Full text of Commercial and Financial Chronicle : December 20, 1945, Vol. 162, No. 4448, Section 1

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US. ADM.

UBRAW

DEC 2 1

1945*

1

Final

Volume 162

Number 4448

New York,

By FREDERIC EDWARD LEE
Professor of Econoniics^ University of Illinois

,

Noted Austrian Economist Cites German and French Results

Have

possibility of Stopping Inflation Through Price Control.

Sufficient Income to Maintain

an,

American Standard of. '

Living, Professor Lee Points Out That Living Standards Are
Dynamic and That Self-Respecting and Ambitious Individuals
Generally Seek to Constantly Raise1 Their Levels of Living. Holds

liance

oil

trarily Fixed by Legislation. Cautions That Artificially Fixing
Wage Rates Will Lead to Inflation. ;

Hie Quantity of
~~

One of the popular miscohcep-

"labor

meated so-called

-

A Tax

econom-

for the past 10 or 12 years is

ICS

the

idea

or

notion that in

some/ way

a

-'standard

of

which
or

society
State

the

should pro¬
vide for many
of its citizens.

h

e a r

the

Ings

Full

on

Congres¬
sional move to

arid in
the arguments

on page

Program

guaran¬

3030)

Roswell Magill

execution

The

Ordinary Shares

/,

,

;

;

_

socialism

about by the market process and
the price structure it generates.
! | The market steers the capital¬
,

.

istic .economy. It < directs each in¬
dividual's a activities 1 i ato
those

Channels in which he best serves
The

/

the wants of his fellow-nien.

.

o

prod

Graduate Institute of International Studies

czar

f *

At

present he is a visiting

Ludwig'

von

Mises

what he should

man

(Yale).

The coordination of the

various individuals' activities, and

''

•

of

Index

page

,

•

.

(Continued

Everybody plans and acts for

himself.

professor at the

Business. Administra¬
/
His Theory of Money and Credit, first
published in 1912, was translated into
many
languages.
An American edition
was published in 1934 by Harcourt Brace
A Co.
Other works available in English
are;
Socialism tMacmillan), Omnipotent,
Government
(Yale I, 1 and
Bureaucracy
tion, New York, University.

no'
a

He acted

Graduate School of

t i o n

tells

1934 to 1940.

economic
adviser' of.
the Austrian
Chamber bf Commerce from .1909 to 1934.

/
do.

from

Geneva

in

the' free-

u e

.School^

at. tne univer.ny of.
1913 to-1934, and at the

as

ernment.
?In

wel,-,"i«»*<«t

th»

"Austrian

economics

Vienna ..from!

plan adopted
by the Gov¬

economy

Mises,

von

the so-called

of

taught

Overall

e

* Ludwig

;

head

the

th

by Mr. Magill before the Golden Anniversary Congress of Ameri¬
can Industry of the National Association of Manufacturers,
New York City, Dec. 7,
1945.. Mr. MagUl was Under Secretary, of the Treasury 1937-8 and is now a member
of the firm of Cravatb,Swaine & Moore, Attorneys, New York City. '

Gaumont British

Evil, Namely Increases in

production is entirely directed by the orders
of the central board of production management.. The whole [nation is

Reductions for Small Corporations.

•An address

"A" &

Under

an "industrial
army" (a term.,
used by Karl
Marx in the

Ordinary; layman, Casper Milquetoast or
Elmer Twitchell; is aghast these days at the con¬
fusion of the times.
Only a few months ago, we
had one job, to' do—to defeat our enemies, the
German and the Japs/ Notwithstanding all our
worries about our sons and rationing and high
taxes, we had a warm inner satisfaction iii the
knowledge that all the citizens of the country

teed annual wage, this fallacy has

(Continued

•"« /

mends Elimination of Double Taxation and Further

■

wage

rates,

for a

••

■

,

increase mini¬

Frederic E. Lee

■

Favors Aban¬
doning Federal Estate and Gift Taxes and Retention
of Excise Taxes. / Stresses Importance of Early
Balancing, of Federal Budget.

Em¬

the

Dr.

:

share ' to

ployment Bill,

mum

•

'

In the current
.

■'

,r

'

.-.living?'
is
[something

,

"Superstitution" That Diverts the Pub¬

a

the Circulating Medium.

>'-TBy ROSWELL! MAGIIX*
/'. .'/;', .'V, ' :
';WChairman,- Committee on? Post^War Tax Policy
Former Treasury Official Maintains That Prune Fiscal Problem U to Communist
Facilitate Reconversion and Holds That 1945 Revenue Bill Repealing Manifesto)
Excess Profits Taxes and Lowering Income Levies and each citizen
is bound
Was Step in That Direction, f Says for Later Period, to'
obey
his
the Key to the Fiscal Problem Lies in Reduction of superior's" orEveryGovernment Expenditures and Fixes a Prudent ders.
body has
td
Budget at $15 Billion.
Maintains Income Tax Must
Continue to Provide Bulk of Revenue, but Recom¬ contribute; his
//

Proving the Im-

Completely Authoritarian System/ /He Terms Re¬

a

Such Governmental Controls

lic's Attention From the Real Source of the Inflation

the Level of

tions and fallacies which has per¬

as

German Experience

During First World War and Again Under Nazism, Shows That Effective Price

Regulation Must Lead to

[That There Is No Barometer for Determining a Minimum Living
Standard and That Such Standard Cannot Successfully Be Arbii

Copy !

a

By LUDWIG vouMISES*

'

on the Statements Made at the Hearings on the Full
Employment and Minimum Wage Bills That Every WorkerJMust
a

1

European Experiences With Price Control

Commenting
>■

Price 60 Cents

N/Y., Thursday, December 20, 1945

Living Wage Standards Fallacies
//■'

In 2 Sections-Section

ESTABLISHED OVER 100 YEARS

Edition

3041)

on page

Regular Features

■ ■■

on

3048.

their integration into a harmoni¬
ous

system for supplying the con¬

sumers!

with the goods and serv¬

ices,-They

.

demand,

brought

is

•

/.^'.

Aerovox

'

.7.:

-;-/

(Continued on; page 3044)

Corp.
/

v

Nil-Enamel

V

We

Specialize in ;

NEW YORK STOCKS, INC.

RETAIL DISTRIBUTION
and

are

Municipal
Bond

Brokerage

Bonds

interested in blocks

^bf attractively situated
Bonds and Stocks

Hirsch & Co.
.Successor*,to
;
'

HIRSCH, LILIENTHAL

.

*

'

,

•

and other

Established

,

Exchanges
.

25 Broad St., New York 4,
MAnover

?-M(W

-

N. Y.

Teletype XV 1-210

Cleveland

Chicago

London

/

INVESTMENT

-f.

1927

SECtTRITTES

York 5

64 Wall Street; New

{Representative

>

"

Bond Department

and Dealers

;

BOSTON
PHILADELPHIA
Troy
Albany '
Buffalo
Syracuse
Pittsburgh
Dallas
Wilkes Barre
Baltimore
Springfield
Woonsocket
,

Geneva

for Banks, Brokers

R. H. Johnson & Co.

&"• CO.

Members New York Stock Exchange

RAILROAD SERIES

HUGH

LONG

and

COMPANY

Members New York Stock Exchange
Members Netfi^York Curb

INCORPORATED

46

WALL STREET

NEW YORK

3

634 SO. SPRING ST.

LbS ANGELES

,

THE CHASE

Hardy & Co.

Prospectus on Request

W.

14

30 Broad St.

,

Exchange

NATIONAL BANK

New York 4

Tel. DIgby 4-7800

OF

Acme Aluminum Alloys, Inc.

CORPORATE

:

Common

Aireon

BOND

TINANCE

BROKERS

SECONDARY

&

Conv.

Scranton

Preferred

Sola* Aircraft
90c

$6 Preferred

Company

Dealt

Raytheon Manufacturing Co.

Kobbe,Gearhart&Co.
INCORPORATED

Members N.- Y.
! 4 WALL ST.,

NEW YORK S, N. Y.

TELEPHONE-RECTOR 2-6300




Security Dealers Ass'ii

New York 5

45 Nassau Street
Tel.

REctor 3-3600

Philadelphia

,

Telephone

Teletype N. Y. 1-S76
-

Enterprise 6018

on

request

HART SMITH & GO.

N.

Y,

Curb

Members
New

Members Neto York Stock Exchange

120 Broadway, New York 5, N. Y.

Telephone;

52

York

Security

Dealers

WILLIAM ST., N. Y.5
Bell Teletype NY

Assn

HAnover 2-0980

1-395

REctor 2-8600

Teletype NY

1-635

Hew York

Montreal

Toronto

on

Exchange

request

ira haupt & co.
Members
and

Reynolds & Co.
Rpli

on

Analysis

$2.40, Conv. Preferred

'(MEMBERS NEW YORK STOCK EXCHANGE

in

Conv, Preferred

Prospectus

Spring

Brook Water. Co.

Manufacturing Corp.

60c Conv. Preferred

MARKETS

BULL, HOLDENa C3

THE CITY OF NEW YORK

Tele. NY 1-733

111

Neu>

New

York 6

REctor

York Stoch

Exchange

other Principal •Exchanges

Broadway
2-3100

10 Post Office Sq.
Boston 9

Hancock 3750

Tele. NY 1-1920

Direct

Private Wire to

Boston

Thursday, December 20, 1945

CHRONICLE

& FINANCIAL

THE COMMERCIAL
3002

Trading Market* in: ZZ

ZZ

Outlook for Federal Taxation

American Phenolic
U. S. Sugar,

Dr. Bo wen Considers

Jardine Mining

Double Tax

Members

Dealers Ass'n

Dividends and

a

—r*

■'

1945has beenoutstand- •♦>*—. -.;1 • .
—
■,"'-•
ing in the annals -of'Federal tax
;'.-l
',y,.
legislation. ^ For the first time in
many years, Federal tax rates have
The year

down-

moved
wa r

■::;

Two

d.

Christmas

acts have been

passed

Members New York Stock Exchange

HAnover 2-0700

New Orleans,

-y"-'L ^

by

Tax

provided sub¬

est

stantial

bene¬

[11(11
WOrth 2-4230
Bell

Teletype N. Y.

1945

ery

N.

on

Y. Curb

New

31

York

Exchange

Curb

Exchange

Nassau Street, New

Howard

R.

Bowen

According to of¬
ficial estimates, the provisions of
this act will make available to
business over $5 billions of cash—
money which it would otherwise
have collected only in the more or

York S

remote future.

The Revenue

Act of 1945 made
ductions in actual

substantial re¬
tax liabilities

less

COrtlandt 7-4070

Telephone

Bell System Teletype

NY 1-1543

*An
Bowen

Bankers & Shiopers Ins.

Nov.

Capital Stock

by
Mr
Controllers In¬
America
in Chicago
made

address

before the
of

stitute

{

the
of

27,

1945.

Common

Common & Preferred

j

f

Caribbean Sugar
Common

Panama

Pressed Steel Car
Coil v. Pfd.

4 V-2. %

;

,

cause

your

economy.

Govern¬

than
Cole

Franklin

steadily

economic

an

ex¬

profits,
activities looking

of: reasonable

of

satisfaction

the

wants,

such

as

non-

educa-

New York 5

fvjc flONNELL & fo.

Telephone: WHitehall 3-1223
Teletype NY 1-1843

Members
New
New

120

of Savings &
at the Waldorf-

State League

Loan Associations

BROADWAY, NEW YORK
Tel. REctor 2-7815

Cole

luncheon meeting of the New

a

York

York Stock Exchange
York Curb Exchange

address made by Mr.

*An

at

City,

York

New

Hotel,

Astoria

13, 1945.

Dec.

Active Markets in U. S.

^

Bell

Teletypes—NY

Securities Dcp't.

1-1126

&

ing as a result of

Members N.

Y. Stock Exchange

BROADWAY

115

Telephone BArclay 7-0100

Reason's

Segal Lock & Hardware
Preferred

tary, and credit
ment.
At the

yyy:>

..

y.

.

R

production of goods; arid
discourage production because
doubt over the exact profits

to

of

Teletype NY 1-609




Simons, Unburn & Co.
Members New

York Stock Exchange

25 Broad St., New

J

UP-STATE

Securities

'

■

George R.Cooley&Co.
[y .inc.
j

Established 1924

,

William

•V»
t

St.,

New

WHitehall 4-3990

"

York

5,

Y.

N

Teletype NY 1-2419

in

will

mood

buying

a

yof

widespread dis¬

every

it be¬
imperative to

bonds,

war

Haytian Corp.
EasternSugar Associates
Punta
'

stable

reasonably

middle
will be most affected by
Here

or

Quotations Upon Request

again, the

changes, for to

wealthy

Alegre Sugar

available means toward

the very

a

greater

of the very
poor,

pur¬

at a sacrifice

chases of war bonds

FAR It
:

New
New

&

CO.

:'
Members
York Stock Exchange

York Coffee & Sugar

120 WALL

;

.

*
Exchange.'

ST., NEW YORK

TEL. HANOVER 2-9612

(Continued on page 3043)

Federal Water

CORPORATION

& Gas

Common Stock
•

•

E

•

BOUGHT— SOLD

Memorandum

^

Corp.*

Common Stock

*>

—QUOTED

on

request

BOUGHT,

SOLD

& QUOTED

*Circular Upon Request

Bt[aght—~Sold—Quoted

170 PINE ST., N. 1. 5 WHitehall 4-4970

for Markets in

NEW YORK

Indiscriminate purchasers do
increase wealth-creating ac¬

group

Kingan & Company, Com.

;

HAnover 2-9470

maladjustments, for con¬

L

Common

G. A. Saxton & Co., Inc.

result may precipitate

that might

& GAS

N

8

YORK

NEW

us

those

time

same

extent than in the case

Engineering Co.*

j

Request

York Curb Exchange

ST.

Call

,,,

policy of govern¬

FEDERAL WATER

I

WALL

This

creased

violent

_

Wellman

Srcctings

.

Members New
64

Teletype NY 1-1140

the unparalled

responsible for such policy must
be aware that the danger of infla¬
tion can be minimized only by in¬

maintaining

and Other Principal Exchanges
' NEW YORK 6, N. Y.
Teletype NY 1-672

K

on

Frank C. Nasterson & Co.

requires a slow relinquishment of
admittedly irksome controls and
confidence in the general mone¬

use

Co. ?

Goodbody &

1127

has

Prospectus

tradi¬
is

our,

accumulation of liquid funds.

prices.
Canadian

Common
*

forces exist¬

with the inflationary

come^ all the. more

Hanover 2-4850

-

our

Our immediate concern

tions.

tribution

CANADIAN UTILITIES

Security Dealers Assn.

to

loyalty

its

—from

tivity.* With the

CANADIAN MINES

Members N. Y.

Stock

Hotel Waldorf Astoria

desertion of the middle
class—the stabilizer of our society

not

CANADIAN BANKS

Greene andComp aru\

Teletype NY 1-1919

Brunner Mfg.*

;

the

sure

buy.

FUNDS for

CANADIAN INDUSTRIALS
•

37 Wall St., N. Y. 5

a

sumers

We Maintain

Exchange':'

WHitehall 4-8120

Common

-

certain way
repetition of either to in¬

further

SEASON'S

GREETINGS

-

hardly devise a more

and community
toward

r-

Central States Elee. (Va.)

in¬
could

We

deflation.

and

flation

to

both

which

Industries

Warrants

witnessed the evils of extreme

the

and

extent

functioning* of
Our generation

the

of

core

ment and bus¬
iness

Bell System

shipL;^y;>\:ywV:::^y
V.
The price mechanism js at the

—

depending
upon

-

the

to

failure

y

Asphalt

York Curb

50 Broadway

in

onciling these points of view is
difficult task of statesman-

spell
success,
piediocrity, or

pectation-

Bought—Sold—Quoted

H. G. BRUNS & CO.
Bell

which

forces

icy, a just v tax system,
increasing consumption,

Stock

Coca Cola

20 Pine Street,

basic

the

..

York Stock Exchange

Members New

short order and those
to believe that
we are living in the best possible
of worlds.
To find a way of rec¬

only within a framework of sound
monetary (including price) pol¬

Common Stock

.

who always appear

\ A healthy economy can exist

Campbell

S.

society

sibility' for a
yyyystable and vigorous economy.
■w

Byrndun Corporation
A.

dation of your

There:

prices.

Common
British

Y.

Textron

Members New

'

development

interest

-

accept respon¬

(Continued on page 3026)

,

lie at the foun¬

e

branch officei

Edward A. Pureed & Co.

Before examining these re¬

tion..

rate'and

credits.

and tax

Vanderhoef & Robinson
Members

up

''.''.V

•'

* ;;v..

.

quirements
at
closer range, I
should
like to emphasize that
there will always be a tug-of-v/ar
between those who would remake

t h

tax refunds

3/6s, 1956
Traded

ing

ommodity
services,

and

lor speeclr

payment

Savoy Plaza
•

c

pro¬

Federal

;;

People Will Manifest Itself."
who make possible
primarily interested in the public demand for its

lis Association are
this

Reis

Greater N.

management, depositors and borrowers

The

•

Rademaker Chemical
;'■

of'Treasury Deficits and Predicts

Common Sense of the American

par¬

vided machin¬

7s, 1952-1957

Continuation

Sees

corporate tax¬

of

Power Securities

Calls Capital Gains

on

ti cularly to

justment Act

*International

Levy

our

Gaumont

Both

payers.
The Tax Ad¬

1-1227

Robert

Higher Wages and Prices. ; Concludes, That With a Secure
World Peace and Despite Frictions at Home and Abroad "the

payers

Stock Exchange
N. Y. 5

120 Broadway,

^

Capital, and Criticizes Policy of Artificial Low Inter¬
Rates and Financing Through Sale of Short Term Obligations
a

Banks.

to

fits to taxpay-

Members Baltimore

Inc., New York City

Capital.

Patchwork That Penalizes Venture

Congress botn

NY 1-1557

La.-Birmlngham, Ala.

Direct wire» to

and Says Tax System Is a

Mr. Cole Assails Present Fiscal Policy

of which have

Request

on

cole;*';yyyy • y;;4,

by franklin

v

President, Cole, Hoisington & Co.,

major revenue

Quoted

25 Broad St., New York 4, N. Y.

Government's Fiscal Policy

iHcrry

—-

Steiner, Rouse & Co

—*

^

Sold

—

Analysis

That There'll Be No
\.
;

Sees

TELETYPE NY 1-423

BELL

on

Special TWx Relief for Small Business, b' t Concludes
Sweeping or Revolutionary Changes in Our Tax System.

Securities Dealers. Inc.
Exchange P1..N.Y. 5 HA 2-2772

Nat'l Ass'n of

Bought

High Bracket Levies, a Partial Elimination of
Lengthening of the Carry-Forward Provisions.

Incomes, Relief From Excessive

Established 1920

40

& CO., INC.

as a

Can Be Balanced in 1948, Providing
Tax Rates Are Held High and Country Is Prosperous.
Foresees Further Sub¬
stantial Cuts in Income Tax Rates With $10 io $12 Billions From Individual

KING & KING
York Security

Around $25 Billions

Normal Post-War Budget of

a

Conservative Estimate and Holds Budget

Lear, Inc.

New

York

Economist, Irving Trust Company, New

Concrete

Vacuum

P. R. MALLORY

1

By HOWARD R. BOWEN *

Com.

HAnover 2-0600

York 4, N. Y.
Tele. NY 1-210

Troster,Currie s Summers
Members N. Y, Security
74

Trinity Place, N. Y. 6
HA
Teletype NY 1-376-377
Private Wires to

Detroit

«

J-G -White &

2-2400

37 WALL

NEW YORK 5

STREET

-

St. Louis

^(dc/UI
MEMBERS NEW YORK STOCK

{

EXCHANGE

'

ESTABLISHED 1890

Cleveland

Pittsburgh

Company

INCORPORATED

Dealers Ass'n

Tel. HAnover

2-9310

1

Tele. NY 1-1815

One

Wall

Street, New York 5, N.

Telephone BOwling Green

9-4800

Y.

THE COMMERCIAL &

iVolume 162

Number 4448

Airline

Transportation—A Major
Industry'

i

By MICHAEL

.

:

Predicts

*

Business.

Great Expansion

a

.

Sees

Mr. Shields Maintains That Despite Difficulties and
Perplexities
Ahead, Restrained Optimism Regarding Future May Be Based on
(I) Probability That a Loug Period of Peace
With Higher Living Standards Lies Ahead;

■

1

in Both Its Passenger and Freight '

J

Maintains That Prices of Air-

j

Into Much Higher Net Earnings and

Than in the Case of Other Securities. ;

Become

.

velbpment and experimental costs
relative to volume of business,

bechar-\

; may

\/acterized

as

-

earnings for practically all of the
companies in the field were either
non-existent or very slim. Sub¬
sidized mail contracts weret the

which

in

one
k

air

;

Wars

World

\ transport i

struggled to
gain
a
firmv;
? foothold.; De-

...
*

sustaining

of

source

•

Policies

Followed

Are

and

He

Early Balancing of National Budget,
End of Credit Expansion and a Reformed Tax
Urges

V '. At.the present time air transportation is probably the fastest
growing industry in the country.
The i period : between the two

Telephone WHitehal! 4-6551

Inoperative Unless Sound Economic

Fiscal

and

C###

an

United Artists

United Piece Dye Works ;

System Which Does Not Destroy the Profit
..Incentive. ;;*•
;
• I '
As

we

from
set

move

problems

urgent

as

Polaroid Corp.

through the transition period

to peace

war

by

the world

to threaten to undermine

Taylor Wharton Iron & Steel

to be be¬

seems

difficult, perplexing

so

and

Murray

confi¬

our

•

Shields

dence

revenue.

J. GOLDWATER & CO

'

The

imand for this
x

industry

finds itself
spectacu¬

now

of

serv-

in the second and more

\yas

hesi-

phase of rapid development
and
expansion.
It has emerged
from the war as the glamour in¬

class

*

Ice

and

tant

un-

..

i ; v *An
address by Mr. Shields before the Eastern Association
University Business Officers, Atlantic City, N. J., Dec. 3, 1945.

lar

"certain and

(Continued

and

College

of

39 Broadway

3045)

on page

confined

to

;

a

large

ex-

to

the

tent

*

The return
of planes requisitioned by
military
authorities
after

dustry of the century.
flow
the

'

luxury class
of travelers.

is

already,

'JW Ipassenger

Michael Pescatello

flown

new

establishment

v

of

feeder

imand

j fares have been reduced; an
30% annually. Be- j pressive number of-larger
of the large outlays for de- I
(Continued on page 3032)

cause

An analysis of the, various factors affecting the money market
in the postwar period leads to the conclusion that no material increase

Aubrey G. Lanston, Vice-President of The First Boston Corporation,
a Study of Debt Problems, Urges That the Administration Desist
From Promoting Further Declines in Money Rates.
Warns That

in

dously Promote Price Inflation. Contends That an Increase in the
Treasury Certificate Rate from %% to 1% Is Necessary for Stabil¬
ization of Our Existing Interest Structure at Present Levels.

well.'

corn

head-

ditions

;r.,

0

*•

the

expenditures
that

the

and

pos¬

with

beginning

the

foreseeable

fiscal

future, accord¬
ing to a bulle-

balanced, have
raised the question regarding the
trend of money rates in the post¬

entitled

reduction

timate

reflected

it

ors

short-term

losses

and

more

70

mil¬

than

war

in the

been

Post¬

Period"
on

war

De¬

17

thorities

as

the

been

of

about

g

to

Aubrey

G.

n

order

to

kets

the

Corpora¬

!

•

be

University.r

in

I The bulletin
states: '•1" Vv 1' ,A:
I; The end of hostilities, with the

inevitably
decline in

general

bring
com¬

A.

G.

Lanston

stated

Members

HAnover

2-4785

Teletype, NY 1-2733, NY 1-2734

Bell System

Private Wires

the

to Chicago & Los

Angeles

Greetings

the
war

To Our Many

measures

Friends

have

discarded, however, and the
and supply factors are
Est. 1926

money
rates are
bound to increase. It has also been

nmm d

J.

in

T.

Madden

stated that low money rates

170

role,

affect

(Continued

on page

[o.
WOrth

Broadway
Bell

adversely the thrift habits of the
people and that a decrease in s^v-

Govern-

3

Members New York Security Dealers Assn.

System

2-0300

*

Teletype NY 1-84
i

3027)
Punta

that, since
acqui¬

We

interested in

are

-

•

(Continued

on page

3019)

which

Mr.

figures to show that com¬
paratively small savings to, tax¬
payers,
resulting from lowered
rates
on
short-term
Treasury
loans, would be more than offset

cited

j

U. S. Sugar

and Industrial

Pressurelube, Inc.
:

Members New York Security Dealers Assn.

25

25 Broad Street, New York

.
.

Broad

Whitehall

Telephone HAnover 2-4300
r

f

UNNE & CO.

Spencer Trask & Co,

1

....

.Blocks of

.

i

Sugar Assoc.

Lea Fabrics

PREFERRED STOCKS

:

Alegre Sugar

Eastern

.

■i MARKETING FACILITIES#
for

Public Utility

.

Nationwide

Lanston

offerings of

High Grade

during,1945, an increase in
Treasury Certificate. ~ coupon

rate from % % to 1% is necessary

Lanston

■

in

decrease

consequent

The warning was contained in
an
exhaustive
20-page
memo¬
randum

Dean

escence'- encouraged the lower
levels of yields which have char¬
acterized Treasury security mar¬

The First Bos-

tion."..

would

;

Quoted

York Security Dealers Assn.

New

au¬

enable

finance

to

artificial

ditional

York

would

rates on long-ter<m
bonds, and that this

—

Reilly&Co,

•

again permitted to play their tra¬

reductions

rates

by

New

the Treasury has by "silent

Xanston, VicePresident
of
top

a

Mr.

policyholders
-will ensue, acrd i

turn

Government's

Sold

demand

of

Finance

.

requirements at low cost. As soon

the

of

Institute

in

Government

Madden, Di¬
rector

J.F.

—

be

artificially by the monetary

by

John T,

Dean

.Bought

mercial interest rates.

lion' insurance

c o

loan

Government
in

the

later

interest

the

savings
deposit¬

o

bank

in

Y.ORK

INDUSTRIES

1947-1948 the Federal

may

'

iang toward in¬
flation and ul¬

GREATER NEW

period, The opinion has often
expressed that .during the
interest rates were kept low

"Money Rates

cember

year

budget

International

:

He pointed out that any further

..

ment

sibility

in

issued

Recline in interest rates and in the direction of stabilization at cur¬
rent levels, a
by the losses to these same tax¬
progression in
payers and millions of others as
monetary and
bapking

interest

ir^

place

war

Unless the Government takes positive steps away from a further

Pfd.

&

40 ExcIk PL, New York 5,N.Y.

rates will take

tin

Emulation by Us of Britain's Cheap Money Policies Would Tremen-

I

Mortgage Loans Will Be Slow and Foreign Financing
Limited.
Sees Possibility of t Renewal of Government Deficit
Financing if "Full Employment" Legislation and Other Federal
Projects Are Adopted and Hints of Consequent Inflationary Dangers.

..

Must Be Maintained

Common

Supply of Both

Growth of

-

Current Interest Rates

Director of institute of International Finance Holds

Short-Term and Long-Term Capital Continues to Exceed Demand.
Does Not Look for Rapid Increase in Long-Term Financing as

lines;

proximately

.AMERICAN BANTAM
-

v

routes and

the industry grew at a rate of ap.'

Rise in Interest Rates

in

wild scramble for

Y.

Teletype NY 1-1203

Madden Foresees No

being

gross revenues in
recent months. There has been a

provement

*

New York 6, N.

-

HAnover 2-8970

evidenced in the considerable im.r

X Nevertheless,
in
terms
of
miles

Harbor

Pearl

,;

t

,

Members New York Security Dealers Assn.

*

-was

YORK

NEW

STREET,

WALL

99

During the War. Warns These Potentials May

Earnings M

•

>

CHRISTMAS

at Home and Abroad, and (4) Our Industries
Have Acquired a New "Know How" Capacity

I"V-; line Shares Have Already Discounted Increased Revenues, and ; j
That Present Prices Are Relatively , Higher in Relation to

A

;
;

can

obsolete!

grow

MERRY

\Has Been Liquidated; (3) There Will Be New
and Expanding Markets for American Products

i

Accompanied by Progressive Lowering of Bates.
No Immediate Prospects of Larger Traffic Being Converted

One wish that
never

(2) the "Deflation" Complex of the Thirties

;

tationin Future,
<

By MURRAY SHIELDS*
Vice-President of the Bank of the Manhattan
Company

t

Despite its Growth and Bright Prospects, He Points
Out That There Will Be Keener Competition With Other Transppr-

3003

Whither the Economic Trend?

PESCATELLO

Asserting That Aviation Is the Glamour Industry of the Century
Mr. Pescatello Reviews Its Rapid Progress During the War, and

.

FINANCIAL CHRONICLE

-r

-

-

Teletype NY 1-5

;

Members New York Stock Exchange

-

St., New York 4, N. Y.

3-0272-^-Teletype NY 1-956

Private

Wire to Boston

.

UNLISTED
TITLE COMPANY

CERTIFICATES
Bond & Mtge. Guar. Co.
r

Lawyers Mortgage Co.

Lawyers Title & Guar. Co.
N. Y. Title & Mtge. Co.

SECURITIES
Inquiries invited from dealer?,
estates, corporations, banks, fn-»
stitution? (ind individual holder?

STRAUSS BROS.
^mbp'

Vpw

Vork

8ecur1tv

Broadway

INewburger, Loeb & Co
New
5

WHitehall 4-6330

Bell Teletype UT1-2033




.

:

,

Bought—Sold—Quoted

Dealer,

\

Ineome

1{

*

»

Hon. RgSE S Trqster

Harrison 2076

Y 1-832. 834

Direct

.

CHICAGO 4

DIgby 4-8640

40 Wall St.. N. Y.

Republic Pictures
Common and Preferred

Board of Trade Bldg.

NEW YORK 4
reletype

« Members Nep York Stock Exchange

Public National Bank j
& Trust Co.*

American Bantam Car

Bonds

32

Prudence Co.

;;

Wire

Teletype CO 129

Service

Established 1914

York—Chicago—St. Louis

Kansas City—r-Los

Angeles

74

Trinity Place, New York 6, N. Y.

Telephone: BOwling Green 9-7400

4s, 1965
Odd

Pieces

Analysis available
to dealers only

C. E. Unterberg & Co.
./

j' !'

and

Teletype: NY 1-375

Members N. Y. Security

61

Dealers Ass'n

>

Broadway, New York 6, N. Y.

Telephone BOwling Green 9-3565
Teletype NY 1-1666

'W"

Inflationary Danger in Federal
Borrowing From Reserve Banks
|
V)
j
By HON.

.'*•

B. B. HICKENLOOPER* ■

•••*

:.f

r"

U. S. Senator from Iowa

-

•

Republican Senator Opposes Provision in Extension of War Power
Bill Which Continues the Power Given Treasury io Sell Directly
Government Securities to the Federal Reserve Banks to a Maximum

Transportt

Air Cargo

Pfd.

&

Com.

'

American Hardware
Amer. Window

Glass*

I Dayton Malleable Iron*
Du Mont Lab. "A"

I

Kingan Co.

I

reported

Christmas

re¬

power

of

o

th

be made

cess, it will be
difficult to

Most

officials ar$

last.

people
an

a

fedling

—-——

chance

of

popular

support.* They

gaining

widespread
put

up

a

tough fight last week-when) the
agreement, was debated:
Opposi¬
tion came not only on the part of
the

handful

of

specialists

who

have acquired a reputation as op¬

of
the Bretton Woods
plan, but also on the part of en¬
tirely unsuspected quarters. They
may be roughly divided into the

ponents

interest in the

following groups:

permanent, which

matter had be¬

(1) The opponents of the gold
standard, such as Mr. Grenfell,
former Secretary of the Depart¬
ment of Mines in the Coalition

way

these
loose fiscal practices beyond June
30, 1946, but the Senate Judiciary
Committee
added... another
six

exasper¬

come

ated

thought fit not to continue

should

were

took

who

permanent. ., . - *
" )
The bill which will come be¬
fore us is H. R. 4780.
The House

atten¬

pro¬

nego¬

at

over

made

the

the

tiations

was

Paul

the
and

by

the

ups

and

downs

of

the

trend

of

by

of the talks.

,

Einzig

nou n cement

suspense

;T he
a nby
Mr.

made

was

*

;

:

'

;

,

.

Government, Richard Stokes, Nor¬
Smith and other radical

man

cur¬

reformers, and Conservative
representatives of business inter¬
ests such as Sir Patrick Hannon,
chairman of the National Union of
Manufacturers.
>
>
:

rency

months to make it Dec.

.

.

"

:

>.,

>

>

;

Co,

.

"

Natl; Vulcanized Fibret

P. R.

.

•

billion

Mallory
& Pfd.

Com.

;

*

;1';J

Polaroid Com.....

An

H. H. Robertson

1945.)

18,

Airways*

grasping the; broader, implica¬

of

tions of the transaction. But it re¬

constituents

t'

t American Insulator

further, and that for the next
at -any rate the most
urgent needs of the country ap¬
pear to be secured. *
* ■ ).,)»;.'"

any

*M. H. Lamston, Inc.

"Simplicity Pattern
tLocomotive Fire Box

U. S. Truck Lines

1

complaining about the

shortage of supplies cannot help
feeling pleased that there will be
no need for., tightening
our belts

l\

United Artists

Warren Bros. "C"

Federal

When the Bankj-

,,

j
'|
;

the

into

dollars

Reserve System.

Hick-

ing Act of 1935 jwas passed it was quires, little or no expert knowl¬
S. Senate on recognized that, along with prej- edge'to realize that it means im¬
(Continued on page 3037)
}
mediate relief. M. P.'s whose mail).;■;
bags are full of letters by their

U.

the

in

enloper
.-Dec.

Taca

by Senator

address

..

Rockwell Mfg.

I

B

Agreement

—————-—

31, 1946. j Attlec at a late hour on Thursday
occasio n,With respect to all these powers
night, after two days of heated
therefore, to
(2) The supporters of Imperial
the, question rL.. naturally,
arises debate on the Opposition's motion Preference and of the Sterling
direct the atB. B. Hickenlooper
whether-Jit is necessary to conf of censure, during the course of
t e n ti o n- of
Area, including mostly Conserva¬
tinue them in time of peace, and
which members of both Parties tive M.P.s but also a sprinkling of
members
of
;
what danger there may be to oup had spent most of their energies
Socialists.
:.
r
*
this body to at least one provision
system
of
government
in
so
doing.
and passions. This accounts, per¬
in this bill which should be con¬
;
(3) The supporters of bilateral
This is particularly true when it haps, to a large degree, for the
sidered even more carefully than
trading, headed by Mr. Boothby. *
comes
to practices affecting the lack of any extravagant display of
other provisions because it con¬
(4). The opponents of the relax¬
soundness of the nation's finances- enthusiasm on the part of the nu¬
ation
of
exchange
restrictions,
cerns practices that threaten the
merous supporters of the scheme
consisting almost exclusively-of
soundness of our monetary sys¬
)) The War Time Grant of Direct ; on both sides of the House. Yet
Socialists who fear that free ex+
tem.'"!'*"');
C-.v.v" 7?!.; ; r .*•'•>.
Borrowing Power
;
there could be no doubt; even then changes would mean a flight -qff
I- refer to the provision that
I want- to take a rhoment to
that
they represented the majority capital abroad.
would continue for another entire
sketch, the history of this power of of Members of Parliament.
Only
year (Dec. 31, 1946) the power of
Price to Britain
the Treasury to force up to fivje one out of ten perhaps was capable
the Federal Reserve to buy up to.

Oxford Paper •

I

relief.

Govern¬
going Info

.

II

of immenseV

asked that this

to have

another

reaction tothe announce¬

;
LONDON, ENGLAND—The immediate
ment of the conclusion, of the Washington

■

Mohawk Rubber
Moxie

\

U.

tinued

of asking that
deficit financing and inflation be
is

have.) I
am
faking -this

Michigan Chemical
:

dollars

Treasury and Reserve

the

tion it

Laqison & Sessions*

I

press

careful

Kaiser-Frazert
I

Capital.- »The Aspect of Agreement That Assures Con¬
S.-British Friendly Relations Universally Welcomed.

of British

market.
In the Nety
Dec.' .11, 1945, the

open

before

measure

Hartford-Empire Co.

*

York "Times" of

give this far-'
reaching

Douglas Shoe*
Gt. Amer. Industries*

I

the

last

the

legislation

of

,

the Provisions for Removal of

;

ment securities without

minute

Cinecolor, Inc. %

of Supplies in England, Though Socialists Dislike Strongly
Exchange Controls and.Fear Flight

ages

I

that

billion

five

people.

.

{

With Op-

There Would Be Parliamentary Approval. Gen)eral Feeling Is That Temporary Relief Will Be Afforded to Short¬
ponents Knowing

tracted

"

.

Reaction' Generally Apparent,

rights and in¬
terests of the

Printing of Greenbacks.

In

S. F. Bowser

By PAUL EINZIG

Favorable

Writer. Sees

.

supporters and
opponents o f
the proposed
loan were glad

Ptd.

&

Com.

^*

f
Sometime this week we shall be asked to renew the Second War
Powers Act which contains powers affecting the most fundamental
,;

American Bantam Car

London Reactions to British toaif

j

i
of $5 Billions.
Holds This Increases the Danger of Inflation and j
as Proof, Points to Tragic Inflation in European, Countries Which
<
Followed This Policy.
Calls Provision a Short-Circuit of' Wise j
Checks on Treasury Operations and Holds It Is No Different From (

INDUSTRIALS

Thursday, December 20, 1945

FINANCIAL CHRONICLE

THE COMMERCIAL &

3004

two years'

Pittsburgh Railways

Generally speaking, there is a
feeling that the American gesture
in

wiping out claims arising from
was generous, but; that
price paid for the loan, in the
form of abandoning the monetary
and commercial policies that suit
Britain's interests in existing cir¬
cumstances, was excessive. Many
people feel that„ it would have

Lend-Lease
the

been much better to borrow from

the Export-Import Bank at
for 30
years without
"political"

conditions
The

*Prospectus and

Special Letter Available

The Opposition

,

„

4Statistical Study or Special Letter on

>

,

on

loans.

the

to

the

of

(Continued

^ 7,"v'*

Request

attached

reduction

period

of

3006)

)));

page

-In the circumstances the minor¬

'

FIRST COLONY CORPORATION

TEXTILES

Members

New

York

Security Dealers Association '

a

.

hostile

reception

Kingan

&

The

little

stood

Reg.

Teletype NY 1-2425

Hanover 2-7793

COMMERCIAL

Aspinook Corp.

Co., Com.

Standard

Worsted

Colorado

U. S. Patent Office

Textron Wrnts. & Pfd.

United Piece Dye

National

Service

preferred

Huntingdon <fc Broad Top

Huntingdon & Broad Top Mt.

William D.

1

American Gas & Pow.

Huntingdon & Broad Top Mt.
Oklahoma Interstate

I Mass. Pr. & Lt. $2 Pfd.
|

RR. & Coal Co.,

preferred

RR. &.Coal Co., common

42 BROADWAY, NEW

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President

Thursday, December 20, 1945

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-

Volume

THE COMMERCIAL & FINANCIAL CHRONICLE

-Number 4448

162

By HERBERT M. BRATTER

Authority of Agricultural Department Acts on

By ALFRED

,

Cites

Rye Purchases Were Made to Compensate for Losses in Other
Grains.
Hearings Expected to Result in Changes in Commodity
■

,i;„;

Agriculture opened in Washington what will
weeks-*>

be

to

which the De¬

complaint

partment

over

leges

al¬

consti-

tu ted

the

May

clude

the

prices

case jin¬
Foods Corpo¬

Corporation's

execu¬

Vice-President, Charles W.
Metcalf; Daniel F. Rice and Co.,
the

Board

tomers

of

of

The

is

W,

Jack

Trade; certain

and

company,
referee in this

Bain,

office

of

cus¬

that

others.
the

members

are

case

attorney in
Secretary of
Before the hearings

of

Agriculture.

an

the

ended

are

it is possible that the
of the performance may be

scope

widened

as

so

to

air

some

of the

feuding

which has characterized
the business relations between two

powerful groups in the Board

■'v.'-"v,/

'

Trade.

of

at Chicago from

public elevators
which

Board

respondents in

partners

deliverable and stored in those

contracts. The

tive

whose

that the various

against

General

that

taken

been

,

the complaint alleges

conspiracy,

of rye futures

this

the

ration;

the

on

Trade, and
manipulation

Mehl

since

by the Secretary of Agricul¬
ture.
Without directly charging

as

rye

in

M,

has

are

of

1944

futures

■'■..

hearings,

Chicago Board

actual rye

of
and

'

J.

These

respondents/'in¬
dividually and collectively'.' cor¬
nered the actual rye in Chicago,
especially rye of grades declared
by the Board of Trade in Chicago

cornering

'

'—~~"

.

activities

-

-

:———■.

—

the direct
outgrowth of a complaint and no¬
tice of hearing which was. first
filed last May by the office of
the War Food Administrator. The

long,
and
maybe
months
long
hearings on

,.

i

Authority of the Depart¬
certainly prove

11 the Commodity Exchange

'On Dec.

that

delivery could be made
futures contracts on the
of Trade.
It alleges also

respondents
cornered
futures and manip¬
ulated prices of rye futures con¬
tracts through their operations in
the

1944 May rye

and also in Winnipeg,
result
being
that the rye

Chicago,
one

which

these Tespohdents

held

at

<

istrators

of

1943 domestic rye

The Department

contends, more¬
that the operations of the
respondents which it details all
"were speculative, caused the ab¬

Builders to Remedy Situation.

on

.;;

;

farmers

ment

accumulation

con¬

all branches of Government, down

deeply
cerned

the

in

critical

industry

ing

transportation

in, the

reconversion.
I

also

cernecl

i:

more

It

am

.

deeply

'

must

in

do

of the

Alfred

V

country

We

are

.

*

Brown

veterans

who

Dinner

a

Our

kinds.

the

Hamilton
j

the

of

Jack Waite Mining
Kirkland Lake Gold Mining

Massey-Harris Co. Pfd.
Paper Co.

Minnesota & Ontario

Industry

Building

Nipissing Mines

'

/

Pend Oreille Mines
>Premier Gold Mining

on; page

Direct Private Wire Service

COAST-TO

iHarvill *'Corp.
*

MADE

ON

K

OLD

Jonas

ST., N:

WILLIAM

52

Yr 5,, HAn«Ter 2-«W»

Teletype NY .1-395

Jefferson

UNEXCHANGED

7

Chemical

Standard Fruit

&

\

'

.

32

Steamship

United Piece

Kansas City

•

YORK

4

>

-

bye

ST.

-

i

New York 4, N. Y.

Bo. 9-4433

Chicago and North West RR.

Utilities'
Common

KANSAS CITY

Mission

Pledger & Company, Inc.

New Orleans 13, La.

v

41 Broad St.

General .Public

-

Baum, Bernheimer Co.

LOUIS

Members New Orleans Stock Exchange

Brill Corp.

Ass'n "

.Harrison 2075
! Teletype' CG 129

1,

DIgby 4-8640
Teletype NY 1-832-834
White & Company

,

,

:

Board of Trade Bldg.
CHICAGO 4 ;

Broadway

'NEW

T. I. FEIBLEMAN & CO.
American Locomotive Co.

_

Toronto

1 Montreal ,*r

Now York

Los Angeles

-

Members New York Security Dealers

Standard Commercial Tobacco

'SECURITIES

St Louis

•

STRAUSS BROS.

c

Sulphur >i-,1

Lake

.Rademaker

New York- Chicago

yl

Naumberg

&

f

HART SMITH & CO

COAST

-

Bell

3042)

^

Sun Life Assurance

->iu-

"

(Continued

#

■

Noranda Mines

r

facil-

Bridge Co.

Hydro Elec. Securities Com.
International Utilities

Jubilee

Golden

Electrolux

;

are

Lumber

Western

Canadian

life.

Employers of New York State,
Albany, N. Y,, Dec. 12, 1945.
(Continued on page 3020)

great na¬
demand
for

all

of

at

& 7% Pfd.

Company Com. & Pfd.

Canadian Pacific Rwy.

is in hous¬

"

to civilian

Schindler

V -

;
of

aware

deferred

construction

Andian National Corp.
Assoc. Tel. & Tel. $6

*An address by Under-Secretary

Schindler

,

ahead;

all

in

Royal Bank of Canada

These
veterans need living quarters. War
industry centers are bulging with
people who apparently intend to
stay put and who therefore need

and

do

of

number

returning

industry

•

can

is

the

con-

with

what I believe
your

are

.

Bank of Montreal

is growing
acute with each passing clay.
being constantly swelled by
demand

This

ing.

of

days

the

storage

and

invest¬

and

Canadian Bk., of Commerct

part of this deferred de¬

mand for construction

crit¬

these

ical

township,

nee'd of construction. But the most

build¬

the

of

smallest

the

to

progress

-

in

rye

congested

which

Chicago,

of

sell

'

over,

normal

will

and

,

with

;I'm

former

securities here

surrounding territory.t a

tion; industry is in need of con¬
struction; trade and service businesses*are in need of construction;

m e r c e-

The

Carolina has decided to settle in

need of construc¬

in

are

Building;

Greensboro

<&-

7

ment of Com-

tion-wide

C

crop."

Responsibility

Depart¬

the

in the years

an

of the

40%

of

now a securities sales¬
according to announcement
by McDaniel Lewis & Co,,

quarterback and forward passing
star of the University of North

appreciate the opportunity of addressing you this evening.
an important leason for this.
As one of the public admin¬

I

fin Chicago] for .all grains and
excess

Secretary of Commerce

Lt.

—

Navy, is
made

There is

helping shape
the prosperity

sented

in

GREENSBORO, N. C.

man,

(1) Lack of Effective Control of
Land Values, Construction and Housing Costs; (2) Seasonal
Character of Building Work and Absence of Basic Annual Wage;
(3) Restrictive Practices in the Construction Field; and (4) An¬
tiquated and Obstructive Provisions in Municipal Building Codes.
Calls Attention to Recently Organized Construction Division in
the U. S. Commerce Department and Expresses Belief That Building Conditions Are Improving and That Building Industry Should
Take Initiative in Lowering Construction Costs.

time, May 27,' 1944, repre¬
"approximately 50% of the
public storage facilities available
one

amount

Housing

SCHINDLER*

Obstacles to Building:

as

'L

James F. Laianne, just out of the

Jefferson
Schindler Places

That

ment of

I

Asserting That Four-fifths of People Are Under-Housed, Secretary

poration and Daniel F. Rice and Company Among Those Accused.
General Foods Denies It Acted to Corner Market and Maintains

Exchange Act. ,'^V-

Under

,

.

McDaniel Lewis Co. Staff

In Low Cost

Complaint of War Food Administrator That There Was Collusion to
Corner Rye Market and Manipulate Prices.
General Foods Cor¬
■

Lt. Jas. Laianne Joins

Industry's Part

"Rye Corner" Hearings Get Started
/ Commodity Exchange

3005

LOS

Carondelet Bldg.

ANGELES

Dry

77"

.*.

Bell Tel.—NY-1-4US

«:

:'.'v v'-

v'.v' ,V

Chicago and East Illinois RR.
Chicago Great Western Ry.

v

f \,

PANAMA COCA-COLA

/

Consolidated Film Industries.

i

Quarterly dividend paid October 15, 1945

Farrell-Birmingham

Consolidation Coal

1915

Cuban Dominican Sugar

7/; Company

Des Moines and Ft. Dodge RR.

Ipp"

■: "'-V;;

Erie RR.

f

Iowa Central RR.

»:/'•

ON

*

Lacka wanna RR. of N. J.

> v

Mobile and Ohio RR.

7

50

Broadway, N. Y. 4

Analysis

HAnover 2-8380

qAllen & Company
Established' 1922

I

7

j

1914

?

30
;

NEW YORK 4, N. Y.

t

;

j

"

J

,

Trinity Place, New York 6, N. Y.
Teletype: NY 1-375

Telephone:
Teletypes:

HAnover

Los

2-2600

& 1-573

1-1017-18

NY

Direct

Crescent Public Service 6s

Eastern

Carbon Monoxide

Wires to

Angeles and

New

;

Orleans

Minnesota

Pr.

5Hs

Securities Co. of N,J Y. 4%

1948

Roi

1951

Consols

,.v'7

.

.7 •;

Preferred

&

American

Common

Eastern

and

7

New

Cyanamid Preferred

Sugar Associates,

Petroleum

Gilbert & Bennett

Old
v\

.Bowser, Inc.

...,

American Insulator
-

Heat

&

Marmon-Harrington

Common

Power Co.

Bought—Sold—Quoted, ;

GUDE, WlNMILL & CO.
i

,

1 Wall St., New York 5, Ni Y.

32

Teletype NY 1-953

•v..I

t

.



I

r.,

T

Broadway, New York 4, N. Y.

Tel. WHitehall 4-6430
i

Incorporated

Tele. NY 1-2500

,

63

.members

Wall Street,

n.

y,

security

New York 5. N. Y.

dealers

120

'

association
Bell Teletype NY

c

O'CONNELL & JANARELI

FREDERIC H. HATCH t CO.

PETER BARKEN

Members New York Stock Exchange

DIgby 4-7060

»

1954 *

Minneapolis & St- Louis Ry. Issues

Eliminator

-

Service 4s

Wabash Ry.
Pacific RR.

STREET

BROAD

.

Norfolk and Southern Ry.

Western

Preferred

1943 $4.50

request

on

established

East Coast Public

Studebaker Corp.

—

Specialists in Soft Drink Stocks;

74

N. Y. Railways

•

1944 $2.75

Telephone: BOwling Green 9-7400

N, Y. Lackawanna and Western
'

—

HOIT. R0SE SIRQSTER

1-

W. J. Banigan & Co.

j-.,

*,

$2.25

(to date)

/vV' •'

*

Manati Sugar Co.

and

Approximate selling price—27Vz

M

Minneapolis and St. Louis Ry.

Tommoii

REQUEST

Kelly Springfield Tire /-/.

:

Republic Pictures

$.50

'

New
ANALYSIS

—

DIVIDENDS:

..

1-897

Broadway,

Telephone
REetor

^-7640

New

York 5:
Teletype
NY 1-9S»»

THE COMMERCIAL & FINANCIAL CHRONICLE

006

Thursday, December 20, 1945

oxtdozi's Reactions to British Loan
fixed in the
Woods agreement to 12
is subject to much criti-

from

ace

retton

onths

5

years

widely felt that
ven
five years are not a long
ough period. Few people doubt
it

for

'sm,

is

another 12 months or
the relaxation of ex-

at within

after

ss

hange control the

proceeds of the

partly as a
esult of the adoption of multilatwill be exhausted,

an

ral trading

enabling the Domin-

to spend

ns

their

f

artly through illicit capital outby the loopholes

facilitated

low

reated in the hitherto

estrictions.

popularity, during the
years at
any rate, by
maintaining and increasing sup¬
plies for consumers and by mak¬
ing better progress with recon¬
retain

to

two

next

struction and the reconversion of
industries. On the other

watertight

tions

in the

Most Socialists received the an-

BALT1MORE

upset. /

/

the

is, however, one aspect of

which is univer¬
sally welcomed; that it makes for
agreement

United

relations

with

;

the

States.

Although
many
people feel that the price paid for
it is too high, in general it is felt
that closer

collaboration with the

the scheme. This indeed is the last

hope of the opponents, who have
realized that they had no chance
to ' win
mons.

r;

Bayway Terminal

States

rifices.

This

is worth

feeling

some

did not

pre¬

however, the expression of

some

acrimonious criticisms of the

bates

Alister.C.

Emerson Drug
!r

Common.;

Bankers Associa¬

the

of

'

The

to

Financial

PORTLAND,

Butchart has formed Frank Butch¬
&

a

-./

'

Building, to

partner in Hess &

close

Monday, Dec, 24th,

on

three-day shutdown for
Christmas, the Board of Governors
a

"

decided.

BOSTON

Grischy

UNI0N TRUST BLDG.

[Y'V JOHNSON
[AUTOMATICS INC.

CINCINNATI

2

Teletype CI 347

'■

made a similar an¬
nouncement shortly after the ac¬
tion of the big board.
The New
York Cotton Exchange will close
on both Dec. 24th and
Disc. 31st.
Exchange

,

Governors-Of

Stock

the

Ex¬

change had turned down the pro¬

A Low Priced

BUILDING STOCK

posal

DES MOINES

LATISTEEL, Inc.

to

the two Mon¬
meeting on Dec. 6th but

close

on

days at a
reconsidered.

70% of

Southern Advance

Memorandum

•

Iowa Power &

United Light

Request

on

:

& Rys.

V.

Grinnell Corp.

Preferreds

DES

Pont, Homsey Co.
Bank Building

MOINES

9,

Teletype

4330

1606 Walnut

Bell Tele. DM 184

Phone 4-7159

Private

BS 424

;.

Girdler

Gas

ating company stocks. In the case
of Florida
Power, the earnings
figure did not reflect substantial
savings anticipated from the re¬
duced cost of fuel oil. With Sioux

City, the very high ration may be
due to the conservative character
earnings statement," which
the earnings equity in a

the

of

omitted

Estimated tax savings

subsidiary.

in 1946 also entered into the ques¬
■■

.

,

.

of rates and per¬

next

In

written

out of the

plant

down

to

average

alone

does

not

indicate whether
a
vulnerable to a rate
ratio of net operating

The

of

studied

net plant account is
interest/ but
must be

to

in

relation

to

the

local

balance sheet?

account been written
cost of acquisition, or

original cost? Is the company sub- ject to the jurisdiction of the FPC
of

(or

Commission

State

some

lead of >
original '
cost)—and if so, how will this
affect
plant account
when the
write-offs are completed?
Is the /
which

followed

has

in

FPC

the

the

enforcing

depreciation reserve ample in re¬
lation to plant, and is the annual f;
appropriation in line with approved standards? In other words, ;
does the company have a "clean
slate"
from
an
accounting and;
regulatory point of view?
Capital structure may play

}-

'-r

C'/ V

England Lime Common

Winn & Lovett Grocery

stock' equity

in relation
preferred stock,
the higher the investment caliber
of the issue is likely to be." Some
common

of the highest
found

Warner Co. common

on
•

common

a

the

stock basis.

However, the capital ratio may f-

not

necessarily

the

same

way

terminant.
lic

the

a

In the

1920's', the pub¬
"leverage"/, and
of

sought

course

work in i.
market de-1

always
as

smaller

the

commoft

m

BANKERS BOND

H. M.

f 75 Federal Street, Boston 10
Private New York Telephone
REctor 2-5035

t

Incorporated

/

Kentucky Home Life Bldg.

the

1929

trend,

market.'

however,

(Continued

The

present;

appears

on page

to, be

3021)

UTILITY

★

★

LOUISVILLE 2,

Long Distance 238-9

KENTUCKY
Bell Tele. LS 186

Byllesby & Company
OFFICE

PHILADELPHIA

Stock Exchange Bldg.
Phone Rittenhouse 3717

/>

Phila. 2

Paine,Webber, Jackson & Curtis

,TeIe. PH 73

ESTABLISHED. 1879

-

SPARTANBURG

PHILADELPHIA
We Suggest

Oregon Portland Cement Co.

Gear

Common Class "A"
Capacity—900,000 barrels annually.
Book value—around $18.
*

•

•

earnings
all
through
war
period.
Company would benefit substantial¬
ly from tax reduction.
Oregon's
huge
highway
program
ready to start.

•

Market
.

:i

about

12%

Circular available

■*

Pump Co.

United Printers

& Publishers

Textile Securities

Memos

on

Request

■

!

Properties

BUCKLEY BROTHERS

10

POST

OFFICE

BOSTON
Tel. HUB 1990

& CO.

9,

SQUARE
MASS.
Teletype BS 69




American Gas & Power com. & warrants

Crescent Public Service 6s 1954 & com.

Members New
Los

1529

York, Philadelphia and
Angeles Stock Exchanges

Walnut

Street, Philadelphia 2

Los Angeles
Pittsburgh, Pa.
Hagerstown, Md.
N. Y. Telephone—WHitehall 3-7253

A. M. LAW & COMPANY

New York

LERNER

American Gas & Power 3-5s & 3.6s 1953

Central Public Utility 5V*s 1952

AND

> Good
•

Southern

Grinding Machine Co.
Reda

Private

Wire System between

Philadelphia, New York and Los Angeles

(Established

1892)

SPARTANBURG, S. C.
L. D. 51

Teletype SPBG 17

Gilbert J. Postley & Co.
29

BROADWAY, NEW YORK 6, N. Y.
Direct

f

higher the lever^ 1:
age.
During the 1930's and per- ?
haps until recently, high leverage ]
became
unpopular, since it re- f
fleeted the promotional phase of J
stock equity the

;,>■

1st Floor,

•

price-earnings ratio |

among

'

[/

■•

;

New Eng-1
land
utility stocks which have |
traditionally been financed largely i
are

PREFERREDS

common

r

the bonds and

to

PUBLIC

Corp.

John Irving Shoe

an

important role in valuation. Other U
things being equal, the larger the ;

are

Pref.

'

•

recent

the
and

Central Steel & Wire

Louisville

Dayton Haigney & Company
!

of 17.2 is about the same* as
average for all oper¬

age
the

as

turn, it

regulatory background. Houston
Lighting, for example,' has for
years
earned a high percentage

Empire Steel Corp. com.

Submarine Signal

-

the
Florida

change

may

well

as

Inquiries Invited

Vinco

\.

greater

earnings, Central Arizona at 15.6
The aver¬

Botany Worsted Mills pfd. & A

Corporation

Hialeah Race Course

Boston & Maine Prior Pfd,

!

' ;'/.;

considerations,

Philadelphia Co. common

American Turf Ass'n

Boston Edison

New

N. Y. C.

to

Z-l202

LOUISVILLE
Dealer

1

for

room

and Sioux City at 19.4.

also

PH 30 /;

Phone

COrtlandt

American Barge Line

jl

is

which

revenue

St., Philadelphia 3

Pennypacker 8200

.

MARKETS

TRADING

in importance appears
price-earnings ratio, but

there

here

cut.

BOENNING & CO.

IOWA

BOSTON 9, MASS.

Capitol

oper¬

necessarily
company is

BUILDING

EQUITABLE

Shawmut

electric-gas

eral

Has

the: rate

Rath Packing Co.
Common

i

sixty-odd

the

ating company stocks now traded

of interest in this connection. But

Stock

Common

Priced about 6H

du

-considering the rate of re-'"
is also essential to know >
what "net plant account" really1
means.
Have ' intangibles
been

KWH

Common Stock

i

gen-/

were marketed
4.50% to 4.70%,
which is close to the average for

above

within a range of

in
importance.
The
residential revenues per
compared with those of
neighboring or similar companies,
and with the U. S. average; the
annual residential usage'is also

Bag & Paper Co.

Light Co.

Preferreds

statistics must therefore be inter-

Company's own rate policy
history, ;/r:..v.- :\

rank

.

Legisla- /

Probably the most important fac¬
tor is income yield.
The issues

average

patents

the

preted in the light of these

centage earned on investment may

INCORPORATED

than

other

having similar
characteristics to the new issues.

The question

construction;;
Protected by

particularly

more

tion in each cas6.

WHEELOCK & CUMMINS

fabricated

of

.«

„

Officials of the* New York Curb

Horan &

and

•

earnings picture in 1946.
Pov/er was retailed at 16.6 times

The New York Stock Exchange

making

{ New York Telephone Rector 2-3327

averages,

with other utilities

variation because of the numerous

..

in Texas

,

.

the

Close Dec. 24th

to

principal

return on its investment, but there
is no State regulatory authority

affecting the market val¬ ture,' which has allowed a return
of 8%
subject-to the action of .
ues of these issues-may be of in¬
authorities.
In other j
terest.
'
"£"'*■
\ '>/ '-•I*' .. municipal
states regulation riiay be regarded ;
( In making bids for these com¬
as stringent or liberal, depending !
mon stock issues the underwriting
onthe political set-up, the his- j
houses work on the basis of com¬
parison ; with
general
market tory of local regulation, etc. The i.

factors

NYSE

brief dis¬

factors

Second

formerly

wealth of information, this is not presented in ABC

number of additional stocks

to be the

will

Bell Teletype BA 393

Manufacturers

in

offices

with

Co.

Sioux:

uninitiated investor.

appear in 1946, a
cussion of some .of the

con¬

SECURITIES

|6 S. CALVERT ST., BALTIMORE 2

offerings contain a
form for the

tinue his investment business/ He

Stock

Exchanges and other leading exchanges

Owns

'

—/Frank

CINCINNA Tl

STEIN BROS. & BOYCE

>

j

Chronicle)

ORE.

-

Power, Central Arizona Light & Power and

City Gas-& Electric—and others such as Pennsylvania Power &
Light and General Public Utilities have appeared on a "when is¬
sued" basis.
While the cumbersome prospectuses prepared on new-

mentioned

American Bank

CINCINNAT!

a/

f:/;

Firm of Frank Butchart Co.

Butchart.

Members New York & Baltimore

./

■
i

Frank Butchart Forms In v.

art

•••::/••/

&

Harriman

tion for Foreign Trade.

stocks—Florida

may

Co.; 59 Wall Street, New York
City, died on Dec. 10. Mr. Colqtfbecame
associated [ with
Brown Brothers, Harriman & Coi,
more than 30 years ago/becoming
manager in 1941. An authority" on
foreign funds/ control,, he was a
member

There have been; several recent offerings of utility common

j

As .a

Dies

Colquhoun, manager

Brothers

Brown

was

i

L »/

houn

during the de¬

the part of many oppon-

on

Com¬

-'//://;■/L

Alister Colquhoun

/(Special

■

of

House

.■

-mtamrnrnamim——

,

sac¬

vent,

American attitude

Davis Coal & Coke

;

the

over

y.,■,

_

Appraising Utility Common Stocks

of the reaction to Ameri¬

opinion, Corigress might reject

can

:

United

in

Possibly

scheme.

expressed more strongly than is
actually felt, in the hope that as
a result

of

Friendly Relations
There

the

instances this criticism, was

some

v

Forecasts U. S.-British

of

ents

planning of produc¬

tion "are liable to be

friendlier

■/;//;■

hand, they

dislike the idea of unplanned free
trade as a result of which calcula¬

Britain, and

to

feelings.

hand, they are pleased
that their Government is now able
On the one

abroad the proceeds

exports

with mixed

nouncement

(Continued from page 3004)

Wire to Chicago

Volume

162

THE COMMERCIAL & FINANCIAL CHRONICLE

4448

Number

1

Melzger With
McLaughlin, Baird Go.

Government and the

Insurance Business

McLaughlin, Baird & Reuss, jl
Wall Street, New York City, mem¬
of

the

New

Stock

York

By

Ex¬

*

•

,

'

■

.

-

i

.

Hentz

&

(:

Co., 60 Beaver St.,

as

broker.

floor

'*.•

<

•

-Government;

.

-CHICAGO, ILL.—By special ac¬
by the board of gov¬
the Chicago Stock Ex¬
will be closed-;Monday,

change

today, .v.. v

i

in which

PHILADELPHIA, PA.—Clement

„

B. Newbold will become

"partner

January

on

1

a

limited

in

W.; H.

Street, members
and

Stock

JK?-- ;

|

-a. ■«

'fiy-V1'.;''':v-

-1;1.! !

du mont laboratories

KAISER-FRAZER CORP.

re-

of

•_#»». '-ft

is

•'!

»*"

,

U

*

'

.1'

l':l

'J 'J'

'■ *■

Sen. J. C.

mind.

O'Mahoney

;
There

•

tradition,; is

under rules laid

absolutely contrary
everything for which ,this na¬
stands, are still struggling to
preserve their power over people.

..

Until

this

Government of

founded there

government

a

based

ours

upon

principle that all of the people
the

of

source

political

both

economic

authority.

Every

tle

quarter

century

of

East

are

nesian
ton's

and

his¬

tory, either in his inaugural ad¬
dress or in a message to Congress,
referred to this Government

an

as

Abraham

and

Lincoln

ter'mine

or

could

endure.

a

Totalitarianism Persists

we

have just emerged was
our Government and

one

in which

our

people engaged to prevent to¬

talitarian

from destroying

power

this traditional American concept
of what government ought to be.

We

have

the

won

war,, but

British

are

so

the

war

far as

object of which is [to
system of imperial

the

needs

no argument to prove that
(Continued on page 3023)
|

the

con¬

road

back.

Edward A. Purcell & Co.

alLthe centuries'has been the his-,

-

tory of

, ■„

is

struggle involving power,

a

property

and

three

people

Of

people.

Revolution" itself,

business1, (indeed
every. citizen;
must begin his contemplation of

sprang

*An address by Senator O'Ma¬
honey; before the Insurance Fed¬

property interests of the-Tories
who did not want their -"comfort¬

eration of New York in New York

able''

are

V

A

''

'•

1

Members

:

'

•

■

New York Stock Exchange

,
"

.New

New York

which

of

V

j!

always and

out

.

\

these

finally triumphant. The American

the

Curb

York

Coffee

and

Exchange
Sugar Exchange

this Government, was a
victory of the people, over the po¬
litical power of the king and the
'

position

disturbed

'l:c\h rag-tag and bobtail which

j:,^announce
"'I '...V

the

by

;!'"♦»

•;

.f-

'

THE REMOVAL

made

OF THEIR

'

''

■

,

OFFICES TO

\

'
ARE, PLEASED

ANNOUNck'THE

TO

SUSPENDED

DURING

RESUMPTION

.THE.

WAR

OP

!PERIOD

SO

ACTIVITIES,
,:V.:>•

>

NEW YORK

AND
RETURN

' '' 1

FROM, MILITARY:SERVICE. OP

•"/"..GENERAL

; MB.

Broadway

^

.

PARTNER

OUR

C

*

"

December 17, 1943

"

:

,

f l.

4, N.Ys
WHitehall 4-8120

.

;

FREDERICK;TILNEY, JR.

J.F.Reilly&Co.
' 'J.

Members

New

York

'

Security Dealers Assn.

State

Revenue

40 Exch. PL, New York 5, N. Y.

HAnover 2-4785

,

Bell System

Teletype,

Private \Ylres

NY

Municipal Bonds

Bonds

.United

-

•

j. ;

I

,

J

„

States

1-2734

Treasury Obligations

Housing Authority Bonds

;138 P.earl Street, New York 5/N. Y..

/

;

1-2733, NY

and

,;.*

Hanover 2-4086

♦

:

December

17,

to- Chicago & Los Angeles

1945

:
,

We

%

pleased

R.

WE TAKE

PLEASURE

IN

j

THE APPOINTMENT OF

Kingan

v

MR.

Co.;

&

Pfd.

-

Dayton Malleable Ironv

.

*

Mclaughlin, baird & reuss

,

%

■';V:- ("B")
Common

us.

ANNOUNCING

Common

United Drill & Tool

that

HOWARD W. METZGER

has become associated with

Great American Industries
!

to announce

...

I' ACTIVE MARKETS:

4

are

v..

HENRY; H. PATTON

v

.

Members New York Stock Exchange,

■:.,

Members New York Curb

:■/>

Exchange (Assoc.)-

\

•

\

(formerly'Lieutenant USNR)

-

One Wall Street, New

York 5.

^

HAnover 2-1355

.
'

<

AS

Common

Air.

Broadway, N.Y. 6
Teletype

Philadelphia Telephone—Lombard 9008

)
•

..

FREDERIC H. HATCH & CO.
'

'...

DIgby 4-55370

NY

Teletype NY .1-2155

1945

.

SIEGEL & CO.
•-

PRESIDENT

December 17,

Common

59

VICE

Cargo

63

1-1942

.,'

,

..

INCORPORATED

•

WALL STREET

Ton

Jed

1888

\

NEW YORK 5,

N. Y.

WE ARE PLEASED TO

"

,

Telephone Bond & Share
7%

Class

"

A

Associated Tel. & Tel.
Preferred

Wall

Street, New York

Telephone

HAnover

Teletype NY

2-9335

1-2630




will, '

several years,

SUGGEST

ANNOUNCE THE FORMATION OF

Curb and Unlisted

.

HOURWICH

Securities

Consolidated Cement

TO TRANSACT A

Riverside Cement

MICHAEL

Spokane Portland Cement

Preferred

JAMES M. T00LAN & CO.

companies

Oregon Portland Cement
,

'

Associated Tel. & Tel.

67

cement

WE

'

6%

believe

Preferred

Telephone Bond & Share
7%

We
•

^operate at capacity for

Circulars

10

Inactive

POST

Tel. HUB 1990

i

Securities

OFFICE

BOSTON

&

CO.

GENERAL BUSINESS

IN CORPORATE AND MUNICIPAL SECURITIES

WALTER KANE, Asst. Mgr.

Available

LERNER 8c CO.
•

:

HEANEY, Mgr.

SQUARE

MASS.

9,
-

Teletype BS 69

Joseph McManus & Co.
•

Members New York Curb

Exchange

Chicago Stock Exchange*

39 Broadway
Digby 4-3122

1SKANDER HOURWICH
27

WILLIAM STREET

NEW YORK
WHitehall

New York 6
Teletype NY 1-1610

5,

ARTHUR VARE

N. Y.

4-4185

do¬

exploitation in Asia.
While this is going on in the
South Pacific,* Russia is pursuing
a similar policy in the Middle East
and in Eastern Europe.
2
The
struggle for power over
people is not confined to Europe
and Asia. It rages in South Amer¬
ica, also.
'
j
Surely in the face of this ^ it

All of this is merely preliminary
to the statement that the war from

which

Washing¬

Dutch

gone

maintain

(

-

Indo¬

the

of

Empire, but thfey
to organize
Japanese mercenaries to carry bm
have

that

fought to der
not popular

was

whether

government

said

crush

The

rebels.

tain the

experiment in popular sovereignty,
the Civil War

to

counterparts

ing it not to regain their own co¬
lonial position of power, but to
help the Duthh re-establish their
sway
over
the people of Java.
They are not content to lend-lease
their own army and navy to sus¬

Presi¬
its

Indies

the

dent of the United States for the

first

Great Britain is fighting a lit¬
war of aggression in the Dutch

-

;

had been

never

are

tion

terests.

was

imperialistic ideas, both

which

down by

sponsibility in Government oi* in

WE

Request

on

groups

(which, is designed to serve

only the road forward. Every pierson who holds any position of re¬

THE

**Prospectus

to

contending

/;The history of mankind through

request:,

on

have sought to control and direct
the Government in their own in¬

the people themselves?

;

sim¬

WH
'Circular

which

of

•

|l

•>'' * *4'

yet been won because totalitarian
ideas and

be¬

power

Americar^
not"

government ha4

;V

American

ducted

to

no

for

the

preserve

Do-you want to live in an econ¬

the

or¬

;

struggle

a

tween

to

of free

,the; public interest and which, in

prewar

Bought—Sold—Quoted

\

Do you want to live in a man¬

omy

-

and

City, Dec. 5, 1945.
■"WELLMAN ENGINEERING

j:

■

sible * to

There is

"■'air cargo transport

>'

ad¬

vate group?

ganization

•

V-

-

.

it will be pos¬

political

Pfd.

;

it "is

aged economy, an economy man¬
aged by the State or by some pri¬

his

&

passed. «
7question is, and

The

'

i:

war

ply not using

Com.

turbulence

belie fjthat;

status

:Vv

the

dressed to everyone:

the

economic

*u. s. sugar

when

ent hour have

we

•

.

in

live

to

after this

the

changes.

ideal

of reconversion and

and the uncertainties of the pres¬

who

structure

Ex-

between

.

•

of the New York

Philadelphia

the problems

store.t he

Newbold's Son & Co., 1517 Locust
•

He

cherishes

'■

about the relationship of gov¬

reconstruction by deciding first of
all what sort of a world he wants

.

■

live.

.

—r-—.

I

business

of the times

To Be Newbold Partner

i

-

taking account

announced

was

ance

—without first.

taken

Dec. 24, 1945, it

I

fight

.

,

and the insur-.

■

ernors,

j

'

business—particularly about the relationship

and

ernment

Chicago Stock Exchange11
to Close Dec. 24th ";
r '
tion

Wyoming

Insurance Departments if They Are to Retain Powers Granted by
Says Problem Is Now in Laps of the States and)
the Industry.
; V
1
'f;' :
I -.-It is impossible to talk intelligently

;

<*' *"

-

from

the Federal Act

;

Kaplan

has been associated with the firtn
for some time.. ;

'^r

S.

Regulation and Taxation of Insurance Is in
the Public Interest., i Holds Act Puts State Regulation on Trial, ;
but Does Not Relieve Insurance Companies From the Full Scope of <
the Federal Antitrust Act.
Calls Upon States to Improve Their >

;w

indi¬

an

Mr.

j

-

the Belief That State

'

member, and John H. Kaplan to
partnership on January 1.
Mr.
Hesse has been active

Senator

'

That the Issue of Our Time Is the '
Conflict Between Free Enterprise and a Managed Economy, and j
That We Are Faced With the Great Evil of Arbitrary Central Power, j
Points Out That Under Act of March 9, 194$ Congress Expressed

New York City; members of tb*»
New .York Stock Exchange, will
admit
Stanley Hesse, Exchange

vidual

U.

O'MAHONEY*

Senator O'Mahoney, Asserting

H. Hentz & Co. to Admit
H.

JOSEPH C.

1

change, announce that Howard W.
Metzger has " become associated
with them.

HON.

Washington's

armies.

been

v

bers

George

All through history on every con¬
tinent and in every area there has

up

-If. W.

3007

J

DECEMBER

15,

1945

j

1

Thursday, December 20, 1945

FINANCIAL CHRONICLE

THE COMMERCIAL &

3008

Predicts Drastic

Lubixt

Employment Drop
News
'

THAT:

WE HEAR

on
•

■

;

■

■

.

Court
Series
C-2 trustees for approval of the sale of Hampshire House, at 150
Central Park South, to Arnold S. Kirkeby for $3,235,000 cash but
has given the bidder the right to increase his bid to $3,550,000 before
Bid

Higher

Asks

Court

On Hampshire House—Supreme
has denied the application of

Hecht Jr.

C.

William

Justice

perceptible drop in industrial production, employment,
income, was forecast by Xsador H. Lubin, United States
Commissioner

Justice

an

on

ended

which

ported.

re¬

Hampshire, House
occupies a
plot'117 by 120 feet between Av¬
enue of the Americas and Seventh

REAL ESTATE

SECURITIES

Title

York

New

—

C-2; will on
make a principal

1945

30,

distribution of 2%.

4's

distribution

165 Broadway,

4L's

870-7th Ave. '4H's
(Park Central Hotel)

3%

Jan.

Savoy Plaza 3-6's, '56

will

Beacon
★

★

-,v

Members New York Slock Exchange
Member! New York Curb Exchange

Bell

firmed

the

estate

assessments

1942/1943

our

the

for

$2,250,000;
1943/1944 to $2,225,000.
The

decision

of

Appeals results in

(the

assessed

a

above mentioned years of

TITLE COMPANY

of

$3,000,-

■

SOLD

QUOTED

•

after

Members New York Security Dealers Assn.

39

a

reduction

for these years by

is

HAnover 2-8970

Firm

-

of

setting

aside

Teletype NY 1-1203

Broadway Barclay 2/56

Federal
to

Walter W. Holcomb is
in

securities

a

ficesat

489

York City /

Fifth

V,:

•

engaging
from

business

Avenue,

of¬

New

'fif,' / ./■ j'/'?

-

Specialists in
,r-'

i

be admitted
Jan. 1st.
,;1 /

Street, will

partnership

on

REAL ESTATE

Stern & Co. to Admit
Broadway, New
York City, members of the New
York Stock Exchange, will admit
Stern & Co., 120

SECURITIES

Maurits E. Edersheim to partner¬

ship

on

Jan. 1st.

,

40 WALL ST.

would

control

such

///.'V■ //■:

.• •

be

records

and

Telephone WOrth 2-0510

Tele. NY 1-2802

Tel. WHitehall 4-1580

the ^au¬
pertinent

*

of

employers

their ability to pay

poration—Monthly statements for
the five-month period ended Sept.

higher wages. He said

30, 1945 show a net after bond in¬
terest at 3y4% per annum of $22,362 in comparison to a net of only

afford to pay

th^at. there

Mason's <5rrethtijs

little doubt that industry can

general

that
on

Y.

the

before

years

subpoena

to

determine

out

St., New York 5, N. Y.

New York 6, N.

recommend¬

should have

boards

was

■

He contended that fact find¬

books
to

Y. Security Dealers

111 BROADWAY

40 Wall

thority

period

Members of N.

disputes,

several

!

SECURITIES CORP.

request

formula for settling wage

ing

Court & Remsen Building Cor¬

on

G. L. Ohrslrom & Go.

ation

April

Memorandum

/

endorsed

warmly

|

C. H. TIPTON

during

period

the

of

5s—1966

finding"

war.

at least $44,000
of retiring bonds.

$6,352.00 for the annual
ended April 30, 1945.

./Holcomb in New York

*.r

President Truman's ."fact

;

making

interest distribution next

in¬

distributed that
would receive $13,-

ment made a similar

$30 per $1,000 bond, in addition

for the purpose

6, N. Y.

Trading Markets

165

an

said that this

recalling that the Labor Depart¬

the City of New

///;/',////''■/ /'/■//7

>

so

Lubin

Mr.

voluntarily

The Board is hopeful of

to

Broadway

New York

be

retained.'

Further recoveries may be re¬
from proceedings for the
year 1944/1945 and for the year

York.

L J. GOLDWATER & CO

he

must

y

made in the real estate assessment
Complete Statistical Information

000,000,000

which

all expenses ^of ap¬
proximately $65,000. : -

unless

.

.

9,000,000 unem¬

6,000,000 to

statement

1945/1946 which will be instituted
BOUGHT

//"'■

,

income," Mr. Lubin added.
He
urged
continued
price
control
with
a
clear
cut
Government

ceived

CERTIFICATES

Lubin

Isador

worker. "The American peo¬
are going to have to spend
$46,000,000,000 more than they did
in 1941 to achieve this national

000, in the aggregate and a net re¬
covery

40 Wall

New York City, members
the New York Stock Exchange,
Jan. 1st.'
/''■ •'//^

age

the

for

members

of
on

T.

partners

ple

for

reduction of

valuations

Harold

and

weekly wage of $45 for the aver¬

year

Court

the

Weld

To Be Shields Partner '

000,000,000 of the total. He calcu¬
lated that this would provide a

real

and

to

Dlgby 4-4950

Teletype NY 1-953

of

nment

individuals

of Appeals

reduction

that

come

Corporation—Re¬

Court

the

of

sum

sinking fund.

of the State of New York has con¬

SHASKAN & CO.
40 EXCHANGE FL., N .Y.

that

ports

''41

★

use as a

Beacon Hotel

Hotel, 4's

the

available

make

$25,000 for

White, Weld Partners
David

BOSTON, MASS. —Charles W.
Eaton, Manager of the Boston of¬
fice of Shields & Co., members of
the New York Stock Exchange, 24

ing that the country's goal for its
national income should be $170,-

1, 1946 at the rate of
and in addition

annum

per

closed
g o v e r

cate

Broadway Trinity—Will pay in¬
terest

Street,

Salle

R.

to serving

.

dis¬

ployed by Spring, with an ensuing
reversal in trend thereafter. Stat¬

interest.

principal and 3%

17,

statistics indi-

distribution

Series B-K will distribute

2y4%.
6%

The principal

interest

the

1%,

Decem¬
Mr.

ber

Lubin

Series F-l will be

on

La

sociated for many years.

Clearing

cago,

interest

an

i nistra-

m

P.

Sam¬

with

was

House in Chi¬

Mortgage

&

Series

distribution of 8% and

Hotel St. George,

sponsored

tion

Company
Dec.

sion

A d

ments.

