to
$14 or $15 billion will not the tremendous economic momen¬ reflect major changes in industrial
swamp our economy nor require tum of the war influence, with its techniques and plant capacities,;
creation of superabundant mone¬ in tastes and habits of
us to pass from free enterprise to
eonsump-.
regimentation. Some rather sys¬ tary purchasing, power, and its tion, arid in government commit¬

cities,

or

detectives

President, the Congress,~ and the
tematic and vigorous discipline, accumulation of enormous unsat¬
thoughtful citizen must take their
isfied wants, public and private,
stand during the next few months however, must be exercised to
redirect our economic effort so as from highways, dams, generating
and oyer the ensuing years. The
to meet the new goal in an orderly plants,
factory equipment, and
common problem in whose solu¬
and economical manner.
operating inventories to houses,
tion both points of view and both
"(2) Every citizen must recog¬ passenger cars, electric toasters,
types of professional competence
and bed linen.
What we were
nize
that
further
diversions of
are required is that of the needed
witnessing in the market was an
balance
between
the
military productive effort to military uses
inability of end promts to satisfy
striking* force and the civilian inevitably involves somet sacrifice
simultaneous
demands
of
the
reservoir
of
men,
morale, and of civilian types of consumption.
market for capital goods, current
machinery upon which the actual -It is our particular application of
consumption goods, and exports
fighting force must depend in this the old alternative of 'guns or
on
the level that unprecedented
day of industrialized war. The old butter.'
savings, high current earnings,
adage that "an army travels on
"Our people had—and we be¬
and foreign demand made pos¬
itk belly" has to be enlarged to lieve quite properly—looked for¬
sible. Hence we were being swept
the form, "travels on the eco¬ ward
to
&
postwar period in
along in the grip of a strongly in¬
nomic machine that maintains the which larger numbers of
people
flationary
current, inadequately
physical and psychological well- would achieve higher standards of
stemmed
either by government
being of the soldier and keeps living than had ever been real¬
policies or by private self-re¬
him supplied with efficient weap¬ ized before. These hopes are not
straint.
ons."
In providing the means of nullified by the defense program.
At this point, I may perhaps be
modern .war the whole structure But they must in some measure
of economic society is involved.
be postponed or for the present permitted a modest reference to
the Employment Act of 1946 and
I appreciate the opportunity af¬ revised downward.
During this
the dual implementation which it
forded me by Secretary Forrestal period if any group insists that
its income shall be advanced in provided through the, Council of
to consider

this in the face ofpatterns of economic
behavior.
To
quote from
two;
sentences in the Economic Reportall

ments,

tenacious

of

July, 1947: "At present

we are.

in the process of seeking to find
a

workable pattern of income aikh

price relationships on a new price,
but with continuing high:

level

production and employment It is*
generally conceded that this new

price level will be higher thanprewar."
nave

!

If

Probably

this

should:

read

"substantially higher".
prospect^ for peace had im¬

proved, or even i\ot grown worse,

throughout 1947 and 1948, our,
ability to adjust our economy to,
requirements
of
sustained;
peacetime prosperity would pro-,
gressively have been put to the i
test in one industry after another
as each passed from a condition of .
scarcity to one of abundance* from c
a
sellers'
market to a buyers' j
market—or true competitive en-;
yrith you how the
Economic Advisers and the Joint jterprise. If the practitioners ofeconomic factors may be brought proportion to every advance in
Committee in the Congress. The communism had not thrust us *
into proper working relationship prices or that it shall be in a po¬
declaration,
of /national
policy back into, the danger of war* we
with the military factors in the sition to pay up to whatever,level
made 1 in this act was! for such would soon have been thrust for¬
security equation.
In the well- Is needed to bid its accustomed
wise use of free competitive en¬ ward into the (difficulties of peace,
amount of goods away from other
worn phrase of economics,
it is
terprise and such prudent disr- i These difficulties are of various
and the end of the year, the question of economic supply users, it is in effect demanding
charge of public functions by gov¬ sorts. There ; is the danger that,
and military demand. This issue that it be exempted from sharing
though I may change my
in the common burden of pro¬ ernment as- would prevent a re¬ faking
fright
from weakening
can be considered at two levels,
mind.
turn to. the baffled waste of pro¬ markets, business would sharply
These-eco¬
first as it was posed by the Presi¬ tecting our country.
♦
*
*
"
nomic facts of life should be pro¬ ductive resources of the 30s and, purtail ;■ its investment plans, and
dent's Message to the Congress on
on the other hand, transmute the
bankers
claimed along with every step in
unduly - tighten •: :> credit.
Summing it all up in a few .March 17, 1948 and, second,as it working out the practical details momentum of the war' arid rerr There is the t danger that busi¬
will' confront the country when
conversion period into ,a long- ness managements would attempt
words, I suggest that buying the 81st
of the defense program."
Congress convenes. It is
sustained
period
of^ high-level io .hold up prices and profits at
be postponed for the time be- to the latter that I will
Personally, I still believe that
primarily
peacetime
production i and
the the cost of restricted production.
that statement correctly defined
ing« This doesn't mean that address my remarks.
broadly rising standards of living There is the danger that labor
the majoT, economic implications
stocks will go lower. It does
that would go with vigorous and
Defense Preparations
jvould make excessive wage de¬
of the limited defense program to
tnean that stocks will be safer
efficient use of bur rich resources. mands, contributing to unemploy¬
What the President said last which the President has thus far
of
if you wait awhile, even if March was that "the
This was a large order, but I ment, and loss
production.
critical situa¬ held the line. In amplification of
for one have never felt that it is There is the danger that con¬
you have to pay more in the tion in Europe" required that we that statement, however, I should
beyond the powers of a people sumers, hoping for lower prices,
not merely arrest the process of like to review quite briefly the
immediate future.
disarmament but promptly en¬ situation of the economy at the possessed of as much ingenuity as would limit their purchases, un¬
large defense preparations. A few time when mounting international ours, with such highly developed duly or, on the other hand, that
institutions of public information they might spend so lavishly that
days later, this .general recom¬ tension caused this preparedness
and discussion, and with the de¬ savings - would not provide ade¬
mendation was given definite di¬ program to be launched,
.This
mension by a proposal that the involves considering not merely gree of economic literacy that we quately for capital needs. And
have attained. Perhaps the most there is danger that/government,
military budget be enlarged by the situation of the economy at a
requisite for success faced with some or all of these
certain
about $3 billion.
point in time but also important
would be that we also be ani¬ threats to continued prosperity,
The economic implications of :omething of where we had been
mated by good will and a spirit would not use its powers with
from
and
where
we
that development in national af¬ coming
of practical cooperation.' Individ¬ sufficient vigor to offset or cor¬
What
Orders Executed on
fairs were briefly but quite def¬ thought we were going.
had our people been demanding uals and groups must accept the rect, the elements of instability by
initely appraised by the Council
Pacific Coast Exchanges
necessities of practical
working which our type of free economic
or expecting of the
postwar econ¬
pf Economic Advisers in the clos1
'
omy?
adjustments between themselves system is beset. >
ng paragraphs of their quarterly
The level of defense expendi¬
and other parts of a complex pro¬
memorandum to the President on
How War Affected Our Economy
tures for which the President and
April 9. We there said:
ductive mechanism.
Otherwise,
The war period had been pre¬
\
♦
the Congress made provision last
"At this early stage of the de¬
ceded by ^ severe depression in they slow down the machine in
Members
fense plan, two points should be
Htm'York Stock Exchange
which the use of the Nation's pro¬ the stubborn effort to gain im¬ spring .tended to avoid or defer
Htm York Curb Exchange (Associate)
clearly
recognized
and
made ductive resources
dropped to less mediate personal or group advan¬ these dangers. They are still fur¬
San Francisco Stock Exchange
plain to the public:
than half their capacity. Millions
Chicago Board of Trade
ther limited by the very wide¬
tage. ;
"(1) We are in a peace econ¬ of men and women able, willing,
14 Wall Street
New York 8, N. Y.
expectation in business
If the nations of the world had spread
omy, not I a war economy.
OOrttandt 7-4150
The and seeking to work had not been
Teletype NT 1-028
circles that that level will be
maintenance of an armed force is provided with work
Private Wires to Principal Offices
opportunities, been willing to disarm and devote

lot

more

than their

current

market

appraisals.
Their
earnings charts are done in
pretty two color tones; the
companies' products are en¬
thusiastically described.
In
fact there is every reason to
rush right out and buy a zil¬
lion shares.
But despite all
flowery predictions I still
think that nothing outstand¬
ing will happen between now

the

.

.

>

i
This would have to be worked^
compelled really to
out through the competition of
meaning of. the word
the market, the policy decisions of:
^austerity." While individual dep¬
rivations and family losses were jexecutives, the rulings of regulagrievous, it could be said of the jtory bodies, and the process of:
.collective wage bargaining, to¬
Nation as a whole that we lost
gether with the financial opera-'
3ome blood, shed a few tears, and

were

Of

*

occasions, however, are

the
war
by
preceding
depression.
rupted

The be¬

sources were not already being
fully utilized.
There were large
numbers of unemployed persons

'earn

that I don't know.

These

views

Implications
railroad

everybody is
looking, nodding their head
approvingly and whispering
gleefully, "I tpld you so."

sion and catching up with activities and rates, of growth inter¬

t

I

peacetime, with security as¬
at least, with military
insecurity
adequately
guarded
against by a relatively minor allo¬

their lows while

brillianf national effort.

ush¬
and

in this
defense effort therefore got under
at any
way with a minimum of disturb¬
of the
ance to the civilian economy.
In great flood of products resulting
Chronicle. They are presented as
from high employment with effi-:
the end, however, attainment of
those of the author only.J
!cient
equipment and direction
military success required the, sub¬
would move promptly into use.1
ordination of ordinary consumer
Interests to the requirements of

and

Markets occasionally make

War changed all that and
ered in a period of intense

article do not necessarily
time coincide with those

ministration of economic resources

%

Thursday.
—Walter Whyte

[The

wagging that this is the level
to buy them again. For all I
know this' majority opinion
may be right. I'd like very
much to come right out and
even say so:5 But if I don't,
put it down to the fact, a com¬
paratively unimportant one,
*

1947 and 1948 would have at
least gone far toward completing
the process of physical reconver¬

mutually profitable trade, the

years

money.

one

were

of

grandchildren of
the
pioneers might' allow our¬
selves to accept
a condition of
chronic economic stagnation.
to be felt lest we

Oh yes, Mr. ginnings of this effort moved
Anonymous, I get paid. I don't much more easily and swiftly by
write this for nothing.
reason; of the fact that our re¬
more

To

Says—

The

of

some

spondence.

ing a recovery-that concern began

.

s

Pacific Coast

.

Securities

Schwabacher & Co.

-

■

■

Sam Francisco—Santa

Barbara

lloateray—Oakland—Sacramento
Fresno




as

touch

a

part of .the peacetime

system

as

police

force

is the maintenance of
by

states,

a

counties,

and the national standard of liv¬

ing
sion

suffered.
we

From

had made

this

so

depres¬

disappoint¬

themselves to restoring and

sequently

expanding

sub¬ raised. If the scale of military

domestic

production and enlarging the flow

penditures does in fact

substantially, they

may

ex¬

increase
be post-

Volume

168

Number

4756

THE

indefintely, and the coun¬
try confronted by quite another
kind of problem.
poned

Prospective Enlargement of
■

Military

This

Expenditure

brings

the

to

me

second

We

must face the

of the trend

COMMERCIAL

possibility that
inflation

toward

be¬

generally discernible at the
present juncture, it might develop
a strongly marked cumulative or

came

effort

our

of

level

a

CHRONICLE

very

productive

our

Today there-are bottle¬

necks

steel

in

and

non-ferrous

metals, in coking coal and petro¬
spiralling force unless strong leum, ore-carrying boats and pipe¬
anti-inflationary
policies
were
line capacity, and at numerous

question of economic

promptly declared by the govern¬

other

ment. There would also be needed

of

fluential business leaders and

of

of

prospective

enlargement
expenditures.
How

military

a

strong will

the

on

question look
to the
President and to the 81st Congress
in

the

of in¬

part

nomic groups to resist

eco¬

this

discharging their responsibility
for providing an adequate defense
program?
Both the Congress and
the public will need to understand

the economic implications of

fense budget $2

$5

or

de¬

possibly

or

billion above the level

$10

even

a

Superficially it may seem plau¬
sible to say that a $2 or $5 billion
cannot

seriously disturb an
in which total produc¬

economy

tion

amounts

to

$250 billion

an¬

nually. But it is equally important
to

remember

mist,
the

that

the

to

econo¬

less than to the physicist,
and the physician,

no

"critical

points" where
relatively small changes of actual
magnitude have decisive influ¬
are

-

Hence

ence.

merely at aggregate

strategic
be

not

but at

sums

the* delicate

economic

of

process

would

in

spots

look

must

we

affected

life

which

by the

mone¬

tary disbursements and the

mone¬

tary withdrawals,
You

well

are

being

You

that

aware

used

realize

at

peak

that

too

the

resources are

levels.

already

a

substantial portion of our produc¬

tive resources are being used for
military and foreign aid purposes

—approaching

10%

national

of

product. These uses do not give
rise to the production of domes•tic

consumer

goods or
capital
Inflationary forces, though

goods.

checked at various
no

Even

if

the

limited

were

points, have by

disappeared.

means

$15

billions, the

exceed

by at least $3 billions the
present annual rate of cash out¬

lays for national defense.
added

are

If

to

further

increases,
to a level of $18 to $20 billions,
there are hound to be important
repercussions on the operation of
the economy.;,
-

,

.

.

_

The specific effects on our busi¬

ness world that

from

The

uses.

lem

methods

civilian

by

be

can

which

effected

To
and
the
but

necessitate

military

this

transfer

still

avoid

probably

costs,
further

advance

in

military pay and allowances and
compensating reclassification of
ful

that,

as

seems

practical

a

offsetting economies
ment
expenditures
worked

in

out

for

demand

services

the

doubt¬

matter,

in govern¬
could
be
face

of

the

civilian,

ancillary to the

ef¬

war

fort.

We

public

works, at least in such
as
transportation and elec¬

areas

that

remember

tric power, would have to

can

reasonably be

be

ma¬

in
1949 and
1950-plus
conveniently be discussed un¬

der

four

cost.

any.

deficit

to

Resort

in¬

large

financings through bank borrow¬
ing would at once enlarge the
stream
of
money
demand and
start an
upward movement of
prices. Rising prices would not
only push up the cost of living,
giving rise to demands for higher
wages.
It would also create a
speculative interest in markets
which would be well designed to
prices upwards.

An

inflationary. spiral initiated

and reenforced

by

must

cost

manner

is

unavoidable. To pre¬

no means

vent

this

in

it,

however, the program
be financed by drawing the
out
of the pockets of the

people. It must, in other words, be
financed out of higher taxes and

the

short

time

available, I must state

my conclu¬
points quite dog^matically without much support¬

sions

these

on

ing data

or

-

analysis.
Inflation

"

agreement

last

months

few

during

among

the
profes¬

sional economists and

and

Men

of

Materials

larging military program, we need
to

distinguish between overall de¬

mands

and'

points

particular

of

The military efforts that
talking about are estimated
to divert somewhere from 1 mil¬
impact.

2

2V2

million workers
from the civilian labor force. Out
of

a

to

or

total

of

62%

some

million

this is not a .crippling
drain. We anticipate a rather ab¬
normally large increase in the la¬
workers,

leaders

and

the

trend

of

both

wholesale

prices is still rather
steadily upward. If against this
background we project a substan¬
tially larger scale of military ex¬
.

withdraw

appreciable

numbers
where scarcities (par¬

consumer

penditures for rearming ourselves
and perhaps Western Europe and
some
other countries, it is clear
that

be

granting exemptions, they would

new

forces of inflation would

unleashed.

erate

isms,

They would op¬
through monetary mechan¬
technological
situations,

from

areas

ticularly
character

skilled workers)

of

ready exist.

At the

of

the

same

al¬

time, ,the

equipment

and

materials required in the military
effort would increase the pressure
of demand on areas of manufac¬

turing
now

and

there

mining,
is

where

real

skilled personnel.

even

shortage
'

of

„

Much the same can be said as
iparket processes, and psychologic
reactions. To some extent, the in¬ to the demand which an expanded
flationary impact would be mod¬ military effort will make upon
erate

strong according to the our supply of materials and equip¬
amount of outlay. But
to some ment for producing finished goods.
extent also, they might prove er¬ Unlike the expansion of our mili¬
ratic

or

or

financial

disproportionate to the
sums actually involved.




tary

program at the beginning of
World War II, we must now start

military expenditures in
immediately coming months.

the

It is not

clear that

a

control pro-

a

further

least materials controls

inflation

referred

Even if general meas¬
taken to stem the infla¬

ures were

tion, there is
physical
from

that the

no assurance

transfer

of

resources

civilian to military produc¬

tion could be made with sufficient

promptness

and

completeness

to

meet

the need without the intro¬
duction of more direct methods of

controlling .the flow of

resources.

pleteness

not

were

have

physical

military

by

banking
as

forces

to

is

system

to

in

which

we

the

ade¬

production could
Since our money

be maintained.
and

elastic

achieved,'

breakdowns

process

now

the price level, we can expect the

specific impacts of an enlarged
military budget to produce an ac¬
celerated

inflation

offsetting

measures

the sources
not

were

unless

strong
taken. If

are

of monetary inflation

severely curbed,

the more to prevent

sive

and

senseless

prices and to
level of

direct
much

so

the progres¬

bidding

of

up

the scheduled

assure

military production.
Controls

A program of
tures

at

military expendi¬
level much above

any

present

ment,

would, in

force

market

out

us

of

procedures

judg¬

my.

the

of

a

free

peace¬

time economy and drive us to the

number of direct

a

of

Otherwise, the strength
inflationary pressures, the

the

confusion
fense

and

in

delay

pacts

would create

tions

both

and in the

The

de¬

in

market

to

processes

public mind.

feature

trols

economy

demoralizing condi¬

central

and

of

a

facilitate

duction
of

would

be

certainly

system

of

military
the

the
con¬

pro¬

allocation

the

nized.

the

conservation

So

controls

is

which

_T

limited

field

where

they

been tried, they have not
conspicuously successful. It
easy to
see
that a mounting

been

of

program

permits inflationary
develop.,

_

,

suggested
to the question of the

swers

my

spe-

effects, that a continued and
rising scale of military expend-

itures

would

have

nomic life in the
that

the

onset

For

the

this

on

near

our

eco-

term.t It is

would

not

mean

of

economic

disaster,

next

few years

it would

defense

more

would soon
authoritative meth¬

labor

and

employment

a

more

ex¬

service.

Fi¬

nally, to prevent the spiralling of
living costs, wages, and produc¬
price control of a quite,
extensive
scope
might well be
necessary,
unless
severe, fiscal
tion costs,

measures

were

invoked to

curtail

civilian demand.

against this view as to the
need of controls in an increasingly
inflationary situation, it is clear
that businessmen,
workers, and
farmers have

limitations

in

on

the

a

basic
a

aversion

free

areas

to

enterprise
where they

situated,

the

and

unscrupulous can often
themselves
against
ad-

or

tive

effects

reap

posiprice

or

income

weak

even

disturbances.

unfortunate

or

not

The

merely

problem
still

ultimate

of

stabilization

difficult,

more

|

Two Pronged Danger of Controls
Finally, 'the return to controls
and

their

continuance

would

years

pronged

danger.

ple,

are

we

economic

for

some

a

two-

free

peo¬

present

As

a

always

fearful

controls

that

prove

may

habit-forming and develop a spirit
of acceptance of authority
over
larger and larger areas of life
weaken

the

reliance

of

the

people orr free bargaining. If that
! danger is avoided, there is the
opposite danger that in avoiding
it, we develop evasion or defiance
0f

constituted

authority,

black
lowering of the
moral fiber of our people. In any
event, by giving legal sanction
to certain structures, procedures,
and property rights for a period
of years, controls build up greater
markets,

or

and

a

less vested interests

on

the part

goods .and services.
But it cer-. have been hurt by them to secure
tainly would not provide the max,- ■ some offsetting benefit.
Either
imum standard of living that our;
way it complicates the return to
men, money and management are
smooth operation of the economy,
capable of producing
It wouid in-I
What j have been gaying in_
definitely postpone the time when voives no judgment as to what is
we

can

life

for

organize

our

economic

the

production of maxipurchasing power for
our
people
and that was
the
purpose for which
the Employreal

mum

Act

ment

1946

of

designed
thought we
could really get down to business
on
in these postwar years.
and

which

This
tion

of

economic

implica¬
expend¬

military

rising

itures raises

was

had

we

clear

much

a

funda¬

more

mental

question. Would such a
development simply defer the at¬
tainment of peacetime economic

objectives,

or

will it make them

difficult of attainment

more

over

an

This

diversion
to

sources

of

goods would

peace

national

re¬

goods rather than

war

bring

a

new

threat to the educational interests
of

this

country.