Primary Markets in:

reconver¬

Clifton

Walker was
formerly Executive
Vice-Presi¬
dent of First Securities Company
of Chicago, with which firm and
its predecessors he had been asof the
New York and Chicago

by the Public

contains 219 apart¬

Avenue, and

o n

—

Stock Exchanges; Mr.

conference

a

Macart

Street,

South

-

Mr.

Paul H. Davis & Co.
CHICAGO, ILL.

In

Macart,

White, Jr., will become
in White, Weld & Co.,

Walker, Jr. has become associated
with Paul H.
Davis & Co., 10

an
address before

$863,405. The tax valuation
of the property is $3,250,000.
was

business.

securities

Leon

C. P. Walker Jr. With /

the
York

"Time s"

1945,

30,

Sept.

on

and

New

the fiscal year

for

revenue

Sta¬

idential

r e s

adviser,

out that total

He also pointed

room

P

George A. Bowman.

President of
Inc.

tistics

by Frederic D. Sasse,

for the court

appraisal prepared

Labor

of

a

are

COLO. — Macart,
has been formed

G. Bulkley & Co., prior
in the U. S. Navy.

A further

the property.
Hecht based his decision^

Financial' Chronicle) *

The

Jones, Jr., and Dr. Bruno

DeRose.

and national

the end of the year to get

largely

T.

uel

Sharply Reduced Production and National Income. Endorses
Fact-Finding Boards in Wage Disputes, With Power to Subpoena
Employers'Records.

,

to

conduct

Partners

With

•

(Special

PUEBLO,
Jones
&
Co.,
to

Expects Six to Nine Million Jobless by Spring,

Labor Statistics Chief

Various Issues

Macart, Jones Co. Formed

higher wages with¬

Government

and

increases,

price

policy is based

C.

Frank

///Joseph C. Eagan /

Masterson

Benjamin H. Van Keegan

Leonard M. Totten

Harold J. Pollack

George V. Leone

that assumption.

Broadway BIdg. 4Vi/58

Wall & Beaver 4V2/51

SPECIALISTS

Westinghouse Bldg. 4/48

m

17-7;

Real Estate Securities
Since

J. S. Strauss & Co.
155

1929

Frank C. Masterson

Montgomery St., San Francisco 4
Bell

Teletype SF 61 & 62

Members New,

Seligman, Lubetkin & Co.
Incorporated

SPECIALISTS

—

REAL
,

IN

—

Members

ESTATE

41

Broad

York Security Dealers

Association

Bell Teletype

;

\

NEW YORK 5
HAnover 2-9470

NY 1-1140

HAnover 2-2100

TRADING MARKETS IN

'<■ ]■
Beacon

Chicago Stadium
Income

Alms

Hotel

Salle

"B"

4/47

Madison

Hotel

Chicago

(V.T. C.

and Land

„

Trust

So.

La

Salle St.,

4s

1958

S.

F 0 R

Mayflower Hotel Corp.
N. Y.

Stock

Majestic 4s 1956 W. S.

Broadway Motors 4s 1948

Roosevelt Hotel 5s 1956

Gov. Clinton 2s 1952 W. S.

Roosevelt Hotel Common

Hotel

Lexington Units

40 Wall St. 5s

Hotel

Lexington Common

165 Broadway

Hotel St. George 4s 1950

870 7th Ave.

1966 W. S.

HELP WANTED

•/

POSITIONS WANTED

.

1958

OTHER CLASSIFIED ADS

4^5 1957 W. S.

Amott,Baker & Go.

CG 660




150 Broadway
TeL BArclay 7-2360

1

'

SEE

Incorporated

Chicago 3, III.
Tele.

W.

Units)

FIRST LA SALLE CO.
Tel. Central 4424

Hotel

Broadway Barclay 2s 1956

5/60

Transportation Bldg., Chgo.

11

////.

SECURITIES
5/57 w. s.

La

ST.

'

Street, New York 4

Hotel Sherman

*

New

64 WALL

& Co.

York Curb Exchange

New York

7, N. Y.

Teletype NY

1-588

\

•

.' "

'

4

INSIDE BACK COVER

1

'

>'

''!

Volume

Number

162

ttttt

4448

pomM^PCTAL

*

FINANCIAL CHRONICLE

3009

The International Trade Struggle: Approves British Loan
Wilbert Ward, National City Bank
Vice-President, Says It is Es¬
Great Britain and Latin America
Multilateral
Must Stabilize Sterling.
sential

Restore

to

L. F. Rothschild & Go.
to Admit T. Hockstader

Trade.

Thomas

'

Dollar Rate to Have Maximum Volume of International Commerce.

By DR. RICHARD SCHUELLER*

;

International Authority Emphasizes

Wilbert

Vital Importance to American

Trade

'

Ward, President of the Bankers Association for Foreign
Vice-President of the National City Bank of New York,

and

Trade Interests of Great Britain's Prospective Abolition of Exchange
Controls.
Hails U. S.-U. K. Loan Agreement as Countering the

'

13

Surprisingly Strong British Trend Toward Permanent Control af

v

i

businessmen

Predicting That Their Postwar Exports to the U. S. Will Decline,

some

aspects

and Their

of

foreign

European Market Will Be Uncertain.
He Cites Various
Measures They Are Now Utilizing for Promoting Reciprocal Trade

'7' Among Themselves.

*

;v:.

.

:;j

In the statement on the American Loan Great Britain agrees
it
of

the

United

States

and

that

within

<S>-

countries would have been
to

a

abolish

these

controls in

re-

maintain

to

buy

more

can

goods,

If

had

been

such

and

United

no

diversion

the

Latin American

there

of

imports from the

States

Britain

Great

to

ment, the gap

might have amounted to about 200
million dollars a year. Such a loss

•in

would not be of vital

agree¬

the

British

balance

to the United

of

would
to

ma

that thousands of import
licenses
would
be
refused
to

have

trol,
can

businessmen

Washington
with

con¬

and

•Latin

American

i t

in tain

exchange

would

but it

imply

payments

•compelled

States

importance

their

policy

the
Richard

Ameri¬

republics

and

Schueller

was

be

flooded

complaints.
bound

to

Such

appear

a

the

obnoxious to American eyes
it would be applied not only in

more
as

other

many

would

that

and

Latin America
countries

Thus

but also in

the

of

American

discriminated

all

sterling
trade

in

a

be

large

part of the world, and cooperation
between the United States and the

United

'•"An

the

and

Y

the

United

v

'

worked

beep

asked to

com¬

ment with

re¬

spect

the

to

must not overlook

the

to

the alternative

such

conclusion of

derly

to Great Brit¬

achievement

trade, until
the relationship between the dol¬

in

part:

The chief
we

will

gain from

the

proposed

credit to the United Kingdom will

world
of

ume

lar

a

maximum

and

the

pound

part of world trade has been con¬
the past century—has

ducted for

reestablished

been

on

a

afford

premised

are

as

our

falls

for the

business bargain

a

complementary

locking;
and

to

the r conviction that
in war our interests

on

peace

seems

basis

fair

a

negotiation of
in

foreign

with

inter¬

and

rises

trade
We

theirs.

are

mutually each other's best custo¬
mer.

It is in

best

our

it is in that of Great
a

'.-YY,;

Y;<

■

mutual beneficial

interest,

as

Britain, that
business

bar-

York

and

Exchange,.:;: Y:

Curb

other

Y

Exchanges

SCHENLEY

Another Milestone
By MARK MERIT

On

August 31,1945, another fiscal

ended

year

members

of

the

Philadelphia
will
of

admit

the

Herman

sales

department, S.

Nathan -Snellenburg

Thanhauser

S.

advisory

of

and

Liberman

P.

and

the

department,

Robert

investment

and

James

Wolff, Manager of the syndi¬
department in the New York
office, to partnership on Jan. 1.

holders

of the

Reed, Lear

^-5000

"

Pittsburgh 19, Pa.

Congress St.
Telephone;

Boston 9

,

Tele.

LAfayette 4620

PG

effort to

intangible in

lllll;

EVER Y

VICTORY

Co.

EHIND
one

52 William St.

New York 5, N. Y.

;

Wire

.Y Yr,: Tele. NY 1-1420
between

Offices

BONDS

public offering of securities is

every

but

potent

market conditions

unseen

as

factor—knowledge of

the

summarized and

expressed in

price of the issue. For, whatever the issue and

whatever the

figure, it should reflect

a

both underwriter and investor in the

informed

;?■

SPECIALIZING
BROKERS

IN

AND

SERVICE TO

DEALERS

^

•

This

ON.

yy

appraisal
on

COAST SECURITIES

quotations
handled

and

over

executions

our

direct

promptly

private

tests

more,

wire

of

to

light of

an

the

part

lasting confi¬

of both investor and

of which this firm

public enthusiasm

or

never

an

an

a

firm's,

objective, further¬

loses

sight, regardless

the lack of it.

NEW

PINE

NEW

STREET

YORK

YORK
YORK

STOCK
CURB

The

SAN

RUSS

BUILDINO

FRANCISCO

the review of this last fiscal year's

Scanning the report,

read that

we

-

war

purposes,

August, 1945,

and the

delivered

we

|

alcohol.''.'This

war

was

equivalent to about 14percent ofallof

William

NEW YORK

CORPORATE

BONDS

201

LOCAL STOCKS

■

Pressprich 8C Co

Street
5'

Devonshire Street, BOSTON 10

Members New York Stock

PUBLIC

Established
BLDG.

Teletype AT 288




1894

MUNICIPAL,

UTILITY,

AND

Robinson-Humphrey Company

RHODES-HAVERTY

Teletype NY 1-993

GOVERNMENT,

•

The

Telephone HAnover 2-1700
.

Exchange
RAILROAD,

INDUSTRIAL

INVESTMENT

produced by all registered
beverage distillers for the war pro¬
(Less than 1

gram.

per

cent of the

from

incidentally,
sale

the

terials.)

of

de¬

was

war

ma¬

„

Besides the inner satisfaction im¬

plicit in this record, we shall treas¬
ure, too, a letter of commendation,
which

we

received from the Direc¬

of the Basic Chemical Division

of the War Production Board under
date of August

18,1945, character¬

ment in the service of the nation in

its time of

peril."

And, too,

we

N

have another highly

gratifying letter from the Army
Service Forces, Office of the Sur¬
General. It refers to the

geon

tribution

of

one

—

what

of

con¬

affiliate

our

Schenley Labora-

Department fully
important

an

part

firm played in the develop¬
ment, production and delivery of
supplies so vitally needed for the
preservation of the lives of our
fighting men and women."
There will be other annual state¬
ments in other years.
never

issue

1,

GEORGIA

Long Distance

108

one

sincerely reveal
the

But

we

which will
our

will

more

gratitude for

privileges which we—in indus¬

trial

America—enjoy.

FREE —Send
mark

corp.,

a

postcard

merit of schenley

or

letter

to

distillers

350 Fifth AveN. Y. 1, N. Y.,

and you

ATLANTA

.

company's consolidated net profit

BONDS

STOCKS

,

the alcohol

your

63

,

Government agencies over 202
j
million proof gallons of vitally
to

realize

R.W.

■

voluntarily under-,
production of 190° proof :

company

4

STATE AND MUNICIPAL BONDS

i

company's material- contri¬

of the Medical
1SOD

!

com¬

-SCHENLEY. We quote, "We

EXCHANOe
EXCHANGE

SAN FRANCISCO STOCK EXCHANGE

5

early and

toriSgi producers of PENICILLIN

-Members
NEW

20

achieve

companies

8.
'.

the

com-

izing *'a magnificent accomplish¬

the ultimate worth of

underwriting associates. It is

v:

war.

woman among

bution to this effort is revealed in

tor

fair price

independent judgment.

underwriter—and helps build or lose
dence

PACIFIC

this ;

plete victory.

took the

HAnover 2-2823

482

Private

BUY

"

Atlantic 0881

for

of the part the company was privileged to play in the Nation's united

alcohol for

Security IOffering
&

issued

is perhaps pardonably proud \

pany,

our

Pittsburgh Stock' Exchange

Grant Bldg.

;

19

and

man

before taxes

Members

REctor

an-;,

to our stock,

12,000 in the employ of this

rived

Telephone:

year

coincidentally with the end

,

120 Broadway, New York 5

12

fighting phase of the

essential

Common

,

its

in

been

has

Every

)

Yf-fYHemphill M'j
'l;

milestone

other annual report

W.

cate

company—;

of development. Now,

almost

Exchanges,

Stock

retail

York

New

for this

Schenley Distillers Corporation—■

fiscal year which came to an end

PHILADELPHIA, PA.—Newburger & Hano, 1419 Walnut St.,

3029)

;

DISTILLERS CORP.

between November 1, 1941, when

Mackintosh

Members New York Stock Exchange

advertisement which

hope will be of interest to our fellow
Americans. This is number 111 of a series.

report.

s an

New

NOTE—From time to time, in this space,
there will appear an

end of

Josephthal&Co.

will

Dec. 31st.-

on

•

•

another

Newburger & Hano to

Bought—Sold—Quoted

;

\

story

impossible.

page

sound

United

This

member,

the firm

on

Sulz-:

SCHENLEY DISTILLERS CORPORATION

vol¬

to its traditional

war.

Exchange

A.

sterling—the
major

Admit Four Partners

to

me

support

the

bacher,

Exchange,

Charles

two currencies in which the

exigencies of

the

enable

return

Stock

1st.

international

basis?

4o

York

retire from

and ' the

economy

of

thus given
Kingdom
policy
ai multilateral trading from which
it was forced to depart due to the

that

be

Will

New

January

deal..

a

ain. Mr. Ward

.

be

What reasonable prospect is there
for the reestablishment of an or¬

!%i&Dr. Schueller

on

We

proposed loan

.

will

which

out.

Research, N. Y., Dec. 13, 1945.

v r

(Continued

■

has

Hockstader

partnership in L. F.
Rothschild & Co., 120 Broadway,1;
New York City, members of the

j has not been patiently considered

\
j

LatinAmericas

Address

can

modifi-

or

arrangement

before The New School for Social

request

on

and

would have beccvifee

New Common
Prospectus

Kingdom

States

Gas & Electric

was

group.

would

against

the

Wilbert Ward

\

the

H.
to

we

Ward

said

British and less Ameri¬

anyone

addition to

an

of

that

Mr.

benefit

coun¬

cation

occasions

balances. They would have had to

other

suggest

whether

trade. On both

".

products of all
tries.

increase

to

or

—

by the negotiators, and I suggest
that the time has come to put our
support solidly behind the plan

our

their exports to the United King¬
dom and to unfreeze their sterling

to the

p e c t

obliged

apply exchange controls in or¬

der

will

it

year

s

that
abolish exchange controls in respect to products

will immediately

doubt

I

?us.

groups
of
Twin Cities

He Warns That the Washington Agreement Does
Not Solve the Commercial Problems of Latin American Countries,

v

—r:

discussed! gain should be concluded between

with'- various

Foreign Trade.

\

Dec. 12 and

on

admitted

will receive

a

booklet contain¬

ing reprints of earlier articles
subjects in this series.

on

various

,

FINANCIAL CHRONICLE

THE COMMERCIAL &
3010

Hajoca

Corp.—Circular

Also available is

Recommendations and Literature

Thermatomic

on

that the firms mentioned wilt be-pleased.
interested parties the following literature:

It is understood
to send

New York—
the period Jan.

Canadian Funds in

C. L.

chart covering

Schmidt &

1,

1919

Established

cords monthly

1922

La Salle Street

120 South

Tele. CG 271

6960

Tel. Randolph

Canadian Dollar in
Dollar
—Wood, Gundy & Co., Inc., 14
Wall Street, New York 5, N. Y. "

National Association
o/ Securities Dealers

Member,

Middle West

Pacific Coast

—

For

&

cific.

cago-4, 111.

a

Trends—Current

de¬

Mass.'

650 S. Spring St.

CG 99

Michiga^4181

—

An¬

alysis of company established in
L862 on which there are arrears
the 5%
$100 par preferred
stock of $67.50 and interesting re¬
on

*'

The Chicago
Circular

Corp.

Request

on

1Members Principal Stock Exchanges
Chicago Board of Trade'
«
,

ST., CHICAGO 4

SO. LA SALLE

231

Randolph 5686—CG 972

York Office

New

Central
Globe

T.

Wire, Com.

Com.

"Wells-Gardner & Co., Com.

Paul H.Davis & Go.
1916

Members Principal Stock

Guide—Com¬

N. Y.

Street, New York 5,

Widely Held in Wis¬
tabulation—Loewi
&

Exchanges

Industry — Study
completely overlooked in?

of

"a

situation"—Penington,
Colket & Co., 70 Pine Street, New
York 5, N. Y.
vestment

Socket—
Larson &

Circular—De
Bank

Young,

Grand

Building,

Rapids

National

Grand Rapids 2,

Bahamas,
Thomas

Company—Descriptive
Lubetkin

circular—Seligman,

&

New York.

ion

Engineering

issues

Roi

lative

Company

purchase

-

First

—

\

available

Insulator,

American

Company—Report—
&

a

American
Window
Michigan
Chemical;
.

Ox¬

Cement;

f.

.

Realization

Midland

land

Common

Utilities

N. Y.

Vyyy;

•

135 South
Chicago 3, 111.

Teletype CG 405
Indianapolis, Ind.
Rockford, III.
Cleveland, Ohio

231 South La Salle

Street, Chicago 4, 111.

analysis—
also memoranda on United Light
&
Railways and Queensborough
Gas & Electric Co. 6% preferred—
New York Hanseatic Corporation,
120 Broadway, New York 5, N. Y.
Arden

Central Coal & Coke

Corporation
Wheel

Drivf^

Street.

!

Miller

3

Wohl

acquisition at this time is particu¬
larly welcome and his addition to
the staff should help in many of

Company,

of
selling

this operator

retail

of

chain

-

on

stores

Electromaster
Inc.)-— Recent
report —"Mercier, McDowell
&
Dolphyn, Buhl Building, Detroit

/sis, for dealers only—C. E. Un.erberg & Co., 61 Broadway, Nev

26, Mich.

York

'4

available

Also

report

a

who joined
the
staff of FLC and is
organizing his own office
personnel, recently was released
from the Army, alter attaining the
Mr.

F

a r r e

11

-

Birmingham

National

6, N. Y.

Co.—

&

Gas Corpora¬

tion—Memorandum—J.
&

G. White

common-

Engineering
Treat

&

He

f

N. Y

—

Memorandum

>;

—

Memorandum—G. L. Ohrstrom &

Co., 40 Wall Street, JNew York 5.
New York.

Franklin

Coal—Anal*

County

of condition and post-war
prospects—F. H. Koller & Co.?
Inc., Ill Broadway, New York 6
ysis

Y.

NT.

Farms—Late

Sehenley Distillers Corporatloi
of articles they have

Brochure

nt. Y.
Gro-Cord

Rubber

analysis—Caswell

—

ill.

:

r,

120

Co.,

&

Chicago 3.
" ;>'

'

,

New York

Salle Street,
York

1

Spring

Brook

the

-

-

•

|

members of the NewStock
Ex¬

will admit Wyllys KL
partnership on Jan. 1..
Mr. Morris has been with the firm
for some time in charge of the;
changes,

Water

Co.,

Co.—Analysis—Ira Haupt &
Ill

for

Chicago

and

Morris

Scranton

New

circles

investment

Cormick

Recent

South La Salle Street,

beeri

CHICAGO, ILL.—Kebbon, Mc+
&
Co.,
231
South La

running in the Chronicleto Mark Merit, in care of
Sehenley
Distillers
Corporation
write

Avenue,
'v—•

has

and

Kebbon, McCormich Is
Admit W. K. Morris

/

been

Fifth

Chicago

past 25 years.

Grinding Machine Co. and United

350

in

Gear

on

Printers & Publishers.

'.

.

memoranda

Also

He

Government.

York

Brothers, 1529 Walnut
Street, Philadelphia 2, Pa,

invest¬

the

of

bearing his name and is
for duty with

prominent

—

Buckley

Forty Wall Street 5s of 1966

-Rome*

leave of absence

the

Pump

Reda

*

President

is

ment firm
on

Company, 37 Wall Street, New

York 5,

in

Institutions

nancial

Regional Finance Off'cer for Tus¬
cany,
and Senior -Finance Offi¬
cer
of AMG 5th Army.

Works—
Co., 40

York 5, N. Y.

Wall Street, New

and serv¬

since 1943 with Allied Mili¬
tary Government in Africa and
Italy.
He was* Controller of Fi¬
ing

Lime

Circular—Amos

Lieut., Colonel

of

rank

; ;

Descriptive
circular — Dayton
Haigney & Co., 75 Federal Street,
Boston 10, Mass.
Northern

Water

;

,

England

New

Analysis—W. J. Banigan & Co., 50
Broadway, New York 4, N. Y.
|
Federal

Co.—Anal-

Radiator

to

research department.

Broadway, New York 6, N. Y.

United Light & Railways Com¬
Aircraft

U.

S.

Sugar—Circular

—

J.

F.

Reilly & Co., 40 Exchange Place,

CHICAGO 4
231 So. La Salle St.

New York 5,

Capital Stock

N. Y.

r-

.

.

Dearborn 1501

Wellman

Teletype CG 257

NOW LISTED ON

Engineering Co.—cir¬

cular—Simons, Linburn

& Co., 25
Y.

Broad Street, New York 4, N.
THE

I SINCE 19081

Stock

Exchange

Chicago

Board

of

CHICAGO STOCK

available

on

Members Chicago

Telephone
Direct Private

4,

Stock Exchange

Wire to

System

Chicago 3, 111.

Telephone RANdolph 2100

CORP. Com.

'

POWER CO. 6 & 7

Pfds.

Incorporated

So. La

Salle Street,

Telephone State 8711

New York




SO. BEND RR. Com.

Byllesby and Company
135

Teletype CG 1166

4068

CG 537

H. M.

ST.

ILLINOIS

Randolph

;

'

request

NORTHERN STATES

135 South La Salle Street

CHICAGO

Markets In-r•

Dempsey & Company

M-3—

SALLE

—

become

years.

DEEP ROCK OIL

Realization

LA

Gustave E*.
associated!
with Robert Showers, 10 South La
Salle Street. Mr. Gooden was for¬
merly sales manager of the North¬
ern
Trust Company with which
he had been connected for twenty

CHICAGO SO. SHORE &

Trade

study of Midland Utilities

SOUTH

The Financial. Chronicle)

has

EXCHANGE

Midland Utilities

For

to

EXCHANGE

YORK STOCK

Prospectus

Write

(Special

CHICAGO, ILL.

Gooden

—We Maintain Active
THE

Members

Chicago

NEW

Robt, Showers Staff

and

Fred.W.FairmanCo.L
Midland

Gustave Gooden Joins

pany—Study of common stock—
Vilas & Hickey, 49 Wall Street,
New York 5, N. Y\ \-7;

COMSTOCK & Co.

Bell

Clarke,

Washington

op

Sheller Manufacturing Corp.

Corporation

208

complex surplus problems." 'f

our

popular-priced women's and chil¬
dren's apparel—Hardy & Co., 30
Broad Street, New York 4, N. Y.

Company

Howard

A

and qualifications that
possesses," Mr. Mc¬
"Men of high caliber
executive and business lead¬

now

American Service Co.—Circular
—Adams & Co.,

securing

in

ership are departing Washington
in growing numbers, and we are
finding it increasingly difficult to
secure
vitally-needed
key per¬
sonnel.
Therefore,. Mr. Clarke's

Revised

Salle

La

Inc.,

The

.•

warranted..!

fortunate

are

Clarke

and

Mid¬

and
—

bulletin—Doyle, O'Connor & Co.!

■

Company—Circu¬

Pinna

Canada, in, the near fu¬
sub-offices may be

Cabe stated.

Inc.—circular
De

A.

Lt. Col. J. W. Clarke

at

business executive with the ex?

Mr.

Circuit; and Purolator Prod¬

ter

be

perience

Co., 209 South Le
111.;

Salle Street, Chicago 4,

American

Mills, Inc.;

X

*

in the area as

set up

"We

Magnavox

*

Other

ture.

and
? ;

Firebox.

will

Ottawa,

Pittsburgh Railways, York Corru-r

'

sub-of¬

a

established

of

studies

are

in

Washington,
McCabe
said,

Colony

5, N. Y.

at

Head¬

quarters

of

specu¬

fice

Hardware; Douglas Shoe; TACA
Airways;

Study

be /

will

maintained

York

Cruttbnden

Industries;

American

Alabama

Field

office

and

late memoranda oh:

are

—

sound

a

the

of

Commissioner

and

all

Corporation, 70 Pine Street, New

possibilities for appreciation for
this company—Ward & Co., .120
Broadway, New York 5, N. Y. Alsd
Great

as

d q uar-

e a

new

Real
York City.

New

in

stock

common

gating,

/

to4

H

Co.;

practically

on ;

Estate

an¬

nounced

ters

Park, Shatterproof Glass, and

reports

missioner,

--v"

Also detailed circulars on Fash¬

Locomotive

available

b.

day..

Co., 41 Broad Street, New York 4

Study of outlook and speculative

American Forging and

Mich.

Tel. Franklin 8622

Auto

Co.—-

Iron

Malleable

'

^

and the

muda

St., Chicago 3

10 So. La Salle

Four

v

Newfoundland,
f

Ber¬

McCabe, Com¬

Also

East Mason Street, Mil¬
2, Wis.
■ a

Shipbuilding

Tornga,

Chicago Board of Trade

231 South La Salh

Street, Chicago 4. 111..

■

Request.

*Prospectu3 Available on

Established

Stock

parative figures on public utility
preferred and common stocks—G.
A. Saxton & Co.,
Inc., 70 Pine

Borg Corp.

&

Steel

Chicago, Corp.—Circulars-

Hicks & Price,

lar—Herrick, Waddell & Co., Inc.,
55 Liberty Street, New York 5.

A.

S.

&

Preferred

Corp., Com.

Steel Tubes Co.,

am

ucts.

waukee

George W.

Utilities

Gas

fornia, 210 West Seventh Street,
Los Angeles 14, Calif.
Also a study of Bank of Amer¬
N.

on

Canada,
nland,

r e e

Iceland,

FLC

United Artists Thea¬

Current data

—

G

Descrip¬
low-priced

—

Boston 9, Mass.

Wellman

circulars oi

are

Port.

Co., 225

Burton-Dixie

"'.■'■A-,'";

ford Paper;

Views

Securities

*

.

Clarke, Chicago in¬
banker, has been ap¬
pointed FLC Field Commissioner

building stock—Du Pont, Homsey
Co.,
Shawmut
Bank
Building,

.Le

insurance

consin—A

"The

■

Lawrence

&

the

Wall St.

1

-

•%:

.

and banking
fields—Butler-Huff & Co., of Cali¬

News
on

memorandum

W.

vestment,

analysis

land Cement.

Glass;

ica

HICKS 6■ PRICE

v

available

Also

per

range

10
9

Central Iron & Steel, Oregon Port¬

share
after taxes—ask for analysis M. C.
P.—Raymond & Co., 148 State
Street, Boston 9, Mass.
...
>
earnings

cent

Consolidated Gas
Utilities Corp.

■' '■

Dayton

Company

England

de¬

recent

on

velopments—Lerner
&
Co.,
Post
Office 'Square,
Boston

The

New

LOS ANGELES 14

135 La Salle St.

A—Bulletin

Class

Automatics

Kendall

Corp.

Cement

Consolidated

velopments-— H. Hentz & Co., 60
Beaver Street, New York 4, N. Y.

DISTRIBUTION

Co.,
Chi¬

&

tive

»

Consolidated

'

'

,

.

.

New York

memorandum
Rock island & Pa¬

Chicago,

on

Minfon

stock—Sills,

mon

MARKET

SECONDARY

State 6502

on

transportation statistics—Vilas
Hickey, 49 Wall Street,

Industry

UNDERWRITERS

CHICAGO 3

Comment —Data

C.

5, n. y.
Also available is

Wholesale Distributors

Chicago Railway Equipment Co.

r—Analysis of high leverage com¬
Inc., 209 South La Salle St.,

John

Co.; Red

for

of the United States

C«

I.

CARTER H.C0R6REY& CO.

the

of

ages

terms

CHICAGO 3

1945, which re¬
high and low aver¬

June

to

Commissioner for FLG,

of Panama Coca-Cola.
Johnson

A

J. W. Clarke Field

memorandum

a

Carbon

Rock Bottlers, and a new

Ray-O-Vac

in¬

on

teresting possibilities—Hoit, Rose
& Troster, 74 Trinity Place, New
York 6, N. Y.

Dealer-Broker Investment

Trading Market

Thursday, December 20, 1945

New York
i

i

Philadelphia

Chicago 3

>

Teletype CG 273
Pittsburgh

Minneapolis

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4448

3/olume 162

Facing Facts

Consumer Credit

on

By CARL M. FLORA*
Chairman, Committee

.

.

.

M;

j

^

A buffet luncheon will be

fori prizes will:be held.

served; following, which.- a drawing1

**.'I.'.;'-:

'>:♦*

P;'\:

■p'M The Entertainment? Committed have made preparations'for
of the largest attendances in the history of the
Club.;vi'.V'v
'

one

Members of the Committee are; F. Howard

White; Stifel, Nicolaus
Co;, Chairman; Ray Denyven, FuszrSchmelzle & Co:; Eddie Olden•dorphr, Reinholdt. & Gardner;., Mike Sestric, ,L M. Sinion & Co.; and
Jerry Tegeler, Dempsey, Tegeler & Co.
;
v- '
j ''J* * r
4
&•

(

BOND TRADERS CLUB OF

CHICAGO''

r; -Itis

.'banking, asso¬
ciations; are in

States.

for

the

organization,

four" elective

and must announce same to the

exist

for

this,

this

of

type

offices

Plans' for the Jan. 29 Party are

shape, and the
out-of-town
members

Committee

attendance.

contact

is

It

their, out-of-town

friends

!

ject at

ing

ex-

con¬

meet-

a

of

Airlines
•

,

creator

-

135 South La Salle Street
T

\\e

The safety

credit

has

!:sAn

isr very popu¬

predictions

have

of

fore

made

have- been
market

consumer

credit

WE

heard

read

and

!

IN

Long Bell Lumber

Pickering Lbr, Co.
Minn. & Ont

Assoc.

the

by Mr.

State

Flora

Gas

Paper

Elec.

&

5-61

American Util. Service

Griess-Pfleger Tanning

be¬

Section 'of

the

Bankers Association

in

HICKEY& CO.

,

wish to attend, ai\d: urge the necessity for
making hotel arrangements at once.

Morton

ARE ACTIVE

GalviiAlfg. Corp.

in¬

St.'Lbuis, Mo;,'Dec. 12, 1945.
(Continued 011 page 3034)

on

will

that

Tele. CG 573

i

been

good public rela¬

address

!American

tremendous

Chicago 3, III.

Teh STAtfr 4950^

have been extolled.

You

•

lar. Optimistic
the

KITCHEN & CO.

Field Bldg.,

may
Howard

MARKETS

Mid-Continent

bank-

Today it

ers.

who

Exchange,

Chicago & Southern

numerable times of the profitable
operations of sales finance- and
personal loan companies. In addi¬
tion, it has been emphasized, and
[I might add accurately, that a very
'low. degree of. loss has been in¬
curred by these companies through
periods of war and depression, as

troversial sub--

rapidly taking

Wall

profit picture has
painted in rosy hues,

been

tions

credit

an-,

tremely

expecting a large
suggested that all

is

was

a.

as

.

sumer-

is received:

Nominating Committee's selections.. If no
suggestions are; received within the allotted time,
"the Nominating Committee's selections shall be
considered unanimously elected.

of

and the virtues of

years ago con¬

of the

•

TRADING

40

City, members

The

stressed.

often

when:

credit

reach, full production.

y Not"m an-y

Secretary within

week after formal announcement

one

may

Dean,

of the New York Stock

privilege which; I greatly appreciate to discuss consumer
you today.
You gentlemen, as secretaries of the state

a

credit .with

,

nominations

&

Make the Most Democratic: Banking System Even More Democratic "

v

Committee of Ithe Bond Traders Club of Chicago (a" position to
influence very
has unanimously selected the following members to hold office durmaterially the
ing the 1946-1947 fiscal year;
: r • : :■ 'C:i,
a c t i v. it y
of
.,; President: Howard Morton, McMaster, Hutchin¬
banks in. con¬
son & Co.;. Vice-President; Glenrn
Darfler;: Kneesumer;
credit
land & Company; Secretary; Howard
McHugh, t h
roughout,
Ames,,.Emerich & Company; Treasurer: Charles
the United(
Matz, Harriman Ripley & Co.
p:'y

Any, nine members ."of- the

on

partner-

a

Credit

The Nominating

make

become

New York

Efficient Personnel:

; sumer

Security Traders Club of St.; Louis, will1 hold its; annual
Christmas party on Saturday, Dec.'22, in the Jefferson Hbtel Crystal

Struthers, rJr.,

will

Struthers

•
Foresees Postwar Expansion of Con*
byr Banks and; Though Stating That Consumers Credit
I® "Not Fool Proof!' and That Its Profits Are
Exaggerated, He Holds
L That This Extension: of Bank
Activity Is Beneficial-by. Improving
Public Relations^, Expanding Mass Production Through
Larger
; Markets anii Raising Wage Earners* Living Standards,
Cautions
.Against Abuses and Concludes That "Bank Consumer Credit Wilt

r

The

Boom:

in

Street,

Spokesman for ABA Points Out Progress, Banks
Field, but Warns Against Undertaking Business
Without Adequate Study and Precaution and Without
Experienced
and

CLUB OF ST. LOUIS

W.

1st;

011

Have Made-in This

SECURITY TRADERS

William

Jan.

Consumer Credit, American Bankers Ass'n
First Wisconsin. National Bank, Milwaukee

Vice-President,

Struthers & Dean to Admit

-

Consumer Credit

'

.

3011'

Chicago 3

Randolph 8800 '

CG 1234-5

.

»■

fovemment andl Nation's Budget

INVESTMENT TRADERS ASSOCIATION OF PHILADELPHIA
The Investment Traders Association

reception

and

returned.

It

.O

dinner

was

held at

The

guests.

service

:

guests

about

90'- members

Len

were:

Bailey,

and

Tom

Bowers,

Bob

Highlights of. the dinner
Len

t

the

Penn

.standout

team

during

the

past

the other boys in the service

':-;v

CLEVELAND

*

spring when most of
,

willi probably have received their

SECURITY TRADERS ASSOCIATION

The Cleveland Security Traders Association

v

:

••

an

being advised of the party and

,are

:

V;

.

,

possible and

as

It is

^

•";:

*

:;-v

—

-

<

'

.:*

is

r

a

SECURITIES TRADERS ASSOCIATION OF DETROIT

;C-'
.

: The Securities

J

:
Inc!

Dec.,•?, in the Champagne Room

Morelaud,, Moreland & Co.,: is: Presi¬

The Committee in charge of the party consisted of Claude G.

Porter, Baker,. Simonds & Co.;, H. Terry Snowday, E. H. Rbliins &
:Sons, and Douglas H. Campbell, First; of. Michigan Corp.' 1 /

*HALLICRAFTERS

> v-,":

as

:

u

v

-

v

thrift;

n-d ya.

Within

Gov—

t,

ful

PORTLAND

OF

as

a

upon

pet

they

!

cost

a

Government,

is

knew

once

1 Teletype CG 361

address by Mr. Smith be¬

of American Industry of the

City,

New York

turers,
1945,

stubborn: realist and

(Listed

ADVERTISING
In

All

Plans

Its

Dec.

7,

Albert Frank
---•

>•

™.

*

"

•




New York6,N.Y*

Telephone COrtlandt 7-5060
Boston

Chicago Philadelphia San Francisco

-

(Continued

II

on page

3033)

V-

-

Gisholt Machine
'

&LD

A New Memorandum Sent
"

i

:

QUOTED

Request

on

f.

_

-

"

j

HGLLEY, DAYTON & GERNON
Member—Chicago
105

STREET

Members

So. La Salle

MILWAUKEE

PHONES—Daly

5392

Chicago:

State

0933

;

(2), WIS.
Teletype MI 488

Stock Exchange

St., Chicago 3, III.

CG 262

Chicago Stock Exchange

*

225 EAST MASON ST.
Teletype: CG 1200

'

All Wisconsin Issues

" ¥

CHICAGO 3, ILLINOIS
6164

Guenther Law

-

j„C()Tp0T(jtecj-

131 Cedar Street

the Chicago Stock Exchange)

" '

■

Telephone: Dearborn

Branches

Prepared—Conference Invited

.

SALLE

v

Phone State 0101

\

on

BOUGHT

request

INCORPORATED

SOUTH LA

request

FINANCIAL

a mem¬

DOYLE, O'CONNOR & CO.
135

on

Chicago U, Illinois

Common Stock

CHICAGO

,

■

and

National Association of Manufac¬

'T
equally-

circular

Souih l;a Salle Street

231

of..a state legislature^whose

' *An

gress

v;;

Corp.

Macfadden Publications

i.,

'

■

ADAMS & CO.

then

been many

:

*■

*

few

fore the Golden. Anniversary Con¬
Harold D. Smith

*Recent

schemes

they come from- both public and
ber

-r

and

in-my* experience

'private life. I

on

ELECTRIC POWER PRIOR PFD.

*Prospectus available

I'-'a

come

men

WEYERHAEUSER TIMBER
COCA COLA BOTTLING

Budget is not

value. There have

such
i

they other hand,; he*
damned

-

Common

to my office to
some local project of doubt¬

urge

visionary.
er.nmen

in

economy

spend-;

a

•

%

privately

budget. *

a

:

Interstate Aircraft
& Engineering

«

Perhaps the worst cases are
those, of double talk. I refer to
the men who publicly shout for

do liar v

a

'«

Common

million dollars.

in:

d g e t

He-is

Common

;'?

1

way

lioir.

Common

Mich. Steel Casting Co.

?

is
personally re¬
sponsible for
lhe: multi-bil-"

such

Traders Association, of Detroit and
Michigan;

»t. the Penobscot Club.- Paul L

....

o:

ideas

because

(merely

which go with

held its annual-fail dinner Friday,

dent.

h

w

some

Class A and

R. Hoe & Co., Inc.

miser. He is the man who blocks

brilliant

bureau¬

crat:

\ ,k,\

"

•

a,

d

and
the; tax e s

V.

AND MICHIGAN

damned'

the

as

b

,

,"

;

generally.he-

AIL affiliates

Certain hotel space is being

•*

,

tax pay-ers

.provided for and definite reservations should, be made by writing:
Carl H»> Doerge,-. Wm. J,s Mericka. &
Co.,-Inc., 11-16 Union. Commerce

Building;. Cleveland' 14; Ohio;'

a n

Trading Markets
.

Full

in

busi-'

nessmen

cordially invite all out-of-

later than Jan. 8.

no

Preferredj

Responsibility of Government to - Stabilize Economic Conditions
Through Fiscal Policy,. There Must Be More Cooperation Between

Amongv

an¬

state* members but request; that notice- of attendance be reflected;
soon

a

y.,' "t

^American Service Co.

popular man. r If. you. need any evidence of'this fact, L can supply
plenty of- it.

will hold their,

.allrOhio party.

we

_

*

Government Corporations Under
Broadened Approach to Our Federal Budget

You know that the Director of the Bureau of the

•expected and planned that Cincinnati, Columbus and Toledo-will" be

represented; thereby making it

y

Employment Act.,
Estimates Post-War
Budget at: About $25 Billions, and Concludes That in View of

''i

nual mid-winter party on. Friday Jan. 11, 1946 "at Hotel Statler.

well

•

Putting

Business and Government.

re¬

Vy -y:yuSvK'Cy.

Prescribed

as

few

a

•<

Another such gathering is planned .for the

leases.

illustrated

plays with movies.

Advocates

Budget Control and

short account

gave a

and

season

...

Agencies Render Services Authorized by Congress, and (2) Seeing
Manner.

told by

as.

George Munger, head

University of Pennsylvania,

.

..

That the Services Are Rendered in. Most Economical and Efficient

'

,

stories and experiences

were

Bailey, Jack Swann and- Ned Phillips.

football coach of the
of

" i

,

.

ithe Process of Budgeting Under the Budget and Accounting Act.
Holds Budget Bureau's Functions Consist of (1) Seeing That the

Phillips, Les Rodgers, Joe Smith, Jack Swann, A1
-

A

Active

'

Warner and Howie Young.

'

Director, Federal Bureau- of the Budget

Asserting That the Federal Budget "Is the Most Far-Reaching Document Which the Government Formulates/' Mr. Smith Describes

service

19

By HAROLD D. SMITH*

y
,

'

Brooks, Ed Christian, Connie Dorsey, jack Fant, Bill Gerstley, Free¬
man
Grant, Phil Hawley, Ben Lowrey, Steve Massey, A1 McBride,
Newt Parks, Ned

,

their

There .were in attendance

;

'

of

Philadelphia tendered a
service members-who have already
the Benjamin Franklin Hotel on Dec. 12.

to

Direct wire to New York

u

.

Central 0780
Offices in Wisconsin

Eau Claire

-

Pond du Lac

Madison

—

-

LaCrosse

Wausau

'V.

^

u

V

\

'\U

f •;

.

.

;

Thursday, December 20, 1945*

FINANCIAL CHRONICLE

THE COMMERCIAL &
3012
drive

Loan

Michigan Brevities
'

at the

Detroit will

Manufacturers National Bank of

Shareholders of the

the

annual meeting Jan. 8 on a resolution to increase
common stock to $4,000,000 from $3,000,000.
The increase
volve declaration of a stock dividend of $1,000,000 from
at their

vote

would in¬
undivided

approve

attended the recent 34th
annual convention of the Invest¬

limiters

don

Association
of
Included
John
Watling and Gor¬
Hill
of
Watling,
Lerchen

and

Co.;

ment

Bankers

were

Chicago.

in

America

the

Murray of
Detroit;

Hay
Bank

National

W.

Call Us On Any

McPherson

Co.;

&

Kenower

of De¬

record delegation

of the
Detroit Trust Co.; William. Moore
and Harold Chapel of McDonald
Moore & Co.; Charles B. Crouse
of Crouse, Bennett, Smith & Co.;
Browning and Oscar Buhr

Parcelis
and

mann

Fred

Co.;

William

Merle

Co.;

&

Bosworth

Braun,

Bowyer of Paine, Webber, Jack¬
son
& Curtis; Wayne Spade of
Merrill

Lynch, Pierce, Fenner &

Beane;

Hale V. Sattley of H, V.

Sattley & Co., and S. R. Living¬
ston of S. R. Livingston & Co.

MICHIGAN

*

*

.

*

Shares traded

UNLISTEDS

the Detroit

on

Stock Exchange in the

month of

November again reached a new

of

high in volume with a total

This

867,214.

Wm.C.Roney&Co.
Members New York

November, 1944.

BUHL BUILDING

812

DETROIT 26,

The month's total is the larg¬

MICH.

Phone

Teletype

-

I

Charles A. Parcelis & Co.

traded.
November
was
well distributed throughout the
month commencing on Nov. 2,
with 68,422 shares, and ending
Nov. 30, with 55,650 shares.
It is anticipated that the trad¬

Stock Exchange

pace

in

December will he

;

DE 206

any

are

V

Exchange

an¬

of

King

Seeley

Cor¬

poration,, manufacturers of auto¬
appli¬

motive items and household

began

Dec.

7.

The

ex¬

of

of
unissued

$1.00 par value common stock,

Electromaster, Inc.

which 112,275

reserved

and

Shelter

the

shares are

conversion

for

of

preferred stock.

Manufacturing Corp.
Michigan's effort in the Victory
request

American Forging

& Dolphyn
Stock Exchange

& Socket Co.

Detroit 26

Wayne
approxi¬
the

that

1945, the Southern New England

Telephone
a

•

of

declare

D.

MARKETS

be

;

to

a

recent luncheon

Bond
at

by Col. Cass S.

Air Force, U. S.
A. A. C.
Colonel Hough's subject
was "Aerial War Over Germany"
and was followed by moving pic¬
tures of actual combat action and
strafing
eon

operations.
This lunch¬
part of the Bond Club's

year,
to be
pre-Christmas
cocktail party, on Dec. 21, which
will be in the nature of a "Wel¬
come
Home" gathering for club
members who have returned from

the

program

for

followed

by

or

a

other service.

DeYoung, Larson & Tornga
GRAND RAPIDS, MICH.
GR

Phone

84

98261

The Financial

Chronicle)

laney has become

Darling;

Michigan Securities
Dependable

Mr. Delaney was

formerly with the

Detroit

Request

on

.

Stock

Members New

Commis¬

Members New
••

26, MICH.

T°letype DE
Battle Creek

-

«»

GRAND

Lansing

Muskegon




income

consolidated

For

;

.

in

•

Securities

at

basis

the

on

stock

purchase

and

stockholders

$10.25
of

one

held.

all

If

of

shares

are

kwh... compared

ac¬

tioned

the

Light
peti¬
Public

consolidate

to

'
*

%

the

For

period ended Nov. 4,
1945, Veeder-Root, Inc., after Fed¬
eral
income
and
excess
profits

$2.12 a share against $711,$3.55 for the same period
a
year ago.
During these same
periods, earnings before Federal
income and excess profits taxeii
and contingencies were
$708,211
compared to $2,184,046.
■
or

01*

and

for Federal income
excess

profits

taxes

for the current year total $283,-

which

381

compares

472,721 for 1944.

with

$1,-:

Provision for

contingencies in the amount of

The hearing will be

the Federal excess profits taxes

Light

Dec. 21.

on

not

are

#

■

Provision

the

with

prices

share.

Power

Connecticut
Company.

-

.

taxes

Utility Commission for permis¬
sion

at

for ; the

license.

325,

Connecticut

a

being issued in
outstanding
stock of B. A. Proctor Co., Inc.
This acquisition will give Gray
ownership of the basic patents
covering the Gray Audograph for
which Gray now holds exclusive
3,364 shares

830,

has

year

$10.25

taxes, showed net income of $424,-

1944.

Company

Power

one

exchange

November,,

Litchfield Electric

The

capital.

by the Board of Directors

less than

,..i'

*

&

sold

within

.

kwh. for November,

company

vide additional working

reported sales of 77,019,000
..with. 82,684.000

pany

the

will net
$422,000 which will pro¬
up,

C

&

.v-

v

post-war credit of $125,084 was '
in the period ended Nov.

made

14, the City of Stam¬
ford awarded $820,000 "1945 Pub¬
On

Dec.

Improvement Highway Bonds,
Series A," due $41,000 annually
Dec.. 1,
1946 to 1965, inclusive,

lic

$235,000

"1945

Public

Im¬

provement Highway Bonds, Series
B," due $28,000 annually Dec. 1,
1947 to 1955, inclusive, to a syndi¬
cate headed by Harriman Ripley &
Co., Inc., at 100.6499 for a 1% in¬
The next highest bid

terest rate.

of 100.54 for bonds

submitted by Phelos,
and syndicate.
The
were reoffered to the pub¬
a scale ranging from a .40%
was

coupon

Fenn

bonds
lic

on

basis

carrying a 1%

&

Co.

to

IOOV2.

recently

No provision has been
the
comparable

5, 1944.

during

made

period this year.

Chas. W. Scranton Co.
to Admit Two Partners
NEW
W.

HAVEN,

Scranton

&

CONN.—Chas:

Co.,

209 Church

Street, members of the New York
Stock

Exchange, will admit Wil¬

liam J* Falsey and Paul Lybrand

Jan¬

Sampsell to partnership on
uary

ager

2nd.

Mr. Sampsell is Man¬

of the New London office.

^Announcing
—-n
A CHANGE OF

TELEPHONE NUMBER

YORK-NEW HAVEN WIRE

TO CAnal 6-3662

Chas. W. Scranton & Co.

7-3191

Members New York Stock

BOwling Green 9-2211

209 Church Street, New
Bell

System Teletype: HF

~

.

New York:

2

Teletype GR 164

:

Hartford and

MICH. TRUST BLDG.

Phone 94336

offering 42,-

common

share for each four shares

now

v..'C-yNS.:.

the., month

Stock;

York Curb

Primary Markets

Stock Exchange

RAPIDS

*

currently

share

some

Water

Greenwich

the

ON OUR DIRECT NEW

WHITE, NOBLE & CO.

7«

*

Manufacturing Com¬

subscription

new

with the

Exchange

Connecticut

Members Detroit

is

the

per

.

.

of

<

Hartford

DETROIT

.

Com¬

Insurance

The Town of Stamford

York and Boston

and

Exchanges

Exchange

Penobscot Building

Bay City

Michigan Cor¬

poration and Securities

Markets

Moreland & Co.
1051

the Detroit

l

Inquiries Invited

Member

Penobscot

Co.,

&

Stock Exchange.

Associate

Welding

Prospectus

.

The

Tifft Brothers

National

*

Hague

associated with

sion in Detroit.

Industrial Brownhoist

:

•?

and

Roy F. Delaney Associated
With Smith, Hague & Co.
to

Railroad,

Any unsubscribed stock may be

.

was

"•/

•

shares of its

by

Eighth

Hough,

'''

180

Connecticut Light & Power Com¬

Luncheon; Xmas Party
of Detroit was addressed

Trust,

quarterly dividend of 37V20 pay¬
able Dec. 20; Phoenix Insurance

respectively.

Club

Northern

'

for

Inc., for the 12 months
ended Sept. 30, 1945, showed net
income of $186,272 against $209,081 for the preceding 12 months.
Earnings per share on the 6% pre¬
ferred stock were $7.28 and $8.17,

i

MICH.—The

365

of.

trustee

a

Central Vermont Transporta¬

The Gray

System,

;

.

trustee

a

taken

count

Co.,

changed

Company,

payable Jam. 2, 1946; Torrington
Manufacturing Company, 750 ex¬
tra
together
with the regular

1946..
.

members of
New York and Detroit Stock

Bennett, Smith & Co.

Life

tion Company.

dividend of 500 payable
Jan. 2, 1946; and Arrow-Hart &
Hegeman Electric
Company, $1
year-end dividend payable Jan. 2,

Building,

DETROIT,

the

regular

Building, members of

C. H. Dutton*

Elec.

■ ■

Fire

Company, $1 extra along

DETROIT,
MICH. fL Effective
January
2,
the firm name of

Smith,

L. A.

1944.

$2,121,337 for the
of this year

500 extra together with the
regular quarterly dividend of 500

Changed to
Bennettr Smith & Co. <

will

London

pany,

Firm Name

Exchanges,

extra

Hartford

S. Army.

&

Mr.

Secretary

General

director and treasurer of the New

local companies to
year-end dividends

are:;

of
Paine, Webber, Jackson & Curtis,
Penobscot Building, after serving

Smith

Company,

Financial

Sayings Bank,

with $2,060,242 for the

Among the

Campau has rejoined the staff

Bennett,

been

Aetna

of the Guardian Investment

pany

has

Riley, Kansas where he had been
training as a radio operator in the
Field Artillery branch.
■;

Crouse,

has

the

-

charge from his Army post at Ft.

the U.

is

Connecticut

State

•'

MICH.—Charles M.
rejoined the sales

of

Steam. Boiler Inspection

Insurance

corresponding period last year.

of M. A. Manley &
Co., Buhl Building, after his dis¬

in

the

the

months

ten

compares

department

MICH.—Gordon

of

reported

October,

in

$239,365

Net income of

first

Hickmott

Insurance

Hickmott

compared with
$2,562,437 and a net

of

gross

,

DETROIT,

Hartford

net of $207,481

a

DETROIT,
MICH.—Robert; G.
Mace has joined the staff of Gold¬
man, Sachs & Co., after serving in
the U. S. Navy.
; -j

Company

C.

director

a

Company and its five,
subsidiaries, to' fill the vacancy
caused by the death of W. R. C.
Corson,
late
President
of
the

income of $2,815,964 with

gross

DETROIT,

Allerton
elected

Insurance

October,

11 times more than those of the

^DETROIT, MICH.—Roy F. De¬
Circular oh Request.
TRADING

of

month

the

For

Liberty Loans in World War I.

Simmonds

.

and

Wayne County sales totals were

Detroit Personnels

pany

net current assets
compared to $35,ago. "
;

146,439 a year

sales
$3,000,000,000.

division

aggregate

$600,000 notes due June 18,
1946, to the Bessemer Trust Com¬
of Jersey City, N. J., at a
.46% rate.
/ '■
„'..V

,

The balance sheet dated Oct. 31,

1945, showed
of $48,487,891

state's

the

follow

would

banking

(Special

Tele. DE 507

5752

it

military

Mercier, McDowell

Buhl Bldg.,

of

one-half

state's
will

for

accounts

mately
total

Since

County.

County

Detroit Bond Club

change has listed 362,500 shares

„

Wayne

2.18 times,

••

/

Stock

stock

mon

ances,

Cadillac

total of

a

$1,783,559,000 sale of bonds ex¬
clusive
of
"E"
were
sold
in

the

Detroit

Randolph 5625

Detroit

the eight bond drives

nounced that trading in the com¬

Teletype

Members

During

Wayne County figures.

sold

1.97 times

respectively.
'
Earnings per share on 490,367
shares of 7 % preferred stock were
$19.86 against $24.35, while the
1,571,186 common shares showed
earnings of $4.38 and $5.78, re¬
spectively.
\
•

the

that

are

of $78,545,734 and

revenue

$22,083,901<S>-

and

$19,773,442

was

which covered charges
and

:

Telephone

furnished on

ready

of the new

entire state will be in line with

indication.
The two-hour Saturday session
was one of the busiest in recent
years with 41,827 shares chang¬
day

ing. hands^

DETROIT 26, MICH.

Reports

first

the

be

with freight

passenger revenue of $62,801,818 for the corresponding period of
1944.
The total available lor fixed charges for these same periods

figures

total
not

indications

year,

Penobscot

*

639 Penobscot Building

will

maintained if the results of the
first

Michigan Markets

in

Activity

ing

Established 1919
Members Detroit

1936, when

February,

final

1945, as reported to the
total freignt revenue of $71,655,407 and passenger reve¬

snowed

of $62,915,543 compared

nue

shares was

949,118

Cherry 6700

DE 167

since

est

the
state

after

until

with

compares

649,931 shares in the preceding
month
and
204,577 shares in

Stock Exchange

the

for

Barg-

A.

Adams of

M.

Railroad for the ten months ended Oct. 31,

12.

Dec.

Charles

Charles A. Parcelis of the
A.

Connecticut Brevities
The income account of the New York'New Haven and Hartford

farewell

While

and a. certificate of approval is re¬
ceived from the Compiler ofS>—
~
—- ~
**
the Currency, the bank will issue S. ' Gilbreath,
Emmett F, Connely> and Douglas Campbell
of
20,000 new shares, $50 par value,
the First of Michigan Corp.; Phil¬
which
will
be
divided among
holders
of
the
present 60,000 lip K. Watson of Campbell, McCarty & Co.; William C. Honey
shares at the ratio of one new
and Clyde Hagerman of William
share for each three held.
C. Roney & Co.; Ralph Simonds
•5
Bank directors have authorized
of Baker, Simonds & Co.; Ralph
presentation of the resolution, Fordon of Watkins and Fordon,
a letter to stockholders states.
Inc.;- James B. Shannon of Miller,
!jt
$
*
A new

the

with

pace

report meeting oi
the Wayne County Banking Di¬
vision, War Finance Committee at
the Penobscot Club, Wednesday,

profits,

shareholders

kept

production line records during the
past four years, it was revealed

Exchange

Haven 7, Conn.

:

Volume

Number

162

THE COMMERCIAL & FINANCIAL CHRONICLE

4448

Sweden and Woild Trade
:

By HERMAN ERIKSSONk

special meeting 0f the stockholders of National
Candy Com¬
has been called for Dec. 27, 1945 to ratify a
proposed change
from a New Jersey to a Delaware
corporation.
This would be a
preliminary step in a program to consolidate National
Candy Com¬
pany with the Clinton Company, corn products
subsidiary in which
it has an 8.9.9% stock ownership.
It is also contemplated that the
new
company
would change its.®/
name to
the Clinton Company or The
stock
offering was headed
pany

Diplomat, in Stressing His Country's Interest in World
Sweden's Dependence

Trade and International Peace, Points Out
Both

Imports and Exports.
Reviews Commercial Relations
Germany Before and During War and Contends That Al¬
though Transactions With Axis Country Increased, Sweden Re¬
on

With

ceived

Payment

Full for All

in

Sold.

Goods

Clinton

Sweden

Denies

National

Profited

featured

in

Louis

by War, and Gives Information Regarding Sweden's Aid
Relief and Rehabilitation.
Says Sweden Is Opposed to Bilateral

Favored

Most

Advocates

and

Agreements

Reciprocal
Widest

Nation

trade

tion'

of

my

own

House Extends I

starting-

point,./we

Bill

all

I

agree,

is

trade

of

the

(W

that

being,

almost

with-

,

for

it.

In

this

Obviously,

trade
to

abroad
small

a

the
is

with

matter

home market and few natural

Whereas

represented
tional

20%.

In

of

five

period
annual value

Sweden's

exports

for

ure

000,000
will

imports

kronor.

notice

2,068,this you

was

Sweden

bought

sold, the difference

the balance of payments being

made

up

other

sources,

tourist

for

incomes from
such as shipping,
Swedish
invest¬

by

trade,/

ments

abroad, remittances of for¬
emigrants and the like. •

mer

Sweden's

in

Interest
Trade

another

leader

action

House

in

living and achieve full
ployment, we must import

coffee,
also

a

fruit,

textiles,

great variety of

rials,

and semi-finished

goods such

300

million

which

the

ber,

gasoline,

ounces

and

'?An
before

a

as

switching railroad, a belt line, and
carrier, serving St. Louis, Mo.,

It

central and

operates
der

southern

an

additional 3 miles

un¬

Approximately

386

lease.

In

addition, the

offering

made

enterprise

has been

the

as

owned

Power Company

quired to sell under
vestment order.
dends

of

l7l/iC

Stock

of

the

Co.

by

and

man

the

bonds

was

Pea-

New

that

York/and included Gl H. Walker
& Co. and Stix & Co. of St. Louis/

the

Treasury

ounces

either for

moment,

sale

for

or

to

the prime

mover

of.

by

years.

showed

the

of

the

United

/ '

,

Stock

i

Bank

Eighth

Markets

Insurance

War

*Stromberg-Carlson Co.

Loan'

an

*

Mid-Continent Airlines

*Trenton

Banking

were

Jacobs

M.

Taylor,

&,Co.,

Valley

silver

;

"

Pickering Lumber Corp.

Majestic Radio & Television

Corp.

A.;
■

Luscombe

Airplane Corp.

Information

■

Punta Alegre

While &
Members

Company

Louis

St.

Stock

Valley

Mississippi

ST. LOUIS
Bell

.

Descriptions

j.V-

1, MO.

'//•';

/:"■/;/*

Sugar

Match

on

Request

interested in

arc

,..

Illinois Terminal

Stix & Go.
SECURITIES

SCHIRCK RICHIIPv COMPANY

Railroad Co.

Landreth Building

Common Stock

509

ma¬

OLIVE

Bell Teletype
SL 456

STREET

St.

Louis

2,

Garfield

Mo.

L. D. 123

.

Metropolitan St. Louis
/:

?

COMPANY
Locust

718

of
Members St.

'

Active Markets in

Stock' Exchange

Louis

LOUIS

ST.

■■

v/- Xv,

V

;

Central

//::///;/f;/

L.

Street

Louis

Saint

1,

D. 208

St.

— Corporate Securities — Bank
Stocks
St. Louis Stock Exchange Issues
;

v.v'-

.

.

Western Lt. & Tel. Co.

Taussig, Day & Company,Inc.
ESTABLISHED

'■

Newhard,. Cook

Baltimore Avenue, Kansas
KC 472-3

Strauss
York

Bros.

and

Chicago




City 6, Mo.

White

&

Company

St. Louis

FOURTH
Bell

Pledger
Los

&

York
St.

To:

Company

Angeles

and

Go.

&

r

'■

i

1924

'
.

'

Member

St.

I
4

Louis Stock Exchange

DISTRIBUTORS

Members
New

Phone—Harrison 6432

Connections

UNDERWRITERS

Co,

'

L. 499

:-

Municipal Bonds

Pickering Lumber Corp.

bauivi, "Sir h h ii ivier

Mo.

8250

MIDDLE WESTERN SECURITIES

'
:

,

0225

large

Central Coal & Coke Corp,

New

Exchange

Trust Bids.

System Teletype—SL 477

We
i:

fin¬

Wire

Request

.

Universal

States,

Private

on

merchandise

National Oats
/"/•fZZOld Ben Coal, Common

in
;

TRADING MARKETS:

—

Distillers

*Ampco Metal, Inc.

I-

r

Semple-

Robert

and

Walsh, Dempsey-Tegeler & Co.:

and

Teletype

Stocks

of: $27,-,

Investment

the

of

&

re¬

^

;;/;/•'• m/:

in seeking

City, Pec. 12, 1945.
(Continued on page 3036)

Bell

1

,

York

1016

'

Exchange and
Exchanges

Broadway & Locust, St. Louis 1, Mo.
Teletype SL 84
Tel. Central 0838

Spinning, $5.00 Preferred and Common
J >
Chicago, Wilmington & Franklin Coali:</"•"••'•."
r ■
.yy1.;:/:■/'/Chicago & Southern Air Lines \
-;V-\
-/V■:/" ■■■:>■,Collins Radio, Preferred and Common
/
/ Kansas City Public Service, Preferred and Common
v Moore-McCormack Lines, Preferred and Common

rub¬

Long-Bell Lumber Co.

York

Other Principal

but

Commerce Trust Co.

»

Office<

Members

New

Primary

final

sales

total

the

in

in

Berkshire Fine

as

Chamber

to

G. H. Walker & Co.

Miv: Eriksson

Swedish

Wire

Providence

■

mone-

industry.

idle

of

and

/

now

additional silver which is valuable
the

York

*Statistical

attractive

as

holds about 275 million

Private

Direct

New

silver

Treasury last Summer

program,

some

dealers

Co.; > Mel

in the

such

McElroy

Joseph A. Glynn, Jr.,;
Blewer, Heitner & Glynn; Roy W,
Jordan, G. H. Walker & Co.; Max
S. Muench, Stix & Co.; Joseph G.i
Petersen,.- Eckhardt-Petersen
&

Lynch,
of

ST. LOUIS >

SECURITIES

Division and the "Syndicate Man-;

,

Kidder.
Beane

;

.

agers"

Merrill

Pierce, Fenner &

of

assigned quota
of $11,356,250.
Bert H. Horning.;
Stifel, Nicolaus & Co., was Chair¬

be

-

Louis,
Co.

SINCE 1900

compared with

»

jointly

&

to

St.
&

LOUIS, MO.—St. Louis In¬

02-3,926

are

will

according;

Offering

body

port

the New

on

prospectus.

headed

ST.

re¬

share

per

of

&

vestment

SEC di¬

an

Exchange

requested,

in

Quarterly divi¬

planned and listing
York

was

L. D. 240

St. Louis Dealers Exceed

property

which

2, M0.

Teletype—SL 486

8th War Loan Quota

the Illinois

by

all

Brothers

with the firm for

possible

the first public participation
the

BUILDING♦

ST. LOUIS

LOUIS, MO.—A. G. Ed¬
Sons, 409 North Eighth
Street, members of the New York,
Chicago, and St. Louis Stock Ex¬
changes, will admit Warren Mc¬
Elroy, Jr. to partnership on Jan¬
uary 1.
Mr,> McElroy has been

.

The

LANDRETH

ST.

wards

miles of line is electrified and the
is steam.

Co.,

Illinois.

476 miles of railroad and

owns

&

Stern

to Admit

as a

and

Peltasonjenenbaum Co.

A. G. Edwards & Sons

terminal

a

business.

Kansas City.

met with immediate success,
being particularly well received
by Missouri investors/ The Com¬
operates

Rein-

St.LouisI.Mo.
address
the

Commerce
New

cars,

types and

many

and

pany

pany

an

Incorporated, and Smith,

Moore

the

Com¬

Treas-j

chemicals/

hides, airplanes, motor
chinery of

of

to monetize

INVESTMENT

coal,

ex-;

needed/
only about 125 million ounces thus
far have been monetized. Beyond
undertook

mate-;

cotton,

as

of

Co.,

not

etc.,

ished

Stock

Railroad

em¬

such

raw

Common

.

Terminal

&

&

pany,

500,000

commitment to monetize more
of its idle seigniorage silver. Of the

Treasury.

stand¬

our

and

in

Lea Fabrics

Company, I. M. Simon
Co., Stifel, Nicolaus & Com¬

&

ury

the

of truly vital im¬

goods

under

year

Act, instead

Senator Abe Murdock of Utah has

ard of

consumers'

one

of the two years provided
Green-Martin Bill; also a

of

only

a

tension of the Green

monetization

are

month.

respects. Compromises

discussion include

the

To keep up

this

bility of compromise in some mi-?

been

supplies

the

revives

form

some

In other words,
not only our
foreign customers hut our sources

portance.

hearing," at

Patrick vMcCarran

Senator

tization

:>■;/ •-'/:;

Senate

However/ there is still the possi¬

at

Foreign

have

nor

same

From

that

than she

more
on

the

the

Tomorrow

Nevada,

Act

1,715,fig¬

was

000,000 kronor and the

the

possibility of renewal of the Green

to

years'

average

in

Currency

The

na¬

your

silver

of the Senate
Silver Bloc is expected to testify.;

to

of

1, ,1970

Company
owns
the
McKinley
Bridge, a railroad and vehicular
bridge, which crosses the Missis¬
sippi River between St. Louis,
Mo., and Venice, 111.
: ;

will

war

amounted

ours

the

1936-40, the
of

5% of

some

income,

would

of

idle

metal

July-

at^

offices

opened

Bowser

St. Louis

public offering of $13,500,000 First Mortgage 4% bonds
due

investment

Gardner/ A. G. Ed¬
wards & Sons, Edward D. Jones
& Co., Stix & Co., Metropolitan

1

approximately 710 an ounce,.

which

re¬

exports

your

that

to

Bill

users

Banking and Currency Committee

than it is to continental
empires like the United States or
Russia.

Railroad

Treasury during 1946 and 1947 at

sources,

.foreign countries before the

This

Bill.

measure.

limited

a

' f

18, the Senate Banking
Committee at its
first public hearing on the pend¬
ing Green bill heard testimony
from Secretary of the Treasury,
Fred M. Vinson, in support of the

opportunity to
more
important

nation

11

On Dec.

Sweden, a small country with a
relatively important world trade,
is vitally interested. ;:
,,,/

Newhard, Cook

balance

and

most
lundamental;,: pre¬

Eriksson

•(

Dec.

industrial

access

outadoubt,the
Herman

Silver

tin

insure

Considering

19—The
Representatives late this
passed the Green-Mar¬

afternoon

to

peace,

of Silver

J'

'J

"'i

.'WASHINGTON,

world

of

."..111

House of

the day, rank¬

next

Now

Senate

JPfcSI Cf

one

most

pressing
problems of

ing

Terminal

has

dealers:

/

-

Securities Publicly Offered

shares

Sale

Continue

Will

Years.

a

world

free

requisite

Illinois

Illinois

Bullion to Industrial Users for Two

am

that

sure,

f

Sreen Silver Act

country.

a

'

Recent

situa¬

pol¬

icies

As

the

and

the

holdt

a

discuss

St.

for

reflecting man¬
changes and greatly

improved operations.

chamber of commerce and its guests in a
world-center of trade such as New York, it is natural that I should
addressing

When

the

years,

agement
•

on

Exchange

Bauer

470 Park- Avenue to engage

jointly by Merrill Lyncti, Pierce,
Fenner & Beane and Kidder, Peabody & Co., of New York and G.
H. Walker & Co. of St.
Louis, and
included the following Missouri

Candy Common has
trading

Stock

past two

Compacts and Freedom of World Trade. Calls for
Possible Freedom in International Commercial Intercourse.

Trade

;

Industries.

Leo

East Orange

in

ORANGE, N. J.—Kenneth

'

'

A

,

Minister of Sweden to the United States

Swedish

EAST
*

•

,

Bauer

1

Missouri Brevities

'

'

3013

Stock

Exchange

Louis

Stock

&

Teletype—SL
New

OLIVE
152

New York

Exchange

Curb

Chicago

Exchange

Stock

STREETS

,

York Correspondent,

(Associate)

Exchange

SAINT
L.

D.

St.

Louis

506

Olive Street

ST. LOUIS

1,

MISSOURI

LOUIS

340,

Clark, Dodge & Co., 61 Wall Street

34i; .342

Teletype

—

SL 62

f

THE COMMERCIAL & FINANCIAL CHRONICLE

<3014

continued to forge
katchewans
their

ahead but Sasinclined to lose1

were

recent

Internals

: j
and

momentum.

active

less

were

Analyst, Basing His Conclusion

on a Statistical Study of 59-Year
Period, Holds That Chances of a Reaction of Sizable Proportions
in the Stock Market Is Not Likely to Exceed 10% From ike Present

free funds eased

By BRUCE

.«

slightly to 914%,'
although market opinion still does
not rule out an imminent restora-j

WILLIAMS

tion of the Canadian dollar to

Canada's vast neglected northern
frontier assumes a new vital importance. With the great land masses
concentrated in the northern hemisphere, Canada -in the age of air
transport, is situated at the center of the world air-map. The shortest
«reat circle routes between this country* and Europe, Russia and
Asia, pass over "the top of the world"—Canada's little known arctic
of

world

the

In

tomorrow

/.'

•'

boundaries.
ft is logical

to

that'to¬

assume

'•

;•

"

be

the

that

]

CANADIAN SECURITIES

the

cold

STOCKS

this

tion

with

the

program

is

of

-classes of

Canadian external

meeting

now

than

addition

In

and internal bonds.

will

North

Canadian

the

The

and

Exchanges,

or

at net New

York Prices.

;

Buffalo,

Direct Private Wires to

,r

/,///

■

,

,

im-j

of the.

have

far

Great

Bear

Lake, the Norman Wells oil

fields

of

Montreal

of

the

Grporatioti
;

40 Exchange
'
■
■

Bell System

Coppermine
It

in

Teletype NY 1-702-3

tian

will

Shield

i

North

The

strategical

the
increasing
importance of this

region

not

to

fail

near

of

CORPORATION

^

ceeding.. 10%

-the

the
present one)

including

and

lasts

the

said,

/

/

and

stability

Y//Vv■.///•:

trade

as

A. E. AMES & CO.

„

1,

value
war,

TWO WALL

Canadian Dollar in terms of the

crop

about

Toronto

Montreal

This

in
longer

conclu¬

all
an

market
upswing

it goes percent¬

further

action of

as

much

as

on
re¬

10%, but the

advance

percentagewise has also
less than for
other
upswing
of
similar

been

considerably

any

last

The

low

point since a de-

cline of 10% or more for the pres-

50%

the

above

Banks

—

Winnipeg

pre¬

Bought—Sold—Quoted

request.

,

-

WHitehall 4-8980
private
and

wires

to

Toronto

.

Montreal




31, 1945 and if not that then
March 31, 1946. This
is not to say that corrective re¬

about 265 by

experienced in the meantime.
a prediction that a cor¬
rection of greater than 10% won't
occur—anything can happen in
any market anytime. We merely
call attention to what the chances
are
based on a purely statistical
be

Research Department, J. R. Williston & Co.,, New York City.

&

a

in

'

London/England

Company

t h

in

t

on

e

ptemb e r
he found

Club of Toronto.

W.

Corporate

or

'

,

officers' chosen werer C,

Midland

McBride,

Securities

Limited, Vice-President; R. M. W.
Hitchcock, McLeod, Young, Weir
& Company,

Van

Ltd./Secretary; F. J,
Co./

Duzer, Mills, Spence &

Limited,; Treasurer;
Robert
Al
Webster, Royal Bank of Canada;
H.

P.

Bell, W. C. Harris & Co/
&c

Ltd.; D. S. Beatty, Burns Bros.
L. B.

Schwellenbach

Denton,
Ltd.;
Jay
D.
Sargent,
Hart, Smith & Co., Ltd.; Joseph
the foot of a
C. Mitchell, The Dominion Securi¬
Monte Frassino, Italy.
ties Corporation, Ltd., committee.
hill were three houses,
T. H. Baker, A. M. Ramsey &

himself and
his

detachment
near

the

at

of riflemen ad-

*An

address

by

Secretary

Detroit
Guild in

Schwellenbach before the
♦

& Sons was
the Bond

President*

Traders

Other

for

y

CANADA—

elected

Co,,, is
tee,

J.

Co.,

Municipal

moments
W. Wigle.

election,- L. L. Bell

recent

its

At

of James Richardson

courage,
gal¬
lantry and in¬
trepidity,
a t
risk
of
life,

day

ONT.,

TORONTO,

death '? he

Honor

of

"Family Spirit" in Industry,. *

a

Elect New Officers

/He
Sept.

troopers.
Twice a platoon

♦

Maintains That Author¬

Toronto Bond Traders

e

/ awarded
the
Congres¬
sional /Medal

Atop

canadian securities

<

sec¬

a

iieuten-

was

;

War Is Now

the

protected by a triple wall, and
commanded by 36 German para¬

Provincial

!

"v

v*-y.v

■

beginning to talk with you for a few
former resident of Detroit.
His name was Thomas

was

hill

♦

245 before

to hit

Dec.

Recommends

Are Essential.
wish

I

14, 1944. After

New York 5

WHitehall 3-4874

Government

historical precedent this in¬

ity Must Be Used to Establish a Quiet Zone in a Nerve-Wracked
World and Upholds Collective Bargaining, but Says the Public
Good Is Paramount and That Full Employment and Full Produc¬

died

;

v

*

Direct

on

dex would have

Disappearance of Industrial Strife.

Cause

a n

<

,

Stock Exchange

ly

That the Conditions Prevailing During War
Holds Elimination of These Fears Will

United* States

United States Dollar.

CHARLES KING & CO.
Toronto

indicates that based pure¬

Will Not Be Maintained.

Infantry.

of the

*8?
Members

industrial

ments of the Dow Jones

average

a

Labor and Management

ond

64 WALL STREET, NEW YORK 5

€1 Broadway, New York 6, N. Y.

ically, the correlation of time and
factors in the move¬

Sense of Fear Pervading AH Elements, Secretary
Schwellenbach Ascribes the Labor Unrest to a Fear on Part of Both' !

•He

1945
averages

Vancouver

TaYlor, Deale

Mines

consider¬

percentage

Pointing Out That Courage and Faith That Won the

tion

'

—

statistical

a

ably further distance to travel be¬
fore eventually experiencing a de¬
cline of as much as 10%. Specif¬

Secretary of Labor

Replaced by

S

Industrials

has

By HON. L. B. SCHWELLENBACH*
//•

yond the call
duty. On that

STOCKS

market

Conquer Fear and Have Industrial

above and be¬

CANADIAN

this

study.—G. Y. Billard, Investment

duration.

may

chart covering the period

written

upon

14 Wall Street,

NY-1-1045

on

that

Nor is this

fail¬

Incorporated'/
RECTOR 2-723!

conclusion

previous upswing
record without encountering a

conterbalancing

Wood, Gundy & Co.

N. Y.

/•.%

other

any

his

STREET

NEW YORK 5,

the

,50-year

a

actions of less than 10% could not

average.

TO JUNE,

1919,

available

upon

by those who

through

INCORPORATED

Copy

Doiv

agewise. The present upswing, for
instance, has lasted longer than

effect."
Discussing
foreign
trade,
Mr.
Arscott said that both.exports and
imports of "commercial" products
remain at a high level, with; a
a

monthly high and low

records

the

is

whole

a

while there

"and

suffered

have

have prepared a

JAN.
which

BiUard

simply is/ based

reached.

The

the

wherr

the

of

Canadian Funds in New York
we

Y.

•••

percentage

about

Under this title

Gordon

based upon. the demon¬
consistency between time

swings.

1943

study of technical market data is

/

markets

strated

,

Summarizing,
based

have been ten

are

There were, for in-^

more.

from 145.8 to 129.6, or about 24%)/

years

bull

.Nov.

Jones industrial average slumped

for

past 50
(there

,

or

November

11

u

on

,

ex-

b

• /

129.6

of "about. 5 %/• in<
1944, about 3 %,
January 1945,.-about 6%; inMarch 1945 and 5% in May-July
1945.
As previously pointed out/
we
are
not talking
about' these
reactions—what
we
are
talking
about are those
exceeding 10%
(such
as
the
break
in
July-

Considering

all

was

in

.precedent '/ '
isLany guide.. II

markets

/. ■———■ •

stance, declines
Jflly-September

m

m

/'••-*'

CANADIAN STOCKS

10%

histoid-

in

reaction of sizable

a

•'30, ■•1943. Since then there have
been declines but none equaling,

and non-exis-

reactions

:

■ -

ent .bull market

cal V

and by those seeking re-em ployment where war work has
ended, the requirements' of close
to 300,000 men and women who
already have returned to civilian
life from the armed forces should

Turning to the market for the
past
week,
further
substantial
gains were registered as antici¬
pated in high grade externals and
in Nationals in particular, which
pushed
through
their . all-time
highs.
Albertas
and Montreals

MUNICIPAL

a

slim

:

tent if

ures

lead to

and

Canada

conditions

be smaller demands

world in general.

PROVINCIAL

labor

prices.

have

future, to the economic ad¬

vantage

in

"Domestic

spectacular developments in the
GOVERNMENT

positive
further

a

profits
tax.
Two
other
requirements were stability

:in

cott

and

can

to-—:

/

still ahead of last year," Mr. Ars¬

map.

tremendous advance of air

transport

CANADIAN BONDS

the

on

•

excess

Alaska
placed the

Highway

Canadian

being put to work must be

vital

the

and

airplane

Military

Although

11.

substantial ' modification

the

of min¬
description, both

every

shareholders of

Dee.

on

•ihgly

sion /is

Bank

Canadian

the

removed.', He listed, as
step in this direction,

known, and as yet undiscovered.
The

Toronto

from

world's principal source
erals of

of

proportions •
(Say, Vexceedirig 10%) de-,
yeloping from ^g
preserit levels ;•

levels

Canada

in

''

'•

technicdl light, the chances of

the market in a

purely statistical data, that the
prospects of a reaction exceeding
this figure are more or less neg¬
ligible until substantially higher

and credit are available
for these large investments, Mr.
Arscott told the meeting that cer¬
tain-obstacles which retard capital

Ocean,

become

investments

"

Aside from the basic .underlying market factors and looking at

the conclusion

consequence.

money

-clear that the Canadian Lauren¬

!:

securities
differential

the bank at their annual meeting

increasingly

become

has

in

of Commerce, told

of the Bath-

area

jurst Inlet on the Arctic
r

Place, New York 5, N. Y<
.

the

over

domestic

existing

President

great outcrops of native copper in

Dohkhoti Securities

respect

production and trade, exclusive
of public works, may exceed $3,000,000,000, A. E. Arscott C.B.E.,

Basin, and the

Mackenzie

an,!'

have

in

'

Toronto and

this

narrow

Capital

mineral-rich Laurentian
virtually unexplored.
Where geologists and prospectors
have penetrated there have been
fruitful results—the gold of the
Youlcon
and
Yellowknife,
the
deposits

still

durmg the next four to five years

are

uranium

issues.

Capital Investments in
Canada Seen Large

economic repercussions.,
Northern reaches of the fab¬

Shield,

in

in

yield

grade

issues

the

should

ulously

Montreal and Toronto Stock

.