Few people

ap¬

gcale 0f

miliary expenditures
could
wisely
and
safeiy undertake at this time." It
ig
simpiy- an attempt!* to
look
fran^iy a^ the actual costs, present
country

and future

0f

a

military effort of
'

gtated magnitude.
If

moral

any

is

harmless

as

for

need

held

or

sible

doves

war

inflation.

be said

during post¬

Much the

same

can

to streets and highways

as

other

and

the further

and

both plant and per¬

public facil¬
ities.
This type of problem is
further
aggravated by the fact
types

of

that the accelerated rate

of fam¬

ily formation in the war and early
postwar years has brought more
than normally increased demand
on community facilities and is just

to

bring

larger

num¬

that

the

(2) that those who
with the military
display the prescience and
the
abnegation that will direct
every dollar to the point of great¬
est effectiveness, and forego every
outlay based on traditional prac¬

are

point;

entrusted

effort

ment

prides, or dispensable
(3) that the govern¬
stand
ready to introduce

those

measures

tice,

corps

ceremony;

disturbing effects

war

so

military effort shall be

tenance in our total school

the

drawn

reduced to the lowest pos¬

control

during

be

problem, it would go to these
points: (1) that those who are
entrusted with our foreign rela¬
tions must be wise as serpents and

to realize how great was the
accumulation of deferred main¬

system

to

from the objective analysis of this

pear

beginning

Over

very

employment' of beneficiaries of these arrangein some sort of activity and max- 1 ments to have them
perpetuated
imum production of some sort of and vested claims of those who

deterioration

skilled

are

The strong,

benefits from extreme

verse

*

ex-

The im-

guarantee maximum

sonnel have suffered

system

i

an-

cific

clear

process

favorably

protect

and

pres

„

,

much for

So

Second, there would undoubt¬
edly be early need of considerable
placement control for scarce types
tensive

to

Govern-

to

ods of broader scope.

of

related

the

No Onset of Economic Disaster

recog¬

only voluntary
available, and even

far,

are

have

call for

directly

part

extent to

ment

controls is there-

nitely to be the case. I shall touch
briefly on only four.

allocation

methods

is

in

direct

or¬

and

by

ders and

in

for

the

inventory controls. Even
present time, some need

limitation

for

need

The extent of

indefinitely long future period?
There
are
several
respects
in
which the
latter appears defi-i

key materials, re-enforced

at

of the market.

sures

more

A1

severe fiscal policy of taxation, and possibly forced saving,
would minimize the need for price
control.
It would also to a degree
lessen the problem of allocation
by driving civilian demand out

the

this

of

ruthless

other

from

Government.

the

of

very

effort, and the friction and

hardship in the civilian

first

the

divorced

be

policies

so

permit such market
readily reflected in

be

cannot

perhaps

unevenly distributed.

The issues of economic controls

fore

if this promptness and com¬

And

accel-

keep their operational suffer deprivation but even create
from bogging down.
'maladjustments which make the

to

sary

the

neces-

and

treme phase of inflation.

introduced piecemeal, but it is possible that even
could be

gram

program

for

in

itary effort could be the further
distortion of price and income relationships that would result from

on

of

points

,

and

parallel

with discussion of and decision

facilities would be the first focal
to earlier.

results

is anybody's guess, but cer- cheap substitutes are available,
tainly an issue which will be |
The third danger of economic
fought out in the next few months scar after the
period of actual mil-

for

special military demand
skilled labor, materials, and

effort

tion

at

yet been satisfied.

These points of present shortage

controls.

Shortages

preparedness and actual mobiliza-

and

not

acceptance of

"■■■

mlitary

erated drain on natural resources
which are already scarce and for
which no equally good or equally

and ..of

of withdrawals from

expense

in

twilight

between the present state of

above the present level would find

at

other claimants whose wants have

noted.

experienced
that, in the.ab¬
sence of the foreign aid and en¬
bor force of a million or even a
larged defense programs, defla¬ million and a
quarter next year as
tionary influences would by this
against an annual gain of some
time have become clearly evident.
700,000 in recent years. The point,
As
current
expenditures, have
however, is that the withdrawals
developed under these programs, for
military service would be per¬
and as expectations for the future
sons of more than average physical
have become more clear, infla¬
and mental capacity.
Even with
tionary forces have tended to out¬
the
most
skillful
procedure
in
run
deflationary
developments,
business

re¬

be

en-

use

sort of economic distortion is aggravated to the extent that the

How

the

savings, voluntary or in¬
voluntary. And, even so, it may
call for other types of control to
meet the physical problems to be
larger

lion

There appears to have been in¬

creasing

by the

reserve

war

ho

controls

would be accepted in the
zone

of

uses

31

civilian production or which are
in excess of peacetime needs. This

business leaders who would have
to bear the brunt of responsibility
for delivering the goods specified
in a military expenditures program only a few billion dollars

we are

•

of

use

but would have to

the

inflation, labor
Passing from the monetary to
diversion; materials shortage, and the physical implications of an en¬
Within

general, military

controls would be needed

heads:

controls.

stimulated
sources

quate

creased

In

up.

demands could not be met

cient

^foreseen
nan

caught

would

finance

eas¬

where

p.
At present tax levels, govern¬
ment revenues .would be insuffi¬
to

present

some

,

additional

must

is

ing in various food, clothing, and

the

higher prices
would increase

the Civil Service. It

partial

or

gram would be at the very points
we are still far from
being

to

trans¬

higher wages
government's tax revenues,
they would also raise military

procurement

lesser

scale

and

extent

some

have to be invoked.

would
far

and must be considered in

resources

is

related economic prob¬
in
devising
financial

lies

program

expenditure of that amount would

this

ferred

force

defense

to

production

gineerirtg which have

non-durable goods industries, the
chief impact of a rearmament pro¬

of

terially enlarged.

country's productive
-now

to get

specialized to the

Grether

problem

physical

increased defense program

a

chemist,

there

major

The progress

respectively
affected.
Mr.
yesterday indicated to
you that at M-Day, the full panpply of wartime controls far beyond
those of
World
War
II
are

While there

the potential inflation.

presently provided.

item

A

minor spots.

military stockpiling of strategic
and essential materials is being
slowed down by such shortages.

(2307)

inflationary

temptations.

will

,

from

high utilization of

that

v

FINANCIAL

resources.

supply and mlitary demand which
I raised earlier in my remarks,

part of the

:

&

which

omy;

and

large

face

(4)

and

finance

of

will

minimize

upon

the

the

econ¬

that the people at

the necessities

of thje

situation, make the sacrifices, and
accept

the

disciplines which are

entailed.

'

With Swan, Stickley &
(Special

to

The

Financial

Co.

Chronicle)

PORTLAND, MAINE—Lloyd B.
Ingraham has joined the staff of

Swan, Stickley & Co., of Boston.

bers of infants to the schoolhouse

door.

With R. C. Buell
second

A

harm

to

the

type

of

economy

persistent

is that

a

military effort results in building
expensive
and

kinds

to some

of

equipment—

extent plant—highly

(Special

to ~ The

Financial

Chronicle)

HARTFORD, CONN.—Joseph S.
Lewis is with Robert C. Buell &

Co., 36 Pearl Street.

?/orld Teamwork—For

British Industry in Changing
production

kets for the increased

(Continued from page 4)

ensue." Tfc the

should

which

re¬

ing well informed

industrial

on

sufficient

matters

allied

and

Thursday, December 2, 1943

CHRONICLE

& FINANCIAL

COMMERCIAL

THE

(2308)

32

A Better Tomorrow

to

President
quest for money, the Government prevent the recurrence of unem¬
Roosevelt enjoined as desirable
(Continued from page 11)
intimates
that" nothing
Many industries at
could ployment?
for all men.
However, here as
The American
please it more than to oblige, and present, and notably the textile, promoting payroll savings plans in forward moving.
elsewhere, thinking makes it so; it takes another dip into the tax¬ still report 'labor shortages; but their own organizations.
people do not want to go back.
just as the Briton will always
We have the dynamics and the
Widespread savings by individ¬
payers'
pockets.
But
markets? the Government has thought fit
late

the

which

duct

in his own gar¬

bold that the rose

beautiful and dis¬
iris which flour¬
beside the Sultan's gate.

is

den

more

tinctive than the
ishes

well

be

should

of¬

is

if
be

closer attention than formerly

mingling of the larger

It is this

all

that

However,

sway.

consolation

soothing

fered

Progress

Paradoxical

A

are
-

Government's
the

to
political
outside the

subject
turveydoms

These

topsy

philosophy with what is perhaps
the narrower patriotism that enenables the Briton to clear hurdles
which, to foreign observers look,
as
though they must bring him

paid to potential consumers' needs.
Research

as

Means of Advance

a

to

give warning that some amount
unemployment "not comparable

of

with

statistics reveals

ment

before

be expected. Even
study of employ¬

may

superficial

a

existed

which

that

war"

the

that

some

readjustment in the labor situa¬
tion can hardly be avoided. Thus,
the number of workers at present

will

uals

(1) relieve inflationary

individual's

the
well

(2) provide
security, as

prices,

on

pressures

own

vitality to aggressively pursue the
objectives of our proven way of
progress.

that

(3) help to restore the
historic pattern of capital forma¬
tion out of which America's great¬

together,

ness

becomes much

Every

as

grew.

is

Here

concrete

a

example of

.

step

America

of

think

we

understanding

and

America

by

—

important, if

more

it

of

take

can

we

toward

not

as

limited

a

how united,

nomic Position has

the

Rather like the

which have existed in many coun¬

determined, purpose¬ step, but as an unlimited start.
effort—by business, by gov¬ It is out business here to find the
ernment, by labor* and by our many positive advances which all
big
boss,
the whole American groups and every individual can
public—can correct what is wrong I make
together.
Confidently—
and improve one of the many top; with complete determination, unflight jobs which the American derstanding and good will, for a*
people want done, and it will get better tomorrow,
done through united and whole¬

tries.

hearted teamwork.

Designed although it was

down.

effect, the

produce a depressing

to

probable that Britain will,
over the next five years, achieve
more
economic production than
is the case at present.
The ex¬
It is

planation is not at the moment to
be found so much in increasing

employed

orders for

on

the ex¬

port market is nearly two million
against less than one million be¬
the

fore

This

war.

both

flects

increase

Britain's

re¬

need

acute

Britain's Eco¬
failed to do so. resort to heavy machinery, (al¬
immortal colored though that must come), as in the
man,
the Briton does not know greater attention that is being paid
Where he is going but he is quite to research.
The semi-public or
sure he will reach his destination.
cooperative
industrial
research
Paradoxically, his uncertainties organizations in Britain have now
do not destroy his sense of confi¬ a record membership, growth dur¬
dence.
It is this underlying as¬ ing the past decade being most
surance, much more than all the
marked.
Further, individual re¬
Government urges to reach "tar¬ search departments are becoming
gets" and "to work or want," common among firms of any mag¬
which is responsible for Britain nitude.
This movement is bound
increasing her production by 17% to find practical outcome in nu¬

be maintained
indefinitely? Or is it
now the position that countries are
less in need to import, at any rate
at
prices
which have
hitherto
been asked and paid? Is Britain

during the past two years.
The
well-to-do rebuke miners for ne¬

ing for Home requirements? And
if she could do this, how could

Paper

White

on

glecting their work in order to at¬
cricket matches,
and the like; the miners reply
with a few well chosen words
concerning the
idle rich who
tend football and

spend their lives at race meetings.
Hours of labor have been lost on
sides, but the social temper
lias been restored by a brief ex¬

compliments

of

change

and the

dustry averted.

Gratuities

and

Forms

at the be¬

Form-filling which

Socialist regime
much of the Briton's
the

ginning

of

took

up

so

time

has

been

countered by the

development of a new technique;
it has been learned that it is pos¬

shortening

for

employment of fresh
rials
ones,

tive

re-combination

or

mate¬

raw

old

of

entry into new produc?
fields, and in the better use
or

of labor

the result of time and

as

motion and similar studies.

tx>th

major cataclysms of class warfare
and prolonged dislocation of in¬

directions, among them
of processes used
existing
manufactures,
the

merous

the

most important industries,

of the

of jthe

members

that

have

who

eration

older

gen¬

in¬
difference to investigations other
than those of
a
most palpable
professed

kinds, are handing over the man¬
agement to younger men who are
strongly research-minded. It re¬
be

mains to

will
of

find,
via the technicians, full expression

answer

tions shortly and

lim¬

likely also to assign greater

to future
schemes for State control of in¬

its than had been hoped

dustry.
Thus, to give a
example of much that is

typical
occur¬

ring, the officials of an electricity
supply company — all of whom
supported the taking over of their
company by the State—have been
informed that they can no longer

at Christmas
that they are State servants,
neither can they expect in

expect
now

and

future

a

to

tricity

gratuity

their

obtain

and

servant without
in

elec¬

own

appliances

electrical

at reduced prices.

To be a State
Christmas box,

a

part of Britain's indus¬

trial

machinery

much of the erstwhile charm

of nationalization.

Something

appoint

to

Parties"

"Working

to
make recommendations for this,
that and the other industry. Some
these

Parties

months and

according

to

the

result

same.

sit
for

for
a

whether

comfortable

But
the

some

or

is

a

few

few years,

the

chairs

that

The

of the money necessary and
also if it will guarantee me mar¬
aome




and

sufficient

material

raw

believe

Some

for
that

palliative will have to be
in emigration on a large
The attempt to forestall

a

scale.

-

possible eventualities by becoming
self-contained

more

little

but

makes

headway, whether tested by

the total acreage devoted to agri¬
culture

the

or

of

sources

opening

up

of

materials

raw

new

within

Britain herself.
The

found

through

substantial

a

rise in the purchasing power of the

world

as

outcome

an

of

a

gen¬

eral

revivification, for which, so
far as Europe is concerned thanks
will have to be paid to the Mar¬
shall Plan.

began
the

writer

The

than

more

affirm

and

Briton

feels

do

no

where

he

can

to return to

that

although
keenly the

very

uncertainties of the times for him¬

it

still be

can

of

tives

has

in

objec¬

initi¬

It

an

in¬

must

be

mind, also, that British
is benefiting from in¬

industry
ventive

refine¬

widely

so

renaissance.

dustrial

side

been

a

of

and

it should lead to

ated that

borne

said that

method

ment

skill

the

provided from out¬

normal

channels.

An

outstanding instance of this is in
electronics, where the powerful
Rank cinema organization has en¬
industrial field.

tered the

with

philosophy
and good humor as he has ever
had and with considerably more
ingenuity, industrial and other¬
wise.

a

compare

case

that

erature

shortage, to in¬

paper

formation of all

kinds.

for

the

good deal of the

a

is

lit¬

which

the

Government has been
is

redundant

recognition
cacoethes

or

of

It

Socialist

responsible
but a
of
among
the

worse;

the

presence

scribendi

tions

should

not

al¬

be

of Government publica¬

whatever

the

readjustments

and
may

this

have

war.

makes

his

The
way

to

inquirer
who
His Majesty's

in order to obtain light on a spe-

Stationery

Office,

whether

it

is

cific problem of industry or with
some
broader objective in view,

as

a

Possibility

Are the facts that the Briton is

Rosenfeld Co. Offers

put it, our high standard of living
come about "not only because

Video

Corp. Common

has

thought hard, invented,
innovoated, and worked together
well, but also because men have
been willing to risk millions of
dollars of their savings for invest¬

many men

machines

in

ment

They have all had their
But it isn't they alone

power.

reward.
who

in horse¬

and

benefited—it is every¬

have

have played their
roles well in the great American
Many

one.

venture.

They

induced

were

rewards of

that

success

rewards—and

These

to

great.

are

I

may

say

must preserve

them—are
like magnets drawing out the un¬
we

talents of all of

common

influence

They

us.

of the our
3,881,500 businesses and everyone
of our
143 million people.
The
avalanche of invention,
innova¬

made

one

every

system the most produc¬

our

tive in the world's history." Let's
have much

such professors.

more

To achieA'e better tomorrows we

merit

must

Better

dawn for any

circuits

man-

tend to be

nation which short-

are
a

Previous

cannot

tomorrows

incentive

the

Americans

nounced today

Rosenfeld

P.

Co., of 37 Wall St.,

York.

New

Michael M.

of

Video,

Platzman, President
that completed

states

plans call for the manufacture of

excel.

to

generations of Ameri¬
incentive, the vision

have the

and

the desire to face

the future

build the brave

courageously, to

which

world

of

out

came

such determination.

Because

ing 7
table

inch,
In

Console

AM

matic

They sought

they spent more hours
play,

at work than at home or at

they found in their jobs their
financial, economic and trading greatest opportunities, the greatest
equilibrium is generally achieved. fulfillment of their ambitions.

FM

and

inch Con-

12

a

addition,

12

a

with

commercial

use

inch
auto¬

record changer plus a
for

line

inch and 12 inch

10

models and

solette.

club

and

a

grade artisitc custom line
made specially to suit and fit into
furniture
designed
by
interior
high

decorators. The television industry
is

growing at

It

startling rate.

a

by
RCA
industry
Service Laboratory that there are
is

reported

presently 750,000 television sets
in operation, that there will be
over 1,000,000 receivers in use by
1948.

Production of the television

industry during the third quarter
of 1948 was 50% greater than the
duction
tember

Estimated pro¬

1948.

the

of

industry

in

Sep¬

October 85,000;
90,000 and December

is

70,000;

November

100,000.
At

present time, there are
permits already

the

construction

83

mediocre people.

a

line of television receivers includ¬

not and do not in¬

cans

new

stock, at $1 per share, is an¬
(Dec. 2) by Henry

mon

first half of

them—through

by-man participation in the jobs
ahead.

of 300,000 shares
Corp. of America com¬

Video

of

men

think hard and take risks because
the

stock issue

A

in stations presently

outstanding

There are, in

under construction.

applications out¬
standing in television stations.
303

addition,
"With

for

new

sales

sets,

on

territories

television

opening
receiving

the potential market would

tremendous,"

appear

says

Mr.

Platzman.

Warren York

Missing

of

invaded

They

Joins A. G. Edwards & Sons
to

Financial

LOUIS, MO.

Marshall
with

The

A.

North

has
G.

—

become

Edwards

Chronicle)

George J.
associated

&

Sons, 409
Eighth Street, members of

the New York and St. Louis Stock

Exchanges.

Mr. Marshall

was pre¬

viously with the Mississippi Val¬

McDonald & Co. Adds
(Special

to

The

KANSAS

Financial

of

CITY, MO.

McDonald

They
understood
what
they
doing.
They knew what
they wanted and how to get it.
Not just for some of them, but for
all of them and by

—

Myron

&

Company,

Avenue.

We in this

descendants.
to

generation
Their

is the ingrained knowledge
something unique under the

America

means

(Specikl

ST.

to

The

PAUL,

Warren

is

Financial

Chronicle)

MINN. —John

to every

land.

Mannheimer-Egan

What it

perfect

C;

connected with Mann¬

their
legacy

are

great

us

of

sun—what

With

is.

What

individual in
takes to

and practice

it

our

preserve,

all that the

American way of life is and will
ever be.

heimer-Egan, Inc., First National
Ideologies
that
put
men
in
Bank Building.
chains, or merely replace one set
of chains with

With King Merritt Co.
(Special

ST.

to

The

LOUIS,

Financial

MO.

Chronicle)

ingless

in

the

another,
advance

Public

gaining steadily in research and

American action.

that he has the opportunity of be¬

408 Olive

all

—

are mean¬

of

man¬

kind. They are backward moving.

Harry M.
Lewis is with King Merritt &
Co.,
Street.

On Air

our.

opinion
wills

and

still

President

habits.

sum

It

of Warren

W. York

&

Co.,
of Allentown, Pa., whose
private plane carrying himself,
his wife and personal pilot, has
been missing since Nov. 18, has
been unavailing, although planes
have
been
searching over the
central and eastern portions of
Texas for several days.
Following attendance at the an¬
convention of the National

nual

Security

Traders

Association

at

plane and its pilot by appointment
at
Mineral Wells, Texas,
about
50 miles from Dallas, where, it
was

reported,

landed
The

en

the

route from

plane

had

Allentown.

party then took off for New
to
attend
a
reception

Orleans

given the returning convention
delegates by the New Orleans Se¬
curity -Traders
Association.
Nothing has been heard of the
plane since the pilot asked for and
received

weather

information

shortly after taking the air.
Mr. York founded his firm, with

of

principal offices at 530 Hamilton
Street, Allentown, in
1927.
A
branch
office
is. maintained at

is

39

dominates

It is the

Trip

The search for Warren W. York,

Dallas, Mr. & Mrs. York met the

all of them.

Chronicle)

A. Mcintosh has been added to the

Baltimore

unknown fron¬
tiers with courage and vigor, in
the
conviction that opportunity
produced its own security. They
were
that paternalism in
aware
any form would bring an end to
their rights to live their lives as
they chose—the traditional rights
of independent Americans.
were

ley Trust Company.

is not likely to do so in vain.

Unemployment

a

of my college tours

one

to be made before the attainment

is

higher and much more
comprehensive than it was before

on

are likely
responsibility,
they craved
ac¬
capital value which will tivity. They knew little and cared
favorably with the assets less about frustration and futilty

of most other countries:

ST.

Information to Hand

who became

professor

a

These attributes

to have

(Special

Another advantage which Brit¬
ish industry has in comparison

the

much

as

As

friend

tion, and risktaking that has been
drawn out by our system of rich
rewards and mild penalties has

Capital Position

Others hope that a solution will

be

1009

answers

time, be still in

import

to

the dilemma cannot be solved and

staff

industrialist, sensible
this in effect by
Baying, "I will do all this, or some
of it, according to my discretion,
If the Government will provide
man,

same

needs?

standard

produced and well-known argu¬
ments
forthcoming.
Industries
must become more efficient, they
must group into larger units; they
must obtain fresh equipment and
machinery. So, with monotonous
reiteration,
the
platitudes
roll
forth.

her

lowed to obscure the fact that the

are

the

foodstuffs

nearly

always

so

position

bureaucrats

statistics

or

at

she
a

necessity,

large scale un¬
of turning over a
workers to provid¬

employment,
million

the

avoid

order to

uncomfortable.

Familiar

with

faced

be

to

future

despite the

continues

pace

replacement, despite Government
assistance, are not easy to solve,

with the past is in greater access,

Account

on

Government

The

goods

self and for all men, he faces

Dickensian at the core, is to take
away

are

date
of

of

out

of

and that the financial problems

land where sentiment is still

a

of

is

and also

shortage

increased

in

recommendations

departments to

in factories; but with a Socialist
official inquisi¬ Government so keen upon the utyet not rudely—
.most use being made of progres¬
at least not in an indictable sense.
sive aids, no opposition from La¬
Nationalization has been discov¬ bor is
likely to meet with more
ered to have its humorous side,
than a temporary success.
and this fact is not only a corAlthough it is true that a con¬
jrective
of irritation but seems siderable

to

sible

this

Can

or

whether Labor

seen

the

allow

research

abnormal

found

Moreover, it is the case in some

the export pace

to force

ful

Broadway, New York City.

jVolume 168

THE

Number 4756

COMMERCIAL

&

CHRONICLE

FINANCIAL

(2309)

Indications of Business Current
The

are

cover

AND

STEEL

Latest

INSTITUTE:

Previous
Week

Ago

TION

Ago

Indicated

steel

operations

(percent of capacity).

-Dec.

5

97.7

98.9

99.2

100.1

ingots

castings

and

IN

URBAN

DEPT.

S.

-

(net tons)

-Dec.

5

1,710,000

1,782,600

1,788,100

1,804,300

All

AREAS

building

Crude

petroleum

oil

Nov. 20

Gasoline

i

output

Kerosene
Gas

oil

Residual

|

(bbls.)

output
fuel

oil

115,676,000

5,712,000

5,556,000

5,229,000

*

.

—

(bbls.)

Gas oil and distillate fuel oil (bbls.)
Residual fuel oil (bbls.) at

at

LABOR

17,811,000

17,238,000

2,472,000

2,665,000

2,077,000

2,192,000

7,577,000

7,669,000

7,331,000

6,574,000

9,119,000

8,964,000

9,227,000

8,447,000

Total

89,808

*$1,783

$1,497

*1,336

660

685

1,129
590

328

*334

275

114

*113

137

*123

Nov. 20

26,908,000

26,528,000

27,329,000

83,979,000

80,291,000

82

35

*35

14

79

*88

68

100

*98

56

25

*25

13

25

25

17

11

10

39

*38

18

39

63

50

238

254

214

34

36

55

65

59

149

153

.123

439

*447

368

(nonfarm)

building (nonfarm)
•

Warehouses, office and loft buildingsStores, restaurants and garages

56,774.000

80,751,000

83,659,000

84,577,000

building

Commercial

62,646,000

Nov. 20

_

1

Industrial

21,218,000

84,392,000

OF

(in millions):

construction—

Residential

84,777,000

Nov. 20

at

162,597

*94,054

$1,704

DEPT.

S.

October

of

construction

Nonresidential

91,074,000

91,795,000

91,244,000

Nov. 20

Month

—

new

Private

lines—

!

Kerosene

I

310,503

65,003

etc.-

$562,908

*360,540

*193,667

114

alterations,

*$648,261

285,827
215,545

.l
-

CONSTRUCTION—U.

BUILDING

16,138,000

17,802,000

Nov. 20

|

Other

nonresidential

building

Religious
association of

.

american

Educational

railroads:

Revenue

Nov. 20

857,492

871,677

927,532

694,406

702,860

726,864

Hospital

902,662

Nov. 20

freight loaded (number of cars)
Revenue freight rec'd from connections (number of cars)

731,410

engineering

construction

—

U.

construction

S.

Private

and

$179,052,000

32,606,000

59,946,000

103,421,000

49,693,000

48,196,000

63,294,000

75,631,000

43,086,000

49,093,000

50,554,000

5,110,000

25,077,000

public

11,429,000

utilities

construction

OUTPUT

Bituminous

military

(U.

Beehive

BUREAU

S.

coke

Nov. 20

*12,065,000

12,040,000

13,383,000

1,205,000

1,151,000

1,185,000

1,217,000

Nov: 20

(tons)

12,270,000

Nov. 20

153,800

*144,900

145,900

144,300

and

and

Sewer

STORE

TEM—1035-39

INDEX—FEDERAL

SALES

RESERVE

SYS¬

1

AVERAGE=100

"

Electric

output

INSTITUTE:

(in

of
-Nov. 27

kwh.)

000

5,373,597

'

Middle

(COMMERCIAL

AND

STREET, INC.

INDUSTRIAL)—DUN

BRAD-

&

East

72

104

126

101

_Nov. 25

_

10

11

*66

45

16

*17

14

$15,838,786

Finished

Pig

steel

3.75628c

3.75628c

3.75628c

Central

South

$46.82

$46.82

$46.82

$37.06

(E.

&

M.

J.

Nov. 23

$43.00

$43.00

$40.58

$43.16

QUOTATIONS):

BUSINESS

—

refinery at
refinery at

Export

Straits tin

Louis)

(East St.

Wholesale

Louis)

at

103.000c

103.000c

103.000c

80.000c

21.500C

21.500c

19.500c

Sept.

U.

BOND

21.300c

19.300c

14.800c

17.500c

17.500c

15.500c

10.500c

DAILY

___;

(millions

.Nov. 30

100.80

100.75

100.69

101.86

.Nov. 30

111.25

111.25

110.52

111.81

(DEPT.

f

14

COTTON

LINTERS

AND

—

Railroad
Public

MERCE—RUNNING

MOODY'S
U.

BOND

Govt.

S.

j

Average
Aaa

j

116.6'

114.85

In

consuming establishment

109.97

109.97

109.79

112.0(

In

public storage

103.64

103.64

103.64

104.4f

106.39

106.56

106.39

106.74

In

111.62

111.62

111.07

113.7(

115.82

115.63

114.66

115.24

2.44

2.45

2.45

2.44

DAILY AVERAGES:

Bonds

I

corporate

nr^_ frr-w-y

trV

—

V

Nov. 30

__

■

Nov. 30

A

2.81

2.87

2.96

Nov. 30

3.53

,

3.53

3.36

3.37

3.08

3.08

3.11

3.Of

2.87

2.92

2.86

COMMODITY

402.0

INDEX

Sales
Sales

national

fertilizer

index

ity

by

association—wholesale

231.8

.

235.3

236.3

231.9

212.2

oils

268.6

299.9

294.6

336.6

210.0

205.9

311.8

Nov. 27

261.1

256.7

272.2

—Nov. 27

242.3

Nov. 27
,

'

252.1

198.J

242.3

244.1

173.7

172.1

171.2

194.3

194.4

192.9

Metals

190.7

190.5

188.3

159.4

—

Miscellaneous

Building

commodities-"

229.0

229.0

and

Fertilizer

materials

151.0

151.4

156.5

142.6

142.5

142.4

drugs

v

All

;

machinery

Nov. 27

Durable

150.1

140.6

151.3

219.3

222.4

218.1

Orders

PAPERBOARD

received

Production

Nov. 20

167,198

_Nov. 20

195,552

190,406

Nov. 20
Nov. 20

97

96

(tons)

(tons)

i

Percentage of activity
Unfilled orders (tons) at

373,804

,

165,882

189,737

182,964

95

359,739

418,582

144.4

143.0

151.0

9,521,000

10,802,000

420

452

I

All

267>

286

252

280

257

*252

250

252

225

267

256

253

236

243

224.

13,478,000

*13,245,000

13,125,000

6,793.000

-—

6,630.000

6,495,000

164.5

...

*6,709,000

*6,536,000
*161.7

160.2

188.1

*185.8

183.6

145.9

*142.7

141.8

381.7

__——

Payroll indexes—

v '

goods
goods

—----—-

345.3

*418.9

382.2

*331.6

309.2

16,704.000
8,292,000

*16,443,000

16.175,000

*8.187,000

8.070,000

8,412,000

.——_—_—,

*374.8

422.6

341.7

manufacturing

*8,256,000

8,105,000

£105,012,000

£5,196,000

£3,942,000

$115,709,718

$105,256,808

$81,145,528
14,252,802

employees in manufac¬

Estimated number of

turing industries—
All

manufacturing

102

394,769

23,889,000
21,563,000

9,414,000

—

—

goods
goods

^—

Nondurable

161,905

21.302,000

6,685,000

—.

goods
Nondurable goods

ASSOCIATION:
174,440

:
—

Durable

Durable

NATIONAL

23,832,000

1935-39

,

goods

Employment indexes—
All manufacturing

129.3

220.2

Nov. 27

combined

groups

—,

Nondurable

150.1

'

23,811,000
21,157,000

FEDERAL
—

October:

of

goods

Durable

151.3

21,550,000

PAYROLLS—U. S. DEPT.

AND

134.9

150.1
•

65,541

21,302,000

LABOR—Month of September:

manufacturing

157.1

'

153.7

Nov. 27

Fertilizers

Farm

236.4

230.5

Nov. 27

.Nov. 27

materials-

Chemicals

Y.

N.

monthly), unadjusted.:
(average daily), unadjusted
______
(average daily), seasonally adjusted.,—

Nondurable

223.1

Fuels

142,192

65,628

''

179.4

Textiles

OF

All

103,559

144,129

FED-

(average

EMPLOYMENT

287.P

257.4

210.6

Nov. 27
—

Livestock

213.8

249.1

300.7

Cotton
Grains

210.9

252.1

and

108,997

57,118

400

Stocks, unadjusted as of Oct. 31_—________
Stocks seasonally adjusted as of Oct. 31

commod¬

groups—1935-39=100:

Foods
Fats

OF

AVERAGE=100—Month

459.9

409.7

402.6

BANK

RESERVE

115,116
209,187

______

DISTRICT.

RESERVE

ERAL

#

Sales

MOODY'S

,

SALES—SECOND

DEPARTMENT STORE

1,476,112
5,098,757

——

on

—

828,576

739,139

1,262,404
4,140,319

21,157,000

October

of

October 31——
spindle hours (000's omitted;), Oct.—
spindle hours per spindle in place,

October

3.37

3.37

Group

Spinning spindles active

3.1',

3.53

2.86

Group
Public Utilities GroupIndustrials

*

month

CQTTON SPINNING (DEPT. OF COMMERCE)
Spinning spindles in place on October 31——•

Active

3.18

3.17

3.17

31

1,468,500

7,325,729

of Oct. 31

as

public storage as of Oct. 31
Cotton spindles active as of Oct. 31

Active

9,265,460

11,663,229

695,887

October—

of

of Oct.

as

consuming establishments as of Oct. 31

2.89

3.53

3.14

month

Linters—Consumed

2.81

2.89

Nov. 30

_

Railroad
i

2.81

Nov. 30

:

Baa

3.10

2.89

r

Lint—Consumed

3.1(

3.10

Aa

,

$46,443

COM¬

OF

In

Nov. 30

YIELD

115.63
113.89

.Nov. 30

-

116.80
115.24

.Nov. 30

Group
Industrials Group

*$52,504

-

BALES—

116.80

115.24

.Nov. 30

Group

Utilities

7,233

12,155

prior to
—

DEPT.

.Nov. 30

Baa

$27,055

8,112

:

——,

.Nov. 30

A

*$30,401

$):

COMMERCE):

OF

.Nov. 30

'

■

of

$53,300
GINNING

-Nov. 30

Aa

289,668,672

—

___.

Total

Nov.

corporate

-Average

288,973,504

13,991

COTTON

AVERAGES:

Bonds

Govt.

S.

PRICES

64,072,237
$325,882,167
36,213,495

COM¬

OF

Running bales (exclusive of linters)
MOODY'S

55,394,396

$369,560,328
80,586,824

15.000c

21.300c

73,536,100

$304,183,448

Retail

Nov. 24

_.

7,603,837

20,833,432
4,964,165

$30,460

of

DEPT.

Manufacturing

21.500c

Nov. 24

at

(St.

Zinc

21.200c

23.425c

Nov. 24

at

at

Lead

j

23.200c

23.425c

Nov. 24

(New York)

Lead (New York)

,

Nov. 24

23.200c

23.425c

-

1
City—

INVENTORIES,

23.200c

Nov. 24

40,700,752

20,640,496

35,674,139

—

,

York

New

MERCE—Month

Domestic

48,206,677

263,509,309

States

City—

of

39,162,019

59,260,969

—

——

York

New

Electrolytic copper—

{

.

United

Total

Outside

METAL PRICES

_.

67,119,632
35,249,962

73,555,475

8,337,781

—

—

31,608,333

27,889,827

:

Central

$19,405,887

109,672,769

63,589,863

'.

$22,878,345

31,486,494

3.19541c

Nov. 23

&

58,617,709

Pacific
Nov. 23

(per lb.)

(per gross ton).
Scrap steel (per gross ton)

DUN

—

Mountain

iron

—

:

___

Central

West

IRON AGE COMPOSITE PRICES:

35

9

Atlantic
Atlantic

South

FAILURES

*44

178<

CITIES—Month

INC.—215

England

23

13

October:

New

4,983,439

5,555,254

5,626,900

VALUATION

16

21

*190

64

—

BRADSTREET,
ELECTRIC

9

47

—

and

PERMIT

BUILDING

EDISON

1

27

13

___

public service enterprises
development
public

other

All

395

344

345

371

Nov. 20

2
*56

22

facilities

water.

Conservation

9
53

*23

2

naval

_

24

Miscellaneous

DEPARTMENT

5

*102

180

Military

32

58

,

—

other nonresidential

All

and lignite (tons)
anthracite (tons)

8

than

Industrial

MINES):

OF

building
(other
facilities)

naval

or

Hospital and institutional

coal

Pennsylvania

4

106

building

Nonresidential

Educational

COAL

1

—

Residential

55,680,000

14,201,000

Nov. 25

_

Public

67,109,000

Nov. 25

_

Other

$116,802,000

Nov. 25

municipal

Federal

i

$123,240,000

Nov. 25

construction

State

$80,802,000

Nov. 25

_

construction

Public

utilities

Telephone and telegraph—.

record:

Total

types

construction

Railroad

news-

engineering

;

Institutional

and

Remaining
Farm

Public
civil

Ago

5,275,300

Nov. 20

output (bbls.)

Stocks at refineries, at bulk terminals, in transit and in pipe
Finished and unfinished gasoline (bbls.) at

I

5,595,950

Nov. 20

oil

fuel

output

(bbls.)

5,626,400

Nov. 20

1

(bbls.)

distillate

and

5,658,550

Nov. 20

output—daily average (bbls. of 42 gallons each)
Crude runs to stills—daily average (bbls.)

Year

Month

$586,375

-

residential
nonresidential

Additions,

Previous

of

1,265

construction

New

institute:

Latest

S.

u.

Month

—

omitted):

000's

New

American

THE

OF

LABOR

OF

(three

September

Equivalent to—
Bteel

U.

—

Month

CONSTRUCTION PERMIT VALUA¬

BUILDING

Year

Month

Ween

IRON

Activity

production and other figures for the latest week or month available (dates
either for the week or month ended on that date, or, in cases of quotations, are as of that date) :

following statistical tabulations

shown in first column
AMERICAN

33

__—

GREAT BRITAIN—
Bank, Ltd.—Month of October—

NEW CAPITAL ISSUES IN
Midland

SELECTED INCOME TERMS OF U. S. CLASS I
(Interstate

RYS.

Commission)

Commerce

(Month of August):

PAINT

OIL,

AND

DRUG

PRICE

REPORTER

INDEX —1926-3(5
—:

AVERAGE=100

Net
144.6

-—.—..Nov. 26-

railway operating income...—

Total
PRICES

WHOLESALE

SERIES—U.

NEW

DEPT.

S.

Income

All commodities

164.9

products

Foods
All

.

commodities

Textile

—

—

-

other than

products

farm
_

Fuel &

&

Building
All

metal

Income

188.4

Other

177.5

177.8

177.1

Net

after

fixed

.

_

.

—_

.

_

.

88,950,897

79,753,626

55,511,760

3,279,417
76,474,209

52,644,055

31,221,196

29,586,632

charges

—

income

153.2

153.1

147.1

147.0

146.3

145.8

Depreciation (way & structures & equip.) —
Amortization of defense projects.

136.8

136.7

118.6

Federal

.

.

Dividend

Income

85,509,833
31.547,870

2,867,705

<

—

1,380,987

1,373,752

1,354,569

50,913,666

48,854,376

30,738,444

21,621,964

4,911,593

J7,280,446

4,318,935

taxes

1,088,075

4,318,989

3.43

3.18

2.52

appropriations:

Nov. 23

173.8

173.1

172.6

150.9

Nov. 23

203.3

202.4

203.6

187.8

On

common

134.7

134.5

134.4

136.6

On

preferred stock

and skins

—

172.7

168.6

225.4

245.3

223.4

238.1

239.1

251.5

stock

u-

•

to fixed charges

TRANSACTIONS IN DI¬
RECT
AND
GUARANTEED
SECURITIES
OF U. S. A.—Month of October:

•221.6

Nov. 23

206.7

206.2

203.7

262.5

^Includes 373,000 barrels of foreign crude runs.




253.2

174.2
230.1

Nov. 23

:

—

:—Nov. 23
Nov. 23

——

—

♦Revised figure.

91,951,173

TREASURY MARKET

Livestock

Hides

116,339,033

income

1A?..C

Special indexes—

Meats

95,398,330
3,447,157

125,550,184

from

fixed

deductions

Ratio of income

Grains

for

Nov. 23

",
__

___

159.P

177.5

5,056,191

charges—

...

deductions

available

136.8

Nov. 23

..

—

_

164.7

175.2

16,138,416
121,395,224

153.5

__

__

.

products

materials

other

.

and foods_

_

lighting materials

Metals

-

164.3

177.6
177.1

—
■

Farm

14,589,923
130,299,641
4,749,457

•—

—

income

Miscellaneous

LABOR—

OF

1926=100:

r~

3,441,064

income

Other

$14,128,500
Net

Durchases

♦Revised figure.

——_—

$120,000

-

$7,174,000

34

THE

(2310)

COMMERCIAL

affairs is

saying, that
particular form and content of legislation to be
sought—and presumably obtained—will depend upon
how those against whom these enactments would be di¬
purpose are

the

rected behave meanwhile. It is even intimated that some

legislation could be avoided altogether if the business
community "takes a hint" from the White House.
Un-American

Now

submit that this mode of

procedure is not only
likely to be quite futile in the long run, but that it is in its
very essence un-American. In effect it sets the Administra¬
tion up as a sort of court of ultimate wisdom in all these
matters, and holds a club—not law, but a threat of a law—
we

the heads of business

over

men

and others in

Thursday, December 2, 1948

m

(Continued from first page)

appointed for the

FINANCIAL, CHRONICLE

given recently to the situation in the District of Columbia—
light of which there were, as always, suggestions of "reg¬
ulation." Of course, to all realistic observers this state of

As We See It
to have been

&

an

attempt to

which grows out

one

temporary nature and,

of abnormal conditions of

a

important, is one which will
in the nature of it cure itself most
quickly if left to its own
devices. What has happened is at bottom what
always hap¬
pens when any effort is made to keep the price of any scarce
more

semi-scarce article below that which
many

or

hungry

con¬

sumers

are
willing to pay. So far as we are aware, this is
only case on record where the manufacturer of an article
has consistently and
steadfastly refused to ask what the
market would
obviously bear. Dealers have not always been
as
far-sighted—or whatever the quality is—with the result
that a new sort of "black market" has
developed in response
to the demand of the
public. It is a sort of morbid growth on
the body economic, but one which will
inevitably disappear

the

with the conditions which created
it, and leave far less dam¬

behind it than any foolish attempts of public authority to
It is at bottom the
regulate the industry.

force them into

"voluntary" obedience.
antithesis of free enterprise and individual initiative."
It is almost certain to be futile in the long run, so far as
business is concerned, precisely because American industry,
in the last analysis, rests upon the foundation of a large
number of independent and competing units who by and
large insist (and rightly so) upon running their own affairs
as they think wise.
It is likely to be about ^equally futile
as applied,
for example, to the labor unions because they
have attained, or think they have attained, a position of
monopoly in every day affairs and of- power in political
affairs which renders them quite capable of defying Wash¬
ington.

age

America instead of seeking to
get
something out of America.