?

comparable

reaching

Stock orders executed on

the

demand for

advantage

frequently

up

,1

which

military

its

to

predominant influence

Canadian

war.

plications the opening

i

pros-4
in all investment mar-- A

as

the

pour,

future

to

outstanding. high

American-:

the
more

the

during

•is

to

parity/, en-,

any

:

1

kets the

part of

as

Canadian Board of Defense,

'MARKETS maintained in all

pects,

official

also .tendbd
on

•With Tegard

These steps

country

have

water

•Level.
/•;

unduly; areexceed- j

was

London

r o m

thusiasm.

in full coopera¬

taken

been

have

iONDS

Air

in the Arctic.

however,1

out,

margin

buying , and, selling
sterling.. .-Recent:$coiri'4

f

sources

Force expedition;
through the Arctic early next year
to explore the possibilities of mil-i
itary operations in this area. This
northward penetration will be as¬
sisted
by
the
current
studies
which are taking place at McGill
University on the problems of ex¬
istence

was,

1% /to

pointed

1%

of

ments

is

and

Army

from

Canada

in

official

rates

interesting to note
that Canada is about to send am
it

Thus

dollar

be

the

the

wide in comparison, for example,!
with the -14 % ^difference between

of

-spaces

U. ,S.

should

the

to

when

narrowed

Canada's
northern vempire constitute this }
country's Achilles heel.
f
uncharted

;parity move-,
spread .between
buying and selling. rates for}

the

f

future act of aggression will
by aiir. Therefore the wast

any

given

was

/

par-j

ity with the U. S. dollar. Impetus
ment

Thursday, December 20, 1945

Chapter of the Lawyers'
Detroit, Dec. 10, 1945.

(Continued on page 3038)

W.

a

member of the commit¬
.;

ex-officio.
II.

is
E.

Gundy,

Young,

Weir & Co.,
ran,

Wood,

Honorary

Gundy &

President,

McLeod,

and

Young,

Ltd., and H. E. Coch¬

Cochran,

Murray & Co., are

Honorary Vice-Presidents.

Volume

162

Number

4448

THE COMMERCIAL & FINANCIAL CHRONICLE

■

Chairman of General Electric Co.

t

Oiir

Aid Britain

Will Mean Creation of Economic

Basis

for Elimination of Trade Barriers and

Sees

Loan

as

Preferences.

'In

a

Advo¬

ber

This time

Com-

pointed

General

the

Electric

Com¬

pany,vigorouslv

ad

cated

vo-

of

Great

tain

the;

policy for
country

.and

sion

of the

can

>

■/' //

,.

the

of

"We

his

discus¬

United

the

He described

two

as

of the world .into,

four

or

blocs

battling

for

to

threat

be

to

piK'V'-*''"-'
would be

race

The

restricted

peace

we

a

he continued.. "It

contribute to
but it would

TIME

/;;/

In

in

editorial

an

v

severely at-/'''
.the

s

terms

dollar bloc and

a

a

inject

the

of

germs

World

War III, but would seriously limit

for making more
raising our standard of
living here at home. The fact is

jobs

and

that America and
world

are

Twins.

the

rest

economic ;

■

Although they

(Continued

on

of

the

Siamese

free to
page 3040)
are

bonds

eligible

on

It
same

t

the

bond.

jnounced,
the

in

t

-

average

loan

to

t

in

-

as

.

Jesse

;

,,.

to 55 years,

H.

Jones

largely at the

charged

year

on

on

the loan

the loan

1.62%, assuming that the
be paid

continuously

after five years. There is,
a

however,

provision in the agreement that

no

interest will be charged in any

year

where

alone,

an

the

United Kingdom

unfavorable

exchange

happen
,no

1

§
•

a

|

BONDS *

i

I

.

3;

I

-

V

.

the

the

.

.

these

securities

///

,

bought

be

can
;

;

//;

•

Wm. E. Pollock & Co., inc!

issue, the 2V£s due Dec. 15, 1967/72, can be

new

deposit banks si?t months
'

.

.

when

time

:.;■•••

sooner

ZO

between

we

for

equipment

:!///

believe
can

this

that

.

certificates

,

issue

will

be

above

the

'

'■

•' ..."

'

over

the likelihood, of

and

the

in

full

%%
I

the

little

if

/

settlement of

and

all.

Gladly

sacrifice
the

large
to

only

our

one

our

loan

at

own

substantial

year

international

position. If

this should

every year, we

would get

ment

by

dollar

our

controls,

after

the

ac¬

the




years

our"

(Continued

orypage

;,''i
•.

December 31.

levels.

.

.

certificates to 1%.

on

.

.

/..;': ';/.•

:!:\/:;;;'.yV/■■• ■//;■/!

.

There

seems

to

be

considerable

!

June

30

and

<

'' •'••••

Monthly or Special
Appraisal

....

Our

experience and facil¬

ities at your

Thus

:V

!we

will

will have- the

end

up

old

again lwith

cycle

disposal.

a

mass

...

repeating
of

poor,

itself,
quality

STROUD & COMPANY

and the
invest¬

INCORPORATED

Mortgage competition will be increased, with resulting
lower rates, which with a real estate crisis, will leave the banks
in a poor position.
\
...

PHILADELPHIA

...

has

Under

Pennypacker 7330

policy of further reducing the rate on certificates it is
indicated that the quality of bank assets will deteriorate substan¬
tially.
'.
All of this could result from the desire on the part of the

Parlia¬

a

now

coun-

though the Government's approach to the public debt problem should

.

j

not be

NEW YORK CITY

.

Treasury to save a few million dollars in debt service, by reducing
the rate on certificates from %% to %%*or Vz%." It seems as

3040)

each

.

logic

lower-rated issues in order to get income.

ments.

use

Appraisal

Complete dollar appraisal

Some money market students believe that the policy to follow at 1

concession

Britain

Valuation and

.

gre^t

interest whatsoever. If it hap- i tries of the British Empire to

pened in one-hall of the

:

■;/!//!;.

v

Semi-Annual

or

----

banks

enabling

%%

issued

taxpayers,

loan

to

yields continuing to decline they will be driven deeper into the cor¬
porate bond market.
v.
The AAA corporates will be bought first,
as
is being done today, but the yield on these obligations will go
down, so that eventually the deposit institutions and more particu¬
larly the smaller banks, will be forced to buy AAs, As, and even

making
a

British

which

thereby

.

from 7/s%

.

un¬

they agree to eliminate the
pool

.

this obligation

to the opinions that the
rate on certificates of indebtedness should not be lowered.
If this
rate should be decreased it will mean that the commercial banks will
force up further the prices of the
eligible 2s and 2Vis, and with these

been ratified by our Congress and

approved

V2%.

on

EFFECT ON COMMERCIAL BANKS

that the British make is that with¬
in

as

upon

change in the coupon rate of
have on the Government

Vf an infinitesimal sdving in debt charges, while the damage that
/could result from a new financing poliey could be very great.

!!

our

"In consideration of
very

low

furnished

request.

would

it

The cutting of the rate for certificates would result only in

return

investments,
materials and surpluses in Eng¬
land.
Obviously, this is .tanta¬
mount to a gift.
/
;
!"!
this

a

Weekly List

It has been rumored that the money managers are in

changing the rate

or even as

/!

effects

on

■

They point out that this could be done by increasing the rate of

any

paid $25,000,000,000 lend-lease
count

certificates

bids

.

.

will be getting under.:way and important decisions will

the

firm

practically all issues.

106

be bought by the deposit institutions.
•

Offerings Wanted
Immediate

.

this time would be to stabilize interest rates at present

bear

trust '

T

/V

SIGNIFICANT

financial.circles

money.

which

of

Y.

•

'.J,■■.?!■•'

...

by the time they

favor of

the in¬

pay

ST., NEW YORK 5, N.

TELEPHONE HANOVER 2-8 244

"•

-

PINE

drive

than the

.

substantial loss

very

£

1

MUNICIPAL
'

price,-although the-former issue will be bank eligible six months
ahead of the new.obligation, v
; Likewise the 2V2S due June 15,
1962/67, and the ?%s due Dec. 15, 1963/68, selling at prices that give
a larger yield than the new 2Vis due Dec.
15, 1959/62, both become
available for.purchase by the deposit! institutions ahead of the Vic¬

.

has

is

bond market

as¬

relationship to business principles,
our negotiators have agreed to ac¬
cept Britain's notes for $650,000,-

interest free, the

interest rate

interest will

I

GOVERNMENT

,

"In addition to the loan of $3,-

000

■

i'or five years, arid thereafter the
will be 2% per annum. Al¬

be

interest

interest

the

tions

rate

will

H

15, 1965/70, and the 2V2S due March 15,
1966/71,. with only a slightly lower return than the new" 2V4s due
Sept.' 15, 1967/72, will be available for purchase by the commercial
banks, in 1954, compared with 1962 for the recent issue.
The 2Vis due June 15, 1959/62, the Seventh War Loan bond and
the Victory Loan 2Vi£ due Dec. 15, 1959/62, are selling at the same

750,000,000, the terms and condi¬

convenience of the British. No in¬

average

STATES

SECURITIES

probably be coming .out of Washington shortly after the turn of the
year,>.which will no doubt have an important bearing on the money

collect from the British

we

borrowed

a

in-

lowing five

'V;/^-'"/'/

'

/;f;4,/

the

.4;;;./.Meetings,

we

the difference

and

the

terest is to be

UNITED

>

obligations

EYES ON WASHINGTON

make the loan and
British will pay it, we

have

terest

b 11 me his

from 5

//.'

;

new

non-bank-irivestors

would

e r e s t ' rate

the

on

the

will

that

annual

i ri t

,

suming that

750,000,000, to
jbe repaid
in
s

that

so

.

tJnited Kingid om of $3-

50

-

borrowing money from its citizens
an
average interest of > 1.92 %

dhat

make,

we

:/"V4/'

.

at

have

proposed

'

.

market.; !!// . One of the points likely to be considered will be the
:
future/rate on certificates of indebtedness which presently carry
"During. the past few years the
•Ws%%
coupon.:... There is considerable concern and discussion in
United States Treasury; has -been

i ted
negoti-

States

.

amount to 0.31%V >'

n

ators

.

Although -the call date of the 2Vis is three and four years longer
than that of the-new 2 Vis, the bank eligible date is in their favor..:.
the 2Vi's due Sept. 15, 1956/59, are well liked .at these levels and
still embody appreciation possibilities.
This: bond will ,be a bank
eligible obligation the 15th of next September, and many shrewd

®

v:'

following

"U

advanced to levels where

now

4.

"Chronicle," J Jesse /H,y Jones,
Federal Loan Administrator,

and

language:

</

investment

Inc.,

'Also the 2V2S due March

/V;''-; ;!/-////-;■

Houston

i n, a s r e- "
nt 1y a n- '

a

Milhol¬

Sternberg,

counsellors.

pointed out that the 214* due June 15, 1967/72, at the

was

priee

bought by

mark

Credit.

loan proposals:
to Great Brice

of

Griffin,

/

by .the commercial banks..;

Rus¬

bur opportunity

the

of

&

securities that

FACTOR

.

■

only

of Commerce

formerly Secretary
ta ck

wajf

Vice-

a

One' of the factors being considered in the purchase of the in¬

.

sian bloc, for example—would not

greatest

/Food and Raw Materials
„

the

to

was

so

Interest Rate Is Lower Than Long-Term Cost of Money to Treasury.
Says There Is Nothing in the Agreement to Indicate That U. 5. !
Will Receive Any Concession* Such as Foreign Bases, Raw Mate?
rials, Communications, Etc., Advocates, in Lieu of Loan, Sale of

.

President
land

were active
with trading centering
issues, which advanced to prices equivalent
were brought out during the Seventh
War Loan.
The Victory Loan bonds will probably not advance
much from these-levels, unless the rest of the restricted issues show
improvement, which is expected in trading circles.
:
>
\

those of the

CALL DATE

a!

Prior

.

.

.

the

In Houston "Chronicle" Editorial, Jesse Jones Points Out That

•

Street.

Milholland

Mr.

;/y,,v 4y;; ,/y,./.-;-//'; yV,,/,':,/y V-V.;;

largely around the

to

sure, -

.

figuratively, with tragic results.

j

Wall

Glore,

firm of

partially exempt bonds- followed the trend of the eligible
taxables, with the 2%s of 1960/65, 1958/63, 1956/59, the 2%s due
1955/60, arid the: 2 Vis due 1954/56,. moving up to new alltime

tory Loan 214s.

„

depart¬

Forgan &
Co. in their New York office, 40
change

The

RESTRICTEDS ACTIVE

ling bloc,

productive and
military power on earth," he as¬
serted, "and we simply cannot es¬
cape
the consequences of that
greatness/After World War I we
let George do it, literally as well
as

certificates.

on

PARTIAL EXEMPTS MOVE

world into economic blocs—a ster¬

States

World War II

emerge from

the

as

reduce the rate

highs.

of

loan proposal, he em¬

that

of ir¬

source

high employment,
reduce—not raise—our standards
living. .'.
'■'!'//' ;
^So also the partition ! of the

association,

bilities of world leadership.
V

reduce the
trade, he. said,'

world

war.

would,

longer avoid the responsi¬

no

of

greatly desire,"

introducing

phasized

drastically

"An armaments

held in the Stevens Hotel in Chi¬

In

eligible issues haye

another

direct

Philip D. Reed

Mr. Reed spoke at the 52nd an¬

cago.

exchange

sales

...

The taxable

domination.

government

will

economic dominance.

in foreign trade.
dinner

will

within ' themselves,

S. N. R., is now
the

of

ment of the New York Stock Ex-r

.

r

the
private enter¬
prise system

nual

.

ritation, ill feeling, and ultimately

serving

?

largely

three

of pre-,

means

1952/54,

again

highs were

to

that

world

the subdivision

the

as

loan,

of the worst things that could
happen, an armaments race and

;

this

us

/,
he

,

member

the unrestricted bonds to new tops.
The 2}4s due
1956/58, and 2Hs due 1952/54, the ZHs due 1952/55, the 2s due
1951/53, and the 2s due 1951/55, were also in the parade into new
high ground.
./•
."••'' /

mean

and will become the

soundest busi-

/ ness

alltime

1967/72, and the June and December 2s due

15,

sea

Commander, U.
a

.

the

volume

Bri¬

as

to;lead."

extend, the

to

out, will

under

proposed loan
to

.

made in
2'Vfcs due

Sept.

•

of

Milholland,
Jr.,
completed
three
duty as a
Lieut.

.

the bank eligible taxable list, with the old favorites, the

new

V.

recently

years

the

as

appreciation from here is limited, unless the money managers decide

This

,the

gives

very power

again

own

the crea¬
tion of economic blocs throughout
goods

exten¬

sion

Failure

.

f

o

our

ho alternative but

and

Chairman

.

leading

Cham¬

of

merce

into their

came

who

the

.

Dec. 11 before the Illinois Manufacturers' Asso¬

on

Glore, Forgan & Co.

.

Interna¬

tional

following

,

ciation, Philip D. Reed, Chairman of the United States Associates of
the

broadened,

Accordingly, many

address

an

"

Victory Loan and the period of
initial trading in the drive issues:
Money conditions improved
and the commercial banks were again in a position to resume their
buying of the eligible securities.
/. The Victory Loan did not result
in any increase in the amount of the outstanding unrestricted bonds
so that the deposit institutions, in their quest for income, -had to pay
higher prices for the available obligations.

Foreign Trade.
v

,

Edw. Holland Joins

•

on

bank eligible obligations

The

market

cates U. S.
Assuming Position of Leadership in World Cooperation
^JHid Calls for Greater Unity and Harmony Among Business Organi¬
zations, Congress and the State Department in Matters Relating to
:

■

Edward

Blocs and Dras-

tically Reduce Volume of Foreign Commerce.

'

.

By JOHN T. CHIPPENDALE, JR.

Philip D. Reed, Speaking in Chicago and New York, Says Failure
to

•

Reporter

Advocates Loan to Britain
,//

•

■

>.

3015

guided by

consequences

a

further minor cut in the debt service but by the

that will follow in the future.

...

REctor

•

Two

2-6528-29

private

Philadelphia,

1

wires-—
New

York

Teletype—PHLA 296 & 297

THE

2016

COMMERCIAL

Thursday, December 20, 1945

FINANCIAL CHRONICLE

&

—

tax
liability.
Amortization will
probably reduce reported earnings
for the current year* by approxi¬
mated $3.00 a share despite which
the company should be able to
show at least $4.00 a share on the

stock, Even with the

Speculative activity in Northern Pacific eased off considerably
When the directors failed to take action on a dividend at their No¬
vember meeting.
Actually there had been no reason for expecting

ness

such action as ever since the road instituted its post-depression
dividends the declaration has come after the December meeting.
In

road

any

hopes

-

distribution to

the

that

quarters

month's

this

at

authorized

be

meeting will be more liberal.
Considering
the
amount

v

of
by the company to

used

money

with
its recent refunding operation arid
the uncertainty as to general busi¬
ness
activity over the next six
months or so, it appears dangerous
connection

in

bonds

retire

put too much faith in the pos¬
sibility of liberalization of the
dividend
policy
at
this
time.
Rather, it would appear more log¬
ical to declare the $1.00 in Decem¬
ber and then another $1.00 at the
to

mid-year if it is considered feasi¬
ble to increase the rate. However,

regardless of whether or not the

dividend

rail

analysts

the

intermediate

term

The road did not

get

the

of

most

as

many

on

prospects
so

a

roads

other

characterized

formerly

early

"mar¬

as

in reducing its debt and
charges. There were no ma¬
turity problems to be worked out

ginal"

fixed

and

bank

no

tions

taken

be

to

RFC accommoda¬

or

of,

care

the

so

under no great com¬
retire debt.
Instead,
finances were
strengthened and
large sums were spent on, property
rehabilitation and improvements.
company was

pulsion

to

aims had been reach¬

After these
ed

a

debt program got under way

and progressed
the

At

rapidly.
indicated, about

reduction which compares
favorably with the accomplish¬

ago,

CHICAGO

a

ments

of

such

roads

Southern

as

Railway and Southern Pacific and

ANGELES

LOS

and

1

>

;

Solicited

on

Unlisted

Listed and

considerably

York

Central's

these

other

markets in

these

although

off

got

to

an

Earnings this year are naturally

cities

affected

adversely

celeration
fense'

of

by

ac¬

of de¬

amortization

projects although the same

factor will have a favorable influ¬
ence

York

Stock

finances

and

Exchange

So.

LaSaile

St.,

lington and Quincy, Which Comprises Use of Radio Telephone as
Well as Other New Devices.
Shows How Delays and Mishaps Are

thing there will not be

one

cut

reported

$3,000,000 below
the 1945 accruals/equivalent, be¬
fore tax adjustments, to $1.20 a
share. Finally, there are consider¬
ations in the Northern Pacific pic¬
ture

that

lead

its traffic

to

the

a

up

ready demand for all the wheat

that

will

be

produced as the war

ravaged countries will have to be
fed.
This is a cumulative consid¬
eration inasmuch the

prosperity of

served has

areas

a

influence

the

on

volume

bound miscellaneous

farm

of

should
farm

be

up

heavy

the

in the

there

shortages

war
a

in¬

of

with

backlog of demand built
years

strong

freight. With

and

prosperity

movement of

machinery.

Finally, lumber

traffic should be

high in reflection

of
a

construction

activity which is

"must" for the country.

Forest

products normally supply North¬
ern

Pacific

freight

>vith

some

materially

by the

the

in

vast

status

of the

Northwestern Im¬

owned

the

At

i\;: ,"

railroad fixed properties as:-distinguished
generally interconnected by the most modern

forms of corn-

including such

praise the value of existing serv¬
ices, and with that information, to

the

calculate the value of further sim¬

muni cation,
items

as

ilar installations.

of the tel-'

use

Now that it has become

ephone for
train dispatch¬
ing, telephone
and teletype
for

well

as

local
dress

i

and economical
portation service.

ad¬

systems

discount

in

above

the

provement Company,

h,

tal

has

facilities
been

made

little

at

H.

backer

after

only

and

time

a

years'; of experience, en¬
abling those responsible for rail¬
road operations definitely to apmany

•

'<

•-

.

:

i/

:

of power

today

as

bankers

held

generation

a

two

or

Selected

at

all

RAILROAD

When I first

••

Street

forty

work
years

the

ago,

bankers—both
the

large

of

cities

and

the

small

communit i

STOCKS-BONDS

e s

—had tremen¬

Railroad Bonds and Stocks

New York 4. N. Y.

Roger

Telephone BOwling Green 9-6400
Teletype NY

m y

-statistical
,;

Times

INCORPORATED
25 Broad

Its

Power?

of

CUARANTEED

-

1-1063

W.

Babson

dous power

make

'

-

or

businessmen

pflugfelder, bampton & rust
Members

New

York

This

and
This

Bell Teletype—NY 1-310

"

done

what ultimately

was

power

in

the

Government's

practically taking over the man¬
agement of the nation's banking.

New York 6

Telephone—DIgby 4-4933

be

resulted

Stock Exchange

Broadway

unions hold

clipped and a banker is only
businessman like the rest of us.
In those days, labor had very

been
a

power
and
labor leaders
looked upon as "irrespon¬
bolshevists."
As the power
of the bankers waned, the power
of labor
leaders, has increased.
Today, many labor
unions are

little

Now,

the

bankers'

to make or
manufacturer,
mer¬
chant or other businessman.
Let
us
hope that labor will consider

wings

have

enough

powerful
break

any

sacred trust in the in¬
people as a whole;
labor leaders will be
dethroned the same as were the

its power a

of the

terest
Tf

not,

our

In

bankers.

can,,

group

a

democracy, no one

long,

for

abuse

Labor

Unions Increase

Unemployment

'•Apart from the abuse
is

labor

fast

reaching

it will kill

where

BATES

big .mastodons
throughout
to Sir
Isaac Newton's Law of Action and
Reaction, commonly known as. the
(Continued on page 3034)

weight as did the
of

Every

old.

has

historv

group

been

subject

(When

UNITED

63

Wall

Street, New York 5

BOwling Green
3ostoD

9-8120

Tele.

Philadelphia

NY

1-724

Hartford




Members New

Com.

BOND

i

UTILITIES, Com.

ONE WALL

co.

TEL,

Member of National Association

52 wall street

of Securities Dealers, Inc.

HAnover 2-9072

n.

y.c.

BROKERAGE SERVICE

Specializing in Railroad

•»

1. h. rothchild &

York Stock Exchange

Issued)

PUBLIC SERVICE,

UNITED PUBLIC

Adams & Peck

Mclaughlin, baird & reuss

MANUFACTURING CO.

5

STREET

HANOVER 2-1355

f

Tele. NY 1-1293

of power,
a
point

itself by over¬

Railroad

Bought—Sold—Quoted

its

power.

to

by granting or
withholding credit and advising
others to
follow their example.
could

61

seriousness of the present labor

break

merchants,
in
general.

manufacturers,

Beech Creek

Congress Does Not Act,

sible

Hi

Situations

to Be
"Fool¬

were

ago.

started

-v

So Powerful

remains that labor

the same posi-<»

v

Members New York Stock Exchange

'

\

BABSON

Labor Unions Have Become

People may disagree as to the
The fact, nevertheless,

contracts.

Telephone REctor 2-7340

(Continued on page 3039)

,v

situation.

120 BROADWAY, NEW YORK 5, N. Y.

SECURITIES
•

December

That, Like Bankers a Half Century Back, They Will Have
Dethroned by Governmental Power.
Lists a Number of

SUTRO BROS. & CO.

RAILROAD

of Security Analysts, Rail¬
in New York City,
7, 1945.

road Division,

ROGER W.

By

Mr. Babson Holds That

Abuse

i

York So¬

Insuring Against Labor Troubles

Will Labor

Specialists in

ciety

the New

before

Hassel¬

Mr.

by

address

sAn
H. Hasselbacker

a

losses

assume

issued"

r.

these

Company

profits and

•

12,000 miles of experimen¬
runs
made on the Burlington

proof Labor Stocks" and* Concludes if
There Mav Be a General Labor Strike.

Utility Corporation

"when

trans¬

The

applica¬
of

tion

is

Runs.

stations, yards
and terminals.
The

an

Information from Experimental

passenger

n

of

field

sew

com¬

units,
service

adequate

and

use

public

mobile

to

doubt, want to know how this will
be beneficial in promoting a safe,

for

as

facilities for

munication

available. As analysts, you will, no

dis¬
service

long

tance

possible

to extend these

ennre

tion

We will

Signal

Existing

(

present time

from mobile units are

im¬

jointly owned Burlington and the
wholly

Equipment.

Displace

Aside from these

revenue.

provement

Says Radio-Telephone Is

Moving Trains and Station Employees.
"An Additional Tool" and Does Not

20% of its

direct considerations Northern Pa¬

ened

1

Between

Communication

Effective

and

stant

that

belief

better than
that for the industry as a whole
during a reconversion period.
7
Wheat is a very important traf¬
fic item, normally accounting for
slightly more than 10% of freight
revenues.
Certainly there will be
will, hold

Promoted by Devices for In¬
Trains or Between

Avoided and Economy and Efficiency

charges

Fixed

net.

should be at least

Seaboard Railway

111.

Chicago 4,

The Actual

,

Broadway, New York5,N. Y.

231

For

Made in Extending

Railroads to Promote

on

Safe, Adequate and Economical Transportation Service.
Illustrates
Operation of Modern Equipment on the Chicago, Bur¬

particular

other

leading Security and Commodity Exchs.

120

by reducing the

General Public

MEMBERS
New

on

Communication Facilities for Mobile Units

considerably

be

cific's position has been strength¬

refunding nextt year.

'

*

being
with

record

roads

New

position to do some further lower

epupon

Securities

than

better

earlier/start.
Present
indicated
fixed charges of $10,500,000 should
put the company in a sound posi¬
tion to operate at substantial prof¬
its
consistently
during
normal
business
cycles.
In addition to
which the company should be ini a

BIRMINGHAM

Orders

is

Railroad Operating Official Describes Progress

higher than those for 1945.

the'farm

below the level of ten years

29%

should

annual

time

present

fixed charges are

Direct Private Wires to:

now,

with favor

look

for the shares.

start

general busi¬

facing the coun¬

the acceleration of amortization to

increased

is

By II. H. IIASSELBACKER*

Superintendent of Telegraphs, Chicago, Burlington & Quincy Railroad

result of .work stoppages

a

the' 1946 results of this

paid and there have

three years $1 a share has been
expressed in some^

each of the past
been

uncertainties

try as

^—,

Modern Railroad Communication

Philadelphia Tefepho/ie

Securities
NEW YORK 5

TELETYPE

NY

1-2155

Lombard 9008

Volume

NYSE

Solving the Transportation

v

Member, House Committee on

announced

That It Is the Purpose of Con¬

Interest

Service, Asserts There Is No Intention to Re-write <.he
Commerce Act.
Says Our Far Flung Conglomeration of

Interstate
Transpor-

from

the considerahave

mote

the In¬

enced

terstate

to

mittee
dertake

in¬

transporta¬
tion services, without unjust dis¬
criminations, undue preferences or
advantages, or unfair or destruc¬
tive competitive practices; to co¬
operate with the several States
and the duly authorized officials
reasonable charges for

vestigation of
transportation
problems, for
in

we

Con¬

know

gress

shippers

that
and

transpor¬

tation

thereof;

agen¬

prob¬

lems

in

and

to

"

the

Iti

iff

Oren Harris
"
f jj- '■ f;;.
xf.

long and difficuIt period >

,

perhaps

s

a

not, in

any

sense,

repre¬

senting the Committee. Any opin¬
ions

that

own

and

I

express

may

are

are

my

not, necessarily, the

opinions of any other member of
Committee.

our

Our Committee is composed

of

the ablest

of

in Con¬

men

They think' for themselves.
differ
widely
on
many

gress.

They

questions but there is unanimity
of opinion among them on one
point. We believe that transpor¬
tation, from the overall view¬
point, rail, highways, water, air,
has only one mission and that is
service to the public. It is not an
itself. It is

in

end
If

it

an

instrument.

.through
mis¬

becomes inefficient

its " own
.

errors

or

through

fails
through neglect in Congress, the
whole public suffers. ^ C?. {
takes of regulatory bodies, or

i

And

we

should

never

forget

who the real owners of transpor¬

the

companies,
depositors
in
thousands of savings banks and
other
holders
of transportation
ance

securities.

■I

..

The approach then of our Com¬

mittee to the solution of these per¬

plexing problems stems from so¬
licitude for the users and the real
owners

of

transportation

facili¬

ties. And when we have said that,

have said practically the whole

we

American public.

it wrote the fol¬
lowing declaration of policy as the
preamble to the Transportation
Act of 1940, as we. sought to pass
an act that would,
and I quote:
Congress when

''provide for fair and impartial
regulation of all modes of trans¬
portation subject to the provisions
of this Act, so administered as to
An

address

by

Congressman

one

as

patch

of

all other collateral $588,-

Some of my

the

be

located

Sun and

private
offices

Bishop Pot¬

when

first

i.7'

will

the main

with

A direct

connect
New

on

home-sewing

field,

this

to all who

exhibit

are

inter¬

ested in their homes and in cloth¬

themselves

for

ing

for several

time,

will

be

exhibits.

.

pects of home sewing

made

in

Varied
are

Broadway,

announces

York

New

Bonner, U.S.A., has been released
from active duty and has rejoined
their organization.

Davis & Davis to Admit
PROVIDENCE, R. I.—E. Russell
Davis, Jr. and Foster B. Davis, Jr.
on

as¬

stressed,

January

ners

1

will become part¬

in Davis "& Davis, Grosvenor

Building,

glamour, through technical

members

of

the

.

\V>%Equipment Trust Certificates

7
,.

These

each January

on

•

ij 1947 to

1956, inclusive

guaranteed unconditionally as to principal and dividends by endorsement
by The New York Central Railroad Company.

are to be issued under an Agreement to be dated as of January I, 1946
provide for'the issuance of $17,700,000 par amount of Certificates to be secured
standard-guage railroad equipment, estimated to cost approximately $22,308,500.

Certificates

which will

political adversar¬
enough to say

by

new

ies have been mean

that

melon patch was responsi¬

a

MATURITIES AND YIELDS

ble for the loss to agriculture of a

the cre¬
ation of a mediocre politician. But
enough of my good friends and

darn good farmer and for

neighbors, I am glad to say, think
otherwise and have sent

me

1947

0.90%

1948

1.05

1949

1.15

f
:v

I

1950

1.25%

1951

1.35

1954
?: 1955

1952

1.45

1956

VW- 1953.

three

' 1.55

r

1.65%
1.70
1.75

•

times to Washington as their rep¬

resentative/It
I

slid

is

apparent then
meeting by

this

into

of Washington

on a

Issuance and sale of these

-

"

-

couple of

carloads of melon rinds.

Certificates

are

Offering
of the
'ffif.:

subject to authorization by the Interstate Commerce Commission. The

be obtained in any State in which this announcement is circulatedfrom only such
undersigned and other'dealers as may lawfully offer these, securities in such State.

Circular may

jjfx

C Another circumstance gives me
certain

right to talk to your
You are engaged in the
shipping and marketing of the
farm products that your hillsides
and valleys yield so bountifully.
Our hills and valleys in Arkansas
also yield a bountiful produce. If
the sun of your beautiful Finger
a

?

group.

BLAIR &

[ HALSEY, STUART & CO. Inc.
EQUITABLE! SECURITIES CORPORATION

CO., INC.

If;:.

HARRIS, HALL &. COMPANY
1

(incorporated)

L. F. ROTHSCHILD

OTIS & CO.

THE

CO.

f

R. W. PRESSPRICH & CO.

(incorporated)

,

;

&

*':■

'''1

PUTNAM & CO.

ILLINOIS COMPANY

Lake section enhances the sweet¬

glamor and potency of your

ness,

grapes, we can

corn

our

due to our moonlight.
moonshine does to our

JULIEN COLLINS &, COMPANY

McDONALD & COMPANY

MULLANEY, ROSS & COMPANY

THE FIRST CLEVELAND CORPORATION

NASHVILLE SECURITIES COMPANY

in Arkansas produces a re¬

sult which

vorably
said

that

be compared fa¬
what the sunshine
grapes. I have heard

can

with

does for your

it

HAYDEN, MILLER & CO.

FlRSTOF MICHIGAN CORPORATION

also claim for our

certain enhancement of de¬

corn a

ALEX. BROWN &, SONS *

our

a

SCHWABACHER & CO.

F. S. YANTIS &. CO.

THOMAS &. COMPANY

SINGER, DEANE & SCRIBNER

UDon our corn,

C. C. COLLINGS & COMPANY
incorporated

healthy kick!

Transportation Is

MASON, MORAN & CO.

KEBBON, McCORMICK &. CO.

incorporated

(Arkansas white

mule, which feeds

packs

ALFRED O'GARA & CO. ! '

PATTERSON, COPELAND & KENDALL
a

incorporated

Tool

,

It is not about the products that

the members of your Association

and market to the people
but about the mechanism through-

,

made
today.

that

conveyance

•

To be dated January 1, 1946. Principal and semi-annual dividends fjanuary 1 and July 1) payable in New York City.
Definitive Certificates in coupon form in the denomination of $1,000, registerable as to principal. Not redeemable prior to
maturity. These Certificates are offered for delivery when, as and if received by us. It is expected that Certificates in
temporary pr definitive form will be ready for delivery in New York City on or about January 7, 1946. The information
contained herein has been carefully compiled from sources considered reliable and while not guaranteed as to complete¬
ness or accuracy, we believe it to be correct as of this date.
/
,

That mechanism is in mgw -^rms.

(Continued

on page

3024)

December 14, 1945.

New

York and Boston Stock Exchanges.

*

(PHILADELPHIA PLAN)

annually $1,770,000

City,

that Captain Gerald A.

their

and

months, during which

changes

individual

from

120

The exhibit will be open

families.

1

To be

York

Bonner & Bonner Incorporated,

Dec. 3.

EfI $17,700,000 jffi

To be due

these

—

Equipment Trust of 1946

Teachers College

is




Whitehall

the

at

New York Central Railroad

were

that I would speak to you

tady, N. Y., Dec. 12, 1945.

un¬

be

Rejoins Bonner & Bonner

a new

points, to re-make ideas.

$

two

which

Schenec¬

The

11

Surf Club.

wire

office.

Supported
by leading manufacturers in the

I

Fruit and Vegetable Shipoers and

Association.

Hotel.
w

adequate
display carrying out

a

With this in mind

at the Bank

057,847; total $911,115,092.

na¬

Harris before the New York State

Receivers

offices

managership of Arthur J.
Henry and Burnett W. Straus and

exhibit, featuring sewing, bpened

$323,057,245;

course,

Arkansas State

for

space

this idea.

to

(2)

The

under

ter, has made available

interest by the United

Government

on

time residence of

Beach

Beach

be

will

der the
will

31,

States

convey

*

or

mine.
the finest
melons that ever grew. They net¬
ted
me
$833j67 and with that
profit I was off that fall to the
that

were,

What

Declared Policy of Congress

The

interest.

sirability

These considerations influenced

obligations guaranteed

of

from

ket

They

way

holders in hundreds of life insur¬

direct obligations

those sun-kissed Ar¬
kansas melons that went to mar¬

through financial default due
to breakdown in our transporta¬
tion machinery are the policy¬

fer

on

about trans¬

1923,

of

spring

carloads

that

are.

(1)

Dec. 20th

Florida.

in

office

Hollywood
Palm

and

as

Oct.

in

of materials in their costumes and

helped to plant a melon patch in
which I was to have an important

Among those who suf¬

tation

or

principal

organization that I am
not entirely out of my element. As
a boy .I started out as an Arkansas
farmer. I was a real farmer and
did not become one when I sought
to run for office. I remember well,

financial
:

some

of

was

basis,

same

force

vital

a

home furnishings.

borrowed,

business

offices

new

the management of John H. Kap¬
lan
and
will
be
located at the

$963,-

of

ture of this

in

ex¬

Empire

great

the

into

here

up

portation. But I see from

am

1945,

the

on

close

little presump¬

State and talk to you

I

the

tuous for an Arkansawyer to come

And we have already found
that, in more ways than one, set¬

tling down to peace is a harder job
than setting up for war. -

compiled
of

money

the opening on

of

Hol.ywood

will appeal

of

total

nounces

fair
working con¬

of readjustment to an economy of
peace.

The

4th Ave. at
McElvare,

R.

believes thrift is

of business

aggregated

Rowland

H. Hentz & Co., 60 Broad Street,
York City, members of the
New York Stock Exchange, an¬
New

encourage

and equitable
ditions.''
V •'
wages

cies must face
-these

economic

*

transportation and among the sev¬
eral carriers; to encourage the es¬
tablishment and maintenance of

un¬

an

and foster
conditions ; in

service

efficient

sound

Foreign Com¬
merce
Com¬

30, 1945
175,307. ' ►

economical,

adequate,

safe,

and

d

a n

Nov.

recognize and preserve the inher¬
ent advantages of each; to pro¬

th a t ' i
influ¬

t i o n s

Savings,

St.

Acquisition for
fuiure Bank expansion of an ad¬
joining old brownstohe residence,

borrowings from other

of the close

new

day living, of which puttingaside in a bank is only
one of many forms.
Through this
new fc/hibit, the Bank is encour¬
aging people in the effective use

or

as

the

money

interest by the United
was $422,277,481; (2) on all other collateral
$540,897,826;
reported
by
New
York
Stock
Exchange Member
Firms

by

Opens

Senior Vice-President of the Bank

States Government

<♦>-

apparel

every

changes, (1). on direct obligations
of or obligations guaranteed as to

afforded me to lay
of transportation some of

the

offered

is

for

Bank

22nd

borrowed

money

members oi national securities

principal

New Fla. Offices

of

solution

"Make It Yourself" exhibit at The

re¬

banks, trust companies and

excluding

[

representative body of users

before such a

as

v■.

of

Exhibit at Bank
shortage

other lenders in the United States,

pleased with the opportunity you have

I am

■

total

The

;

'{■* Common Carriers and Private Owners as Well as Between the
Various Carriers Themselves.
Holds if Private Operation Cannot
Be Maintained, Socialism Will Result, and that a Way Must Be
Found to Make Private Capital Available to Carriers Subject to

''

the

The following is the Stock Ex¬
change's announcement:.,'.. .

Agencies Is the Result of Free Competitive Enterprise and
That the Problem Is to Prevent Unbridled Competition Between

i Tax-Assisted Competition.

'>

H.Heniz& Go.

One

;

tation

•

that

4,

borrowed

money

Oct. 3i.

Uphold Private Operation of Transportation in the Public
and to Preserve Inherent Advantages of Each Type of

to

of

total

Dec.

on

"Make it Yourself"
Exchange

ported by Stock Exchange mem¬
ber firms as of the close of busi¬
ness on Nov. 30 was $963,175,307,
as compared with $911,115,092 on

from Arkansas

Interstate and Foreign Commerce

Congressman Harris, Maintaining
gress

The New York Stock

HARRIS*

By HON. OREN
S. Representative

Borrowing

Higher in November

Problem
U.

3017

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4448

162

_

'

*

THE COMMERCIAL & FINANCIAL CHRONICLE

3018.

Beyond the Call of Duty

1946 Price Guarantee to Farmers

i

Bank and Insurance Stocks

The bells

ringing;
The lights are bright again;
4
And children carols singing

A. VAN DEUSEN

By E

This Week

For

once

are

more

By

'

II
The

home

hero

!

'

Use of Guarantees Above Levels Provided by Law Than
During War and That". Guarantees Used Will Be Materially Lower
for Many Commodities
Says Study Is Being Made for Renewing
Whole System of Supporting Prices.

r

i'

Here

are

few

a

There has beeii

no

general statements about support prices for 1946.
change during the past year in the legislative basis

:'■,■

■

'

Income

Investment

pet

Share
CuVrent

1939
$

■

•$
1.91

1.75

4.58

4.30

•4.13

4.1.)

'

7

1.92

-

2.14

What
Let

shall

war

1.80

God, No!

4.29

3.50

For Love

1.34

1.33

1.37

1.40

1.38

1.41

1.37

1.20

1.49

1.30

1.62

1.. I ■'

1.45

1.00

0.69

0.67

0.60

we

Equitable—

0.98

American

Insurance-^

0.64

0.64

0.63

0.83

0.68

0.42

0.46

0.49

0.44

0.42

0.43

0.44

0.30

A hero 'needs

5.51

5.88

6.35

5.90

4.73

5.19

5.59

4 00

31.22

31.74

31.32

30.88

21.00

In peace

30.82

1.74

1.43

1.38

1.63

1.00

2.34

2.33

2.41

2.30

2.00

•2.70

2.54

2.20

3.93

3.92

2.50

1.35

1.51

1.00

Bankers ds Shippers-

City of

York——

New

Continental

—--

Phenix—*—-

Fidelity

Association—

Fire

—-1—

Franklin

Glens Falls———
Great

1.75

2.14

2:23

2.36

2.27

2.41

2.61

2.62

2.63

3.79

3.69

4.05

4.08

3.95

1.39

1.58

1.84

1.58

1.33

1.14 r

0.87

wl,03

1.19

1.26

1.26

1.25

Fire———-

2.88

3.00

3.03

3.24

Hartford

1.37

Insurance

1.52

—

Mfrs

&

Fire—
National Liberty—

_u_

Brunswick

—

York

North

Fire

River

—^r.—

"Beyond the Call of Duty"

1.54

1.59

1.62

1.45

1.44

1.57

1.20

4.00

4.32

3.76

3.00

3.55

3-69

0-44

0.44

0.56

0.49

0.51

0.64

0.51

0.40

2.75

2.62

2.54

2.367

2.33

2.55

200

0.38

0.43

0.46

0.41

0.38

0.38

0.41

0.30

2.00

2.24

2.24

2.15

1.96

1.98

2.10

1.50

2.14

*2.21

2.26

2.22

1.96

2.13

1.28

1.06

1.17

7

1.18

1.33

1.18

0.80

1.12

1.19

1.12

1.00

1.79

2.00

1.79

1.59

1.56

1.72

3.22

3.34

3.52

3.43

3.35

3.33

Washington——

1.65

1.72

1.71

1.78

Security Insurance——

1.79

1.67

1.84

1.96

1.52

1.68

1.75

1.40

5.51

5.57

5.72

5.45

4.75

2.68

2.55

2.00

1.82 >

1.69

1.60

Prov.

—»-■

.——

1.80

Springfield F. & M.—_

5.27

5.21

5.44

TJ. S.

2.38

2.49

2.57

2.52

2.63

1.62

1.60

1.69

1.70

1.73

Fire

——

Westchester

———

CHARLES T. GREENE, :

-

-

examining this table, it will income since 1941 is probably
be observed that the met invest- attributable to the fact that durment income of most companies ing the war years they invested
in v 1944
exceeded
the
six-year j more heavily than usual in Govaverage.
There are 10 exceptions, ernment bonds, rather than in

however, viz.;. Baltimore Amer¬
ican, Bankers & Shippers, City of

equities.

New York, Franklin, Home, Na¬
tional Fire, National Liberty, New

York, found it necessary in 1944
In the

Brunswick, Paul Revere arid Se¬
curity.
Seven of these 10 belong
Fleet," and the de¬
their

in

rate.

of the casualty and

Investment

Income

per

Share
Current

1940

1941

0.81

0.68

2.34

2.51

Casualty..,

2.07

Insurance—!—

0.56

246
0.61

1939

1942

Continental
Excess

4.69

1.49

Pref.

Accident—

Seaboard

,

1.23

—

Surety-*—

1.32

U. S. Fid. & Gty.——_

1.41

.

income

in

1944

rate

is

within

well

1944

1944

1943

.)

lower

report

six-year average,

Exess

Casualty,

In the

.of

case

•'•■ $

Avge. Div. Rate
$

3.66

2.96

2.50

consistent

1.98

2.41

2.01

2.00

the other six companies show

0.44

0.30

0.30

0.23

0.41

5.03

5.30

5.68

542

6.00

5.31

5.21

5.24

5.05

3.50

dividend rate is covered by

J.91

1.81

1.81

1.71

1.00

1944

0.80

the

1.02

■

0.64

1.25

0.96

1.27

1.55

1.66

1.76

1.69

1.58

1.61

1.80

-1,63

the

above

six-year

0.71

r

0.60

-

1.06

1.13

1.78

4.63

1.80

1.92

1.66

1,50,

average,

Only

irregular

and

unbroken

trend;

gri

uptrend.,

The

current

boith

investment Income

net

and

six-year average in all cases
& Deposit and Sea-,
board Surety.
Fidelity & De¬

but Fidelity

four

companies, however, viz.: Fidelity-Phenix, Hartford, Hariover and

posit, however, has also reported
Consistently
good
underwriting
profits

approximately

has

also

reported

Surety

consistently

underwriting results for

favorable

Trust Co.

apd

$16

Seaboard

$22 per share.

FIRE INSURANCE

varyihg

the period,

over

between

CLEARS

producers have been,
'obtaining for the commodity.

Completion of the schedules of
support prices for 1946 for some
commodities is still some distance

In

been

a

with the goal recommendation, at
this time, but for the most part we

anticipate that the important cle->
ments of proposed support pro-

few cases in
be justification

for 1946 will be available

grams

for

consideration"

connection '

in

with the goal planning at
stage during that process.

some-

/

■

announced:

Kohlmeyer, Newburger
fo Admit James Fox
NEW

reduction below the current

some

support is quite possible.

meyer,
:

ORLEANS, LA.—KohlNewburger & Co., Caron-

delet Building, will admit James

,

many years.

,'''. ^I.,

.

erage

for

the

is $1

per

hundred pounds less than the

cur-

rent

support.

price

is

season,

This

new

support

approximately

minimum level which the legisla¬
tion authorizes.

In the process of reviewing past
support programs and adjusting
them, where they are not already
adjusted,
to
this
minimum
level, the specific price schedules
so

Leon E.

Newman, all of New Or¬

leans.

Royal Bank of Scotland
Incorporated by Royal Charter 1727

.

being • reviewed fJr the

are

*

Kohlmeyer,
Herman S.
Kohlmeyer, E. Kirby Newburger, ancf

HEAD

pur-

OFFICE—Edinburgh

Branches

A

throughout Scotland

LONDON OFFICES:

transcript of statement made
by Mr. Boyd at the 23rd Annual
Agricultural Outlook Conference,)
Washington, D. C., Dec. 4, 1945.

3

Bishpsgate, E. C, 2

8 West

'

$miihfieldt E. C. /

49 Charing Cross, S. W, /

THE HURDLE

f

Burlington Gardens, W, /

Bought—Sold—Quoted

64 New Bond Street,

W, I

BANK OF AMERICA
"•

Laird, Bissell & Meeds
120 BROADWAY, NEW YORK 5, N. Y.

Telephone: BArclay

'

TOTAL ASSETS

ARDEN FARMS COMPANY

0./vu»t'Ct<Y>4O.

Members New York Stock Exchange

Members New York Stock Exchange

ond other leading exchanges

7-3500

BtU Teletype—NY 1-1248-49

1 wall st.

£115,681,681

KAISER-FRAZER CORPORATION

*
'

KERIV COUINTY I.AND COMPANY

new york 5

Associated Banks:

•

Williams

(L; A* Gibbs, Manager Trading Department)

Telephone Dlgby 4-2525

PACIFIC GAS; AND ELECTRIC COMPANY

Deacon's

Bank,7 Ltd.

Glyn Mills &.Co.

( Preferred^)

SAN DIEGO GAS AND ELECTRIC COMPANY

PRIMARY MARKETS IN

Sold,

Bought

BANK and INSURANCE STOCKS

Quoted-

NATIONAL BANK
of INDIA, LIMITED

First California Company

GHEr run.
10

Post

Office Square

h°8bvrfn?65°
97

NEW YORK 5

67

Wall Street

Whitehall 8.0782
iV)
i
-2875

PRIVATE WIRE SYSTEM CONNECTING:

NEW YORK,

Office:"26, Bishopsgate,
London, E.C.

-

Burma, Ceylon, Kenyn
Colony and Aden and Zanzibar

Branches

CHICAGO 4
231

S. 1CaSalle Stmt

FRAtlKUM 7838

300

Montgomery Street

650 South Spring Street

•

SAN FRANCISCO 20

LOS ANGELES 14

YUkon 1551

TUcker 3151

*

Teletype SF 431-432
BOSTON, CHICAGO,

Oakland
San

Diego

San Jose
*

in India,

Subscribed Capital
Paid-Up Capital
Reserve

CG-ios

PORTLAND, Enterprise 7068
PROVIDENCE, Enterprise 7008




Head
*

investment securities

PHILADELPHIA, FT. LOUIS, LOS ANGELES

HARTFORD, Enterprise 6011

Bankers to the Government; in
Kenya Colony and. Uganda

:

incorporated

INCORPORATED

BOSTON 9

3

few cases the specifier
information is not available along

away.

This means that support prices /M. Fox, member of the New York;
will be materially lower for many : Stock. Exchange, to partnership:
Excess, the 23c. in 1944 is pn .commodities than they have been on January 1, the firm thereby;
200,000
shares,- compared
with in the last couple of years. For ex- becoming Exchange members. Mr.
151,000 shares in previous years. ample, the support prices for hogs Fox was formerly a partner in
No adjustment for this has been
for the year beginning next Sep- Robertson & Co., New York City,
made in the figures.
American tember 1 has been announced and Other
partners
in
Kohlmeyer^
Surety is the only one to show a the level of that support, as an av- Newburger & Co. are Charles

Preferred Accident.'

3.25

4.85

re¬

sugaV
sugar qaue, and flaxseed-.
Other possibilities, where we are
considering
support
above
the
minimum level, are dry beans and
soybeans,
although
even
here1

viz,: American
Insurance and

3.14

4.69

ready
beets,

merit income in 1944 than for the

•1.73

"1.74

returns that

very

there will

between the support-price
the actual average,

schedule and

Some of those exceptions have al-1'

investr

net

1.72

1.52

lation

or^ need for maintaining support
above this minimum level,

It will be noted that three com¬

panies

2.86

4.99

there

cific

prices

]

:

be

reviewing experience of past
which throws light on the re¬

should be speques¬

<

years

B. Boyd

will

which

income and also within

vestment

the six-year average.

:S

■

there

in¬

net

0.68

Twenty-three of the companies
In the table reported net invest¬
ment

upward trend since 1939. On the
other hand, 19 out of the 33 com¬
panies show an irregular upward
trend,
with
1944
income well
above the 1939 figure.
It will be
noted that, with the exception of
Glens Falls, - the current dividend

.

5.07

4.95

Fidelity & Deposit——
Massachusetts Bonding
New American Casualty

America,
unbroken

S

.

0.71

North

consistent and

a

0.76

■

$

America^ Casualty
American Surety——J4

are

.

surety companies

Casualty and
Net'

.case

dividend

business, figures for 10
representative c o m p a 114 e s are
shown in the following table:

investment

net

its

surety

to the "Home

cline

Eac^i of these{ "Home"

companies, except City of New
reduce

of

Insurance

show

In

to

do

.

Christmas 1945

1.40

1.76

1.87

to

.

3.00

.

tinized very closely and grade dif¬
ferentials are likewise. Also we

so

garding them.
The princi¬
pal change which we anticipate in
support of prices for 1946 as compared with those- we have had
during the war will be less use ofsupports at levels above the mini-'
mum provided
by the applicable
legislation.
We
anticipate
that

>

For

no

tions later

HoWard

Amott, Baker & Co., Inc.
\[■ ''V-"New York City

1.20

1.59

Phoenix

should know-the beauty

men

Of Love that makes them FREE!

1.80

1.13

1.12

3.14

Revere—

Paul

1

level.

some

is

again,

•

unless

'..

.

the tree

on

'

*

1.13
1.06

That

1.20

1.46

1.42

1 02

r-

that

The Christ died

1.75

1.45

need

vi,*r

/

■■.

1.20

1.39

than one

there

1,80

1.64

have

occasion,

support

price schedules usually
point other than the
farm; hence they involve an esti¬
mate of a farm-to-market differential, a: differential between farm
price and the price at some stor¬
age " place
or
central
market.
These differentials are
being scru-!
at

are

discuss¬
ed
i n detail
with
this

more

minimum

example,

op¬

been

To rid mankind of hate!

2.50

1.26

the

erations

•'

1.25

:

2.67

.

1.96

New Hampshire——

1.29

3.54

the

Agricul¬

group' on

no fighting;
his role is great;

3.06

,1.49

,

3.84

3.17

Ins. Co. of N. A.—i_—

Merchants
National

,

1,48

1.53

1.22
2.68

Hanover

New

1.56

1.91

American-———

Home

New

30.01 '

30.16

Insurance—

Boston

Depar tment

.

American

———-—

of making a more accurate
determination of the meaning of
pose

ture.

Resolve to live it!
o'ercometh all! 'v

1.27

Baltimore American-,-

for the price-<t>~
support oper¬
ations of the
of

do to

give it?
again enthrall?

1.94
'

Alliance—-

American

$

•

.

1.95

3.98

Agricultural

S

,

1.95

Aetna..

Avge. Div. Rate
8
7.'- S '

1944

1943

1942

1841

1940

BOYD*

Less

t.

..

Net

B.

Agricultural Price Administrator States That in 1946 There Will Be

returning,

Underwriting profits (or losses) of fire insurance companies are A medal on his breast
! : •
characteristically erratic; oh the other hand, net investment income A heart that's full of yearning
is relatively steady.
Furthermore, many companies exhibit a favor¬ For Love and Peace and Rest!
able trend in investmet income,, partly the result of a conservative
ni
dividend policy which permits a year by year plough-back of un¬
distributed earnings, thus building up the volume of funds available "Beyond the Call cf Duty"
;'/•.
for investment.
In view of this, it is of interest to review, the trend The medal1 bravely reads;
•!■.'
of net investment income since 1939 for a group of 33 representative His soul for simple beauty
Of Christlike Love, still pleads!
fire insurance companies, as follows:—
<;•
■V
FIRE INSURANCE COMPANIES
\
.

HOWARD

Director of Price, Production and Marketing Administration
U. S. Department of Agriculture

Peace, restored to men!

Insurance Stocks

—

Thursday, December 20, 1945f

• ,

•

Bererly Hills

Teletype LA 533

,

r. Stockton

Frews
Reno, Nevada

.

' Santa Ana

Sacramento

£4,000,000
£2,000,000
£2,200,000

'
The

Long Beach

Fund.

Monterey
Pasadena

Bank conducts every description
banking and exchange business
,

Trusteeships and JExecutorships
also undertaken

•

of

Volume

Number

162

THE COMMERCIAL & FINANCIAL CHRONICLE

4448

and

James Baker V.-P. of
Harriman

Current Interest Rates

Ripley & Go.

Must Be Maintained

Harriman Ripley & Co., Incor¬
porated, 63 Wall Street, New York
City, announces the election of

James S. Baker
of

the

pany,

Vice-President

as

rates

tcf

are

effec¬

be

:r

els.

effective

who has been

of the

Manager

ducing the rates paid to the Brit¬
ish and Scottish banks. • "The pol¬

the

of,,

United

States

credit

-

less

t V

Harriman
Ripley & Co.,
•Incorporated
a

in

■-

was

New

;York

James

in

served

as

officer

in

.

Coast

the

War

World

Baker

S.

I

Artillery

measure : up h to v- our
-Consequently,> the pol¬
British Government
.

and

graduated
from Harvard College in 1919. He
entered the investment banking
business with the Guaranty Com-/
pany in 1927. ''..:. .Ny.;::'/. N

further lowering of interest

a.

rates

It

by

our

Treasury."/

/.y

would

be inimical

to

The only gain

debt and interest rate

policies would be the relatively
small, 'sayings' in .; the- over-all
cdsts of. Government that \vould
come from a presumed
reduction
of

corresponding
amount
in
Treasury interest payments. Sav¬
ings in expenditures are expected
ultimately to benefit taxpayers.
the

Treasury has esti¬

the number of these to be

36,000,000./ It
believe, that

seems reasonable to
in subsequent years

the number may

be less.'

.

t

banking system) need to be fully
understood. before4 they- are of-'
fered as an acceptable 'precedent'
for

they
such

v'?;

"To
achieve
these
'savings,'
however, all interest rates are re¬
duced by virtue of their own in¬
terlocking character." In the end,
therefore, some portion, perhaps
all, of the savings turn up as costs
to

all

those who have net

of

or

Neff to Head Phila.

pointed out in Mr. Lan-. gross. assets of one kind" or an¬
ston'sreport that any v further other,
Moreover, all holders of
lowering of interest rates would life insurance policies, or those
promote inflation by accelerating who expect to be holders/will pay
the transfer of non /- bank - held some portion of these 'savings' in
debt
to / the
interest
commercial banks. the
burden, T either
Any / "savings/' i he /; explained; through decreased dividends or

Securities Association:

minor degree to

higher costs for future insurance.

only 36,000,000 taxpayers," yet the

-"Yet I these payments by the
great majority of our people are
only a small part of the probable
total. / As the detailed analyses
clearly show-—such policies would
constitute a tremendous tangible

!r'.

PA. — Clif¬
Schmidt, Poole & Co.,-

jhas been nominated for President
Philadelphia Securities As¬
sociation in 1945, by the associa-,
tion's nominating committee, to
succeed William V. McKenzie, of
Paine, Webber, Jackson & Curtis,
of the

the 1944 President.

was

-

PHILADELPHIA,

ton Neff of

'

would

in

accrue

effects 1 of

«

a

inflation

would

:

turn

even
these small savings into an
insignificant offset to the rising
2osts of living that would follow.
"Policies
designed
to
bring

NOTICE OF

iv.*

Club.

an

For member¬

serve

the board of governors to
three years: Harry C. Rip¬

pard;

Francis

on

3rd;

Goodhue,

Williams,

/

G.

Pennsylvania

Company; and Theodore M.
Hughes,: Standard & Poor's Cor¬
poration. For membership on the
board of governors to serve for
two years: Harold F. Carter, Hornblower & Weeks.

certificate rate, particularly
as
to whether this would consti¬
tute an effective and sound public

REFUNDING

AND

75

billion

Such

a

Hislop

B, DUE JULY

partners;

and

Marth C. Bruns, Hedwig G. Reh
T.
Cullen,
Ivy< H.

Bernadine

eminently sound policy in exactly

and Sixth War Loan

the

der, Peabody & Co.

same

Halev

——.

'

Jewett & Shean to Admit

Peabody & Co. also led the field

from

resulting

By such"

would

fact

that

York

City, members

York

Stock

P

of

Exchange,

wiJ7

MacCulloch

tc

partnership on January 1. He was
a partner in the firm in the past

Luke, Banks, Weeks Admit

the

vidual

from

move

a

prolonged

©f the
est

to

In

existing structure of inter¬
The psychological adof

this

"Finally,

incidence

trust

fund

of indi¬

banking

division,

in

the

dollar

and

the

volume

&

Vic¬

of

William S. Tod, Trustees, and that

January 1, 1946, there will become and be due and
payable upon each of said bonds at the office of J. P. Morgan & Co. Incorporated, in the
Borough of Manhattan in The City of New York, N. Y., the principal thereof, together with
a premium of 10% of such principal amount, and accrued interest on such principal amount
to said date. From and after January 1, 1946, interest on said bonds will cease to accrue and
any coupon for interest appertaining to any such bond and maturing after said date will
become and be null and void.
;
*
/
v ->

to

survey

obtain

any

of these

further

reductions

It

also

underscores

with decided emphasis the degree

by which debt management will
have

a

financial

profound

effect

on

economy.".

^jnemberr

•

6% Series, due April 1, 1956;
■

oJ/2% Series, due April 1, 1956.

.

/' '
,

gage Bond, 6% Series.
together with accrued interest

on

A. M. Gottschaldj
v

New

Y., September 26/1945,

York,

amount

■

*

Secretary

$1,180.00,
on

from October

the

principal
December 31,

1, 1945, to
1945, inclusive, (being $15.00 for each $1,000 Bond).

:

NORTHERN PACIFIC RAILWAY COMPANY

By *

Six Per Cent Series

.

For each $1,000 Development aifd General Mort-

/

,as

may

"

t' /"

;

*

•

Six and One-half Per Cent Series

,

For each $1,000
."

;

/ gage

Development and General Mort-

Bond, 6}i% Series.

$1,220.00,

together with accrued interest
amount

on

front October 1, 1945, to

the

principal
December 31,

1945, inclusive, (being $16.25 for each $1,000 Bond).
Bonds should be presented at the office of the
Company's
The First National Bank of.the
City of New York, #2 wall

*

OFFER OF PREPAYMENT

Holders desiring to receive immediate payment of the full redemption price including
int'erest to January 1, 1946, may do so upon presentation and surrender of said bonds at the
office of J. P. Morgan & Co.

Incorporated, in the Borough of Manhattan in The City of New

York, with the January 1, 1946, and subsequent coupons attached.

•

■

Atlanta,

Birmingham

and

Coast

Railroad

Notice of Redemption of Preferred Stock

„

Company
*

NOTICE

IS HEREBY GIVEN that Atlanta, .Birmingham
and Coast Railroad Company by
of
its Board of Directors adopted July
19, 1945, has exercised its option, under
petition for
Incorporation
and
the ■ Certificate
of
Incorporation
issued
to
it
by
the
Secretary of State of the State of Georgia, to redeem and will redeem on January 1, 1946, the
vhole of the Company's outstanding
$100 par value Preferred Stock at the redemption price of
'103.00
per
share together with an amount equal to five per cent per annum per share
rom
July 1, 1945, to said date of redemption, and that on said date the aforesaid redemp<on price
per
share ($105.50) will be due and payable and will be paid at the office of
"he Chase National Bank of the City of New
York, 11 Broad Street, New York 15, N. Y.,
\s Agent of
this Company, upon surrender of the certificates for such Preferred
Stock, accom¬
panied by a Letter of Transmittal properly filled in and signed.
Prom and after January If 1946, right to
receive dividends on the Preferred Stock shall
ttase
to accrue and all rights of the holders of such stock shall cease and
determine except
he right to receive said redemption
price.
I
No
transfers
of
the
Preferred
Stoc'will
be
made
after
the
close
of
business
on
"^WGUibGr 31
2945
i

ATLANTA, BIRMINGHAM AND COAST RAILROAD COMPANY,
la ted:

New York 6,

N. Y.,-September

20,

1945.

i'"

■

;

By: P. D. LEMMON,

-

~

Holders

1945,
of

obtain

their

Prepayment
of

the

above-mentioned

payment

stock

of

certificates

the
at

full

New York. Coupon Bonds must he surrendered with
April 1,1946, and all subsequent coupons attached. Registered Bonds
must be
assigned in blank or he accompanied by appropriate detached
assignments, with signatures guaranteed. V," ' * / .%
i
Bonds will he paid for/in the order in which
presented until the
above mentioned $5,000,000,
principal amount shall have been
acquired, provided, hoWever, that the Company reserves the right
(a) to accept such additional principal amount of Bonds, if presented
within said period, as it may desire,
accepting such proportion of each
lot (to the nearest $1,000) presented as the
aggregate amount of
Bonds in excess of said $5,000,000 determined
by the Company to be
accepted bears to the total additional principal amount presented,
without preference between the two Series, or
(b) to reject any
amount

offered in

the

Privilege

/

excess

of the first $5,000,000

principal

amount

presented.
The

Agent will

with reference to any Bonds presented for
account of the
owners
thereof by any Bank, Trust
Company,
Member of a National Securities
Exchange or Member of the Na¬
tional Association of Security Dealers, Inc. (such
Bank, Trust
Company or Member not being the owner), a commission of $2.50
per $1,000 Bond.
All Bonds purchased are to be cancelled, and United States
Stamp
Taxes are not payable on the sale.
pay,

.

Vice President,

Preferred Stock may at any time on and after October 1,
redemption pric° thereof fS'ns 50 per share) upon surrender
office of the Agent as aforesaid.

Agent,
Street,

New York 15,

SOUTHERN RAILWAY COMPANY

of the New York Stock Exchange




-

..

and

'

-

Coupon bonds should be presented and surrendered for payment and redemption

•

S

will admit John K. Weeks to part¬

January 1.

of Southern Railway Company's

Development and General Mortgage Bonds,

Railway Company hereby extends until the dose of
on
Monday/December 21, 1945, its offer to
purchase, for retirement, $5,000,000 principal amount in the aggre¬
gate bf the two bond issues set out in the heading, at the
following
prices:
//.
'

on

,

illustrates

Southern
business

the provisions of Article Ten of the Refunding and Improvement Mortgage, dated July 1,1914,
from Northern Pacific Railway Company to Guaranty Trust Company of New York and

first

in future Treasury annual interest

payments.

funds and the provisions for their

'/r

<•

sales

Co.* took

vestment requirements

of

resurrected an old
Government
trust

investment. 8 The

number

the

how truly futile it is to endeavor

invest¬

we

worry—the

in

:

.

,

place with sales of $40,788,000.

the analysis continued:

ment,

Kidder,

/

Discussing; the
Government

of

office

Hayden/ Stone

maj or
policy
change would be virtually incal¬
culable Jn: waging an anti-infla¬
tionary fight.
/>'
■

Seventh

Sixth and Seventh War Loans.

achieve stabilization

rates.

Vantages*

the

.

tory Loan Drive, and in the Fifth,

to one/in
would be

sales

investment

in favor of cheapen
money
which its" primary aim

stand

Boston

in Boston in the

step the Government

a

•

t

Luke, Banks & Weeks, 61 Wal
Street, New York City,

on

(1)

The

cost is small, and (2)
change in policy is great.

the basic
V

the

in

second

was

War Loan Drive.

Development and General Mortgage Bonds,

ts

New

nership

Fourth, Fifth
Drives, Kid¬
top place,

won

arises

NOTICE IS HEREBY GIVEN that Northern Pacific Railway Company has elected
to redeem and pay off on January 1,1946, all of the above-mentioned Refunding and Improve¬
ment Mortgage 6% Bonds, Series B, at 110% of their principal amount, together with accrued
interest on such principal amount to said date, in accordance with the terms of said bonds and

esolutions

a*

New

P.

alter¬

y

Full'*1*

limited partner on the same date
/

Robert

its

'

■

admit

that

and

J

Hynes, limited part¬
ners.
;
'.
I
C. E. Fuller, Jr., of Duluth, a
general partner, will become a

Shean,

respects

native is unsound.. Such a small
upward revision may appear in¬
significant,- but-' its
importance

^

and Denis M.

Jewett &

Co. in number of individual sales
in New York. In the

6% BONDS,

1, 2047

To¬

of

ronto; Robert L. Turpin; Walter
T.
O'Hara; Cecil B. Pepper of

..

about

today.

constitute

near¬

margin of 931
subscriptions.
This is the Fourth
Drive led by Kidder, Peabody &
a

SOUTHERN RAILWAY COMPANY

will admit the following to part¬

Katherine

be

sum

by

an

be detached and presented for payment in the usual manner. Interest due January
fully registered bonds will be payable only upon surrender of such bonds for re¬
demption. Registered bonds, in cases where payment to anyone other than the registered owner
is desired, xnust be accompanied by proper instruments of assignment and transfer.

1 On January 1 Thomson & Mc¬
Kinnon, 11 Wall Street, New York
City, members of the New York
Stock Exchange and other prin¬
cipal exchanges, on January 1

Halev/

small

would

move

;;

io Admit New Partners

general

debt would

millions—a

COMPANY

IMPROVEMENT MORTGAGE

SERIES

1, 1946,

Thomson & McKinnon

■Miami,

est competitor

to the

275

total of 3,045 sub¬

a

scriptions, topping the next

the report said that the costs
Treasury on the basis of a

ury,

To the Holders

1,1946,

Thomas

nounced, with

surate with the cost to the Treas¬

aforesaid with all coupons payable July 1,1946, and thereafter attached. Coupons due January

nership:

Drive in the Wall Street brokerdealer syndicate, in number of in¬
dividual subscriptions, it was an¬

measure, and whether the over¬
all benefits would
be
commen¬

/

/

>. t

/

(

Kidder, Peabody & Co., 17 Wall
New York City, has won
first place in
the Victory Loan
.

Street,

term

•T ?

NORTHERN PACIFIC RAILWAY

by the committee are: Vice-Presi¬
dent, William B. Ingersoll, Stroud
& Company; Treasurer,
Francis
Goodhue, 3rd, Calvin Bullock; and
Secretary,
Harry I C.
Rippard,

Ellwood

In V-Loan Drive

the possibility of
upward revision iii the short-

REDEMPTION

to the holders of

Is equivalent to election.
Other
nominations
announced

ship

time.

-

Election will

at the University

Brothers.

this

at

exploring

According to custom nomination

Buckley

Kidder, Peabody and
Hayden, Stone Lead

( This

funds and the effect of their in-

be held at the annual meeting and
on Jan¬

15

inflation.

particularly true if they

attempted

In

dinner of the association
uary

price

a

Measured in such terms the en¬
visioned 'savings' obviously would
have been only an illusion."

not

policies," he said, "be¬

the public welfare.
from

mated

interest, rates ;,(and - its moves
to further nationalize the British

1943 and 1944.

sound

For .1946

concepts, and .- one
(at..least.^rela¬

failed

the

of

said,

\

on

Government

He

to

ours,'?/ he

is basically i different

social

standards.
icies

Security Deal-/
<ers .Group
in-

"an

than

has

tively)

the

of

its

which

1940,
Chair-

Government

British

be

cheaper money would

,

/ banking, : and
adapted to an economy

are

virile

i'one which

-

since
man

the

re¬

interests rates,

on

ernment Bond '

Department

British Government in

icies. of

Gov¬

about

cause

.Mr.. Lanston/warned against ac¬
cepting as a precedent the' action

1,
1946.
Mr. f Baker,

Jan.

•

(Continued from page 3003)
interest

if

tively stabilized at prevailing lev¬

com-

<

intangible force operating to

produce
would be
were

V.

,

3019

<

•

Washington, D. C.
December 3", 1945.

By Ernest E. Norris
President.

our

Prof. Laski

Business- After Listening lo
Who is the

cause

business!

<

•

.

'

Who makes so many nations

Who

tanks?
'
'
Who turns the inside inside-out?
*
Who wrecks this world without a 1 General Motors!
splits the little
doubt?
• 7/7> Who
<••''-7

brings the atom bomb about?

It's business!

y'WJiv
II.

_

snuff?

'

get

cause

starts

Who

of every scrap?

with

wars

snap?
Who

gives
*pap?

me

»

Who makes me sometimes hard to

Who puts that green stuff in green
\77' V..;
..
peas?
'17/'"
7:7',;
food for all this 7\";
Who puts the sting in bumblebees?
•/ '
■

The breakfast food

,

The Rotary

Clubs!

'

"

t

concern

team?

■

-

dream? /:'

Who ruins every lovely

cigarptte corporations! 1 : 7
Who makes some people quarrel¬
The

V

"

some,

others

make this

world

kindly

a

the

live

chum

as

chum?

Who to all

The Ladies Garment Trades!

(Phone 6n request.
■
service.)

(Reprinted from the Sun Dial of the New York

"Sun," by H. I. Phillips)

Spencer Wright Heads
Phila. Bond Club
PHILADELPHIA, PA.—Spencer
Wright, Jr., partner of Wright,
& Co., was elected Presi¬

D.

Wood

dent of

Bond Club of Phila¬

the

delphia at the club's annual meet¬
ing and dinner held at the Racquet
Club. William K. Barclay, Jr., of
Stein Bros. & Boyce, was elected
Vice-President;.-John C. Bogan,
Jr., of Sheridan, Bogan Co., was
elected Secretary; and Edgar J.
Loftus,
was

of Elkins, Morris & Co.;

Lynch, Pierce, Fenner & Beane,
retiring President; was elected to
board of governors for term

expiring in. 1946, and Willard S.
Boothby, E. H. Rollins & Sons and
Philip. L. Lee, Wurtz, Dulles & Co.
were
elected for terms expiring
in 1948.
: '
"

Wm. McGovern Joins

Staff of Baker & Co.
Baker

New

William

the

&

York

J.

Co., 40 Wall Street,
City, announces that
joined

McGovern has

unlisted

ton.

Partners

.

1

will

be

trading department

of their firm.

Rotan ?was

formerly principal of
George V. Rotan Co., with which
Mr.< Mellinger
and Mr. Cooper
associated.

were
n

the

new

firm

Other
were

partners in Mosle and

Merrill

partners

all formerly

Moreland.

Lynch Changes

Merrill Lynch, Pierce, Fenner &

Beane,' 70 Pine Street, New York
City, members of the New York
Stock Exchange and other lead¬
ing Exchanges, will admit Kath¬
leen M. Hargrave, Harold F. John¬
son, William R. Lovett, and Robart C, Rooke to limited partner¬
ship as of January 5. Albert G.
Boesel,
general
partner in the
irm, will become a limited part¬
ly

effective December

31.

You

represent a tremend¬
and
continuing

It

is

business

7:7*

price control legisla¬
tion—^legislation which should re¬
main in effect until the dangers

only to meet the urgent housing
needs of this overwhelming por¬
of

tion

be¬

population; 'but

our

'

if their demands for hous-

cause

ng
are
not
met—if they are
neglected—then 7 the
prosperity

should

which

o

half million jobs

which the build¬

As

a

terrible

business

builders want to build houses
people can afford to buy. It
makes good
business sense, be¬
cause
you sell more houses that
But the reason you haven't
able to make houses cheaper

tangled

surrounded

of

a

of

be cleared

n

«*iven

to

the

your

I

say r

Obstacles




7 ; ::

has

econ¬

7:
been

be in

a

po¬

:

Phone LD-159

to

housing they can afford to buy,
the
present high hourly wages
paid to the mechanics and labor¬
ers
of
the
building trades are

helping "hamstring" this goal..
Labor is not at fault in demand¬
ing this high hourly rate of pay:
fault lies, with the industry
itself.- When you consider that the
building trades workers are em¬
ployed on an average of only thir¬
ty-two weeks out of the year, then
whatever they demand for hourly
The

„

.

dustry cannot give them work.
I

want

correct

labor costs and an am¬

j them after careful study,
I enumerated:

(i j The

ras

follows:"

can

be

*

lack of effective price

in

make

workers

manufactur¬

a

ing plant. The average annual in¬
come
received
by
the building
trades worker prior to the war
was
less than $1400. During the
war it crept up to over $2000. But
this increase was largely the result
of overtime paid during the rush
get munitions plants built and

to

other needed construction built in
the

/!

speediest possible time.

nobody can argue against
the fact that "a laborer is worthy
Now

of his hire." Building trades
ers

be
I

work.

work¬
and.

mechanics

-skilled

are

should

paid

for

well
they

believe

their

would

be

willing to take less pay per hour
if they had
better assurance of
and an annual
permitting the decent
to which they
entitled.
"
7 v
' "
7,
round work

year

basic wage

of living

standard
are

.

A true measure of income is not
a

man's hourly wage but his an¬
income and it's this annual

nual

specula¬

in land did not hin¬

excesses

construction activity.
.He could out his weight behind

j

the

drive

where

areas

most

for

new

the

<

in the
situation was
homes

urgent; He would have the

+o

help assure

houses

that

the production
of our people

more

can-afford to buyv
7 Quite

•*

obviously such^a co-ordi-

wage

this objective can be

ways

many

One method is by com-,

reached.

bining

as

cilities

cooperatives, so that fa¬
be exchanged- and;
prefabri.cation,parts of a structure can

can

built .where

sheds

some

be carried on at all times. Another

is by making

method

work
In

possible

year-round-

"tenting"- -the

by

when, weather- necessitates.

iob,

this

of tremendous scien¬

age

tific advancement there should be.

kinds,

why construction of all
especially that of houses,

cannot

be carried

no

reason

of

on

weather. During

manner,

approach to helo lick, the housing
shortage—to make the volume of
production of houses: possible and

annual

far
toward bringing
down building costs and helping,
stabilize the industry. There, are

tane and

to cut red
get things done.
a direct and
forthright

„•

go

these tents

is

basic

assured

Ah

overall power necessary
This

77'7:

living.

would"

of

strong action to see that

■

SSSSZ2 if rfw.v-'-'SSZZg

mistaken impression that

a

people have about the wages
building trades workers. There
is widespread
belief that* these
workers make big money because!
of the. high • hourly-rate of pay
they receive. On the contrary, a
building trades worker's income is
less than that which his fellow-

7'7-7 '77

tive

obstacles, as we in the
Department
of
Commerce - see

•

take this occasion to

to

his stand-;

der

These

other weeks the in-'

ard of

ity to apply ceilings to future sales
of existing houses. He could take

,

remuneration

include

must

pay

for the twenty

behind the housing industry.
He could expedite the production
of building materials and he could
channel them into that type of
construction and housing where
the reed and the market is great¬
est. He could set ceilings on new
^ouses. These ceilings would take
into consideration present mate¬

He would also have the author¬

"collec¬

Building

industry which must

an

income that determines

ple margin of profit.

tively" because they involve real¬
tors, the building industry, labor,
and
Government
down
to
the
smallest Town Council.
\
:
•

DISTRIBUTORS OF

Un¬

sition to mobilize the whole econ¬

rial costs,

away

task.

one.

strive to give more consum¬

now

,

:*

•

the

omy

because
and belot of ob¬

them

:

as

ordinator who would

with
bv

of

President to appoint a housing co¬

sell them cheaper is
have

general wel¬

the

suggested in the bill introduced
by Congressman Wright Patman
of Texas, whi,ph authorizes the

you

vay.

to

soundness

whole.
Legislation such

I know that

oeen

and

omy as a

mess.

man

to

contribution

phase and facet of it,
a

and

fare

erialize. And the building indus¬
every

as

stability in the indus¬
assure its continued
growth and progress and needed
try

?ainful" employment will not matry,

and

to establish

ing industry could supply toward
our
national goal of "maximum

will be in

introduced

been

be contemplated/designed to
avoid serious immediate pitfalls—
may

only by the
thinking, the clearest
understanding, and
the boldest
action
that
can
be
collectively

Exchange and

Home Office Atlanta

necessitating
; it
have,
safely
passed.
;
' •'-7.1(7.77'
They should
likewise support
such additional legislation as has
already

richly grace our
'and will evaoorate. The four and
so

INVESTMENT SECURITIES

•

the building in¬

in

men

port needed

building industry must turn. .Not

can

Private Wires

sources

dustry should champion and sup¬

the

that

market

this

to

most honest

BROKERS OF BONDS, STOCKS, COMMODITIES

credit

'

high in the path of your indus¬
try's progress—high in the path of
'ull profitable production and full
Gainful
employment
for
the
American people —they are not
Immovable They mvst not be im¬
movable. They are obstacles that

,

builder to operate.

other

that it has to burst, they

untapped
'

and

the bubble grow, and

see

choosing. These obstacles can
correctly be labelled "cost ob¬
stacles." And while they stand

UNDERWRITERS AND

and old structures

just so much tougher for

the legitimate
Banks

own

Exchanges

new

rapidly. This encourages the

in the building game.

histori¬

together, these four-fifths of our

market,';

In

sense.

knowing
withdraw
from the building field—and the
industry is soon in a serious and
costly depression. .77 7:/'
7 7 7
The responsible and legitimate

population

of

assured

This "cost ob¬

artificial

an

lack

booming
land values
and
speculative profits, this problem
cannot be solved by legislation,
But it can be solved by wisely ap¬
preciating the demand for housing
as
well as by the application of
some good hard thinking—ingen¬
uity and sound, common business

Three-fifths, could pay just rea¬
sonable prices for dwellings. The
remaining one-fifth are in dire
need of subsidized housing. But

ous,

an

for the work¬

in the industry.

ers

of

stacle"—some

Other Leading

The prices of

identify this disease.
rise

of the People :/■
industry

and

wage

like

many

~orre

Members New York Stock

War, and again ,in the late

1920's. You know what symptoms

that

C

gentlemen

it happen after the First

saw

land and of

building

made—the

round work
annual

7 ; :

to the second point

come

previously

basic

makes it

ind

BANKERS

I

year

high prices. But it has not
-.pi'ved adeouately or wisely the
other four-fifths of our population.

tou

INVESTMENT

the

what happens when infla¬
the
housing industry.

World

to pay

Edward

one

hits

tion

population which can afford

our

Rotan, who will acquire the Ex¬
change membership of William G.
Curran; J. Marvin Moreland; Earl
W. God bold, Jr.; Everett E. Mell-

You

control.

price

know

cally has always been able to mar¬
ket houses
to that one-fifth of

in

Now I

fly-by-night speculator to dabble
He jumps in,
puts up a few cheap structures,
and takes out a fancy profit. In so
doing he further bids up land val¬
ues and the cost of materials. This

The

the American Na¬
tional Insurance Building, Galves¬
and

ton,

is

Underhoused

HOUSTON, TEX.—Rotan, Mosle
& Moreland, a
new New York
Stock
Exchange
firm,
will be
formed on December 27th, with
offices at 806 Rusk Avenue, Hous¬

by

points I've enumerated. The first

'

7

their present
unrealistic

to

Price Control

-..>,77

fate.

f Four-Fifths

inger and Arthur C. Cooper. Mr.

elected Treasurer.