Employee
work

ceed

Each

the other.

upon

and

employer must
They have a com¬

interest.

mon

and

and

together.

is dependent
shall suc¬

Both

or both shall fail.
Intelligent
far-seeing leadership in labor

management is

sity if

we

vital

have

to

are

a

industrial

peace and prosperity.
Failure to
achieve this cooperation could and
will bring a business depression

A national debt of

000 is too

ally

$250,000,000,-

large. It must be gradu¬
steadily reduced if we

and

to make

are

secure

our

bonds,

our

savings deposits, our social secur¬
ity funds, the pensions of our
veterans

the

civil

and

life

our

workers

insurance

savings of

be

if

lost

All

thrifty people

a

do

we

and

policies.

not

can

maintain

a

solvent nation.

But let

look

President in his desperate political
campaign
a successful conclusion, has placed*
several

unenviable

Must

out is not to be found in

mandate
in the

or

semi-imaginary

a

the

other element

any

why

Budget
balance

must

we

at the sacrifice of

even

worth-while spending.

price

must

we

It is

for

pay

sta¬

bility.

population.

We

for

have

in

much

this

to

be' thankful

favored

land.

These

United States comprise only about
6% of the world's total surface;

Don't Make Business

The

Balance

is

budget

way

some

trying to hold

the heads of business

over

That
our

situations, but the

and

have only about 7% of the

we

world's population. Yet this rela¬

Whipping Boy!

tively small segment of the globe
the inspirations of free¬

—under

little more closely at these cur¬
dom and law—and honest enter¬
(Continued from page 7)
prise—produces, y^ar in and year
developments. It is being said in unofficial, official
the barest necessities of life with¬
cles, education and even in th€ out, about 55% of1 all the wealth
quarters that the President is ready to "give business
in two weeks.
In many of oui
of the world.
churches.
'
another chance." It is being intimated that if business
industries there is hardly a week
This must be a never
We
produce
65%
of
the
ending
men will
reduce their prices and "voluntarily surren¬
between the factory and direct
struggle. Liberty can be only fo: world's corn; 60% of all the pe¬
der" some of their profits, it may not "be necessary,"
consumption of i.he product in the those worthy of it.
Liberty can troleum; 60% of the wheat; 50%
American home.-'
for example, to reenact any excess profits law to take
only be for those who are willing of the copper; and 45% of the
How complex and delicate is the
to fight to preserve it.
And let world's total meat supply. Our
away the profits to which the President in his wisdom
economic mechanism which moves me tell
you, folks, there is no lib¬ daily life is served by 92% of all
does not believe enterprise is entitled. And, conceivably
this tremendous volume of goods
erty in Communism. There is no the bath tubs in the world; 85%
so
at least, should the cost of living cease to rise further
swiftly from production to con¬ freedom of the church; there is of all the automobiles; 60% of all
sumption! We stand in awe before no freedom of
and particularly if it should appear to be in a declining
speech; no freedom the telephones in the world; 48%
the mighty picture of America's of press or
radio; no opportunity of all the radios; 95% of all the
phase, it might not be regarded as necessary that even -f economic power for
good. And we either for the worker or the em¬ television; and 35% of all the rail¬
do well to remind ourselves often
"standby control" legislation be enacted. Although, so
ployer. All come under the domi¬ roads.
that we have a great responsibil¬ nation
far as we recall, the Administration's anti-trust cam¬
of a powerful bureaucracy
Measured in terms of purchas¬
ity in protecting and defending that tells what can and what shall
paign has not been specifically mentioned in all this, it
ing power for the necessities and
us

a

rent

:

is

the

inconceivable

not

that

"an

heart" might save business

men

humble

and

a

contrite

days in court and much

time and expense.

system of free, competitive
enterprise which is the source of

our

strength and well-being.
This
great American
destiny

must

Not
Now it is evident to

us

be

worked

in

out

harmony

with the precious American heri¬

by Law
that this is

tage

guaranteed
through
Constitution.
As long as we

the

—

attempt to govern,
are
by law or even by an administrative body which has been loyal to the ideals of America, we
given wide discretion by virtue of some statute, but by the need not fear the future. It will
conceits, or at the very best the judgment of one man with¬ be as glorious and as resplendent
as the past.
out even the benefit of an
enabling statute! It seems to us
We are in troubled times. There
to be going one step further even than the New Deal mode
is chaos and confusion
abroad, a
of government by men rather than
by law. If we assume natural condition following a
an

not

its effectiveness then the
practical business man would be

obliged to keep constantly informed as to what the President*
thinks or is likely to think in order to conform his actions
day-by-day not to conditions as he sees them, but to the
judgment of one man or a small coterie of men sitting
cloistered in the nation's
capital far distant from the

burley of business. It would
under which the
economy

be difficult to

would be

surer

imagine

fortunes of millions of people.
America

It

system

world

success.

Rebuilding

War-Torn

is

to

rebuild

that

forth

this

America

billions

war-torn

is

pouring

dollars

of

of

the

this

be¬

American business is still
by and large competitive.
In can not for
very long take undue

peoples'

it remains

bility. We must have a stabilized
and peaceful world if we are to

profits.

competitive, it

higher than conditions
factors

over

not raise and

warrant.

which it has

itably have their effect

can

no

upon

There

So long

keep prices

are

numerous

control, and which inev¬
prices. One of them is the

monetary and credit situation. We have financed
on inflation—as we
financed a much less
in 1917 and 1918,

as

a

expensive

war

war

One

net result is a
staggering increase
supply of money, and in the amount of such "pur¬
chasing power" in the hands of the rank and file of the
people. So far as they are disposed to
spend it, they
are able to demand
goods in excess of current produc¬

in the

tion.

It is the rank and file of the
consumers, not

the
directly causing price increases, and
insistence upon having what
they want is beyond

seller, who
their

are

effective control

even

of government.

cause

in

work

The innumerable

cases

of violation of the various

the

out

do

We

there

world

be

can

without

completely

our

no

sta¬

own

Our need to pour out great sums
of money

to Europe and Asia be¬

increasingly

came

when
we found another
ideology reach¬
ing out to engulf Europe and Asia
and eventually all the :world.
necessary

type of situation is the state of

affairs which is well known to
exist in the retail market
for new automobiles.
A good deal of
publicity has been




our

where

a cruel, cold war being
between Communism and

the free way of life as best exem¬

plified here in America.
win

this

cold

war

cause

false
our

unite.

I

That

are

if

We must

we

are

and

publicity
filtrated

influence

turn

solid ground upon
sure
all of us can
determined to keep

the

dominate

our

the

at

and

our

life.

aid and temporary

you

security, but eventually they will
get the money back through high¬
taxes, and still retain all
they have secured.

er

stimulations
300

the

above

white

light of

business,

labor

cir¬

the

wear

chains of

Federal

think

bondage.
But I do not
so.
I hope not.
I love to

think

of

people

our

as a people
forward with the
spirit
of
adventure,
courage and determination.

to

ready

go

American

This is the spirit that conquered
wilderness and built here the

a

mightiest
by

nation

conceived

ever

It is the spirit that

man.

two

world

that

won

will carry us even to

levels

in

if

maintain

to

great

is

the

spirit

higher
only the faith

have

we

institutions

our

age

it

wars;

and

the

them.

It

cour¬

is

a

challenge to the people of
May God give us the

America.
courage

to meet this challenge.

Must Build

Strong and Solvent
America

If

we

are

to

do

full

share

in saving the world we must build
a

strong and

and

is

our

solvent America.

a

first great task

it is only

today
through unity and

cooperation that
our

we

can

achieve

guard well the herit¬

which gave

age

must

greater

create

in

unselfishness.

all be ready to

America

We

us

tion in the world.

that

sure

the

building
and

but

assistance

and

devoted to the

are

of the machinery of
liberty in the strick¬

up

freedom and
en

this high posi¬
We must make

aid

send abroad

we

of Europe
said, we are
of the population of the

war-torn

7%

lands

As I have

record of achieve¬

our

ments for human well-being is

the

beacon

light and the brightest
hope of the remaining 93% of the
world's population today. We dare
not

treat

lightly this great herit¬

age.

The

spirit of

fabulous

is

achievement

people.

our

have equal stores
timber

this

of

secret

American

of coal, oil, gold,

fertile

and

the

Other lands
Other

acres.

in

lands

history have achieved
power
and
greatness
only
to
wither and pass from the scene. In
the

shadows

other lands,

ancient

of

ruins

in

living to¬
day amid resources which match
our
own—yet they struggle des¬
perately for a bare existence—
living in huts,
wearing rags—
helpless and hopeless — because
sacred

people

flame

are

of

freedom

has

not touched the land to spark the

spirit of

the

people.

Our American
web of
from

moral

the

ages—from
from

desires.

We

other possession.

every

We must

the

our

liberty to the
possessions
far

are

earth—but

to

as

the

during
continuous de¬
this
continent,

of

individual

Perhaps we have reached that
stage in our national life when we
ready

under

freedom

of

years

much

so

people

of

velopment

and Asia.

are

history has-

achieved

where freedom and

phase of

every

They give

This

upon those who had in¬
into powerful places of
in

money we

is

to

Communism out of America!

roll

will be given

away

why we must be on
guard against the steady onward
march of the Federal bureaucracy.
Already enormously large,
and
growing steadily, it threatens to

one

am

We

by
With

American

security,
of liberty.

cost

human

the

promises of security.

own

all

nation

lured

were

we

in

any

temporary

keep Communism from supplant¬
ing Americanism.
There is

country through a defeat in
When it goes it will be be¬

arms.

There is

waged

price
For some years some of us have
and other
regulations still in effect are eloquent witnesses
vigorously fought to get the Com¬
of these truths. A somewhat
unusual—unusual, that is, only munists off the government pay¬

an.^ detail—this

conveniences of life the wages of
the American worker today are by
far the highest in the world. No¬

great destiny.

which

They Will Disappear

realize

we

peace

money.

done.

This liberty we all like to talk
about will never disappear from

powers

World

hurley-

a

of lack of

deadly world war which severed
ancient moorings and wiped out
the stability, the hopes and the

be

spirit is

a

living

responsibility

basic

the

wisdom

Holy

spun

of

the

Scriptures,

Magna Charta, the Declara¬
the Bill of

tion of Independence
a

must

.

that would be disastrous.

recently brought to
himself in

.

neces¬

very

The

*

Rights.
moment

What political party, in a
of intoxicated triumph,

give something to would dare turn its back

upon

this

\

Volume

168'

illustrious
And I

Number 4756

tradition

am

of

if it

sure

THE

freedom?

did, it would

meet with disaster.

Partison

Not

of

.democratic, or States Rights, or
Progressive. I speak in the terms
of fundamental Americanism.

and

We

precious heritage to guard

ave a

defend

in

troubled

a

world;

Administration.

The
ries

a

in

strated

life.
is

That

-

why

two-pany

shall find

we

the

system

the

best

ap¬

Italy

are

living

examples today of the impotence

departments,

the

with

rather

startling ef¬

question

whether

well

may be
Federal pay¬

the

of itself,

has not grown to
dimensions that it is now a

self-perpetuating political

organ¬

ism—which holds the power to
keep: itself in office independently
by sheer number of votes?

These

proach to stable national govern¬
ment.; France and

of

The

such

relationship of his daily

civil

military per¬
sonnel. The political power of 2million payrollers and their fami¬
lies
recently has been
demon¬

roll,

every

the

exclusive

lenge confronting
in

new

Federal payroll today car¬
few more than 2,100,000

names

ity of any one par„y. It is the chal¬

American

must

reflections

are

command

the

attention, of

business, people

our

which

if

are

we

ultimately from too
many pardes.
Our problems can

determined to

be

keel in these United States.

which

comes

resolved; and

steady prog¬
best assured, through the vig¬

ress

our

operation of the two-party
system.
And that system, to be
orous

really effective, must be a part of
the government of every State in

'

pay¬

shall be continued

asked

every

of

under the

fect.

responsibil¬

rate

this

roll expansion

That defense is not the particular
tne particular

establish¬

the

Union.

The

sound

thinking

people of the country must unite
under

banner, whatever
the party which

one

call

may

braces

all.

us

we
em¬

America is greater

than any party!

Business is naturally interested

;•

vitally in the
the

budget outlook

in

Congress, to assemble in

new

January.

President

Truman

ready has indicated that

enlarged demands
ury for European
sistance.

There

al¬
face

we

the Treas¬
relief and as¬

upon

is

talk

much

of

(direct military aid to Europe and
China. There
national

There

plans for

are

d efense

a

larger

expenditure.

demands for bigger ap¬

are

propriations for housing for roads,
for
irrigation
and
reclamation.
There is talk in

some quarters of
taxes, particularly to finance

new

the Truman National Health Pro¬

with its proposal for com¬
pulsory health insurance, and a
"beginning in Socialized Medicine,
gram,

such

England
* '. * v

as

'-year.

launched

tional

I

these

larger

in

in

Cabinet

positions

programs

several

sub-

in

Washington.
They have indicated clearly since
the election that they regard the
results as a green light to the de¬
velopment of their enlarged
spending programs. If these meas¬
ures are

the

Administration,
face

once
we

presented to Congress by
the

shall

we

decision

to revert to

are

at

whether

deficit spend¬

ing, or to increased taxation all
along the line.

on

an

even

long ex¬
Congress that the
principal difficulty encountered
in government programs is that
they too often start out on an
overly ambitious—and excessively
costly
scale.
Businessmen
are
trained to approach their prob¬
lems
in
a
more
practical way.
They often patch up the bad holes
in the road, and thus get traffic
moving.
Government
programs,
in

the

on

other

abandon
and

hand,
old

the

often

too

road

plough it under r— and the
are left with no thorough¬

fare whatever while the
i3

being

We

debated

must

dreams

and

designed.
against costly

guard

by

road

new

bureaucratic

aries.

1

.""4 ■" ■

element of

an

bureaucratic brokerage

in almost
government project. We do

every
not

know

But

exactly why this is

universal experience has
that
government
agencies

seldom make ends meet

busi¬

on a

Record

every great industry, in our
educational system, in every fo¬
rum

of Private

Enterprise

these

to

vast

gov¬

enterprises^ we have the
of
private
enterprise
through the ages. The verdict of
history, as I read"it; is that human
progress
marches
step
by step
with the ' perfection of freedom
and

effective

In

all

today

self-discipline

practical problems
find, upon reflection,

we

that all issues fall

a

line

side

of

line

or

clear line—

spirit, perhaps. To

th3t

of

side

one

on

the other of the very

find

we

one

faith

and confidence in free institutions

—calls

in

mistrust

lack of

If we add as much as $ll/z bil¬
lion to that figure for the fiscal

the

men,

a

tional

And

the

problem

the

at

arises

revenues

once.

United

the type of new taxes
imposed will depend whether we
have

times

good

or

a

disastrous

depression.
;

The

spending

of the

1948.

A

from

report
on

the

Non-Essential

Expenditures shows that

of

these

and

spirit

States for

of

trust

the

in

institutions

ernment in

Yet

our

we

may

fair land

that

the

trusted

not deny that there

of thought

school

a

abroad

are

their

with

not

own

to

must

program,

finance

total

of

crease
no

the

to

125,178

payroll

persons.

a

This in¬

in civilian personnel takes

account, of

pansion
under

Federal

of

the

course,

our

of the

military

peacetime

ex¬

forces

draft.

The

dictate

and

organize

guide

be

decisions

erything,

added

in

today which teaches

people

—that government must plan

Administration

every

cies.

step

every

of

That
roots

school

in

finds

its

spiritual

the terrible agonies of

European Continent all but

persons

every day, including Sundays and

holidays.

That

means

we




have

are to be
national, gov¬

our

Washington. We know

What

the

Administra¬

new

ter for the future to

mat¬

a

clarify.
with fur¬

I shall not burden you

ther

detail

once

the

of

confronting
that

This
munism

is the

picture
is clear

new

History

us.

forsake the

men

disci¬

plines and responsibilities of

or¬

derly self-government, they start
down

those

tortuous

paths which
lead ultimately to the black tyr¬

of the Police State.

anny
As

member

a

the

of

party

in

the

would

iU

become

minority

Congress,

new

to

me

it

predict

those

forecast

developments
which surely will engulf us if the
or

Administration

new

in its

wavers

devotion to

our

and

traditions.

sacred

duty to give the new gov¬

deepest American
is

It

our

ernment

fair chance

a

present

its

program, to outline its objec¬
tives, to develop its methods and
anproaches to the pressing prob

lems of the hour.

fail in that

To

duty would be to foresake Amer¬
ica

the

at

That

outset.

shall

we

on

must keep our

we

politica1

We must be on guard

Socialism.

firm

against

must

We

stand

encroachments

new

ending

year

in

higher during
June

30,

1947; it is estimated

that sulphur

will be 15% greater,
and wood pulp 23 % greater..
These I think

sufficient

government upon the daily
the people.
On these great fundamentals a

lives of

host of solid and time-tested Dem

ocratic
tives
the

Renresenta

Senators and

stand

firmly

American

on

to

the side of

the side of hope

and reasonable confidence.

doubted for

never

the

of

jority of
be

faith

old

hearts

a

still

moment thai
lives

in

the

people.

our

ma¬

There can
that we
through tc

real doubt, as yet,

no

shall
the

I have

overwhelming

an

eventually win
great American Dream of

or¬

dered liberty under law.

of

the

Plan

Marshall

duction.

Breaking
Even
mate

in the battle, businessmen

of free men and free women.

of

pro¬

individual

in

Europe

is

the

real

start that has been made towards

greater

economic

cooperation

the nations of Europe—co¬
in breaking down the

among

operation
barriers

that

divide

into

Europe

separate uneconomic segments.
There

have

already been

solid achievements.

Intra

few

a

On Nov.

European

-

1,

a

Currency

Clearance Program went into ef¬
Under this program,
the
creditor nations in Europe have

fect.

agreed

to

(1) fund

freeze the

or

debts which have been contracted
with

the

debtor

nations

since the war,

rope

tend

credits

new

of

(2)

and
their

on

Eu¬
ex¬

own

re¬

sponsibility to the greatest extent
ECA has agreed to give

possible.
the

creditor

grants

to

additional

tions

nations

credits

beyond

their

own

to

extend

debtor

to

those

na¬

offered-

on

Let
a

us

responsibility.

will which

to

can

work

our

know

no

economies

would

one

as

France

and

and

merge

are
As

union.

op¬

after 1950.

economy

Italy

customs

a

(Special

to

The

AURORA,

Financial

negotiating
for

Great

has become associated

Slayton

&

Company,

Louis. Mr. Schwanz

Inc.

was

St.

local mnaager for Carter H.

Cor-

brey & Co, and prior thereto was
with William H. Flentye & Co.

We have asked the OEEC for

tabulation

of

the

a

barriers

trade

which divide the countries of Eu¬

From there

rope.

to

what

see

about

we

more

shall go on
be

can

done

to

The

Financial

beginning.

The goal is a much

movement

people

of

goods

and

throughout Europe.
We
that
further .efforts
tc

expect

break down the national barriers
to increased trade in Europe wil"

multiply

in

and

ness

and effective¬
intend to encourage

scope

we

them with all of the force and all
the

pressure

muster

can

we

The

important thing to note now
however, is that the centuries-old
trend towards increased compartmentization

in

reversed,

that

concepts

Europe

has

beer

are

and hopeful
stirring
Europe's
imagination and that new institu¬
tions are in the making.

Perhaps

new

Sabotage

persuasive

more

the evidence I have given

effort

The

France

are

recent

is

good

a

is the

sabotage that
of
the

at

Communist

than1

that the

is working,

Plan

agents

making against
strike

coal

in

example of the

lengths to which the Soviet Union
is

its agents

pushing

countries
covery.

block

to

Wrecking

in foreign

European

the

unintended

Chronicle)
we

re¬

Marshall

is the number one objective

Plan

success
are

MIAMI, FLA.—Robert W. Goggin has become affiliated with

moving

Thomson &

tribute

I think
to

the

of the

program^ proves that
the right track and

on

speed.

McKinnon, Shoreland

Arcade Building.

What would have

western

Italy and France had
munistic
about.
Plan

Europe

if

Com¬

gone

is

too
grim
to
think
is the fact of Marshall
which Js giving to the

It

aid

free peoples of Europe

continu¬

a

ing determination to resist totali¬
tarianism

remain free.

and

It is
the new spirit of cooperation that
has come to Europe as a direct

of
us

The

the

last

cause

the

unite

in

No

Marshall

that

Plan

best hope for peace.
world war occurred be¬
our

free

nations

their

failed

will

aggressor

to

interest

common

dare

march

against the free nations if they
regain their strength and remain
united.
After all, with the people
of free nations of western

Europe

and the North American continent
lie all the advantages.
There are
of

more

million

us—approximately

500

against their 250 million.

We have 75% of the world's

85%

steel,
the world's shipping and

of

most

of; the

Most of
of the

all,

petroleum.
have the advantage

ingenuity and resourceful¬

that

ness

world's

we

come

only to free

men.

All that is needed to avoid World
War

is

III

people,

that

plan

the

we,

together,

free
to¬

work

gether and stick together.

Thomas H. McKiitrick
Honored by
Thomas

H.

Belgium

McKittrick,

Vice-

gium at
mal

in

for¬

a

ceremony
Brussels.

Mr.

McKitt¬

As

a

at

a

leave

satisfactory rate of

final word,

I

several
months

while

serving
Chief

as

of

Trade

th#1
and

Branch of **•"*

These steps are, of course, only
a

freer

this

by the wreck¬

to

Payments

reducing them.

of Communism in Europe.

Joins Thomson

happened

on

with

of

formerly

France in 1947:

the

Italy and

of absence for

$300 million.

over

it.

Sch¬

halt

to

who has

Soviet Union

ILL.—Emil O.

hope

enough

been

extreme

Chronicle)

built

European nations to the extent of

the

Slayton & Company

the

of

intangible

march of Communism in

rick,

Marshall

Emil O. Schwanz With

its

tne

was

Britain, she is offering credits tc

with

defeat.

results

countries—Belgium, President of The Chase National
the Netherlands, and
Luxembourg Bank, recently was decorated with
—recently announced that their the Order of the Crowd of Bel¬

Communists' Efforts At

turn

It

important

more

are

announcement
of the Marshall concept which re¬

As further evidence of progress,
the Benelux

Business is the servant of peace

and progress.

gains.

even

tangiuie
Plan

conditional

them

enable

that

me

offers

than the

increases

countries

man

result

important in its ulti¬

more

consequences

duction

of

every

Economic

Down
Barriers

tradition.

one am on

are

are

progress

of the

& McKinnon

the domestic front. We

potash produc¬

29%

be

than

erate

do.

never

pros¬

challenge of Com¬

1949

new

(Special

trated and crushed

513

will
fiscal

the

next

a

age of war and revolution.

was

tion

whether

progress.

the

roll

The
us

tion will do about them is

wanz

ev¬

every

advance,

figures shows that the increase in
civil

tell

have

the Reds and Wobblies are there
—in many high offices in the
gov¬
ernment departments and agen¬

and

aspirations of freedom under law.

it is estimated that

wrecking forces

cleared out of

overwhelm¬

1948

Truman

I

that I

methods

kind will be marching
these steadily in the progressive ranks

years.

many
an

study

ing majority of our people are
aligned on the side of confidence

is

the

to

will

months

ano

Communists

infiltration.

secret

six

And
to

during the first eight months of
the

the

been driven

now

character

suspicion of
of faith

occasion

convinced thc.t

calendar year,

current

recent

Byrd Committee
Federal

am

had

temper

and

tendency of the
present Administration is pretty
clearly demonstrated in the rec¬
ord

have

addi¬

upon

American

of

purpose,

opinion of others.

I

of

other figures

are

could give you that are of interest;

making substantial
towards increasing pro¬

rock

Democracy

to say

Marshall

that

^

1950,

There

prewar

indicate

dent in the hard

a

want

a

the

during
of 1935-1938.

years

even

With that program, with that
vision, with that high purpose we
wisdom of the people, a
shall yet light the lamps of free¬
respect and confidence for dom
again all over the world.

the

$43 billion.

of

peoples,

the average annual

over

countries

I for

our

increase

production

Unable to make

the people.

among

opinion,

35

(Continued from page 6)

in
government itself in Washington.

State

record

'

year

public

of

against the ever-advancing tide o'

ernment

distant

of

in

But

opposed

Our budget this fiscal year—
the year which ends June 30, 1949

expenditures

cells of Communism today

cerous

powder dry!

"

total

Your Bulwark for

thrives

that it may cripple or hinder the
great productive forces of Amer¬
ica. Tnat is why we find the can¬

basis.

ness

Communism

prevail only to the extent

can

so.

the

been

and

•

Government programs too often
cost more than the preliminary

estimates. There is

revolutionary Communism are at
war with
everything that America
holds, dear.

(2311)

to

ideals

vision¬

r

and honest representative govern¬
ment. On the other side we find

The 1949 Budget

for

that Communism wants

mighty America laid low. She

see

entirely,

people

:

spending

command

constitu¬

convinced from

am

As

are

maintain

government

perience

this

We know that the advocates of

,

know

suming fires of inflation.
The aspirations of international

if

taxes

new

job<

or

Federal

CHRONICLE

hopes to accomplish that by push¬
ing us steadily toward the con¬

narrow

partisanship.
I am not speaking
to you in terms of Republican and

l

the

by 3,591 people every week!

FINANCIAL

of

Issues

concerns

ment

&

It requires no occult powers to
divine what is ahead in the way

In this larger sense, the issues
and problems before us today are

far above the

enlarged

COMMERCIAL

would like

Economic

Cooperation
Administra¬
tion

in

Eu¬

T. H. McKittrick

is
ex¬
pected to return to New York at
rope,

the end of the year and will re¬
sume

his banking duties with the

Chase.
The

honor

McKittrick
ernment

conferred

upon

Mr.

by the Belgium Gov¬

was

in recognition of his

friendly attitude to Belgium arid
his

services

Bank

for

as

President

International

of

the

Settle¬

ments during World War II.

36

Alabama Power Co.

obligations,

current

(12/7)

SINCE

ADDITIONS

INDICATES

improvements and

building

erect

ISSUE

PREVIOUS

capital.

Bradshaw

Mining Co., Tonopah, Nev.

add

Probable bidders: Halsey, Stuart & Co.
Inc.; The First Boston Corp.; Lehman Brothers; Harriman Ripley & Co.; Shields & Co. and Salomon Bros. &
Hutzler
(jointly); Morgan Stanley & Co.; Drexel &
Co.
Proceeds—For construction.
Bids—Bids for pur¬
chase of bonds will be received at office of Common¬
wealth & Southern Corp. (N. Y.), 20 Pine St., New York,

(letter of notification) 1,500,000 shares (5c par)
common stock.
Price—20 cents per share.
Underwriter

itive

bidding.

to 11 a.m. (EST) Dec. 7.

up

All

•

Life

States

of company
mill

and

Montgomery,

Insurance Co.,

No under¬

of capital stock.

Offering—To be offered to stockholders at $10
per share.
Proceeds—To complete company's purchase
of Eureka-Maryland Assurance Corp. of Baltimore, and
to keep surplus intact.

Co., Toledo, O.
13,000 shares ($10 par)
common, 1,500
shares of preferred (par $100). Price,
par for each class.
No underwriter. For capital funds

Bemberg Corp. (12/13)
filed (by Attorney General of the United States)

American

Oct. 19

cumulative preferred (par
$100), 91.851 shares of class C common (no par) and
34,033 shares of class D common (no par). Underwriters
—Stock will be sold at competitive bidding.
Probable
bidders: Kuhn, Loeb & Co., Lehman Brothers and Glore,
Forgan & Co. (jointly); Kidder, Peabody & Co.; Blyth
& Co., Inc., and Merrill Lynch, Pierce, Fenner & Beane.
Pullman, Inc., may also bid. Bids—Bids for the purchase
6,175 shares of class B 4V2%

of the stock will be received at the

Department of Jus¬

tice, Office of Alien Property, 120 Broadway,
up to 3:30 p.m. (EST) Dec. 13.

and

Nov. 18 filed 168,425.5 shares of

$1.25 convertible prefer¬

4x/2%
preference stock (par $25). Offering—The $1.25 prefer¬
ence

stock is to be issued in exchange for

Ohio Finance

(par $100) on a four-for-one
preference for each
The 4 */2% preference stock would be

preference stock

basis and Ohio common in ratio of 4/s

share.

common

exchanged for Ohio Finance 4*/2% preferred (par $100)
on a four-for-one basis.
Underwriter—McDonald & Co.
will act

as

dealer-manager.
Metal

American

Finishing Co.,

Grand Rapids,

Michigan
Nov. 3 (letter of notification) 40,000 shares of common
stock (par, $1).
Price, par.
Underwriter — DeYoungTornga Co., Grand Rapids, Mich. To enlarge manufac¬
turing facilities and for additional working capital.
American

Steel

&

—To

Price—$8 pel* share. Proceeds
capital.
In¬

Co. (12/7)
Nov. 10 filed $150,000,000 25-year debentures, due Dec.
1, 1973.
Underwriters—Names will be determined by
competitive bidding.
Probable bidders: Morgan Stan¬
ley' & Co., Halsey, Stuart & Co. and The First Boston
Corp. (jointly).
Proceeds—For advances to subsidiary
and associated companies; for the purchase of stock
offered for subscription by such companies; for exten¬
sions, additions and improvements to its own telephone
plant; and for corporate purposes. Bids—Bids for pur¬
chase of debentures will

be received at Room 2315,

Broadway, New York,

to 11:30 a.m. (EST) Dec. 7.

Areata
Nov.

(Calif.)

filed

15

up

195

Timber Products Co.

shares

100,000

6%

cumulative

preferred

(par $10) ahd 300 shares of common stock (par
$5,000). Offering—To be offered in exchange for out¬
standing common (par $10), or as an outright sale.
^

Underwriter
common

—

and

None.

pay

Proceeds

To

retire

outstanding
notes; balance to erect plywood mill.
—

Argus, Inc., Ann Arbor, Mich.
(Nov. 1 filed 115,315 shares ($10 'par)

5J/2% cumulative

convertible preferred stock.

Offering — To be offered
initially for sale to stockholders at the rate of one pre¬
ferred stock and purchase warrant for each 3V2 shares
common

stock held.

With

each share

of

preferred

purchased company will issue a purchase warrant en¬
titling the holder to buy 80/100 of a share of the com¬
pany's ($1 par) common stock on or before Dec. 31, 1950.
Underwriters—Leason

Co., Chicago.

& Co., Inc., and First Securities
Proceeds—For working capital.

•

Augusta National, Augusta, Ga.
24 (letter of notification) $200,000 30-year 3V2%
sinking fund mortgage bonds. No underwriting.
To pay
Nov.

To purchase instalment contracts, make loans
individuals and to partially retire out¬

Bend, Ind.
to

dealers

and

Brush Co.,

preferred

Price,
•

par.

(12/2)

tract calls for
per

a

underwriting commission of $1.65

gross

share.

share with a selling commission set at $1 per
Maine

Central

stock. Un¬
derwriter—Coffin & Burr, Inc.
Offering—To be offered
initially to existing stockholders both preferred and

Nov. 1 filed 303,330 shares ($10 par) common

Proceeds

common.

—

Power

To reduce outstanding short-term

The First National Bank of Boston.

&

Co.

Light

21, 1947, filed 40,000 shares ($100 par) cumulative
preferred. Underwriters—Lehman Brothers; Glore, For¬
gan & Co.; Dewar, Robertson & Pancoast negotiated a
purchase contract in April, .1948, but the SEC on July 27,

Nov.

1948, concluded that financing by the proposed

preferred

Dr. Pepper Bottling Co.
Oct. 29 (letter of notification) 57,950 shares of Class "A"
common
stock ($5 par) and 2,050 shares of Class "B"
common
($5 par).
Underwriter—Rodger, Kipp & Co.,
Chicago. For additional working capital.
Chicago

Co., Inc., Brooklyn, N. Y.
notification) 37,400 shares of 50£
cumulative convertible preferred stock.
UnderwriterCantor, Fitzgerald & Co., Inc., New York. Price—$8 per
share. Working capital, etc.
Clarostat Mfg.

26

(letter

of

Corp., Newark, N. i.

July 26 (letter of notification) 290,000 shares of common
stock.
Price—$1 per share. Underwriter—Charles W.
Warshoff & Co., Newark, N. J.
To meet obligations.
Ltd., Montreal, Canada

Coleraine Asbestos Co.

200,000 shares

16 filed

of capital stock.

Price—

share in Canadian Currency.
Underwriter
—P. E. Frechette.
Proceeds—For drilling operations.
50 cents per

Columbia

Pictures

New

Corp.,

York

1,414 shares of common stock

Nov. 24 filed

(no par) to

publicly at market by Harry Cohn, Jack Cohn
and members
of their family. Underwriting — None.
These shares were received as stock dividends.
be

sold

Spokane, Wash.
notification) 1,000,000 shares of capital
(par 10<£). Price, par. No underwriting. For ex¬
ploration, development, mining and purchase of equip¬
•

Crater

Mining Co.,

Nov. 20 (letter of
stock

ment.

"

Elkhorn

Mining Cor., Boulder, Mont.
Nov. 22 (letter of notification) 50,000 shares of common,
non-assessable stock. Price—50 cents per share. No un¬
derwriting.

For purchase of

equipment and operating

expenses.

Ex-Cell-O Corp.,

Detroit, Mich.

Family Finance Corp.
Sept. 2 filed 25,000 shares 4*/2% cumulative preference
stock, series A (par $50) (convertible to and including
Aug. 1, 1956) and 97,580 shares ($1 par) common stock
to be reserved-for conversion of the preferred stock
Underwriter—E. H. Rollins & Son, Inc.
Proceeds—To
outstanding

bank loans

and

commercial

paper.

Temporarily postponed.
Ferro

Enamel

—

Sold

—

proceeds for working capital.
Insurance

Gulf
Nov.

15

stock

•

120

I'ROADW * V.

to

Offices in other Principal Cities '




\TV-

FX*

IMNfiKS

YORK

j

-

Co.,

Indefinite.

Dallas, Texas

10,000 shares of common
To be offered for subscription by stock¬
one new share for each 12 shares held.

(letter of notification)

(par $10).

On rights not
per share.
underwriting. To increase capital and surplus funds.

exercised
No

per

stock

share to stockholders.

will be sold to public at $30

Hajoca Corp., Philadelphia
5 (letter of notification) 5,756 shares of common
sale to existing stockholders and 1,000
shares for sale to employees. Price—$35 to stockholders;
Nov.

stock (par $1) for

Stockholders of record Nov. 15 were
given the right to subscribe in ratio of one new share
for each 20 shares held.
Rights expire Dec. 15. Under¬
$40 to employees.

Working capital.

writing—None.

Harwill, Inc., St. Charles, Mich.
Oct. 27 (letter of notification) 125,000 shares of common
stock (par $1).
Price, par. Underwriter — Charles E.
Bailey & Co., Detroit.
To pay current liabilities, pur¬
chase property, building and equipment and for working
capital.
Heidelberg Sports Enterprises, lnc.f
Pittsburgh, Pa.
June 25 filed 5,000 shares of class B common stock (par
$100).

Price—$100 per share.

Underwriter—None. Pro¬

ceeds—$600,000 to be used for spectator grandstand and
balance for related purposes.

,

Heyden Chemical Corp.,: New York, N. Y.
June 29 filed 59,579 shares of cumulative convertible

(no par) to be offered common stock¬
one share of preferred for each 20
stock held. Price—By amendment.
Underwriter—A. G. Becker & Co. will acquire the un¬
subscribed shares. Proceeds—To be used in part for im¬

preferred stock

holders in the ratio of
shares

of

common

provement and expansion
Offering ^postponed. -

of

manufacturing facilities.

Inc., Long Island City, N. Y.

Hotelevision,

shares ($1 par) class A stock.
Un¬
Cantor, Fitzgerald & Co., Inc., New York.

Nov. 3 filed 160,000
—

share.

per

distribute

Proceeds—To develop, exploit and

television innovation.

a

Idaho-Montana Pulp & Paper Co.,
Nov. 23
mon

Poison, Mont.

(by amendment) 258,675 shares ($10 par) com¬
Underwriter — Tom G. Taylor & Co., Mis¬

stock.

soula, Mont. Price—$10 per share. Proceeds—To erect
operate a bleached sulphate pulp mill with a 200ton per day capacity.

and

Inter-Mountain Telephone Co.,
Oct.

20

filed

Bristol, Tenn.
(par $10).

95,000 shares of common stock

Underwriters—Courts & Co.; Equitable Securities Corp,;

Scott,
A.

Horner

Evans

&

WKMCKtS

,

Co.

holders in ratio of

Offering

*

Proceeds-

46,000 by selling stockholders. Underwriter—A. C. Allyn
& Co., Inc. Price by amendment. Proceeds—Company's

remaining

New York G Kit Exchangs"

and dividend.

Goldsmith Bros. Smelting & Refining

Quoted

A>

Telephone WOrth iY",u

Private Wires

PHINUPU

•

par

Sept. 27 filed 100,000 shares ($3.50 par) common stock,
of which 54,000 shares will be sold by the company and

&

Co.

Mason;

Mason-Hagan,

Offering—Two

Inc.;

Clement

principal stockholders

42,776 shares of the proposed offering. The
shares will be offered for subscription by

will acquire

Cleveland, Ohio
Sept. 17 filed 79,080 common shares ($1 par).
Corp.,

Price,

Rock, Ark.

Price—$3

stock (par $3). The
corporation plans to exchange the 27,000 shares for 1,500
shares of $10 par common stock of the Robbins Engin¬
eering Co.
Ex-Cell-0 plans to operate the Robbins En¬
gineering Co. as a wholly-owned, consolidated subsidiary.

AND I'THEK

-Chicago

5.10% cumu¬
Underwriters—Butcher

Reduction of bank loans.

derwriter

Oct. 15 filed 27,000 shares of common

reduce

preferred stock (par $100).

Sherrerd,

Price—$27.50

stock issue is not necessary.

Aug.

&

Little

Power Co.

1?Reynolds & Co.
Pittsburgh

■

Philadelphia; Singer, Deane & Scribner,
Pittsburgh; Buckley Securities Corp., Philadelphia; Hill,
Crawford
& Lanford Inc.; Southern Securities Corp.,

Members New York Stock' Exchange

,

-

(letter of notification) 3,000 shares

Nov. 24

a

Bought

Boston

nonvoting

stock ($100 par).
Underwriting—None.
Proceeds—To increase working capital.
General Waterworks Corp., Philadelphia

first

DETROIT HARVESTER COMPANY

New York

Hartford, Conn.

11,606 shares of 4%% cumulative

Nov. 8 filed

lative

•

stock

of

Lynch, Pierce, Fenner & Beane, who have signed
contract to purchase the stock at $30 per share. Con¬

Aug.

American Telephone & Telegraph

~

Lehman Brothers and

by means of a negotiated sale to

retire indebtedness and for working

definite.

South Bend, Ind.

(letter of notification) 985 shares of $50 cumula¬
tive 5% preferred stock and 3,015 shares of $50 cumu¬
lative 5%
preferred stock being substituted for the
outstanding no par common stock of the corporation.
Underwriter—Albert McGann Securities Co., Inc., South

Merrill

Cobalt Mines

6ept. 21 filed 200,000 shares ($2 par) convertible class A
Underwriters—Herrick, Waddell & Reed, Inc. and

Bills, Minton & Co., Inc.

purchased in stabilizing the stock.
Underwriters—
& Share Co. (parent) is disposing of the
SEC permission for sale of stock

Electric Bond

Pump Corp.

•tock.

First Discount Corp.,
Nov. 9

shares and has asked

Central

stock, series A (par $25) and 68,175.6 shares of

5%

be

(no par)

17,500 additional shares which may

plus not more than

general corporate purposes.

Fuller

350,000 shares of common stock

filed

14

for

Light Co.

Power &

bank notes payable to

ence

Co.

Oct.

will use the funds
Offering postponed.

Proceeds—Company and subsidiaries

standing loans.

liquidate notes.

to

Carolina

of Illinois

Investment Co.

American

New York,

(letter of notification)

18

writing.

,

capital.

Buckeye Paper & Specialties

•

additional

one

To repair and renovate mine

York.

and to exercise option to purchase processing
and erect such mill on the company's

move

property and for working
Nov.

Alabama

Nov. 24 filed 30,000 shares

Oct. 8

—Batkin & Co., New

subscription by stockholders in ratio
shares for each four shares held.
Underwriter—Merrill Lynch, Pierce, Fenner & Beane.

—To be offered for

of

to working

$12,000,000 first mortgage bonds, due 1978.
Underwriters—Names to be determined through compet¬

Nov. 5 filed

Thursday, December 2, 1943

CHRONICLE

Registration

in

Now

Securities
•

FINANCIAL

&

COMMERCIAL

THE

(2312)

Volume 168

Number 4756

THE

COMMERCIAL

mulative

preferred

underwriter.