Chauncey P. Colwell, of Merrill

the

Rotan, Mosle and %
Moreland to Be Formed

chained

I want to discuss one

collapse after a brief period just
as sure as

facing the

afford to buy, de¬

attitudes

1

AIl-Year-Round Work

ers

greed for only fat or swolprofits, then it will have suc¬
ceeded
in
sickening our entire
economy.
If people cannot buy
what you build because of high or
nflated costs, then the boom now
oefore the building industry will

Day or night

obstacles

past performances. The public will
not wait impatiently forever.
-

am

•en

^

moved;::; 7

stacle" is not

of these

can

have

mental

blind

key?

people

who

should your industry become bed¬
ridden
with
inflation " through

...7;7. //y

7

.

removal

The

our

talking to you
business man to another—

one

as

I

many

spite the selfish interests of those

I have in mind is in¬

disease

flation—and

problems has the pass■■■':* '
".7 • /' y/^
to 7 Who boldly tackles every task-y?
Who else but good old Dr. Laski?

bubble gum?

Who takes away my

place?:>.,
./7/y7/: 1
Yoursitruly!
;7y/7y. y7:
Who would all earthly jars efface?
(Don't ask!)

whole.

a

industry be 'afflicted
by a fatal disease—and I make no
bones about it when I tell you that

/y'^i/dv'^vyyy \7/.

The shirt trust!

While

Who'd

as

in

cheaper materials
other ways add to

industry today. For we are going
to have houses built that more of

Should your

VI..:..*,7 '--yl,:i^;7
spoiled ,the Eve and Adam

Who

to the nation

sup¬

agree¬

and

new

is the Number One job

Thus;the health and well-being
industry is of the greatest

'

7 "

industry

restrictive

the cost of construction.
7

;. i ;:

> •

of

and

total na¬

our

of your

.

magnate! -try-;

of

tional production.

please?

finger

a

10%

between

use

industry, together with its
industries, < can produce
than

ments

the

The continuance by most of
our
municipalities of antiquated
building codes, which restrict the

•'feeder"
better

and

Thus a most serious "cost
obstacle" to the wholesome prog¬
ress
of the industry can be re¬
tation.

(4)

the construc¬

40-hour week

a

tion

Commerce!

The Chamber of

kings!

In

buzz?

Who made Attila tick and

rough?

The tooth paste

Who is the

Manufacturers Association!

The

pliers,

secure their best help and co¬
operation in developing a proper
plan of procedure and support in
its full and successful implemenr

management and
labor in the construction field.

to

Next

workers.

and

round

assured basic annual

an

construction

some

four and a

some

nator would have to work most
closely with all elements involved

con-

on

year

(3) The oppressive and restrictive
practices now being carried on by

agriculture,
construction is" the
largest industry in the country.

Who made J. Caesar what he was?

little [

a

million

half

V.

J

77.-7

The pants maker!
makes
men

Who
-

employment for.

finished houses.

dustiT.

goods. * Together; they add up to

Krupp?

Hart, Schaffner & Marx!

world NOT up to ;
,7" r
7

Who keeps the

*'•

Who is to blame for Mr.

7.1.

of

values,

on

lack

for The workers in the in' y .7
7

wage

housing,

atom up?

The

work and

de¬

mand,

Who makes the kitten scratch the
7 /:•
pup?
'

:

(2)

especially the demand for
is
geared into
almost
every
industry in the country.
These "feeder*".industries are the
whole run
of consumer durable

*'

•

■

Who

Now all of this construction

awful

those

all

out

turns

living quarters—not trail¬
and makeshift barracks. •'

ers

land

on

struction, and

decent

United States Steel!

sore?

It's business!

control

(Continued from page 3005)

Russians and the

Yanks?

V*

•

•

parts the

Who

of every war?

*

Thursday, December 20, 1945

Building Industry's Pail in Low Cost Housing

IV.

I-

It's

& FINANCIAL CHRONICLE

THE COMMERCIAL

302G

work

can

shoring
be

could

in all kinds

cold weather

be heated. In this-

and

carried

concrete
on^ The'

original carpenter or brick laying
can be carried on under this

work

kind

denting/ And when thel
tent can be,
down. Windows can then-be.

of

roof is: completed the
taken

boarded up
the

interior

-

and in cold weather
oi.7the- house can - be:

•

Volume

Number

162

so
that the plaster work,
plumbing, the electrical work

sought to protect itself by limita¬
tion of work agreements, have no

other

the rest of the carpenter work

right to existence in these days.

be constructed to withstand- a live

productive of
full employment than are the re¬
strictive provisions of cartels and
other
monopolistic ' understand¬

load of 50

heated
the
or

be

can

Page.

carried

nual

They

stop-

/

_

Paradoxically,

;

without

on

assured

an

an¬

in the building indus¬
would mean lower
and thus more
sales of houses, but at the same
time it would mean more jobs and
higher annual wages for the work¬
ers.
Thus, the "cost obstacle" of
try

wage

construction costs,

the

within

of

means

people.
Yes, there

this

" -I'

.

■

done.

say
are

who say some time in the

many

.future we

find

it.

however, will find

a way

a way

a

to do it

are

em¬

lie ahead for us,

•Justice

Department

the

and

Commission

•

the

of

is

—

Federal

of

tions

Trade

forced agreement against building
manufacturers.

In

this

type

retailers

boycott

building

a

could

lower the cost

Building
The

•

tion

by

considerable amount of

a

he is blocked in his efforts.
.Although the Federal Trade Com¬
mission

several

leveled,

bas

to

building codes
use of
and; less
costly materials,
methods of construction, and

new

such

on

reports indicate
that this practice is still being car¬

.5

groups,

ried-on

make

sub-rosa.

Plumbers

also

agreements

whereby ' they
'refuse to install the plumbing un¬
less the plumber is permitted to
furnish

his

is

•same

other

material.

own

of

true

contractors

tors. All these

The

electricians

and

sub-contrac¬

or

practices

are

in

re¬

straint of trade. Restraint of trade
restraint

means

.

—not free

Freedom

prise

of

employment

enterprise.

,

-

individual- enter¬

of

means

•

freedom of competi¬

tion—not license to destroy com¬

petition
All

to establish monopoly.

or

these

practices are helping to
keep the cost of housing beyond
the reach of the average Ameri¬
can
family. They can be stopped
at once through the cooperation of
builders'

associations

like

yours

the Federal Government.

!with

of
in
the
building field. It must be recog-j
nized that building codes by their

the

But

tices.

re¬

unions.

labor

Sometimes

between

exist

;cause

more

hours

ispent

upon

a

than

tion

farthest
tion.

to

prohibit! the

of

labor to

are

b^

and

been tested

The

quantity used per million dol¬
worth

are

builder has rel-

on

to the pur-

used

were

ers

by

the home

But

its

its

use.

use

In

and

another

:

"make-work"
affairs,
outgrowths of the depression
when
construction labor

these

was-

in

streets

large
and

walking the
understandably

part

very




of

sion

"cost

any

consider

the

have

They

are

low

the backbone of

act

the

cost
cure

tive clauses in the building

take

and

removal

the

of

codes,

costly man¬

agement-labor restrictive agree¬
ments. In short, it will concern it¬
self with

helping the building in¬

dustry-to achieve the fullest prot
duction possible.
v
.
; :
Our

furnish

also
and

division

construction

statistical

with

you

wlil

research information,

as

and

as

information

on

city

t

the

in

walls

in

most

tem

can

material

in New York
Hourwich

so
on

able to make its plans on the
of facts.

there

Incidentally,
the

that

our

production

Street, New York City.
Partners
are
Iskander
Hourwich
and

which

to

objective,

every¬

^

thing else is secondary.
The

building
the

1934

in

build

consumer

at

afford

can

the

interest

price the

a

to

the

of

Mr. Hourwich has
Mr. Vare, who has

to date.

discharge from
formerly with
Jesse Spier & Co. for 15 years.
The firm will transact a general
business
in
corporate and mu¬
nicipal securities.

would be a
Now is the time for
role

costly error.
the industry to take a page out of
the history of other industries—
and

,

been in business for himself from

business¬

As

costs.

other

any

Vare.

Arthur

industry should
in
lowering

initiative

construction
men,

consumer

just

received

the

Army,

his

was

This not onlv

pay.

is the only method by which our

business

is

basis

country will
able

Mitchell, Hutchins & Co.

but it

sense,

full

industry

figures

show

building

boldness

materials

of

considered

is

and

a

to

profit¬

Admit New Partners

Mitchell, Hutchins & Co., mem¬
bers of the New York Stock

gainful

Ex¬

challenge

change, will admit Wilfrid Wood

face

and Weatherly Reinmund to part¬

must

nership

vision—with

upswing, and

even

action

and

with

con¬

certed action. In this direction lies

we

the

and

the

the

on

production

full

This

tak¬

is

achieve

employment.

ing into account a normal amount

January 1.

on

progress

will it

so.

that

can

be

ours

make

their

They will

firm's

New

York

office,

the

at

1

Wall

Mr. Wood in the past was

Street.

if

headquarters

partner in Coggeshall & Hicks.

a
,

New Issue

$214,000,000

Federal Land Banks
1V2% Consolidated Federal Farm Loan Bonds
Due

Dated January 2, 1946
;

The Bonds

;

Not Redeemable Before January 1, 1951

(.

and

are

are

the secured

issued under

January 1, 1S53
_

.

;

joint and several obligations of the twelve Federal Land Banks
the authority of the Federal Farm Loan Act as amended.

..

re¬

Bonds are eligible /or investment by savings banks under the statutes of a majority
including New York and Massachusetts. The Bonds are also eligible, lor the investment

The

under

of

the

statutes

of

various States.

of the States,
of trust funds

'

100%% and accrued interest

new
1

a

This offering

depen¬

~ safe

the

is made by the twelve Federal Land Banks through their Fiscal Agent,
of recognized dealers in securities.

with the assistance of-a Nationwide Selling Group

dimensions,

working
V

example,

is

been

first

with

feet

this i code
requires 2x4 studs without; per¬
mitting construction of equivae
lent ■ strength but of different di¬
mensions, such as glued panels. <.
Then

has

r

generally
other cities.
cost is added

that there is

on

Cily
Co.

are

minimum

than

&

formed with offices at 27 Williafri

pno^!

work best when business

still another city the code is

written

value.

of lower con¬
struction costs. That must be, the
way

makes good

has knowledge of the facts and

build¬

the- code

an unnecessary

dence

picture,

powder.

well

duction.. The free enterprise sys¬

deprived

the

In

the

Hourwich & Co. Opens

chronic disease

forces.

armed

purchase price
homes in that city.

to

into

market

The
problem must be tackled at its
source. Fight to get rid of the ob¬

stacles

purpose

with

as

Sound P. & L. Many other

construction.

of
a

headache

a

pos¬

mechanical invention to

You cannot
with

of

Puget
factors
but the
ones mentioned above are perhaps
the most significant in appraising
important,

are

enter

star¬

some

the price

as

Questions

sible sale to public power agencies

afford to

can

wait for

and

concessions

rate

renewals.

of

mass

new

reduce

for the

which was organized

back

regula¬

authorities also enter into
the picture. Dates of renewals pf
important franchises are signifi¬
cant since municipalities may ex¬
tory

in¬

annual

company

Public relations with consumers

of

extent

full

the

and with state and federal

country. They are the greatest

of assisting any and
every phase of your business. This
division will concern itself with
the promotion of year-round con¬
struction, the removal of restric¬

sole

possible
especially
may
have

the

is

business,

war

where

market. The vast majority of

tling

obstacle."
Commerce

of

-

factor

Another

the economy of

8-inch

accepted

rather

; years

sit

Department
of
has a new construction divi¬

quires the thickness of brick walls
to
be *12
inches for dwellings,

stresses;* For

These

our

owners

;

building owner.
,

million

of

of this large city are

of

chase price of a house, or to the
—4:

growth record.

I-

Hundreds

i

j

now

•

than trebled in the last de¬

more

;

*

part to expectations of rapid
growth in this territory as fore¬
by the management. In the
case of Central Arizona attention
was
also called to the consistent
cast

has

construction

of

picture

for what is com¬

housing. No builder

Department

wide acceptance. It
and approved by

has

growth has been
rapid in the past, and appears
likely to continue above-average
over the next year or so, investors
are willing to pay a little more for
the common stock. In the case of
Florida Power, the populartiy of
the offering may have been due

certain

a

National Bureau of Standards.

when

usually passed

of

our

Thus,

latively the same additional costs
! that his competitor has—costs that
iare

The

of

record

is the company's

of growth. Where

worded as

so

has

necessary by the
of the imagina¬

every

removal

of fireproof wallboard.' Yet
product,
manufactured
in
about
30 plants throughout the
United States, is of standard qual-

ity,

A

leverage

market
in
this
country for . housing,
and their
housing need is the most pressing
problem facing the country today.
There is neither magic nor mys¬

building

type

installa¬

these agreements

Since

is

use

ket

an

potential

this

unions

agreements

particular

stretch

city-wide,

local

These

recog¬

codes,

many

instance the code

-

they

Themselves.

a

day

,

exist in most
large cities. They usually exist be¬
tween
building associations and
local

be

through
long usage, have acquired a kind
of sanctity although they are outof-date, and, in a good many in¬
stances, just plain ridiculous. Take
the example, of the code of one of
our
large midwest cities, In this

cade.

the

protect

to

dangerous prac¬

it must also

that

nized

is

stocK

.

restrictive,* and

are

purpose

public from

and

strictive agreements

;

their

that

development

progress

nature

very

lars

and suppliers in
construction' industry—these

the

deny

technological

With regard to the restrictive
agreements between management

labor,

is

on

which restrict the

-—codes

which

retailer

}

"cost obstacle!' I want

last

expound

new

"cease-and-desist" orders

Restrictions

Code

prepare

citizens

our

Com-

of

again come into fashion, in
case
the ,< high
common
capital fatio may lose mar¬
appeal.
iactor
closely
related
to

may

important transit interests or an
unusually heavy proportion of in¬
dustrial sales of electricity. '

comes.

industry will not
find itself alone in fighting for the
The

tion and full

of construc¬

-money,

Division

\
ige

lUwao,

opportunity of fitting
our
mass
production
skill
and
techniques toward the problem of
satisfying the housing needs of all
our people. As
business men you

our

.

merce

;

of work, in full produc¬
employment.
. V
;

of plenty

contractor

or

buggy

li>6V

loss

,

a

builder

volume

-

to

your

and

is

codes

and

-

to

which

tery in the production of low-cost

housing. The .solution
should be found in the assurance

volume builder
contractor direct. Thus, where

or

a

supplies to

of

Horse

Construction

cost

lower

ma¬

terials manufacturer if he should
sell

that. The correction

housing.

to cancel out these agree¬
ments, these "cost obstacles" to

agreement, some building supplies

Bu¬

guarantee

.

steps

of

a

baCK

ing. Never before has the building
industry had so great and chal¬

must

represent an entirely un¬
necessary and burdensome* "cost
obstacle" in the path of low-cost

all added up, the aggre¬

are

National

the

by

materials

the

lenging

codes

gate is very costly. Both industry
and
labor must take immediate

retailer-en¬

the

used

the

Standards is

of

reau

"must"!

agreement
amounts to much in a specific in-,
stance.
But when these restric¬

•

in

is relatively small.

modernization

restrictive

single

•

h
normal again the building indus¬
try should be all set to go. Begin¬
ning now, every day should be

of technical dispute

imply

not

(Continued from-page 3006)

in

yond the limits established in the
codes of comparable cities. This

against

employer-union

One of the worst practices—a
practice that has been under the

scrutiny

no

kind.

change

meet

building demands.
Building Prospects

cities

established

per-;

agreement such as I have drawn
your attention to, exists on a naion-wide
scale,
and
no
single

-against the years of full profitable
can

list of this

a

Now,

over-all. They are also militating

ployment that

to

all

building of
"Jerry" structures. The standards

frequently settled by divid¬

end

of

be gloomy

terials should be available to

unduly'; cumbersome,,

area

most codes

does

rival attends the setting. There is
no

builder should

no

discouraged. By early fall ma¬

or

to go beyond the safe
established by the Na¬
tional Bureau of Standards, or be¬

ing the work. A member of one
union
sets the beam
while the

respects, and- are
the industry in the

gainful

is

But

standards

or

brush

four-inch

a

all too

many

full

five

a

mechanics
are

the

tain

simi-,'

and

me

in

nitted. Jurisdictional disoutes are

practices now
carried
on
by.
industry,
management and labor in the con¬

and

member

than

being

production

We must

There is no need for codes of cer¬

six-inch
paint brush is practical, no wider

reference to earlier is the oppres¬

to

be available until fall.
recognize that this com¬
ing spring will be for the building
industry a rather trying period.
not

may

When

■;

But

saving devices are a fa¬
vorite taboo with unions. In some

sive and restrictive

harmful

rounded

a

national building code

a

tion.-"codes

by
of the local electrical

'nstances, where

practices

taken out

be

must

a

lar labor

The third "cost obstacle" I made

illegal in

of

ties of further action in this direc¬

cities,
window sash by a

agreements, In some

union. Paint spray guns

Practices

struction field. These

structure

fair supply although
a
completely
line of these materials

*

and,

inventories

which

be taken out and then put back

themselves
the fruits of their leadership.
Restrictive

needed is

glazing union. The same treatment
is usually accorded factory-wired
electrical fixtures. The wires must

and thus reap for

now

skeletal

the

soil pipe will be

steel, and

in reasonably

house is so unduly costly. What is

builder and the window reglazed by-a member of a local

to do
Leaders, aggressive and wise,
may

pounds per square foot to be
than reasonably safe.
These are not isolated examples.
But they all add up to the reason

can

manufacturer

■

who

There

many

are

be

cannot

sheet

pounds per square foot,

Securities

Public Utility

skim

more

gated at once they will do more
narm to building labor than good.

by

-

our

about

40

why

glass put in a

of

more

of work stoppages due to strikes
and bad weather, we should just

through -the nearly
spring. We think that by summer
the present scarce materials such
as
lumber, brick, gypsum lath,

plenty of work. There is more
than plenty of work in the years
jf full production that lie ahead,
if these agreements are not abro¬

these

removed if we
houses whose costs

build

to

are

iare

requires
dwelling

city

large

every city and community
adopt, perhaps with minor lo¬
cal variations. Starting with the
wartime experience with ;.a na¬
If they are not discarded it will
tional building code for defense
be because of unfortunate short¬
sightedness.' ■ " > 7-''/,,: housing,' the Department of Com¬
merce
is exploring the possibili¬
Let me cite some examples of

be

must

which

that the first* floor of a

when most other cities have found

was

high hourly wages is a
challenge to the growth and pros¬
perity of the buiiding industry. It
is a challenge to the
industry's
ingenuity and engineering ability.
It is a challenge that can and must
be met. It is a "cost obstacle" that
and

more

no

ments

seasonal

can

are

ings. During the war these agree¬
were waived because there

only

not

3021

THE COMMERCIAL & FINANCIAL CHRONICLE

4448

code

in

an¬

Charles R. Dunn, Fiscal Agent
31 Nassau

-

^

Street, New York 5, N; Y.
C

December

17,1945.

%

THE COMMERCIAL & FINANCIAL CHRONICLE

3022

Some

Mutual Funds
Question

The $64

Putnam Fund of Boston in the
current Portfolio Review comment on a question raised by the
Investment Company Committee at the recent annual meeting ot
the National Association of Securities Commissioners.
They report
Trustees

of

The

against a
facetiously by

representatives at the^

of the

The Putnam Fuhd Trustees

r

bej-

lieve that these present prosperous

present a real challenge to
all in the industry.
Bull markets
times

invariably lay the foundations for
later
crippling losses.
This is

especially true of investment com¬
panies, where- such a large pro¬
portion of the new money always
comes in near the top of the cycle
when optimism is
The

-

strongest.
"The

concludes:

review

dangers inherent in this situation
can be minimized, however, by a
clear recognition on the part of
the

dealer

salesman

and

of the

characteristics

and

functions

meeting.

is

Tt

different- trusts.

of

impor¬

an

part of each dealer's job to

tant

and to

fit the fund to the purpose

the times."

.V'/V//.'

Investment Com¬

Commonwealth

the

pany,

on

North

sponsor,

Amer¬

Securities Co., compares the

ican

performance
of
the
Barron's
prize-winning programs with that
of Commonwealth.
Figures show
the

standing of the winning pro¬
at each anniversary date

grams

and Commonwealth's management

period.
winning list with the best

The

had

record

six-year

a

gain of $20,189 in value and total
income

of

of $32,562, or a

total gain
Commonwealth had a

52.7%.

six-year gain of $90,443 in value
and total income of

$32,238, mak¬

ing a total gain or 122.7%.
Reconversion

National

Hearing Completion

Securities &

Research

Corp. devotes the current Invest¬
ment

Timing to

discussion of

a

conversion and its effect

tries.

The

President

ported
trial

report

indus¬

re¬

plants/ and
93% recon¬

\ .'.%>■
of the present

verted.

.

brief

;A
;

A PROSPECTUS ON REQUEST FROM
YOUR INVESTMENT DEALER OR /
Distributors Group, Incorporated

63 Wall Street

•

position of 10 industries with

conclusion

following

is

reached:
"American
formed

a

the

in

business

has

per¬

remarkably efficient job

last

four

In

on

Lord,

months.

The

production and the

should

pleted

by

be

the

virtually

end

of

and

Million

comments

on

"This

diversifica¬

supervision,

raised

price

while

Transit

them.

were

ris¬

Bendix'

was

than

just

one

of

after

excellent

more

the

value

of

offset

others."

good

by
■

.

,

An

Command, President. Major Allah
K. Shackleton, who served with
the 30th Division in the European
Theater and with the 52nd Troop

in

Carrier

folder

not been available to their means.

comments'

on

ment

Fund

of New

In

covering letter the

a

that

this

sponsor

Secretary.

fund

this

war

pro¬

career
in the investment business in 1925

was

Trust Company

Central

the

with

hardship formed iti response to a country¬
have all too frequently been suf¬
wide demand for an investment
fered by those who could least
fund designed to produce liberal
afford it./
/'//Co'\•/:>'% income from securities carefully
By the purchase of investment selected for that purpose. /
company shares, smaller investors
At the completion of its first
may
enjoy
all ' the
advantages year the Fund has $6,880,114 of
available to larger investors.
In assets, 492,826 shares outstanding
essence,
investment
companies and nearly 3,000 shareholders.
represent a banding together of
Railroad Equipment Orders
thousands of investors of all de¬

He was Man¬

Topeka, Kans.

of

of the Bond Department un¬
til 1933 when he became a partner

ager

Estes, Payne & Company.

in

he

In

of net wprth to secure the
advantages
previously- enjoyed
only by the wealthy.
In other

News, Distributors Group reprints
two news items from the Dec. 13

words, states this sponsor,; whether
the amount available for: invest-,

The

grees

,

ment

is

a

few hundred

thousand, "It's just
a

Selected

few

as

if

you

had
;

Pays Again

/,/- /•//•

Investments

Co.

uses

the recent
ation
as an

history of Bendix Avi¬
Corporation common stock
example to show the advan-i

tage of diversification. Before the
Bendix

primarily an au¬
tomobile
/equipment " company.
During the war, the company ex¬
panded ; its lines, turned out a

war,

volume

of

was

war

products at

many

times the rate of its peacetime ex¬

perience.

But it was, and is,

be-^

lieved by many that Bendix will

in

a

very

the

much bigger

coming

than

it

did

/YV/Y/./Y :.///'/r','' C

1940.

However,

years

busines^

on

Nov. 21 the direc¬

com¬

tors of Bendix met and declared

year.

quarterly dividend of 500 instead

a

der

deals with the

first item

from

order

cent

the

System for 420 passenger
the

constitutes

This

".SAN

FRANCISCO,
CALIF.—
Kaiser & Co., Russ Building, mem¬
bers of the New York and Sara

or¬

largest single'

for- passenger

The

cars

admit

American

of

item

second

Mr.

Mutual Fund Literature /

of Steel

Steel

.

.

Co.

diversification

ing

in

investment

of

"These

announces

Things Seemed Important."
.
.
Lord, Abbett—Investment Bulle¬
.

tin

on

Union Bond

Fund B;

rent issues of Abstracts.

.

.

that John W. Standish
from active

been/ released

has

military service and has. resumed
his association with them.

cur¬

Na¬

.

tional Securities & Research Corp,

.

Notes;
portfoliq
Current Information
alP National sponsored

meriiorandum

changes;
folder-

STOCK SERIES

on

funds.

.

;

.

showing

folder

memorandum

<

1945

of

COMPANY

complete

New

on

the

Mutual Investment Fund

/

York

/•''

/' '//-■■/
■>'

Dividend

Institutional

NATIONAL SECURITIES &

Lord, Abbett & Co.
INCORPORATED

120 BROADWAY

showing

Series

various

•

RESEARCH CORPORATION

on

dividend information

Stocks.

investment dealer or

New York 5, N.

INVESTMENT

Steel In-*
dustry Series of New York Stocks;

Shares

your

COMMONWEALTH

'Hugh W. Long & Co.

-Up-to-date

New York

•

Chicago

•

Philadelphia

•

Atlanta

A

semi-annual

Los Angeles

Y.

★

/■■■■./"

NORTH AMERICAN

per

2SOO Ru»»

Shares

Building

Son Franci*co

\

SHARES OF CAPITAL STOCK OF

F unds
from

your

The

local investment dealer

or

your

Keystone Company

of Boston
50

Prospectus

Congress Street, Boston 9, Mass.




THE

may

be obtained from

local investment dealer,

PARKER

*

FUND, INC.
Prospectus

Prospectus maybe obtained

*

INVESTORS SELECTIVE

INVESTORS

or

CORPORATION

ONE COURT STREET. BOSTON 8. MASS.-

.

on

•/.!•"

SECURITIES CO.
•

/

*

.

GENERAL DISTRIBUTORS

of

share on Insurance
payable Jan. 31,
1946, to stock of record Dec. 31,
1945.
V-■"■•/I

$.0375

Group
•

./'/'

Ltd.—

distribution

★

:

Prospectus on Request

>

Securities,

/

Graff & Co., 120
Broadway, New York' City, mem¬
bers of New York Stock Exchange,
Townsend,

American

of

issue

Graff Co.

of Townsend,

$10,000

a

Selected

current

Shares;

Standish Rejoins Staff

.

Memorandum show-;

—

20 Pine St,

Railroad

Shares of Group Se¬
Selected Invest¬

Equipment
curities.
ments

and

New York office,

the

News; revised folders

Shares

limited partnership on Jan¬

1. Mr. Quine, Mr. Rowell and
Burgess have been with the
firm in San Francisco for some
time.
Mr. Horton is Manager of

uary

Distributors Group—Current is¬
sue

general part¬

nership, and Edward L. Turkington to

from

on

Burgess,

P.

Charles

Rowell,

the

announces

Quine,

Charles C. Horton to

France for $85
million of railroad rolling stock.

inquiries

Charles

will
Leslie E.

Exchanges,

Stock

Francisco

in the
railroading
and
represents
22 ' streamlined
sleeping car trains.
order

history

Partnership

Five to

re¬

York

New

to cost $34 million.

cars

;

Kaiser & Co. to Admit

issue of the "Wall Street Journal."

Central

million dollars."

Diversification

a

or

at the time he en¬
1942.

organization

tered the service in

recent Railroad Equipment

a

—Current issue of National

Prospectus upon request from

Ira

organized the Columbian
Securities Corporation of Texas
in San Antonio
and; was VicePresident and Manager
of this
1940

.

<

Priced at Market

'

Y.

"

/

/

.

Payne began his

..../ Major

loss/ and

result,

a

Division,

Second

the

Stocks.

York

with
Assistant

minal leave after seven years

Diversified Invest¬

Long & Co.

and

Secretary,

Wing,

Lieut. Robert G. Day, now on ter¬

attractive / "anniversary"
is at hand from Hugh W.

value, thorough study and plan¬
Small investors have either
not realized the importance of this
degree of management, or it has

one-half

and

with the. Southern Defense
Command and Eastern Defense

v

■

three

serving

years

wide

results

\

.

William

Officers

W., Payne, now on terminal leave

Diversified Investment Fund
~

engage

municipal bonds.
are:
Major

Texas

»

is

in the
specializing in

to

Tower,

securities business,

diversification/A poor experience
in one holding is frequently more

ning.

As

dividend' rates

cases

other stocks

illustration

the

obtain

their

of

formed

been

The conclusion is reached that:

Bul¬

continuous

to

in

falling.

Investment

1

few

a

/

ANTONIO, TEX. — The
Texas Corporation has
with offices in the

SAN
First

•

many

ing

American Business Shares,

able

Selected. During
period many of the
stocks
held
by
Selected

in

And

advantages available to small in¬
vestors through investment, com¬
pany .shares.
Large
investors,
points
out
Lord, Abbett, have
recognized the importance of and

before

-

a

Corp.
in San Antonio, Tex.

same

maintained

-?11

»

Abbett

practically reconverted from

cess

You Had

current

a

letin

do

peace

if

as

'

•-

Dollars

manufacturing plant of this coun¬
try in the physical sense is already

to

Securities Series

re¬

spect to reconversion is given and
the

New York 5, N. Y.

NATIONAL

resume

Just

that

recently

about

are

,t

the

First of Texas

sharply in price.
only one out

was

than-one hundred invest¬

more

other

re¬

country's indus¬

manufacturing

facilities

on

states

Truman

that this

of

had been expected.

broke

Bendix

,

record during the same
over-all

But

policy are removed, the industrial
production of the nation should be
in high gear for several years."

tion,

memorandum

current

a

The stock

ments owned "by

been

Superior Performance
In

of the 75£ that

problem

handicaps of the present wave of
strikes and the OPA price ceiling

George

that the question, What protection does the investor have
drastic general market decline? was treated somewhat
some

no

at, all; others had it to. a moderate
degree and a few faced a serious
problem.
After
the
temporary

■N*.

The

had

industries

Thursday, December 20, 1945

request from Principal

Underwriter

INVESTORS SYNDICATE
MINNEAPOLIS, MINNESOTA

4

Volume

162

Number

COMMERCIAL

THE

4448

cion

Government and the

& FINANCIAL CHRONICLE

stands
the

out

ond,

unimpaired through¬
period; sec¬

moratorium

that there is only a limited

moratorium

Insurance Business
tr
if

4

-

•

/

(Continued from page 3007)

•

the" principles of tree govern¬
and free enterprise are t

survive

in

this

world, they

mus

to preserve a free economy

gress

governed

"people of the United States who
.

spirit is the desire of Con¬

.'hat

be defended and preserved
by the

•

spirit of the law.

'.ctnerence to the

ment

•

.-.•* •

in the public interest by

authority of all of the people

he

j have inherited them from the1 pa1

and'" not-by any small group even

triots and the statesmen who wrote
the Declaration of1 Independence

jJhough they may be regarded as
well
qualified
to
manage,
but

■.■A

and the Constitution of the United

whose authority does not

States.

from the people.

:V

'.•"v,"""'

'

'•

*

proceed

'V

'

,

Government' organization and
business organization,are the in1
struments by which the.American
ideals of political and economic

-

•

freedom

to

must

proceed

from

the

serve

public interest. WhenV• ever either political organization
or business
organization falls under
the domination of group or class
:
; or special interest, it ceases to be

C

1

lish.

^.

This

.

to

me

public inter¬
"Regulation", is the longest

est."

word in that sentence and it con¬

tains

four

only

insurance

It is
regula¬

syllables.

sometimes pretended that
tion is a hard word
to

.

under¬

specific problem with
which you, as persons engaged in

word which has

the

are most

plied to business/although it is

in-

ment.

which have

Various

State

-

to

come

the

industry committees, from
insurance
commisioners'

committees

and

all

others

'

beginning. There

very

never

was! any doubt -in the constitu¬
tional
convention that- Congress
should have the power to "regu¬

from the

me

a

been in the Con¬

stitution of the United States from

concerned at the mo¬
Let me say that the reports

commerce." Congress has al¬

late

inter-

ested

ways

an

one

in insurance, indicates that
honest effort is being made to
adjust the insurance business and
its regulation to the decision of

exercised
degree
have

states

Business

that

always

has

authority in

another

or

the

and

it.

exercised

prospered

and

ex¬

the Supreme Court that insurance
is commerce and to the law of

panded under it, because regula¬

Congress

for

approved

by

tion in the

President
I con¬

public interest is good

business

well'

as

for

as

the

public. Unregulated business
tends to develop abuses, and the
gratulate the industry on its ef->
forts because if it succeeds—and greater the distance between the

Roosevelt

I

think

have

it

done

will

succeed—it

much

dustry how the

,

to

show

delicate

all

in-

balance

between government and business

be

preserved in a manner
that will protect the interests of
may

■;

people and managerial authority,
the greater the tendency.
1
;;

will

"regulate" means only to
provide rules and the American
of

not

does

Expansion

V
-

expansion

-

,

'

;

*

•

,

;

of

Central

/ The great evil of

of

central

Power

power,

ar-

bitrary central power, sometimes
exercised by private groups,
some-;
times exercised by Government;
In either form it is the foe of free-

/ - v dom. When any private group unA c.dertakes V to establish sUch con-

■-.ttrols

over

any

Ztirp inomic system
\-y-^tunity and
v;

branch of the eco1
as ;to

deny. oppor?
to others, it
upon 'I the road to

freedom

launches " itself

authoritarian government.

.

of Mar. 9, 1945,

was an

preserving competition and banthe

evils

of

monopolistic

central control. It was
tion by the legislative

a

declara¬

authority of

the

United

States of

strengthen

a

desire

to

state

regulation :by
closing the door to private regu¬
lation. Surely it must be clear to
business

leadership that such an
invitation, proceeding from the
in

government

Washington,

should

be promptly accepted, be¬
cause
it affords not
only an op¬
portunity to avoid all the dangers
of
central
government
abut

an

secure

control,
opportunity also to make

real

freedom

of

opportun¬
ity in the industry itself. Yours, is
the chance to establish the "grass
roots" rule for business
whereby
alone

we
can
escape the world¬
wide trend to central power.
It is not an easy task. It is not
_

one

that

fcmart

can

be

legalistic

performed

construction

by
of

the language of the Act of Mar. 9,
1945. It is not a problem that can

be solved

by

narrow

construction

of the letter of the law or

by seek1
ing to make of it a cloak to hide
private purpose. It is a prob¬
lem that can be solved only by
some




control

to

the

in

when

in

Congress., de¬

the-first

of

sentence

Public Law No. 15 that ."the con¬
tinued regulation and taxation by
the

several

states

of the business

of insurance is in the

public inter¬
est," Congress made it clear that
it was not trying to take over the
business of : insurance or;to estabr

lish rigid -regulation from

Wash¬

ington. Congress wanted to stim¬
and " revive; state) authority
and a free competitive economy.
ulate

I

say

it-, sought, to

.

anti-trust

laws?

too, is simple. It was be¬
knows that pri¬
vate monopoly is the direct road
to totalitarian power. The private

Congress

group,

which attempts to set up a
around its own privileges

and

and

power

to

exclude

all

engaging in business,

nomic

concentration

power

and

.

by

-

of

eco¬

bringing

about that concentration it makes

•the

^expansion

■> of •/ government
inevitable. That is : why

-power;

there, never, has been
der

system

our

tions

and

time

a

when

trade have not been

illegal; To

strain trade is to deny

gives first
protection or
public interest in its recom¬
mendations to the state legisla¬
tures, the invitation of Congress
will have been accepted and the
industry will have avoided the
danger of either private or public
control,

time

enterprise and the state managed

competent to examine,

economy.
across

say, which are
audit and
complexities of the

business.

regulate

establish':

a

this

manner

as

is to be

no

business

such

life

an investigation of
insurance, pointed out that
state
appropriations usually are

not survive

insufficient to do

abuses. Free enterprise, he says,
inevitably develops monopoly and

perimenting with the nationaliza¬
tion of industry. The Communist

than pro¬

more

of

trade

are

particularly

pointed

to

the

tions

only

two

four

to

terms and that the changes
rapid that frequently com¬

with

their

of

Over

asserted

and

that

regulate the industry
eral government will.
Does

the

with

of

*

This

ments

is

to

not

among

hibited.

They

say

•

agree¬

the

companies -are pro¬
not. It is not to

Agreements which
serve

the

must

prohibit
Certainly not.
plainly de¬

are

public interest

to

forbidden; The aim is not to make
difficult^for the insurance in¬

it

through

agree¬

the

industry" or" to make it
difficult for any private group to
engage in the insurance business
at all except On the terms

of

other private group.

)

-

:

has

pro¬

industry

the

that

weak

links

there

are

some

very

state supervision."

in

apply, I

am

to

the. State

or

to

other

of

happy

competitive

economy , under
state regulation and I say that this
is the clear purport of the law be¬
it is so stated in the act an

states

mentioned. It is

a

ing fact that at

a

separate

clauses

which

are

The first of these is the proviso
after Jan. 1, 1948, the anti¬

:

trust laws

shall

be

presented

to

economy.

that

could

clause

untilJan.

1,

also President of the National As¬

Street, New York City, to engago

Insurance

of

Open in New York

H. F. Boynton & Co., Inc. is be--

ing formed with offices at 2 Wall
in the investment business.

Commis¬

bert F.

ley & Co.

.

,

various insurance departments."

on

January 1.

Mallory Adee

mitted to
Adee

&

partnership in Mallory,

York

City, members of the New

.York

Stock

Exchange,

any

of these

states

(A Delaware Corporation),

hot apply to the
of;insurance or to acts

150,000 Shares

\

150,000 Shares

A

,

6% Cumulative Preferred
Stock
i

and

%

Common Stock

!

=

There you have, first, a positive

(Par value $10 per share)

1

*

(Par value $1

per

declaration that the federal anti¬
trust

laws shall apply after Jan.
1, 1948, if "insurance is not regu¬
lated by state law,"
and/ second,

Offered] in units of

|tnd

.

exemption from the anti-trust
laws for a limited period, an ex¬
emption that was granted solely
for the purpose of affording time
for adjustment.
an

Then there follows another very

simple

statement

contained

in

the

that
Act

of

nothing
Mar.

■

-

••

I

.

one

i

,

Act

inapplicable

agreement

to

intimidate,

or

cion,

or

'

|

I

]

'

'

Price $15

any

4

*

unit

'

'

I

#

,

'

»

.

1

FLOYD

boycott, coerce, or
act of boycott, coer¬

clear, first, that the
prohibition against coer¬

per

V ■
.
••
'
Copies of the Prospectus may be obtained from the undersigned

9,

intimidation." Thus Con¬

gress made it

Federal

to

•''•:•■

i.

"

1945, "shall render the said Sher¬
man

share of Preferred Stock

share of Common Stock

.;•.:

-

one

D.

120 South
December 19, 1945

CERF

'

'

COMPANY

LaSalle Street, Chicago

Admit

Co., 120 Broadway, New

NEW ISSUE

1948, the anti¬

conduct thereof."

in

to

Berkeley W. Jackson will be ad¬

offer to sell nor a solicitation of offers to buy
offering is made only by the Prospectus, \

an

Her¬

Boynton principal of the

firm will retire from F. S, Mose-

an

securities. The

Act "shall

business

;

:

trust laws and the Robinson-Patman

\1

Chicago, Commissioner Jas. M.
McCormack of Tennessee, who is

applicable to

which

;

insurance

in

business is not regulated by state
law." The: second „is the) famous

that

'

to

This advertisement is neither
;

the

,

H. F. Boynfon & Go.

be

most encourag¬

;>'v•

?

on

a

*

insurance "to the extent that such

moratorium

the

-

not difficult to understand.:)

that

station

recent meeting
of the American Life Convention

cause

two

way

This is the challenge which has

our

)

have, therefore,; is

welcomes

Massachusetts

.'7 If this is done in the state laws
which are passed before Jan. 1,
invitation to the states-to become 1948, and the competence of the
the Unipfres of a free
'economy states' to regulate is thus firmly

.N.rWhat we

stateism

to the State of New York

say,

or

form statute governing the organ¬
ization and qualifications of the

an¬

con¬

industry and to the states. Lead¬
ership in business and in govern¬
ment can keep enterprise free if
leadership is unselfish enough, is
courageous
enough and vigilant
enough to do it. By the Act of
Mar. 9, 1945, the government at
Washington has laid the problem
in the laps of the states and of the
industry. It is yours to make or to
break. You can keep the insur¬
ance industry free and when you
do so you will be setting an exam¬
ple for all business and all gov¬
ernment/in every other branch of

organ¬

sioners, declared that "It is high
time that we explore the advis¬
ability of recommending a uni¬
form statute setting up high stand¬
ards of state supervision —a uni¬

ments or combinations among pri¬
vate groups to fix
prices or con1
trol

in

people

sociation

dustry, to do business, but only to
prevent > abuses

Commissioners

know

to

strengthen the companies by
preserving their solvency are not

or

highly
industry.

Regulation Called For

That does not

are

all such agreements.

signed to

that

competent

for ex¬
ample; the editor of Best's Insur¬
ance
News who, in the issue of
July 2 of this year, asserted that
"most
people
in
the
business

Public Interest

that the states

say

1

:

the

r

a

road to totalitarianism.

been

deal

of

only

able

formed

the fed¬

or

strengthening
departments by

know that it is essential as,

will

is

it

posed better state supervision. In¬

N°t Prohibit Insurance

Agreements in
:

states

is

small

monopoly because he knows that

<'

to

by

advocate

TNEC

laws which will make them better

surance

again it

over

the

The

The National Association of In¬

grant of power
to permit combina¬
conspiracies in restraint

trade.

was

tasks.

so

ducted

so

Better State

states

or

be¬

time

our

business

managerial
groups who- are beyond regulation
in
the public interest by local
communities or by the people. The

ized insurance

was a

in

cause

serve

cerned.

that this law

so

much

out that most commissioners of in¬
surance

executives

con¬

free economy can¬

a

because, he says, cap¬
italism cannot protect itself from

for perfunctory examination

of state insurance

Nobody in Congress who
had any part in the preparation of
this law had the slightest notion

behold
arising.

member, made

recommended

keep it .free. There
unregulated area so far

look

we
we

state

•believes that

ed

a

seas,

Great Britain and France are ex¬

missioners
are
replaced
before
they have really become acquaint¬

to

restraints

as

in

Wherever
there

the

authoritarian

the

As long ago as March, 1941, the
National
Economic
Temporary
Committee, which, as you may re¬

"are

Congress has invited the in¬
surance industry and the states to

the

understand the

year

So

repeat, the issue of our
conflict between free

me

is

regulate, that is to

re¬

ity. To deny opportunity is to de¬
feat the basic objective of free
government. ; :
)

Let

.

competent to

are

of insurance companies. It

opportun¬

leaders,

its

consideration to the

not be sufficient, how¬
merely to
announce
the
principle or to pass laws in the
several states which merely for¬
mally assert state authority.
If

vide

combina¬

the

the

It will

un¬

conspiracies to restrain

assume

affirmative regulation
insurance
industry,

of

if

through

end.

insurance

,

sibility

the states by the
the respond

if

laws also

and

there is to be state regulation, the
must have. insurance
de¬

ing
competition, / is V working
against the public interest. It pro¬
the

this

partments which

difficult for. others
to engage in business
by penaliz¬

motes

neces¬

that business

now

states

make at

to

or

than it is

ever,

That

answer,

,

more

leadership and government lead¬
ership should cooperate to achieve

cause

fence

it

was

sary

the

regulation fails.
Congress so concerned

was

the

it free. Never

anti-trust
anti¬

established;
hew

<

free

invitation to the insurance industry and to the states by the Congress to set up a formula of state
regulation which will preserve a
*free.. economy in insurance
by

ashing

clared

f

'

\m > The Act

mean

Therefore,

time is the

our

is to

of taking over or absorbing.

sense

t

business regulation

regulate in the -public interest. : It

aii.

■-

Why
about

To

ideal

that

trust laws, after the
expiration of
that
period, are revived in all
their vigor if state

March 9, 1945.

on

the

third,

and the saviours of private enter¬
prise by regulation that will keep

.

the insurance history,

to

timately

: ^

of

business

the

in

stand, particularly when it is ap¬

and

,

brings

J

•

is

the

of

states

insurance

of this nation sought to estab-

ers

15

,

several

the sort of organization the found;

lawyer to read Pub¬
of the 79th Con¬

no

No.

it in the spirit
American
institutions.
You
need no lawyer's brief to expound
this statute, In the plainest of
plain words it expresses the belief
of Congress "that the continued
regulation and taxation by the
of

the people, from all of the people.
They must, both be designed to

.

Law

gress and construe

They
democratic,; that is

be

they

say,

It takes

be maintained.

can

both

must

Federal Regulation of Insurance

lic

from

and,

others from

'

^

laws,

30231

share)]

on

Jan, 1„

their

in

ment

strument and

Transportation tiesProblem
however, and tremendous

Solving the

of course,

others. It must,

of

use

system of free enter¬
prise, not only pay for its keep but
under

our

profit to those who supply
capital to create it and keep
,
Y. •
•
But transportation
must serve

pay a

the

it running.

of transportation through- i
are,
nation but we do not know as may be
is not true to describe them as a
what all of those problems are.
"system."
vVe do not know how they meas¬
What we have, in fact, is a farure up in your job of meeting the
flung conglomeration of transpor¬
jemands of the public you serve.
tation systems
and independent
Ye can only find out what those
agencies. This is due largely to the
problems are from you and we enormous variety of needs, geo¬
Zvrant to know how you look upon
graphically and economically,
.hem and from what angles you
which
these systems have been
ipproach them.
created to meet. It is also due in
Not to Rewrite Interstate
part to the fact that each system
'•Y
Commerce Act
and each mode of transportation
viders

(Continued from page 3017)

Grouping it all together we call it
transportation. From the stand¬
point of the user transportation is
a single implement. It is a tool. It
is created not for itself but for the

■

■

public first and its own inter¬
ests second. It is that public service and not the self-interest of the
the

hat
he

\ct.

Congress in its approach to

ences

transportation.
It is from the
standpoint of predominant public
interest that we must expect the
agencies of transport and the us¬
ers of transport to approach their
problems. Unless we jointly, the
Congress
and the people, seek
every possible means of adjusting
self-interest to public needs, and
succeed in doing so, we will get
nowhere, Legislation enacted in
the
vacuum
created
by selfish

without strict re¬
gard to the needs of the people is
merely empty phrases and mean¬

pressure groups

ingless words.

Lea,
in¬
resolution
thoroughgoing sur¬

When the' Hon. Clarence F.

of

Chairman

last

troduced

calling for

a

jretty

July

fou will agree,

recently in our econ¬
made much of this
iramework obsolete. Indeed, obsoescence set in many years before
:he war but just as that catastro)he has opened up new vistas in
nanufacturing, it has also opened
new
vistas in transportation and
oas
multiplied and magnified its

said Mr. Lea,
"is vital because transportation is
between our

producing machine and the con¬
suming public. Without adequate,
economical
transportation
our
whole economy can bog down, no
matter how much energy, wisdom,
capital industrial executives
put into the other phases of

may

reconversion from
to an economy

a war economy

of peace."

>

,

?

problems.
The

Congress,

significance
all of

of

to

right answers.
In dealing with

matter of this
should be statesmen and

kind we

a

interests

"orget local and regional

hope the people who

and

appear

their recommenda¬
tions will do likewise.
If we are to be representatives

before us with

all

of the people

we

must ex¬

pect the people whom we serve
to forget self-interest when they
approach common problems. We
grow the finest melons and corn
and cotton in the world in Ar
kansas but if you here in New
York can't get them, due to a

further that fail¬
legislative rem¬
breakdown in transportation, we
edy to meet the needs
of our
both suffer. What we need from
transportation system, or failure
you,
I wouldn't know but there
to focus the thought of leaders in
are
other states that are less in¬
the
transportation
field
upon
their
own
responsibility,
apart dependent than we are and I am
sure my pepole will
wish me as
from legislation, can prolong for ;
their representative to act also as
many years this nation's period of
your
representative
in my ap¬
reconversion. And he truly said
that
it
might even throw our proach to this inquiry.
He pointed olit
to provide a

ure

whole
As

member of the Subcom¬

that will

mittee

quiry, I

I

into chaos.

economy

one

can

conduct

assure

you

this

in-

that we

will devote all the time and all

the

that is necessary to the
prosecution of our study. We hope
and expect to find the answers to
some
of the problems that are
perplexing to you as users and
providers of transportation. These
same
problems .have
likewise
perplexed
the
users
and proenergy

an

have

hope and believe that I
open

I

Personally

mind.

am

prepared to find that some of the
views

I held

a

transportation,
roneous

of

few

years

on

ago,

be quite er¬

may

when I have examined all

the facts

inherent in

the new

conditions that surround our pres-

ent transportation problems.
We

frequently hear our trans¬

portation facilities in this country
described as a "transportation sys¬
tem."

Magnificent

as

these facili-

up under our system
competitive enterprise

grown

free,

largely through the inspiration of
competition. This competition has
been not alone that of the enter¬
prisers
who have
created our
transport agencies. In many cases
a
mushrooming
and
sporadic

growth has been stimulated
tense
competition
among

by in¬
geo¬

graphic and economic areas.

Let

me

devote

give this
ours

of the factors that

transportation
problem of
such compelling interest to
,

both

the

people and the Congress.
history
of the economic
progress of the world is in a very
large sense, the history of the de¬
velopment
of
transportation
The

You men
thing which deter¬

efficient.

and

know that the
mines

ability to do business

your

extent of your
market. To all business enterprise
the business of transportation has
an
importance exceeded by no
is the

profitably

It

other.

transportation

is

that

transportation

only

mines the extent of the
any

and

deter¬

market of

VY''

business.

this time

its States

(other than the State of Ceara) and

issued prior to

Notice is

given

heretofore made by the

that the Offer to Holders

at

will

United States of Brazil as of January 1, 1944,

the close of business

on

A

or

date.
have

will thereafter be treated

as

if it had in fact been presented in

acceptance

of/

the expiration of the Offer.
However, in
established to the satisfaction of the Minister of
Finance, upon application made through the appropriate ,Fiscal Agent, that
failure so to elect w^s for reasons independent of the will of the holder' such

Plan

A

immediately prior

to

individual cases, where it is

relief may be afforded

by the Minister of Finance as the Minister

For the United States of Brazilr

may

decide.
~

'

sands of terminals, freight

depots,

shops, and other supple¬
mentary and maintenance facili¬
ties.
/..■ .'Y; ' •
repair

■'

1919 this country had

While in

less than 10,000

miles of hard sur¬

Mario da Camara,

'

December 11, 1945.




to

who

hold

men

,

distributed by

their jobs at the

pleasure of a political party? This
obviously could lead to totali-

postwar years. The over¬

system has
ascertained but the

all cost of our highway

Y

tarianism.
you going to say about
3,000,000 transport em¬

What

are

ployees to the Federal payroll?
They will vote.
They will want
be

run

/

Y;

they

because

business

your

,

They will
They will

pension schemes.
in the driver's cab.

new

government!
industry and agri;
figure is very large. Add to the
culture exist as free enterprises /Y
three and three-quarters billions
authorized
for federal
aid, the with such a set-up? There is the
..
state, county and city funds that answer to those who brush off
have
been
expended on streets this problem with a'"so what."
Yv'Y
and highways and the figure will
After World War I
run
up into almost astronomical
Some 25 years ago we came out
proportions. But whatever it costs
oi World War I with a transpor-, ;
I am certain that highway users
problem quite different
consider
the
investment
well tation
from that facing us today.
Then, v:
worth while for they'are still ask¬
we
merely had to consider the
ing for more.
railroads.
Airlines did not exist.
I will not burden you with fur¬
been

will

the

run

ther statistics. I have

that is your

dwelt on the
I assume

because

road * situation

predominant interest
think of the
private
capital that

but I will ask you to

of

billions

the construction of
roadbeds, terminals and other

have gone into
the

of our rail lines
billions that have

facilities

basic

other

the

of

stock

rolling

the

ask you to
millions that have

,

vehicles

Motor

not serious

were

All that we had to
rehabilitate our rail
facilities atter 26 months of gov¬
ernment
operation
which
had
been characterized by the worst
service in transportation that this
competitors.
do

to

was

country has ever seen,

v

either be¬

I seriously doubt
anyone who had any
experi¬
ence
during
those
dreary • 2*3

fore

since.

or

if

the

of

would

months

must
of taxfree,
interest-free,
government
capital in other facilities. If we

of

transportation when they

compete with the billions

. .

ever

solve

cannot

must face the

this problem, we
alternative. That al¬

thp
demands of war,
transportation did a magnificent

meeting

part of our free

a

Transportation must and will
continue as a service to the peo¬

tem if we

built with fed¬

You will never see a sign
plastered on the door of a railroad
station on any of our truck lines,
"This road has been closed down

impose

highways,

which

been

have

have near¬

we now

these
highways, at the beginning of the
war,
were
26,200 trucking com¬
panies and more than 1,500 motor
bus companies, together operating
eral

Operating

aid.

over

there

United

are

3,000 airports in

States

the

and

Civil

Authority has plans
3.000 more. There are nearly

back

to

and
ger

the

highways,

.

.

All of these

onstrated

j:

,

facilities have dem¬

beyond

question

abilityto serve our

their

people. They

this and per¬
form even more satisfactorily than
in the past. Our only hope is that
our
regulatory system and! our
statutory framework may be per¬
fected to aid them in this effort.
Our aim shall be to prevent un¬
bridled competition between pri¬
must continue to do

vate carriers
and

among

carriers
carriers
destroying the

and common
common

value of this fine

instrument.

People's Huge Bill for
Transportation
The

out

people have a huge

of

it unprofitable

government ac¬

prise or become a
tivity. '

unreasoning competition or
upon it, through regulaimpossible restraints.
The
performance
of highway, rail,
water, air and pipeline transpor¬
tation was beyond anything that
the
American
people had §ny
right to expect.
This should be
the best answer that can possibly
be made to those who would force
transportation
into government
ownership and operation.
But this fine record will amount
to nothing as an argument against

tion,

government

/Y/

I

to

Road

The

hear

can

Socialism

some

who

do

not

through this problem say
"and so what?" This view is very
holds that so long as
railroads/bus lines and
airlines roll and fly, we don't care
what happens to other elements of
our. business
fabric. But there is
much more to this picture than
meets the eye blinded by self-in¬
terest. :
\
'• i
'
~
narrow.

It

trucks and

If

examine the history

you

socialism,
mean.

of

to
what I
is the social¬

that have gone over

countries

you

will

The first step

see

transportation and com¬
munication.
We. see in England
today that almost first on the pro¬
gram of the new socialistic gov¬
ization of

ernment

is

the

nationalization of

A few days after the
government took over the banks,
it took over domestic airlines. , I
transport.

warn

you

that what is

invest-in England can

compose

structive

think

happening

happen and will

enterprise sys¬

permit it to starve itself

by

not

is

operated,* trucks and passen¬
cars/

warehouse can
business whenever it
to continue.
A factory making hoe handles can
close up any time it wishes. The
stream of commerce through our
transportation system cannot stop.
It must continue as private enter¬
by its owners." A

go

finds

five million vehicles.
Also

ple.

Y

When we approach the prob¬
lems of peace, however, we canhot reasonably expect it to work
miracles and continue to exist as

job.

ly one and one-half million miles
of
such roads,
230,000 miles of

face

Delegate of the Brazilian Treasury in New York
New York,

be

power

ternative is not pleasant.

themselves,. from
.

ing

.

have.to consider, as a most im¬
portant competitive force, millions
of motor vehicles, privately owned

within which the holders of the above bonds may

the first

Y

abouf, turning over to politicians
the largest single unit of purchas¬

fall

last

Y

,

Going

December 31, 1945, and that the period
elect to accept either Plan
Plan B set forth in the said Offer will not be extended beyond that
As provided in the Offer, any bond as to which such election shall not
been duly made at or before the close of business on December 31, 1945,

expire

office. I doubt
this but it is possible.
but what are you going to say
from your

contemplate
the prospect of government oper- ,VY
been spent by federal and local
ation with anything but a shiver
governments for airline develop¬
of horror and disgust.
>
YY'h
beginning of the war there were ment and the billions of expendi¬
Fortunately our repair job at ,
ture that are in immediate pros¬
more
than 8,000 miles of coastal
this time is much simpler.
Ex*Y
pect. ,' / 3■' S\;,Y-3
and intercoastal water routes com¬
cept for a brief period of threat- Y/
You will see, if you think clear¬
peting
with rail and highway
ened labor trouble there has never
users.' ;
\ Y_.
: ■ Y V
Y:\
ly through these staggering fig¬
been
any
suggestion of govern? ,,,Y:i
■'/
There are 1,302 railroad com¬
ures,
what our greatest problem
ment
operation during the war
panies of which 136 are Class I is. We must make the services
which has just ended.
roads' operating 230,000 miles of provided by private capital con¬
Everyone
will agree that in
/
privately-owned tracks and thou¬ tinue to be available to the users

greatly during the war. It, too,
a factor to be reckoned with. .:

of Dollar Bonds

trucks will roll as ef¬

your

rected

highways. This includes one
one-half billions authorized
for expenditure during

and

,

transportation as efficiently
as
private enterprise.
Let's assume

adding

think

of

miles

Then, too, there is an extensive
of pipe lines, expanded

January 1, 1944s

hereby

govern-

operate the business of

Congress for expenditure on fed¬
eral

navigable inland
waterways served in peacetime by
more than
11,000 vessels.
At the
30,500

network

Municipalities,

the

that

assume

that

into

we

;

Let's

ment can

fectively for you if directed by a
bureau in Washington as when di-

a

lines. I will also

for

United States of Brazil,

competitive race with
government-aided transport.

streanYof produce flows
through the channels provided by
transport and this stream must
never stop or we would starve and
freeze and disappear as a nation.
The size of the transportation
bill that the people of this coun¬
try are paying is suggested by our
appropriations for roads. Since
the passage of the Federal High¬
way Act of
1916, approximately
three and three-quarters billions
of dollars have been authorized by
factory

these

35,000 miles of lighted airways.

(Estados Unidos do Brazil)

happen here if privately-financed
transportation goes bankrupt in
its unequal

the service. From farm and from

gone

Aeronautics

To the Holders of Dollar Bonds of the

paying not only through direct
charges but also through taxation.
They have paid this bill in the
past without serious complaint be¬
cause they know they must have

of facilities? We have

the way

in¬

huge bill
They

are

and

-,'YY;

Now what have we at
•n

the

United States of Brazil

pay a

How long can

few moments

a

transportation

they

and maintenance.

use

never

laying before you

of

task

the

to

some

Y

v The Problem. ^YY::

.-r:j:' V'

in view of the
transportation to cheap

people, will endeavor

our

lpply itself" in a statesmanlike,
objective fashion to finding the

of

has

of

have

omy

quote him here.
"This problem,"

and

that the

taken place

a

connecting link

am sure,

expansion of the services of the
forms
of
transportation
and the vast changes that have

uation that I

the

I

statute books,

newer

brilliantly pictures the sit¬
can do no better than

so

has been on our

aw

of postwar transportation, he
made a comment before the House
that

that

created over the many years

vey

to

thorough job within the
framework that has been

tatutory

Committee,

our

understood, however,
we do not expect to rewrite
whole
Interstate Commerce
We believe that we can do a
it, be

Let

of transport that influ¬

agencies

their achievements, it

out the

for its

1945

Thursday, December 20,

COMMERCIAL.& FINANCIAL CHRONICLE

THE

'3024

tion

into

operation if we do
the potentially de¬

elements of transporta¬
a

which must earn a
of

it

will

ernment
have

to

The

serviceable tool.

job will not be an easy
part of this implement
supported
by
private
be

for
will be
capital
one

return/ Part

supported by gov¬
that does not
a return
to inves¬

capital
earn

Z taxpayers provide this
It is a problem similar to
that which faced this nation when
half of it was slave and half of it
free;
I am optimistic enough to
believe that we can find the an¬
tors;

"the

,

capital.

without going through the
of a socialistic revolution. Y
Search for this answer we will,
Searching for if we are.

swer,

throes

Progress
Our

of Inquiry

Subcommittee

on

Trans¬

portation has made much progress
in its inquiry.
This has been due
in large measure to the fine co-r
operation that we have received

.

[Volume 162

Number

3025

I:

CHRONICLE

THE COMMERCIAL & FINANCIAL

4448

f

from

hundreds of

many

Suggested Topics are not
as just another

These

of

users

transportation facilities, the oper¬

construed

be

to

agencies,
investors in transportation securi¬

questionnaire.
that you and

ties

nessman

of

ators

transportation

of

economists—students

and

and experts in transportation.

We
have received a great volume of
statements,
opinions
and
com¬
ments in response to the request

We are quite sure
every other busi¬
has seen

in the country

quite enough of these.
We have
offered topics for discussion. They
are subjects for comment.
If any¬
has

thousands
companies
throughout the country. Much of

anything to say on any
subject not covered in our docu¬
ment, he may let himself go in
any direction that he chooses and
be sure that his opinions, if they

the

are

which

This

Chairman

request

of

Lea

went

individuals

ceived

is

to

and

which

material

out.

sent

have

we

significant

highly

re¬

and

one

to the inquiry, will
careful consideration.

germane

receive

our

people are to the importance
of this problem.
It indicates to
me that Congress is on the right

Matter of Great

a

I

what

From

said

have

you

ing

expect

give

These

i'

statements

are

be¬

now

digested and analyzed.
We
to publish them for the
use
of the Committee,' the ■ Con¬
gress
and' the public generally.
This
publication, however,- will
hot supply the only-basis for ac¬
tion by our Committee.
Hearings
will
be
held
on
any
proposed
legislation before it is reported to
the Congress for enactment.

of

should

bureaucratic

their

management.

return

he has

any

thought to this.
We
have the job of regulating com¬
petition not only between agen¬
cies of the same type but also be¬
tween different types.
We realize
that each mode of transportation
much

service.
and

special

a

valuable

and

its advantages

Each has

disadvantages. • Furthermore,
to some extent all of

at the

that

servants,

your

earliest possible
have before

want

do

you

date.

to

all

us

so

absolutely necessary gov¬

We

government, however, is not that

the

of

either

punitive control or en¬

pertinent comment in time for it

croachment

to appear in our preliminary pub¬
If any of you wish to

agement.

lication.''
have

copies of the topics sent to
request to the Committee

you,

a

addressed

the

to

House

Building will bring
reply.

.

Inquiry Topics Summarized

:

,

Office

immediate

an

A brief summarization of these

topics will serve to indicate to
you the thorough nature of our
inquiry. They are grouped under
nine
main
headings.
The first
heading is "National Transporta¬
tion Policy."
Under this we seek
to find what criticism

can

reason¬

ably be directed against the state¬
ment of policy in the Transpor¬
tation Act of

1940.

The job of the

ernment function.

field

the

on

Its job is to try to as¬

to

set up

to

legal structure which

a

the inherent values

will preserve
of each.

Regulation, of course, must im¬
pose restraints on carriers.
Sin¬
cerely carried out, with recogni¬
tion on the part of government
agencies of their power for evil
as well as good, regulation has in
it substantial benefits for the reg¬

ulated

agencies.

,

.

brief consideration of one of

A

important aspects of compe¬
tition will serve to illustrate the

the

whole

the

of

nature

1900

From

to

1920,

the

ment on:

wise water services,

(a) Advantages and disadvan¬
tages of separate regulatory agen¬
cies for each mode of transporta¬
tion.^, •' A.
v\
(b). Advantages and disadvan¬
tages of a single regulatory body
;-

•

for all

forms of

common

carriers,

reporting directly to Congress.
(c) Should the Interstate Com¬
Commission be reorganized

merce

in the light of present-day.condi¬
tions and post-war transportation

problems?

(2)

What

would

extent,

The

if

handled

substantially
freight

added

is this the case with
waterways, highways and pipeLines in the handling of freight
and buses and
airplanes in the

statutes

where

question

are

the

at

all,

ob¬
re¬
-

to

exempt from
the anti-trust
activities

the

eral,

in

;

ties of

(f)

to

powers

promote
carriers?

common

activi¬

what extent and under
what circumstances- are differen¬
To

tials fh rates

types

of

between different

as

carriers

desirable;

warranted

or necessary

or

in fairness

to the carrier; or necessary to give

the public the
of each?
I

inherent advantage

• <

•

i

•••;

«

(gL What do'you suggest to
further "our

ordinate

co¬

tion

agencies,

same

types and as between differ¬

ent
*;

types?

both

within

the

"

Time does not permit me to go
further detail.
I think you

into

will

see

that

we

have overlooked

We have dealt with
the subjects of finance, common
ownership, taxation, Federal aid,
very

little.

interstate

barriers

to

commerce,

and the submarginal, carrier..




with

practically
during the early 1900's.

all

;

of

«

it
,

Beginning with the advent of
steam, transportation was almost
entirely the function of the com¬
carrier.

Today vast tonnage

transported

manufacturers
count.

'

,

by
for

farmers
their

ac¬

•.

Those who
that

have

use

been

by

the

taxpayers through our system of
roads, which is the finest in the
world, owe to the public the best
possible service that can be given.
The

same

responsibility rests with
of transportation.

other forms

all

I did not Icome here to lecture you

the

on

I

think

of your business.
might be useful, how¬

conduct
it

to point out that some 85
90% of the highway haulage

ever,

of

'freight is1 by private and

tract carriers and that only

15%

is

carried

by the

to know that we of the Inter¬
state and Foreign Commerce Com¬
mittee of the House of Represen¬
tatives

job.

come

to

in

everything

do

their

complishing
shall
tion

our

tain

to

a

it

as

as

tation

We

purpose.

regula¬
minimum and to main¬

endeavor

than

reduce

to

benign service rather
for the regimen¬

a

force

a

of

your

ask

you

business.
the other hand
you are a part of
what can be a great transporta¬
tion system. If you and the other
parts of that system realize this
fact, we may see a real transpor¬
tation system in this country and
not
a
mere
conglomeration of
transport facilities.
The
serving
of
self-interest,
failure to re,cognize that interest
as
merely a part and not' the
whole of any problem, cannot be
tolerated in this complicated econ¬
omy of ours.
The alternative is
We

just

on

that

realize

to

the

around

ernment

corner

the service that

to be found with

transportation has rendered to the
nation. It did a job under terrible
that

conditions

favorr
ably with what transportation did
for us.
Yet, we find the govern¬
ment taking over transportation
in a program for industrial so¬
the land

to

That

is

and

you

users

The

as

You

task.

We

must

work.

make

Woods
billion
U. S. loan bill after a perfunctory
challenge of both measures by the
noted

•.

,

opposition,

United

in

it

ficulties

was

The

to pay a war

19 also said:

for food and

voted

600-odd peers
loan agreement at

the

on

the close of

law

dealing with
bankers," he continued.
been dealing with the
representatives of Amer¬

New York

"We

two-day debate in

a

have

opposition, led by Lord
Beaverbrook, virtually wasned its
hands
of
responsibility for the

elected

American deal.

without challenge—that the Amer-'
ican
Government
conduct their

final

The

for

90

was

the

Beaverbrook

Lord

Conservative

the

wound

up

have

those of

with

argument

I

Mr.

objections to the requirements at¬

ing rejection of the loan on the
grounds that it was "entirely un¬
necessary" at this time. The quick
action on Bretton Woods by the

tached to the American credit.

United

"If the

fit
in

house assured final British
of the agreement by
Dec. 31, the deadline fixed by all
signatories to that accord.
The
measure
already had been ap¬

upper

to

say

rid

or

Broad

Jr.,

&

28.; Partners

the

firm, which will hold
bership in the New York

Exchange,

will

CO

partner
-

-

.

■

'

natural

other matters,"
Mr. Churchill said. "As it is, we
seem to have the worst of it both

understanding

tion

The loan

arrangement, also pre¬
approved by the Com¬
not presented to Par¬

viously

liament in the form of

on

hence does
nature.

v

^

Stating that

House of Commons were

York

New

the

to

reading,

second

on

E.

Britain

;

trade

on

Bretton

the

of

"Whatever

House

the

on

Paying high tribute to the
American

un¬
peo¬

ple, .Mr. Churchill agreed that un¬
lend-lease—"the

der

Churchill's

sordid.

act in

more

the

than

war

the

most

history

United

tions'—the

Bevin,
behalf of the Gov¬

securities.

un-

of

na¬

paid

States

$5,000,000,000 in aiding

effort

and the.common,
' ;-v

cause.;

"

'

■

'»;

100,000 Shares

C. H. Dutton

in

(A Michigan

S.

■v.-v';-'

A

Company

Corporation)

KALAMAZOO, MICHIGAN

t

^

Common Stock
"Par Value $1.00

Per Share

&

r'

'

■

solicitation of offers to

The offering is made only by the Prospectus.

NEW ISSUE

ef¬

common-

Battin & Oberholtzer Join

Staff of Yarnall & Co.

Price $3.00

Per Share

with

be.

personally do not wish to see
further regulation of either the
private or contract carrier and the
situation is entirely in the. hands

Copies of the Prospectus may be obtained from any of the undersigned as are
licensed to do business in the states in which this issue has been registered.

PHILADELPHIA, PA.—Yarnall
&

it should

•

Co.

announce

them

of

A.

the

association

William

Battin

in their municipal department and
Charles

H.

Oberholtzer

sales department.

Mr.

Battin

was

in

their

OLMSTED & MULHALL, INC.

MORELAND & CO.
1051 Penobscot

Detroit 26,

Bldg.

Michigan

.

k

.

204 Commerce Bldg.

Kalamazoo 12, Michigan

,«

formerly^ with

Edward, Lqwber Stokes & Co.

December 13, 1945

the

di¬

Foreign Secretary Ernest

replied

to

"our relations have deteriorated.''

proval of the loan proposals.
who

be said

contrary," Mr. Churchill persisted,

than

more

Mr.

of

greeted

was

No!" from the
■

may

selfishness of the

When the matter came to a

in

Government"

that

Labor benches.

that has been extended.

members

establish¬

the

Socialist

a

statement

distant

more

since

that
"have

Woods

Agreement on International Mone¬
tary Policy, and upon the interest
rate of 2% charged by the United
States on the $4,400,000,000 credit

vision

relations

become

difficult
of

contended

by shouts of "No!

Britain's commitment to become a
member

,

Churchill

ment
—a

centered on con¬
Empire preference,

.The objections

cessions

true."

Mr.

and

Empire preference.
>

accepted convertibility

we

definitely

including

barriers,

was

definite legal obligation.
ii.
"This
convertibility
proposal

Anglo-American

by the United States and agreed
to work for a general reduction in
world

it

a

be

to

advanced

the world trade policies

months,

15 months appears to be
proposition so
doubtful
and
perilous that in practice we can
only hope it will defeat itself.
It
is—in fact we hope—too bad to

■;>;

committed

15

Woods

within

from

Charles

as

a

approval of the loan

voting
House

recorded

"Times"

Dec. 13, by
Egan, said in part:
In

as

cablegram

a

London,

the

before

;

votes in the

both

time

a

at Bretton

contemplated that there should be
a
delay of as much as five years

require royal sig¬

not

■'

Everyone has drawn atten¬
the proposal that sterling

whereas

bill and

a

to

short

so

was

mons,

Stock

Hirsch

in

been very

be convertible into dollars within

partners;
Carmen
deM.
Hirsch,
limited partner.
Mr. Hirsch was
a

loan without interest'

have

share their benevolent act and

to

way#.

Hirsch, Jr., the exchange member,
and Mildred P. Arnold, general

formerly

seen

grant

a

nature.

mem¬

Charles

be

had

proved by the House of Commons
and will go to the King for sig¬

Co.

Street, New York City,

fective December

States

'We shall give
a

would

it

ratification

formed with offices at 25

will be

Churchill, in which

the former Prime Minister voiced

cautiously worded address urg¬

buy any of these

to Form Own Inv. Firm
Hirsch,

them

about

■' ;

Charles S. Hirsch, Jr.,
S.

said

it

foreign policy in the light of a
change made by the free, elected
people of Great Britain."
: Mr.
Bevin's remarks followed

Bretton

approved unanimously.

was

a

vote

eight against it.
-V*
Woods agreement

loan and
The

ica and I will not believe—neither

will

This advertisement is neither an offer to sell nor a

Charles

machinery.

"We have not been

the

of

98

fault of its

loan, he said, was not one
debt but an advance

London, which, as given in
the "Wall Street Journal" of Dec.
Only

any

get out of them."

from

party disregarded his plea against
voting. More than 50 cast nega¬
tive votes and 10 voted in ap¬

in

through

own, nevertheless "when you get
into difficulties you have got to

advices

Press

financial dif¬

got into its present

agreement

Conservative

————-——rr*

-—

ernment, maintained that although
the Brtish Government had not

18

Dec.

are

can

the

loan.3>

the

on

60

far. You have the major

so

Lords

can

not

lawmakers.

your

just

oper¬

means

for

States

of

both the Bretton
and the $4.4

passed

That is

the

as

do

we

in your hands,

primarily

go

-

of transport

help us prevent.

ours

down

,

happen here.

which

thing

reaches
itself,

thing which

a

not want to

ators

compares

which

cialization
even

Housb

gov¬

*—

government

ownership,

operation, State socialism. In Eng¬
land there was no legitimate fault

almost
I

servants in aid¬
the performance of
We do not seek to be¬
masters. Furthermore,

to prevent those who seek
become your masters from ac¬

by the Interstate Commerce Com¬
mission.
The contract carrier has
as

your

will

United

The

your

in

con¬

The private car¬
rier is immune from all regulation

This is

are

you

tne

which the

are

Approve U. Sloan

on Dec. 13, by a vote of 345 to 98,
the terms of the $4,400,003,000 loan to Great Britain by
the United States.
After voting for the loan, which must win ap¬
proval by the U. S. Congress before it is granted, Commons voted
314 to 50 to ratify the Bretton Woods Monetary Stabilization Agree¬
ment, approval of which was one of the conditions laid down by

The British House of Commons

approved

10 to

carrier trucker.

none.

"TV'Ca-'.of your Associa¬

you

the vast facilities

provided

un¬

and

own

Obligation of Highway Users

to

transporta¬

63%

of

performing a fine service
to this nation. You are delivering
food to our great cities.
I want
tion

a

began

of the total freight tonnage, con¬

under the supervision

To what extent should Fed¬
Government j agencies
be

given

traffic,
only

handled

railroads

the

of the regulatory agency.

(e)

of passenger

handling

is

be

of

far more efficient
promise to be of
competitive
importance.
and

Especially

carriers

should

com¬

provide

port

facilities

mon

application

all

and
passenger
traffic.. Today, however, both the
older and newer forms of trans¬

which any or all forms of common
the

the railroads

mercial

trasted

setup?
be

and

Just before the last war

jects to be sought by such
organization?
(d)

Lakes

;

(1) If so, how? By changing
its powers,' its procedures, or
the mechanics of its

tonnage

problem.
except for

carried on the Great
by inland and coast¬

The second heading is "Regula¬
tion."
Under this we seek com¬

:

man¬

each mode of transport
the type of service for which it is
most useful.
We must endeavor

sign

1

<'/■.

of

imposition

members

The

Commons and House of Lords

few can

a

the many.

upon

power

■

These considerations make reg¬

an

no more

wanted and undesirable restraints

tion

;

;

privilege by

the

to

lead

not
as

carrier. There is

other black-market dealing.

we

competitors.

under the law, a

become,

Abuse of

ulation in the field of transporta¬

Topics and have
replied, it is important to us,

innocent-appearing
loads, he must realize that
those

stance,

can

performs

for in¬

acter and seeks or accepts,

list of Suggested

we

in

contract carrier steps out of char¬

making this study in your be¬
half.
If you have received the

that

know

free

and

meddling

when either the private or

But

your

to

you

agencies

government

its

want

They

free from snooping by

be

from

ing

I

any

as

same

business.

private

other

each excels

are

the

exactly

treated

place in our economy for a blackmarket carrier than there is for

Concern

rightly judge that the matter
of competition gives us the great¬
est concern.
Our Committee will

:

ing

common

Competition

our

track.'

strictly within tne mean¬
the law they should be

,

It all shows how alive

practical.

So long as they

of such carriers.
operate

•

:

<*•

FEDERAL '

Outlook tor Federal Taxation

duction

During

expenditures.

billions.

to

the

consideration

1945

two

made

of

tax

leaders
and
by
spokesmen for the Administration,
that the bills were regarded as
interim relief measures, and that
planned,

legislation

is

legislation to

in¬

tax

such

fact, experts of the
and Congress are now

few months.

is

the field of taxation.

The Postwar Revenue Goal
In

weighing

the possibility of

further tax reductions

in the fu¬

ture, the first step is to estimate
the

probable size of the Federal

ment in

financing

under

by combining the two

expenditures,

of budgetary items
Expenditures

group

Other

as

government assuming the con¬
tinuation of present law and pol¬
of

Then,
of

groups

icy. Actually, there are numerous

rough but usable
estimate for a post-war

budget
Chart

I

shows

expenditures
and

timates

additional

for

actual

It

of

Federal

fiscal

also

1948

continuation

likely

during

1945.

assuming

by

as

es¬

listed

in

Congress

or

later.

possible programs,
lower portion of

the

Chart I, are:

the

under

now

considered

be

to

Some of these

years

shows

programs

consideration

be derived.

year can

1939

is about $22 billions which
may
perhaps be regarded as a
reasonable estimate of the totaL
It will be remembered that this
estimate refers only to the cost

a

nonliquidating loans

to foreign countries;
programs
for promoting educa¬
tion, nutrition, health and hous¬
grants

or

present law and

policy.

the TVA for the
of
river
valleys;

ing; projects like

War-Related Expenditures

development

The most significant feature of
the
1948
figures is
the
large

additions

to

the

social

security

Chart I

ing1 Continuation of

1939

National Defense—
Veterans Services and Benefits..—
or

Interest

on

the Debt———_

-

_

_

.2!

Sub-total

.

1945

Present Law & Policy)

1.2

90.0

5.0-8.0

0.6

2.0

3.0-4.0

0.9

3.6

5.5-6.0

2.7

95.6

13.5-18.0

Social Security (exclusive of trans
fers to Trust Accounts)
Relief

Works"!————Z
Agriculture-

-

Transfers

-

Tax

refunds
Sub-total

Trust
——

Accounts—
—

_

!

_

Grand Total, All Expenditures

Possible

Loans

or

Grants to

_

Foreign

0.6-0.6
'

■

;

_

1.0

0.3

1.0-1.5

0.8

1.5-2.0

0.6

0.9

1.5-1.5

0.2

0.5

0.5-0.5

0.1

1.7

0.5-0.7

C.O

4.8

5.6-6.8

8.7

100.4

19.1-24.8

Items, 1948

Housing
River Valley Development
Expanded Social Security

Additional Veterans' Benefits

ilu10n

Health




0.5
•—

1.2

Additional

Countnes

2

2.5

_

_

General Government
to

.

•

'

"

X

*-

re cEiPrs

net

7

'

J

V

I

shall

not

be

would

this figure.
Course

^

of

"
and

Expenditures

Receipts, 1945-48
Given

actual

p

;

Federal budget of $25 billion,

/

■

-

j:"

z

)

'

'

prob¬
expendi¬
several

p:v-v-;

...

'

1.

9.

»

(;

'

i03«

,9tb

1937

'

iSSft"1

three

these

,546

"

104^

1941

segments

In

be

fiscal

In

the

was

individual

the

year,

obtained.

most

,

of

tax
rates,
granted ir*

later.