NEW ISSUE CALENDAR
December

Gas & Water Co.,

11:30

Oklahoma
10:30

6, 1948
Inc.

lative

Stocks

& Electric Co.

Gas

(CST)

a.m.,

Potomac Edison

noon

11:30

1

July

v

a.m.

Noon

(EST)

Common

December

*

Alabama Power

Co., 11

7,

1948

(EST)Bonds

a.m.

a.m.

■December

December
York

New

Noon
:

8,

Central

RR.

1948

;•

(EST)_„—Equip. Trust Ctfs.

December; 13,
American Bern berg Corp.
3:30 p.m. (EST)_____
;

:

.

New Bedford

1948
>,

-

Light Co.___
North American Rayon Corp.
•

3:30 p.m.

Old

Edison

Co....

Common

..Capital Stock

Southern Pacific Co., noon (EST)__Eqp.

Trust Ctfs.

December 16,
1948
Light & Telephone Co. Inc...

Common

Western

North

North

State

a

share-for-share basis.

Proceeds—For expansion.

Price, by amendment.
Johnson Bronze

Co., New Castle, Pa.
Oct. 27 filed 125,000 shares (500 par) common on behalf
of executors of the estate of P. J. Flaherty. Underwriter
—McDonald & Co., Cleveland. Indefinitely postponed.
(Calif.-) Cotton Oil Co.
(letter of notification) 76,302 shares of
Offering — Warrants will be issued to

17

stock.

shareholders

entitling

them

to

purchase

for each five shares held of record

at

per

$2.50

share.

Underwriting,

•

common

share

on

To

none.

the treasury for amount spent for capital

common

one

common

of

Nov. 30,

reimburse

improvements.

Lakeside

Nov.

19

stock.

Co.

Laboratories, Inc., Milwaukee, Wise.
(letter of notification) 1,000 shares of common
Price—$6.50 per share.
Underwriter—Loewi &
increase

To

working capital.

-J

•

Langendorf United Bakeries, Inc., San Fran.

per share; common $12.75 per
Underwriter—Walston, Hoffman & Goodwin, San

Francisco, Calif.

Livingston Mines, Inc., Seattle, Wash.
21
(letter of notification) 90,000 shares (50 par)
stock and $30,000 6% 2-year interest bearing
promissory notes.
Underwriter — Lobe, Inc., Seattle,
Wash. For operating and general corporate expenses.
Oct.

common

Lockheed Aircraft Corp., Burbank, Cal.
Nov. 2 filed 34,750 shares ($1 par) • capital stock, to be
offered officers and employees:
Underwriting — None.
Proceeds—For general corporate purposes.
Masonite Corp., Chicago, III.

& Co.

to

exchange their holdings

shares for

common

share of Masonite stock.

one

Gas

&

Co.

which

body & Co. (jointly). Proceeds—To pay bank botfow*^v~
ings of $4,000,000, to pay $1,700,000 of borrowings
from the
trustee
of
the company's employees' pen¬
sion fund to pay $1,200,000 of indebtedness to New
York
Telephone Co., and provide funds to pay indebtedness to
Federal Telephone & Radio Corp. Bids—Bids for pur¬
chase of
Broad

Michigan

Bakeries, Inc., Grand Rapids, Mich.
Oct. 18 filed 67,500 shares 5V2% cumulative convertible
preferred stock ($20 par) and 67,000 shares ($1 par)
common.
Underwriters
S. R. Livingstone & Co. and
First of Michigan Corp., Detroit, Mich. Proceeds — To
redeem stock and complete a plant.

&

'<

Co.

business

to 10:30

Electric

Co.

•

pur¬

up

a.m.

1978.

Emacio &

Wash.

15.

mon

•

manufac¬

•

Mineral
26

Investment

(letter

Corp.,

of notification)

(no par) stock.

Price—$100

per

Midland, Texas

698

shares

share.

of

common

No underwriting.

For operation expenses.
•

,

Nov.

Mississippi Power & Light Co.
30 filed

$7,500,000 first mortgage bonds, due

Underwriters—Names

to

be

1979.

amount of short-term bank loans.

Southern

Oct.

received

at

Room

Service

use

Proceeds—For prop¬
company and its
purchase of securities will

& Gas Co.

Sale

Monarch

Machine Tool

Sept. 13 filed 26,000 shares of

Vernon

stock (no par).
Inc. and Prescott,

common

40,000

shares

(par

$25)

Telephone Corp.
Oct. 25 (letter of notification) 3,000 shares of 414%

liabilities and working capital.
•

cu¬

;

.

10.000 shares of

Offering—Class

..

common.

999.993

shares of

common

stock

(par $1).

Taylor Food Co., Raleigh, N. C.
/
(letter of notification) 23,000 shares of common
(par $1).
Price—$1.75 per share.
Underwriter—
Griffin & Vaden, Inc., Raleigh, N. C.
For purchase -ot [,
additional machinery, to defray the costs of sales promo*
tion and for working capital.
■•$"¥
Nov. 5
stock

1

Manufacturing Co., San Francisco, Calif.
(letter of notification) 3,300 shares *' ($1 par)
Price, market. No underwriter. •

filed

Co., Inc., New York.
Proceeds—For payment of moneys which was used in
connection with company's organization and acquisition
of certain properties; corporate purposes.

cumulative

5%

18

Underwriter—Willis E. Burnside &

Rheem
19

(12/6)

Surety Oil Co., Ltd.
Nov.

Distribution, Inc.,

preferred will be offered at $25 per share with one
share of class C given as a bonus with each 4 shares of
class B purchased.
Proceeds—To pay balance of current

Nov.

(Ohio)




filed

Co.

—

Proceeds—For drilling operations.

29

Investment

Un¬
derwriters—Schneider, Bernet & Hickman; G. H. Walker
& Co.; Dewar, Robertson & Pancoast; Underwood, Neuhaus & Co.
Proceeds
To increase working capital.
Price—$16.75 per share.

B

Co.

Underwriters—F. Eberstadt & Co.,
Hawley, Shepard & Co., Inc. Proceeds—Stock being sold
by certain stockholders. Offering indefinitely postponed.
Mt.

Southwestern

Montreal, Que.
Oct.

»

Nov. 12 filed 33,880 shares (no par) common stock.

20,000 shares of stock sold, the company will de¬
liver to the underwriter stock purchase warrants en¬
titling the holder to purchase, on or before Sept. 1, 1950,
1,000 shares of capital stock of the company at $1.50 per

convertible class B preferred stock and
C stock (no par). Underwriting—None.

filed

Southwestern Associated Telephone Co.
Aug. 24 filed 22,000 shares, of $2.60 cumulative (no par)
preferred stock.
Underwriters — Paine, Webber, Jack¬
son & Curtis; Stone & Webster Securities
Corp.; Rauscher, Pierce & Co.
Price by amendment.
Proceeds—
To pay, in part, bank loans used for construction pur¬
poses.
Indefinite.

each

Films

8

ital and general corporate purposes.

•

Renaissance

property additions and betterments.

Corp., Jackson, Miss.
1,500,000 shares of common stock (par lc)
1,350,000 shares will be sold by company and
150,000 shares b,y W. G. Nelson Exploration Co. Price—
$1 per share. Underwriter—J. J. Le Done Co., Petroleum
Equities Corp., New York. Proceeds—For working cap¬

Quebec Oil Development Ltd., Montreal, Can.
Aug. 4 filed 2,000,000 shares of capital stock, ($1 par
Canadian funds).
Underwriter—Hiscox, Van Meter &
Co., Inc. Price, $1 per share (United States funds). For

share.

,

use

of which

provements. Underwriting—The company rejected bids
submitted Aug. 4. The SEC on Aug. 23 exempted the

Probable bidders:

com-

Price, by l/

Smith, Barney & Co.

Southern Oil

901, 50 Broad St., New York, up

the competitive bidding rule.
basis being discussed.

its proceeds for

Oct.

June 11 filed 200,000 shares ($100 par) cumulative pre¬
ferred stock. Proceeds—For property additions and im¬

agency

—

Proceeds—Commonwealth will

Offering deferred.

by

proposed sale from

-

its pro¬
ceeds to reduce indebtedness and Southern Indiana will

(jointly).

Electric

Underwriter

amendment.

(EST) Dec. 6.

Public

Electric Co.

shares (no par) common stock
the Commonwealth & Southern Corp. and 75,-

000 additional shares of stock for the benefit of the
pany.

Ripley & Co., Blyth & Co., Inc., and Union Securities
Corp. (jointly on stock); Shields & Co.; Equitable Secur¬
ities Corp.; Lehman Brothers; Kidder, Peabody & Co.

for

Indiana Gas &

filed -600,000

20

owned by

by competitive biddiryj.
Probable bid¬
Halsey, Stuart & Co. Inc. (bonds only); W. C. Langley & Co., and the First Boston Corp. (jointly); Harriman

determined

through com¬
Halsey, Stuart & Co.
Inc.; The First Boston Corp.; Glore, Forgan & Co.; Equit¬
able Securities Corp. and Shields & Co. (jointly). Pro¬
ceeds—To finance in part company's construction pro¬
gram and other corporate purposes.
petitive bidding.

22

ver,

(12/6)

improvements

Nelson, B. C.
stock (500 par).

Underwriter—Peters, Writer & Christensen, Inc., Den¬
Colo. For additional working capital and to reduce

ij

determined

and

Ltd.,

common

(C. D.) Co., Grand Junction, Colo.
(letter of notification) d,500 shares ($50 par)
5V2% cumulative preferred stock. Price—$51 per share.

ders:

Bids—Bids

shares of

Smith

Nov.

bonds, due 1977 and 30,000 shares ($100 par) cumulative
preferred stock, series B.
Underwriters — Names will

additions

Working capital. "-.'.Y?

Ridge Mining Co.,

P. Pearson, managing director *>f
K. Fudge and Victor Semenza, co¬
& Co.
Price—300 per share U. S.
funds.
Proceeds—For exploration and other develop¬
ment work, tc pay off loans and for other
purposes.

Nov. 9 filed $5,500,000 first mortgage and collateral trust

and Alex. Brown & Son

Co., Inc., New York.

Aug. 24 filed 1,106,600
Underwriters—Harry
company, and Richard
partners of Pennaluna

Rights expire
of

&

Silver

Proceeds to selling

Underwriting—None.. Expansion

Edison Co.

Corp., New York
*V
(letter of notification) 299,000 shares of com¬
stock (par $1). Price, par. Underwriter—^Willis E.
17

Burnside

share for each three shares held.

Co., Inc., and Hachez & Brown, Inc., Spokane,

For mining operations.

Silver Diner
Nov.

Price—$2.50

Potomac

on

C.

able stock.

16

noon

D.

Crescent, Inc., Kellogg, Idaho
(letter of notification) 550,000 shares of assess¬
Price—180 per share.
Underwriters—R. L.

Oct. 30

(EST) Dec. 6.

turing facilities, working capita!.^

to

Washington,

Silver

due

—

Nov.

Sightseeing Inc.,

(12/6)

Corp./ New York
(letter of notification) 24,079 shares of capital
per share.
To be offered for sub¬
scription by stockholders pf record Nov. 24 in,ratio of

erty

;

& Co.,

Nov. 22 (letter of notification) 10,000 shares of 6% cumu¬
lative preferred stock (par $10). Price, par. No under¬
writer. To provide working capital and to reduce exist-,

Pervel

be

(H. J.)

sales contracts.

repay notes and finance
purchase of bonds will be
at Room 1100, 231 So. LaSalle St.,

Kebbon, McCormick & Co., Chicago.

Dec.

s

share. For working capital and to carry conditional

per

stockholders.

new

at Room 1922, 15
(EST) Dec. 6.

South Bend, Ind.
Oct. 5 (letter of notification) 1,000 shares of 6% cumula¬
tive preferred stock (par $100) and 37,500 shares of class
B (no par) common. Underwriter—Harrison &
Austin,
Inc., South Bend, Ind. Price—Preferred par; common 25c

Orangeburg; (N. Y.)
Manufacturing Co., Inc.
Oct. 29 (letter of notification) 2,000 shares of common
stock (par $10).
Price—$16 per share.
Underwriter—

stock.

a.m.

40 cents per share. Underwriter—Old
Colony Securities"
Ltd. of Toronto. Proceeds for gold
mining operations.

Schrader

general

to 11

up

Anthony Mines Ltd., Toronto, Can.
Aug. 6 filed 1,088,843 common shares (par $1
).KPri<^~/r3

Proceeds—To

company

Nov.

debentures will be received

St., New York,

St.

Bids—Bids for

Chicago,

to be al¬

the basis of eight

on

Inc.; The First Boston Corp.; Glore, Forgan & Co.;,, L
Shields & Co.; Union Securities
Corp. and Kidder, Pear ^ J

Inc.; The First Boston Corp.; Merrill Lynch, Pierce,
& Beane; Equitable Securities Corp.; Harriman

Ripley

Halsey, Stuart

& Co.

Expected Dec. 13.

$7,500,000 first mortgage bonds,

construction.

be

(par $1) with holders of Marsh

(N. Y.) Telephone Corp. (12/6)
Nov. 3 filed $8,500,000 sinking fund
debentures, due 1963.
Underwriters—Names to be determined through compet¬
itive bidding.
Probable bidders include

Fenner

subsidiaries.

Nov. 5 filed 81,250 shares (no par) common stock.
Pro¬
ceeds—To be exchanged for Marsh Wall Products, Inc.,
lowed

from

Fortson, Wash.

Rochester

ing equipment obligations.

filed

4

Price—Preferred, $23.75

stock

Timber Co.,

(12/13)

Underwriters—Names to be determined through compet¬
itive bidding.
Probable bidders include Halsey, Stuart

one

Nov. 17 (letter of notification) 500 shares of $1.80 cumu¬
lative preferred stock and 2,000'shares of common stock.
share.

Insurance

Proceeds—For

received by

Kingsburg
Nov.

fund

.

except about $275,000 may be advanced to a new sub¬
sidiary to be used by it in making part payment of the
option purchase price of one-half of the stock of Conifer

-

Oklahoma
on

replacement

17

Blyth & Co., Inc. Proceeds—To company from the sale
of the 105,000 shares will be added to
working capital,

American

Carolina.

poses.

Nov.

stockholders of record Nov. 8

Un¬

&

24 filed 100,000 shares of capital stock (par
$5)
Price—$15
per
share.
Underwriter—First
Securitiei
Corp., Durham, N. C.
Offering—26,667 shares will be
initially offered on a "when, as and if issued" basia;
13,333 shares will be purchased by underwriter for pub¬
lic or private offerings; and the remaining 40,000 sharei
will be publicly offered ona "best efforts basis" on
completion of the subscription of the first 40,000 sharei
and the company's receipt of a license to do business to

14, 1948
(EST)—.Equip. Trust Ctfs.

December 15, 1948
Cigarette Machine Co...

Comas
Detroit

pre¬

June

Stocks

December

Long Island RR., noon

plant

.

_

of Justice, Office of Alien Property, 120
Broadway, New York, up to 3:30 p.m. (EST), Dec. 13.

Notes

(EST)__

convertible

Light Co.

Plywood & Timber Co., Everett,
Washington
filed 271,025 shares ($1
par), common stock, of

which 105,000 shares are to be offered
by company, and
166,025 shares by 15 selling stockholders. Underwriter-*-*

Department

Stocks

Gas & Edison

Sachs

To increase working capital.

.

Nov.

Rayon Corp. (12/13) ~
Oct. 19 filed (by Attorney General of United States)
177,398 shares of common stock (no par) class C, and
88,853 shares of common stock (no par) class D. Under¬
writers—Stocks will
be sold
at
competitive bidding:
Kuhn, Loeb & Co., Lehman Brothers and Glore, Forgan
& Co. (jointly); Kidder,
Peabody & Co.; Blyth & Co.
and Merrill Lynch, Pierce, Fenner & Beane.
Bids—Bids
for the purchase of the stock will be received at the

Equip. Trust Ctfs,.

9,

Co., Danvenport, la.
Robinson

For

by amendment

borrowed for construction.

were

North

1948

——

($50 par)

pre¬

Underwriter—Quail

&

No underwriter.'

Price and dividend,

company's

funds

(EST)----------r—^—--Debentures

Erie RR

River Valley Finance Co.,
Davenport, la.
(letter of notification) 1,000 shares of 6%
ferred stock (par $100).
Price, par.

Battery Co.
65,000 shares

stock.

repay

American Telephone & Telegraph Co..11:30

»

bidding.
Probable bidders include Halsey, Stuart & Co.
Inc.; Kidder, Peabody & Co.
Proceeds—For payment of
notes held by First National Bank of Boston and to

—_Stock

(EST)—

a.m.

share.

37

Nov. 22

Nov. 9 filed $5,000,000 25-year notes, series
A, due 1973.
Underwriters — Names to be determined by competitive

Wisconsin Power & Light Co.
11:30

per

New Bedford Gas & Edison

Common

Television & Film Productions Inc

No

$3,000,000 of bank loans and general corporate purpose*
Temporarily deferred.

Equip. Trust Ctfs.
Co

Investment

par.

Co., New York; Pipei,
Jaffray & Hop wood, Minneapolis. Proceeds—To retire

Seaboard Air Line RR.

Southwestern

Price,

Textile Co., Inc.

derwriters—Goldman,

-Debentures

(EST)

$100).

(letter of notification) 1,000 shares of $6 cumu¬
(no par) common. Price—Preferred, $100

14 filed

ferred

.Stocks

Rochester Gas & Electric Corp.
11

(par

(2313)

shares

National

(EST) _-Bonds and Pref.

(EST)___

a.m.

(N. H.)

share; common, $2
working capital.

____Bonds

Public Service Co. of Indiana Inc.

stock

CHRONICLE

reimburse the treasury for capital ex¬

per

•

,

——„

Co.,

Nashua

Nov. 19

(EST)_-__^___—

a.m.

FINANCIAL

penditures.
•

Indiana

To

■.

&

,

•

(Continued

on

page

38)

'

•--

38

Utah

•

(Continued from page 37)

Thursday, December 2, 1948

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(2314)

Tele-Video Corp.,
Oct.

20

(letter of

Upper Darby, Pa.

Nov.

115,480 common shares

notification)

Western Chem.

•

(letter of notification) 198,000 shares of common
(par $1). Price—$1.50 per share. Underwriter—

Nov. 22
stock

feature

Finance

Time

Light & Telephone Co., Inc. (12/16)
Nov. 10 filed 47,206 shares
($25 par)- common stock.
Offering—Offered to stockholders of record Dec. 1 in
ratio of one new share for each five shares held. Rights

Brockton,

Corp.,

Oct.

28

consisting of 1 share of preferred stock (par $25) and
1 share of-common stock (par $1). Price—$25 per unit.

common

For
#

Tucker's

Mrs.

'

Foods,

Inc.,

stock
fered
of

United

Salomon

•

©

Additional working capital.

The certificates, dated May 1, 1948, will

Sta'es

Life

Co.

Insurance

r

Bros.

(jointly); Halsey, Stuart & Co. Inc';
Harris, Hall & Co: (Inc.) -t •

& Hutzler;

20

Proceeds—To retire unsecured

(letter of notification) 62,000 Shares of capital
(par $4), exclusive of 63,000 shares to be issued
to C. V. "Starr at $4 per share for investment. American
International Co., Inc., will acquire and hold for invest¬
18

connection with

purchase of

a

i

Probable bidders: Halsey, Stuart &
Salomon Bros. & Hutzler; Harris, Hall & Co...
(Inc.); Freeman & Co.; Shields & Co.

;

.

»

cates,

loans and for

for share basis.

Oct. 15 (by amendment)

125,000 shares of common stock
(par $1) and 33,000 stock purchase warrants (to be sold
to underwriter at 10 cents each). Underwriters—George

•

Detroit

Dec. 15

noon

Edison

Co.

bank loans, working capital, etc.

Dec.

Upper Peninsular Power Co.
Sept. 28 filed 200,000 shares of common stock (par $9).
Underwriters
Names to be determined through com¬
petitive bidding. Probable bidders include Kidder, Peabody & Co., Merrill Lynch, Pierce, Fenner & Beane and
Paine, Webber, Jackson & Curus (jointly).
ProceedsWill go to selling stockholders. Consolidated Electric &
Gas Co. and Middle West Corp. will sell 120,000 shares
and 34,000. shares, respectively; Copper Range Co., 34,000
shares and several individual owners 11,200 shares.

Detroit

of

United

wants

15.

Co.

bids

open

stock

common

on

the

stock

$20).

Probable bidders: Blyth & Co.,

Inc.; The First
Corp.; Coffin
Burr, Inc., and Spencer Trask &
(jointly); Otis & Co.

Boston
Co.

—

its

subsidiaries

RR.

bids

up

to

instalments.
ered.

The

No

for

less

proceeds will

of the cost of

of

bid

new

be

than
used

equipment.