1945,

Relief

to

are

Moreover,

income

fairly certain."1

seem

tax

(

However, if the individual in¬
is to yield as much as

come' tax

billion, as suggested by Al-'
(Chart 3), little in the
of additional cuts can be
made.
This is indicated in Chart

$14

ternative I

that

income

those

individual

in

cuts

year

In

income

above

enacted

rates

1945, which was a peak year for
receipts, a "total of $46
was

and

the
public fully expects such reduc¬
tions.
Thus, further substantial

individual income

important.

"ift'4t

'

Revenue "Act

the

$2.6 billion from miscellane¬
receipts—the latter being the

most

1945

individual

over

tax, $1.3 billion from corporations
ous

7544

1943

in

has
>

.

I

1

1939, out of total receipts of $4.9
billion, about $1.0 billion was de¬

and

..;

.

v/''

•

*

'

billion

Federal

"

'

1

/j"

able

of

>.

'■;

Federal

during
the
next
(see Chart 2).

J.

•

"

\

W

'

'

...

it is possible to indicate the
course

^

X

s

.

•

rived from the

expenditures

\

\

z ff'-'f—-

.

\

surprised

probably,, exceed

X

,

J

actual

tures

i
'

'

tax

way

important revenue

year 1945 (ending
1945), Federal expendi¬
tures
were
over
$100
billion.
During the present fiscal year
1946, they are estimated officially
at $66 billion. By 1947, they may
be set roughly at $35 billion and
in 1948 the "normal" peacetime
level
of
$25
billion
may
be
reached (see Chart 2).
At least
two years will probably be re¬
quired from the end of hostilities

source,

producing
Corporation taxes

$19.0 billion.
yielded $16.4
billion and miscellaneous receipts

4, which compares several possible
rate structures under the individ¬
ual

income

tax

(normal and sur-f

The latter group
relatively the least
important of the three sources,
despite the fact that it included

tax

combined).

In this chart, net
along the hori¬
bracket income

of extraordinary
receipts from the renegotiation of

The top

to

tax

During fiscal

June

30,

liquidate unusual

ditures

and

down to

roughly

World

after
1922

shake

the

budget
peacetime basis.
This

a

conforms

to

expen¬

war

was

to

War

the

I

first

experience
when

Judging by the
and

the

normal

recent

year

actions
of

Congress,
Federal
tax
receipts
also be expected to approach
peacetime levels
by 1948
(see
Chart
2).
The tax reductions
provided in the Revenue Act of
may

.

,

will

1945

be

partially effective
in fiscal 1946 and completely ef¬
fective by fiscal 1947. Any addi¬
tional
will

1946

The basic

question of post-war
this: What propor¬
the $25 billion revenue

.

several are shown by the
bars in the righthand portion of Chart 3.
Each
combination adds to $25 billion,
involves

each

but

three

the

of

It

might be most

individual

income

the

reduce

receipts in 1947 and
Net receipts in
1946 may be reasonably estimated
at about $35 billion and in 1947
at
about $30 -billion.;
Receipts
may reach
the assumed normal
level of $25 billion by 1948. "

The individual income tax

years.

Thus, it is possible that the
budget might be ' balanced, - or
nearly balanced, in fiscal year
1948, provided (1) that tax rates
are
held
high enough and
(2)
that the country remains pros¬
perous so that high revenue yields
can be
maintained and expendi¬
tures can be held to the $25 bil¬

Tax"';;

direct tax

is

cussions

tax

on

leaders

sional

policy,. Congres¬

have

income

scale

revenue

yield/-;

lic j

clearly indi¬
reductions

;

-

chart
•

f

■■

FEDERAL

having in-:
$25,000." Thus^

persons

' :r

i

--

i

expects,') rate
(Continued
■

of ! more
3028)r ' 'v

cuts

on page

I'.

v*

RECEIPTS
years

fiscal

BILLIONS

'7

total

receipts

c.*cludi»i6

social

the

determine

largely

/' It seems clear 5that / Congress
intends to grant, and that the pub¬

dis¬

substantial

that

cated

recent

persons

the rates at the lower end of

levying the tax^" therefore, Con¬
is highly sensitive to public
opinion and to political pressures.
with

by

of less than

comes

In

;

95%

and

affecting many people;

connection

by

received

having income bf less than $5,000

a

gress
In

is

total

of

For ekample,, 84%

brackets.,

^

tax.

The Individual Income

parentheti¬

stated

be

may

cally" that the great bulk of; tax¬
able! income
is
in! ; the
lower

probable, we may first look into
the question of post-war rates for
the

possible if $14 billion were to
For example, the rates

applicable to the income bracket
from $2,000 to $6,000 could be re¬
duced by only about one or two
percentage points.
*

determine

To

sources.

which of the four

prosperous

be raised.

somewhat

a

proportioning

a

De~

cross-hatched

different ?

next

The

$14 billion of revenue
post-war year.
As can be readily seen, only very
small additional reductions would
in

possible alterna¬
combinations
of the
three

Among many
tive

recent

the

by

1945.

duce about

"

*

of

Act

curve

schedule for

(dotted) curve shows a hypothet¬
ical schedule which would, pro¬

goal will be derived from each of
the three sources?

provided

as

Revenue

policy is
of

solid

next

the

and

1945

below shows the rate

surplus property.

tion

along the vertical axis;
solid curve shows the ac¬
rate schedule applicable/ in

tual

sale

the

from

and

rates

tax

1946

reductions enacted in

subsequent

and

contracts

war

axis

zontal

billion

$3

over

of

income is shown

become

sources,

intentions

announced

had

fiscal

for Federal expenditures.

billion.

$10.6

corporation taxes

-

/
sccubitv

favcft

his

recent

Senate

testimony

Finance

before

M.

1 N

v/ere

w

M

>

V A

Ml}

-r-;:

opinion that a budget of about
$25 billion could be balanced in
1948 if present tax rates (as re¬
vised by

; '

"

the

expressed

Vinson

Secretary

M

M.

Committee,
1 *;•

'lv'

,

the Revenue Act of 1945)

held and if national income
*

•

commodity taxes, customs,
estate

■

-

tax.

etc.

'

Alternative Sources of Revenue
0.4
-

to

r

—"TTTV

,

Public

.V

V

remained above $130 billion.

Other Expenditures

Aids

':

'

estimate.

conservative

•

\
f

this

a

Indeed,

the

11)48
Snf!r>'1aUve (Assum¬

War

is

\

7

''

Budget for say 1948, of $25
billion.
My own feeling is that

In

(in billions)

Expenditures

\

lion level.

Federal Expenditures

War-Related

X

eral

this

I

*

e) =endturi

$3 billion to the
estimated $22 billion for activities
provided by present law and pol¬
icy gives an estimated total Fed¬

Adding

years

Expenditures

range

new programs

consideration.

'

V'\

'

'

■

"

war

penditures and other expenditures
gives an estimated total budget
(exclusive of transfers to social
security funds) of $19.1 to $24.8
billions.
The midpoint
of this

now

t

be adopted.
In my judg¬
ment, a conservative figure would
be $3 billion.

penditures gives a total ranging
$13.5 to $18 billions—repre¬
senting perhaps 70% of the total
budget.

spend in a normal peacetime year.
It is possible, however, to make
fairly reliable estimates of the
likely be
spent to carry out existing policy
as
provided
by
present
law.
Rough guesses can also be made
as to the amount of possible addi¬
tional costs which may be as¬
sumed by the Federal Govern¬

>"
'

.

f'

1

may

in
1945, the official budget estimate
for 1946 and the assumed post¬

classed

would

Vv!;

impossible

is

to

legacies from World Wars I and IL
Combining the estimates for the
three items of war-related ex¬

Combining the war-related ex¬

that

it

\

changed during recent years.

will

amounts

\

of

budget-conscious. They may be regarded as the costs of
to bring revenue
ordinary peacetime government.
and expenditures into reasonable
Altogether, these items are esti¬
proximity. In the coming delib¬ mated at $5.6 to $6.8 billions, a
erations on tax policy, therefore,
total amount not unlike the ex¬
budgetary requirements will be a
penditures for these purposes in
paramount factor. From this, I 1939. It is noteworthy that among
do not necessarily imply that the
these items the cost of General
budget will in fact be balanced,
Government, i. e., of operating
but only that the size of the pros¬
the
governmental
departments
pective budget will have an over¬ and
bureaus, the Congress, and
whelming influence upon tax pol¬ the
judiciary,
is
estimated at
icy..
about $1.5
billions—a relatively
The Postwar Budget
minor part of the total.
It is, of course, not possible at
Estimated Total Expenditures
this time to predict exactly what
Government

time,

<■

-

>

budget

sincerely want

Federal

I

'.

under
present law is estimated at $3 or
$4 billions, and the interest on
the debt at $5.5 or $6 billions.
Both of these items are primarily
provided

gress are

the

x

expenditures prove to
more
than $25 billion.
For
exmaple, if there should be a seri¬
ous slump in national
income, the

Other

Con¬

and

v

1

this

-

.

.

be

as

*

'

•

if

The

Administration

The

\

'

billions. At the moment, we
rely on such a favorable
development.
The cost of veterans' services

goal.

enue

'•

cannot

from

postwar budget.
The magnitude
of the budget will tend to deterVmine the dimensions of the rev¬

■

\

'

At

■.

/1

$8

benefits

-•

;,!•
r

sons.

as

to

:

be demand, and perhaps some
form of relief to
indigent per¬

ing, and the magnitude of the mil¬
itary
research
program.
More
basically, it will depend upon the
status of international relations.

present

RECEIPTS

AND

may

estimate accurately the cost of
such of these additional programs

and

time,
therefore, to look ahead in order
to examine future potentialities in
appropriate

an

of

out

financed

be

the extent and
character of citizen military train¬
forces,

tions in defense costs below $5

studying further tax revision, and
Congress is expected to
begin
hearings on a new tax bill within
This

course,

policy calls for
defense expenditures far in ex¬
cess of prewar amounts.
We may
hope for a new era in interna¬
tional
understanding
that will
make possible
important reduc¬

In

Treasury

require¬

to

program

EXPENDITURES '

bluqns_

general revenues; additional ben¬
efits to veterans for which there

and equipment of

the size

armed

Clearly,

clude both tax reduction and tax

reform.

$8 billions. The exact
will
depend,
of

upon

Congressional

additional

is

defense

ment

bills, it was
abundantly clear, both by

these

be spent for na¬
estimated at $5

The amount to

tional

the

$5.9

of

for war-related

required

amount

(Continued from page 3002)
effective oeginning witn the tax¬
able year 1946, These changes are
expected to reduce the 1946 tax
liabilities 6f corporations by about
$3.1 billions and of individuals by
$2.8 billions, making a total re¬

a

Thursday, December 20, 1945

THE COMMERCIAL & FINANCIAL CHRONICLE

3026

t£L

JSfl.

Once the total revenue goal

for

post-war tax system has been
we can then
explore
the various possible methods by
which this goal might be attained.
The

Federal

revenue

If

Vf'A
•

ri

■■

r

'/
individual

system

be divided into three major
segments; (1) the individual in¬
come tax, (2) corporation income
taxes and
(3) miscellaneous re¬

As shown by the

3,

black bars in

the relative importance

taxes

1

may

Chart

income

140

-

ceipts, including commodity taxes,
customs,
estate and gift taxes,
administrative revenues, etc.

m-

2«>

the

estimated,

M

•,

'■■■'A

■

\zx>
/

10/)

"J
,

v:'////.•
.

W:
"S

a
1939

1939
speculative

'♦

f , '/1:

■

/;!

yk ';A

„

m;tll

1945
1948
possible

alternatives

.

Volume

162

Number 4448

THE COMMERCIAL & FINANCIAL CHRONICLE

have^benefited

country

Madden Foresees No Rise in Interest Rates
(Continued from

•

3003) - ! the future to unbalance its budg¬
ings will by itself tend to bring et hnd appear again as a large
qbout.an increase in interest rates. borrower.
Such
a
development
Furthermore, owing to the huge would increase the demand for
backlog! of demand for all types capital which in turn may cause
of consumer
goods and housing, a rise in money rates. Experience
the

volume

price level
Such

a

of

page

business

and

bound to be

are

the

high.

situation, it is asserted, has

always

caused

increase
in
money rates, and there are no rea*
sons to

an

believe that the

tors

will

t]he

same

not

exert

in

influence

the past.

fac¬

same

the

future

they

v.'/;

had

in

of

far

demand

as

short-term

and

funds

■

tal

will

supply

and

The supply of capi¬

be

(the budget
ernment

of the

is

(Treasury

large, and

very

Gov¬

and

offer

to

ceases

once

Federal

balanced

the

in

the

open-market securities, exclusive

,

jof funding and refunding issues,
Jt may even

the

exceed

demand.

.During

recent
years
American
business has become acutely cog¬

-

nizant of the depreciation factor
fand

consequently-most obligations
are
being offered to the pub-

;that

lie

.

to

or

contain

.

institutional

.rule

for
repaying
reasonably short

a

period of time.

.

investors

provisions

the debt within

.

Term

•

loans

provisions requiring

carry

gradual

cur¬

repayment

'Practically all

of

principal;

bonds and pre¬
ferred stocks offered in the mar-r

ket

4

new

stipulate

sinking

a

for

fund

the

repayment of a part of the
issue. Repayment of principal con-

,

.

stitutes

:

steady flow of funds for

a

.reinvestment in the
ket.

,

v"-...

Of

.

capital

;

•

perhaps greater importance

is the fact that business

has

recognized

factor

•

mar-

in

the

.evidenced

the

depreciation

human

by

whole

as a

element,

the

as

widespread

adoption of pension funds.

Pay¬

of

savings

vestment in

which

or

seek

in¬

high-grade securities,

No Heavy Demand for Long-Term

*'Loans
The

demand

loans,
has

been

for

the

once

''

■;. >;

acquired
date

budget

the

or

great. Corporations will

to a considerable extent on
their accumulated surpluses in fi¬

nancing ' improvements
While

the

and

ex¬

demand

for

mortgage money will be substan¬

tial, the growth will be slow, and
the amount of mortgage loans will
be determined

securities.

the

insured

Government

by

from

the

the

of
of

used

was

capital

ac¬

tivity, should again be forced

if

the

country

banks,

credit

to

particu¬

base

adopted
tary authorities.
and

of

the

'

Inflationary

by the cost of home

modern

central

banking

system

to

obtain

and

is

a

not

high

serious danger that

materialize.

foreign-bond
will

be

tional

and

very

The

-

issues
small.
for

Bank

may

volume

of

of

necessity

The Interna¬

Reconstruction

Development,

if established,
some
long-term

contract

may

in the market

loans

and

member

countries may offer publicly their
bonds

guaranteed

The volume

by political
crease,

the

Bank-

practically

compared

securities

with

bly leads to

chasing

war

years.

In

possible

future

commodity prices.
of
quantitative

that

be

can

at

effec¬

and

present,

particularly in the immediate fu¬
ture,

the

billion

50

could

reserves

support 500 billion

demand

of

in

dollars

deposits.'

dollars

There

is,

contravene

policy

the

of

whose

activities

during

sumed1

operations

the

were

138

re¬

Pearl

New York City.
Fred¬
Tilney Jr., general partner

therefore, no question that under
modern f central .; and commercial

banking systems the governments

nancial

control the money market for

indefinite

an

period.

tary

service; has been in the fi¬
business since 1932, spe¬
cializing in New York State and
municipal underwritings. He

Conclusion

In conclusion the bulletin

that

the

real

points

but rather whether

•

soon

further de¬

a

take place

This
as

in the

question

will

begins

currency

and

amounts

the

com¬

mencement of large-scale exports
of United States

and

plans

now

to

products reverses

Will Admit Three
Arthur A.

through
banks

their

and

respective

the

central

commercial

bank¬

ing systems

are still able to main¬
tain interest rates at desired lev¬

This

borne

was

France

out* recently
despite -wide¬

where

spread inflation and the huge pub¬
lic debt, the discount rate of the
Bank

France

of

reduced on
Jan. 20, 1945 from 1%% to
1%%,
the lowest 'in. the
history of the
was

bank.
This rate compares with
the average annual rate of
6.54%
in 1926 and 4% in 1913.

Government

Now

Can

Control

Interest Rates
In

admitted

to

Moseley
New

partnership

&

York

other

in

Stock

the

Exchange

Exchanges,

on

S.

F.

Co., members of

and

January

monetary
the

authorities

states:

The

monetary
limited

to

the

the gold

as

influ¬
were

country

a

ing

activity

public

construction

utility

plants.

lower

was

standard, under which

on

tries

no

tween

by

legal

the

the

volume

of

time,
coun¬

relationship

central

amount

most

of

gold

bank

currency

be¬
held

and

and

the

credit

outstanding. In Great Britain, for
example, the entire monetary fetock
of
of

gold as reported by the Bank
England amounted on Oct. 24,

1945, to

£247,833

0.0188%; of
the total currency in circulation.
or

Order in Council of

an

30, 1940 freed the central
bank from the obligation of main¬

taining gold
notes

the

June

of

12,

the

as

and

a

States

1945,

gold

reserve

deposit

United

.an

reduced

(certificate)

Federal

against

liabilities.

Reserve

Act

the

of
re¬

reserve

banks

New

with

in

the

charge of

Herzer

bond

is

Man¬

York

Mr.

department

office,

Laun

will

14

in

Wall

make

his

headquarters in Chicago,

Be Formed: NYSE Firm
Robert
ander H.

West &
the

1%.- This

was

nouncement

member of the Exchange;
West, also an Exchange
member, previously a partner in
Filor, Bullard & Smyth; and How^
ard

National

the

sales

tap

Nov. 27,

may

be

compelled

sometime




in

or

lawful money to 25% of gold cer¬

partner

the

Exchequer

of the 2%%' National

War Bonds

1954-1956

of

bonds

by

and

of

discontinued

of the

3%

1965-1975

Sav¬

will

be

Dec. 15, 1945. The
Chancellor also stated that for the
on

to replace these by other

issues. The 2%% Conversion Loan
of 1944-1949 and the 2

re¬

tion

on

loans

will

receive

the

op¬

of

converting their bonds in
April, 1946 into 1%% bonds ma¬
turing in 1950.
The

often,

s;

presented

argument

that low money rates will destroy
the savings, habits of the
people
does not seem to be substantiated
careful investigation. The
pre¬
vailing interest rate certainly has

NOTICE IS HEREBY GIVEN that, pursuant to the provisions
Indenture dated December 1, 1940 between

of Article V of the
National

Dairy Products Corporation and The Chase National Bank
of New York, Trustee, and Article III of the Indenture
supplemental thereto dated December 1, 1940, under which said
Debentures were issued, National Dairy Products Corporation has
elected to redeem on January 14, 1946, all of the Outstanding 3 V\%
Debentures due. I960 issued under said Indenture and Supple¬
of the City

mental Indenture.

V2% National

War bonds of 1945-1947 will be

paid

Accordingly, on January 14, 1946, there will become and be due
payable upon each such dl/4% Debenture due I960, at the

and

office of Goldman, Sachs & Co., Fiscal Agents, 30 Pine Street, in
the

Borough of Manhattan, City and State of New York, the
redemption price thereof, viz., 105 Vi% of the principal amount
thereof, together with interest thereon accrued to such date. Themoneys necessary

effect whatsoever

ings of corporations

on

the

as well

sav¬

as

on

the collective savings of individu¬
als through insurance and pen¬

sion funds.
the

last

rates

so

as

definitely
is

years, when money
exceedingly low, have

proven
more

ber

While

be and continue

to

be entitled

to

to

be available therefor, said Debentures

the benefit of said Indentures

14, 1945, and said Indentures

were

cline

in

the

eleemosynary

institutions

individuals

in

interest

on

upon,

Decem¬

cancelled and satisfied.

From and after

January 14, 1946, no further interest shall
said Debentures and the coupons for interest thereon

accrue

matur¬

ing subsequent to January 14, 1946 shall be void.
Debentures presented for payment
pons

maturing subsequent

to

should have attached all
December 1, 1945.

NATIONAL

cou¬

DAIRY PRODUCTS CORPORATION

By Goldman, Sachs & Co., Fiscal Agents.
Dated: New York, N. Y,, December

14, 1945.

that the small

interested

safety and availability of his sav¬
ings than in the rate of interest.
and

to

ceased

during

few

were

saver

Deevlopments

for this redemption having been deposited with
benefit of the Debentureholders

the Fiscal Agents for the prorata

on

no

Dairy Products Corporation

REDEMPTION

PRICE IMMEDIATELY

rates,

important economic

the

most

groups in

the

AVAILABLE

Holders of

3% % Debentures due 1960 may obtain the full
redemption price (including interest accrued to January 14,
1946) at the office of the Fiscal Agents, Goldman, Sachs &
Co., 30 Pine Street, New York 5, N. Y. upon surrender of
Debentures

and

certificates

Nammack,

3Vi% Debentures due 1960

1945 that

prescribed in the foregoing notice.

in

gold

J.

Struther & Dean.

been adversely affected by the de¬

of

York

mack,

circulation

notes

Nammack, members of
Stock Exchange,

York

To the Holders of

followed by an an¬

on

was a

Samuel W.

Reserve

35%

Mr. Tomes

Broadway,
City, on January 1st.
Partners will be Jerome W. Nam¬

Should

from

New

New

living on fixed
income-yielding investments have

legis¬

Stock Exchange,
Morgan & Tomes with

will open offices at 115

against Federal

employment"

York

Formed in New York

from 40% to 25%

"full

New

West & Nammack to Be

Federal deficits the bulletin states:

lation be enacted the Government

W. Morgan and Alex¬
Tomes* both members of

REDEMPTION NOTICE

posit Receipts from 1^8% to % of

these

however, there is in

time

Mr.

of the

Treasury De¬

banking

determined

some

been

interest

the credit expansion power of the
was

has

On Oct. 18, 1945, the Chan¬
cellor of the Exchequer reduced

April 1 and July 1, 1946,
respectively. Holders of either of

system

Morgan & Tomes to

rates.

the interest rate

and

H. nentz & Co.

industrial

and

toward

been

of

York

Angeles Stock Exchanges. Mr*
a partner in

■V j-.'J
Britain, too, the trend

In Great

has

and

build¬

on

present the Government does not

to

ager

the

effect

propose

the

for

Street,

adverse

of

market

money

long

so

control

Browne

cost of carrying the debt and also

bulletin

powers

authorities

the

ence

on

market,

money

Mr.

have

an

Los
New

part¬

a

Co., 325
Angeles,

Blumenthal has been

1.

coun¬

try because it would increase the

ings

discussing the ability of the

rates

money

the

&

and Harold G. Laun will be

zer,

Tower.

rise in

Street,
of

Maynard & Co.

Indianapolis office, in the Cir¬

a

is not to the interest of the

Morris

partner in Buchanan & Tomes.

cle

namely, that

8th

members
Los

W.

Browne, Karl P. Her-

firm

the

West

A.

City, effective January 1.
Mr.
Morgan was a partner in Stillman,

the

beyond

in

ner

offices at 50 Broadway, New York

Moseley & Co.

the Treasury and his predecessor;

public

Blumenthal, member of
Exchange, as

January 1 will become

will form

F. S.

in charge of the
Trading Department

in Boston.

the

expand the firm's activities.

problem is not

much whether money rates will
from the present level

not

1935

in

pany

.

time

some

Corporation

started the firm of Tilney & Com¬

stated by the present Secretary of

ability

the

Boston office, 50 Congress
Street; he has been with the firm

of

who recently returned from mili¬

can

firm's
for

A. Pam

Street,
erick

Perry
MacKay Sturges to limited part¬
nership on January 1. Mr. Stevens
will make his headquarters in the

the New York Stock

sus¬

has

war,

at

cnange, will admit Lawrence M.
Stevens
to
general .partnership,
and Anabel C. Parsons and

Morris Partner

Tilney & Company, dealers in
State, municipal and Government
pended

mem¬

Blumenlhal to Be

Tilney & Co. Resumes
Activity in New York
bonds

Graham, Parsons & Co.,

bers of the New York Stock Ex-

central

had in the past.

ever

carry¬

increased

quired

discussing

the

or

of the country and
where inflation is
rampant, as is
the case in many countries on the
Continent of Europe, governments

where

even

ing

In

and

legal limit, i.e., 13, 10, and
7%, respectively, against demand
deposits, which would average ap¬
proximately 10% for the country,

as

power

has

its

rearmament

influ¬

activity

debt

But

offered

the

lower

arise

decline in the pur¬
of the currency,

a

of

con¬

the flow of gold. The attitude of
the Treasury has been repeatedly

by the Federal Government dur¬

ing

to the

siderable

April

when

be reduced

unlimited

policy inevita¬

subdivisions will

volume, of

to

were

require¬

purposes, it does not
the fact that such

In Canada

in¬

billion

50

reserve;

to return from circulation in con¬

of obligations issued

but the amount will be in¬

significant
the

by

to

the

amounts of credit for any desired

central bank.; At the present

a

ments

If

may

current

expected building boom

increased

be

future.

decrease

the

could

dollars.

cline

by the amount of gold held by the

level there is

Dec. 5, 1945 they were
outstanding in the amount of $24,*
429,335,000), member bank reserves

near

a

building costs

the

reserves.

(on

position

commercial

in

type

only

exercised

increase

construction. Unless
from

member bank

so

Government aided by

a

of

The

control

lars of Federal Reserve notes and

)

v-S Tendencies
While

movement

credit

could support 80 billion dol¬

ury

out

Deficits

credit

instrument

an

business

tively

present in the vaults of the Treas¬

through
by the mone¬

measures

as

encing

The 20 bil¬

broadened

were

trol

quantitative

banks

increase the.public debt the new
obligations could be absorbed by

larly

removed

discount

Hence if in the postwar
the Federal
Government

commercial

of

floating debt of the Treasury have

monetary gold at

requirements.

dollars

legal

tremendous

lars'

because of declining business

the

lion

the

upon

the

con¬

portance by far greater than the

purposes.

period

depending

reserve

balances,

support roughly

can

$500 and $1,000 of bank

between

credit

reserve

of

with

people in

culation increase to 30 billion dol¬

were

for

bank

which in turn

$100

junction

the

that Federal Reserve notes in cir¬

.cominer-

banks

member

supports

1

of

dollars

obligations

Government

bank

to Admit New Partners

hands

On the

indebtedness, and notes. A con¬
siderable portion of the funds ob¬
tained

Reserve

Graham, Parsons & Co.

the

Assuming

of

deficit

rely

pansion.

62.3 Million

against
deposits.
This
means that at present $25 of gold
certificates owned by a Federal

therefrom.

The sharp increase in the volume
of deposits and of liquid assets in

will be through the proper
handling of the public debt. Debt
management has assumed an im¬

war

relatively short maturity consist^
ing of Treasury bills, certificates

drastically reduced, is not likely
to be very

of

years

long-term

Federal

balanced

"*

the

which 36.5 billion dollars

in

by
the employer alone. In either form
the pension funds represent sys-?

'■

one-half

.

els.

employer and employees

.tematic

During

longthree
from

cial banks held 82.4 billion dollars

by

the

also

Jan. 1, 1942 through June 30,1945
the commercial banks of the coun¬

ments into pension funds are made

jointly (contributory plans)

commercial

trade .but

capital.

and

a

as

,die thirties and those placed

rently
.

term

the

position to furnish

a

short-term credit to in¬

and

stipulate serial amortization

payments.
Nearly all mortgages
that have been sold since the mid-

>

dustry

latter

longterm capital are concerned, indi¬
cations are that the supply in the
immediate
future
may
exceed
the demand.

not only

that

in

are

of government

Adequate Capital Supply
So

shown

banks

.V..!■■ try

...

1

i

has'

tificates

3027

on

and after December 15, 1945, in the

manner

in

THE COMMERCIAL & FINANCIAL CHRONICLE

3028

Thursday, December 20, 1945

CO/ObED

Outlook for Federal Taxation
(Continued from paj^e

,

points
for the populous lower brackets.
Thus, it may be concluded that
$14

billion

is

than

more

can

reasonably be expected from the
individual

Referring again to Chart 4, the
lower

of

shows

a

the

dotted

two

curves

might

schedule that

rate

produce $10 billion in a prosper¬
post-war year.
This schedule

permit

lower

bracket

five

six

or

The

reduction in the

a

of

rates

is

percentage
points.
rate, for ex¬

ample, might be as low as 13%.
This
type of schedule would
to

conform,
much more
closely
than
the
$14
billion
schedule, to the intentions of Con¬
gress and to the expectations of
the public.
An intermediate $12
billion schedule, however, calling
for a first bracket rate of perhaps
15 or 16% is a possibility.
The sum up, $10 to $12 billion
appears to be a reasonable esti¬
seem

of

mate

be

the

derived

a

will

individual

the

from

income tax in
war

which

revenue

post¬

prosperous

year.

Miscellaneous

Returning

to

Receipts

Chart

the
receipts,
commodity taxes,
3,

amount of miscellaneous

consisting
of
customs, estate and gift taxes,
etc., has been set at from $4 to $6
billion.
at

If these taxes

present

might

wartime

produce

prosperous

certain
are

$6

special

from

the

ties,

as

However,

year. *,

allowed

to

held

were

rates,, they
billion in a

wartime

lapse

if

excises

six

months

of

hostili¬

termination

provided, miscel¬
laneous receipts would decline to
perhaps $5 billion.
It now ap¬
now

.

to

pears

gress to

time

be

the

intent

Con¬

of

allow these special

excises

war¬

to

lapse; therefore,
$5 billion is the most that can be

within

least

at

the

realm

with

excises

continuation

a

present corporation "rate

One

his

take

can

choice

be¬

The

from

this

conjectural analysis

high,
for

(1) that
likely to be

reduction

material

less.

or

there is

yield

from

yield to $4 bil¬
hand,
possibility that the

On the other

some

the

estate

and

gift

taxes may be increased—as a re¬
sult of a revision of these taxes
and

as

result

a

in

crease

of

taxable,

the

in¬

great

wealth

asso¬

ciated with the growth of the na¬
tional debt.
Thus, it may be pos¬
sible to hold the amount of the

miscellaneous
billion

or

The

receipts

$4

to

up

more.

ditures

billion,

(2)

and

much

as

that

3, the yield of the

cor¬

poration income tax has been set
at

$7 to $9 billion.

tion

income

tax

The corpora¬

if

levied

the

at

standard rate of 38%, as provided
in the Revenue Act of
1945, might

yield about $9 billion in
post-war

perous

35%,
and
The

it
at

might

30%

Most

Combination

Having considered

seems

most

or

$8 billion,
about $7 billion.

three ingredients

it

pros¬

34

yield

Probable

tem,

a

At

year.

each

of the

remains

of

tax

determine
which combination of
ingredients

plausible.
Alternative
I,
shown

the

right-hand
calls for

portion of Chart 3,
$14 billion from the indi¬

vidual
income tax.
Since
this
would permit little in the
way of

further individual income tax

re¬

duction, this combination must,
therefore, be rejected as unlikely
—though this is the combination

rates

$10 billion, but allows
tion

in

yielding
reduc¬

no

the

corporate rate
miscellaneous
receipts.

or

Since

Congress has already tacitly
vided

for

laneous

reduction

receipts

in

down

$5

pro¬

miscel¬

to

billion, this alternative
also; be rejected.




in

about
must

the

corpora¬

and again to the

(under the
It is held

form

the

un¬

dividend

of

is, therefore;
the credit to

often pro¬
granted
paying

be

be

r

here:

problems

there

dividend

a

(2) should it be

so,

credit

tant.

issue,

will

Any
will

100

INCOME

Of

in

revenue con¬

be

material

cost

impor¬

very

dividend

perhaps

billion

a

major
will

from

each

three

the

of

|

Congress

revenue sources.

also
consider
next year many proposals for the
reform of various aspects of the
tax system.
undoubtedly

Secretary

Vinson

has

stated

that in his opinion the tax system
needs

comprehensive reorgani¬
Congress has clearly

a

zation.

And

indicated

its

willingness to hear
during 1946 the tax

consider

and

viduals

and

Secretary
remarked,

groups.

Vinson

"Any
it

sphere

of

in

made

be

can

atmo¬

an

rather

reduction

tax

than of tax increase."

Among

the

proposals

reform

which will doubtless receive

sideration,

the

con¬

important

most

Moderation of individual

are:

tax

come

in

rates

brackets,

partial

elimination

the

or

of the

in¬

upper

complete

••

double

tax

on

of
the
acceler¬
special

dividends,
lengthening
carry-forward of losses,
ated
depreciation
and

business.

of small

Other

reform proposals which
probably receive considera¬
tion, but which I shall not dis¬

will

here,
gains

are:-Revision of cap¬
ital
taxation, taxation of
now tax-exerftpt corporations and
organizations, tightening of the
estate and gift taxes, taxation of
now
tax-exempt
interest
and
elimination of special advantage
to persons residing in the com¬
munity-property States.
cuss

Rates

Income Tax

Apparently the opinion is
widely accepted that the higher
income tax
tive

and

quently
as

argued

not

are

the

relatively ineffec¬

are

uneconomic.

that

highly

securities

long

so

rates

depreciation rates, and (2) that
depreciation should be allowed at
rates

frankly

in

which would

of

excess

those

celerated

have

adopted
depreciation, and

as

held
tax-exempt
is

More¬

it is argued that such rates

over,
tend

to

.

discourage
investment
risk-taking... As
a
result

considerable

sentiment

de¬

has

top rate of
70%,
A marked
scaling down of top bracket rates
would, therefore, not be surpris¬
ing.
The post-war rate pattern

perhaps

in

the

60

brackets

upper

either

curves

shown

marked
lion."

"10

of

of

a

might

the .two

in

Chart

billion"

Since

proportion

a

to

semble

or

the

re¬

dotted
4

and

"14

relatively
nation's

the

see

should

be

form it should take.

thought

would

credit should

at

would be similar to

undistributed

on

other
tax

tude

the

corporate

unsound/
individual

be

granted

dividend

distributions

porate

Conclusions

In

would

posed

those who
the
dividend

to

if

be

:

general,

would,

confronted

are

op¬

credit

with

the

choice of taking the credit at the
individual
or
corporate
level,
choose
those

the

corporate

who

much

that

the

want

level.

And

credit

very

would, in general, prefer
it be applied at the indi¬

vidual level.

Thus, there are two
outcomes
based
on
a

possible

resolution of opposing forces.

First,
tions

as a

bil¬

small
total

less rigid, and (2) that man¬

were

result of the opposi¬
those wanting the

between

the

at

level, and in view of
the revenue problem, the whole
proposal might be defeated. This,
I think is

highly probable.

Agents,

to

accounts

The

want

not

it

but

prefer

the

cor¬

porate level if they have to have

it,

compromise

a

corporate

on

level

a

credit at
might
be

reached.

However, it is extremely diffi¬
cult

to

will

predict how such matters

I
do not rule out the possibility*of
a dividend credit applying at the
ultimately

materialize,

so

There
ment

is

that

of

should

be

fairly general agree¬
carry-back of loss
discontinued and that,

in place of it, the period of carry¬
forward should be lengthened to

write-offs would distort income,

no

It is probable
of the carry¬

that this lengthening

that the regulations should be

lib-"

Of course,
expenditures should be

if Federal

involve

mated

if

or

balance

attempt is made

no

Major

of the

Adjustment Act of; 1945
provided;

i

That the post-war credit of
10% of the excess profits

(1)

It has been estimated

of the

some

be

more

respect to tax liabili¬
ties of 1944 and subsequent
with

years.

That

(2)

re¬

• '•
1
v/"".'.the maturity date of

post-war

re¬

bonds shall be
vanced to Jan. 1, 1946.

ad¬

outstanding

that

fund

liberal plans for

accelerated depreciation

betaken currently

tax shall

Federal

and

therefore

Provisions of 1945 Tax
Legislation

administrative

plan),

would

might be

The Tax

problems. Moreover, as a result
of the adoption of either, total
depreciation charges would tend
to be increased (during the early
years

the budget, important

Otherwise they should
too confidently expected,

be

not

proposal would no doubt
serious

esti¬

considerably less than I have

.

Either

would in¬
as much

(3) That refunds resulting from
the
carry-back .of losses,

$1 billion per year for several

carry-back of unused ex¬
cess profits credits and recomputation
of five-year
amortization shall be ex¬

volve

revenue

losses

of

V'■

-

Altogether,
the

that

for .it

it

demand

would
for

appear

revision

of

force
early and drastic action. It would
not be surprising if some liberali¬
zation of depreciation were pro¬
vided-through revision of either
statutes
or * regulations,
but
it
seems

form

will

so

compelling,

as

improbable that a drastic
of accelerated depreciation

be

pedited.

current
year may be claimed, op¬
tionally, as offsets against

for

the

small

two leading

provisions:
(1)

the

of

Repeal

excess

profits tax.
(2)

Repeal of the carry-back
of

unused

credits

graduation of the corporation in¬
come tax rate, possibly including
(3)

excess

of

(as

1946).

first

31,
-

the

of

Repeal

profits

Dec.

,

.

stock tax and the

declared

other is permitting

Similarly, in the Revenue Act of

the

Corporations—

proposals

complete exemption of the
few
thousand
of
income.

of 1946 con¬
following
major

Act

Revenue
tains

treatment of
One is further

a

a

current tax payments.
The

differential

business.

during

arising

adopted.

are

to

carry-backs

from

result

For

There

k

.

refunds expected

(4) That

to

The
small,, closelyheld corporations to be taxed as
forward will be enacted.
partnerships.
It is not unlikely that special
Accelerated Depreciation
One of the more controversial tax relief will be granted to small
tax proposals relates to the treat¬ business. By successively increas
ment of depreciation in the com¬ ing the specific exemption under
the excess profits tax, Congress
putation of income for tax pur¬
has
indicated interest in-doing
poses.
In general, there are two
for* small • business.
something
somewhat different proposals: (I)
five years or more.

proposals may be adopted,
revolutionary or sweeping

assets and thus encourag¬

new

ing investment. Against accelera¬
tion is the argument that it vio¬
lates sound accounting since rapid

of the

more

or

adopted.

of Losses

the

one

change appears likely.

Taxation of Small Business

Carry-forward

lower,

reform
but

Rates may be a

Act of 1945.

capital outlays by producers there¬
by reducing risk in the purchase

individual level.
The

by the recent Rev¬

tem as revised

reductions and reforms

present depreciation practices is
not so insistant, nor the arguments

do

The future tax

prospect.

to

as

who

far-reaching changes

in

are

would hasten the recovery of new

dividual

those

is impressed by the

principal argument for ac¬
celerated depreciation is that it

years.

and

titudes, one
fact that few

little

Second, as a result of a com¬
promise between those who want
the'credit and want it at the in¬
level

:

,

the various

quirements and Congressional at¬

rates

minimize their taxes.

duced.

credit

Revenue

depreciation

juggle

those

the

depreciation

permitting greater lati¬
tude, the argument is advanced
that taxpayers would be able to

revenues

wanting

adds up

one

proposals for tax reform, and ap¬
praises the possibilities of their
adoption, in terms of revenue, re¬

enue

Against

credit at the individual level and

corporate

When

as¬

so

cor¬

on

f

1

the

to

recipient

that the effect of taxation

minimized.

credit

further the

reduce

taxation upon smaller

system will probably be not too

Internal

The

like to

different from the present tax sys¬

correct

tax

com¬

reduced if the Bureau regulations

than'

the

sharply than those for

reduced

were

taxpayers would be

sign

that

and

should

and the

enue

that of

would argue that a
'undistributed
profits is

should

more

incomes

impact of

(1) that controversy be¬

agement is more qualified to

profits.

»'

evaporations

for

concerns.

tween the Bureau of Internal Rev¬

school

on

are:

rates

the

its net result
a

low

would

ac¬

The arguments for greater lati¬

ap¬

that

the

case

with

demand for it in this

One school of

argue

be

level—in which

the

over,
from recent debates, one
gains the impression that Congress

be regarded as cor¬
of conventional ac¬

Britain

Great

1945,

panies with large incomes. More¬

counting theory. Both Canada and

long

so

rate

available.;

are

fre¬

is

these

effective

capital gains

at 25%mnd

It

credit

I

proved, there would undoubtedly
be a serious controversy as to the

the
Individual

As

revenue.

dividend

derived

EXEMPTION
DOLLARS
t

eralized in order to permit greater
latitude in the determination of

country ap¬
not be borne out in fact.
pears to be growing—though it is
revenue
problem, therefore, the
not overwhelming and may actu¬
prospects for the dividend credit
Proposals for Reform
ally diminish now that the excess
are not bright.
So much for the broad question
If, in spite of revenue needs, a profits tax has been repealed.
of how much revenue
shall
be?
dollars

400

.

BEFORE

THOUSANDS

rect in terms

On the first

assumptions should prove to be
false, then the conclusions v/ould

40 50

NET

"

individual

to the

or

two

are

30

corporation

/

should

siderations

veloped in favor of

to

(under

by
the

to

once

recipient

budget-—at least in years of pros¬
perity.
If either of these two

Alternative IV calls for a sub¬
stantial reduction in the individ¬
tax

represented

.

and

income

or

pres¬

granted at the corporate or at the
individual level?

effort will be made to balance the

that would be
preferred by many
students of taxation.-

ual

Under

taxed

credit, and if

bracket rates under the individual

in

is

to

There

(1)

the
sys¬

to

the

that

partially

receiving it.

$25

as

income

the dividend

sincere

a

is

be

Some

either

conclusions
rest,
of
on
two
assumptions;
(1) that Federal expen¬
total

law,

posed,

,

will

eliminated.

sound.

post-war tax relief.
course,

wholly

credit

profits tax, business probably has
already received the bulk of its

namely,

should

criminatory and economically

tax and the declared value excess

These,

dends

individual income tax).

profits tax, the capital stock

cess

widely advo¬

that this duplicate taxation is dis¬

income tax are not
With the repeal of the ex¬

treatment

Corporation Income Tax.

In Chart

higher

double taxation of divi¬

individual

corporation
good.

most

tion income tax)

the

in

if

lion

TAX

•

proposals

dividends

the prospects

that

(2)

and

a

tax

corporation

are

taxes of all kinds are

the

so-called

ent

conclusions

net

of

cated

tween these two.

well

the

INCOfvC

DEPENDENTS'

Dividends

(Alternative III).

haps 34%

incidentally
reorganization of the tax
system will be greatly facilitated

reduce

revenue.

One

the corporate rate to per¬

tion in

elimination of various ordinary
excises which, if enacted, might

reduction

the

in

INDIVDUAL

-TWO

The Double Taxation of

ol

siderable

for

affect

(Al¬

recommendations of various indi¬

pressure

is

—

bracket rates would not seriously

oi

expected from miscellaneous re¬
ceipts.
Moreover, there is con¬
or

income

RATES

TAXPAYER.

brackets, this scaling down of top

ternative II), or (b) excises main¬
tained at $5 billion with a reduc¬

perhaps

bracket

first

taxable

SURTAX

RATE

possibility, and either (a) reducec

ous

would

and

II

III, which call for $12. billion from
the individual income tax, wnicn

the

tax.

income

Alternative

leaves

This

3026)

two percentage

one or

AND

MARRIED
BRACKET

than

NORMAL

profits, tax.

value

related
excess
.

.

(4) Reduction of

capital

,

-

,s

corporation

income tax rates.

.

>

(a) For " corporations with
net income of $50,000

•

.

or
1

more,

a

flat reducto 38%.

tion from 40%
:

(b) For

corporations with

net income
a

t

.

of less than

$50,000;a reduction in

r}v

■Volume 162, ;Number

COMMERCIAL

THE

4448

They

tries

activities

Organization. The credit of 4 bil¬
400 million dollars and one
billion, which
Great
Britain can use under the Bretton
lion

additional,,

Woods padt, in connection
settlement of Britain's ZV2

with a

achieved

billion

litical unity..
But
Latin-American

pound debts by installments and
adjustments, will allow for the re¬

each

by

balance

adopting the relative price levels,
the change of which shifts the
/ balances rapidly.
That is indeed
culation of the future British bal¬
of

ance

trade

which

based

is

of

statistics

trade

the

on

prewar

•years.
,

The repercussions of the Wash¬
ington agreement will be advan¬
tageous to Latin-American coun¬
tries but do not solve their trade

the

"problems.. During

war

,

they

continental

of

markets

the

lost

!.

trade

represents

a

method of

trade

nates the

reciprocal
customs

free

union

and important
policy. It elimi¬

new

political difficulties and

administrative

the

po¬

,

system of
without a

complications

innerent in custom unions and yet
creates larger free trade areas. To

•

countries

question whether the United States
within

could,

other

certain

es¬

Latin-American republics involves

progressive

might be worth analyzing.

establishment

of

Europe to which more than oneof their exports had been

third

,

consigned.
The / United
States
stepped in by increasing their im¬
ports from Latin America from 30
to 56%. Therefore Latin-American

There

WHAT

re¬

IS

greater difficulties but

;;

Department of Member Firms of New, York Stock Exchange Informs
Members and Member Firms of Discipline Involving Conduct of
Registered Employees.
v

are

Step?

some, no

GOING TO HAPPEN
INSIST

UPON

TO

BUYING

HIS BUSINESS,

THE

IF

HIS

CUS¬

SECURITIES

WRONG

IN

THIS BULL MARKET WE ARE NOW HAVING?

tablish reciprocal free trade with

evidently

BUTTON:

doubt, who hold to the opinion that it is not
the duty, nor the prerogative of the security dealer to educate.
In
their opinion, stocks and bonds were made to sell—and why preach
to the public. With this opinion we do not wholly disagree, but we
think such a viewpoint is too one sided and prejudiced.
The path of enlightened self interest lies along the lines which
are directed toward keeping a clientele.
The altruistic motives them¬
selves, such as protecting the public from its own excesses (if that
can be done)
can be secondary if you feel that way about it.
The
important point that every dealer and salesman must consider is;
TOMERS

limits,

preferential
tariffs,
based on exceptions admitted in
their trade agreements. And they
go further, trying to arrive at the

As
"The

a

recent advertisement for Some financial service phrased it
has been too easy."
As we hear the stories from

market

dealers, and brokers, the public is beginning to buy tips again, in¬
stead of securities. All one has to do is to look at the price advances
in some low priced stocks that only a few months ago were selling
at bankruptcy levels, and today are way up in the so-called respect¬
able class.
One such common stock that comes to our mind, rep-f
resents what is left of an equity in a defunct and bankrupt concern,
that a few years ago had to sell its machinery and equipment in
order

to

All this company owns today.
obligations, a few minor
Yet
The Department of Member Firms of the New York Stock Ex¬ this stock is being recommended as an attractive speculation, and is
change issued the following circular (M. F. Circular No. 30), dated being retailed to unsuspecting security buyers, at levels which in
Dec. 11:
;■Y'V-r ;
v/-:'.""
-V.'/' our opinion are ridiculously out of line with any substance of reality.
This company may come back—a miracle may happen—but the odds
To Members and Member Firms :<§
*
—
The following instances of dis¬ was making a practice of acting against it'must be overpowering. Why sell such dogs? Are there
as
"go between" in arranging for not enough securities still around, at current levels that represent
ciplinary action taken by. the Ex¬
change in cases involving the con¬ short term loans at unusually high equities in solvent, aggressive companies? Of course, such cases are
rare.
The majority of dealers are looking high and low for sound
rates of interest on behalf of a
duct of Registered Employees are
non-member broker dealer.
cited for the attention of members
In values today, just as they have done in the past—but some are allow¬
most cases the registered repre¬ ing their customers to lead them astray.
and their employees: ,
The low priced dogs that
" " ' ; '
sentative secured the - borrowed have that "quick run," are luring the public along unsound lines,
Participation in "Kick-back"
and
some
dealers
are
naturally going to follow the trend. They feel
funds from persons who made a
Arrangement
practice of lending money for that one or two such pups won't hurt anybody, and besides most of
them
are
An
short
making
good.
This is true. For a while almost everything
investigation by the Ex¬
periods of time at abnor¬
change into the, activities of.',a mally high interest rates, but in will make good; but the point to remember is WHERE WILL YOUR
*

principal objection to the cal¬

the

The

JOHN

Time To Watch Our

trade

'ilMiWtSE Gases of Disciplinary Action

.

the

with

connection

free

commodities.

•

decisive argu¬
ment in favor of the surprisingly
strong British trend toward per¬
manent control of foreign trade.
The Washington agreement pro¬
vides the time necessary for the

would have been a

•

in

reciprocal

with the exception of only a few

begun to apply other more
practical
methods.
They
grant

British balance of
payments during the dangerous
transition period which otherwise

of

tablished

have

storing of the

restoration

of these facts and
attempts at en¬

many

a

United

the

of

By

Honduras and Nicaragua have es¬

larging their markets. In 1941 the
La Plata States proposed to create
customs union, in 1942 Argen¬
tina and Chile agreed to prepare
a customs union. These plans are
not likely
to succeed because a
customs
union
can
only
be

the way for the
Nations

Britain and opens

Securities Salesman's Corner

existing in only one of
Guatamala, El Salvador,

or

them.

are aware

have made

free

trade for industries not yet in ex¬
istence in either of the two coun¬

(Continued from page 3009)
The loan agreement avoids this
danger, implies the ratification of
the Bretton Woods plan by Great

3029

treaty

1941, " provides

in

gentina

Great Britain and Latin America
•

The

CHRONICLE

! concluded between Brazil and Ar¬

.

'

trade.

free

ciprocal

The International Trade Struggle:

& FINANCIAL

is

some

keep its office doors

open.

almost

debts

equities which

inexhaustible

and

of dubious value, and a name on the door.

are

,

number of registered representa¬
exports could rise from 1800 mil¬ tives, one of whom was also an
lion dollars in 1938 to 2400 million order
clerk, disclosed evidence
in 1943 while; their imports re¬ from which the
Exchange con¬
mained on the 1500; million level.' cluded that such
employees had
Their reserves in gold and foreign received "kick-backs" on over-

least

at

one

instance

borrowing also at

effected

he

CUSTOMERS BE AFTER THIS SPREE IS OVER.

other

experienced professional in the securities
that tries to look farther than one or
whose account he serviced.
two years ahead in times like these is only kidding himself."
With
The registration of the employee this too we agree.
But the point to remember is that even though
was suspended.
your customers may make some temporary profits out of chasing
exchange increased from 900 mil¬ the-counter business introduced
overpriced stocks which are touted, and which follow the ever
Unwarranted Statements
lion dollars in 1939 to 3500 in the to a non-member firm.
changing trends of this whirling and surging 1945 bull market—the
middle of 1944; moreover they reInvestigation by the Exchange securities that represent VALUE will still give them something more
•
;
It was the practice of the regisdisclosed that a registered repre¬ than some empty dreams upon which they can relie—IF,
AND
patyiated a great part of and the
s - tered representatives involved to
sentative made a practice of, in¬
WHEN, THIS MARKET "TOPS OFF." And this will be true whether
| transmit to an over-the-counter
,uni,ea states.
J firm orders in unlisted securities terpreting tape action of a secu¬ it happens next spring, next fall or in a year or two.
The Latin American republics which
telling
his
customers,
they obtained from cus- rity - by
The point to make clear with investor clients today is that YOU
start with a number of advantages, toraers whose accounts they serv¬
"They are moving it up" or "They ARE STICKING TO YOUR FUNDAMENTAL PRINCIPLES.
That
but they have good reasons to as¬ iced.
In
certain
instances,
the are moving it down" and thus in¬ its your responsibility to them to offer them securities that represent
sume /that
this country will buy over-the-counter,, firm acted as ducing a customer to buy or sell
greater than average opportunity for price appreciation, or income,
much less from them after the
agent and, charged a commission the particular security that the but that you won't sacrifice intrinsic value for the passing oppor¬
war and that the recovery of their
to the member firm while in other mysterious "they" were allegedly tunities fbr
making quick turns, or playing tips and hunches.
This
market in. continental Europe will instances the non-member acted moving up or down. The Ex¬
is not your business, and you don't believe that in the long run it
be slow, and only partial. And the as
principal and included an un- change was satisfied that the reg¬ will work; even though for the time being some people who are fol¬
southern republics were not at all disclosed Drofit in its net Drice to istered
representative
did
not
this trend may temporarily look like market wizards. This is
satisfied with their prewar trade
™*Pr,ce to mean to imply that any manipu¬ lowing
the kind of straight talk some people who are buying tips instead of
conditions. They are determined the member Urm.
lation
was present, but was mere¬
The
securities need today. The only way to keep customers is to control
Exchange suspended the
to go ahead with industrialization.
registration of each of the regis¬ ly using loose and irresponsible them.. Otherwise you will eventually lose their business anyway.
But in most cases the market of
language in interpreting transac¬ This i? the kind of education that pays—and you don't have to preach
tered representatives involved.
a single Latin-American republic
tions appearing on the tape.
to do it. Just stick to fundamentals and show your customers WHY
is too small and offers no ade¬
The
Participating in Customers'
Exchange felt that such its the best policy in the end. •'
:
Va:v"
x-V :
! :
quate basis for the development
Profits
loose talk
cannot
be
a

high rate from

unusually
woman customer

a

an

The

business

day,

an

said to us, "Anyone

,

.

,

.

.

.

.

,

,

|

their

,

,

-

of modern industries.

the
Latinare hindered

exports
of
American countries
I The

by the tariff walls of their neigh¬
bors and by the competition of
the industrial countries. The small
output of such new industries will
be produced at extremely high
costs,

national income
this way.

real

and

<

cannot be expanded in

Circumstances involving
mer

resulted

tain
was

of

manager

bracket

"...

from 25%
from 27%
from 29%
from 53%
(no change)

to 21%

0—$5,000
5,000—20,000
20,000—25,000
25,000—50,000

$

as

"

follows:

/

rates

to 23%
to 26%

to 53%

.

had

had

mer

.

normal

tax

exemp-

tion of $500 for each tax'V '' '/
payer is replaced by exemptions .of $500 each for
;
the taxpayer, his .spouse,
,f.,
and each of his dependents.
:
_(2) Reduction in individual
y income tax.rates: the rate
(

,

arrange¬

an

whereby they agreed to pay

him

a

percentage of

realized

on

the profits
Such

con¬

on
the part of a registered
representative is contrary to the
provisions under which he is ap¬
proved by the Exchange.

The Exchange

suspended regis¬

tration of the branch office man¬

involved.

•

.

one such fact should be re¬
ported to his employer and the
Exchange; that if he in fact had

for

tion

knowledge, his intima¬
may
have misled the cus¬

,

In

a

case

recently

before

the

Exchange a margin clerk who was
also a registered .employee ad¬
mitted that he had received pe¬
riodic payments from a non-mem¬

ber brokerage firm whose account
was cleared by the member with
whom

he

was

bracket

V.

,

thus. computed is .further
reduced by 5%.
<3) Repeal Of-the.Automobile
•
"Use Tax.' *
"
1 *"
.

.

s

■

,




||A. DePinna Company

For

conduct detrimental

to

interest and welfare of the

change and
business

Exy-

was

the

registered

of the

none

any

Circular

violation of good

in

on

request

■

f.y •

repre¬

sentative.

firm

Class A Stock

the

principles the Exchange

suspended
In

$J4;: $0.60 Convertible Preferred Stock

;

tomer.

cases

cited above

partner of the employing
of the facts until the

aware

was

Edward C.

Herrick,Waddell & Co., Inc.
55 LIBERTY STREET, NEW

YORK 5, N. Y.

instituted

Gray, Director.

Thos. Price Bond

,

the

,

It

was

brought to the attention

of the Exchange

representative of

that a-registered
a

member firm

Mgr.
Over-the-Counter Quotation Services

for Nat'l Bronx Bank
1

The

-

National. Bronx

-

Bank

For 32 Years

of

New York, 150th Street and Mel¬
rose

employed.

Exchange suspended
registration of the employee.
The

.

■

>>

income

;

Registered Employees

\./ is reduced by 3 percentConduct Inconsistent with Just and
.age.points, and the tax
Equitable Principles of Trade

-

..

each

^. ■'

CHRISTMAS

such

no

Avenue, New

„

,

MERRY

any

Acceptances of Gratuities by

.

..

V-V:-:

if the registered

investigation

-

,

condoned;
representa¬
tive had knowledge that the stock
was being moved up or down by
that

transactions which he

duct

the for-

.

cer¬

Evidence

ager

.

tax:

with

customers.

produced that several of the

customers

(1) Liberalization of personal
exemptions applicable to
the normal

for¬

ment with the branch office man¬

ager

Individuals

For

a

branch office

discussions

in

his

of

a

recommended to them.

the

>
1

announced

has

that

become

institution

as

york City, har

Thomas E.

associated

&

that

Manager of the Mu¬

nicipal Bond Department.
formerly

Price

with

with

.

Co., and was

rowsmith & Co.

Campbell,
an

He

BUREAU, Inc.

Established 1913

Phelps

officer of Ar"

NATIONAL QUOTATION

was

46 Front Street,

Chicago:

.

..

,

.

New York 4, N. Y.

San Francisco

•

THE COMMERCIAL & FINANCIAL

3030

CHRONICLE

for any class in a society, is-well
covered
in one of Sumner's es¬

Living Wage Standards Fallacies
(Continued from first page)
been repeatedly evident.
Instead
of being something which can be
handed out on a platter, so to
a
"standard

—

life" as the British
something which must

of

it—is

call

living

of

standard

speak,

|

for, saved for, and
worked for throughout the life¬

of
Schwellenbach,
Secretary

mind

in

_

B.

income

lowest

the

in

Commit"is necessary at this

national
standard there are a
number of class standards, each

before the House Labor

in justice to that group of with its own goals and aims. The
low-paid wage earners who have "American Standard," therefore,
never
received sufficient income is a sort of. generalization of all
to maintain an American standard
0f the class standards prevailing
of living." (Bold added.) Some of
in our group, which resumes their
the
implications > of this state- | common elements.
"The lowest
ment will be taken up later, but classes have the least effective
at this
point certain questions standard; that is partly the cause,
need to be raised and answered. I as it is certainly the barometer,
time

.

..

ww

What is

i

,

National

a

^

Living

Before

>

of

American

an

to

the

•

Standard of

of

or

national
is

a

see

social science

tell upon those who care

^egins

decency and order.
In the
middle classes
it is
sometimes

for

in

to

seems

thing static or stagnant that when
onces attained
should never be

his wife, and his children."

given up? Or is it something dynamic, something moving, always
a little beyond what has been already achieved?
What is this,
customary level or quality of ex¬
istence
deemed
fit
for human

ciety or the class to which he
belongs sets its norm and are the
things which awaken and sustain

_

beings, which to lower it "would
be to live a dog's life," a life not
fit for "the men"?
Well, fortu¬

the

of

customs

The

surrounding

so-

Men are born into it, but in

it.

time they may work out

their own
But a period of warengendered "prosperity" such as
that through which we went after

variations.

the end of World War I and have

nately for us, two of the greatest
thinkers turned out by Yale Uni¬

been

repeating today,

the

standard

"to

elevate

may

of

balloon

a

senseless heights.

Once raised, its
during the past two or
generations — William -lowering encounters stiff resis¬
Sumner and his adept tance. Thrift, once jilted for ex¬
successor,
Albert
Galloway travagance, becomes cynical of
Keller,1 in the field of the Science renewed wooing.
of Society—have answered some
How applicable this statement
of the questions for us. To them
is to what is
versity
three

Graham

,

is

static

both

.

for

it

takes

the

on

nature

goal, or ideal toward which
strain; not merely to live
at present,
but better."2
Nothing
will
lower
it
more
quickly than failure to practice
thrift and the reckless propagation
of numbers, for in the relentless
law
of
population growth, the
growth of numbers in an area is
as

jace
(

Under these conditions the Law
of Population

reads, "Population

(or

numbers) tends to increase
the limit of the supporting
power of the land (environment),
up to

given stage of the arts, and
given standard of living."2
Thus population, varying inversely
with the standard of living, and
directly with the arts, increases
on

a

for

a

until

the

reached.
of

a

limits

ehance

before
stern

land

are

living

to

halt

retreat

or

reaching nature's

near

and

limit."

1 For

the

the

views

of

the

is low, "there is not

group

much

of

If the standard of

most
of

complete

presentation

these

Yale scholars, see
Society." four volumes,
Yale
University Press, 1927, written be¬
tween
1899
and
1927;
or
the
popular,
abridged edition in one volume by Keller,

?The

Science

"Man's
W.

Rough

Stokes

But

Road,"

1932,

(Frederick

Co., and Yale University Press).
"Essays" and Keller's "So¬

Sumner's

cietal

Evolution"

2 Keller,

A.

are

G.,

equally

"Man's

stimulating.

Rough

Road,"

73-74.

pp.
3

of

Keller, op. cit., p. 64. Hereafter where
are given without
specific ref¬

quotations
erence,
ence

or

are

not

of

where

given

common

for

the

most

the

two

men

notes

taken

or

principles of
paraphrased

knowledge,,

part,

from

referred
from

one

or

or

sci¬

which

are

they

the

jto,

social
w:ll

writings
from

botii.




be,
of

lecture

work

for

the

time
they got

as

52

same

peace

hours

is

an

Administration gen-

an(j

erally for the

same

volume of

em-

ployment, at the same or higher
pay, which prevailed in wartime,
when goods had to be produced
regardless of costs or prices if the
war
was
to be successfully car¬
ried

the

is

on,

another

thing.

same

of

example

Standard of Living

Implied in the statements of
Secretary Schwellenbach, and in
those of President Roosevelt and
President

as

well, there

to lurk the notion that the

seems

State

Truman

someone

or

must step

in to

the
high wages of
wartime and to maintain the artiperpetuate

fically

high

which the
Take

Mr.

standard

war

of 650 per

plied

hour,

a

more

thousands,
thousands

yes, even hundreds of
of teachers; preachers,

and other

unorganized white col¬

lar

Workers

much

have

who

their lives had

never

«.

in

States

the United

had incomes of less

income

of

an

This figure, he maintains,

is

the

lowest

that

$1,300
any

per

President
message

to

Truman

said

in

he

(see

well-being of the workers."
'ate

President

Roosevelt

in

The

his

Executive Order No. 9250, of Oct.

3, 1942, in extending the

powers

to

be

standard

a

based

upon

a

minimum wage of

$l,300.per year;
going to provide it, and
will it be
provided, unless

who

is

how

back of all of these noble schemes
there is to be a wholesale redis-1

tribution of wealth and/or income
in this country?
' - .
,

•High Nominal Wages and "Real i

j,v/-.Wages"
Even

,ought

we

it that everyone has

to

see

an

the

tyro in Economics—1
school student in his

high

"social studies"

existence worthy of a human be¬

economics"

ing,

level—is

to keep it in the form in

or

offered;

was

menschen-

a

.

the

in

or

at

the

familiar

that* it ; is

"elementary
high school

with

theJ* fact;

not

money wages or
take-home pay that really

even

,

being?
The hod-carrier, who is
earning a dollar a day, will' say

money wage.

of less than $2,000.4 Hence, a war¬
time minimum wage of $1,300 per

ilies

income

of

that

of

all

for

at

fam¬

Eleanor

so

by toil

only

If

he

high, he will have
long preparation to
reach it.

It is

a

is

rather

fine

bloom
.

deplored the fact that
American homes had

evidence

first

that

some¬

it

is

about

50%

more

than

us is getting now, which
would, for a time, mean hap¬
piness, prosperity; and welfare to
us all," L e., a dynamic standard
of living to be striven for, a sort
of inkling of what might be.
"

"The next question

is: for how

many-people must a menschen¬
wurdiges Dasein be provided? The
provision of such an existence is

of

It is
like honor in this respect also; for
honor,
while
inestimable as a
regulator of life, is most effective
;

in

each of

self-

standard

to make a
be able to

morality.

the

eral

most mischievous

the

and

columns

mind

that the standard
living is at the disposal of the
social philosopher and projector.
It

,

slippery notion which the human
can try to conceive., In gen¬

For

of

character

year,

It sounds like a
concrete and definite thing, but
it is not such; a menschenwurdiges
Dasein is the most shifting and

to suppose

error

Roosevelt's

many

us

man

and

his

sets

a

thing is wrong.

addresses to himself, and is to be
denial.

thousand

therefore, at the first touch gives

beneficiary by
degrading his self-respect, which

answered

man

only one maid, and that many,
many did not have any maids at
all?) A menschenwurdiges Dasein

and pauperized its

a

a

thousand dollars will

a

which she

Benevolence has often lowered

which

that it
whose

say

speak of "five thousand a year as
misery.
(Remember one of. Mrs.

Writing in "The Science of So¬
ciety," Sumner and Keller say:&
give anybody things that he
wants, without exacting any re¬
turn from him, raises his appetite
and his sense of the right to de¬
mand, not his standard of living.

demand

get for a
mechanic

the

.will

three;

.twelve

was

"To

a

could

half;

that it costs fifteen hundred.
I' once heard a man whose salary

;

is

cost

income is

the country.
But here again
"Sumnerology," or the writings of
"Old Bill," as he is affectionately
remembered by his fellow work¬
ers
and former students,
has a
better and more timley answer.

that

he

a

dollars

say

some

is the flower of his standard.

what
and

two

would

of

...

is

dollar

directly affect the in¬
65% of all families

and

comes

the

.

first

of

he

when

meets

which

necessity

(o
understand the world in which he
one

us

comes

lives—that is, he has to earn a liv¬

and real when least is said about

ing. .. The task of earning a liv¬
ing is found generally, to be a some¬
what heavy one, chiefly for the
jreason, as shown in the. former
paragraph, that a man's definition
of a decent living will not stay
fixed
long enough for him to
.

it, and when least outright use is
sought to be made of it."
Look at the right to demand of
the

CIO

Workers

Auto

the

at

prices are the
order of the day. Similarly, in a
letter to Mr. Philip Murray, on
Oct.
23,
1945,
Mr.
John
A.
Stephens, Vice-President of the
U. S. Steel Company, says:
"Your wage demand is a stag¬
gering one. In substance, you ask
for nearly the same pay for 40
hours of work as is now paid for
increase

any

in

at

in

22.1%

a

it wants,

be

an

of

Fallacy

But this idea of a social
"at

his

living
or

or

social

disDOsal"

which

of having

"provide"
4r/.

a

Blorisren.

Economic®."
5 pp.

reformer

he

Ralph

22,

pp.

increase

have

will

as

those

of per¬

with

great

are, of course, all
have neglected or re¬

who

fused to win

a

menschenwurdiges

Dasein for themselves; and when¬

of

it is

body

else shall give it to them,
provided that their number
multiply indefinitely and

it

of

determined that

ever

is

shall

some¬

forever."

away,

398-401.

children

They

rapidity.

philoshaving

H..

to

an

.

will

sons

Although

the state or someone
minimum standard

Chapter

74-75.

give

who is

Therefore this class

den.

only

st»"dard

a

can

man

.

good a claim 'to such an existence,'
as he;
their support will there¬
fore cause him no anxiety or bur¬

Sentiment"

ouher

.

and

wife

"Noble

a

But the

.

provided with such
.

his

The

.

exist¬
ence
will not have any such
difficulty to contend with; he is
to have his living secured to him
by the state, or the social re¬
formers, or somebody else.
His

appetite and sense of
the right to demand, not his stand¬
ard of living."
"raises

he

,

children.

average

this

it

long, rarely does more than
obligation
to guar¬
antee a menschenwurdiges Dasein
to
himself,
his
wife, and his

Give a man

and

him

to

meet this

things which he
without exacting any

from

return

way

life

labor union

or

he thinks he

as

a number of other per¬
His whole energy, his whole

sons.

worker."

or

soon

Dasein of

and a consequent
reduction in the weekly steel out¬
per

As

wants to
marry; then he becomes respon¬
sible for the menschenwurdiges

weekly straight-time wages, with
a
16%% reduction of productive

Shades of Sumner!

his

sees

half

to

amount

would

of

andra

time

realize it.

hours

eight

including

That

pay.

increase

Congress

health, efficiency and general

living."
might ask, "what American
standard of living?" And if it

500, and about 79% had incomes

as

the

an

of

counts; it is instead "real wages,"
the -purchasing
power
of; the

his

on
Sept. 6.
"Chronicle" Sept.
13, p. 1262), "the maintenance of

1945

had suffi¬

maintain

"The first question is: what is
an existence worthy of a human

worker

aught, to be paid, to "assure,"

out

never

to

standard

$1,000, almost
65% had incomes of less than $1,-

put

year.

The sentiment is that

;
to

wurdiges Dasein.

in

points

who have

income

One

,

all

families

He

is

to examine is stated in Ger¬
and that, to try to translate
it causes it to lose something, of
its
"poetry, and • transcendental
solemnity"!
V',.

which it

the

year,

"bathos."

sentiment

cient

man,

distribution

come

40-hour

assumed 50 weeks of labor per

simply

noble

a

poses

$1,300!

as

hours per week

an

standard

that this noble sentiment, he pro¬

yearly income of

a

e.,

a

Studies of in¬
by families in
1935-36; show that almost 42%-of

as

at present under the
Fair Labor Standards Act, as an
example. He states that with a

week, as provided under
FLSA, a minimum wage of
650 would give the worker, i. e.,
the lowest paid
worker, a weekly
wage on $26 per week, and with

ex¬

such

hours,

widely ap¬

"an

or

then

overtime

than

estate

an

pro¬

state

of

argu¬

that

a

procured for

$1,300 being the minimum
nominal wage which would pro¬
vide' for the healthj decency* and
general welfare and well-being of
workers, may be found' in the

48

minimum wage

that„ includes

provisions of the FLSA.
■
t
•
The answer to these statements

living

Schwellenbach's

ment in favor of

earners

American

of

and hours

is
to
"correct substandards
living" or to provide for that
"large group of low-paid wage

sentiment

about

possible.

of

has made

He

Sentiment.''^

says that a noble sentiment is a
noble thing when it is genu¬
ine, but he concludes that such a

—-i.

present time, where the demands
a
30% wage increase without

^

The Fallacy of "Providing" a

of

Noble

istence worthy of a human being,"

indus¬

not supposed to

of

circumscribed

by three factors—
the supporting power of the en¬
vironment, the development of
the arts, and the standard of liv¬
ing.

hours

40

of

demand

get
in

example of their resistance to
any change in nominal wages, un¬
less they go continually upward.
All the agitation of Henry Wal-

ofan

aim,

to

pay"

wartime

in

.

.

men
on

"take-home
for

tbe

and

unions

labor

.

.

desire

The

dynamic.
When viewed in the
light of the standard set by the
customs of the
group, "it is a
static, stagnant, unprogressive af¬
fair;
with the self-satisfied
the present is the standard and
stagnation is the result.
There
comes to be more to it than this,
.

today!

happening

and

of

something of our concept
of living—is to be
an individual by the
or by some social reformer,

were

.

.

.

aim

tion

vision

minimum

550

a

intra-state

in

under the wages

tribution

individualistic.

be

it, resembles honor. It is a sense
of what a man owes to himself,

standard

later,

even

ago, how aptly this fits into
today's picture, with those whose

which he calls "An Examina¬
a

1945

years

says

very

establish

to

.
.
.
taking the form of
ambition, a "keeping up year to be maintained in perpe¬
with the Joneses." But within the tuity, would at a single stroke, so
to
speak, bring about a redis¬
class
"the, standard
of
living

society, is meant by the concept
"standard of living." Is it some-

ihe

WLB

social

of the science of

or

The standard

position.

their

sordid,"

of

principles

the

of

light

I

the nature

see

of living, perhaps it
if possible what,

standard
best

can

we

°f

np

«.i

and

come

those

arguing for a' who are the least thrifty and
650 minimum wage, as a starting practice the least foresight. But
point is reported to have said within the bounds of a so-called
tee that this

500,
wage

of

that

was

groups,

Labor

the

of

tries, which

one

had

enbach

individuals.
Labor, Lewis

of most

time
<

War

offices

the late President
Roosevelt and Secretary Schwell¬
the

the

Board,, gave
the Board power "to correct substandards of living." This power
was used widely by the regional

But a "national standard of living" or an "American standard
0f living," of which we have been
hearing so much in current dis¬
cussion, is not describable in sim¬
ple and unqualified terms. Prob¬
ably

sacrificed

be

of

"American Standard" Described

|

Thursday, December 20,

written

over

forty

G.. Pnd Davie, M. R„ "Se¬
lected Essays of William Graham S"mner,"
6

Keller,

1924

pp.

A.

90-93.

7 Parenthetical

writer.

reasoning "about

statement,

"dded

by

or

a

union

Offer

a

three-dollar

a

wages.-.

,

man

a

day wage, with rent, clothing, and'
a market. basket of supplies of a;
given quantity and quality, avail-'
able at $2.75; or offer him a daily
wage of $9.00 a day, with rent„

and the market basket
arid see which he

clothing,

costing $10.00,

.

takes!

VI

■

recall "a

fifty

V-"...','

f

community

:V-'!
forty;

ago in Southeastern
None were rich in this:

years

Kansas.

community yet
poverty.
There

in,
families',

were

none

were'

whom the churches

Ladies Aid;
remembered with bas-!.

Societies

or

kets at Thanksgiving and

Christ-,

and to whom

partially wornclothing
were
welcome, but none lived on un-;
employment benefits or direct re-:
mas

of

articles

out

the state

lief from

or

community.',

honor and their
self-respect, fighting their own
fight to maintain their standard:
and to push it to higher levels.;
They Were all "ill-housed, ill-fed,and ill-clothed" by today's stand¬
ards. In this connection, the state¬
ment in "Time" Magazine recently!
that
cartoonist
H, T.
Webster'
once
drew a political cartoon on•
They

their

had

Lincoln's

Birthday, 1940, will be;

interest.

of

In

it

Webster

drew'

storm-whipped, be-!
nighted, 'wildnerness
cabin,
a;
light in its window like the fever
of birth," and below the cartoon :
appeared the caption: Ill-Fed—
Ill-Clothed —Ill-Housed!
If the'
"forlorn,

a

absence of modern

of

case

a

all

were

lain

being

plumbing were;
ill-housed, then;
the

in such condition, for

bathroom with its porce¬

modern
tub

and

its

flush toilet did

not'

until about
the turn of the century, along with'
the first telephone and the first
electric light in this community. •
All were ill-fed, if to eat fried'
pork chops or fried rabbit, with;
fried potatoes, and "skillet corn-'
bread," and honey or sorghum
"out of the pail," instead of the1
choice citrous fruits, the prepared
breakfast
foods,
and
electric
toaster toast, may be considered
a case of "ill-feeding."
And wages,
make

appearance

for adult male laborers,
some

skilled

the

of

including'

and

semi¬

$2.00 a day
for a 10-hour da,V—20c an hour.
Upper grade school and lower
high school boys worked in the
late spring and early summer for
50 an hour, "dropping" sweet po¬
tato, tomato, cabbage and other
plants, or pulling weeds out of
gardens or corn rows. And they
were not,
in my opinion, in any
sense exploited.
skilled

trades,

were

could be bought
pound: esas, three
quarter: butter, 200

steak

Round

for ten cents a

dozen

for

a

and bread, 40 a loaf.
Calves' and pig livers were given
away if you boueht other
meat
a

or

pound,-

could

ston

tun ^'tnher

on

his

return from the "slaughter house."
A young
at

.

Yet here, especially

among labor, union leaders, there"
is much. spurious and fallacious

man's suit of all-wool or
- 1
"dth long
vest ar<-T
- '
^ost $6.00.

least of gor>-'

pants,

Volume

But

Number

162

question would be
poor farmers who
had to grow the meat, and pioduce the butter and eggs at such
to-day's

''What

of

the

worked itself into

Dr. Kemmerer Dies;

Noted Finance

...

Well, they didn't do so
The death was announced on
badly, as I recall it. They lived Dec. 16 of Dr. Edwin W. Kem¬
well, sent their children to the
merer,
noted
international ex¬
local high schools and to the state
pert on finance and, over a pe¬
university and the state agricul¬
riod
of
31
tural college, and without AAA
payments for what they did not
produce, every few years they
added an eighty or another quar¬
ter section of land to their farm.
Nominal wages in this area were
extremely low, yet real wages—
the wages that count—were high
and provided for a better standard
of living than is possible today in
many
areas
under much higher
nominal wage levels. And because
that community did not have a
standard of living provided for
by

what

British indus¬

a

and his
E. W. Kemroerer
who had serve in
1924
on
the
were "exploited" at five cents an
hour in learning to do an honest Dawes Commission and on the
States
Trade
Commis¬
day's work, came out as lawyers, United
sion in South America in
1922.
doctors, civil and electrical engi¬
with

themselves

neers,

ers,

university and college teach¬

members of the state legis¬
and Supreme Court of the

lature

State.
As Roger Babson has recently
pointed out in one of his syndi¬

Princeton,
N, J.j the Associated Press stated
that Dr. Kemmerer was also^re¬
tired
Walker
Professor
of In¬

consciously or uncon¬
sciously forcing this country into
more inflation by their insistence
on higher rates of pay and higher
take-home pay.
They have set
are

University.

have

im¬

added

petus to the spiral of rising wages
and

stop until some 75 billion dollars
of

Princeton

at

New

stated:
As

-•'

■.

consultant,

financial

a

reconstructed

Kemmerer

Dr.

money

Mex¬
Colombia, Ger¬
many,
Union
of South Africa,
rising prices, which will not
Chile, Poland, Ecuador, Bolivia,
and

motion

in

Finance
-•••

special Princeton advices to
York "Herald" it was

In

the

from

dispatch

ternational

cated articles, labor union leaders

today

its

In

extra

purchasing power are
used
up,
with
the
inevitable
eventual collapse, with wholesale
unemployment, no wages in many
lines, and a. lowering of the stand¬
ard of living for all as a resuit.
Good real wages, are possible at
much lower wage rates and lower

prices than now prevail. Why not
give more attention to some of
the real facts of wages and stand¬
ards of living today, and ferret
out
some
of the fallacies and
erroneous reasoning in this field?
The results might be worth the
effort.

systems for the Philippines,

Guatemala,

ico,

U. S.

on

World War I Dob)

ad¬

Currency

and

Banking

the

Committee
reorganization
of the Gerfhan
Reichsbank and
the stabilization of German cur¬

viser

Dawes

the

to

drafted

which

the

rency.

As

"money doctor,he called

a

diagnostician
rather
attending-physician.
His

himself
than

a

an

practice was simply to analyze
difficulties, devise a list of rem¬
edies and
then leave it, to the
troubled

there.

country

to

go

from

on

\

came

heavily

on

dication."

,

.

failure

.

.

.

.

constructive in¬

a

Either it would head

higher prices immediately
it would take the path

or

pointing
There

ifs,

no

in

a

butsr or

The market

about it.

thens
was

prices.

lower

to

were

and had to

corner

H*

.

how far it will go.

to

widespread
to blame for

try to blame anybody for
something that was evident to
students of the mgfkeu for

i'e

H«

to

out

one

way

the

or

strength but the industrials 1929 or so, replied succinctly,
along.
"Buy Bonds."
:!«
J{c
that many will
consider this hindsight.
But
How much lower the mar¬

On that

rally I suggest doing
selling of long stocks.
Sell American Foreign Power
about 37, Steel Founders
the fact is that I warned of a ket is
likely to go and what across 42, Flintkote about 37,
break when I wrote last week stocks will
participate is Central in region of 32, Lock¬
that
the market
had
something for the coin tosser heed about 42 and Western
If the stops
and the psychologist to de¬ Union across 53.
cide. In the past few weeks are taken before the rally,
is
that.
If the rally
I had a great deal to say about that
the danger ahead because of comes first, you'll have to de¬
a
large public following, for cide fast. You may not get a

failed to go
I realize

.

.

.

.

a

little

.