99%

will

be

finance

to

about

the

2%s of 1982

yield

now

will

originally planned, before its

Telephone has been
holding rigidly to a 35 to 40 years
maturity schedule on its several
issues since the war, but in this
substitute

a

25-

tenure, presumably recog¬
nizing that such a term will hold
year

up New
contingent at the
Investment Bankers

sizable

forthcoming
Association

convention

busy

are

greater
buyers

,

.

.

.

,

But

it's

a

immediate

f=afe

bet

interest

that

upon

their

arriv¬

ing in Hollywood, Fia., will be
directed

back 'home,

where

for

must

be

The

approach

the

of

for

time

marketing of the latest big issues
of

American

Telephone has been
easing tendency in
the company's outstanding obliga¬
reflected in

an

only about

lion

remained

first

mil¬

a

offering day.

at

it

the

end

of

Within

about

the

tures,

an

fort¬

last
a

levelling

off of prices which has made for

that the entire $8,500,000 of Flo¬
rida Power Corp.'s new 314%

first

mortgage

spoken

for,

balance
Gas

Co.'s

had

bonds

and

of

only

a

Northern

rise of about 10 basis

average

points in the

been

314%* debentures

such

is¬

would

yield

huge syndicates will be
facing the barrier for this one lead
by underwriting firms which have
traditional

rivals

for

Bell

System busines- 'dnce the advent
of ^competitive bidding for utility

The
most

issue

The boss
avr>*<>r--

*n

Bell

to have taken

a

out of the book of North¬




to

said to be working out well

investors with the

than 60%

issue better

sold.

ity,

namely

have

moved

to about

a

the

2%s

down

against

a

3.10

yielding

3.15

1980

are

about1' 3 25%

around

Three

more

utility

mid-month

- -

companies

have issued calls for bids for
securities to be opened next
and since all three

3.20% yield.

Meanwhile the 23As of

currently

1975,

of

from

Ready to Open Bids

forth¬

the

coming loan in point of matur¬

^securities.

System

which

comparable

"street"
be

Light Co.

(12/6)

Monday

on

size,

are

new

the

on

Co.

will

tration

new

first mort¬

The

following

Power

Co.

will

from

among
000.000
of

day,
pick

ulating

Alabama

the

winner

bidders for its $12,first

new

mortgage

bonds.

bidding likely

Telephone

+>'

-

Power

*

&

covering 350,000 shares of

fixing

a

in£ price of $30

bonds, due Dec. 1, 1979.

f

Light Co. has amended its regis¬

common

bids for

open

the

proposed offerr

share and stip¬

a

underwriting

spread

and

selling concession.
Formal
offering awaits SEC consideration
of

the

deal

Company

under

Act

and

the

the

Holding
Truth

in

Securities Act.

White, Weld-Stone & Webster Securities Group
Offers Transcontinental Gas
Pipe Line Corp. •
Securities
A nationwide investment

on

Unit Basis

banking

group headed

Line Corp. 6%
consists of

cipal
and

a

a

6% note of $50 prin-<§>-

amount,
one

will

due

share

The

offering
$52.50.

of

May

1,

common

price

1951,
stock.

unit

plan of financing announced last
month.

is

Concurrently with this financ¬
ing. the company which was or¬

The
nctes will be payable at
maturity by delivery of cumula¬
tive preferred stock $3 series at

ganized to build a natural gas pioe
line from Texas to New York City,

the rate of

holders

one

per

share for each $50

is

offering to its present stock¬
rights to subscribe for

2,250.000 shares of

common

Oct. 1, 1949, securities in the units

at

The

will be transferable

proceeds of the units and the of¬

and
the

Corp.

by White, Weld

Corp. is offering to the public
unit basis $26,500,000 Transcontinental
Gas Pipe
notes and 530,000 shares of common stock. Each unit

on

week principal amount of notes.

of so-called

quite aggressive.
Rochester

and

Carolina

& Co. and Stone & Webster
Securities

Dayton Power & Light Co.'s flo¬
of $15 000,000 of new first
mortgage bonds, brought out as 3s,

he

on

&

Meanwhile
'

day the Oklahoma Gas &

Electric

re¬

tation

to

tenders for $8,15-year deben-

Natural

sues.

Two

new

small

mains to be placed.

were

Power

the

reported

was

over

of

today 'Dec. 2)

night there has been

takings in postwar financing.

that

tions.

on

of tb* biggest under¬

encountering gen¬
erally satisfactory reception. For
example
of
the
$12,000,000
of
George Power Co. 3%s, reports
indicated

tures

gage

reported

were

Meanwhile,

Outstanding A. T. & T. Issues

Tuesday, American Telephone &
Telegraph Co. will open bids for
its $150,000,000 of new deben¬
one

institutional
the. major

Wisconsin

its $7,500,000 of

This week's principal new issues

outlet for the loan.

putting the

finishing touches to
their affairs
and
clearing their
desks for the getaway on Satur¬
day.

appeal
who

•

noon

& Co.

look

same

American

York's

to

1

while

New Issues Moving Out.

make

(12/15)

up

Probable bidders:

Probable bidders: Halsey,

recent offering.

will

Co.

Co., 16 Wall St., New York, up to 11:30 a.m. (EST) Dec. 6.
Glore, Forgan & Co.;-Smith, Barney

80%

return 3.28 against 3.17% and the
2%s of 1987, a yield of 3.20 against
3.14%.

down to 31 years from 45 years

who

Pacific

Wisconsin company at the Prosser
Room, Bankers Trust

consid¬

the maturity of its recent issues

Those

Hutzler; Halsey, Stuart & Co. Inc.; Harris

Middle West Corp. (owner) will receive bids for the
pur¬
chase of 20,467 shares (par $10) common stock of the!

purchase of $4,850,000 of-equipment trust certificates to
be dated Dec. 15, 1948, and to mature in 10 equal annual

which

will

(12/6)

(EST) Dec. 15 at
its office Room 2117, 165
Broadway, »New York, for the
purchase of $15,740,000 equipment trust- certificates,
series Z, to mature in 10 equal annual
instalments, and
to be secured by new railroad
equipment costing not
Jess than $23,610,000. Probable bidders:
Halsey, Stuart
Co. Inc.; Salomon Bros. &
Hutzler; Harriman Ripley &
Co. and Lehman Brothers
\ '
(jointly).

Dec. 8 for the

500,000

it

(12/6)'

(Inc.).

Southern

•

will receive

3.23% against 3.10; the 2%s of 1986

instance

j

.

Indiana, Inc.

Line RR.

Company will receive bids

(12/8)

company

revised

as

of

.

Erie
The

western Bell Telephone, one

C\;

Bros. &

mon

Hall & Co.

about

or

(jointly); Halsey,
Corp.; Salomon

Boston

V

Street, New York, for the purchase of $3 255,000 equip¬
ment trust certificates, series E, dated Jan.
1, 1949, due'
15 equal annual instalments.
Probable bidders:'Salo¬

(EST).

(par

on

First

in

(12/15)

Edison

to

The

.

Seaboard Air

-

Light & Railways Co. has asked the SEC
permission to sell at competitive, bidding 78,270

for

Lehman Brothers

Inc.;

Bids will be received up to noon (EST) Dec. 6 at office
of Wilkie Owen Farr Gallagher &
Walton, "15 Broad

bids

United

shares

Co., Inc., Albany, N. Y., and others to be
amendment.
Price, market.
Proceeds—To

and

Co.

West Corp.
(owner) will receive bids for the
purchase of 8,198 shares common stock (no par) of the
Indiana company, at the Prosser Room, Bankers Trusft
Co., 16 Wall St., New York, up to 11:30 a.m. (EST) Dec. 6.

■

The

R. Cooley &

repay

before

on or

up

Middle

•

named

by

5, N. Y.,

or

Public Service Co.

(12/15)

purchase of all or any part of 250 shares of the
stock (par $50)
(said shares constituting 5%
of the total issued and outstanding capital stock) of the
company.
All bids must be presented at the Office of
Alien Property, Department of Justice, 120 Broadway,
New York

&

Bros. & Hutzler.-

common

United Utilities & Specialty Corp.

to noon (EST) Deb.
equipment. truSt certifi^"1
1, 1949. Bidders are asked tp
15-year serial maturities. Pror

Jan.

10-year

Ripley & Co.

for the

offered to

dated

either

;Stuart

•

Cigarette Machine Co., Inc.

(12/9)

ceeds will finance up to 75% of the cost of equipment
estimated "at $13,338,000.
Probable bidders: Harriman

gen¬

The Attorney General of the United States invites

be

to

name

i

sinking fund cumula¬

bank

RR.

The company will receive bids
9 for the purchase of $9,720,000

Prospective Offerings
Comas

company's insurance business.

Diesel locomotives

seven

Co. Inc.;

V

'

46,640 shares and will assign 6,000 shares (of the
62,000 shares) to six individuals at $4 per share. The
balance (9,360 shares) is being offered to other stock¬
holders of record Nov. 24 at $4 per share on a share

ment

Rights expire Dec. 15. C. V. Starr has
purchase any shares not taken by stockholders.
be used to increase capital to be used in

•

costing $2,426,694.

*

Proceeds will

*

asked

company

j

eral corporate purposes.

stock

RR.

the ICC for authority to issue
$1,800,000 of equipment- trust certificates to be used in

tive preferred stock (#00 par) and 70,000 shares (no par)
common stock.
Underwriter—A. G. Becker & Co., Inc.

City

the

in

1,

.

Younker Brothers, Inc.
Oct. 18 filed 34,000 shares of 5%

,

t

„

Missouri-Kansas-Texas

Nov.

notification) 299,000 shares of common
stock
(par 10c).
Price—$1 per shares Underwriter—
Mercer Hicks & Co., New York. Corporate purposes.

of New York

page

.

Lehman Brothers

;

Nov. 17 (letter of

(par $5).
Price, par.
Underwriting—None. Of¬
existing stockholders of record Nov. 16 in .ratio
new
share for each five shares held.
Rights

expire Dec. 16.

been

include:

anjil

plant and equipment costs plus operating capital.

Wireway Sales Corp., New York V

Corp., New York
notification) 52,095 shares of capital

one

Nov.

bidders

! mature in 15 equal annual instalments of $363,000
May
-1949-1963. Probable bidders: Harriman Ripley & Co.

by amendment.
Proceeds—Will go to selling stockhold¬
Offering postponed.
'
'

Chemical

(letter of

8

the

plans sale early in 1949 df
Proceeds for construction. Prob¬
Halsey, Stuart & Co. Inc.; The

New York Central

Unexcelled

for

company

bonds.

new

;cates series K.

Denver, Colo.
(letter of notification) 59,999 shares (no par)
stock.
Price—$5 per share. No underwriting.

ers.

poses.

[

bids

Long Island RR. (12/14) •
.
Company will receive bids at Room 1811, Broad Street
Station Bldg., Philadelphia, up to noon (EST) Dec. 14
for the purchase of $5,445,000 equipment trust certifi-

Wiegand (Edwin L.) Co., Pittsburgh
Sept. 28 filed 200,000 Shares (no par) common stock.
Underwriter—Hemphill, Noyes & Co., New York
Price,

of common stock (par $2.50)
will be sold by the company and 120;000
shares by certain stockholders.
Underwriter-^Rauscher,
Pierce & Co., Inc. Proceeds—For general corporate pur¬
of which 80,000

(12/6)

receive

©

Sherman, Texas

Nov. 26 filed 200,000 shares

Nov.

24

reported

First Boston Corp.

Wastern States Chemicals Corp.,

•

Nov.

Securities to .be issued through
directors and officers to finance expansion, etc.

Underwriting—None.

27

able

companies $2,500,000 30-year first mortgage bonds, se¬
ries C.]
Proceeds—To pay a current bank loan and to
finance part of construction costs.

Square Stores Corp., Brooklyn, N. Y.
(letter of notification) 10,000 units, each unit

Times

will

(owner)

Corp.

Kentucky Utilities -Co.

$10,000,000

expire Dec. 15. Price—$20 per' share. Underwriters—
Harris, Hall & Co. (Inc.) and The First Trust Co. of
Lincoln, Neb. [Company has sold privately to insurance

of instalment financing.

ness

•

Western

Mass.
Nov. 24 (letter of notification) 1,150 shares of 6% cumu¬
lative, non-participating preferred stock
(par $100).
Price, par. No underwriting. To provide funds for busi¬
•

for general working

and

Nov.

plays, working capital, etc.

screen

equipment

of

site, purchase
capital.

Inc., Newark, N. J. Production of
motion picture, production of short

Koellner & Gunther,

television

Refining Co., Salt Lake City

&

West

purchase of 43,853 shares of common stock (par $10) of
this company at the Prosser Room, Bankers Trust Co.,
16 Wall St., New York, up to 11:30 a.m. (EST) Dec. 6.
Probable bidders: Lehman Brothers and Bear, Stearns &
Co.
(jointly); Glore, Forgan
& Co.; Blyth & Co.;
Inc.; Harriman Ripley & Co. and Central Republic Co.
(jointly).
.

(letter of notification) 300,000 shares class A
common
stock
(par $1).
Price, par. No underwriter.
For research, development of markets, purchase of plant

(12/6-10)

Productions Inc.

& Film

Television

Middle

22

Nov.

Indiana Gas & Water Co., Inc.

•

due 1954.
Underwriter—Peters, Writer. &
Christensen, Inc., Denver, Colo. For acquisition of plant
and business of Montana Service Corp.

Additional working capital.

York.

$100,000 first mortgage

(letter of notification)

15

Salomon Bros. & Hutzler, Harriman

Ripley & Co. and Lehman Brothers (jointW).

bonds,

5%

Price—
and one
preferred share. Underwriter—Gearhart & Co., Inc., New

(par 50) and 57,740 preferred shares (par $5).
$5.10 per unit, consisting of two common shares

Co. Inc.,

&

Stuart

Springs,

Ice & Storage Co., Colorado

Colorado

not-separately.
offering

vision

of

the

Until

only as units
The form of

reoresents

some

re¬

company's tentative

$10

fering

per

to

proceeds

share.

stockholders,
from

stock

combined

plus

$143 000.000

the
of

3%% first mortgage bonds to be

Volume

168

Number 4756

sold to insurance
be

for

used

the

the

company's

the cost

companies, will
construction

pipe

which

or

line

of

in late 1950

or

early in 1951. It will connect New
York and

sections of New Jersey
eastern
Pennsylvania with

and

natural

time
to

fields

gas

Louisiana

and

in

will

Texas

supplies

of

City

natural

Corp. has long-term contracts for
the

for

substantial

a

contracts

increase

has entered

calling

DIVIDEND
ANACONDA

and

area

25

of

New

The

Board of

share

$50

on

per

holders

Inc.,

New

maximum
range
per

York

HOMESTAKE

such

shares

par

value

on

1948,

November

&

the close
December 6, 19*8.

THE

MINNEAPOLIS '& ST. LOUIS

Board

of

of

an

record

All

of shares of

said

at

stock

the

December

on

JOHN J.

1948.

6,

O'BRIEN,

A

Secretary

1948,

tain

close

a

Stock

for

15

of

Park

($1.75)
of

week

for

same

of

share

per

dollar

one

OTIS
COMPANY

Company, payable

Borden

the capital stock

'

Treasurer

five

(35tf)

per

share

the

on

been de¬

at

the close of business

on

Common Stock

CARL A.

A

quarterly dividend of 75 cents

cash has been declared
of

C.

I.

December

not

payable January
record

SUNDBERG

Secretary

1948

at

1,

1949,

_

_

/

ber
1

125,
dividend

a

Y.

haJf

of

cents

on

1948

Board

dollar

one

also

twelve

W.

of

PREFERRED

1,

at

the

15,

at the

of

of the

the

on

payable January 15,1949

outstanding preferred stock

Company to holders of

pre¬

ferred stock of record at the close

of

all

record

close of business December 20, 1948.

transfer

books

will

WALTER

not

be

closed.

H. STEFFLER

November 30,

DIVIDEND

to
busi¬

4

1948

declared

a

the 56 Preferred

on

dividend

of

payable January 15,
1949, on the outstanding common
stock of the Company, of the par

value of $1.00 per
of

of

share, to holders

stock of record at the

common

close

business

on

January 3,

1949.

H. A. WAY
W
Secretary

November

24,1948

January

stockholders of record

the

Corpora¬

3,
at

per

Stock and

Stock of this

payable

share has

been declared

this day

$1.50

dividend of $1.75 per share on

Preferred

January 3, 1949.

NOTICE

The Board of Directors has

1948.

on

A dividend of 50$ per

1949,

MINERALS & CHEMICAL

to

the close of

CORPORATION

l'HE TTT

business December 10, 1948.

WestPenn

General Offices
H. F. Sanders,

November 30.1948

Company

20 North Wacker

Treasurer.

Drive, Chicago

Electric

★

Preferred Dividend No. 171
Common Dividend No.

Dividend No.

160

quarterly dividend of 75d

per

(1 J4%)

Judgment

Dividends

159

Common
A

INTERNATIONAL

IBM
share

590 Madison Ave., New

the Preferred Stock for the

on

able January 3,
dend of 604 per

Experience

1949,

share

a

year-end divi¬
the Common

on

BUSINESS

MACHINES CORPORATION
York 22

The 135th Consecutive

quarter ending December 31, 1948 pay¬

<

Quarterly Dividend

a

payable December 10, 1948, to stockholders of

Stock

payable December 28, 1948 and

Stock

payable January 3, 1949 have
been declared, to respective holders of
record December 6, 1948.
The stock
mon

Loyal & Cooperative

transfer books will remain open.

Energetic

W. F. Coi.clough, Jr.
November 24,

November 23,
1948. Transfer books will not be closed. Checks

record at the close of business

prepared on IBM Electric Punched Card Ac.ting Machines will be mailed.
A. L. WILLIAMS, Treasurer

Octo'

•

26, 1948

Chronicle, 25 Park
Y.

New

York,

December 1, 1948.
has
this. day
de¬
quarterly dividend of Three Dollars
($3.) per share on the Capital Stock of this
Company for the quarter ending December 31,
1948 payable on January 3, 1949 to stockholders
The

clared

of

13,

Board

of

Directors

a

record

at

the

close

of

business

December

MACHINES

CORPORATION

The Board of Directors of this

New York 22

4% Cumulative Preferred Stock
27th Consecutive Regular
Quarterly Dividend of One Dollar

($1.00)

per

share

$5.00 Par Value Common Stock

Regular Quarterly Dividend of
Fifty Cents (50c) per share
payable December
stockholders of record at
10,1948.

books

of

business

will

not

January 7,

on

be

October

26,

1948

1949.

L.

WILLIAMS, Treasurer

record at the close of business

1949.

$1.75
for

Robert P. Resch
Treasurer

share

on

January

on

the Gass A Stock

the

quarter ending December 30,
1948, payable on December 30, 1948, to

stockholders
on

of

record

at

December 17,

the

close

of

1948.

COMMON DIVIDEND
The Board of Directors of The West

Penn Electric
a

Vice President and

,

!

'

per

business

dividend

on

Company has also declared
the Common Stock of the

Company in the amount of twenty-five
(25^) per share, payable on Decem¬
ber 27, 1948, to stockholders of record

cents

at

Transfer

closed.

Electric Company has declared
regular quarterly dividends on the pre¬
ferred stocks of the Company as follows:
$1.75 per share (1$4%) on the 7%
Cumulative Preferred Stock and $1.50
per share (1 l/j%) on the 6% Cumulative Preferred Stock, for the auarter
ending February 15, 1949, payable on
February 15, 1949, to stockholders of

Checks will be mailed by the
Bankers Trust Company of New York

1949, or as soon thereafter
practicable, to stockholders of record at the

close

Board of Directors of The West

Penn

are

issued January 28,
as

PREFERRED DIVIDENDS

19,

Both dividends

Company has

this day declared a stock dividend at the rate
100 shares held, to be

A.

MURRAY, Secretary.

on

follows:

BUSINESS

of five shares for each

1948.
MATTHEW T.

as

Company

(INCORPORATED)

The

30, 1948, to

INTERNATIONAL

590 Madison Ave.,

GUARANTY TRUST COMPANY OF NEW YORK

of Directors

by the

the close of business December

Secretary

1948

on

co".

IBM
&

Board

declared

were

November 18, 1948,

The Board of Directors of this Corporation has
this day declared a dividend of $1.00 per share,

dividend of 40tf per share on the Com¬

Convincing Personality




Stock

declared,

Cor¬

American

ANALYST

N.

The

Corporation

-

Preferred

been

stockholders

to

Power & Light

1948

close

declared
.

of business

payable January 1, 1949,

Electric

McCASKEY, JR., Secretary.

SECURITY

8,

STOCK

dividend of 2 Of!

of the

have

Bank Note

York

extra

on account

quarterly dividend period

ending January 31, 1949, has been

1IAUTAU, Treasurer

$4.50

December

record

December

STOCK

144%, amounting to

share,

per

current

one-

Preferred

Available

New

$1.75

vertible

declared
and

A dividend of

Greensburg, Pa.