Floyd D. Cerf Co. Offers
Fleming-Hall Issues
New

common

financing

and
preferred
aggregating $2,-

250,000 for the Fleming-Hall To¬
bacco Co., Inc., by a nation-wide

often - be
the
man
designated. ferred stock and an equal amount
15 the United States
Instead
of
issuing
voluminous of SI par common stock priced at
received the sum of
and*
hard-to-read
reports
he
$15 per unit, each unit consisting
$258,054.74 from the Government
would close an investigation by of two shares, one share of pre¬
of Finland, representing a pay¬
submitting
proposed legislation ferred and one share of common.
ment of principal in the amount
all drawn up and
ready to be The company represents the re¬
Of $90,000' and the semi-annual
passed by the legislative body of cent merger of Cambridge To¬
payment of interest in the amount
the country in question.
bacco Co., Inc. and Fleming-Hall
of $133,227,50 under the Funding
Dr. Kemmerer was a consistent Co., Inc.
Agreement of May 1, 1923; $13,695.06 on account of the semi¬ advocate of the gold standard.
In
Proceeds
from
the
financing,
annual payment on the annuity May of this year he told the which is entirely for the company,
due
under
the
postponement banking committee of the House will be used for purchase of ad¬
cigarette
making
ma¬
agreement of May 1, 1941; , and of Representatives that the United ditional
should
immediately
de¬ chinery, tobacco inventory and
$21,132.18 on account of the semi¬ States
annual payment on the annuity clare intent to resume the gold other purposes in the company's
due
.under
the
postponement standard
after
the
war
and expansion program.
should call a
conference of all
agreement of October 14, 1943.
Capitalization to be outstanding,
Dec.

„

These

payments, says the Treas¬
Department advices, represent
the entire amount due from the
Government of Finland on Dec.
15, 1945, under these agreements.

other

interested

the

international

In

the

Prisoners to Work in

of

economic

known

the

which

of

may

partially

the

to

French

American

an

the

ease.

announcement

Ministry

of

authorities

of

on

was

by

Labor,

are

now

sending 20,000 prisoners to French
.

ing supplied by French
authorities.




military

of

consist

the

about

second chance.
More

next

common

[The

views

article do
time

not

coincide

arettes account for more than 92%

ABC

through twelve edi¬

Will Be Formed
WASHINGTON, D. C.—Thomas
L.
Hume
Sons,
Inc.,
will
be
formed with offices at 917 15th
Officers will be
Thomas L. Hume, Jr., President;
Laura G. Hume. Vice-President,
and

W.

Charles W. Hume, Secretary

and Treasurer.

frightened

Chronicle.

like

those of the author

an

stocks can; drop
elevator with a broken
It takes

cable.
mob

more

than

5%

bacco

over

2%.

answer
Un¬

feeds

on

spread, and with each repeti¬
tion more fears are generated
and more selling occurs.
He

tR

*

It is

rection

and

presented at

only.]

LAMBORN & CO.
99 WALL STREET
NEW YORK

5, N. Y.

SUGAR

He

possible that the cur¬

rent break is a

are

and

start

Rumors

fear.

technical

Exports—lmports-~Futures

cor¬

be consid-

may

DIgby 4-2727

Pacific Coast
Established

and

and

other

brands.

AH

H. Hentz & Co.
Orders Executed

have total assets of

before

will
than $4,-

company
more

financing,

which

will add approximately $2,000,000.
Total combined cigarette sales for
the first ten months

of this year

aggregated
$4,868,298 with net
earnings for the first eight months,
before taxes, of $541,247.

on

Members

Pacific

Coast Exchanges

New

York

New

York
York

New

Schwabacher & Co.

enjoy nationwide distribution.
combined

1858

Securities

tobacco
smoking to¬

its products are Sano,
Sheffield, Mapleton and Banquet
cigarettes, and Bowl of Roses,
Patterson's
Rum
and
Maple,
Jameson's Irish Mixture smoking

150,000

fear

fortunately,

They

student of

to

when fears will subside.

Among

The

a

psychology

cigarette

production,

toboaccos

N.

manufactures cig¬

monetary

System,"

expressed in this
necessarily at any
those of • the

with

stock.

The company

of

Thursday.
Whyte

—Walter

of

arettes and smoking tobacco. Cig¬

Thos. L Hume Sons

Street,

mines, while 10,000 more are be¬

completion

will

au¬

"The

Reserve

of this financing,
150,000 shares of
preferred stock and 517,686 shares

on

noted

the

problems, the best

which

Federal
went

was

was

German

30,000

|ight fuel situation in France, Ac¬
cording

it

tions.

prisoners to work in French coal
mines

advises

Kemmerer

thor of many books
and

"Times"

York

New

Princeton

30,000 German

Assignment

re¬

gold

standard.

that Dr.

French Goat Mines

in

nations

storing

He

last week you held
six stocks with stops. My ad¬
of

As

past few weeks. It's like vice now is as follows: You
blaming the grade crossing were stopped out of American
another. Up to the time you watchman for
waving a red Foreign Power 2nd preferred,
saw that column (last Thurs¬
light when a train is coming at 34, bought at 36. That
day) the market showed no and you are anxious to cross. leaves you with American
desire to advance. On Friday If
Steel Founders bought at 41,
you get hit you blame the
and Saturday it continued to watchman. -So now the sec¬
stop at 39; Flintkote at 36,
show the same reluctance. On ond
guessers
are
blaming stop 35; New York Central at
the basis of those three days Winchell.
In any case, the 3lfe, stop 28; Lockheed at
the conclusion was obvious.
(raise stop to 39), and
gossip columnist now goes 32
In fact the down signal was down in
history with Andrew Western Union at 52, stop 50.
In the next few days there
given* Friday afternoon when Mellon
who,
when
asked
the rails showed a little minor about the stock market
in will be some kind of a rally.
itself

work

Treasury

ury

Maybe it

will be five

points, or six, or
even
twenty. Who can tell?
gossip the man
the break was Walter Win- But one thing is becoming
chell.
He
is
said to have clearer, and that is that what¬
broadcast an opinion that a ever rally starts from here
break was coming before the will have pretty tough going.
Holidays. It's a little amusing So be guided accordingly.
According

'

On

be

present high

The

it.

Last week I warned in the

stock

by some of his assign¬

the

that

margins are a safeguard
against losses, so long as one
holds on. All I can say is that

stronger

public has a lot to say
how
high and low
ments through the United States
stocks will go. When the pub¬
Government.
A country needing
group headed by Floyd D. Cerf
lic purse is wide open it can
advice-would apply for an Amer¬ Co. of
Chicago, was made Dec. 19
ican expert to the Department of with the
By
offering of 150,000 shares go up to ridiculous levels.
State and Dr.
Kemmerer would of 6% cumulative $10 par pre¬ the same
token, if it becomes
He

Finland Pays

In 1924 he was

China and Peru.

probably

will

argument

next week the market should

will not be

column's first paragraph that

honor

self-respect, many of its sons

be fatal to the individual. The

made

Hs

count too

roads.

for

dull

a

column

actual break you have to sit through one
came
Monday morning and of these "minor reactions,"
signalled last
carried on practically all day. worrying
where they will
week
when
week - end
Tuesday,
under the leader¬ stop, before you can become
strength failed to materialize,
causes
frightened selling. ship of Steel, they firmed and smug about it Once a decline
rallied slightly.
starts there is no guarantee
Rally
indicated hut don't

for

made

with

healthy for the market.

break

Market

of

paternalism
grandmotherly State," but
and maintained a standard

back

I closed that

ered

But what may be a shot in the
arm for the whole market can

by adding that "by this time
be

—

—«y WALTER WHYTE=

phor, the "misguided
a

thud."

Walter

Says

fall

and

Markets

the market was at the cross¬

lias called in mixed meta¬

trialist

a
position
y/here it will either explode
upwards
or it will splutter

Tomorrow's

Expert

prices?"

them,

3031

THE COMMERCIAL & FINANCIAL CHRONICLE

4448

And

New York Stock Exchange
York Curb Exchange (Associate)

Exchange

Curb

Exchange
Exchange

Exchange,

Inc.

of Trade
Orleans Cotton Exchange

Chicago
New

Members
New

Commodity

Stock
Cotton

Board

other

Exchanges

Chicago Board of Trade
14 Wall Street

New York 5,

Teletype

COrtlandt 7-4150

N. Y.
N. Y.

NY 1-928

Private Wires to Principal Offices

f£an

Francisco

Monterey

—

—

Santa

Oakland
Fresno

—

Barbara

Sacramento

Cotton Exchange

NEW YORK 4,

CHICAOO

DETROIT

GENEVA,

Bldg.

N. Y.
PITTSBURGH

SWITZERLAND

Airline

growing by leaps and bounds. In
short, the industry is not only
set to go, it is going. It did not
need to reconvert.
It just blos¬
V

,

Extent of the Industry
present air transport in¬

The

,

The

approximately

operates

dustry

67,000 route miles. This compares
with some34,000 miles in 1938. Last

added to
the
network.
Thus far in 1945, there have been
4,000 miles added. Compared to
8,435 miles were
air transportation

year

new

approximated
the war. This
expanded during the war to

was

the

of

out

Army
ices.

the

routes carved
skies by and for the

Navy transport serv¬
Applications that are now
and

Three

network.

seas

ing

service

manufacturing industry
estimates a volume of business in
excess
of $600 million for new

million

in

growth

is

clearly

AIR

TRANSPORT

-

"

fares

Passenger-miles flown—_
Mail—pound-miles flown—
Express

pound-miles—___
profit

27.5

26.5

Business

which is still

relative to passenger and
mail volume. Express pound miles
small

a

1939,

since

of

trebling

flown

and

a

passenger

miles

than five fold

more

in
mail pound miles
in
the period 1939-1944.

increase

that have been and are

gether with improved systems of
weather reporting during the war,
when and as they are applied to

Fresh

and other per¬
chemicals, and peacetime air transportation, will
merchandise provide wide provide greater safety and de¬
pendability and more
efficient
for expansion.

fruits, vegetables,

drugs,

ishables,

^tyle
fields

Future
companies have had

Competition in

Keener

The airline

to contend with

than six
compared wtih ticularly

has expanded more

been im¬

being made. The development of
radar and navigational aids, to¬

4.6

special handling and .care.

have

agined ten or even five years ago.
And, secondly, lower unit costs
are a natural consequence of the
advances

competition, par¬

with other forms
of
transportation,
throughout the
history of their development. It
is likely that competition will be
keener in the future not only with
other forms of transport, but also

So also will the

operations.

of radio control of airway

The expansion
which

were

evidence

lower

will

in

use

traffic.

of airport facilities
consider¬

developed

ably during the war will be ex¬
tended. This is already indicated

al¬

by public programs and plans

ready in being.

load compared with three
and one-half tons on the Doug¬
las DC-3 formerly used. It is es¬
timated
that
the Penn-Central
Airline version of the new Martin
202 now on order by that line will
to

carry

freight

direct cost of six cents a

for

a

ton mile.

weight of the air
package has already in¬
seven pounds
in 1940 to 23 pounds at the pres¬
ent time. Air express eliminates
The

average

express

creased

from only

American

+1—

ine

minimizes
n-nklnm

pro Diem

to
01

a

great
^i•

extent

Glenn

with

lines

This:

the

of

L.

trend




Rate

Yield

$6.80

3,60%

190

•

*

facilities

centralized
those

for

double

rate

a

in

1939.

But

increase

to

revenues

Stock

air¬

Prices

Reflect

Prospects

ture

Fu¬

;

The problem of the investor in
appraising the merits of airline
degree to which pros¬

stocks is the

pective earnings are to be capi¬
talized.
Presently the prices of

equities reflect an optimis¬
appraisal of future prospects.!

airline
tic

Price

Per Share

Range

1944

192-93

Dow-Jones

airlines with standby planes to

earnings as a group are
now being
capitalized at a ratio
of 19 times last year's earnings,
and average earnngs in the 19391944
period.
Airline
company

using the new Martin 202
transport. The method used is to
lend-lease standby planes to the
maintained in

be

pool by the Mar¬
of this plan
is to centralize overhaul facilities
a

effect

tin

Co.

The

at

the

airplane

manufacturing

plant, assure full utilization of
planes at all times by the airlines,
reduce

and

tenance

their
well

as

in

ment

costs

main¬

of

their

as

invest¬

repair shops.
Net

Earnings

the large increase in
certainty and prospec¬

with

that

volume

a

tive saving in costs, airline com¬

will

earnings

pany

upward.

such

But

sharply
conclusion is
be

not warranted dt least for the near

tion

and

routes

are

of

But

incident

Costs

future.

is

importance

equal

Until

this

the
be¬

stabilized, it becomes diffi¬
translate operating rev¬

comes

cult

promo¬

development
of
air
still
relatively high.

structure.

rate

to

to

into

earnings easily or
Airlines experi¬
enced the most profitable period

enues

with
of

Paid

10.07

6.57

net

certainty.

during
the
war
despite the fact that a sizable
number of their planes were taken
over
by the military authorities.
The
reason
orofit margins im¬
operations

proved considerably is due to the
high load factor experienced dur¬
ing the war and still being ex¬
perienced.
Last year 89 out of
every
100 seats available were
sold to travellers. This compared

earnings

group

a

as

are

being

capitalized
at
a
significantly
higher ratio.
These and other
data are summarized in Table II.
But this difference is likely to be
maintained over an extended pe¬
riod of time in view of the strong

factor. Industrials as a
being favorably ap¬
praised largely because of the
accumulated demand for products
are

group

built up
in

are

a

during the war. Airlines
phase of expansion to

permanently higher levels. They
are .already
discounting in the
prices of their equities an im¬
portant part of this immediate
growth. Most of them are at pres¬
ent some ten times higher than
the lows established in the six

1939-1945.
The average
price of the 36 Dow-Jones indus¬
trials is now about double the
lows
recorded in the same six

years

The present

period.

year

yield

the latter group
while on airline
stocks yields are practically neg¬

from dividends in

3.6%,

is .about

It does not appear to be
foreseeable future that
can
be bought for

ligible.
the

in

stocks

such

most other
c6mpanies will
require large amounts of funds
to finance their expanding busi¬
ness,
hence dividend disburse¬
to 56 in 1939.
It cannot be ex¬ ments will necessarily be small
for an extended period of time.
pected that this high ratio of
stock
flotation and
seats sold to space available will Additional
yields comparable to

other

financing

of

means

are

There
group

probably

is

no

better

growth
great. They will

than airlines where

prospects are so
always have an

enthusiastic fol¬
periodically goes to
appraising
airline
values. The principal problem of
the investor it would appear is
to
avoid
these
excesses
while
recognizing the sound basis upon
which the industry is established
and the general excellence of the
management that guides its des¬

lowing which
excesses
in

tinies.

Interim Figures

'

1944

19

26

33

39.

37

85

1.00

1.2

93-9

3.32

1.00

2.60

0.62

1.00

1.0

101-12

2.54

0

2.65

0

99

1944

Increase

1944

Increase

1945

20.3

3~304

2,818

17

m i

_34

12.9

49

1,375

722

90

U9.1

111

69

28

1945

1939-44

19

000's Omitted

%

Million S

Earn. Per Sh.

6.66

-Net Income-

-Gross Revenues-

Price to

§1.1

34-2

*0.36

0

155

0

94

34

5.9

70

52-5

*1.35

0.25

1110,0

1.0

0.50

35

0.50

38

51

**1.47

Northwest

29-10

0.67

/ 1.20

0.67

Pan American—,

1.1

1.00

18

0.25

33

22

0.41

7.3

0.81

0

78.2

0.6

48-5

56

45

0.25

0

91

-18

23

ftl.660

2,037

0

39

1.12

18.3

0

$25.5

2.82

57

68-6

4,113

-21

30

$29.3

4.12

13

5,195

0.17

13

1.74

■25.8

0.50

.

,

National

_

'

—

Penn-Central

.i.—

—

■

0

TWA

r
*12

average

52

0.50

1.0

56-8

0

**0.22

110
-

1945.
t7 months ended July 31.
$9 months ended September
munmo cuucu auzie oo, iv-±v.
t< uzuuuis enuea auiy Ji.
ky moi
tt4fter special charges amounting to $780,000
months ended June 30,

ended June 30, 1945.

a

certainty.

AIRLINES—FINANCIAL
COMPARISONS
Ratio:

1939-44
Paid
Earned
10.13

the

All

groups.

.

PRINCIPAL

•

com¬

panies'

growth

Outlook

It would be natural to conclude

Per Sh. Average

Earned

industrial

30

lines

TABLE II

INDUSTRIALS AND 8

1939-45
•

at

effect

sight.
Airline

Co.

Martin

for

provides

overhaul

in

0.5

•,

rc—igeration and

Price

•

_

Eastern

United
or

Market

Dividend

indices.

30

Dow-Jones

Approximate

taxed

gross

Cur. Mkt.

Current

.

able

be

■-

'

THE DOW-JONES 30

be

19%

operating costs is

.

ton pay

earnings

other indus¬

as

extent.

On Oct. 18, the
House of Representatives passed
The potential for expansion of air
a
bill authorizing the »appropriaamong the airlines themselves. It
cargo
business is considerable.
tion of $700 million over a period
will be evidenced in rates charged,
be
maintained
indefinitely.
As
For a vast number of items trans¬
of ten years for a public airport
services offered, and equipment
new and larger planes are added
portation by air is now limited
development
program.
New
used. Passenger fares charged by
to the airline fleets the ratio will
only by relative costs, and these
York's huge $200 million Idlewild
are
certain to decline. In 1940, major airlines were reduced by
probably decline, Hence the high
airport is now in the final stages
6%%
on May 1 of this year, and
level of profit margins due to this
the average ton mile rate was 80
of
completion.
After the First
cents, and there has been a steady again by 7% on Aug.- 20. This World War the large outlays for one factor will not be as great in
overall reduction of about
10%
the period ahead as it was in, the
reduction since that time.
It is
improvement and construction of
predicted
that ultimately
this brings the passenger rate to 4.5 highways had much to do with the war years. Another reason , for
cents a mile, which for certain
relatively gobd earnings reported
rate will be reduced to around
accelerated growth of the auto¬
routes is lower than Pullman fares.
20 cents a ton mile with a re¬
mobile industry. Similarly it can by most airlines in the past three
It can be expected that compe¬
sulting large increase of ton miles
or four years is the special treat¬
be expected that large expendi¬
of
air cargo hauled.
American tition by the • railroads will be tures for airport facilities will aid
ment accorded air transport com-,
strengthened
with
a
return
to
Airlines is now operating a Con¬
to a very important degree the
more
normal conditions.
But it
names
under the excess profitsolidated-Vultee plane on contract
growth
of
air
transportation.
tax
law.
Since
their invested
with a California grower.
This is not in the nature of airline
Special
Types
of
Planes
managements
to
ignore
such
plane has a nine and one-half
"*mital
base
is
comparatively
The utilization of special types
moves.
In prospect is so-called
flown

line's

the
basis

same

offset the
greater tax burden is clearly in

plans to pool maintenance
example, recently an¬

The

Traffic

and development

could

than

scale

5.9

$122.9

36.4

loss in

air transportation already ac¬
complished and those in prospect
are important in at least two sig¬
nificant respects. First, they pro¬
vide the basis for stimulation of
traffic on a considerably greater

7.4

$160.7

72,134

to

cents

in

683
17,221
5,426
$55.9

31,258

60

The

Increased

of

Effects

The advances

1,052
20,236
6,952
$76,9

the

ment is air express

fold

in

from

mile.

poundage hauled. It is expected
that ultimately all first class mail
will be carried by air.
'■

putting

the

on

.

resulting from this cut
in rates will largely be offset in
due
course
by increase of the

1,385
26,236
10,517
$97.3

industry's growth Is
not confined solely to passenger
business. The fastest growing seg¬

flown'

evidenced

ton

important

an

revenue

1939

1,632

in

mail

rate

thus

nounced was a plane maintenance
service contract by Eastern Air¬

their

a

base, mail revenue had to be ex¬
cluded entirely as part of the base

For

costs.

ordered this year to reduce

cents

more

to

in

seen

wore

32

_______

The Freight
But

in

V

plants for use on

excess

provide
addition,

Further

In respect to mail revenues the
major airlines are no longer de¬
pendent on them to provide the
bulk of earnings. The major lines

1940

1,418
42,332
23,804
$108.1

revenues—..——._

Gross,

Operating

trend

*

profits
provision
profits tax amounted
to
$3.5 million in each of the
years 1942 and 1943 and $4.0 mil¬
lion last year.
Under the law if
an airline's earnings before taxes
rose above the excess profits tax
for

excess

the

compe¬

differences

the

Eastern's

bracket.

tax

for airlines the necessary

towards

indicative of the degree

are

services.

1941

2,264
101,700
34,200

These

its

of

commercial

down

competition to be expected be¬
tween lines especially in overseas

(Figures in Millions)
1943
1942

1944

one-half

airline—Eastern—re¬

out

comfort.
But, in
payloads
can
be
in¬
creased by their use, since the
weight of airframes can be cut

London

to

one

ciprocating engines now used on
planes and therefore

of

AND REVENUES

INDUSTRY—TREND IN VOLUME

than

rate.

titors

ago.

!

■

plants

but

companies for tax purposes.
expected that gas turbine power
plants on airplanes will come into ■Beginning next year with the fed¬
use
in that period.
They result eral tax rate at 38%, these com¬
in much less vibration than re¬
panies, together with the others,

$572, which was approved
Civil Aeronautics Board.
fare
compares
with $575

less

or

Table I.

TABLE I

New York

a

their invested

to

trial

charged during the war and $375
charged prior to the war.
Pan
American Airways has announced
its, New York-London fare of $27.5

<

aircraft

a

.

This

in cruis¬
ing speed—from about 180 miles
per hour now to 250 miles or bet¬
ter
per
hour; and the greater
in operation with a seating capa¬
comfort built into the new and
city of 6,770. This number had
larger
planes.
The placing of
expanded to about .400 and seat
these additional planes in opera¬
capacity to 8,325, when the war
tion
in
the
next twelve
to
with Japan ended.
The gradual
eighteen months indicates
that
return of requisitioned planes by
the airlines will be able to ex¬
the military authorities has in¬
creased these figures since that pand their volume of business in
terms
of passenger, miles more
time. But in spite of this increase
than three times the 2.2 billion
in
equipment, the \demand ifor
figure of 1944. Total gross rev¬
space is so great that the industry
enues indicated on this basis will
is forced to turn away potential
customers.
Plans
are
already be at a rate in excess of oneunder way to expand greatly the quarter of billion dollars at the
end
of
1946 compared to $160
equipment necessary to meet de¬
million in 1944, and only $55.9
mand for air transport space. The
The

Power

were

mained

planes are also in prospect in the
five years. It is confidently

the

by

30,000; the increase

1939.

to

all

next

tares
large mar¬
:c;
v'-'
low

fare of

important is the much
greater increase in seating capa¬
city—from bver 8,000 now to more
than

probably tap

nounced

it is
will

months

few

at

Competition for overseas busi¬
by the domestic airlines is
already on an intensified scale.
Recently,^ American Airlines an¬

operation
double the number in

a

hour.

an

power

ness

Equally

Airlines, have
already been authorized to oper¬
ate air service across the North
Atlantic.
'
At
the end of last' year, the
domestic airlines had 325 planes
and American

miles

300

able

earnings

capital base or to average earn¬
ings for the purpose of figuring
excess
profits.
For this reason,

the huge four-motor

are

cither

revenues

200 passenger^ at more than

carry

intervals dur¬

ana

ket.

700 planes in

nearly

or

days

me

would

London

have over

American

airlines, Pan American Airways,
Transcontinental,
and
Western
Air

service at frequent

300 miles

By the end of next year,
estimated that the airlines

as

transports which will be

such

for

specif ically

designed

order.

pending would add over one-half
million: route miles to the over¬

were

More for the new
planes are consider¬
great¬ ably
improved
over
prewar
er
pay* loads.
With the elimina¬
models, and new developments
tion of baggage and reservation
and improvements are constantly
services, costs can be /:ut further.
being announced.
Entirely new
Hence, the scheduling of planes forms of

hour and fly from New York
in eleven hours and
coast to coast in ten hours. Other
lines have a large number of new
and
larger types of planes on

air

of

web

vast,

representing

miles

200,000

order

since

1936-1939 period, thev
allowed to include air mail

low in the

with
Smaller

savings.

cost

and

small,

compact seating also means

per
to

companies
services with

their

on

resulting

carrying capacity.

passenger

passenger

It can cruise at

million.

the

planes for the shorter high traffic
density routes
are
already
on

about 200 miles, for
example,
such
as
New YorkBoston,
New
York-Washington,
and
Chicago-Detroit, the reduc¬
tion In gasoline load means higher

land
$17 million,
and
TWA has purchased 36 of
these.
Constellations costing $30

miles covered

carry

enable

the most efficient equipment

routes up to

planes to cost about

80,000 just before

to

service de¬
signed to appeal to the mass mar¬
ket.
In the
short high density

Lockheed Constellation

therefore,
the industry's
route mileage is now nearly twice
hs big.
In its overseas operation
1938,

route

64

engine,

four

will

lines

two-rate airline travel

sought by the air¬
lines.
Orders recently placed in¬
dicate the trend. Eastern Airlines
recently placed a $10 million or¬
der with Glenn L. Martin Co. for
50 twin engined 202 type planes.
These are designed,to operate in
a range between 50 and 700 miles,
carry 36 passengers, and have a
cruising speed of 270 miles an
hour or 100 miles faster than the
Douglas DC-3 that they are to
replace.
Penn-Central Airlines
also recently placed a $7 million
order for 35 of these planes. Pan
American Airways.has ordered 23

(Continued from page 3003)
faster planes have been ordered;
and the volume of air freight is

somed.

of planes designed fdr the various
traffic requirements of the air¬

Transportation—A Major Industry
planes to be

Thursday, December 20, 1945

FINANCIAL CHRONICLE

THE COMMERCIAL &

!032

30.

§3 months ended

Sept, 30,

1i 12 month?

■f

727

518

40

"797*

359

122'.

ended June 30.

.

**Six-year

[Volume 162

Number

THE COMMERCIAL

4448

Government and Nation's Budget
(Continued from page 3011)

political

based

was

success

tures,

the

on

simple proposition that he voted
j or
every
appropriation
and
against every tax measure. Fortu¬
nately this attitude is rare in publie life, but as I read the head¬

lines, I have
that

a

another

be¬

was

expenditures within his own

state. With this question his econ¬

Budget Processing

but Tight here in our
world of conflicting interests and

of

executive

an

Congressional

procedure.

leaders realized at that

still

that

orderly

preparation iand

budget

realize

budget

time, and

today,

execution make legislative
control that much more

budget

effective.

Passage of that Act, I believe, was
the most important single advance
administration

points of view. Piesis applied at each stage by

ing all the way from gypsy moth
control to a multi-million-dollar

time. The budget has become one

work

of

of

unworthy projects. The
such
committees is of

into

gram.

that

the

invitation to visit my

an

is

not

determined
in
any
such
The budget process is a long,
thorough one, involving months of
staff Work in the agencies and the
Bureau of the Budget before rec¬

ommendations
President.
be

And

the

to

should

it

remembered

President in

made

are

always

that;; after

the

his

rec¬

turn

makes

ommendations, it is the Congress
which finally determines the re¬
sponsibilities of the Government
to the people and appropriates the

required

money

finance

to

ernment activities.

It

is

the

extremely

citizens

of

Gov¬

*-vV. *;

important

for

democracy

a

to

know exactly how it happens that

for

money

does

or

budget.

get into the

Business

other

all

and

in the population' have

groups
vital

certain purpose does
Federal

a

not

interest

budget

in

tlxe

formulation.

even

However, we should admit
today, almost 25 years after
adoption of that historic Act, we
have not yet

general policy letter that
a guide in the prepara¬
their budget requests,. The

a

serves

as

tion of

first sifting process takes

place in
the agency
itself. Two or three
months later, the agencies submit
to the Bureau of the Budget their
requests for
the
ensuing fiscal
year. Their programs of activities
presented

are

detail

get; yet the budget reflects a very
substantial
percentage
of
our

general

and

perienced staff of the Bureau

re¬

views the agencies' programs, and

cedures

their
and

management

well

as

administrative
pro¬

their budgetary

as

requirements. These examinations
the need for the pro¬
posed activities in the light both
appraise

President's

the

of

whole

of

and

program

as

Congressional

a

au¬

whole

thorizations

most

intent. This is the second stage of
the sifting process. -

national product. It is the
far-reaching document which

the

Government
has

one

No

formulates.

forcefully expressed

more

the importance of a national bud¬

than

get

Gladstone,

"Budgets

are not

said.

who

merely affairs of

arithmetic, but in

thousand

a

ways

prosperity of in¬
relation of classes,

go to the root of

dividuals,
and

the

the strength of

kingdoms."

and

Accounting Act of 1921, each

requested funds from the
Congress without any executive

agency

of

On the basis of this staff work,
the

Director

Budget

his

submits

findings to the President, who
views them and decides what

ommendations

for

re¬

rec¬

appropriations

shall be made to Congress.

Objectives >•' \

■

The whole

of executive
budget preparation aims at a two¬
fold objective. One is to see that
process

the

final

the

judgment of

examined

is

the

Government

as

a

second

situation

The

like that of

somewhat

was

family with

a

single

a

must be by
authorization. The

objective

these services

are

is

see" that

rendered in the

economical

most

to

efficient

and

manner.

account, handing

books

member

how

and

no

telling

anv other rrmmher
checks he drew. Under

many

It would

out check

each, member,

to

estimate

lions

be

of

possible for the family,

departmental

it

was

to

obtain

an

financial

this made

clearly

state

changes

Gov¬
it impossible

requirements.

ernment,

jo

overall picture of its

in

the

taxes

oublic

rm'de

and

the misses

need

for

borrowing

or

policies. Hit-or-mic«
to

In

ethods had

m

finance

seemed

policy,

more

fre¬

quent than the hits.

Furthermore,
the

actual

funds

no

when

spending
central

it

of

came

to

Federal

agency

was

various

the

tions

were

stayed
and

Government

complied

intent.

planned

so

within

opera¬

that

they

the

appropriations

with

Congressional

for

Without effective machin¬

budget

execution,

the

preparation

"power

of

and

the

vpurse," always coveted by legisla¬




of

taxpayers'

"as

examination

a

of

Important

budgets.

.;

procedure

budget

the

on

not1 completed

is

side

executive

we

have traveled

the

mere

a

long

from

way

have moved toward the equal¬

ly

important

tion

of

may

constructive

func¬

planning. What
conglomeration of

program

seem

a

figures in the budget actually
an

rep-

operating program.

budgetary reserves
tions
permit
or
In

this

of

June

when condi¬
demand
it.
year v Con¬

.r

the

Director

gress

placed

of

Budget broad responsibili¬

the

ties
a

in

on

setting

up

such reserves---

great step forward in the

busi¬

Govern¬
During the year the Budget
Bureau follows the operations of

nesslike

management of

ment.

through- regular re¬

agencies

ports and special examinations. It
sets
ceilings on the number of
employees

agencies.
gress

on -

within
Government
It also reports to Con¬
unused appropriations

performs a multitude of other
related duties both for the Presi¬
Congress.

budget

significant
order

steps

toward

chaos.

of

getting

I

say, ad¬
that they were steps to¬
getting order out of chaos,

out

the

a

.

enced

Congressional
the

committees

of
each
agency, hold their own hearings,
and report to both houses for final
determination.

requests

acted

the

figures,

them.
What will be
organization of our;
How much will we

upon

and

size

armed forces?

health
be?
will Congress, decide about
social

security,

and indi¬
rectly affects every one. It should,
therefore, be understandable to

and

educational

the

and

States,

it

for

the

directly

What

have far to go.

Em¬

On

much

a

broader

budgets.'

plane, an¬
improvement

for

proposal

and

unknowns

These

others make impossible the
accurate
forecasting
of
future

many

ployment Act

other

the cost of
support for

products that Congress has

farm

Provisions of Full

housing

programs?

international

Again, what will be
the mandatory price

perts.
We are moving > toward
simplification and readability but

Budget

programs

national

works,

public

people, not merely to the ex¬

we

research? What

spend on national

concern

our

I

believe,

that for a

however,

in the formulation of Government

considerable time to come we can

is contained in the Full
Employment Bill which is now

hardly expect Federal budgets of
less than 25 billion dollars.
The

programs

other
provisions, the version adopted
by the Senate requests the Presi¬
dent to transmit to the Congress
each

made

we

can

label

what

of

"aftermath

as

be

categories.

broad

the

expenditures
may
total
about 10 billion dollars annually.

such
veterans' benefits, in¬

expenditures include

These

outlays

It also

trends.

this figure

in

war"

a

economic

seeable

only

We know, for instance, that

comprehensive eco¬
nomic
program — the
National
Budget-—based on the best avail¬
able analysis of current and fore¬
year

of

breakdown

before the Congress. Among

terest

as

the

on

and

debt

war

requests an analysis of the eco¬
nomic effects of the Government's

funds of wartime taxes.

activities during the

re¬

several times

the

establishes

it

before

Budget

referred

is

portant steps are necessary to as¬
sure
orderly Government in our
we

The more chaotic the world

live

in,

the more essential it
perfect procedures for
respon¬

ganization. Let me give you only
a few
examples of necessary im¬
provements.
Government
A

Corporations

serious gap in our budgetary

existed until

controls has

now

in

the field of Government corpora¬

tions.

ties

are

Many

Government activi¬

carried out, as you know,

by

cause

these

Government

vari¬

deal

with specific aspects of it.
The
procedures envisaged

corporations

independent principalities.
activities must be made
part

of

Such

dollars.

as our

pre¬

the

same,

for

outlays

large

are

because of our greatly
increased
responsibility to help
maintain
peace
among
nations.
That
same
responsibility
as
a
required

by

great

well become the
V significant
forward
step
since the procedures established
under the Budget and Account¬

large

•

bill

that

might

world power will require
outlays in the field of in¬
finance, some in the

ternational

of

form

loans

and

others

to

re¬

millions of
homeless and hungry people. Add¬

lieve the sufferings of

ing Act.
This act laid the basis
for examining the budget require- j ing these uncertain estimates, one
at a figure
approximat¬
ments of each individual agency1 arrives
as
'
part of the Federal program • ing 25 billion dollars.
as
ax whole.
The Full Employ¬ > Of this 25-billion-dollar budget,
ment Bill provides that the Fed¬
less than two billion dollars, or
eral program should be examined
8%, will be for purposes of Fed¬
(
as
part of the nation's budget as eral administration, including the
payroll for civilian Gov¬
employees. ' This
two
billion
dollars
provides for the

entire

whole, the composite of all the

a

ernment

budgets of individual consumers,
of businesses,
and of State and

management of the myriad Gov¬
ernment services ranging from the
collection of taxes to forecasting

Governments.

local

The need for

such

a

broadened

to our Federal budget
problems follows from the devel¬

approach

the weather.
To me, two billion,
opment of Federal finances on the dollars is still a huge amount of
one
hand, from economic trends ' money and requires close scru¬
on
the other.
| tiny. ' On the other hand, we must
'

The Federal

in

-

Their

an

in¬

keep

budget has become

the most

could

others

businessmen
afford to pay

budget.
They could afford
negative
attitude toward
it.
Many
looked • at
the
Federal

I

eral

.

|

necessary

a

evil,

at

The

management

lion-dollar
ment of

a

as

bureau¬

25-billion-dollar

a

cracy.

only minor attention to the Fed¬

budget

the fact that the 25not im¬

clear

billion-dollar budget does

potent 'elementsply
the economic life of the nation.
of

one

a

of

a

25-bil¬

budget and manage¬
275-billion-dollar Fed¬

imperative an
different from
that with which we lightly dis-.
missed a billion dollar budget of
debt

eral

attitude

makes

entirely

at
some decades ago.
The responsi¬
primarily a source
bilities
of such management do
They considered
not
devolve
upon
Government
that the country was rich enough
alone. They are equally responsi¬
to overlook some inefficiency in
bilities of the nation and particu¬
Government and pay for it with¬
larly of business, for expenditures
out much harm being done. They
of that size and the revenues re¬
could think—and often did—that
quired have a decisive effect on
if only this or that group of poli¬
ticians
could be thrown out of J every individual and every busi¬
ness.
This requires an awareness
office then the, budget would be;
of the impact of Government ex¬
almost automatically reduced and
everyone would benefit.
In those ( penditures, taxes and debt trans¬
actions on the.national economy.
fimes the budget wasn't consid¬
The war experience certainly has
ered
anything to be concerned,
demonstrated
this
impact.
For
about.
Today it is cause for con- |
example, the financial condition
cern, I can assure you.
This is
of State and local Governments
due, first of all, to the sheer size
was greatly improved as a result
of present-day Federal operations.
taxes

as

periodic

annoyances,

bureaucracy as

of

patronage.

Importance

of

Federal

Budget

The annual Federal budget

be¬

the Government's
program as a whole.
The Con¬ fore the first World War amounted
gress has enacted the Government

tegral

borhood

most

and

because I believe that further im¬

becomes to

the

large

and may be in the neigh¬
of six to
eight billion

purpose

whole

will

to

which

committees

a

as

as

expenditures

war

for

ward

time.

year

joint Congressional
consideration of

a

National

ous

previous

quarterly

for

Expendi¬

will probably be

tures for defense

revi¬
Federal program.
It

provides

A decade or two ago

should net, be permitted to become

gress,

is possible un¬
til more precise plans have been
formulated
and
Congress
has

will

of

prediction

exact

no

United

individual

visedly,

Con¬
third and final sifting of

budget recommendations to

of

document

a

course,

future budgets

of

present the

many

..

.

procedures, de¬
veloped on the basis of the Budget
and Accounting
Act, were very
Thes.e

requests for
appropriations
occurs.
Specialized and experi¬

President submits his

is

the

Government corporations be¬
they lend themselves more
easily to flexible operations than
do the regular departments." Yet

After the

it

each

pro-rates the appropriations on a
quarterly basis. The purpose of
this is to prevent a shortage of
agency funds during the particu¬
lar spending period. The Bureau
also sets up—as business does—;

Budget;

we

Yet
to

dations, the Bureau of the Budget

negative watchdog func¬

tion of the Bureau of the

Of

about the size
telephone book
interestng read¬

as

and

amount

to

budgets.

war

"less understandable.

are

Committee

sibilities of large Government or¬

improve the
services rendered to the people. In
striving for such improvements
to

they

sions of

has

helped

as

It contains

but

priations. After Congress has act¬
ed on the President's recommen¬

coping with the complex

often

budget is

just about

ing.

At

Manhattan

the

and

pride in the fact that, the Bureau

review
ery

careful

of

an

mil¬

of

these savings are, I take equal

as

sents

charged with making certain that

attempt

that have been saved

result

as

to

hundreds

dollars

of

money

such conditions it is obviously im¬

for the Government prior to 1921.

idle

the

printed
of

itself.

with the recommending of appro¬

'

bank

[L

Bureau

The

Congressional

spent,

improvement which is

long overdue involves the budget

cut

'

•

every

the

,

Functions of Budget

Subsidiary

pro¬

for

from

Government.

con¬

gram

criticized

points of view. It represents
work
plan of a democratic

dent and

Whole.

people; it

many

and

many

the

dollar

Government official

by any single group. It reflects-

or

again that every service rendered,

individual agencies to a
sistent
and
comprehensive

something

not

been arbitrarily deter¬

mined. by one

any

there

is

budget

which has

attempt to relate the requests of

was

into the budget. The

before it gets

and

Nor

Executive.
Another

that

of

one-third in the
ensuing year.
This is a remark¬
ably speedy contraction of the
wartime budget, but the total is
still very large compared to pre¬

of Governrhent

control

present

be

may

corporations by Congress and the

new

examination by both the leg¬
islative
and
executive branches

agencies render the services
which the Congress has author¬
ized, and I want to ' emphasize

examination,

machinery has been provided
better

the

two-thirds

but

act,

the

the gauntlet of se¬

run

this

of

for

vere

the
X

Some of you will remember the
time when, prior to the Budget

expressions

and

benefits

full

the second World War,
fiscal, year the
budget is being cut to less than
lars during

In

enacted?

fact remains that any

in

hearings before Bureau
Budget examiners. The ex¬

the

their toes.

on

The

at

of the

Structure

determine what goes into the bud¬

in

operating agencies of Govern¬

ment

item must

the present
budget procedure: will bear out
these facts. During the Summer of
each
year
Federal agencies re¬
ceive, by direction of the Presi¬
dent,

ing

to the

up

The highlights' of

has-been

vague

fully lived

responsibilities it places on us.

examines

experience,
however,
that
many experts have only
a
notion as to the factors that

my

consistent Government pro¬

a

of

process

It

a

the main tools by which the
President is able to mold the hun¬
dreds
of
Government
activities

It provides for
budgeting
Govern¬
ment corporations of a desirable
degree
of administrative
flexi¬
bility. It will take time to achieve

and

for

billion

budget procedure.

Appropriations
Committees
of
Congress, and occasional special
committees, often perform an out¬
standing job ip, nullifying .pres¬
sures

in

it

what is called program
without
depriving the

document

our

Federal

ranged between three and nine
dollars iiv the period be¬
tween the wars, and reached the
fantastic size of 100 billion dol¬

Corbbration Control Act that at¬
tempts to close this gap in our

improvement. But there
are also those who strongly advo¬
cate economy in Government. The

harbor

pet project—or both—should be
reminded that the Federal budget

con¬

way.

,

advocating prpjects rang¬

groups

office to urge economy or to press

who might

you

a

:

establishment

budget

which

Congress

the

was

great service both to the operat¬
agencies and to the public.
The
larger
and more" complex
Government
operations
become,
the more important it is to keep

of

sider this

•

It

in

crusade ended.

Those

r

the thin air of the remote strato¬

sure

a

recommen^

takes place not in

Congress,

by

/

.

passing the Budget and Account¬
ing Act. Congress insisted on the

ing spent. He was a vociferous ad¬
herent of a policy of Government
economy. I asked him where he
would "recommend a cut in Fed¬

omy

.

still exist. As

amount of Federal funds

eral

-

conflicting

business organi¬
state, where a large

a

;

Act-

,.

chaotic situation by initiating and

example, I recall the en¬

in

v

Accounting

and

sneaking suspicion

ergetic head of
zation

Budget

sphere,

men

agency

process,

clations to the final determination
The

fi¬
nally took action to remedy this

few such

a

budgetary

the first

from

rogative.

entire

The

largely an empty pre¬

was

3033

CHRONICLE

FINANCIAL

&

of the huge

Federal deficits. Sim¬

ilarly, the balance sheets of
show

ness
/

f

the
Ilrtrl

busi¬

definite effects of

THE COMMERCIAL & FINANCIAL CHRONICLE

3034

Nation's Budget Facing Facts

Government and
(Continued from page 3033)
expenditures in the war
Fiscal

Policy

that in re¬
decades a new concept has
into use—the concept of fis¬

cent
come

by chance

not

Fiscal policy relates
to public expenditures, taxes, debt
transactions,
all • considered
in
cal

policy.

ers'

that considers
in the

short, is a policy
the Government's

budget

budget.

light of the nation's
only

Not

of

economic

Federal
operations are
considerations
forced

They are
because the

also

us

■„

of the mere

because

us.

upon

in

policy,

Fiscal

transactions.

forced upon
instability of
given

economic developments has
the

Government

the

bility,

new

a

responsi¬

responsibility to

of

,

enterprise

free

must

ket

as

discharge its re¬
Government policy
conditons

assure

under

con¬

which the businessman has oppor¬

tribute to the stabilization of mar¬

tunity to succeed and the worker
has a chance to find a job.
The

thereby to the
production and

ket conditions, and

stabilization

of

employment

opportunities.

We have

experienced the infla¬

early col¬
We have
experienced the speculative boom
of the '20s and the depression of
and its

boom

tionary

lapse after the last war.

the
the

We

'30s.

experienced

have

responsibility of the Government
to stabilize general market condi¬
employment opportuni¬
ties involves all the policies that

tions and

tool

of global war. There

becoming visible certain
symptoms of a speculative and

I are now

inflationary post-war psychology.
To the extent that speculation is
based on the anticipation of an
early end of the President's holdthe-line

sure

am

serious

speculators
will—make a

the

policy,

may—I

This

error.

might

error

the na¬

be costly to them and to

chest, such

in

its

credit and tax

as

policies, wage and price policies,
and foreign economic policies.
Yy

inflationary pressures and la¬

bor shortages

has

Government

modern

realize

must

Businessmen

that

influ¬
enced, for good or evil, by the
economic impact of all these Gov¬
ernment activities. No longer will
markets

their

a

today

are

negative attitude on
part of businessmen and other

passive

the

or

constructive

A

suffice.

leaders

approach is necessary.
The Gov¬
ernment needs the advice of busi¬
nessmen

and

other groups in ap¬

praising

the

economic

effects of

Government urograms, and needs

tion.

not en¬

who used to watch the stock mar¬

to

expected

is

It is

affairs.

own

The

This is where Government

sponsibility.

their

will

depres¬

deflationary

and

booms

sions.

believe, are realizing the influ¬
ence of Government programs in

tirely by chance that businessmen

it
fulfills
function—
to provide more and better goods
at lower prices.
But we should
not expect free enterprise to take
the responsibility for events be¬
yond its control.
Business by it¬
self cannot, individually or collectively, control inflationary
long

questioned as
its productive

be

good

and

invented

have

would

not

power, business
and
international

investments

size

I

freedom

purchasing

own

competitive
system.
In
other
words, I think that if we had not
inherited a free enterprise system
adopted its main principles.

,

must, for his

and that of the nation, be¬
come
something of an economist
and fiscal analyst.
Businessmen,

we

of their impact on consum¬

view

today

in such a system
would be very similar to manage¬
ment in our free enterprise and
Management

is

of

guidance are now study¬
ing with equal ardor their "Wash¬
ington letter."
>.
for

formulated

be

in

It

is

belief that we can suc¬

my

economic pro¬

the

ceed

only

gram

of the Government becomes
concern during peace¬

if

national

a

time, just as victory was a national
concern during the war.
Wartime
unity and cooperation were not
seriously impaired by the fact that

different ideas about
the best strategies and policies to
be employed.
In facing peacetime
problems we will have ' greater
differences of ideas and interests

people had

regarding the best economic and
social policies.
of

That is the essence
democracy.
But our

vital

a

Government

democratic

vive

only

ideas

and

to

if

the

interest

sur¬

can

differences of
are reconciled

democratic objectives.

common

The healthy growth

of

omy

in our econ¬
employment oppor¬

full

tunities has

become one

of these

the great
majority of the people.
We may
objectives, accepted by

consider different methods of at¬

goal and, as a matter
variety of methods will
be needed.
The job ahead is of

taining

our

of fact,

a

tremendous

magnitude.

To

ac¬

complish it the constructive co¬
operation of business, labor and
Government, of all segments of

our economy, is essential.
people do not their cooperation in the execution
want again to go through another
period
of post-war
speculation
and inflation.
They do not want
again to experience a subsequent
period of collapse with relief rolls
(Continued from page 3016)
of tremendous magnitude.
Right
Cycle. This is most simply illus¬ Companies^ (6) Realty and Rental
now the business outlook is good.
Companies, (7) Companies own¬
trated in the case of prices and
But we know the business out¬
production.
Prices are high be¬ ing Patents, (8) Finance Com¬
look is good because of a great
panies, and (9) Companies Mak¬
cause production is low; increased
backlog of demand.
Some time
prices cause increased production; ing Labor-Saving Machinery,
we will catch up on this penjt-up
until finally prices break and they
demand.
That will be the time
My Cyclone Cellar
are back from where they started.
when increased
peacetime con¬
If Congress does not rectify the
This seems to be a fundamental
sumption
and
investment must
present unfair labor situation we
law of nature.
take the place of the extraordi¬
The unreasonable wages which will have one big national strike
nary war and post-war demand.
when our homes will temporarily
now are being demanded by cer¬

American

The

Insuring Against Labor Troubles

That will

be

the real

ability to make
tem

test of

our

economic sys¬

our

work.

We have in this country a great

asset, the belief of the overwhelm¬
ing majority of the people, in¬
cluding labor, in free enterprise.1
We can preserve this asset only
If we make sure that free enter¬
"It is,'*

tain

labor-saving machinery. A thous¬
and men may, by holding a pistol
up to their employer's head, force
an unjustified 15% raise in wages.
But in such a case, the employer
is forced to install labor-saving
machinery

Pres¬

men

ident Roosevelt said in his budget

men

prise

can

message

succeed.

as

get

and

instead

of

with 850
Hence, 150

on

1,000.

thrown out.

are

of last year, "the respon¬

enterprise to
translate market opportunities in¬
to
employment and production.
It is the responsibility of the Gov¬
ernment to hold open the door of
opportunity and' to assure sus¬
tained markets, ." Then, and only
then, can free enterprise provide

sibility

will result in forcing

groups

the employers to install more new

of

business

Foolproof

Companies
is the

whose

their

the

total

least

troubles.

expense

vulnerable
The

.

Stocks
labor

smallest

pense

of

Labor

ex¬

proportion

following

10%;
17%;
Food
jobs."
Preparations 17%; Chemicals
/
20%; Petroleum Refining 24%;
The Full Employment Policy
Cement 26%; Smelting & Mining
Aid in reaching this goal will 28%; Can Manufacture 30%; Ray¬
on
come, I believe, through the full
36%;
Electrical
Equipment
employment policy.
As I
en¬
37%; Meat Packing 38%; Tires
visage that policy for the United and Tubes 39%; Agricultural Ma¬
States, it does not mean that the chinery 40%; Machine Tools 40% ;
Government
will
assure
each Bakery Products 41%; Office &
businessman a market and guar¬ Store
Machinery 41%; Aircraft
antee each worker a job.
If we 42%; Locomotives 45%; Automo¬
Want progress and freedom, we
biles, Steel Works, Woolen and
must assume risks,
A dictator in Cotton Mills and • Shoe factories
a
Socialist State, concerned with 50%.
increasing the welfare of the con¬
There, however, are other fac¬
tors which investors should con¬
sumers, might to his own advan¬
tage try the following experiment: sider, such as how the earnings
He might hire individuals to man¬ of a
company
are
affected by
strikes.
age the factories, shops and stores,
Considering
this
also
but not pay them a fixed compen¬ makes me conclude that the allfor

speaks

itself:

13%;

Soap

Drugs

Paints

.

Rather he

sation.

blight permit

round

best

hedges

cut
a

little building!;

new

against infla¬

to

sation
ness

a

retain

as

their

compen-

part of the increased busi-

returns

resulting from




tion

are:

(1) Banks, (2) Insurance

1 Companies,

their Merchandising

(3)

Utilities,

Chains,

(5)

(4)

Land

U. S.

merce

of

Department of Com¬

1939,

that the loss

aged

no

on

which

notes

out

aver-

1%%

than

more

disastrous

points

accounts and

open

instalment

consumer

in

the

depression of the thir¬

Furthermore', thousands of

ties.

have

banks

this

entered

credit since

1934 and

few losses.

field

of

experienced

;?'V '* ;YY

.

Y''/;'

and

properly

is

so,

con¬

safe and sound type of
Yes, that's true, but con¬
sumer credit isn't fool proof, and
the foregoing facts don't tell the
whole story.
It is to be remem¬

extending

concerns

instalment

credit

were

highly specialized credit institu¬
tions, dealing in one or a few types

Walker
been

W.

to insure

satisfactory experience,
To illustrate:
In the past, sales
finance companies
in many in¬
a

contractual relation¬

equipment, appliance
manufacturers, distrib¬
utors and dealers, which provided
for a contingent liability on the
paper purchased.
For example, a
sales finance company buying an
ship

with

and truck

instalment

had

contract

in

many

the protection of the

follow¬
ing safety factors: an acceptable
credit
risk;
an
adequate down
payment;
sound
terms
under
which depreciation was offset by
liquidation; the endorsement of a
responsible dealer; a contingent
liability on the part of the dis¬
cases

tributor

manufacturer

or

to

the

institution

financing

against loss if the retail buyer de¬
faulted and the dealer was unable

this

to honor his endorsement. All

protection was in addition to the
repossession value of the equip¬
v.-Ar'

ment financed.

Another factor to be considered

is terms.

Terms in 1929 were on

;

terms

on

appointed

branch offices of

& Co. Mr. Stevenson

was

terms

bulk of instalment
automobiles. In

the

of

weakest

all

released from active duty as Lieu¬
tenant (JG) USNR. The main of¬
fice

of

the

firm,

holds

which

1929 and

personal loans in

banks

that, were

extending

type

loans/

Today

there

are

membership in the New York
Stock Exchange and other leading
exchanges, is located at 15 Broad
Street, New York City.

unsecured

personal

Banks have never had ex¬

loans.

perience in this type of credit in
a
depression.
Furthermore, the
records show that many of the
small loan companies

the

the

on

weakest'

millions

many

of

transactions

consumer

outstanding

were

with substand¬
-Y-Y

•

You know that this

satisfactorily

was

experienced

higher loss ratio during the de¬
pression than banks could afford
to absorb on current bank rates.
a

perience

was

inherent

soundness;

the

on

not

Credit

good

created
of

transactions

ex¬

by the

the

terms

outstanding;

contrary, we were bailed
out by the artificially high
wages,
and full employment created by!
the

on

the

^Y'.V'V

war.

the

manufacture' of
able

sible

for

.

that

fact

the;

consumers'

dur¬

the out¬
impos¬
continue to;

with

ceased

goods

break of the

:v'Vy;

/.;•■

In: addition,

made it

war

buyers

to

themselves for the pur-,
chase of such goods, thus assisting,
in the liquidation of the obliga-;
tions already outstanding, Y/YY/YY
obligate

Credit Not Fool Proof

Consumer
I

of
handling

many

there is

On

this.
fool

of

evidence
other

a

prove

We must not be lulled into:

tions.

false

of

sense

of

to

hand, it isn't

proof. Our experience of the
10 years must not be taken,
yardstick for future opera¬

past
as

great accu¬

a

the

mulation

it inher-Y

unusually safe type of

an

and

credit

that

credit

consumer

ently is

from

experience in
millions of dollars

personal

years

of

convinced

firmly

am

under

because

Y Y

conditions.

The field of
been

securit}*

unusually good experience
highly favorable artificial

our

a

;

consumer

;

credit has.

profitable one in the

very

and rosy pictures are often
painted of the substantial profit

past

that'

the future.

in

this

from

derived

be

can

business

Yes, it is

consumer credit
has been,
profitable and there is good

reason

to believe that jit will pro¬

vide

profitable outlet for funds

a

in the future.

However, there

are.

certain facts which, are often dis¬

regarded in considering the future,
profit possibilities in this field of

credit!..Y'v v.
YY v
Y Yield Not High

Y;

V; V r>

^'The average yield on the funds
employed appears very high to.
most bankers, but too often the
is

fact

of

the

that

overlooked

cost

acquiring

and handling .this
business/ may be 40, ,50 or even.
60% of the income received,;! Con¬
credit

sumer

is

retail

credit.

must

be

units.

Y Advertising -and

in

merchandised

It

smallbusiness
.

promotion expenses are necessary
and there are many detailed steps
in

making

following
tion. Y.

a

it

and
comple-i

loan

consumer

through

to

'X

;

Y

loss ratio on
credit is often quoted in

The extremely low
consumer

relation

the

to

rate

the funds employed,
the
turn

of

return

on.

thus Creating

impression that the net re¬
is very high.
I agree that
are a negligible factor in a

losses

properly conducted consumer
However, losses
don't tell the .whole story,
The

credit operation.

collection
Bank Activity in Consumer

outstanding

liquidated, but

must remember this

we

true,

was on

were

social

history of this type

and

of

ard terms.

very

were

1940, our last full time peace year;

signature

recently

with

the

credit

one-

and the

pay,

financing

time,,

of

were

basis

in

terms

and twelve months to

automobiles

third down

Standard

basis.

conservative,

a

maker

has
manager, of the
Hemphill, Noyes

loosest

a

tect

same

sense

extended in 1940 and 1941

pro¬

thousands of banks making single

Jr.

Stevenson,

a

a

stances had

were

disturbed over
the tendency to pyramid personal
debt through the medium of re¬
financing.
Consumer credit was

..

highly trained and skilled in
this type of work, and that many
up

At the

with

responsibility

was

of credit were largely
confining their operations to co¬

Hemphill, Noyes Post

bankers

of credit, and that their personnel

safeguards were set

credit

consumer

alarmed.

were

ex¬

credit.

bered that the

in

becoming concerned over the un¬
terms
and
by 1941 they

sound

*

an

tremely

consumer

3011)

page

rienced

dollars

that

instalment credit is

sumer

this

W. W. Stevenson in

Consumer Credit

of
Consumer Credit Is Safe

The inevitable conclusion reached

the

maintain

expenses
a

low

necessary

loss

ratio

amount

to.

often!
of the

to

activity in consumer credit
experi¬
ence
since that date has created
an
illusion
as
to
the skill and

Form Own In v. Firm

knowledge required to extend this
credit on a safe basis.
With the

appraising future profits on this
business.The days of lush profits

Bank

started about 1934 and the

Charles B. Crouse

DETROIT,
Crouse

will

Penobscot
the

MICH.—Charles
open

offices

Building to

securities business

B.

in

the

engage
under

in
the

of Crouse and Company, ef¬

fective

Jan.

formerly

a

2.

Mr.

partner

Bennett, Smith & Co.*

Crouse

in

was

Crouse,

exception of the recession in 1937,
which fortunately was short, we
have experienced a

rising level of

national income from 1934 to
It

was

excessive

losses

credit during this

1940,

date.

actually difficult to incur

bankers

consumer

on

period.

who

In early

were

expe-

the

actual

exceed

name

them

of; the

ment

.

labor

list

peace

times; new cars 25% down and 24
off from all conveniences.
hedge against that day, 1 am months to pay/and appliances $5
If
building in my yard a small house down and three years-to pay.
existing in 1940 had
and stocking it with canned goods. the terms
been
in
effect
in
1929,
the
'loss
ex¬
I am driving a well for my water;
am
installing
underground ; oil perience, on consumer "credit in the
early ;• thirties
tanks with a good big wood pile: depression of the
would have been materially dif¬
am building a chemical toilet and
am
insulating the small
"hut" ferent.' ,'.r.;:y• Y/-Y.y /y'Y'C:' . /Y;„
Another factor to be considered
against heat and cold. In an em-,
ergency,
we
could
continue' to is the personal;'loan activity of
sleep in the bedrooms of my ad¬ banks particularly on a single sig¬
joining
house, but
the
living, nature basis. Very, few banks
cooking and eating will be in this were making a volume of instal¬
be

As

should be
to

and prosperity. You
probably read of the report

as

have

bureau¬

a

Washington.

cratic ivory tower in

well

should

The Government program
not

on

(Continued from

The business¬

of these programs.
man

prices.

lower

years.

It

better goods at

efforts to produce

Federal

Thursday, December 20, 1945

losses incurred.

"

competitive situation must
taken
into
consideration
in

The
be

gone forever, and properly so.
Competition will be keen; 10,600
banks have signified their inten¬
tion to engage in consumer credit.Non-bank lending agencies have
announced broad plans for the ex¬
are

pansion of their activities.
The

rate

situation

on

automo-

Volume T62

bile

dealer

financing will be ex¬

In this con¬

tremely competitive.
nection^

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4448

speaking of the
rate available to the -public, but
.the net rate offered to automobile
dealers on discounting their paper.
The

am mot

headlines
from
business publications indicate how
.competitive this business will be:
."Financing Concerns Reduce In¬
following

terest Rates for Automobile Deal¬

ers," "Race for Instalment Fi¬
nancing," and so it goes, a rate
•war
even
before -goods start to
; roll from; the production lines. 7.

credit at the

consumer

reasonable

remembered

be

•must

the

to

cost

most

public

the

it

reduc¬

tion of rates below a proper level

'will

unfortunate for

only, be

not

to the

■the banks, but a disservice

that

!

Remember

industry.

and

.public
.

the good experience on

con-

credit in the past has been

sumer

established

with

structure

rate

a

.that

provided sufficient income to
investigate thoroughly, to service
properly,
and
to
collect
these
credits and absorb losses.

f ;

necessity for

this

tering

bank

every

en¬

field

announced.

The

sufficient

to

should

rate

be

acquisition

cover

•costs

and
operating expense, to
provide adequate reserves and to

allow

for

reasonable

a

return

be

to

in

borne

credit

that

mind

is

largely ex¬
tended to the families in the mid¬
dle and lower income groups.

offer the

able

are

public a substantial

receive

"render

sufficient

to

sav¬

income

of its

to

constructive service.

a

bank establishes rates on

a

If

basis

a

rather

than competi¬
superior service
"and sells that service aggressively
costs

renders

tion,

a

and

persuasively, then I would be
very optimistic on the profit pos-'
'sibilities

The

'?•

A

for

that

bank

credit.

sumer.

in

con-

„

Public

Relations "Factor

the

public relations value
of this type of bank service.
It
.has been pointed out that by mak,ing bank credit available for the
vast majority of Americans, we
..

will create millions of

satis¬

new

fied bank customers. Yes, a broad

expansion of bank lending in the
consumer
credit field will bring
us
many
millions of new customer's and an opportunity to cre¬
mate good will with every one of
.these customers.
j
.

.

■

--

.

However, in lending to millions

,

.of

borrowers

new

easily

can

we

jcreate millions of dissatified
tomers and
of ill will.

-

popular argument advanced
against activity in consumer cred-

ago a

it was that banks would be forced
'to

use

thus

and
many

If

the

lose

in

citizens

ities.
V

.collection,^methods

:harsh

'
we

•

,

look

'
at

of

goodwill

their

-

.commun¬
-

,

consumer

•.

:

.'credit

merely engaging in the highly

as

in¬
..•..

Economic

V/^-^^Tuture Expansion
the

reach full production,

we

amount

ofy

outstanding

reach

may

$15 billion.

budgets

This

of

credit

consumer

total of

a

that the

means

American fam-

most

ilies will be materially iaifected by
the extension of this type of credit.
In order to get a real

understand¬
ing of the social significance of
consumer credit, let's analyze the
folowing hypothetical yet typical
case of John Jones, a discharged
He

anxious

is

to

get

have

V John

pretty
married.

gets

job.

good

a

Then he gets

He wants

automobile and he buys a car
with a low down payment and on
an

liberal terms. He needs

fur¬

new

market lor their out¬

a

and

will soon cease
unemployment
will
result.

^

can>

provide no

L

people

to

build

finance

is

credit

markets

that

obvious

will

play

and

how

the

salesman

he

easily

radio,

refrigerator,

there is

.

ex¬

buy

can

become

.

.

.

John Jones has

indebted

monthly

on

payments greater than he can re¬

of his income.

pay out

three

or

He is two

?

behind

months

his

in

bills—and he is desperate.

He is

actually faced with disgrace in
the neighborhood, by the repos¬
session of his personal belongings,
and he may have to take bank¬
ruptcy to prevent garnishment.
This case multiplied millions of
times graphically illustrates one
aspect of the social significance of
credit.

It is trite indeed

to say

that debt is

—but

it

is—it

terrible thing

a

economic

be

can

slavery.

hand, if this credit
wisely extended to John

had been

Jones he would not have

credit

emergency

a family
he would have
adjust his obligations

arose

been able to

and weather the storm.

millions \
that have

joyed

of

American

acquired

the

There

families

home,
provided

a

freedom

automobile and secured

an

saving

devices

are

through

en¬

by

labor-

the

pru¬

dent use of instalment .credit.

Danger of Credit Abuses

,

Please
my

do

not

interpret

foregoing remarks

cism

of

the

proper

credit,

sumer;.

illustration

of

credit

sumer

structive

use

the

abuse

and

not

on

a

does

cureall

an

as

of
its

pro¬

or

It

a

is

and

distribution.

of

it is

of

consumer

To

un¬

must know from

with

contact

of

Americans,
their
reasoning, their strength and their
Perhaps the widest
credit prin¬

of the instalment

is

life

insurance.

When

a

young man takes out a

to

$5,000 pol¬
family in the

his

protect

of
his death,
he has not
$5,000; he is simply buying
an estate of $5,000 on the instal¬
ment plan and making the benefit
of
that
protection
immediately
event

saved

available to his
ord

family.

The

have

through

accumulated

the

purchase

On

surance.

the

estate

an

life

of

other

in¬

hand,

if

they had not been definitely obli¬
to pay the premiums on
in regular instal¬
ments, their income in many cases
gated

their insurance
would

have

living

tate would

By the

have been

token, when

mechanical

a

with

accu¬

life of

a

fam¬

a

refriger¬

some

10

years

finances the balance/in 24
monthly instalments, every time
that family makes a payment
they
are actually saving
money which
ana

has been invested in

a

utility that

will improve their health and in¬
crease
their standard of
living.

However, if they had not Had the
discipline
of i forced
savings
-through monthly payments they
might,

have acquired
refrigerator.

never

chanical

a

me¬

we preach thrift and ad¬
that savings
be accumu¬
for purchases.
We tell our

lated

con¬

customers that when their .income

constructively
:,

above

.

subsistence

a

level

they should set aside ,a few dollars
each payday in a savings
account,
but if

.we, are

realistic

we

know

'

profitable
the

or

personal loan business

lucrative field of automo¬

financing; if we fail to real¬
ize that all Americans have their
;
pride and their d/gnity; if we
think we are doing the public a
•favor by granting credit;
if we
make loans only on a basis of collateral
and
collectibility; if we
bile

'

It is estimated that .55 to 60 mil¬

lion

jobs will be necessary to
vide a satisfactory level of

ployment.
that

the

have

to

It1

is

also

national
be

some

provide these

pro¬
em¬

estimated

income

$130

will

billion

jobs, .maintain

to

our

econoniy and service the. national

•

•

collections

handle

in

a

cold-

-

debt.

This

of

$90 billion of consumers
and services must be dis¬

ter

stay

out

■we

will

do

-

;

harm.

V

of

this

business

banking

for

irreparable

.
.

On the other hand, if a bank has

a grasp, of the fundamental
prin; eiples involved, realizes its respon¬
sibilities and renders a friendly

a

volume

goods

tributed.; To accomplish this, con¬
sumer credit must be widely util¬
ized.

-

that

some

'

blooded manner, the* we had bet-

means

It

is

obvious'to

thinking

that

would

may

exist within

unsound

a

few years

consumed

terms.

If

credit

consumer

credit

ice at reasonable rates,

will not only make

a

serv¬

that bank

we

do

satisfactory

enjoy




credit

con¬

materially aid in
creating jobs, definitely help in
maintaining a high standard of
living and substantially benefit
our

can

economy.

Deterrent

A

And

-

to

aspects
Thinking

credit.

of

towards

socialized

and

in

won

its

in

the

consumer

bankers

and alarmed

aware

Credit

examine

us

abled

is

that

such

credit

threat

in

this

a

free

to

The recent

England,

ing the banks

which

was

and industry, makes

t$fe worldwide trend evident.

And
that

the

shocking thing is not
England went socialistic, but that
when the program of socializing
the
banking
system
was
an¬
nounced

protest

no

the people.

system
same

in

is

not

sense

the

didn't

as

had

in

and

in

France

voted 'by

cialize

the

four

bank

simply

banking.

the

Last

salaried

or

uals

a

be

banks,

in

evident

credit

wisely

effective

an

this

credit

our

man

majority of
"the

that

bank."

credit

our

sibility,

available

to

citizens, Jt means
becomes
"my

bank",

Bank

average

be¬

credit

the street, to the vast

on

men

a

credit

a

gives the
feeling of respon¬

of security and

sense

a

greater stake in banking.
By ex¬
tending bank credit to the vast

of Americans

majority

American

the

more

even

we

banking

make

system

democratic.

duction

sumer

briefly, if con¬
credit is properly extended

constructive basis, it is safe,
probitable—and it wins many
new friends for banking.
At this point you may logically
inquire, "How may we assist and
on

a

it is

advise
sure

our

that

member

banks

they will have

a

to

in¬

satis¬

factory experience in this field of

1

opinion there are two basic
steps that are of fundamental im¬
portance.
First, it is my deep
joy

a

bank cannot

consumer

on
credit unless the direc¬

tors and executive

real

officers have

understanding

the

of

en¬

satisfactory experience

a

basic

aware

loan

endeavor

and

is

a

an

eco¬

out

get

costs,

debt

of

bank
people

a
assist

to

rather

than

into it;

"That, although a bank must be
competitive, it must maintain its
on

plane

a

which will not bring disrepute to

banking, and keep all advertising
restrained, truthful and exact;
'
"That

bank

a

must

determine

for itself whether it will offer its
services

directly to the public or
through others, but that no bank:
should
uphold
or
assist
such
others when they indulge in un¬
fair business
"That

practices;

bank should

a

the costs and hazards

such

credit

and

determine

inherent in

establish its

loan

charges accordingly; and, finally,
"That
credit

bank which extends

any

to

individuals

standards

these

under

of

practice will merit
the good will and support of the
general public."
With

credit extended

consumer

by banks in conformance with this
creed,

I

believe

banks

will

ade¬

quately meet the credit needs of
the

American

people at low cost
substantially contribute to the
of the people.
I believe

and

bank

the

I

our economy

win

time

friends

nally,

credit

consumer

same

new

for

will

and at

millions

of

banking and, fi-.

believe

bank consumer
credit will make the most demo¬
cratic

banking
even more

system

in

the

democratic.

Halsey Stuart & Go.

a

grasp

principles involved,"
their responsibili¬

/

Offers N. Y. Central

Equipments
.

Halsey, Stuart & Co., Inc., and

other underwriters
fered

for

Dec.

on

public sale

13 of¬

issue of

an

$17,700,000 New York Central RR.
1 % % equipment trust certificates
awarded

ding.
bid

after

and

of

bid

coupon.

Brothers &
a
1%%

Salomon

by

Hutzler

competitive bid¬

a

Halsey, Stuart group
designated an in¬
1V2%.
Underwriters

The

99.517

headed

99.407

for

.

Subject to approval of the In¬
terstate
Commerce
Commission,
the certificates were offered at

yield

to

will

Proceeds
of

the

cover

about

80%

of

buying 2 Diesel
freight locomotives, 750 steel-cov¬
ered hopper cars, 153 steelj coaches,
60 stainless steel coaches, 4 dining
cost

4 kitchen-lounge cars, 4 tav¬

cars,

observation cars, 20
aluminum passenger-baggage cars

ern-lounge
50

and

steel

baggage

cars.

of

families

to

of

they will

a

Second, because the success of
consumer
credit operation de¬

American families to enjoy

able be entrusted with this work.

Raised

Living Standard

consumer

standard

consumer

credit

of

has

living

be¬

credit has created

buying power, thus permit¬

pends
skill

Snyder and McElhiney
Are Loewi Co. V.-Ps.

is

no

suggest

better guide

for

that I

members
than the "Consumer Credit,Creed"
your

WIS,— Loewi

MILWAUKEE,
&

225

Co.,

members

of

East
the

Mason Street,
Chicago Stock

Exchange, announce that Milo F.
Snyder and Lester B.
are

now

and

There
can

t

0.90% to 1.75%,/
according to maturity. Certificates
mature $1,770,000 annually from
Jan. 1, 1947, through 1956.
prices

;

In my

conviction that

of

should
to

terest

summarize

To

basis

to

country,

consumer

bank

makes
the

in

bank

cause

wage-earning individ¬
sound

used

weapon

combat this trend towards social¬
ized

re¬

"That,
while
recognizing
the
importance of volume in the re¬

world

Consumer

.credit

nomically important part of such
service;

materially aid

and

country.

can

on

that

deposit

is

reasonable

France

than 80% of France's

trend

the

quirements of its territory as well
as
provide a safe depository for
funds;

to 35 to so¬

of

major

more

that, in order to
charter, a bank must

welfare

521

Bank

believe

its

Assembly of

deposits under state control.
handwriting is on the wall

The

and

man

banking
socialized because he

stake

placing

is

the

week the Constituent

the

the

England

whether

care

no

reason

English banking
democratic in the
ours

street

made by

was

I think the

apparent. 'Y The

Asso¬

follows:

as

permit the great

better standard of living.

higher

cause

"We

serve

are

the trend

over

landslide by the Social-

a

Bankers

.practices and policies

Socialized

let

now

en¬

lias
Also,

mass

basis, the

However, intelligently used,

almost entirely* upon the
judgment of the man¬
agement and personnel, it is im¬
perative that the most competent
management and personnel avail¬

a

to

credit

constructive

fact

ments will be made and

a

a

.

painfully accumulated 'are

if they buy such goods prudently
on
an
instalment basis, the pay¬

courageously
adhere
to
sound
principles and extend consumer
on

foisting goods on people by
mortgaging their future incomes
nor is it a
magic formula for solv¬
ing
all
of
our
economic
ills.

mass
ties, realize its social significance,
enjoy recognize its economic importance,
living they have and appreciate itfe political poten¬
achieved.
Most
people find it tialities;
and
then
with
full
very difficult to set aside a suffi¬
knowledge
of
the
foregoing,
cient amount out of current informulate well thought-out con¬
icome
to buy large unit durable structive
long-term policies con¬
goods. Yet, experience shows that forming with these principles.

on

not

cold

standard

'

constructive

so

not

ofAmerican

the

bankers that very strong pressure
over-extend

the

savings

odious de¬

an

eredit?%/'>4;^</^

True,
vocate

rises

con¬

^

same

buys

ator

in

absorbed

expenses and an es¬

never

mulated.

ily

been

that

vice for

sumer

American

"That the extension of credit to

evident

credit is not

sumer

rec¬

shows that millions of Amer¬

icans

is

system was

To illustrate:

icy

it

the

justify

merely'^pej^-. dst party on a platform of socializ¬

weaknesses.

ciple

Thus,

election

otherwise have achieved..

personal

were

of

ciation, which reads

only the cash buyers.

all

for

unemployment

new buying
it channels the purchasing
of the average American

intimate

possible if such goods

country

It

have

manufactured in small volume for

competitive economy.

true that

one

public at
than would

magic

family into worthwhile purchases
that enable them to enjoy a higher
standard of living than they could

use

been

goods
much

the

prices

create

a

credit does not create

power

to

durable

itself,

mits buying out of future incomes

power,

lower

other

not

panacea

problems

While

available

political

con¬

a

beneficial social force.

a

in

not

the

of ^.con¬

deep con¬
experience that

credit

consumer

as

rather

I have

use.

viction, based
used is

but

•

of
critir

any

credit

consumer

let usj analyze what
really does from an
standpoint.
Consumer

wealth.

new

and

it

credit

economic

become

over-indebted and when

possible

Therefore,

However,
this

normal

On the other

made

leading role in
viding employment.

washing
and then

.

baby in the family

a

and then illness.

a

created

a

thousands

plains

and

has

distribution.

appliances
tractive

automobiles,

ft^ese goods.

Constmier

derstand this

glistening and at¬

more jobs for

radios, [refrigerators, etc., than we
cah firffl ways to distribute and

niture and this is easily purchased
on liberal credit.
The new home
are

do

production

put,

a

a

If manufacturers

mentioned.,.

mass

st After

major prob¬
face is the dis¬

reducing

manufac¬
turing costs. Mass(pK>duction has
made
automobiles, home appli¬

large volume of
goods and services just

consumer

We

the

soon

production and -thereby

mass

substantially

of :the

tribution

not

of

will

we

mass

/

One

credit.

ting

ances

Next, Jet ,us appraise the eco¬
importance of
consumer

.

,

cus¬

an enormous amount
In fact, not many years

tragic

nomic

•

consumer

deal has been written

great

; about

financial program.

new

ings
in
finance
charges
over
existing rates of other lenders and
still

important part of their planned
>
;
V

an

machine and stove

Fortunately, banks

v

.

is

on

«the funds employed,

be

/■:/.

Credits

Consumer

lems

^;;

home, a family and all
the things he has missed so much.

making a thor¬
ough study of the costs involved
before rates are decided upon and

:

It

consumer

job, have

The Rate Question

/the

r

in importance.

veteran.

>■:■ I wish to emphasize with all of
the earnestness at my command

/

•

Importance

extension of this credit and it was

tend

will

deed.

i

analyze the social
of consumer credit.
The
social
implications of this
type of credit transcend all others

given

•engaged;.'in this: type of credit.
•First, reduced rates mean lower
yields.
While banks desire to ex¬

results

social

us

careful consideration by ;all banks

are sev¬

eral factors which should be

,

Significance

Social

Next, let
significance
;

In
1941, the vast majority 'Of Amer¬
ican: ^families
had
consumer
credit
obligations " outstanding.
Their budgets were geared to the

In this connection there

■

profit but will also win immeas¬
urable good will in its community.

firm.

them

Mr.

&

Co.

some

time.

association

the

was

Mr.

Mc-

wit^i Loewi

previously reported in.

the "Financial Chronicle"
6th.

of

Snyder has been with

for

Elhiney's

McElhiney

Vice-Presidents

of Dec.

Thursday, December 20, 1945

CHRONICLE

THE COMMERCIAL & FINANCIAL
3036

Nationalize Bank of

15c Hourly Increase, Which Is

Offer Promptly Rejected by

Scale.

12.4% Rise Over Present
Union Leaders.

,

.

18, the Ford Motor Company submitted an offer to
General wage increase of 15q per hour to members of
Automobile Workers, which, the Company maintained would
cause an additional outlay to it of $33,000,000 annually. Within one
hour after receiving and considering the offer, it was rejected as un¬
satisfactory by the Union's officials.
'
In its letter, the Ford Company
in effect for two years from the
stated:
date they become effective.
The objective of our present ne¬
3. That this proposal be made
gotiations has been to arrive at subject to agreement On the fol¬
workable and equitable solutions
lowing items involved with the
to
the
problem of wages and
problem *of company security:
the problem of company security
A. Elimination of unauthorized

the

worker productiv¬
unauthorized work stop¬

ity and

Ford Motor Com;-

The only way

to sell for less money.

has

It

clear

been

ceilings on our products
such Action shall not be made the
basis for additional wage propos¬

to

there¬

us,

that solutions to our prob¬
cannot be arrived at sepa¬

fore,
lems

themselves

producers

in

wages
out of increased vol¬

come

production.
our negotiations started,

ume

Before

frankly that we
the time to
wage increase,
be¬

told you quite

we

did not think this was

about

talk

a

costs

what

tell

cannot

we

cause

our

going to be until we have
history of volume produc¬

are

had

a

tion

under present conditions.
told

We
when-

costing

are

that materials—
them at all-

you
can

we

get

than ever be¬

us more

Last week

fore.

conservative estimates that,
without

lose about
the

On

even

increase, we will

wage

a

our

we gave you

$35,000,000. during 1946.
other hand, you have

that these

repeatedly maintained

statistics do not answer the press¬

ing and real problem of the em¬

ployes

lem

represent—-the prob¬

you

of

meeting

overtime

the

without

budgets
pay taken

family

-

during wartime.

home

could ask the
Government to raise ceiling prices
Theoretically,

enough to

we

increase.

a wage

cover

We do not think it wise to go

that

time, because present
policy is based on the
only rigid adherence
OPA ceiling prices can prevent

road at this

Government

belief
to

that

inflation.
That puts the problem

v

squarely

the Ford Motor Company
and its employes. Unless we give
up the problem as insoluble, we
to

up

have

alternative but to take a

no

gamble.
The management

of the com¬
pany has done its best to calcu¬
late carefully the risks in such a
gamble. It has decided to risk an
additional $33,000,000.
Behind this important decision
is our belief that we may be able
1.

The confidence and coopera¬

tion of
2.

production
and keep men employed.
3. In prompt all-out production
can

sharnen

can

we

skills "and
beat
4.

our

production

efficiency to meet and
to

log-jam of post-war

break

mass

the

produc¬

5. By

bringing

cars

new

do

up

That

cents

the

supply of

demand,

to

we

can

share in halting inflation.

Gur

Therefore
1.

Although the subscription books

marketable
securities offered during the Vic¬

for the three issues of

Drive

Loan

tory

closed at

were

8, sales
Savings Bonds,

the close of business Dec.

States

United

of

G, and of Treasury

Series E, F and

Savings Notes, Series C, will con¬
tinue, it was announced on Dec. 18
by Allan Sproul, President of the
Federal
Reserve
Bank, of New
York.

ings bonds
essed

the

subscriptions for sav¬

All

or

through

month

will be
national,
State

the

totals for the drive,
Mr. Sproul stated in his advices,
and

county
also

which

defeated,

was

.

appointees
of

orate

to

the Bank

the new direcof England, to

for

review,

and

to

of

of Bank
stock before April 5.

redemption

all

'

said:

payment for Series C notes',
Series F and G bonds, or Series E
bonds to be issued by us, is made
"If

check drawn on us, or
by
charge to a reserve or non-mem¬
ber clearing account maintained
with
us,
the V subscription
and
check or authorization to charge
by

account,

as

the

motor

interest."

trade

Two New Directors at

the

Inc., announces
the election of two new directors,

tween

Colonel Russell

has

who

associated

been

Webster since 1923.

with Stone &

Colonel Robb was Vice-President
a

Director of

Stoned Webster

•

,

and advice of credit should be re¬
ceived

by

than

later

not

us

the

close of business Jan. 2, 1946.