Stock
and
the
regular
quarterly dividend of 29ll/16f! per share on the
43/4% Cumulative Con¬

$7

Place,

(lOBEflTSIIAW-FULTON
CONTItMS COMPANY

per share and the regular
quarterly dividend of 20<!
share on the Common

tion,

Financial

MILTON L. SELBY, Secretary.
November ip, 1948.

per

a

Commercial

December 10,

Common

to

per share on the
Stock
of
the

($1.12y2)
payable

to

the close of

at

Decem¬

on

COMMON

share

1125,

stockholders of

Penna.

22,

The

25

payable January 1, 1949

business December 10, 1948.

will be mailed.

stockholders
of
record
at.
the close of business Decem¬
ber 1; 1948.

Age

is

share in

1948. The transfer books will not close. Checks

the Common Stock of the
Corporation, payable Decem-

-j

S. A.

J

and

stockholders of record

per

York, November 24, 1948.;.

meeting of the Board of Directors
Allegheny Ludlum Steel Corporation
held today, November 18, a
dividend of eighty cents (80c)
per share
was
declared on

■

ness

Box

200

Bruce H. Wallace, Treasurer
New

Allegheny Ludlum Steel Corporation
a

the close of

at

Checks will be mailed.

An

stockholders

Effective &

per

CORPORATION,
to

close of business

the

FRED

poration,

Diversified

stockholders of record

*

November 24, 1948.

the

Common

the Common Stock

on

FINANCIAL

T.

be closed.

on

Transfer books will

November 29,

Dividend

cenLs

the

of 25c per

business December 10, 1948.
The dividend on the 5 % Preferred
Stock is at the rate of $1.25
per share

the Preferred Stock has

on

the close of business

at

C.I.T. FINANCIAL CORPORATION

payable January 1, 1949 to holders of

9,' 1948.

Cumulative

Mature

share

on

rate

the Preferred Stock and

on

thirty five cents

At

Chronicle,
N.

No.

ber 6, 1948.

record

&

all phases taxes.
exchanged.
Box P

8,

Dividend

quarterly dividend of $1.50

the

at

been declared payable December

94

Common Stock of this Company have

Cashier

York

Preferred
A

E. L. NOETZEL

162

dividend

share
payable December 20,1948 to

and is

ELEVATOR

-

seventy

quarterly dividends on
Company's $5 Par Value Common

The

December 6, 1948.

clared

familiar

New

1948 declared

1948.

on

The

Safeway -

Stores, Incorporated, on November 19,

Stock is

New York 8. N. Y.

Common Dividend No.

Dividends

twenty years' experience leading
firms
(3); also industrial

Place,

1,

No. 155

December 21, 1948, to stockholders
of record at the close of business

promptly.

Preferred Dividend No.

opening for

Financial

The Board of Directors of

1948.

of

To ob¬

holders

Treasurer.

30 Church Street

over-counter

&

Stock Dividends

business

and 5 % Preferred Stocks.

AMERICAN LOCOMOTIVE COMPANY

AI

Commercial

of

close

has been declared

Certificates

exchange

Pittsburgh,

References

31,

the

at

20,1948, to stockholders of record

clients,

of

trading;

record

The final dividend for the year 1948
of seventy-five cents (75$) per share

business

1948.

10,

Trust

McMeekin,

T.

of

dividend,

Capital

SITUATIONS WANTED

43.

of

DIVIDEND

stockholders of

to

at

December

gas

Company, Box 30, 120
Broadway,
New
York
City. '

Over

Preferred and Common

of

be

73OKU<H/s

n

dividend of 25c per share
will be paid on December
record

Secretary

Safeway Stores, Incorporated

Joseph L. Martin, Treasurer

METALS, INC.

should

Doremus

Unlisted

dividend

share will

KING, Secretary

AMERICAN MACHINE

10,

Corporation

the

ed in strictest confidence.
to

November 30, 1948

Dividend No. 11

December

30,

December

on

J. H. Miracle,

1948.

December

AND

business

of

1948.

Wichita River Oil

close

stockholders of record at the
business December 10, 1948.
W. C.

replies will be treat¬

Write

clore

SCHILLER, Treasurer.

holders

Fifty Cents ($1.50)

the Common Stock

on

Company

December 6, 1948, such dividend to be pay¬
able December 20, 1948, to the holders of

November 30, 1948

Salary $100 per
plus commissions.

business December 2nd,

Company, payable December 20, 1948,

Street contacts.

or

of

share

Corporation, payable January 3,

1949, to stockholders of record at the

to common

trader with individual

a

of the

*

close of

The

natural

business

has

*

dividend of twenty-five cents

a

per

(50<')

Fifty

small, unlisted securities
in

*

per

TRADER

years,

(25<f)

Twenty-five cents (25<t) per
paid January 15, 1949 on the
Common Stock of the Corporation, to stock¬

H.

firm

•declared

**o*o

11, 1948, authorized the pay¬

dividend

a

LOUIS.ANA

The Board of Directors has this date

Dividend No. 178

COMPANY

of Directors of this

November

t.

Dividend Notice

THE SUPERHEATER COMPANY

Cents
share on all shares of common stock
outstanding
as
of
the
close
of business

Corporat: on

SHREV EPOR

Company has been
24, 1948 to stockholders of record at the clost
of business December 2nd, 1948.
M. SCHILLER, Treasurer:

M.

the Common Stock of the

on

WANTED

our

UNITED CAS

An extra
dividend of thirty-five cents
(35c'
share on all the outstanding stock of th
Company has been declared payable Decembs:
24, 1948 to stockholders of record at the close

NOTICE

By Order of the Board of Directors.

share

per

Voting

of

*

of fifty cents
(50c) per
outstanding stock
of tlu
declared payable Decembei

the

Secretary.

of One Dollar and

will

York and Richmond Gas Co.

One

*

dividend

all

on

1918

of business

2,500,000 cubic feet daily to New

HELP

*

*

Rich¬

deliveries

the

»

per

A

use

870

Disbursing Agent.
W. HAMILTON,

DIVIDEND

ment

Broadway, New York

day to Consolidated Edison to

will

COMPANY

No.

quarterly

share

to

at

November 30, 1948

from 100,000,000 cubic feet

utilities

16,

Under the contracts

initial

MINING

Allied Chemical & Dye Corporation
has declared quarterly dividend No. 111

Public

*

*

The

61

A

of

23,

record

DIVIDEND NOTICES

Dividend No. 177

of

•

JOHN

the

of

Dividend

pany,

on

Lighting Co., Elizabethtown
Consolidated Gas Co., Kings County
Lighting Co., Brooklyn Borough
and

1948

162

Allied Chemical 8C Dye

Island

Co.

NO.

its capital stock of the
share, payable December

of

shares

The Board of Directors has declared dividend
No.
870
of
fifty cents
($.50)
per
share
o.
$12.5'' par value Capital Stock,
payable Decem¬
ber
»7,
1948
to stockholders of
record
3:0t
o'clock P. M., December 7, 1948.
Chocks will be mailed by Irving Trust Com¬

CO.

Broadway

Directors cf

$26,500,000

DIVIDEND NOTICES

39

THE SUPERHEATER COMPANY

stock.

common

of

utility

Jersey, Brooklyn Union Gas Co.,
Philadelphia Electric Co., Long

Gas

and

3,265,000

RAILWAY

Service Electric & Gas Co. of New

mond Gas Co;

MINING

Anaconda Cop¬
per Mining Company has declared a dividend of
One Dollar and Twenty-five Cents
($1.25) per

Philadelphia.

York,

bonds

and

DIVIDEND NOTICES

N. Y., November 24,

DIVIDEND

They include Consolidated Edison
Co.

notes

into

delivery

for

of

company

in

NOTICES

COPrER

New York 4,

companies in the New York met¬

ropolitan

located

C. EARLE MORAN, Secretary & Treasurer

natural gas to a number of

000,000 of

the

*

fields

of business at 3 o'clock P.M.

in capacity.
The company

require¬

gas

(2315)

outstanding the $143,-

have

DIVIDEND

The

gas.

capacity of 340,000,000 cubic feet
of natural gas per day with pro¬
vision

from

its

program

After completion of the present

first

CHRONICLE

financing

Texas and Louisiana.

access

estimated initial delivery

an

purchase of

ments

FINANCIAL

will

Transcontinental Gas Pipe Line

main transmission line of the sys¬
tem will be 1,840 miles long and

have

manu¬

and

the

for

give New York

COMMERCIAL &

facture of gas.

is estimated at

be completed

substitute for oil in the

as a

system,

approximately $190,000,000.
It is expected that the pipe line
will

THE

Mining and Manufacturing
Phosphate

•

Potash

»

Fertilizer

-

Chemicals

the

close

10, 1948.
•

of

business

on

December
'

'

•

'

H. D. McDowell, Secretary •;

40

(2316)

THE

COMMERCIAL

&

FINANCIAL CHRONICLE

Thursday, December 2, 1948
health proposals, such as
Federal
grants to boost the quality of mu¬

BUSINESS BUZZ

nicipal health

•

A

Behmd-the-Scene Interpretations
Iran the Nation's Capital

services, may, how¬
ever, pass either this year or next.
,
Chances of promoting any cen¬

•

#

tralization or federalization of un¬
employment insurance are dim.

\^VhII
JL

XJLmwfA/

"%Aj

Probably
ness

in

{

far

as

from

WASHINGTON; D. C.—When all the Administration-sponsored
programs for advancement of social security in Congress next
year
added up, they encompass a
breath-taking extension of govern¬
ment activity.
One figure will give a clue as to the vastness of the

legislative

*

in the form

of

di¬

would

trator,

equivalent in cost to
14% of payrolls.
are
also
proposals for

total

than

additional and indirect benefits in
the form of subsidies for local

public health, rehabilitation, and
so on, which cannot be measured

Ewing.

these

programs

of

programs, most of them

Federal

and

with the

states

alone,

would

of

which
from

come

roughly
the

eral

Treasury.

Medical

*

To

'

*

summarize

posals:
As

•,

*

the

main

speci¬

pro¬

the

old

age

has

.•

indorsed

President

security,
and

the

tions

may

expected to re-endorse his 1948
proposal to increase the rate of

maintenance
for

patients

pensions under the contributory
Age and Survivors Insurance

program by 50%. He also fdvors
covering presently-exempted oc¬
cupations into the contributory
aystem, such as the self-employed,
domestics, farmers, and state and
local employees on a voluntary

tion of local

basis.

vides medical

The

\

.

benefit

that

all

maximum

of

at

states

least

26

be

benefits, the Presi¬
too low.
They
increased, particularly
are

heads of families.

While the

Social

ministration

would

like

to

na¬

tionalize

unemployment
insur¬
it may be doubted that the

ance,

will reach

President will

endorse this proj¬
warmly, if at all. The state
unemployment insurance agencies
have built up rather a successful
lobby and to go too strong for this
project would jeopardize other

ect

advancements

in

When
it

employees
jobless insurance.
in

the

form

of

the

Truman

Ad¬

the

hand

one

the

cial

inducements"

to

set

up

a

system of insurance for "temporary"
disability
or
sickness.

'Temporary"
be defined
less

hand,

as

disability would
that of six months

duration.

the

would

On the

Federal

provide

other

government

for

all

other

than "temporary" disability and
sickness—or in general, perma¬
nent total disability—by giving
benefits as part of the old age
and

survivors

gram.

insurance

In other words,

for

pro¬

a person

protracted

'

permanently

periods
or
disabled
would

qualify the same way, more or
less, he would qualify for bene¬
fits
;

y

at

age

65

upon

retirement,

somewhat in the manner of disability clauses of certain kinds

} ot private insurance contracts,
j

Finally, there

ance

and

are

health

health insur¬

aid

programs.

The most controversial is the

proFederal system of prejnedical insurance. The Pres-

tl for
it

first

estimated

that the

on

cost

of

self-financing

a

the

1935

6%—3%

Act

rate by

a

each

set

the

on

payroll

stages of

employer

employee.

Congress, however, has so far
the rate down to 1% on
each, ' although
under
present
law, if it is not again amended,
rate

3%

will

in

total

of

1950 and

in

1952.

motivated

to

go

payrolls

on

4%

to

a

Congress

to

hold

was

down

the

automatic boost in payroll taxes
under the 1935 Act in part from

simple

a

higher
the

desire

taxes,

huge

to

in

trust

avoid

the

a

has

endorsed

compulsory

failure

the

of

the

payroll tax to rise, the true cost
of

old

and

age

survivors

in¬

surance
over

probably will amount
the long run to
6%, al¬

though

some

authorities dispute

this.

Increasing the* benefits by 50%
old .age pensioners and
sur¬
vivors of the latter
probably will
not boost the cost of the
direct
benefits to 9%
of payrolls — if
to

Congress

broadens

the

base

to

include exempted classes into the
system.
'Nevertheless,
boosting;

the

on

sympathy,

my

act

matching

charity.

Government

The

might

en¬

payroll tax, as it does for
unemployment compensation, re¬
mitting the payroll tax liability

fall,

compensation.

a

the

employer if the state
sets up a system for aid and levies
payroll

tax

for

that

It doesn't follow

proposal

also pay the states for the costs of

will

ity aid

program, as it now pays
states for administration of

jobless oay. The funds come from
0.3% Federal payroll tax on

the

remaining

after

even

the

Finally,
items

in

one

the

ibled

the

or

permanently dis
ill, as an

chronically

estimated at

of 1

sur¬

are

% additional

of payrolls.

Already unemployment

com¬

pensation costs employers in the
covered industries
1.8% of the

payrolls, on the average.' Of
this, 1.5% of payrolls is col¬
lected by the states and 0.3
% by

is

medical

estimated

in

Congress, either in

There
ment

Democrats
the

old

ance

that

the

tax

of

2.7%, but this has
to

an

1.5% because

Increasing pension payments by
.">0% also is likely to be favored.
Just how widely
coverage for old
age pensions will be extended, re¬
mains to be
While

will

be

a

Hence,
and

any

sickness

to

pass

this

Administration, it
believed, expects tills

is

Saudi Arabian
South

now

is

too

intense.

Lonsdale Co.

Soya Corp,

FOREIGN SECURITIES

m.s.wkn&co.
ESTABLISHED
Members
40

Next

be scheduled for that
purpose.

taxes,

upon whomever

payroll

they might

N.

Y.

1919

Security Dealers Ass'n

Exchange Pi., N. Y.

5

HA. 2-8780

Teletype N. Y. 1-1397

Trading Markets:
Ralston Steel Car

Oregon Portland Cement
Riverside Cement A & B

Spokane Portland Cement

year, and perhaps 1950, must be
devoted to softening up the
op¬
position
with
a
propaganda

the

of

Finishing

Dorset Fabrics

LERNER & CO.

bombardment, and the hearings

cost

Mining Syn.

Jersey Gas

U. S.

even

system of disabiity
insurance
would

double

publication of the
Commerce of the

a

of

U. S.

year,

proposi¬
tion to go through in 1949. The
of doctors and con¬

servatives

about

the
ap-,

great

agitation for compulsory
Federal 'health insurance, it is

rating systems

steadily employment record.

demand

deal of

opposition

which reduce the tax
liability
for employers with a
relatively

political

which

seen.

there

of

average

of

been

rate

for

insur¬

program should be expanded.

perhaps not next. Not

reduced

1049

coverage

age and survivors'

the

state

the

on

this

Some

subject

of

the

next

year

fringe

Investment Securities

will

national

10 Post Office

Square, Boston 9, Mass.

Telephone Hubbard 1990

Teletype BS 09

pension

payments
by ^50%
increase the eventual
cost
of this phase of social

security by

some

It

figure above 6%.

compensating

HAnover 2-0050

Teletype—NY 1-971
.V

is estimated that

the 'cost of

persons

for

Firm

v/ages

lo§t due to "temporary" sickness
disability would be equivalent
to 1V2%
of the payrolls of the
or

Trading Markets

FOREIGN SECURITIES

covered groups. The President
has
not specified what he
means

the
the

states

to

set

,

compensation

disabled.

The

up

of

to

systems for
the

.Federal

ill

Markets and Situations for Dealers

r.ARL MARKS & no. toe.
120

and

FOREIGN SECURITIES

f

long- certain other
recipients, Qt Fed-

ill, Thompson & Co., Inc.

All Issues

by

"strong financial inducements"

SPECIALISTS

50 Brood Street

Broadway, New York 5

Tel. REctor 2-2020

New York 4, N. Y.

AFFILIATE: CARL MARKS & CO. lac.
CHICAGO

-

itself

pretty general agree¬
among both Republicans and

administration.

a

as¬

half

benefits

is

favored

Theoretically,

resist

a

in 1950.

not

subject to

only

likely to be

and

are

Security,"
Chamber

Social security represents one of
New Deal promises about
which a great deal is

the Federal Government to
pro¬
vide money to pay state costs of

employers

needy

in¬
at

to

those

done

addition to the old age and
vivors insurance
program,

big costly
security ex¬

is

„

14

peared in "American Economic

equivalent to 4% of payrolls
for the covered
employees.

or

for

the

prepaid

This

surance.

compensation systems.
able

of

social

it

getting

appropriations for
aged."
Mr. Corson

cost

exemption where states levy
payroll taxes for unemployment
Cost of making benefits avail¬

final

contributory

has proved

songs

.

larger

pansion favored by Mr. Truman is

administering the sickness-disabil¬ compulsory
the

that the

involve

payroll
taxes, but the cost, without di¬
minishing, might be shifted to
other objects of taxation.

purpose.

Presumably the government might

paid for unemployment

now

gradually

non-contributory plan

Congress

"unable

you?"

are

contributory

will

Govern¬
ilth insurance.
In addition to
ment might match state
grants, as
Lth insurance, however, the it does
for the indigent
aged and
it has endorsed the




Federal

because

part
fund

planned
under the original social secur¬
ity act had its significant draw¬
backs.
'

Despite

eral-state

employers

kept

the

trying to play

siren

enacted,

states

j would be offered "strong finan¬

ill

Security's old

were

»

On

or

Social

pensions

and

compensa¬

ministration. The disability pro¬
gram is divided into two parts.

the

not

the

those

under the

ii.i i

as

upon

taxes to reach

under

the list of the social insurance

of in¬

years.

tion for time lost, is foremost on

objectives of

was

Hence

Disability and sickness bene¬
fits

14%

llili

iHi

"You're

the

under

of

now

benefits

basis would aggregate 6% of
pay¬
rolls over a long period of

social

Federal

direct

eventual rate equiv¬

an

pensions

age

security
desired
by
the.: Administration.
The
Administration would
also
cover

of the

the

been in operation
the number receiving

sistance

pro¬

dustry's payrolls.

the

Security Ad¬

cost

Originally

has

years,

for veterans.

alent to not less than

jobless

The

feels,

should
for

feels
a

period

weeks.
dentf

He

have

plan

Of the above programs, the
government particularly already
contributes to-cost of construc¬

care

the
public
the social se¬

replaced

Although

veterans,

hospitals, and

under

plan, and be
by the latter.

training of manpower in public
health, and medical research. ;

As to unemployment insurance,
the President favors
increasing
should

for

of the Fed¬

Age and Sur¬

part of the

benefits

other

chronic

establishments

.

general

or straight grant
proposition, was enacted with the
thought that it would carry those
initially too old to qualify for

illnesses,
maintenance
of
general
hos¬
pitals, maintenance of Federal

Old

of

neglected.
public assistance,

needy,

and

part

law

institu¬

of

tubercular
with

the

program has been expanded
the contributory

and

injured, construction of hos¬

pitals,

be

benefits.

the

or

curity

community health services and
departments, rehabilitation of

(

to

for

care

by

Insurance,

assistance

...

■

beneficiary,

formerly Director

vivors

involving
up

the

partial contribution

a

future

eral Bureau of Old

sums, the
Federal Govern¬
ment definite contributions:

Fed¬

;

As pointed out
by John V. Cor¬

son,

cooperation,

putting

the

entirely
taxpayer.

fied

billion

state

beneficiaries and

almost

of the national health
include
the
following

program

'

whether the burden shall be borne

The parts

By
1960
this
program
involve an outlay of $4

gram.

Would

;

this

'

pensions, the out¬
primarily one for
long-run increase in

mitigated by

-

conveniently. The total of the
latter is suggested by the indirect
aids under a national health
pro¬

60%

of

Government.

so

,

at

*

The principal
question is whether the extension
of the, government
commitment is

estimated cost by

an

of

*

cost of the
program.

The sum
involves
1960, if en¬
acted soon by Congress, of $4,107
million, of which $2,312 million
would
be
paid by the Federal

be

There

Oscar

a

number

range national health program of
the
Federal
Security Adminis¬

payments in
pensions and
benefits
to
individuals
alone
not less

avoiding

The eventua <£-

program.

rect

;

certain

With old age
look
is
not

disbursements

-

sick¬

stage.

pre

;

and

not be enacted

1949, although this prospect is

seen

'

disability

insurance will

Tele. NY 1-2660