"Sales of Series E bonds by is¬

suing
Ihe

the drive, provided

therefor

ment

be included in

will

agents

totals for

bonds and pay¬

in

are

our

hands

Issuing agents quali¬

Jan. 2, 1948.

fied

on

sale

of

rolled

prepayment basis for
to
employees en¬
payroll allotment
reminded that their sales
a

bonds

in

plan are
not

unless

the

credited

be

the

stubs

of

the

to

drive

issued
not later

bonds

have been received by us

of the company in 1942, a

in

Vice-President

President

and

Colonel

terminal

on

the

Army Air
& Web¬

He joined Stone

ster immediately
from Harvard

During the
later

Transport
in both

to

after graduation
1923.

University i-n

war

Headquarters,
and

is

he

was

attached to

Army Air Forces
Headquarters, Air

Command.

He served

Pacific

the European and

a

we

propose:

increase of 15
be granted, this

wage

hour

per

2; notwithstanding that
agents have previously paid
the full issue price of the bonds.
On Dec. 6 the Secretary of the
Treasury called attention to the
such

fact

that

for

the

the

subscription

three

issues

securities

of

hiarket-

beginning of the calendar month
during
which
total
production
reaches a volume of 80,000 units

nate at the close of business Dec.

including

Fords,v Mercurys,
*

Lin-

colns and trucks.

(This
crease

wage
more

represents a 12.4% in¬
in
our
present
average
.

21%
than the present average of
and

approximately

major competitors.)
That these

new

rates remain




the

8.

would

books

close,

and

Wctory Loan Drive will termi¬
These

issues

are

the

2

l/$ %

Treasury "Bonds of 1967-72, the
Treasury Bonds of 1959-62,

is
a

during

living

Hammill

Co.,

&

14

New York City, mem¬
bers of the New York Stock Ex¬

change and other Exchanges, will
Robert

admit Walter Maynard and

Treasury Certificates

of Indebtedness of Series K-1946.

As

indicated

above

sales

of

the

three issues of savings bonds, Se¬
ries E, F and G, and of Series C

joyed

>'

't

up;

we

more

and

We learned to make
prefabricated houses, which have
turned out to be a blessing to
bombed-out populations in sev¬
eral countries now that the war

refrigerators.

But

over.

the

like

even

so

our

pro¬

list is short compared

to

large industrial country
United

States

or

Ger¬

before the war. And a suf¬
number of customers for
such a limited list have to be
found
in
many
foreign
lands.
many

ficient

.

Consequently we cdnnot be reto primitive bartering of
goods for goods.

of Sweden's

partnership

on

? i.'\t,•

January
•'

'

:•

'

I

system

opposed
of

barter, that is, the bilateral

direct
trade

agreements that were a conse¬
quence of the collapse of interna¬
tional
trade
during the
period
between the two wars.
Unfortu¬
nately this system had to be even

the last

further developed during
war

still

and in many respects is

with

It is this retrograde trade

us.

method

we

must destroy; we must

restore the
allowing each
country to buy where most con¬
bend

our

efforts

to

multilateral system,

wherever

sell

to

are

wanted.

advantageous

most

and

venient
and

goods
quota

its

import

The

restrictions, the rationing of for¬

forced clear¬

eign exchange, the

ing, which means, "I'll buy

from

if you buy from me,"
They are all devices for
coping with immediate difficult
ties; in the long run, they coun¬
teract
the
real
interests of all
you

only

must go.

and

parties

the

detrimental

are

economy

Trade
In

Germany

With

'30s

whole.

as a

had

we

,

set

to

to
..-V

up

clearing agreements with
several countries on the European

forced

Continent, such as Germany

and

It was instrumental in bal¬
ancing our exports to Germany
against our imports from that
country.
In other words, Ger¬
Italy.

and

supply manpower

had to

many

equipment and raw

materials

in goods not only for. what
received from us, but for the

to pay

she
cost

of

freight

commissions,

on

Swedish ships,
royal¬

harbon fees,

etc., and then the interest
and sinking fund charges on the
ties,

Swedish

the
a

Conversely, we have to draw on

Filor Bullard to Admit

to

the

to

are

we

shpres

credits

the

interna¬

were

granted

of

that

for instance,
Young and Dawes loans. As

Germany in the '20s,
Wide Sphere

Commerce

change, will admit John A. Mona-,

Sweden's

how

clear

respondingly

tional

.

defined

thus

foreign trade position and require¬
ments in some detail to make cor¬

matches and

ballbearings, sewing machines

Bilateral Agreements

to

have

I

glass, we also made telephones
electric motors, bicycles and

uary

Filor,
Bullard
&
Smyth, 39
Broadway, New York Ciiy, mem¬
bers of the New York Stock Ex¬

Opposed

world

better diet.

a

We made not only
art

and

built

equipped them better;
clothes and en¬

A.

han

Savings Notes continue.

had

had

better

wore

we

stricted

Kugler to partnership on Jan¬
1. Both were partners in the
firm in the past.

we

In the latter part

as

went

houses and

2j/4%

and the %%

'20s,

that of a

Wall Street,

'20s,

well as during the
years preceding the second war,
we
enjoyed what is now termed
full employment; our standard of
of the

ductive

Shearson Hammill to Admit

the

similar boom.

is

theaters.

Shearson,

to

close

During the decade that fol¬
lowed the First World War, that

1943,
1945,

May,

Production

40%,

Army after serving

with

years

Forces.

United States,
declarations,

by

high quality

goods, and all we ask is a chance
to compete on even terms.

like and get it
sell our

rose

capacity

We aim at producing

of our in¬
dustrial production went up by
approximately 70%, while the na¬
income

ex¬

prewar

our

large

1939, the volume

tional

and

motors

great

During the 10 years between 1929
and

electric

to produce is not
enough
to
threaten any
industrial nation in
any
market; chiefly, we hope to re¬
cover and
hold our old markets.
Our

Partly from our own raw mate¬

Sept. 13.

on

Robb

leave from the

four

we

Industrial

newsprint

portion of our imports in return,

rials, and partly from imported
supplies, we have built up our
industry1, which works for qxport
as
well as for the home market.

member

of the Board of Directors in
a

the engi¬

us.

Sweden's

in
Brazil,
and cream

ballbearings

both

ports went to them and from them
we
took, roughly, the same pro¬

Jr., President of W.R.

Grace & Co., and

and

the

of

policy

air¬

and

cars

pay

Three-fourths of

there should be no conflict be¬

so

motor

tries,

if I understand your

Stone & Webster,

exactly

ponderantly with European coun¬
Great
Britain
included.

highly

products where they are in most
demand. Fortunately, that is also

Stone & Webster, Inc.

match

no

is

situation

but to

separators,

price and

lowest

on

New

or

dynamos in Argentina. • Even so
our normal foreign
trade is pre¬

Of course, we must
what we can to se¬

do

and

the goods we

come

Why should we not trade
gainers? We also like

Mexico,
and

liking for American
nylon stockings and

a

cars,

the

at

Robb.

time,

tropical fruit.
cure

J. P. Grace,

must

we

plantations.
have de¬

rubber

or

same

veloped

ing, with Lord Catto, that such a
disclosure was not in the public

may

case

the

At

be,, from 1929 until
1941, when he re¬
should be received by us not later
signed both of these positions to
than the close of business Dec. 31.
enter military service.
If payment is made by a check on
Mr. Grace is the third member
another
bank,* the
subscription of his
family to serve as President
and check should be received by
of W. R. Grace & Co., the inter¬
us
in sufficient time so that the
national trading and shipping or¬
proceeds
of collection
will be ganization founded by his grand¬
available to us in finally collected
father more than three-quarters
funds not later than Dec. 31.
If
of a century ago.
He joined the
payment is made by a banking
company immediately upon grad¬
institution by credit to a war loan
uation from Yale University in
deposit account, the subscription 1936.
He was elected Secretary
the

fields

ton

or

for them we
be free to sell telephones in

planes,

neers,

the amount of the
England's reserve, hold¬

the

us

American

the skilled workers—but we
have no petroleum wells, no cot¬

England

on

of

Bank

material—the scientists,

India

and both be

materials.

ensure

"The Chancellor also parried

questions

With

import many of the raw
We have the human

have to

can

Venezuela has

reversed.

Having

rather

a

commodities

Orleans.

developed and differentiated in¬
dustry, in many instances based
on
Swedish
inventions, but we

require directives to banks to be
brought before the House of Com¬
mons

have

British

factories, but plenty of petroleum,

export the great bulk of
iron ore to coal-bearing re¬

We

or

seed-cakes

board at either Galveston

high-

own,

our

Egyptian

our

from

come

both

to

iron.

amendments to force dis¬

cussion in the House of Commons
of

of

coal

no

American,

Uruguay.

or

be

free

New Zea-'

or

Argentina
can

be

must

we

Philippines—or, if price and
shipping conditions are favorable,

gions and from there import most
of our commercial and structural

December

of

in

included

savings notes proc¬
the remainder of

our

J

were

as

have

negatively by naming
of borrowers ineligible for

credit.

able

2.

only

classes

increase to become effective at the

our

trol

almost

coffee
Brazil.

or

the

steel, but only in

and

iron

relatively small amounts.

circles

financial

in

Government would con¬

than Jan.

tion.
f

the

"This amendment

ivill

competition.
may
help

We

believed

that

may

increasing

class

in

South

Our

power.

hides

and

cotton

Our

like

Colombia

or

buy in Australia

land,

sure,

From the iron ore we make

credit to
Hitherto it

grant

borrowers.'

was

not later than the close of business

employes.
stay in

our

We

priority

to

to

people

our

Java; others prefer that of

Wool

large forests,

water

and

buy grapefruit in Pal¬

Guatemala

artificial wool and
variety of other
chemical by-products. Our mines
yield not only iron ore; but also
copper sulphur, 'other industrial
minerals and, yes, even silver and
gold, though in small quantities.

to

intends

Government

the

be

to

are,

to

of

from

nat¬

own

free

Some

say

rayon,

paper,
an

time

first

the

I

open

pastures,

good

minerals

h.-.h.

••

need a

be

estine, oranges in Italy, lemons
in Spain, and spices in tne Indies.

forests, for instance, produce not
only lumber, but also pulp and

an

class of

^

for

direct*banks

Victory Loan Drive

the stubs of such

to win these things:

clear

it

that

wind up our ne¬

can

we

/,

•

we

Sweden's

of

resources

and

the

made

Credit for Sates in

stop¬

work

increase

Any

pages.

the union.

that

and

ural

debate, Hugh Dalton,
Chancellor
of
the
Exchequer,
"In

gotiations promptly.

We

tied together.

efficient

eliminating

without
must

are

be

cannot

customer. -■'

problems

the

because

rately,

should raise

pressed

withhold credit from any

V
and trucks
We hope that you will find these
,;
..
proposals equitable and acceptable

better cars

and

more

commercial

pineapples,
Oregon
Washington apples, anu, of
course,
California oranges, figs
and apricots.
But we must also
pears,

considerable. We have arable land

prevent limitation
banks' freedom to

amendment to
on

Certain

quote:

Opposition

Hawaiian

market
on the basis of
price and quality alone prevails.
I mean an
where competition

free,

But all Oppo¬
designed*to re¬
strict
the
Government's
credit
powers were defeated, according
to special advices to the New York
"Times"
from London,
Dec. 17,
"The

to sell,

when

And

market.

free

as

well

and for both purposes

sition amendments

price

als by

their livestocks.

commercial banks.

from which we also

That if the OPA

the productivity

of their land and

from

affairs

customers'

dividual

union committeemen.;
4.

cakes to keep up

We have to buy as

not re¬
regarding in¬

information

quest

Management prerogatives.
C. Reduction of the number of

keep everlastingly at the job of
increasing efficiency and keeping
costs down so that we can make

ap¬

on

ing that the Bank should

8.

in a
is to

can live and prosper
highly competitive industry
pany

Commons

of

Dec. 17 a Government
amendment to the Bank of Eng¬
land Nationalization Bill provid¬

work stoppages.

pages.

House

Tne

proved

(Continued from page 3013)

articles.
Even
our farmers have to import com¬
mercial fertilizers and seed-fodder

England Approved

On December

grant a

•

other

of

variety

United

which involves

Sweden and World Trade

Changes in Bill To

Offer to Unions

Ford's Pay

Willingness to Grant a

Writes Its

regions for the import

many

If

a

we

„

by

.

the surplus value
to Sweden
to Ger¬

the Swedish exports

a

1.'mia, .wer take, a, return cargo
'i" "*

over

population with1 as many went up from a prewar
standard of living as ours, average of about 125,000,000 kroship
newsprint
to Califor- j nor. a year
to over 300,000,000
kro.
.
.
.

needed

high

goods

matter of fact,

of the German exports

,of: nor annually -during the war,

f"v-£v<

j^y/!

.Volume 162

Number 4448 :..■

'

•

THE COMMERCIAL & FINANCIAL CHRONICLE

3037

the

since

countries

of

outbreak

many in 1941 and 1942, were fully

the

paid

before Germany ; col¬
lapsed. Consequently it cannot be
said that Germany did: hot, have

and evacuees in

to earn and pay for what she received from Sweden during the

this amount

War,

Nor can, it be said that
Sweden sold its goods cheaply

tions in money and kind and -300

while paying high prices on what
it received in return. As a mat¬

propriations. vv."/xx/X'7 ■'v'"-.;'

ter

ish assistance have been Norway

up

of

fact,

the

prices

fixed

war,

ated

at

well as to refugees
Sweden, is evalu¬

as

million

750

some

kronor

•—roughly 180 million dollars. Of

million

The

in

450 million kro¬

some

private

represent

ner

contribu¬

Government

kronor

ap¬
■

and

treaties

Finnish children have been cared

were

so

price

prewar

balanced that the

with

relations

80,000

periods

between seven months
and four years.
Swedish Govern¬

ranging

ment authorities took care

of, some
40,000 people from Northern Fin¬

The

true of other goods too.

same was

th£n

More

for in Swedish homes for

re¬

gard to export and import goods
If the Germans
demanded more for their coal, we
raised the cost of iron ore.

Finland.

land who in October, 1944,

crossed
Sweden with most of their

A recent, very thorough Swedish
statistical investigation has shown

into

that the f.o.b. prices on Swedish

hostilities

cattle

export goods to Germany rose
nearly exactly as much as did the
f.o.b. prices on German goods ex¬
ported to Sweden.
1
} ;. To a certain extent it has been

Finland

livestock

other

and

out

broke

.

and

when

between

Germany

the

and

retreating

Germans burned and
destroyed these areas. Last win¬
ter

and

spring around 300,000
Norwegians, mostly children and
aged people, got a hot meal a day

necessary to keep up: this system
of barter, or

bilateral agreements from the Swedish relief stations
trade, after the war,
but in Norway. Altogether some 50,Sweden doesn't like the proce¬ 000 Norwegian refugees found a
dure.
It hopes that the United haven in Sweden
during the war.
; States
and the new United Na¬ While in the
beginning the Nor¬
tions Organization will take the
wegian Government in exile took
leadership in favor of a free in~ upon itself to carry the expenses
x
ternatiqnal market and a free for those people, the costs were
flow of international exchange. taken
over, as of the fall of 1944,
The publication the other day of
by
the
Swedish
Government
American suggestions for the imthrough nominal credits which
x provement
of international trade have later on been cancelled. The
.with an aim of freeing it from same holds true for some
25,000
the present maze of restrictions Danish
refugees
and
refugees
and regimentation will most cer¬ from
many
other occupied na¬
tainly be received with great in¬ tions.
V ;■
'■',.x",
for

~

terest and satisfaction in Sweden.

Sweden has

no

colonies,

no

This year, through the tireless
efforts of the Swedish Red Cross,

mili-

xtary ambitions, and no aspirations
for preferential treatment anywhere. Its trade dealings have no

.

were

Dachau and
in Germany
and brought to Sweden, 19,000 of

political strings, and there is no
element of pressure'in its sales*
x manship.
Its goal is the highest
possible standard of living for its

other
them

materials

in

and

.

'

As

x:

_

Agreements

•

Next

in

sent,
back to their -homes, but many of
them have nowhere to go or hesi¬
tate to return and a great number

to

Great; Britain,

based

on

favored

it

Greece

joint
under

force.

in

have?

For
are

heavy

they had been in 1933
Swedish exports to this

as

and 1934.
:

•

country also went up, but more
slowly,
increasing
during ; the
same period by about one-third.
This mean that in 1938 and 1939

it

surplus

the

.

as
x

UnitedStates

on

the

on

Grant

Poland, where

of

continent

addition
-

to

of

and

race

Credits

these

activities

purely
Sweden

granted or made available
credits totalling some 1,800,000,000
Swedish kronor to a number of
countries, including Norway,
mark and Finland as

well

Den¬

as

the

This is the system of multi¬

Netherlands,
Belgium,x France,
Poland and Czechoslovakia. Some

lateral trade which Sweden wants

of them are earmarked for recon¬

the

Fortunately, it is

declared

United States.,

policy
;

of

the

,

:

As

for

the immediate

of its

establishing

a

sound international

payment
great extent

by, deficient

To a very
operations have covered 4m-

.

According

goods
•

to

recent

estimates,

Sweden's humanitarian
gifts and grants-in-aid




.

aid
in.
to. her:

refer

to

say,

as

and
done

been
in this
country, that Sweden is engaged
in a campaign to flood the inter¬
has

recently

the

cori-

its

of

tents

with

markets

national

bursting warehouses,
is entirely erroneous. On the con¬
trary, this state of things repre¬
sents a very serious burden on
our whole national economy with
very

obvious inflationary dangers

in view,
Do

x

*

v

think

not

for

moment

one

that Sweden regrets the policy
adopted and that we contemplate
relinquishing our efforts to be of
help* to others in getting the
wheels running.
But, obviously,
there is a limit beyond which we
cannot go. And so you will realize,
I am sure, how eagerly Govern*
business.

and

ment

scanning

alike

for

horizon

the

are

Aware that there

were dangers
giving these added powers to a
Government board, Section 14 of

the

There

Profited

is

War

From

that

profited from the.war.
Nothing could be further from the
Our national debt has gone

from about two billion kronor
to
11 billion.
Our expenditures
for
national
defense
increased
up

during

the

ten¬
mobilized; at

war

than

more

our men were
one' time Sweden had nearly
million

a

standard

ered

under

men

of

half
Our

arms.

living has been low¬
10%; similar esti¬

by some
show

mates

20 %

a

and

States

United

civilian

Canada

in

decline

Great Britain, while in the

con¬

during the war

up

by 15 to 20%, ' Even so, we know
we are fortunate to have escaped
well

as

as

Need

we

did.

Coal

of

:

Reserve

;

and
now

production,
interest

Rubber;

needs

xx

most

well

as

of

in her

apparatus,
as

to

benefit of the international

the

econ¬

is more coal and more rub¬
Normally Sweden needs to

omy,
ber.

coal,

about eight million tons
v Before
the war about

one-half

came

The
for

the other half from Poland.
During the war Germany was the
only possible source, and only by
selling Germany iron ore could
Sweden get even ha If the amount
of its normal supply of coal. The
deficiency was made up for by
increased use of firewood, peat

domestic

Other

substitutes.

and shoes and other such

and

marked

exists
have
some

in

materials

of which

Sweden.

These exports

continued, and in

instances

even-

as

times

as coal.
But even
haul firewood out of the

expensive
to

forests

Sweden

ber tires
them

needs

more

for its trucks.

rub¬

It needs

coal has, to
be sure, been received from the
United States, some has arrived
badly.

Some

from Poland, but the amounts ob¬
atained so far represent only a

shortage existed, or still

entailed

for industrial use about four

so,

increased,

could buy Gov¬
securities "only in the

is

reason

a

very sound one

the

safety and health of the
nation's monetary system.
When
the Reserve Banks buy Govern¬

ment securities

directly from the

Treasury the operation is not sub¬
jected to the test of selling securi¬
ties

in the open
market; and the
Treasury is able to dip into the

funds of the Reserve
System with

check.

The funds in the

cus¬

minor fraction of our needs.

Swedish. > They form

■

..

^

•-1

War

Second

Powers

Bill

ury

was

because
lem

five

billion

some

excuse

to

up

There

the

this

difficult that both the

so

was

dollars.
for

financing prob¬

war

Treasury and the Reserve System
needed

a good deal of freedom to
produce the necessary money. As
a
matter of practice, the power
was not used very much;
only a
few hundred million dollars, so
that even: in that extreme situa¬

tion the power did not prove to be

In peacetime, howthe power will hang as a

necessary.
ever,

constant* threat

of

the

nation's

reserves, and their use ought to
be sub j ected to
very careful con¬
sideration and tests.
For another
Government
agency
like : the

this

raises

system, and
question
power should be
'•.\... //■.
'4' ;

Treasury to use those funds di¬
rectly is a good deal like perm itting a trustee to borrow trust

this subject as follows:

continued,
The
/

tt

Treasury Should Borrow Only
x
-From Public
There

is

certain

a

amount

•

Treasury wants
sell

to

and

;
'

investors, to
companies,. to banks,

others.

This means that the

x

must try to

follow

pels
of

At the

time it

same

steer clear
devices that mav

money
wreck the country.

part of the general pattern.

The

maintenance of peace and
the
tablishment of

es¬

sighted international relations

are

constructive, far-

Banks

serve

not

to

in

the

market

open

and the

Treasury would be re¬
quired to pay substantial sums

in fees and commissions/ which
are avoided by the exercise of

power."

\

•

The Principle Involved
•

This

statement

danger to the country of continuing in the hands of Government

tremendous,

climax that could not have
dramatic.
It came to
end with the use of atomic
a

more

confronting us with new
problems, the solution of which
power,

decide the very existence of
There
is
only one

civilization.

out—the way of reason
constructive collaboration.
way

and

:

inflationary money jpractices with¬
out hny outside check. The com¬
mittee directs attention only to a

relatively minor point:

gone

nothing

says

about the great principle involved
in this whole question—the great

involved

just

will

Without

provision, it would be necessary in some cases to buy the

through has been
been

exceed

$5,000,000,000 worth of securi-

the fundamentals. The
catastrophe
that
the
world
has
so

covers

com¬

the Treasury to

easy

report

"The War Powers Act of 1942
gives the Treasury the power to
sell directly to the Federal Re¬

this

policies which give these
buyers of Government bonds con¬
fidence.

committee

securities

money it has

Treasury at all times

a

:•,

ties at any one time.

securities to

insurance

over

serious

this

of

safeguard in providing that when
the

inflation

;

money

the

whether such

funds.

dollars

of

which

costs

the few
might be:

in

the very small com¬
missions which a buyer of securi¬

ties pays.

To say that these

substantial,
dealer

is

sums

Government

in

are

untrue.

A

'

securities

ordinarily gets a commission of
1/32 of 1%, and in a great many
it is less than that, particu¬
larly at times when the Federal
cases

Reserve buys which ought to be at
times

Importance of Freedom in World

•xxfxx7
In
stand

do

field

the

at

not

Trade

-

the

of

same

think

x1

■

economics

that

crossroads.
a

sound

-

*

we

when the market is weak
and when it is profitable to make

purchases.
fall

The commission would
the seller.

on

To center the continuance of

I

com¬

power 6f this nature

on

an

petition between individuals, be¬
tween groups of people or be¬

ment

tween nations has lost its

sound national finances is

impor¬

tance and must be abandoned.

On

financing

over

of

Judiciary Committee

is

necessary for the
mobilization of the human
material

world.
must

But

try

resources

more

change
the

of
the

nations,

the

these

and

services

and

between

to make it possible

to avoid destructive conflicts.

and has become
its

various

ex¬

so

The

much in size

integrated and
parts so interdepend¬
so

to

the

only

by

and

the

was

not

Committee

on

Banking and Currency which

we

goods

world has shrunk

referred

for

nations
as

considered

ever

economic activities and for the

within

the

point out also that this matter

Was

forms

than

to find such

of

while

a gross
I should like

distortion of values.
to

freedom

a

argu¬

fees

neglecting the great principle of

the contrary, I am fully convinced
that the largest possible measure

ent that the international aspects
Our problems are, as you will of economic life must have the
all have noticed, in the main not. foremost place in our thinking
and working.
...

essentially

The

allowed, for the period of the
war, the Reserve System to buy
securities directly from the Treas¬

todianship of the Reserve System
may be thought of as trust funds.
They are the country's banking

from Great Britain

and

and

which
operations,

System

ernment

with

ail for the full utilization

its

Act,

.

borrowing directly from the cen¬
: bank
was
the
mechanism
used in France and Germany in
the great inflation in those coun¬
tries in the- early 1920's.
It has
proved itself historically a very
dangerous mechanism,

to provide that the

open market/'
They could not be
forced to take Government
paper
direct from the Treasury.

an

Sweden

What

permitting the Governprint greenbacks and
that way. The
procedure of the Government's
expenses

'

amended

was

:

Sweden has

truth.

Reserve

Federal

the

from

to

ment

every

impression

an

Federal

relates 4o open market

k

'Not

••'xxy Vx x; 1

in

sign indicating - that world; trade
is stirring anew.
.
Has

for

tral

no

.'.H.x;-/iiix: 4 x. x

collateral

as

directly

row

Reserve -System, it is in fact Very
much like

ernment bonds.

and

j leather
f

economy.

To

export figures

securities

pro¬

of Govern¬

use

paying its

commodities, hard to handle and

the

duty to do its part in re¬

kronor.

million

825

these

ment

This

partly by technical

Federal Reserve notes, and partly
by. concentrating power in the
Reserve Board to purchase Gov¬

been

Sweden is. of course, mindful of_ ^ediate export.® from Sweden of
its obligations in regard to relief! foodstuffs, textiles and clothing,
and reconstruction and in general

period 1936-1940 Sweden had an
import surplus of roughly 350
million kronor and in the single
year of 1944 a similar surplus of

done

visions to free the

full

facilities.

future./

our* whole

to

means

economy will appear quite clearly
from the fact that in the five-year

emergency:

buy Government securities.
was

But both peat and wood are bulky

purposes.: some ; have
established with a view to

hampered

;

war

(Continued from page 3004)

legislation, the^ / If the Treasury can short-cir¬
act greatly increased the power of cuit these wise checks on its oper¬
the Federal Reserve
System to ations through the power to bor¬

ceding

struction

enabling a speedy resumption of
trade that would otherwise be

■

Sweden's Contribution to
Rehabilitation

that

What

of

has

goods,

Consequently,

ended, "Sweden' has
built up a tremendous export sur¬
plus and the trend is continuing.
The Swedish Business Cycle Re¬
search Institute has recently esti¬
mated that by.May, 1946, that is
in one year after V-E Day, ex¬
ports will be in excess of imports
by at least one billion kronor.

sumption went

,

of

exchange.

Europe

own

humanitarian

British. Jsles, and neighbor
countries like Finland and Nor-

also

in

all-out drive for help to starving

In

the

to see restored.

free

in the seven months since the

import

for instance in South America,

.way.

,

bought

concentrated

Sweden's

from which

with other countries

a

being the efforts

Europe, regardless
nationality.
"

trade

in her

time

the

supply, but not yet in a posi¬
tion to pay in return with goods

of

much
sold, and in order to pay the

export

by

Swedish-Swiss; Commission
the responsibility of the

children

difference Sweden had to achieve
an

out

it

countries, hungry for every kind

trying to combat the rising tide
disease.
The last few weeks
action has been taken to sfart an

States more than twice as
.as

carried

was

inter¬
1942-43

made

of

of

Sweden bought from the United

,

in

large Swedish Red Cross
hospitals with complete person¬
nel and medical equipment are

By

States has become three times as

:

great

several

results

What

the
work

and

Swedish Government).

States,
most
1935,

1938 and 1939
Swedish purchases in the United
it

Holland,

relief

1944

and

have

in many fold^

(where

national

the principle 'of the
nation.
Signed in

still

is

did

,

Czechoslovakia

Fran ce.

Sweden

treaty with the United

a

-

Active relief work, has been and

-.

,

the first country to sign such

was

being

gradually

recover,

'30s.

early

the

are now, as

credits

possible for Sweden to ship nor¬
mal Swedish export goods to these

have

Swedish
they

the

of

expense

col¬

Inflationary Danger in Federal
Borrowing From Reserve Banks

Simultaneously,
the
various
or
Governmeiit-un-

Government

derwritten

rehabilitated

and

Government and

example of what Sweden
does like, I'll cite the reciprocal
trade agreements initiated by the
American ex-Secretary of State
Hull

for

\: is still being carried ou|
other / countries
like; .

.

an

Cordell

the

final

They

Germany.

cared

1 still remain.

Favors Reciprocal Trade

-V. ;/•.x

.

at

taste, y and

benefit both sides."
iv f f

of

and

camps

before the

even

been

skills,
to
achieve that we need the highest
possible rate of employment. To
be of lasting value, all foreign
trade, like private trade, must
and

horror

lapse

people, based on their own re¬
education

Belsen

bruck,

'

sources

than 30,000 men and women
evacuated
from
Ravens-

more

rationing ,of, the same products for
the Swedes themselvesr'
i
■

or

largest recipients of Swed¬

each of the annual wartime trade

Were maintained.

•X,

•"iV,

neighbors and fo other European

Commercial credits, totalling 240,*
000,000 kronor,- granted to Ger¬

•

:y;v''yxx<xxx ,vxxxx: ':X/xyxxX;./xx:xs :xx

committee
matters

exercise
the

best
and

competent

informed
best

in

able

judgment

,

is"
to

-

on*

highly technical problems.

I question

of

seriously the wisdom
continuing
this
particular

power

even

months

in

for

another

six

the

present inflation conditions of the country.
If
ever we are to
get off the shiftmg

ary

sands

tainly

of

loose

now,

fiscal policv,

when

the

cer¬

nation

is"

flooded with money, is the time
to do it.

x

•

'■;;

•

FINANCIAL CHRONICLE

THE COMMERCIAL &

3038

Mr.

trouble,
have

Conquer Fear and Have Industrial Peace

each other

over.

ion.

Unrest

Basic Causes, of Labor

•

Lieuten¬ i That does not, however, prevent
ant
Wigle drove
the Germans me- from' discussing what I con¬
from room to room of the first sider some of the basic causes: of
house, then into the second, and our present unrest, nor to suggest
finally into the last house. There what I think should be done about
the 36 paratroopers took refuge them. It is my firm belief that the
in the cellar. Well in advance of fear
complex, more than any other
his men, Lieutenant Wigle started
factor, is responsible for our pres¬
down
the
cellar
steps, calling ent. unrest.. Workers are fearful
upon the trapped Germans to sur¬
that they will lose their jobs or
render.
He was answered by a their
homes, or that if they do
hail' of fire which
severed his find
jobs they will not pay enough
spine and paralyzed his legs. Ly¬ adequately to
feed, house and
ing on the cellar steps, his carbine clothe them.
Returning veterans
still on the enemy, the Lieuten¬ are fearful that
they will not get
ant called upon his men to stay
jobs. They, too, want homes. They
clear of German fire, and throw want to
marry and raise families.
Still leading his men,

grenades into the basement. The
men
refrained from obeying his
command for fear the grenades
might kill
him.
Instead they
dragged him up the steps, then
completed the capture of the en¬

But

rational

men

men,

of

their

readjustment to civilian
pursuits. Management is fearful
because it doubts labor's ability

speedy

doubt

gain nothing, by inspir¬
ing the.passions within men. '
;
The art: of living together in
peace and' harmony is the most
we-

difficult

of all

If

arts.

you

highest

It rises out of the

of all the arts.

of

love

his

for

man

fellowmen.

We all know the message that was

detachment. Lieutenant or willingness so to maintain or sung to us in the first hour of
Christmas.
It was a message of
shook hands with all his increase its productivity as to en¬
assurance
which marked out' for
before being carried away
able them properly to operate. If
us the path we must follow if we
for treatment. He died on the way.
we
could
but
eliminate
these
Would have peace. The promise
I have told you about Lieuten¬
fears, the industrial strife which then and the
promise now is that
ant Wigle for the sole purpose of surrounds
us
would
disappear.
of "peace on earth to men of
good
pointing out that he possessed There is one simple answer to it..
will."
The
art
of living together
two attributes which the Ameri¬
It was given on March 4, 1933, at
and
therefore
the
art
of
democ¬
can
people must recapture if we a time when the horizon was
racy
itself is an art which can
are
successfully to surmount the
much darker than it is today. That
only be perfected by men of good
difficult problems of reconversion.
is, that the American people must will and men who wish to be men
Those
were
courage
and faith. be
taught the lesson that "we have of
good will.
Lieutenant Wigle was
unafraid.
nothing to fear except fear itself."
The "Public Good" Paramount
So
deep was his faith in our
Mr.
Chairman, I
related the
American democracy and econ¬
But, enterprise of all kinds can
story of Lt. Wigle because I want
not divorce itself from the public
omy that he gave his life that they
to believe that although he died,
welfare or the common good. En¬
might be preserved.
he is not dead. If he is dead, then
During
the
war
practically
terprise of all kinds exists for,
you and I are faithless to the trust
and
must
exist for,
everyone in America had courage
the public
he handed on to us. The part he

Wigle
men

When confronted with

faith.

dangerous foreign foes we

closed

courageously proceeded
them.
We never

ranks and

overwhelm

to

doubted, we never faltered, even
during the dark days of Bataan
and Corregidor. We had faith in

did not end
fers

as

he died.

The

scoff.

may

served

the cause he

and

played

memories shortened

The scof¬

welfare

the

like

the

or

to their own

bit

a

"the

phrase

more

than

good.

common

with good" because I think it

men

array

beyond

of facts

question

to

that

have

prove

have full

production of goods and
services if our government, or the
common
good} is to remain sol¬
vent. But you have heard of those

to

if

I

to

recount to

I

of what

we

neces¬

}3'I

down

and

democracy

our

our

here at home.

economy

Frankness*
however,
compels
to say that since the war's
end, there has been more of a
me

may

But.

forget.

We

alarm, for loud shouting, for in¬
flammatory speeches.
It is the
hour for men to think soberly and

does

calmly of the problems we have

labor

must

you, because'
had the very

were' the!

disastrous

of

than

with; you a

the;

was

I

war.

want

to*

thought which'

impressed
know

me..
I
happened
toWashington a man1 who^

in

in"

of the most : difficult;
places during those 'years,, a place-

saf

one

where; much; of

by. Detroit swirled,
;"There:,

the

currents; of

arounct him.

u

Ahei day.T'he
me, .'"when * the: man. who:
was

?:

told:'
con-;

structed many of the great build-:

ings of Detroit

t

Istandard of living.

came

to.

me

to ask;

We talk much 'for: a :clean .shirt.. He wanted a
our
standard of living in clean shirt so he could
get a chance:
lour country and perhaps we- may toi; drive an
automobile back to»
;be justly proud of it when we (Detroit. He had not eaten in two;
iabout

jcompare it with that in some other idays.
^countries.r But the cold facts

re¬

hadv slept in

He

an

aban¬

doned automobile*; He cried as he>

lating to housing, the cold/ factstold, of walking down: Pennsyl-n
relating to nutrition, the cold facts vania Avenue and: of how herelating to the minimum of edu¬ looked at the Capitol" dome and'
cational opportunities for' many
asked
whether
it
was.
erected
of our fellowmen may make us there to establish the kind of a
ask ourselves just how much pride
life he and others were then hav-1
,

we

have

should

in

our

accom¬

'

plishment.
{,
On Sept. 6, the President

.

[who

sented to the Congress a program

[through which these objectives of
full production and full employ¬
ment might be attained.
He'rec¬

that

ognized

production

would not solve the

ing to live in the United States.
was the merchant prince
came in another morning to;

IS: "There

pre¬

alone

of how his millions had

tell

per¬

night and how he was:
bankrupt and in debt and whollyished

over

dependent
his

upon

charity

the

There' were

friends.

of-

college;

problem, but

professors who wanted only a
that the purchasing power of the clerical
job in the government.people required strengthening if There were men by the scores andthey were to consume the prod¬ hundreds who began by asking
ucts of our industries.
Therefore, for food and then returned to de¬
he urged amendments to the Fair mand food.
*
"
Labor Standards
Act, by which I
"One night," my friend con¬
-

[those in low income groups could
be assured of sufficient income to

enable
chases.

them

to

make

He urged

such

pur¬

the adoption of

legislation by which through Gov¬
ernment planning, it will be pos¬
sible to assure full employment.

common

V

The

Administration

has

pre¬

But I

am

interested in full

em¬

ployment and full production for
but I- think an even more
important reason.
that the objectives of collective
Every man has within himself,
bargaining cannot be limited to
'until it is stifled and destroyed,
isolated points of. conflict within
and

to

thereafter.," Those

leave

as you aref and must be,
Interested in full production be¬

in the fields- of management

man

recall

Detroit you

earthquake

"the public
pared and will launch a program
welfare."
The common good is
must try to live the belief that
for
housing.- The President has
like unto the body of man, the
he died that other men might be
our ability to carry on.Never in
whole body made up of various [just recently urged the Congress
free."
that it protect the public health.
history has a peaceful nation so
The war is over. We have had parts. Management and labor are These are
but a few of the meas¬
quickly or so efficiently mar¬
our horrible social
upheaval, and like unto the hands of the body. ures
which
the
President
has
shalled its industrial and military
If there is a wound in those hands,
now we are enduring the
result¬
urged as essential to the National
strength. Never in history have
the body not only has every right
ant and lesser shocks. The story
welfare. Through the support of
two
military
nations
been
so
to know every fact related to that
is like that of the earth, tortured
thoroughly and abjectly defeated
[those in this country with underwound,
it
has
also
the
obligation
by conflict and gasses and then
as were our enemies. Having thus
of life itself to know every fact. !standing^ of and appreciation, for
broken by a tremendous upheaval
the social needs of the people,
demonstrated our ability to de¬
If it does not, the- body may die,
of
nature.
We tremble
as
the
'this program can and will be en¬
fend our democracy and our econ¬
and inevitably it will die.
;
*
earth
quakes.
We
continue to
acted
by the Congress
of the
omy in the far stretches of the
I. am
interested
in collective
tremble in the days that follow as
United States.• j 7
world, I do not- believe that the
the lesser shocks try our souls. bargaining, as Lam sure you are
American; people
intend to let
j Opportunity for Personality
It is not the time for cries of and as I am sure every,intelligent
shadows

in

more

to

of the desire to improve our

\f:

of another kind' of shock,"
another" earthquake' which, was

am,

cause

being

must not fail.

we

would

and

governing

•ourselves,* of ourselves and
'ourselves and for ourselves. ;

expresses

the phrase

of

us

Lieuten¬

now

years

Our obliga¬

democracy compels

the k methods

fseek

I

all desire

to

tion

are

trying experience of knowing the:
facts, the hours from 1929 to 1932':

sity of producing wealth to main¬
tain' our solvency.
We are going
'to have full employment and full

Industry of all kinds.

the torch

did

as

We

And

here

you- the

private debts and the

accounting.;

The Depression Years

story about our national and local
•and

am

successors

.Wigle.

tried;

could be added here tonight
were

rendered

our

ant

facts and I do not think anything
more

management and labor1
Tomorrow, we will'

We will have passed on

must

we

of

1945

trustees.

are

men

emy

and

field

with real faith, production. We must have it and
in the inevitable victory for demo¬ we can only hope that we can
cratic processes, will know that attain these ends through developin. the hours of uncertainty and jment of the family spirit within

judgment and

will'
Istudy the development of our edu¬
cational organizations and notice
the constantly increasing, interest
in the social: sciences, you will be
impressed I am sure, with how
men
are
struggling to discover
the methods through which men
may live together.. But this is not
a science.
It is beyond* the realms
They are surprised and apprehen¬ of science. It is an
art, the most
sive on returning to this country
difficult and therefore the
to be faced with doubt about

Chairman, I could
this meeting an

brought to

immense

equally urged from the other side power to encourage and to induce
(Continued from page 3014)
I
publicly denounce what men to put their faith in collective
vanced up the bare, rocky slope. that
Twice they were driven back by they call irresponsible union lead¬ bargaining. But in these hours of
I have consistently re¬ uncertainty and doubt, perhaps
small arms fire.
On the second ership.
fused the demands
of each.
In there are men without sufficient
attempt the platoon leader be¬
in
their
fellowmen
and
so
far
as the Department
of La¬ faith
came a casualty. Lieutenant Wigle
faith in democracy to submit their
volunteered to command the men bor deals with the question of
cases to collective bargaining.
We
in a third attempt.
Armed with conciliation, mediation and arbi¬
q carbine
he led the platoon up tration of disputes,. I do not in¬ might abandon reason, ourselves,
and;
them.
We
denounce
might
the' slope.
Scaling the walls in tend to destroy its effectiveness
front of them, he drew the en¬ by yielding to the insistence of parade them in scorn in the high¬
either side.
ways and byways of public opin¬
emy's fire, while his- men helped

Thursday, December 20,

be,

■

tinued, "after battling against that
kind of a flood for twelve sue-,

hours, a light.dawned for,

cessive

Every man who came to my.
desk, rich man and poor, man, in-!
sisted
that
the
only
tiling, he

me.

world

from, this

for

asked

was.

security for himself and for his
family.
Suddenly it dawned on

the story of how little- secur¬
found in bank accounts,
bonds, in.-ownership

me,

ity

was

in stocks and

in ownership of farms*
security to be found,
there. There was. only, one place
where security could be; found
and it was entirely.obvious. ..Se¬
of industry,

There

was no

curity,:! in
only

can

any

be

fellowman
measure

and
!

*

is

limit your

thought in
to me after

secure.

-

The

security."'

.

-v

that: story and the;

it seemed so obvious,
I had heard it',. I could,
from the impression it
We cannot: find- secur-;

not escape
me.

on

also

of his security will bound,

Even though

left

society of people,;
when your,

found

ity behind the walls we erect be-'
immediately with us and of the
the desire to produce.
there
will; be
nowalls,
It is the cause
sense of fear and more of a loss
Certainly, collective
goals one year and two years and the family.
desire to express his personality. which
are
high [ enough. *. They[
of faith than we had even during
five years ahead.
It is the hour 'bargaining must deal firstly with We know
it, in greater or less would be, but Maginot lines which,
the dire months of early 1942. We
for
reasoned
judgment and for the questions of emergency, but
are
in the midst of a period of
'degree, in our earlier-years. The would fail us when* we most need,
the ultimate objective of collec¬
men with courage enough to have
farmer loves to. grow more and them.
We can, if we will, find',
industrial strife. I do not attempt
faith that reasoned judgment will tive bargaining must be .to estab¬
finer corn and wheat and fruit. security through developing more
to minimize is seriousness.
It is
lish greater understanding within
prevail.
The wage earner in the factory and
more
of the family, spirit'
ugly. If prolonged it will dan¬
We must counsel together. We the industrial families and to de¬
industry and more
and,'
loves to produce better and better within
gerously imperil our reconversion must
organize ourselves to calm velop and maintain more of the
to peacetime production.
things.
In government, yes • in more of charity for our fellow-;
Strikes the fears. We must revive the
family
spirit
within
industry.
men.
are always costly. They are
government,
the V workers* in
costly
understanding
cannot be
peaceful processes of society. We That
We have finished: one. phase of
to labor, to management and to
greater and less degree, are striv¬
must
get
the
productive lines reached through efforts to conceal
the public. Management and labor
ing constantly to do a better and the war,; or the great social up-'
started again.
And as we' estab¬ facts and information which are
heaval. We must assume our obli¬
,

.

!

and

the

Government

responsibility of using
sonable

effort

We must

to

in

seek

them.

that
out

effort
the

that

so
we

basic

causes

It is my duty, under the

law, to

behind them.
'

minimize

to

the

not, however, become

absorbed
fail

have

every rea¬

'

foster and protect the welfare of
the

wage

earners

of

the

United

States.

As a part of that task,
charged with the responsi¬
bility of furnishing the services of
I

am

better job.
;
"
within the
If we are sincerely interested,
all have individ¬
ual rights, rights which are nat¬ in our standard of living; we must
during the most difficult hours,, ural rights and in- those matters understand that living itself is
we
are unable to
induce men to we have every right to insist, on expression of personality and that
join in the effort to restore calm living with ourselves and retain¬ when through our selfishness, oi
and
some
degree of order,' we ing within ourselves the informa¬ our mistakes of judgment, we pre¬
must assume just-as much author¬ tion which affects us only. But in vent full opportunity for employ¬
ity, and only as much authority, the fields where every right we ment and full opportunity for ex¬
as we need to compel order.
We have is associated with the rights pression of personality, we are
must, in short, establish a. quiet, of. our fellowmen, we cannot in¬ destroying the spirit and the souls

lish

firm

a

zone

I

in

And

industrial

disputes.

Constantly I
to

am being urged' by
assist them in their dis¬

pute by publicly denouncing what
they term to be selfish or stub¬
born

management.

I

have




been

a

we

nerve-wracked

have, throughout

believed

tration

some

which

of

can

as

my

world.

sist

lifetime,

our

collective bargaining.

in

long

as

common

family.

we

conciliation, mediation and arbi¬
in

line

must begin to rebuild the
world in which we must live. If,

hold,

on

Yes,

interest

fellowmen

I live, I want to

ating

to

of

the

all

establish

understanding

involved.

facts

'

because

collective

bargaining is
From its very
Administration

democracy at work.
irst

has

hours,
done

this

everything

within

its

'We have with
mediate
summed

the im¬
which
are
phrase "full
Without much
us

problems
up
in the

employment."

be

now,

'

for us

,
; " .!
the living,,, rather,,

dedicated, here to the un¬
work which they who

finished

fought have thus far so nobly ad¬
vanced. It is rather-for us to be
here dedicated to-the great task
remaining before- us, that from
these honored dead we take in¬
,

men.

We

are

destroying the

creased devotion to

which they gave
ure

their welfare

and

"It is

to

the cause for,
their full meas¬
devotion—that
we here
common good.
Management and the leaders of highly resolve, that these dead
shall not have died in vain—that|
labor organizations
are trustees
this nation; under God, shall.have*
for the common good. Just as I
a new birth of freedom
and that'
am, by result of various circum¬
stances, your public employee as government of the ^eoole, by the^
people, for the people shall not
Secretary of Labor; and therefore
perish from the
your trustee; the leaders in the
of

unlimited license-to affect

without at the same time cooper¬

have faith in collective bargaining

gations.

we

of

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4448

Volume 162

Modem Railroad Communication
(Continued from page 3016)

interest¬

Lines may disclose some
.

ing information which will point
toward the answer to this ques¬
tion.

that you

order

In

may ex¬

developed ana
conclusions, let us
imagine; if you, will, that we are
about to start out on one, of these
experimental journeys.
We will
amine the trends so

form your own

imaginary run on the
"Burlington main line from Chi¬
cago to Denver, This is all typical
prairie country starting at 600 feet
'above sea level at Chicago and
this

make

^rising to

mile above sea level at

a

Denver with dips in the Mississippi
'and Missouri River valleys. East

River it is sub¬

the, Missouri

of

stantially all double track; west

of

is,mostly single track, a
is equipped
With centralized traffic control,
the siding switches with their ac¬
companying signals being oper¬

there

it

major portion of which

point.
This
eliminates the use of train orders
'at
the ' intermediate
stations,- it
from

ated

central

a

in meeting
■Or passing
other trains, and in¬
creases the-capacity of the single
track by as much as 75%.
avoids delay to trains

;

Let

this

that

us assume

train

that

we are

Yard

Departure

Chicago

we

at the

where

going

are

to

ward

other, we notice that the
trainmem exchange signals each
each

indicating that he has checked the
condition of
that

train

right.

that other train had

phone
stead

and

other

is all

the

everything

If

radio tele¬

a

we could talk to him in¬
of having to rely on hand

signals. It certainly would be bet¬
ter, especially if there was any¬
thing wrong to be reported. Another hour passes and it looks like
we
might be headed for some
trouble. Sparks! have
been ob¬
served coming from 1 the running
gear of the eighth car ahead of us.
There is only one thing to do, stop
the

train

find

and

what ;is

out

wrong. Unless one of the crew on
the engine happens to be looking
back

at this particular time, the
possibility of conveying this in¬
formation to the engineer by hand
signals is remote. The only al¬

train has a 5400 H P. Diesel elec¬

locomotive

/will

pulling it, which
through to Denver—over

run

thousand

a

after two

distant—and

miles

three hours for serv¬

or

icing and refueling, will be ready
to make the trip back to Chicago.
It1 is
equipped with radio and
there is similar equipment in the
caboose, so that communication by
telephone over these radio facili¬
ties may be had between the two
•

in

valve

the

which,' under -certain
circumstances, may have and often

does have
the

effect of

the

train

occur,

in

If

two.

will

we

breaking
should

that

delayed,

be

and

have to set out and further

shock

damage to the lading.
Fortunately in this instance, we
have the radio telephone, so the
conductor talks to the engineer,
explains the situation and directs
him to bring the train to a stop.
The
flagman immediately goes
back to protect the rear end of
some

the train and the

conductor pro¬
of the .trouble.

ends of the train at any time. Be¬

ceeds to the

tween the locomotive and caboose

It proves to be a minor defect; he

there

returns to

125

are

carsJwith

a

gross

weight of 6,500 tons and last but
not least, a distance of 6,000 feet.
Before our train ean proceeu the

•.

airbrakes

be

must

train

the

line

First,

tested.

must

be

properly
charged. The engineer is in no
^position to determine that the air
line has been* cut through to the

scene

the cabopse, so informs
the engineer, the flagman is called
,

in and when he is aboard the en¬

gineer is told to proceed. All this
has

taken

minutes.

20

It

Would

have taken at least twice that long
without the radio telephone and if

the

train

had

in

fact

broken

in

two, the delay could have been

as

•caboose.'To establish this ordinar¬

much

ily requires the trainmen to walk

servative, however, and say that
70 minutes delay was avoided.

considerable

a

in¬

and

distance

form the engineer by hand signals
when
the
proper
pressure
has
reached the

rear

end of the train.

It is the conductor's responsibility
to

this

that

see

information

is

/conveyed to the engineer. In ac•eomplishing this, delays varying
in length are not uncommon, par¬
ticularly
in
bad
weather. The
radio

telephone avoids this delay.

•Next, the engineer must be told
to set the brakes for inspection
"then to release them for the final

inspection. This likewise, ordi¬
narily must be done by hand sig¬
naling and involves considerable
delay in traveling back and forth,
•all of which is avoided by the
radio
telephone. These prelim¬
inaries having been attended to
we are finally ready to move and
the

conductor communicates

that

;fact to the engineer over the radio
telephone instead of signaling by
hand for him to proceed. >

*

We are just starting to move out
.of our initial terminal and accord¬
ing to the best calculations, have

,

avoided

minutes

45

of

detention

time through the use of the radio
telephone.
We
look
at
our
watches; it is 1:00 P.M. As we get
under way and head out on the
'main track, we must move at re¬
stricted speed through the turnout
until the whole train is on the

the*caboose

main track. As
main

the

ductor

track

switch,

passes

the

con¬

radio telephones that fact

the

to

engineer who then opens
throttle, thus attaining maxi¬

the

speed somewhat earlier than
ordinarily would be possible. Let

two hours. Let us be con¬

as

Al 5:00 P.M.

ceiving

yard

we

pull into the

be conservative and mark but

five minutes

delay avoided

on

this

account.

re¬

at

Galesburg—162
Chicago. Galesburg is
the hub of Burlington operations
mile,

from

of

east

Missuri

the

River.

Here

main lines, from St. Joseph, Kan¬

City,
St.
Louis, Hannibal,
Quincy, Peoria, the Southern Illi¬
Fields, the tri-cities, Moline, Rock Island and Davenport,
sas

nois Coal
and the

twin-cities, St. Paul and
Minneapolis, intersect the main
line over which we are traveling.
It will
be necessary to change
and break up our train at
point, setting out some cars
and picking up others. To facili¬
crews

this

tate this process
the
terminal has two large

tarder

the

Yards,

other

These

one

for

Galesburg
Hump Refor eastbound,

westbound

traffic.

yards where the cars
by force of gravity from an
.are

move

elevation

to
the
proper
track,
through switches and retarding or
braking devices controlled from a
central point. We notice that the
engines" in these Hump yards are
equipped with telephone com¬

munication

ments

by
a

can

so

that

their

move¬

be directed at all times

two Humpmasters, This is

slightly different form of

munication
are

using

from

on our

that

com¬

which

we

trains. It is the

so-called earlier or inductive sys¬
tem. Under this method the

voice,

instead of passing through the air
all the way, is
the

rails

on

transmitted through
which

the

mum

us

moves

and

an

Two

long

hours

freight

Radio Telephone

go by. We meet a
train moving east¬




and servicing.

ourselves informed as to the prog¬
of his movements. This might'

in

important

inspection
developed
anything
wliich might delay the prompt re¬
the

of

turn

locomotive

to

our

train.

^

At. 8:00 'P.M. our

train is
assembled and we are ready to
move again. We still have a total
Of
125
cars
and
approximately

the radio telephone again

process

minutes delay. We also
avoid another five minutes delay

avoids 45

engine

track

is

While serviceable only for

limited

areas

where

the rail

bonded and the "paralleling an¬

tenna

of

can

be

As

'

provided, this method

communication

has

proved to

Iowa

we move across

that

serve

in

work is

considerable
The

We

648

change

miles

the

from

train

movement

crossover

sitates

a

dark.

The

this

so

chain.

the

,

4.

VJ.

neces¬

however,

the

radio

ore already tired out from our

PeiW®r tnp, so perhaps all that it
ls
?.essary to say is that our
operating^people, after these many

be

while the

conductor

various

is

able

telephone.

ceed without further

incident, ar¬
riving in the receiving yard at
Lincoln, 551 miles from Chicago,
at 11:30 A.M.

Lincoln is
the

for

the

a

Missouri

lines

River

west

with

of

main

of the

use

our

engine is

being fueled and serviced at the
a

mile distant.

Centralized Traffic Control
As

we

are

about

to

enter

the

equipped with central¬
control, we decide to
go to the dispatcher's office and

territory

ized traffic

take

a

while,

look at the master machine
our

train is

a

go
re-

ately and the

of much

In; all of
the

Value of Radio Telephone
„

*.

il

U

J

"

1

'

•

the

to

_.J

•

.

_

.1

_

.

..

question We asked our¬
the beginning, I wotild

selves at

make

these

observations:

first,
the Cost of
equipping
a
freight train of this kind with
radio telephone between head and
of

a

is

less

than

1%

Diesel electric

of the

cost

freight loco¬

cost of maintain¬

ing radio telephone service does
not differ substantially from the
maintaining other conven¬
tional communication equipment.
Second, any delay avoided does

Cost -of

not

operate to reduce the

trans¬

j

as to

Mlu.

merits^
It
414V1 AlO«
At

replace
1

1

does
VtU wU

of the

any
J

t

»

time tested signals or other
appli¬
ances now in
service, nor does its 1
use relieve any
employee from the
strict observance of
the estab¬
lished rules governing train move¬
~

-

_

_

ments Which have been the
uct of so many years of

prod¬

experi¬

and

ence

study, and which have

made railroad property the safest
place in the world for one to be.
The radio telephone must for

the present be regarded as

tool

which

has

just

to

that

a

been

available for railroad

problems

being put to¬ minds

own
V V* 44

or

m!

A

payment and will continue to be
paid for actual mileage made so
that in operations of this charac¬
ter, the time element is not a con¬
trolling factor.
When the operator at Red Oak
gave us that signal that something
was

be

hot supplant

4

plication

dragging, I suppose a question
immediately raised in your

an

solely
on its
«/
v
'*vu

portation payroll. The train and
enginemen are on a dual basis of

was

telephone

as

to

one

To
1/ assist
CluOJly
J UU in
All ailiVing
UUA
you
arriving €11
at J
your
decision as to the proper answer

experimental work
has
been
added facility and
judged and utilized

our

radio

treated

motive and the

this work. Meantime

as

.

constantly recurring

are

and Billings intersecting the main
line over which We are

burg, a hump retarder yard with
the pusher and trimmer engines
equipped with carrier telephone
communication greatly .facilitates

and

once

man was taken care
sooner than would otherwise have been possible,

rear

moving.

at

Set an ambulance started immedi-

lines from St. Louis, Kansas City,
St. Joseph,
Omaha, Sioux City

Our train must be broken up and
reassembled here. As at Gales¬

engine by radio telephone to
°ver there

of the

also

sort of cross-roads

Burlington

,

,

Pacific

at

operations, we do
occasionally some unusual

find

from day to day.

Junction. 475 miles from Chicago,
leaving thereat 8:30 A.M. We pro¬

In addition to the ordinary rouw.-VA UAilW* J
1 VW

tine of yard

,

instances

instances

delay has been

crews

1

radio telephone were founded on
as observed on actual

these

_

change

Radio Use in Railroad Yards
^

Chicago, leaving there suit several cars of lumber were
/
saved which otherwise
would
further
incident, we have been totally destroyed. Then
proceed to Denver, 1,034 miles there was the case where a troop
from
Chicago, arriving at 1:00 train was moving through the far
P.M. Allowing for the change in south side of Chicago for delivery
time our trip has consumed 49 to another line and one of the
hours and the radio telephone has soldiers fell from
a
third tier
avoided
delays
aggregating
4 berth breaking Kis arm. As the enhours and 20 minutes. Although
was equipped with radio telethis was an imaginary trip, all of phone, the trainmen were able to

way.

'

ltselt'

to

test runs. These and other similar

:

f §
J*10*® than
the, ®ost 9* the locomotive

moves

delay

We

^?10«1fu0n y

1Q

real events

avoided.

.?/ equipping a Diesel
electric switching locomotive with

men

made secure and after 30 minutes
At least 20 minutes

1

Without

signal has been given. Again we
faced with the necessity of
stopping the train and again the
radio telephone proves its utility.
The stop is made without diffi¬
culty, a" dragging brake beam is
our

experience, con-

applying the

cars

7:30 A.M.

at

are

on

a

miles from

the depot at Red Oak at
the operator signals to
that something is
dragging. .We have noticed the op¬
erators
giving these signals" all
along the line but this is the first
time anything other than a clear

again

a,9

that the productivity of a
jS<i! electric switch locomotive
an^ the crew operafrng it. Is increased from 5 to 6% by the apE^ca n. °£the radio telephone,

time-

a

We change crews at Akron, 922

caboose

conductor

are

18 miles.

by his situations where the radio teleradio telephone. A radio telephone phone on yard engines is of parof the walkie-talkie type, if and i ticular value. For example, there
when they become available, wijl r was the case where a bad fire oc~
be just the thing for this sort of curred in the lumber district. The
work. We get 50 minutes delay! nearest switch engine was workhere but the conductor tells us the -tog about a mile distant from the
delay would have been an hour fire. The yardmaster, four miles
and a half if he had not had the away, learned of it, notified the

direct

7:00 A.M.

we

they

of

car

IfUlLO

that-the

so

various

missing

a

tVlJ
1/llV
Ml
Fortunately
the
break
is
only six cars ahead of the caboose

passes

our

made

moves

the

wherever

I

make a very careful
bring his separated train

to

VrA.4.C4A.4.A»

th£ train from the rear
by radio telephone instead of hav¬
ing to resort to hand signals. An¬
other, 20 minutes delay is avoided.
We change crews at Creston, 393
miles
from
Chicago and leave
our

of
the

would

and

engines,

radius of about

must

under

are

controls

there at 5:00 A.M. As

This

out.

locomotives operate.
radio
telephone
between
these

provides

might invite you to put in an
imaginary day with me on one of
these switch engines but probably
drawbar .tnese switch engines but probably

the

end

means

Set

false

backup movement in the

conductor,

Diesel

equipped
also one

throughout that portion of the
Chicago
switching
district
in
which we operate, which has a

together so that the chain can be
applied and still not 6ause further
damage by bumping into the damaged car. Also there must be no

forward

a

pull

head

must

move

stop. It develops that
us is occupied
by another train which has broken
down. The dispatcher decides to
put us over on the eastward track
so that we can get around it. This
is * a place
where only trailing
point crossovers are maintained
make

and

This

coupler

neer

a

cannot

engines

may be. We have found the serv¬
ice to be dependable and effective

consuming job under any condiparticularly so in bad
weather and at night. The engi-

the block ahead of

we

several

telephone,

yardmasters

tions but is

change crews at Ottumwa,
280 miles from Chicago and leave
there at 12:30 A.M. At a small sta¬

and

radio

switch

be replaced by a
chain so that
the car may be
moved to the nearest siding and

delay avoided in each case.

to

switch

communication

train stops for a block signal.
With
a
slippery rail we get a

We

comes

Hastings,
Chicago, leaving

our

estimate five min¬

our

principle.

same

have

we

This

at

crews

The weather continues to be very
bad. Two hours out of McCook

engineer over the radio telephone
that
the
final signal has
been
passed. We count six instances of

Ottumwa

the

on

supervis¬
ing the several districts in which

getting bad, a heavy rain and
strong side wind.
We change crews at McCook,
779 miles from Chicago and leave
there at 12:01 A.M. Mountain time.

start

of

with

there at 6:30 P.M. The weather is

of the

west

TherC

6,000

Chicago yards, which

our

operates

line to the yardmasters

beans.

tion

We

however, since May 1944,
continuously maintained a radio
telephone "experimental installa¬

these switch

out

utes

moving

have,

turnout and reach the main
track. Our departure time is 2:00

bad

this kind and

of 115 cars,

between

wayside stations.

P.M.

are

informs

and

the

mal

conductor

service

trains

ready—this

now

use

fixed station, The fixed station is
connected
through a telephone

fixed signals and nor¬
speed is resumed promptly
the

phone

on

the

utes delay. We avoid another five
minutes delay as we go through

marked by
when

in

yet found it pos¬
actual experi¬
of radio tele¬

as

carry

through the air
testing procedure avoiding 45 min¬

track

locations

is

re¬

electric

necessitating

progress

orders.

slow

ob¬

we

ments

tons. We again go

6,500 tons. First the air must be
just as was done when
leaving
Chicago
and
in
this

to

tion in

train

time it consists

new

tested

have not

we

sible

stop.
Our

having to

obviously yes, although because of
the lack of available .eqpuipment,

operate any switch in his ter*

without either of them having to

the

case

the train instead of

radio

a

sort to hand signals. The answer is

proud of his lineup when the two
trains finally get by each other

ress

rather

telephone for communication with

dispatcher shows us
positions of the moving

the

ritofy, and how the whole thing is
automatically interlocked so there
can be no
possibility of error. He
points out two opposing trains ap¬
proaching each other and is quite

period but with -our radio tele¬
phone, we find we can continue
to talk to the engineer and keep

be

been better if he had had

how

can

two miles

Ordinarily we would be quite out
of touch with them during this

antenna

wire erected along the side of the

the
vs.

distant for fueling

roundhouse

through

'

.Signaling

locomotive has gone

our

to the roundhouse some

gether. The

trains ' are constantly shown by
lighted lamps
on
his diagram
board, how by turning a knob he

as¬

turnout.

airbrakes from

the caboose

delay any cars of freight that mby
be damaged and require the re¬
placement of a drawbar or other
repairs.
There
might even
be

tric

being

the

radio tele¬

the

is

This

sembled

is

by being able to tell the engineer
when we are through the final

ternative without

may

about ready to depart/

train

our

phone is for the conductor to set

travel on has been assembled and:
now

these

Keeping Local Contacts by Radio
While

the opposite track. As the
of the two trains pass

on

cabooses

be
quite satisfactory for
Hump yard operations.

3039

use.

new

made

Its ap¬

service

will

doubtless present many and varied

and

requiring

time

much

study for their solution.

railroads

on

their

record

The

can

be

expected to work out these problems

and

to

advance
•

the
i-

whole
-

,.

^ with characteristic caution
but without undue or

whether it would have delay.

unnecessary

FINANCIAL CHRONICLE

THE COMMERCIAL &

3040

.

Thursday, December 20,. 1945
any Jack of enthusiasm so far as
conditions in the "market are coni

strength, in influencing American

Chairman of General Electric Co.

public opinion, and our effective¬
ness in dealing
with the Govern¬
ment.'.

Advocates Loan to Britain

"This, then, is what we are
shooting at. We believe that every

,

they | urging
upor*
other
countries,
have a common blood stream and
sound international economic policies, including the gradual reduc¬
any major illness must affect them
both. One cannot grow fat while tion or elimination of trade pref¬
the other starves; one cannot es-f erences, tariffs, uneconomic inter¬
differently,

the

to

exposure

cape

dangers

Britain's Difficulty Temporary

pictured Great Britain

Mr. Reed

•

industrial
temporarily in trouble,

large, experienced

a

as

company

with

to

damage

serious

debts,

plant and facilities and a pressing
The con¬

suffering

the

and

said,

com¬

must borrow capital or pres¬
sure its existing creditors to ex¬
tend more credit. He described the
pany

United States as another great en¬

for

business,
two sell
products to each

competing

terprise
but

far greater

materials

and

If

other.

we

decide

services^ between

the

the-. worldV:.•

v:

countries of

v-: d) ■!>':

remarks

Reed's

Mr.

;..;

made

the

were

on

ternational trade and finance of a

large
ness

busi¬

portion of American
and industry.

'tide her

1

over.

"The

rangement,"
it

said

Britain

forces

ar¬

"is

those

and

other countries to deal almost ex¬

clusively among themselves.

.

...

"The formation of such a bloc
not only closes the doors to the
sale of American products in that

v

but

it also forces the

crea¬

tion

of

other

blocs

economic

which in turn trade and exchange

goods largely within themselves.
A Russian bloc, a dollar bloc and

perhaps
others
would
emerge,
each endeavoring to strengthen its
position by inducing or high pres¬

suring marginal countries to leave
one bloc and join another
"This

of

means,

that

course,

governments become the dominat¬

factor in world

Regu

trade.

lation and control of exports, im¬

ports and foreign exchange is in¬
herent in the system. The interna¬
tional flow of

another

In

State

goods under these

York,

the
the

on

Dec.

13,

Mr. Reed reiterated his statement

States

United

the

leadership
cooperation and

in

sume

and

must

as¬

international

urged a closer
effective unity regard¬

more

ing foreign policies on the part of
business
organizations, Congress
and the State Department.
•
"In the past, as you know," Mr.
told the Chamber of Comr

Reed

"business has
suffered by the fact that there was
a
multiplicity of large associa¬
tions, national, State and local,
making individual pronounce¬
ments on exactly the same sub¬
jects.
I am speaking particularly
of foreign subjects, but it applies
members,

merce

"These

pronouncements
were
in such a way that it ap¬

made

peared

the

to

man

in

the street

that business does not know what

wants," he continued. "So

it

and unimportant dif¬
the
various

unnecessary

ferences i

many

between

has resulted, by and large,
complete lack of punch, ox-

groups

circumstances is not measured by

in

effectiveness, in the views of busi¬

price and quality, of
goods, but rather by artificial reg¬

ulations

resulting

political

from

considerations and a shortage of
particular; currencies. This results

..inevitably

and

total volume of world trade being
drastically reduced. We would ex¬

port less and we would import
less,, with resulting decrease in
our
employment potential. And
the
pullings and haulings that
would surely go on between these
economic

blocs, including

governmental

achieve

of

source

■ill

feeling and,
tary conflict."-

;•

tp
advantage,

short-term

would be the

special

taken

measures

irritation,

ultimately,

mili¬
V V''

Mr. Reed pointed out that if

make

the

loan,

it

the basis that will

should
serve

be

our

on

own

national interest.

"The immediate thing we seek,"
he stated, "is to remove insofar as
possible the present fiscal limita¬
tions

and

obstacles to the free
trade. We want the flow

of

,

of goods to be determined

by cus¬
tomer demand and
product values,
not by government
regulation or
decree. We want the blocked ster¬

ling

unblocked.

make it

Our

loan

would

possible for the British to

commit themselves to pay for all

future purchases from other coun¬
tries in pounds which are im¬

men

public
State

on

the

Congress,

whatever

or

opinion, the
Department,

agency

supplier
fer

to

that if any

means

or

use

of the

creditor countries pre¬
the payments for the

purchase of American goods, Brit¬
ain would pay in dollars rather
than

in

pounds.

In

addition,
,

the
—,

of

.

...

-

,




v;',
by

the

letdowii

should

the

of

is

avoid

to

those

having an interest in ex¬
ports and imports. We must have
the

Street

every

indica¬

will

year

possible

and

base,

tration

largely to task of keeping

securities.

is

itself

with

I

work.

our

know

a

great many of you haye been ap¬

proached by the United States As¬

marketing

things

the

v':':v

are

posed

Corps

and

desk in the New York office.

foreign questions. We shall set up
a
working committee on Subject
A,

important one in
economic field, and

which is

the

an

foreign

then invite

representatives of all

Resumed Inv. Business
BOSTON,

committee,

and

add

the

to

working committee
on
what
to de¬
position that would be,

get

can

the facts are,

velop
not

a

agreement

and attempt

unanimous—there

differences of opinion—but
be

be

will

would

majority.
It
would
expose
everyone
to
the
other's point of view.
From that
working committee will come a
supported

by

recommendation
be

reviewed

a

which
the

at

then

will

level

of

the

policy makers of these various
associations, again with a view to
exposing each
other's point of
view.
of

In

that

common

way

large

agreement

areas

be

cap

reached.

that

has

been

worked

out.

all

bring about
tl-l

lll+l

wt

a

greater unanimity
1

.

»

Mr. Shee¬

serving

been

Forces for

Associated

the

in

several years.
him

with

as

Man¬

of the Municipal Trading
Department is John L. Donovan.

NYSE Christmas Tree
From the outside
New

gallery of the
York Stock Exchange front¬

ing Broad

Street came recorded
Carols

Christmas
the

on

43-foot Norway

erected by the
Street

Dec.

17

as

Spruce Tree,

Exchange in Broad
week-end, was

the

over

for the Holiday
season.
This is the largest of 22
trees
which, since 1920, except

lighted

at

noon

during the
financial
with

a

war,
section

and

in

week
the

and

late

The

continue

will

carols

through this
On

have graced the
at holiday time

Christmas atmosphere.

Christmas

next, at

afternoon.

Friday. Dec. 21, a special pro¬

gram

of Christmas music will be

played at fhe b^se of the tree
the 12-piece Brass Choir of
Seventh Regiment, conducted

on

does

the

not

use

of such

,

un¬

present

make much

the

un¬

J/'

year.

prospects

that

are

competitors for the

ness,

or

least

at

one

the

busi-

of

them,

block the P
outlined above, to the

will carry the fight, to

sale,

as

gotten

available

they

first

their

over

campaign

their

in

y

to

facilities
the public in what

Pullman

the

keep

perfectly willing to let new
business go over untli after the
of

The
other

hurdle

be

turn

:

nancing which will be necessary
to complete the transfer of those
extensive properties.

have

buyers

facilities, since

Ahead

by the three-

But In all events, the railroads

occasion,

that

appear

Deal

higher courts.

v\s:i

to

the

term

most

plausible

;

manner.

-

Since

transfer will involve

this

payment of upward of $75,000,000
Market Is

Receptive

The current hiatus in new

to Pullman

offer¬

it seems

Inc., for the properties,

certain that securities of

ings is completely chargeable to* a new company in that amount
holiday spirit that has per¬
most likely will have to be under¬
vaded the Street after four years
written.
of war.
It cannot be charged to

the

Holds British Loan Unbusinesslike
(Continued from page 3015)
their current dollar receipts
out restriction.

Australia

or

India, or some

member of the

with¬

In other words, if

otherj

Empire should sell

for
the
dollars any way it wished/ With
the
dollar pool in effect, such
countr es can only use those dol¬
lars at
the pleasure of Britain,
that is, they must give Britain the
us

something and get dollars

it. such country could then use

sterling.
the agree¬
ment to indicate that the United
States will receive anything in the
nature of foreign bases, raw ma¬
terials, communications or other

dollar^ and accept

"There is nothing in

appoint¬
investment securities officer of

Rufus P. Duff has been
ed

Nations?

of the United

•

"It is the 'Chronicle's' view that

claimed

advantages

any.

the

by

proponents of the loan are greatly
outweighed by the unsoundness
and disadvantages of the proposal,
"If we must continue to help
the

British

temporarily,

let's do

.

Byrnes has issued a White Paper
containing many laudable and de¬

the

respect to
world trade. WThile recognition of
this White Paper is made by the
British, they are not signatories

better, and let's

sirable aspirations with

to

work
out
world-wide
multilateral agreements
govern¬
us

other

to

promises

work

out

"try" to help
with the

agreements

forty-eight countries of

United

Nations.

In

other

the

words,

.

the British will only

working

out

we

world
can

to- get

gets

see

our

more
own

see

settled and
way

what

a

little

we

are

in return. Fifty-five years

is much too

long."

to undertake to

it. They agree

helo

only

Duff Inv. Sec. Officer

agreements if we lend them $3,750,000,000, settle our lend-lease
account, and give them title to our
investments and materials in Bri¬
tain on a 55-year note. If it costs
this much to get the cooperation
of Britain in world trade, what
will it cost to get the cooperation
of the other forty-eight countries

concessions/'/ ./. ;v:< it by selling them our agricul¬
"In connection with the loan tural products, cotton, grain, meat,
agreement
Secretary
of
State tobacco, etc., on easy credit until

by
the ing such things as tariffs, cartels,,
by quotas and production, to be ad¬
ministered
by
an
international
Captain Francis W. Sutherland.
trade organization. But these are

included in the working docu¬
ment, for their consideration.
I
think to do it in that way wdl
1 Trt

of¬

ager

noon

have

*

dealer names until after

invest¬

resumed his

fices at 31 Milk Street.

Out of that
we

or

D.

Paul

—

ment business in Boston from

Armed

that

MASS.

Sheeline has

line

membership whatever additional
personnel seems to give it the
right balance.
:

will

Panl D. Sheeline Has

of these great associations to come

participate in the work of

Bankers

pre¬

■

in

and

common
new

sleeping
car
facilities
be
a large group of railroads
brings nearer to market the fi¬

derwriters, themselves, seem to

is once

in charge of the municipal trading

its
one

sold to

their schedules.

upset

will be required to

Joseph S. Banks has, been
from
active duty with
Air

of

man

dis¬

forego business which

the turn of the year. ;

released

S.

?

possible.

as

judge Federal Court that the Pull¬

inves¬

delivery, or holding new
securities which may be wanted in

Blyth & Co., Inc., 14 Wall St.,
York City, announces that

associated with the company

held.

Pullman

.

Of course, there are methods of
overcoming the latter obstacle,
such as making purchases for de¬

New

U.

to¬

their

preferred will be of¬

holders

Recommendation

closing their books for

to

would

Blyth
Manic. Trading Mgr.

the

securities
expedite

much

as

new

to

common

most of

that

institutional

the year and for that reason

Banks Rejoins

more

fact

the

tors

But

Lieut.

is

larger

it

ing to accomplish is the elimina¬
tion of those difficulties on these

this

the

broker

of

to

derwrite any unsubscribed portion
of the issue.
■ ■.'>■■.>■;

are

Added

and

understanding

business

the

in

t'akings for the moment.

ferred

as

The

fered

.

under-

sociates and I hope you will give
it
consideration
with
sympathy
I have said."

.

inclined to sidestep new

to

you to appre¬
I appreciate, the fact that
this great Chamber has identified
as

;

People

tions, but I do want
ciate,

expected

tired out and, as a general rule,

applica¬

you with

these

on

ward the close of last week and

ferred share for each 26 shares of

in our foreign eco¬
policy.
.."That, very briefly, is what we
are trying
to do. I am not going

among

t

(selling groups and really undertake tire task of marketing new

interest

pass

stock.

stock in the ratio of

nomic

to

on

J those whose job is to organize

sions of industry that have never
considered themselves affected by
our

up

Refining Co.

largest propositions
the list for early 1946

The company went into
regis¬

given

be

were

the

preferred

1_

broadest

.

Refining Co. involving
$25,000,000 of new debentures and
102,000 shares'of new cumulative

less

or

the

It's just about impossible to get

must have the interest of divi¬

we

■

,

Atlantic

we have a com¬
a
quorum
to look over a deal
working with other groups. I these days, according to several of
our support to

mittee

...

consideration is that projected
by

pace

with seasonal festivities.

up

job

our

fading

over

undertaking.

was

One of

that the remaining days of

tion

That is the job we

coast to coast.

■

■

secondaries, and there

Atlantic

operations,

more

was

around

there

where

sup¬

by very large numbers of
companies and individuals from
ported

are

last

welcomed

United

be

investors:'
receptive:

'';

audible complaints among un¬
derwriters with regard to the out¬
come.'

well

heavy

the

week's

We do not think they can be sep¬
arated.

Associates

that

decidedly

no

"

v;'

Considering

policy.

"If that is true, then the

sized

to remain virtually dor¬
through the balance of the

set

States

few secondary un¬

a

pected
mant

year.

uysoundness

economic

foreign

our

■,

m the ultimate opinion of business the Excelsior Savings^ Baqk, it was
tfrmsh would join with us in ef-'men which will
by
Reginal Roome.
tremendously in¬ announced
fecting as between ourselves, and crease our importance and" our President of the bank.
„

Except for

dertakings business in the under¬
writing world has come pretty
much to a standstill and is ex¬

prosperity at
direct result

that

con¬

was

-v *
'
"One of the things we are hop¬

mediately exchangeable into dol¬
"If we can do this before any
lars or other currency. It would
particular association makes its
also then be possible for Britain, own
individual study, then
we
to agree to make her instalment
can furnish them the facts
as they
payments
on
the
accumulated have been agreed
upon; the dis¬
IOU's in free exchange.
cussions and the recommendations
"This

believe

cerned.

we

'

flow

a

ness

in the

unhappily

shipped a
dollar's
abroad, has a real
seeing to it that the pol¬
icy of this Government on foreign

to domestic issues as well.

demand

and

who,.may

stake in

"We

the

something like $350,000,000 of securities were brought
to market, including several
good

worth of goods

home is going to be a
of the soundness or

recall

A total of

have

economic affairs is sound.

realize

a

mood.

and

establishment,

manufacturer,

every

to

in

are

every

We must not limit

of

Commerce

New

of

1

before

address,

of

Chamber

.

area,

railroad,

every

mercantile

never

"Part

Business and

Government

that

with this
Mr. Reed,

difficulty

utility,

only

"

duplication and
More Cooperation in

to

go

lic

need

Drive,

(that has an investment
portfolio to consider), every pub¬
company

the proposed

Brit¬
ish loan by a spokesman of the
United States Associates, which is
representative in the field of in¬
first

lend,

to

not

her existing
creditors,
chiefly
India, .Egypt,
Australia,
Ireland,
Canada and
'Argentina, for more credits to
must

Britain

ing

exchange of goods and

often happens, the

as

that

be¬

agreements

private parties or govern¬
ments,
export subsidies,
export
and import controls, , etc. All of
these, things contribute directly
and importantly to encouraging, a

need for working funds.

dition is not unusual in business,
he

cartel

national
tween

the other."

which confront

One

heavy outpouring which marked
the closing of the Victory Loan*

drug store, every insurance

corner

(Continued from page 3015)

'

.

act

and

think

cerned.

such

cooperate in
world

trade

Guy H. Simpson to Open
Firm in Greensboro
GREENSBORO, N.

C.

—

Guy

Haskette Simpson. Jr., is forming

Guy H. Simpson & Co. to engage
in

the

investment business.

firm's offices
ent

in

are

The

located at presr-

the

O'Henry Hotel.
Mr.
Simpson in the past was an of-'
ficer

of

the

First Securities Cor-

juration of Durham.

.Volume 162

Number 4448

THE COMMERCIAL

& FINANCIAL

CHRONICLE

inflation

European Experiences With Price Control
(Continued from first

page)
so¬

free, the result would be a shift¬
ing of capital and labor to them

system of private ownership
the means of production and

market

alone puts

the whole

activities to the authorities.

If the

and a corresponding fall in the
supply of the goods whose prices

the Government has fixed.

How¬

talitarian

goods

would

There is nothing automatic or
mysterious in the operation of the

which
as

market.
The only forces deter¬
mining the continually fluctuating
state of the market

it is

ever,

satisfaction

But
round

by these

value

judgments.

ultimate factor

in

striving of each

his

needs

market

the

in

is

best

tantamount to the

not

structure, but

only

the

price

profit

each

loss,

or

.should

thereby

rich and rich

men

run

it system is

essentially production

for

profits

use,

only by

the

with

the

want

to

be

can

best

tampering with

structure

.

of

the

other

lines.

to

Under

it,

into

market

a

not

manipulated

by Government in¬
terference, there prevails a ten¬
dency to expand the production of
each article to the
point at which
a further
expansion would not pay
because the price realized would
not exceed costs.
If the Govern¬
ment

fixes

certain

maximum

a

commodities

level which the
ket

would

them

and

price for

below1

unhampered

have

determined

makes

for

it

illegal to sell
the potential market
price, pro¬

at

duction

involves

loss

a

for

the

marginal producers. Those pro¬
ducing with the highest costs go
of

out

the

business

and

employ

their production facilities for the
production of other commodities,
not affected

interference

with

the price of a commodity restricts
the supply available for
consump¬
tion. This outcome is
contrary to
the

intentions

the

price

which

ceiling.

motivated

The

Govern¬

ment wanted to make it easier for

people to obtain
cerned.

But

its

the

article

intervention

re¬

in shrinking of the
supply
produced and offered for sale.
If

this

unpleasant

experience

does not teach the authorities that

price control is futile and
policy would be to

that the

best

from

endeavors" to

many

prices,
add

it

several

fix

necessary
to
first measure, restrict¬

consumers'

the

control

becomes

to the

ing merely the price of
measures.

refrain

one

or

of

goods, further

It becomes necessary to

prices

of

the

factors

of

production required for the pro¬
duction

of

concerned.

the

consumers'

Then

repeats itself

on

the
a

goods

same

story

remoter plane.

The supply
of these factors of
production
whose
prices
have
been limited shrinks.

Then again

the Government must expand the

sphere

of

its

price ceilings.
It
must fix the prices of the second¬
ary factors of production required
for the production of those pri¬
mary factors.
Thus the Govern¬
ment must go
It

fix

must

sumers'
of

farther and farther.

the prices of all

goods

and

of

con¬

all

factors
production, both material fac¬

tors

and

every

labor, and it must force
enterpreneur
and
every

to

pro¬

The work¬
in

work

the

the

authorities

The

Government

It is totalitarian.;

private
formal

in

fact

is

su¬

only.

It

cannot

work

market

a

socialism.

war

nationalist

authors

perfect method for the realization
socialism

in a predominantly
country like Germany.
They triumphed when Chancellor
Bruning in 1931 went back to the

essential

are

enforced

The Nazis did

eign

admirers
control
only

frame

decrees

>'

,

j

not, as their for¬
contend, enforce

within

market

a

With them price control
one device within the

economy;
was

these

brutality.

of

an
all-round system of
planning.
In
the
Nazi
economy there was no question of
private initiative and free enter¬

central

production

activities

directed by the Reichswirt-

were

No

enterprise

semantic
the

of

one

this

is

revolution

which

characteristic

fea¬

day has obscured and

our

fact.

used

The

with

term
new

a

in¬

con¬

What people today call
inflation is not inflation, i.
e., the

notation.

increase in the quantity of money
and

substitutes,but

money

the

general rise in commodity prices
and wage rates which is the in¬
evitable

harmless..

First

of inflation.

consequence

all

of

;;

.

is

does

■

longer

no

have

the

op¬

gone already
Although it has
gone very far and has done much
harm, it has certainly not created
an
irreparable disaster. There is
no

doubt that the United States is

policy they
They must enter

detailed

scription

analysis

of this

policy

and

de¬

with full

methods of

still free to change its

financing and to return to a sound
money policy;
The real danger does not consist
in
what
has happened already,
but
in
the
spurious
doctrines
from
which
these
events
have

The superstition that it is
for the Government to

possible

inextricable

the

eschew

conse¬

,

of inflation by price con¬
trol is the main peril.
For this
doctrine diverts the public's at¬
tention from the core of the prob¬
While

authorities

the

are

engaged in a useless fight against
the
attendant
phenomena, only

describe the financial

a

has

country.

methods

opposed to.

too

this

few

into

be

in

portunity to resort to a termi¬
nology accepted and understood
by the public when they want to
are

policy

a

to

cause

no

which inflation

lem.

Statesmen and pol¬

name.

such

of

much alarmed about the extent to

cannot

iticians

is

There

quences

no

the inevitable

what

see

must be.

sprung.

;

„

not

consequences

longer
any term available to signify what
inflation used to signify. It is im¬
possible to fight an evil which you

there

quantity
circulation because it

people

the

attacking

are

evil, the Treasury's
providing for the
enormous expenditures. While the
OP A
makes
headlines
with its
of the

source

of

activities,

statistical

the

figures

stention from

regulating the
minutest details of every business
activity and precisely fixing every

icy increasing the quantity of the
circulating medium, it goes on

The tremendous German inflation

individual's tasks

luxuriantly.;

of the mark to one
billionth of its prewar value was

buying on the part
public; or it can be directed
the
Government's
offices.

of the

by

There

is

able. j

Government

part

of

state

third

no

prices

of

affairs

as

avail¬

control

only

exception

any

siders

solution

of
in,

results

which

—

con¬

the

'

,

-

v;->

and

hand

one

standard

the other.

on

people to grasp the
the

and contrary to
inevitable result is

income

the

,

of

Nazi
fact

the

nature of

very

economic
that

not

expropriate the enterpreneurs and
capitalists openly and that they
did not adopt the principle of in¬

Price Control in Germany
It

has

been

again and
again that German experience has
proved that price control is feas¬
ible

, and
can
attain
the ends
sought by the Government resort¬
ing to it. Nothing can be more er¬

roneous.

;U,."'V*'-'-

When

the

first

vists espoused

Soviet

War

rule

later.

and

discarded

only

;Yet the Nazis removed the

bourgeois

completely from con¬
The enterpreneurs who were
neither Jewish nor suspect of lib¬
trol.

eral and

pacifist leanings retained
positions in the managerial

their

World

equality which the Bolshe¬
in the first years of

come

asserted

structure.

But

ment is

of

of newly

German
well in

ings.

police

rather

enforcing these price ceil¬

There

kets.

succeeded

were

black

no

But the supply of the com¬

subject to price control
quickly fell. Prices did not rise.
a

the

public
position
to

clothes
a

and

longer in
purchase
food,

was

Rationing was
Although the Govern¬

failure.

more

and

rations allotted to each

only

they
of

more

the

individual,

incomes

had

to be

pliance

en¬

deavors to make the price control

system work, the authorities ex¬
panded step by step the sphere of

after
and

of

a

One

the

subject

branch

other

of

to price
business

centralized

was

put under the management
Government commissary. The

Government obtained full control
of

all

tion.

vital
But
as

branches

long

industry

of

this

even

as

were

than

invested in

with

the

The

orders

com¬

of

the

the
is

doomed

to

not

Those

failure

within

completely
advocates

an

social¬

of

price
control who pretend that
they aim
at, preserving the system of pri¬
vate initiative and free
enterprise
are
badly mistaken. What they
really do is to paralyze the opera¬
tion of the steering device of this
system.

One does not preserve

system

by

nerve; one

destroying
kills it.

its

a

to fight the inevi¬
consequences of inflation—

table
the

rise in prices—are
masque¬
rading their endeavors as a fight
against inflation.
While fighting
the ! symptoms,
they pretend to
fight the root causes of the evil.
And because they do not compre¬

The

idea

was

to

en¬

business

causal relation

the increase in money

and

tion

between

in circula¬

credit expansion

the

on

hand and the rise in prices on

the

other, they practically
things worse.
best

The

example

is

as

the

as

soon

the

break¬

Reiehsbank

old

come

the Government grants sub¬

sidies
with

to

the

the

farmers

highest
are

operating

costs.

These

financed out of addi¬

If the consumers
higher prices for the

pressure.

ary
were

to pay

don

its

nied

Government

to

aban¬

inflationary

the

that

commodity

in

rise

prices, wage rates and foreign ex¬
change rates had anything to do
with the Government's method of

spending. In their eyes
profiteering was to blame.

reckless

only

They advocated throughgoing en¬
forcement of price control as the

and called those recom¬
a
change in • financial
methods "deflationists."
panacea

The

products concerned, no further in¬
flationary effect would emerge.

German

defeated

nationalists were
most terrific

the two

in

of

wars

the

But

history.
fallacies

nomic

eco¬

pushed

.J which

Germany into it's nefarious ag¬
gressions unfortunately
survive.
The
monetary errors developed
by
German professors such as
Lexis and Knapp and put into ef¬
fect by Havenstein, the Reichs¬
President

bank's

in

critical

the

great inflation, are
today
the
official
doctrine
of
France and of many other Euro¬
pean.

There is no need

countries.
United

the

for

its

of

years

to

States

import

,

The

would have to

consumers

use

these absurdities.
■ "ii

for

—

such

surplus payments only
which had been already
put into circulation. Thus the al¬
legedly brilliant idea to fight in¬
flation by subsidies in fact brings
money

about

more

Henry Pallon Named :
V.P. of F. H. Hatch
!

inflation.

Frederic
63

Wall

H.

Hatch

Street,

New

&

Co., Inc.,

York

City,

-

process

continental

of

Europe

the issue of non-redeemable

tender banknotes.

balanced

provided

the subsidies." As has been
pointed out, price ceilings reduce
because
production
in¬
supply
volves
a
loss for
the
marginal
producers. To prevent this out¬
by

IV-

announces

There is practically no need to¬

a

great increase
in

possible to balance
Ger¬
many's postwar budget without
resorting ; to
the
Reichsbank's
printing press. The proof is that
the
Reich's
budget was
easily

make, mending

vital

Current Inflation Fallacies

the

been

policy. But
before this happened, all German
would-be experts stubbornly de¬

attempts

III.

is

pur¬

It would have

act of God.

an

the

1923

in

power

less

Fallacies Must Not Be Imported

Inflation

chasing

those engaged in futile and hope-r

that

tional credit expansion. Thus they

Nazi

reduced

which

of

is

result in increasing the inflation¬

of

may

many

not

example of Ger¬
stand as a warning.

the

mischief

Ger¬

experience

,

Here again the

down

second

subsidies

trust the direction of all

production.

planning of all

issues
francs

certainly does not disprove
statement that price control

not

other branches
left free. Thus

the

exact

many

produc¬
was

more

Party

Ministry of Economic Affairs.

ized.

In their

citizens

and
rank
in
the
hierarchy of
graduated leadership. The surplus

card entitled them to.

commodities

other

adequate to their status

as

economy

a

control.

like

not free to spend

were

their

deemed

few people were fortunate
enough to get all that the ration

the

Party.
The capitalists
(sharply reduced) div¬
But

no

shoes.

ment reduced

idends.

mar¬

modities

But

Nazi

got their

which
billion

papers' financial pages.

forced

/The

rise

the

a

are firmly committed to the
policy which only a few years ago
was
called a policy of inflation.'

one

prices, it resorted simul¬
taneously to price control.
The
much-glorified efficiency of the

France,

printed banknotes.; But

the most reasonable govern¬

with the orders of their
superiors,
the bureaucrats of the Reich and

in

every

ments

flation.

To prevent the inevitable
outcome of
inflation, a general

Not

day about

every

they were virtual¬
ly merely salaried civil servants
bound to comply unconditionally

out, the German Reich im¬
mediately adopted a policy of in¬

accounts

govern¬
careless in this regard

so

that

hend the

broke

minute

As you cannot name the pol¬

was

did

and

it,'
they must repeat this bother¬
some procedure in every sentence
in which they deal with this sub¬

even

system

Nazis

particulars

as

:

*

,

What made it difficult for many

Its

chaos and social unrest.
■■

living

without

everybody

—

a

absurd

purpose.

his

and
a

on

the orders

If




The
is

tures of

the

ject.

its operations from

vehicle

left

inflation.

as

expanding

credit and increasing the
of money in

equal, raise prices.

quence of

It goes on

decrees and orders

by the prices fixed on the
market by the buying or the ab¬

of

aimed at all-round

be

must, other things being
No sophistry
and
no
syllogisms can conjure
away
this
inextricable
conse¬

its

balance

to

want

inconspicuous place in the news¬

di¬

of prices and wages and this gen¬
eral order to continue production.
to

not

rected

work.

be

can

in the quantity of
money in circulation. Its foremost

were

does

budget by taxes levied or by loans
from the public. It chooses infla¬

and

the

ceases

production

free to deviate in the conduct

was

the Government decided to go still
farther. The Hindenburg Program

branches

An additional

demand

one

whenever they want to refer to

market

Either

of

some

it

tion because it considers it

means

Nazis

the

011

prepared to restrict its
expenditure. On the other hand

minor evil.

tendency
towards
rising
Those into whose pockets
the additional
quantity of cur¬
rency flows are in a position to
expand their demand for vendable

the

with the utmost

is

Government

issued by the Government.
Price
control was only a minor device
in
the
complex of innumerable

the

and

enough

fixing

gen¬

The

hand not

concerning the increase in the na¬
tion's currency are relegated to an

regulated by authoritarian decree

worker to

omitted from this all-round

a

is

deliberate

a

eral

This semantic innovation is by no

schaftsministerjum.

services

in

provisions of the Hin¬
denburg Program and when later

all

and

spending by in¬

inflation. Such an in¬
always the outcome of
Government policy.

run-away

flation

prices.

flation

industrial

in¬

The Government fi¬

Inflation must result

swirtschaft, the compulsory econ¬
omy.
It was, they said, the most

prise. .All

commodities

But

continued

com¬

an

quantity of paper
types and of

its deficit

flation.

in

also

various

token coins.
nances

confused

of

the

of

to extol the merits of the Zwang-

price

^

within

control and of

the

and

goods and services.

only.

gram

sphere of the commodities subject
price control until the prices of

these

continue production at
prices and wage rates.
No
branch
of
production must be

whom

of

to

con¬

sults

board

to

obey
Gov¬

the

economy. The endeavors to make
it work must heeds enlarge the

by price ceilings. The

Government's

bound

satisfactorily

the

mar¬

central

modities

the

market

direct

by

Price control is contrary to pur¬
if it is limited to some com¬

It diverts production from
those channels into which the con¬
want

bound to

pose

means.

sumers

are

issued

assigned them; their wages
determined by authoritarian

ing.

From this it becomes clear what

price

is

preme.
It determines each citi¬
zen's income and standard of!liv¬

con¬

and

use.

Government

economy

management.

are

are

country in which
exists only in a
and
legal sense, while
there is public ownership
a

a system of cen¬
planning, by socialism. It
longer the consumers, but

decrees.

cheapest
commodities they
>

all-

business

have

earned

in supplying

success

in

sumers

way

as

of

state

a

of

replaced by

plants

men

the champion of
socialism, to make Ger¬

in

crease

of

Spann,

"German"
many

It

ideal

had not yet been complete¬
ly put into effect when the Reich
collapsed.
The disintegration of
the imperial bureaucracy brushed
away the whole apparatus of price

duction

The prof¬

poor.

the

However, the Hindenburg Pro¬

orders

ers

Othmar

commonwealth.

realized

has

ernment's

who

the capital and
They make poor

own

the plants.

such

control

-no

the

entrepreneur's

and

when

have

property

Nazis said—and

quantity
quality and by whom.
They

determine

the

be produced and in what
quantity and quality. The entre¬
preneurs
are
nolonger - entre¬
preneurs.
They have been re¬
duced to the status of shop man¬
agers—or Betriebsfeuhrer, as the

less what should

no

of

needs

.

should

su¬

be produced and in what
and

the

the

the Government who decides what

premacy of the consumers.
By
their buying, and by their absten¬
tion from buying, the consumers
determine

of

for

tralized

Supremacy of the

way.

is

is

to satisfy

man

wants

and

been

considers

important

achieved, the market

The

market

the

the

possible

directed

as

these

Government

masses.

judgments of the various individ¬
uals and their actions

the

especially

the value

are

precisely

banks

money

in Gov¬

borrowing from the

mercial

free enterprise in order and pro¬
vides it with sense and
meaning.

of

consists mainly

ernment

Hindenburg Program had been
executed, it would have trans¬
formed Germany into a purely to-

cial

304!

is

legal

In this country

Henry

H.

the

appointment

Patton

as

Vice

of

Presi¬

day to enter into a discussion of

dent. Mr.

the

tenant in the U. S. Naval Reserve,

slight

comparatively

harmless

inflation

and

that^ under

a

standard
can
be' brought
by a great increase in gold
production.
The
problems
the

conducted his

gold

about

world must face

today

are

those of

Patton, who

ness

the

lieu¬

securities busi¬

in Philadelphia prior

tering
1942.

own

was a

service

in

to en¬

January,

■u-

respectively) and established

n

sition

(Continued from page 3005)
time when these facilities
needed for other grain crops

ities at
were

a

collectively
held
on
April 29, 1944, long May 1944 rye
(3)

they

important
demand." Should the views of the

futures contracts amounting to 3,-

Department prevail in the end,
the
respondents would be de¬

A customers of

prived of all trading privileges on
all
contract markets,
and those
respondents
now
registered as
futures commission merchants or
floor brokers
would have such

on

there

which

for

was

registration revoked.

-

'

J

•.

F.

respondent Daniel
Company, as shown

and

Rice

Schedule

accounted for

who traded in rye

riod described.
tomers

contracts
of Trade,

namely, 12,404,000 bush¬

open

|

.

.

.

No

during the pe¬

Among these cus¬
General Foods

the

was

which; along with
Corporation
Metcalf, in November 1943
had been instructed by the Busi¬
ness
Conduct Committee of the
Board of Trade to make no further
Mr;

purchases of rye without that com¬
mittee's approval. The complaint
charges among other things:

While

"(i)
ration

and

respondent corpo¬
respondent
Metcalf

prohibited

were

futures

or

acquiring
on the Chi¬

from

actual rye

of Trade, as set forth
paragraph (h), the sole agent

cago Board

the corporation's actual rye,
namely, Daniel F. Rice and Com¬
pany, together with the remaining
respondents engaged in a con¬
certed heavy purchasing program
in May 1944 rye futures on the
Chicago Board of Trade, as set
forth in paragraphs (j)( (k), and
(1), thereby assuming and con¬
tinuing the futures end of the
market operations when the re¬
spondent corporation could not do
so
in its own name.
Thus, the
for

dominant control of the rye mar¬
ket

was

maintained and increased,

Price

of

1944, and during this period no
portion of respondent corpora¬
tion's holdings was sold or deliv¬
ered until after the expiration of
May./ 1944
rye
futures
al¬
though not in excess ; of 10,000
bushels of this rye was shipped
from Chicago by respondent cor¬
poration. Meanwhile, such offer¬
ings as were made by respondents
restricted

were

to

those

pros¬

pective buyers who would move
the rye into consumptive channels
and who would not place it at the
disposal of such other persons as

might offer it for sale or delivery
on
the Chicago Board of Trade.,
This ;, arrangement ; and
under¬
standing permitted the respond¬
ents to operate in the futures mar¬
,

with

ket

such

rye

assurance

that

would be

delivered

none

May 1944 futures contracts.
"(k)
Respondents
Daniel

of
on

Rye being subject to no price
ceiling, it is the contention of the
the

respondents in this

not
only by the magnitude of their
own
operations,; but because of
the stimulus to the public, caused
a
large increase in the price of
the grain in 1944. The complaint
states that, during the period of
the
respondents operations, the
price
of rye
futures
advanced
about
52p per bushel between

Trade

as

the

result

of

case

F.

which

(1) they collectively held on Dec.
24, 1943, long May 1944 rye fu¬
tures contracts amounting to 2,090,000 bushels, while Schedule A
.

The

markets.

stock

margin

for

is only about 15%.
During
1944, Government officials point
out, trading in rye in Chicago
totalled about 4,000,000,000 bush¬
rye

els,

compared with an annual

as

Trade, namely, 21,715,000 bushels;
(2) they collectively held on Feb.
1944, long May 1944 rye fu¬
tures contracts amounting to 4,595,000 bushels, while Schedule A
11,

customers of

Rice

and

respondent Daniel F.

Company,

as

shown

on

Schedule A, held 3,355,000 bushels.
These
combined
holdings
ac¬

for approximately 38%
of all open May 1944 rye futures
contracts on the Chicago Board of

counted

Trade, namely, 21,077,000 bushels;




restricted

activity in the
futures to liquidating and
hedging
transactions.
Subse¬
quently, effective Nov. 14, it again
raised initial speculative margins

July

to 35 cents and maintenance

gins to 25 cents.

:..••

mar¬

•

•

became

effective

reducing

daily

position

limits

Dec.

trading

000

bushels.

The

that

fact

there

prices; on
wheat,
corn
and oats, made rye an un¬
usually attractive
medium
for
speculation.
1
ceiling

were

The

Background,;

Washington

of the Hearings

3

Department of Agriculture which
is charged with the enforcement
of the Commodity Exchange Act.
Among other objectives, that Act

designed to prevent manipu¬

was

lation,
corners,
and
excessive
speculation in the)i futures mar¬
kets.

'

,

recently has
been
giving
especial
attention
looking : toward
a
reduction of
speculative activity in the rye fu¬
tures market; Activity in rye fu¬
Government

The

annual

an

in

volume

dented

The

reached

has

tures

unprece¬

recent

years.

volume

average

for

the ten years preceding 1942 was
about 330 million bushels, sub¬

stantially all of this trading being
on
the Chicago Board of Trade.
In the first six months of 1945,

the Chicago Board of
nearly two billion
bushels, or an annual rate of 3,950,000,000 bushels, it is pointed
trading

Trade

on

totaled

out here. 1
In

':

addition

v

to

several

issuing

complaints charging violations of
Commodity
Exchange
Act
through manipulation of the price
of rye and rye futures, the Com¬
modity Exchange Authority took
several other steps to correct the
situation.

provisions of the Com¬

modity ExchangeAct: relating to
manipulation or corners nor re¬
lieve

contract

any

market

responsibility under the
prevent manipulation and

of

Act

its

to

:

corners.

during the five months July-No¬
vember

the

Chicago

posed

to

Trade:

"">>•;,V;.
an initial margin of at

least

least

maintenance

20%

trades

be

margin of at

established

exclusive

of

on

bona

all

fide

hedges. The Commodity Exchange
Act

does

not

give

the

Govern¬

ment

authority to set margins.
That a daily trading limit
open interest limit of 500,000

(2)
and

totaled

1,117,624,000
bushels, a reduction of £ 28.6%
from the 1,565,032,000 bushel total
for the same period in 1944. Open
contracts
as
of; Nov.
30, .1945
totaled 24,311,000 bushels, a re¬

bushels be

established, and

(3| That trading in July 1945
futures be immediately limited to

liquidating trades and bona fide
hedging transactions.
The Chicago
Board of Trade,
effective July
5,
raised initial
speculative margins to 25 cents
per
bushel with a maintenance
requirement
of
15
cents
per
bushel
(from 20 and 12 cents,

re¬

and

wheat

corn,

amount

products,

to

approximately 16 million bushels,
■v. It was also hoped
through re¬
search to develop additional uses
Fortunately for the nation and

world,

the

for

and

corn

wheat

production continued at high lev¬
els, but your company had tried
to prepare for the contingency of
shortages.,

r
•
make a lot of money
,

3. Did we

operation,

the

on

has been im¬

as

plied?

•

:-

■

make

didn't

.We

No.

A.

any

After paying the storage

money.

and

handling

lost

some.

charges, we
early in

even

1944,

From

•:

General Foods manage¬

that its

rea¬

for holding rye no longer ex¬

sons

isted,' we gradually disposed of
the rye.:;,' (,•••;.
•
4. Did we "corner" the market?
A. No; It has been charged that

May, 1944, the alleged corner
89% of a total volume-

in

involved

which has been variously referred
to
as
"deliverable supply" and
"total crop."

1■

■"

■

the

top

of

our

holdings, in

1944, we held 9V4 million
bushels.
Rye statistics published
May,

by the War Food Administration
as
of June 1, 1944, reported 21
million

duction

storage, and more than 10 million
bushels at interior mills and on

of 7,256,000 bushels dur¬
ing the month. This is also a re¬
of 57% from the high Of

56,938,000 bushels

of March 31,

as

1945.

-

J.

M.

the

Mehl,

Commodity

Administrator. of
Exchange
Act,
brought,

under which the action is

declined

this

at

to

comment

stage,

the

on

to

except

"was well satisfied with

V;

thus far."

ments

case

The

,

is

]

position of the
Generql
Corporation in this matter

Foods

the

at

same

that of any

speculative purchaser of

othe;r
The

rye.

Corporation has publicly admitted
that it purchased the rye, hot that
it might have the grain to use* iii
the manufacure of its products,
but instead that, through the an¬
ticipated profits accruing from a
rise in the price of its rye hold¬

ings,

might make

it

of business

loss

normal

activities

the

for

up

occasioned

in

its

the

of

because

shortage of corn. The corporation
explained the activities of which
the Government complains in u
letter to its employees stockhold¬
ers dated July 27, 1945.
Since the
hearings to date have been de¬
voted to the presentation of th0
Government's

case

and

the

rej-

spondents have not yet taken th£
stand

to develop their answers tb
charges, the following ques¬
tions and answers as given in the
above mentioned July 27 letter
will serve to indicate the position

the

Which
when

the
it

signed

testifies.

The

letter

Charles

Mr.

take

will

company

was

Francis,
and Mr.

Chairman

of

Austin

Igleheart, President of

S.

the

board,

Our

the company.
'
./!•
1. Was General Foods in the ryb

Yes, from
April 23, 1945.
2. Why? ■

1,

Dec.

1942,

^

•

V'

to

age,

and

combination

corn

products.

.1
v/vj

The

of

price ceilings on
the products we make from corn
and
wheat
and
the
advancing
prices of these grains threatened
us

with

actual

a

Shortages,

squeeze.

and

in prospect,
limiting
ability to buy adequate sup¬
plies
of
corn
became
another

our

factor.

j

Thus, to protect jobholders and
we attempted to off¬
set anticipated losses. In short, we
were in the position of one
who
tries to make up on apples what
hb
thought he would
lose
on
stockholders

bananas.

approxi-*
44%

were

V

Another Respondent Comments

r

the

of

Another

respondents i^f
this case, although preferring ,to
remain anonymous at this time
because
only the Government's
side has so far been under pre¬
sentation,

commented

to

the !

follows:

"In

19M,

"Chronicle"

as

in a depressed price po-f

was

rye

numbet*;

sition, and had been for a

both in relation to itsQ
"parity" and in relation to wheat5:
and other grains. The established, ;
parity from October 1943 through
May 1944 was $1.20 to $1.22. The
price realized by the farmer in
December 1942 was only 50% bf',
of

years,

parity.

In

of 1944 it

the first five months
averaged 91%.
V f

parity were translated into
market price by adding.
19%0 for transportation and han¬
"If

Chicago

dling costs, as OPA has done in
its. recent rye pricing order (MPR

-

604), it would be found that per-';
missive ceiling prices during this
;
.

period would have been

$1.39% to

period of the com-

"During the

.

plaint the price of rye increased
from $0.70 to $1.25-1.35 a bush-5
even at the peak, rye
reflecting full parity, and

so,

ceilings.

w^s
.

i!:, vv/':

-1-

,j

,

.

was,;

the permissive

receiving less than

"Rye has maintained a relation¬
ship to the price of wheat over a
period, of years of about 250 ,t6
300, rye being lower than wheat;
by that amount. Yet in 1943 rye
prices were 41.5 to 48.60 less than
the price of wheat; and in May
1944— the date of the alleged coprner—cash rye was selling at av-:^,
:

erage

-i

delivery, leaving us with net own¬
ership of 71/4 million bushels.
<
With respect to total crop har¬

"It

.'
\
, //
alleged that during the-;

is

increased

,

complaint rye prices'
During that tiipe

period of the

520.

increased 500 and was be- -

wheat,

traded

ing

bushel less

prices of 50.80 a

than was wheat.

stoi^

million

ceiling .prices v

at

in

($1.73%) from April 15 through
May 1944.
Oats increased about
320 a bushel and during March;
April and May was trading at its
ceiling price of 820. Corn during
the first eight months of 1944 wps
not traded in at all.
The price
action of rye thus seems to be

,

.

y

,

in

vested

the

1944,

best figures

that

indicate

available

top

our

holdings were about/35% of that
amount.
*
.' " % '
But we don't want to confuse

with statistics. The En¬
cyclopedia of the Social Sciences
defines a "corner" as follows: "a
anyone

plan of manipulation whereby one
operator or more secures posses¬
sion of all or substantially all of

given commodity ... available
for delivery upon the outstanding
contracts of short sellers, in order
a

to
an

compel such sellers to settle at
arbitrary and abnormal settle¬

imposed by the opera¬

ment price

tor of the scheme."'
Since that is

*

*

>

technical, too, per¬

the next question will be
enlightening.
. -.
,•
<
'l
5. Did our policy have the price
effect of a "corner"?
*
*
*

haps

more

During May, 1944, at the

A. No.

of

peak

holdings,

rye

our

the

price per bushel declined from
$1.32% on May 5 to $1.12 on May
23. That is not the imposition of
"an

arbitrary
our

sale

normal

the

of rye?

■

rye

policy

and

;v;;

would sell rye as
to Government or

■T'-.y
Is

through

responsible Government
that
General
Foods

officials

7.

prevent

distribution

A. No. We made it clear

offers to

ers.- :

;

-

,

Did

6.

set¬

abnormal

and

tlement."

.

A. We bought rye, which was
cheap, as a means of guarding
against possible reduction of prof¬
it in the manufacture and sale of

wheat

holdings

top

mately 29% of this total, or
of the amount in commercial

v

A.

figures add up
million bushels.

31

than

more

Against our tpp holdings of 9 %
bushels in May, 1944, 2
i, million had been sold for future

develop¬

foresight, we must an¬
our transactions seemed

,

to

These

farms;

the

he

say

1

commercial

in

bushels

that

wise at the time.

not

'

At

swer,

el;
;

duction

(1) That

a

1945

On June 27, 1945

it pro¬
Board of

their

and

ment was convinced

.

General Foods Corp.'s Position

S.

of

quirements

when the

'..»]!:■;>.

that part of the U.

thority is

our

net

and

that

in view of the fact
annual
manufacturing

not affect

Commodity Exchange Au¬

The

bushels of rye were not
excessive in the event disastrous
corn and wheat shortages had oc¬
curred,

than

ter

holdings of 9V4

maximum

speculative
transactions in rye futures, from
two
million to
500,000 bushels.
This order was issued after pub¬
lic hearings were held in Chicago.
According
to
the: Commission^
order, the limits established. did
on

,

,

Our

,

million

for rye.

j

On Nov. 23 the Commodity Ex¬
change Commission (consisting of
the Secretary of
Agriculture, the
Secretary of Commerce, and the
Attorney General) issued an order

of from 25,000,000 to 40,000,-

crop

and

shown on
Schedule A, held 3,555,000 bush¬
els. These combined holdings ac¬
counted for approximately 26%
of all open May 1944 rye futures
contracts on the Chicago Board of

also

The situation in the rye market

to

Rice

as

It

has changed materially in recent
months.
Trading in rye futures

1942:;: and

Thereafter,

33%%, equivalent to ap¬
proximately 50 cents per bushel,

Company,

po¬

1 of
700,000 bushels on nonspreading
speculative accounts with daily
trading limits of 1,000,000 bushels.
Aug.

December

1943.

customers of respondent Daniel F.

and

effective

May 1944,
the Government alleges,:; the re¬
spondents maintained the price at
about $1.25 to $1.35 per bushel.
Trading in grain futures is great¬
ly facilitated by the relatively low
margin requirements as compared,
for example, with those of the

December

the

;

Rice, Ryan, and O'Brien, engaged
in large purchases of May 1944
rye futures on the Chicago Board
of

Rye

on

limits

which

,r

Ceiling

Government that the activities of

the price of

futures and actual rye
in Chicago being kept at a man¬
ipulated level.
f
"(j) Respondent Daniel F. Rice
and Company was authorized to
act as sole agent for the respond¬
ent
corporation with respect to
its holdings of actual rye during
the winter of 1943-1944 and spring

approximately 46%

May 1944 rye futures
on
the Chicago Board

of all

els.

Daniel F. Rice and Co. customers

2,515,000

held

A,

These combined holdings

bushels.

"Directed" By Brokers?

Appended to the Government's
complaint is
a
list of certain

Schedule

while

bushels,

180,000

Were Customers' Trades

in

Thursday, December 20, 1945

THE COMMERCIAL & FINANCIAL CHRONICLE

3042

;\v

directed, either
to private buy¬

;■v

v1:-;

Foods in the

General

rye

market now?

We sold our last bushel

A. No.

of

rye

on

had

we've

April 23, 1945.

Since

for

three

rye

no

months, any statements about our
dealings in rye since that time
are obviously incorrect. *
'•
Well,

8.

how does the

General
its

Foods management feel about

transaction?

rye

We

A.

now

of

course,

possible
shortages in
grains fortunately did not
develop; we now know that re¬
search into new commercial uses
the

that

other

for
we

rye

has not

its

justified

mercial

and

value

proved fruitful;

realized no profit.

Realizing that hindsight is bet¬

'
*

relative

corn- ?

the

price >

by

trends of related

period mentioned "

the

..."During

the only

in the complaint rye was

grain not under a ceiling, f This
naturally attracted, traders .to it.:
a

"The

related

has

Government

of all the respondents ;
—including ; 9% million bushels
held by the General Foods Cor- ;
the holdings

poration and about 2% million by v
the others—to the deliverable rye ;

public store in Chicago, stated
be 13,056,000 bushels.
During
period, however, the 'visible
supply,' which means the rye in
commercial position at 21 points
in

.

to

,

this

about

,

23,000,000* bushels.■> This reduces

.

Rockies,

the

of

East

was

of the ;
supply which the Agriculture De- ;.
partment uses to support its con- y
50%

about

to

tention

there

that

89%

the

was

:

a

corner.

'commercial supply' of rye in the United States
and Canada, as reported by the
the

Moreover,

Bureau of

this

for

namely 31,000,000

.

.

shorts

\

claims that,'v
respondents,, -

compelled

were

,

larger^,,

bushels.

; "The Government
by the actions of the
the

r

Agricultural Economics

period, was even

to

u

future contracts,,
but in this connection it is per¬
tinent to note that in the five rye
futures involved from May 1943 to
make delivery on

.

inclusive, the great .
bulk of rye ^deliveries on futures
contracts were made on the first,
day of the contract month.' This ;
indicates
no
pressure
on
the
May

1944,

shorts.

.

r

,.

■..

example, in May 1944—the
Government's exhibits in this ca^e
"For

•

know,

fully

^

,

used for deliveries
4,100,000 bushels. Of this,,
Cargill, Inc., delivered 2,650,000
bushels and the Continental Grain,
reveal—rye
totaled

Company about 1,000,000
a

substantial

chased from

bushel's,;
pur- 7

portion of it
Cargill, Inc."

.

Volume 162

Government's Fiscal Policy
*

(Continued from page 3002)
represented a reduction in

,

Mve

lining standards of this group.
J

*

A Piecemeal Tax Structure

The tax structure has developed
piecemeal, and reflects attempts
■

to] lheet emergencies by' shifting
emphasis

wholly" On

other sourcq

one

or

an¬

FUnds of

or" end;

the type which might be invested
have faced, oyer the past 15 years,
h6th increased rates and increased

uncertainty;

The' combination has
bfeen too; much-to contend with.
Id the emphasis On planning,1 it

nrijiist be remembered that business
is, called

to plan too; and
that frequent changes in taxes
make - planning ; more
difficult.
upon

Specifically, the tax system seems
toward the penaliz¬

to be geared

ing of venture capital in its treat¬
ment of interest, profits, and div¬
idends, as well as capital gains.
The constant tendency of funds
tb be invested directly or through
financial institutions in fixed in¬
terest Obligations; has been fur¬
thered by our tax system.
But

interest, in the end, must be paid
from the results of economic

ac¬

namic society in itself is not alarm¬
ing, but it means that the environ¬
ment ipust be more Conducive to
making ah investment initially.
In other words, we cannot cut
money's earning power in two and
expect it to go to work, and at
the

create

a

It is hoped
and

that'the Presi¬

his advisors will work

of action at the
earliest possible date which will
expedite building activity in all
its phases, first, because of the se¬
Out

program

a

shortage,

riousness ot the housing

of the impor¬

and second, because

hostile

which the build¬

tant contribution

Environment so that the retention
pf the smaller return or the prin¬
cipal itself - becomes a matter of
grave doubt. .,
; ,
,

hands of the Government in deal¬

sets in'such

ing with inflationary tendencies.
They are taxes, price, and credit

of their earnings as¬
obligations. The Gov¬
ernment will have difficulty in
the redeployment of its obliga¬
tions under peacetime conditions.
The total debt is distributed as
follows:
37% in private hands;
8%, Federal Reserve System; 10%,
Government agencies and trust
funds; 30%,, comjmercial banks;
4%, savings banks; and 8%, in¬
surance companies;
Inasmuch

deficit financing is
likely to eontihue for several
covery.
years inore, the Government will
j It Is my Opinion that despite
nave to rely upon banks and the
| In this respect government has these several important problems
the responsibility Of abstaining which must be reserved, private Federal Reserve System for resid¬
from denouncing, business atti¬ residential
construction,
which ual underwriting. Today the com¬
tudes that have largely vanished, Wilt approximate $500 million this mercial banks, savings banks and
End. business has the responsibil¬ year, will rise to an annual rate the Federal Reserve System al¬
ity of passing on the benefits of Of $4 billion in 1947 and to higher ready hold 45% of the total Fed¬
eral debt.
They will have to ab¬
technological improvement so as levels by 1948.
\
sorb
to sustain buying power.
obligations
liquidated
by
•
i
Interest Rate Policy
I The impact of technological im¬
corporations and savings bonds
provement in the past has created ; The interest rate became the which are expected to be turned
several dislocations and hardships function of Government almost in at the rate of from $5 to $6 bil¬
lion for the next few years.
Which
we
have
now- tried
to
12

ing industry makes to general re¬

as

,

!

.

Soften.

No technological progress
Can be made without investment,
&nd to encourage such investment

the

of

one

most decided changes in the

financial structure of the country.

value of our cur¬
rency is determined by the Gov¬

The stability and

is the best way to assure a con¬
tinued general rise in our stand¬
ard of

and marks

ago,

years

ernment's

living.

As yet, no modern
society except our own has been
able to harmonize political lib¬

the course

erty and economic progress, and

tal such

fiscal policy.
Hence,
of such a policy is of

great importance to

all, especially
capi¬

those dealing in money and

The Government has two al¬
ternatives in managing the debt:
One is through continuation of
the present system of maintaining
an
enormous
floating debt; the
Other is through large funding op¬
erations.
The latter method sup¬

financial

poses

conditions quite
those
prevailing

tivity and the activity will hot be
undertaken unless the risk takers

if

of return is the cost of this

As

conjunction

war
requisite.
The former methods
policy require retention of large float¬
centers around the management ing debt which implies continua¬
of this debt (currently $263 bil¬ tion of present credit and mone¬
lion, estimated at $273 billion by tary regulations and possibly the
June 30, 1946, as compared with institution of even more rigorous
$259 billion on June 30, 1945). controls if interest rates are to be
The pattern followed by the Gov¬ kept low and the price structure
ernment in contracting the debt stable. YY;-v.O YyY-,
is likely to have a substantial Y
'V, Future of Debt. ;
bearing upon the management of
Our
Federal
debt
ultimately
the debt.
The pattern of war fi¬ will have to be
paid or settled.
nancing had three main objec¬ Governments pay by means of

on a

are

some

encouragement. \

;

they

existed

in

a

as

vacuum.

dangers
Wages

In

dx;aft

policy,

a

under

High

wages

Effect

of

Low

Profits

and

:;

;'.,Yt Interest Rates

.,VY'/;
reasonable
expectation of profits, any partic¬
;

I do pot mean, by a

ular

rate, and even less a guar¬
I recognize, for example,
when interest rates in the

antee.

that

pioneer days were 10% or more,
it, took a higher prospective re¬
turn to induce investment in risk-

taking enterprise than in a period
of low money rates. At the same
time,
business —both
corporate
and individual—must not be con¬
fronted with a "heads I Win, tails

fiscal

Federal activities in the fields

and

labor and wages, price
allocation of
materials

supplies,

exists

an

and

taxes.

insatiable

American

goods

There
for

demand

and

services

at

the present time; adequate, pur¬
chasing power is assured in view
of dammed up savings and the
Outlook for employment, with the
result

that

there

rests

the
shoulders of Government and bus¬
iness full responsibility for maxi¬

may

without maximum
employment make for an unheal¬
thy state of affairs. The national
wage policy must respect a sound
pricing policy for the finished
product of industry in the interest
of, the consumer, and it must re¬
spect the adequacyr of business
profits.
■" 'V

sound

control,

for

pects

A

Our

forced

kill off glowing pros¬
of maximum; employment.

of
me

of money,

There arq .extreme

in such
advanced

to

policy requires
of the Administration, with the
aid of Congress, a coordination of
:

tional welfare. :; A labor govern¬
ment accepts as a part of its re¬
sponsibility a reform of the na¬
tional wage policy, and attempts
to, spiral wages over a short pe¬
riod of time.

happy
circumstances, it

sense.

though

wages, prices and profits we deal
With sensitive influences related
ohe to the other,
affecting our na¬

moderate rate

a

that the price of
money is cheap, in more than one

Wages
derivative problem. Wages

a

investment at

appears

national wage policy.

cannot be treated with

■

time

same

try.
dent

60 and 70%

have

^In dealing with increased con¬
sumption, the emphasis is placed

„

3043

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4448

mum

|

.

leaders discourage apprenticeships

in the bricklayers', painters' and

•veterans

who

acquired the trade

in the past we reduced tax rates

i

Speculation: in

become

a

real

estate

has

matter of great concern
This comment

•to the authorities.

applies especially:, to unimproved
changed real estate subj ect to small home
from time to time in conformity
development.
/■ Y Y. y:with broad changes; in the - busi¬ '
Costs of construction are esti¬
ness cycle.
In that event, busi¬ mated to have increased from 30
ness
would
be
prepared .for to 40 % over prewar costs.
change in advance.
;
I Your Association is largely in¬
I sorhetimeS wonder whether terested
in
private
residential
flexible sys¬

be

*

the profound change in the last 20
years in the return on capital is
appreciated.
Today
a
greater
amount of capital and savings is
at work .than at any time any¬
where in world

Construction.

You

must bear

in

mind that

competition is keen iri
phases of the construction in¬
dustry competing for labor and

all

materials.

Non

-

residential

con¬

history.
Overall struction demand is represented
figures are not available, but by three-fourths by the requirements
examining. the interest rate on of the farmer, railroads, service
public and-private securities, the* trades,
public utilities,
whole?
rate of return of public utilities,
salers
and
retailers,
and
oneand the average rate of profit on
fourth by demands for business
the investment-in business by. and
expansion.
Their combined de¬
large it -will be found that the mands are substantial.
President TrUman has promised
average rate of return is strikingly
low. The tendency toward a lower to address himself to the problems
Average rate of return in a dy¬
confronting this important indus¬




3.

refunding.
To prevent inflation.

"

^

.

was complete for Points
1 and 2 but has resulted in com¬

means

a

reduction

in the

purchasing
Whether

power of our currency.
the
latter
method
is

adopted intentionally or uninten¬
tionally makes no difference.

will in¬

Success

.

.during their wartime enlistment,

more

which

which

people—or by inflation,

The

Government's

recent

ac¬

tions and proposals in the matter
of taxes, labor legislation and un-

ployment relief, with its adoption
of the Keynesian theory of com¬
pensatory spending, clearly indi¬

plete Government dominance of cates that our Administration has
the money and capital markets, chosen the easy path of reducing
by
a
complete the weight of the debt by means
with this subject. There exist im¬ accompanied
in
heretofore
accepted of gradually lowering the pur¬
portant bottlenecks which must change
of
monetary controls. chasing" power of the dollar. The
be overcome to assure large-scale, methods
current
problem is not one of
activity in this field. Briefly they These changes are important in
appraising the future course of avoiding inflation—which already
are represented by the following:
the Government's fiscal policy. ' ; is with us—but one of controlling
iThere were 500,000 construction
its spread.
The Government will
firms in the United States prior
•
Government Short Term
do well if it succeeds in prevent¬
to the war, while there are scarce¬
YYy •; '■ 'Financing.'.
ing present conditions from turn¬
ly more than 35 % of such firms
;
The original methods of regu¬ ing into a runaway inflationary
engaged in business at this time.
lating money markets and credits spiral.
Any expectation or hope
> I There is an acute shortage of
at the beginning of the Federal
of going back to the prewar dollar
labor.
The building trade unions
reflects wishful thinking and an
Reserve System were quantitative
,are strongly
entrenched.
Their
controls'.
utter lack of

to begin at once a broad revision
of our tax system.
It may be that

would

needs

from the

(better qualified than I to deal

This would be ^carpenters' unions, and it is un¬
derstood that some of the unions
good time, now that stop -gar)
tax legislation has been enacted: have closed their ranks to war

tem, / which

accom¬

;

at

that we need a

vidual

the

construction,

was

plished by control of interest rates. - ; YY' Y ;Y
; Y'/Y:Y:

j 2. To provide a variety of se!purities suitable to the indi¬

The Building Industry
As; regards

the

which

down,

prospects for
industry,
and
more particularly residential con¬
struction, I understand that you
Will hear from several authorities

y

taxes collected or funds borrowed

1, To keep the cost of financing

;f Y

from

fiscal

tives: f

-i •

different

currently. To be successful, a bal¬
anced budget is a primary pre¬

during this

Government's

fluence the policies in future

you lose" attitude.

when they should have been in¬
creased, and vice-versa. It may be

debt accumulated

the

upon

employment and prosperity.

banks of various types,

as

and building and loan associations.
a
result of the large Federal

•

understanding of the

They were operated by

means

discount rate,

of the

sup¬

plemented by manipulation of the
legal reserve requirements and
the open market policies of the

financial and economic factors of

deficit financing will require Gov¬
ernment insistence upon a

tion and distribution of the Fed¬
eral

debt.

financed
tent

by

such

as

cates of

bined

The

the

Government

war

short
bills,

to

term
notes

indebtedness.

total of these

a

great

has

and certifi¬
The

com¬

kinds

the bonds , ma¬
turing before 1950 amounts to ap¬
proximately one-third of all Gov¬
ernment obligations
outstanding
at the present time.
of borrowing plus

presupposes

a

policy

This in turn

firm control over

money markets arid the na¬
tion's credit structure, and implies
the

of rules
regulations hardly compati¬
ble with the traditional American
idea of a system of free enterprise.
Thus we have further indication

continuance of a system
arid

those

who

believe

Code should be amended, length¬
ening the long-term holding pe¬
riod and increasing the maximum
effective rate of taxation, A capi¬
tal gains tax is a capital levy* and
the holding-period and late of
taxation-are a definite barlier to
the fluidity of capital.
The pres¬
ent capital gains provisions have
induced

a

scarcity of offerings in
security
a resultant bidding

both the real estate and

markets

and

Up of prices.
Except in the case of real es¬

tate,

controls

credit

being

are

rigidly enforced. The stock mar¬
ket is on virtually a cash basis.

Regulation "W" remains in effect
It will take time to relieve the

pressure in the housing situation.,
It is difficult to reconcile; repeal
the

of

Price

Control

Act

which

expires on June 30 next with the
Scarcity that exists in apartment
rentals and small housing through¬
out the iiatioriY As much as we
abhor

regulation

and control

in

form, there is a need to hold
rentals
on
existing occupancies
within
reasonable
limits
while
new construction must go forward
at an accelerated pace.
Stable
any

,

prices are essential to an orderly,
economy.
'.YY
Y
Conclusion

•

opening remarks I spoke
of your business and emphasized
interest rates and prices as re¬
lated to your business.
I stated
In my

further that these

attending your
in the need for a
orous

economy.

considerations*

efforts take root
healthy and vig¬
I have spent con¬

siderable time—too much time in
fact—in posing

the problem of

es¬

tablishing a sound fiscal policy.
In dealing with money* we must
remove

ourselves from our

emo¬

tions and treat with cold reality.
In sifting and analyzing the facts
as I see them in the present day

situation, and applying my inter¬
pretation to the outlook for the
coming year* I believe we can an¬
ticipate on the part of the gov¬
ernment

a

continuation of

low

a

Interest rate policy; price control
on
a
much restricted basis that
will deal with real estate rentals

and
the

acute commodity shortages;
elimination of double taxa¬

tion of corporate

profits that are
paid out in the fofm of dividends;
a national wage policy calling for
an
approximate 15% wage rise,
accompanied by a compensatory
price increase
in the finished
product, arid increasing regard for
the
interest
of
the
consumer

through

improved

quality

arid

priced merchandise.
Despite efforts on the part of
the
Government, I believe the
lower

,

price level will continue to rise
opinion this trend is not
regarded too seriously, but
rather as accepted hand-in-glove
with recovery.
Volume produc¬
tion may usher in a highly com¬
petitive period in industrial ac¬
tivity in the last six months of
1946 and it is volume production
that will prove to be the natural
and
effective brake on rising
my

be

to

prices.
I

•

have

noted

for

some

time

'/'•
a

gradual but persistent shift to the
right in public thinking in this
that we have moved into an era
country,
for a
country which
of politically-managed economy.
grows privately rich, despite Fed¬
Business, industry and investors eral debt, lacks interest in re¬
alike should recognize these fun¬
form' and extremes in politics.
;
damental changes.
But passing reference has been;
Prices

ex¬

obligations

three

of low interest rates.

are

capital gains and losses pro¬
visions of the Internal Revenue

In

The management of our enor¬
Federal debt and continued

mous

new
regulations
introduced, working on the
principle of qualitative control of
money and credit in determining
their use.
In this category be¬
long: (a) the raising of margin
requirements; (b) control of con?
sumer credit by increasing down
payment and reducing maturity;
(c) control Of investment policies
of commercial banks, savings and
insurance; companies,' The reasons
for the
adoption of qualitative
credit controls are the composi¬

economy,

were

There
that

at the rate of 5 to 10 % per annum.

wartime economy.

Federal Reserve Board. Under the
war

controls.

study of the price level and
the advisability of a continuation
•

In

a

price controls, we must differ¬
entiate between cause and effect.
The
fundamental
cause. which

of

makes

the price

level a problem

cheap and easy money in a
period of scarcity of goods, ac¬
companied by unspent current
Short term Government obliga¬ earnings which tend to grow. Sav¬
tions are chiefly held by commer¬ ings spill over in all directions.
cial banks-:which have between There are three approaches in the
is

made to the role

of this country

foreign affairs.
We are the
leading nation of the world; we,
are
the leading creditor nation
of the world.
In spite of the ap¬

in

parent friction that exists in some
foreign quarters among the major
powers/there is widespread confi¬
dence that with the help of Great
Britain and Russia we will grad¬
ually
peace

establish and secure the
of the world. The Bretton

(Continued

on page

3044)

Thursday, December 20, 1945

THE COMMERCIAL: & FINANCIAL CHRONICLE "

3044:

Tax

A

guessing

didn't
have
to think about them
at all.
Yet decisions on most of

page)

(Continued from first

pur¬

stood united for the common

Program
stakes.

The intelli¬

them must be made.

this

performing mir¬
Unity of effort and skill in

land

acles.

were

make

that

any

competent
men
work out and present to the public
the possible solutions and- their
recommendations;
and
let
the
Congress
and
the
people
co¬

and

nation
organization great.

ities

any

ordinate

Questions Unanswered
We hoped that

the conversion to

would be accomplished with
the same facility and distinction
that had characterized the con¬
version to war.
We wanted to see

peace

be done.

democratic

process

the

goals and in the light of the
record, they did not seem Im¬
possible of accomplishment.
But
with the end of the war, the unity

war

of

to the fore and all sorts

complicated questions arose, to
different

ferent individuals would

ferent

answers.

must

individual

quish

relin¬

activities

the

What

be?

ment

extent

of

field, do

much

should

extent

versity, acted

finance

Great

world and

To

Britain

can

and

of

one

ap¬

to

consisted

diverse

through and

many

of

dealing with Federal tax

it

seen

and

shall

I

so

not

review it with you this afternoon.

I

shall

speak

inde¬

outline to you my own

shall

and

ideas

them

on

!,'■/'

sible. "

briefly

as

■..

■

Taxation

we

first

The

question*

was:

what

(Continued from page 3043)

tive business?

reconversion

to

which will provide

and

the

further

con¬

promote

ac¬

We all want to see

tween

Britain

we

healthy, vigorous economy for
factory and farm,
an
economy
a

signal the

!.-V"

facilitate rapid

and

Woods proposals and the conclu¬
sion of the loan negotiations be¬
States

own

choosing

for

jobs of their
those willing
We want also

belief that this country will accept
its responsibilities as a great cred¬

and able to work.

itor

preserved—that is, a high stand¬
ard
of
living achieved without

nation.

Our

policy

foreign

can
be no stronger than we are
strong internally.
: In
this great democracy,
the
envy of the world, we possess a
balance of power between labor
and farmer not enjoyed
by any

other

the

the

in

government

Through

world.

have
learned that we can rely on this
balance of power at crucial points
in our history, speaking through
the Congress, to right our course.
Following in the wake of war at¬
tended by sacrifice and tension,
we

find

years,

we

to

sacrifice
tax

system,

minimum

of

sense

1945

Act

of

field

said:

of

possession,

and

are

ideals

a

achievement!

The

well ahead of our accom¬

First, it was wise to repeal the
profits tax at once.
That
tax was not only a war measure,
primarily designed to drain off
war
profits, but it operated quite
unfairly as
between
competing

the mob, not of
democracy which
a democracy which
fe true.
False democracy shouts:
Every man down to the level of
the
average!.
True
democracy
cries:
All men up to the height
of their fullest capacity for serv-

.ice

are

excess

characteristics of

the people; cf
is false, not of

out

them

plishments in other directions.

"Jealousy of
power
honestly
gained and justly exercised, envy
or

carried

and

admirably. For once* our accom¬
plishments in the complex fiscal

Murray Butler in his
"True and False Democ¬

of attainment

business.
reasons

There
for

its

were

many

sound

the

repeal:

tax

operated as a damper on new cor¬
porations or rapidly growing Cor¬
porations and hence would check
or
defeat
exactly the kind of
enterprise this country needs at
this time. It was good statesman¬
ship to clear the tax off the books
promptly, now that the war 'is

two

everlastingly at war.
The future of this nation, as the
future of the world, is bound up
with the hope of a true democracy
that builds itself on liberty."
over.
'
v j
The challenge is clear.
It was sensible also to repeal
la the leadership of America at
,the capital stock tax and declaredare

,

.

♦

the helm?

,

,

.

;

,

i
I

_

4-




Federal

tax

then,

face and to

consider what the solutions should

be,'

Expenditures are the key to the

problem. In order for private en¬
terprise to be vigorous and to
expand, it must have confidence
in the stability and soundness of
the
Federal
budget.
Business
must
be able to feel that this

XaJue,
.

profits
1 *

+

run.

mainstay

period,

transition

present

"

operates is wisely controlled and
is reasonably predictable.
Hence,
a balanced Federal budget should
be the normal

normally

of

practice. A policy
balanced
budgets

being indicative of fiscal stability,
will be much more conducive to

than a policy of
balance only in times of
great
prosperity with recurring deficits
at other times.
If the budget, is

the

normally to be balanced, the con¬
trol of expenditures is vital.
'
Prudent Budget S15
Can the

Biliion

budget be balanced in

No individual or
group
can
forecast
accurately
what the budget will be, but we
can analyze the possible expendi¬
tures and classify them as being
necessary or optional.
Our com¬
mittee organized several sample
budgets along these lines.
It is
not essential to burden you with
normal year?

to

in

excess

general application and by customs duties.
Even with freer in-;
ternational trade, customs duties can be used to produce more than :
of

they have in past years. The to¬
bacco taxes and the liquor taxes

of

The withhold¬
and payment of
taxes currently should be retained.
Married persons should continue
to have the option of making joint
or

given the Federal Govern-^
and satisfactory service. ,
We
badly^need the element of
stability of tax revenue which,

have

ment long

principle

ing

;:

There would be,general agree¬

proposition that, if
heavily taxed,
all
forms
of
ordinary
income
should be taxed alike.
Certainly
there should be no discrimination
on

the

particular

against

forms

of

Yet, in recent years,

come.

porate dividends have been
taxable to
the individuals

in¬

lion

more.

or

be* necessary

rises to $22 bil-;
••
• V
,

Estate, and •Gift Taxes ■>,&•,b
would

„The Federal Government

well

of estate and

field

taxation.;

gift

All but one of the States

death

employs

and more and more

taxes

gift t&tfes as well.
from these taxes is

adopting

ere

The

>_

the,

withdraw, from

to

revenue

,

significant to the Federal
The
nuisance of

not very

,

Government.

cor¬

duplicate

fully

siderable.

who

not

unless the budget

do

incomes are to be

general

will

tax

sales

;

Dividends Taxed Twice

Some other selected
application,
general:

they assure.
excises
of

should be employed., but a

:

separate returns. ^

ment

past, by excise taxes-

been in the

so

income

an

•,

individuals and

post-war revenue. The remaining
one-third should be met, as it has

$100,000, say 55%.

effort

private

a

able

-

-

corporations will produce twothirds
or
three-fourths of the

that the high¬
est surtax should be, say, 72%, the
bracket rate applicable to income
in excess of $10,000 should be, say,
great factor in its costsy and in 32%, the bracket, rate at $25,000,
the
conditions
under which
it 45%, and the bracket rate applic¬
line,

all along the

be
rev-

in the Jong

■

:■

Income taxes on

per

of the

rate

con¬

can

Excise Taxes

the

indi¬
vidual income tax should be not
less than 15%.
The rates in the
middle brackets and the upper
brackets, which reach a maximum
of 91% far 1945 and 88% for 1946,
should be adjusted and reduced
initial

standard

to the Treasury

enue

-

much

avoided without any loss of

time

some

litigation

and

troversy

individual

-

given effect,

and time-consuming

useless

should not be increased for
to come.
After the

person

per¬

:

If the last two

are

Bureau of Internal Revenue,

-v

tax system,
exemption of $500

/"

'

''

.

they can be, by action of the

as

it was

post-war

current

major questions

which Congress must

the

of

early,

It is not too

On the premise that

income taxes will be the

structure will be re¬

list the

to

recommendations

$500, only about
national income was

in earlier years

'

•

administration

determination.

ary

as

much smaller proportion.

,

whole

that time, the

In

;

'

•

left with

administration

,

is Con-;

to be
some important forms of
all their own.
Death;
The States need

notwithstanding taxation
taxes have had a long history as
the fact that the corporate income
a
State source of revenue, while
which produced the dividends had
already been heavily taxed to the their use by the Federal Govern- >
corporation
itself.
Interest on ment is largely associated with
Hence, why notcorporate bonds and debentures war financing.
has
not
been
subjected
to this give 'them back to the States for
more than the totals, which were
their exclusive use?
:
>
double tax, since the corporations
$15 billion for a low Federal bud¬
had
a
full
deduction
for these
If
these
taxes
are
not now
get, representing prudence and
payments.
Hence, there has been given back to the States, they,
care in expenditure; $18 billion or
and is a strong
incentive to fi¬ should be better coordinated, so
$19 billion for a budget exhibiting
nance
corporate enterprise with that duplicate levies, one at the
restraint and control over expen¬
debt rather than with equity obli¬
time of a gift, another, at deathsditures, but greater liberality than
gations.
In an equitable tax sys¬ are reduced to the minimum. The
the basic necessities required; and
tem,
the
discrimination
against
exemptions should be liberal and
$22 billion for a liberal or high
received

them,

v

and

tives

Nicholas

years ago,

Considered

Congress picked the right objec¬

people will, in short

racy," written 38

Well

the

"

••

.

passed
with
com¬
speed, was a well-con¬
sidered first step.
In my opinion,

order, manifest itself.

book,

braking effect upon

Tne Revenue Act of 1945, intro¬

regarding affairs at home
common

eco¬

up

incentives to produce.

mendable

abroad, the

slow

particular.
But it is possible to work
out
plans which will raise the money
the Government requires with the

duced

and

to

nomic activity in some

adjustment.

Despite friction and

tends

and

some

great home-coming and reun¬
ion.
We are in the throes of re¬

the American

At

liberty.

individual

of

cannot
bring
about these aspirations and ideals,
but it can operate so as to defeat
them.
All
taxation
is
burden¬

The

a

concern

American way of life

the

see

a

,

nation confronted with

a

1946.

in

23%

Thirties.

v'.jr

management with respect to the
proportion of a company's earn¬
ings
that
should
be
retained.
Greater recognition should be ac- ?
corded to business accounting pro- >
cedures and results, with partic- •
ular reference to the accounting
for:
(a) depreciation and abso- .leseence;.: (b)
expenditures for
such intangible purposes as re¬
search and development; (c) sal- <

will
high—not so
much higher

and, early

low

as

of

half

early

bill will start

revenue

but

:•

consolidated

a

should give much greater weight
than heretofore to the decisions of

connection,

tions

making

Improved Administration

known, and the individual exemp¬

■

be done in

can

field to

the fiscal

pos¬

as

'"'yv

Defeat Aims

Can

Gov't Fiscal Policy

Great

;

u

fronted

United

eral

manent mold.

agree¬

wish

us

Questions in 1946

Major

'V:

last year,

nounced that work on a new gen¬

The Committee pub¬
lished its report'in September in
a book of 275 pages, accompanied
by a short summary, or popular
version, of 50 pages. Most of you

questions like these as
upon the necessity of
winning the war.
Most "citizens
have
not
yet
t h o u g h t
them
was

?

2%

again

'

note that even
with the income tax our
chief revenue producer, with the
heaviest income tax rates we have

that

Congressional leaders have an¬

problems.

pendently of the major fiscal
problems the ' country confronts

on

.

The

not

return should be eliminated,

nominal tax rates of the

Twenties

move.

rience in

have

19%,

as

than the

taxed and

professional

If so, what ones?
There is no such

there

well-executed

viewed and recast in a more

the

high

gave

and

should

Income tax

remain

necessarily

Federal income
be taxed.
differential tax on cori

tax

porations

Third, the income tax must play
the major part in raising revenue,
and since the great bulk of income
is received by persons with
in¬
comes of moderate size, the start¬
ing rate of the income tax,
for 1945 and 19% for 1946,

six.

or

another subject to

difficult.

very

-

of years, , not
Dividends

number

five

than

received by one corporation front

to em¬

ing enough revenue to balance the
budget in a normal year will be-

produce that the transition act
them.
It was a well-timed

to

five

of

Rather,'

ment

* rates,
too,
are
far
higher than they were before the
war.
Nevertheless, both individu¬
als and corporations needed the
bit of encouragement and incentive
Individual

research director.

Should taxes be further reduced?

clear

rate

training, but all with long expe¬

afford to do it?

we

with

ac¬

undertake

we

as

Committee

The

Gov¬
what

than

greater
receipts?

ernmental

usual

a

tax

,

agreed to finance the work. Prof.
Harley L. Lutz, of Princeton Uni¬

bother about the fact that expen¬
ditures have been and could easily
remain

still

are

corporate

The Maurice and Laura
Foundation
of
Pittsburgh

Falk

need to

we

expenditures and
tremendous.
The

Federal

deficit

necessary

more

forecast, the problem of rais¬

have

report.

a

complished by private enterprise?
In the fiscal

for the

assemble the material and to make

men

be

the

was

committee.;;; '. Conse¬
quently, the Committee on Post¬
war
Tax
Policy was formed to

Govern¬

best

can

it

pointing

What

sovereignty?,

their

should

what

They

•

be done and that the best way to

do

give dif¬

nations

To

vidual

and

reasonable

ploy all the different forms of im¬
posts. If the Federal expenditures
are to be stabilized at $25 billion,
as some Washington commentators

generally applicable were a neces¬
sary and just accompaniment of
the
excess
profits tax repealer.
The reductions could not be great,

agreed that the work needed to

dif¬

and

nations

proceed.

should

study

a

requirements increase, it becomes

'vi
slight reductions in indi¬
and
corporate tax rates

The

business profits' of other
should be made by per->
mitting a
carry-forward for a

against

de¬

less

more

general

a

years
ago
and more than 50%
higher than it was five years ago.

of individuals and of groups came

which

a

as

used

years

V

study of fiscal policies for the na¬
tion after the war and how such

began

more

used

be

is still about
three times what it was only 10

nations and of indi¬
to dissolve.'
The
particular and conflicting interests
once

cannot

group of men to consider whether
the time had come to make
a

of purpose of

viduals

and

year

it

remedy.

half ago,
President Henry , M. Wriston
of
Brown
University
assembled
a
a

certainly the cleanest method of
simplification. Unfortunately,

have

we

simplify

be

expenditures can be
held down, the taxing power need
not be used to the full.
As the

tax

tax

Such is the

and

tax,

problems of corporations
and the provisions pf the Internal
Revenue Code itself.. Repeal is

decide

Post-war Tax Policy Report
About

business, full employment
high national income were

a

and

found that it works.

effort made to insure a pros¬
perous economy here, and a re¬
turn to normal conditions abroad.
and

results

the

what is to

every

Active

let,

problem;

qual¬

meeting new problems are

the

greatly

will

moreover,

the farmers, and

these

corporate

of

to

rates

of

business net losses as a deduction

If

creases.

high

too

elimination of

The

three, forms

and that the manufacturers
gent procedure seems to be to
the scientists of assemble the relevant data on each

pose,

and

taxes

with

game

Allowance

equity.

greater

as the total money to
raised increases, the choices of

Second,
be

*

,

budget.
will

Individual fiscal experts
their

write

prescriptions, but they will gener¬
ally agree that $18 billion of Fed¬
eral expenditures is about what
we must
expect; that $25 billion
is

possibility if Con¬

fearsome

a

is
spenders.
gress

Most

controlled

*

J

• j

liberal

by

from

Revenue

Income

Tax

important facts become
clear from these schedules
and
studies.
In the first place, it is
evident that the budget at best
will be more than twice that of
Several

the

that

four

and

Thirties

times

of the

or

Twenties.

penditures for necessary

ment

tional

functions

Government bring
this result. If the Govern¬
takes on; a number of op¬
fimctions and spends rather

liberally on them, the total
r '•<;

,

}

?'

* '•)* * *

removed.

be

Moreover,

want to encourage

should
if we

active business

enterprise and new ventures there
is the more reason for giving in¬
come from venture capital an even
break.

:

i) *

Vf

w

f. '

f '

*V *

transfers between hus¬
band ■«, and
wife should not be
levied.
One transfer tax per gen¬
eration is enough.
,
taxes

on

Congress

The

Small

Corporations

what -.activities- the
is to perform
and how they, are to be paid for,
Federal Government

$13 billion figure should
the taxes to meet

If the

the

Con¬
has shown particular con¬

normal post-war years.

gress

and the country

choose

must

has
already begun
the process of reducing the cor¬
porate rate and further reductions
should be made when we enter
into

Bill

$18 Billion Tax

,

Consider

Finally,

moderate.

rates

the

total,

might be somewhat as
,

v..

;

budget

figure.
Xf 4,.t „• !\

sideration

the

tax

applicable to'cor¬

porations generally exceed those
applicable to individual" enter¬
prises.
made

porate

V i
other changes should
in the system of cor¬
-

Various
be

Billions

for small

rates

'

,

taction iq rJhe interests

of

Individual

at

income tax

20% initial rate_V--i—-'
'

1

V

.

i

be
it

foilows; ;•»

<

•

corporations Excises, customs, etc.-—
five and special treatment should con¬ Corporation income tax at
Ex¬ tinue to be given them so long as
30%
——

of the Federal
about

dividend income, certainly

Congress

tax,, that can reach a.much higher

'•

detailed

own

'

$4.4
-

- -

44
..

.

.

9.6

..

•

— •

>':•$18.4
/.

We

sition

are now

beginning the tran-

period .from war to peace.

,

V

THE COMMERCIAL

.Volume 162 : Number 4448
which

Military? le^penditures. have not,
( 6f CQurse^ceasedr The Federal
] expenditure^ in, the, fiscal year

>.

1 1945-1946; will be less than

Congress will want to con¬

sider riiext y ear. A mong -them are
the tax treatment of'cooperatives

engaged, in business and of public
\ budgeted;3 but ? they will still be utilities or other enterprises oper¬
1
ated
br muiiicipalities in compe-.
greatly ^;ih:;:;ex!cess::; of revenue^
with.' private., .enterprise.
Expenditures "will still be abnor- tition
xnal for 1946-1947 and perhaps for
Congress would be well advised3
another year after that. The only however, not to enter upon a pro¬
•'*
hope1 of a balanced and business- gram of further reduction in indi-j
like budget Is to reduce expendi- vidual tax rates or of increases in
»tures .arid"to, reduce ' thern 'mor^ exemptions while/we confront the
•'
rapid 1 y ;than revenues
are
re^ necessity of Federal expenditures
duced. ■' y!/ ■■ ///
> considerably in excess of current
were

.

-

.

*

•••

in

& FINANCIAL CHRONICLE

conclusion,

few and simple.
enterprise , .is

are

private

Vigorous

essential to the American way of
life
as-we-'have known it.
A
sound

system is
active and Wealthy

essential to

an

economy.

The

should

in

balanced

be

normal

Federal

key to a

ful Control over

ought to aim at. a balanced
budget in the first normal post¬
war
year,
now
distant two or
three years. In the meantime, the
primary aim should be to reduce
expenditures, not taxes.
cannot

Taxes

than

paid them during the Twen¬

tain

ties and Thirties, but the wartime

tax

our

major points of sound fis-*
cal policy that I would emphasize,

at

The policy

hard will be either durable

so

conservative
Federal

the

What lines should such re¬

taxes be
reduced
when the
Treasury y is
confronted with a budget deficit
for

any

-

dollars?

.

and

in - the

eluded

program next year.
In the first
«place, the time is ripe for a review
r of
the whole program of excise
taxation and the determinatiou of

exactly what saleaof commodities
are to be subjected to taxes and at
what V rates i- in
ensuing t years.

"

*

Doubtless,

the

liquor

retained,

;

less general

or

*

-

.

*

'

.

-

-

formation and the active

*

encouragement to the use of bond
and debenture issues for financ¬
ing rather than stock issues.

Con¬

gress should move promptly
to
eliminate the present discrimina¬

against corporate income distributed as.dividends.
For similar reasons of equity,
the tax for the privilege of filing
consolidated returns and the tax
on
dividends distributedby one
tion

;

-

,

everywhere

under

the

dented

debt

chaotic

or

laboring

are

burden

of

in

are

inflation.'

unprece¬

throes

the
It

is

not

a

ditions; the y

Under these con¬
optimism which we

all

;

would

1

ness

be

at this time.

This

greatly improve the fair-

of the tax system and would

beneficial

both

to

individuals

who- receive dividends and to

cor¬

porations which pay them.
.

.There

are

numerous

other

equities of less general importance




learned

pious

on

an

enter¬

to

depend
impractical

and

feel

want

to

the

about

post¬

and

be

must

the vicious

witnessed

values

the

great

a

it

^

History
from

teaches

that

us

devastations

the

war

reconversion

Progress

is

under

way.

be slow at first but

may

time

goes

To

on.

be

sure,

taut, tempers strained,
the people weary after their ex¬
ertions on the home and military
fronts and the readjustments in
are

phase will

what

I

should

like

the

precisely,

more

alternative but to

world

organization
preventing warfare
of

words

our

are

system

of

private enterprise has lost its
vitality but there are a number

statesman,

,

economic

nations
not

A Long Peace Period Ahead

place,

\

able to contemplate a

should be
long period

of

mean

we

by which I

free¬

dom from anything more than the
localized conflicts which are al¬

ported

a
•

under

way

some¬

the globe. This assump¬
long peace may be sup¬
by -'some
quite
cynical

on

tion of

remain

a

pro¬

meaning,, for
at

and

peace

if
do

in a great armament
they will be able to produce

engage

race

consumption for their peoples
of for war, which means
higher standard of living.
One

instead

f

the

troubles

great

of

sion

the

30s

with

the

that

the

was

the

seemed

only

way

out.

Again,

war preparations require
use
of totalitarian economic

which

,

.

Higher Living Standards

long peace would have

found

in
as

international
we

know

war

or

trade

from

experience operate in
spiral to contract trade.
from

a

vicious

from feverish prep¬

environment

restrictive

hard

Freedom

arations for war may well
an

in

which

create
those

devices

that strangle
gradually be relaxed.
The 30s were plagued with con¬
stricted investments, internally as

trade

well

may

as

1945.

share

extra

dividend,
corporation

Cor¬

the
value stock of
the
issued
outstanding, payable on and after Decem¬
27, 1945, to the stockholders of record On
the corporation's books at the close of business
December
18,
1945.
JOSEPH N. SEIFERT, Secretary,
as

an

par

Combustion Engineering
200

depres¬
The

Madison

of

Board

Engineering
dividend

on

Company, Inc.

Avenue, New York
Directors

of

Combustion

Company,
Inc.,
has declared
a
$2.00 per share on the outstanding

of

capital
stock
of
January 10, 1946,
the

have
in

the
Company,
payable on
to stockholders of record At
of business December 27, 1945.

close

.

H.

H.

BERRY,

yice-President

and

'

:

Treasurer.■

of the prop¬

Electric

The

Storage Battery

company
Consecutive

18lst

:

Quarterly Dividend

v

The

Directors

declared

have

the

from

Accumulated Surplus of the Company a

final dividend for the

year

i{$.50y ;per: share

"cents

1945 of fifty

the Common

on

'/Stock, payable December 31. 1945.
Stockholders

business

a

of

record

to

the close of

at

December 17, 1945. Checks

on

"

"

'will be mailed.

A

-

i

'

'

*

;

-

'//»

B. C. ALLAN.
*

■

*

•>
•

-Secrtfary and Treasurer

\

Philadelphia }2, December!t 1941

externally, for capital nat¬

of

impor¬
be pointed
of the business de¬

out that many

\

■

great

MINERALS & CHEMICAL
CORPORATION

cisions of the 20s turned out' to be
General Offices

and "costly to
them, not because
the public did not want an in¬
creased volume of goods or be¬
embarrassing

so

20 Korth Wacker Drive,

those who made

the

cause

and

labor

available

not

were

Dividends

materials

to

•,/

production, but only because the
subsequently was
subjected to a vicious and pro¬
longed deflation.
In retrospect it
appears that we need not have
experienced either the inflation of
the 20s

lowed, if

the

In

both

in

ensuing

years

;•//■ yviv;;/

for

blame

Both

periods.
unfortu¬

pened and

what

subject to

was

It is

the

first

for

since

time

the

-

dividends

1945.

Vice President and Treasurer
"

;

••••'

V-

Phosphate

Potash

•

the

have several great

war

i

years,

several million

develop.
During
as we all know,

to

the

be

housed

families have

new

these will have

been formed and

and

supplied

with

community facilities and the other
goods and services which are part
American

ing.. Here is
for

the

American
,

a

GAS

UNITED

'Another

post-war

and services of

business.
new

period

,

market

is

a

for

Chemicals

the

temporary

CORPORATION

Stock

Dividend

-

declared

was

for

stockholders

to

established
such

payment

of

record

10,

January

on

a

Common

31.
1946,
close of busi¬
directors have

January

at the

1946.

The

fixed, annual dividend rate
Stock.
•
,
F. SANDERS, Secretary.
.

H.

.

UNITED

MACHINERY CORPORATION
Corporation have declared
37V2c. per share on the Preferred

SHOE

The Directors of this
a

dividend of

capital

They have also declared a divi¬
capital

stock.

dend of 62V2C. per share on the Common
stock.

dividends on both Preferred and
are payable January
5. 1946,-to
of record at the close of business

The

Common

stock

stockholders
December

18,

1945.

'

WALLACE

M.

DIVIDEND

WESTERN

standard of. liv¬

tremendous market

products

*

a

automobiles, electric gadgets,

of the

Fertilizer

»

meeting of the Board of Directors of
United
Gas
Corporation .held
December
17,
1945,
a
dividend of twenty
cents
(20c) per
share on the Common Stock of the Corporation
At

on

for viewing our
economic future with some optim¬
reason

we

•

Mining and Manufacturing

not

Markets to Develop

markets to

;

Robert P. Resch

ness

new

•'

mailed.

'

Common

ism is that

■■/

payable Dec.

are

'
V/.:
Checks will be

late

American business en¬
terprises are actively planning to
expand markets, increase produc¬
tion and go ahead vigorously.
New

"

now

20s. many

A third

r

a cam¬

accident that

no

($1.00)

/

28, 1945 to stockholders of record
at the close of business Dec. 14,

hap¬

paign of defamation which could
not help but chill enterprise,
The
psychological, and monetary costs
of' "picking up the pieces" from
the last depression were heavy
indeed;

share

per

$5.00 Par Value Common Stock
Fifty Cents (500) per share

often without provo¬
private business was sad¬

with

follows:

as

"Dividend of One Dollar

nately and
dled

by the
29,1945

Nov.

'•

fiscal, monetary and
policies had been

our

realistic

on

4% Cumulative Preferred Stock
15th Consecutive Quarterly

the deflation which fol¬

or

J//

Chicago

declared

were

Board of Directors

increase

whole economy

cation

devices

,

is

Governmental

A

14,

Arundel

it ought to

more

the

optimism.

always

distinguished French
such an organizatior

categorically impera¬
Thus, the probabilities seem
to be heavily in favor of a
long
period of peace.
,'V;:

cautious

most

a

factor

tance and

tive.

Means

*

the

ber

for

has become

Of factors which encourage us to
view our economic future with

peace,

a

develop

capable \ of
and, in the

leading nations were devoted pri¬
marily to the production of war
materials, which reduced the vol¬
ume
of
goods available to the
people so severely that aggres¬

Many observers

In the first

to

seems

economic resources of many of the

to assume that

prone

everyone

shall

we

reconversion-demobilization phase
is completed.

that they
with

readjustment-

conditions

the

the

that the atomic bomb leaves

no

period

when

increase

sense

nomic

of

in¬

us

of

some

well

may

Almost

sion.,

per

effect on the
well as the inclination

as

This

having

now

will ultimately
constructively.
Another reason for viewing the
situation with some hope is that
the new weapons which World
War II produced are so fearsome
that they may well deter aggres¬

a

face

to'be

seem

dealt

be

of

*

We

deferring them until later

this

cents

people to seek opportuni¬
the producive
employ¬
ment of funds, but now I sense
that we are free of these psycho¬
logical depressants and can jus¬
tify an expansionary attitude to¬
wards new investments.;
> .:; t

inevitable

post-war squabbles

stead of

Directors

the

ties

nations are being, aired
public and, in effect, put on the
agenda for the international con¬

to talk to you about tonight is the

or,

of

in

general shape of the post-war eco¬

world,

are

Md.

and

one

These factors had

ahead.

ness

dis¬

for

soon pass.

Therefore,

the

as

erties, loans and securities, which
greatly in the de¬
pression.
The rise in real prop¬
erty and security prices has lifted
many bonds, -loans
and invest¬
ments held by investors to a point
where they are no longer pressing
problems of liquidation.
Again,
many
of the productive plants
which
industrial
organizations
built in the optimistic 20s con¬
stituted excess capacity until the
war
put them to active use, but
it now seems likely that they will
continue to be productive invest¬
ments in the period of good busi¬

the

.

of

resurgence

of many

of

CORPORATION

has
this
day declared 35
cents per
the regular quarterly dividend, and 50

share
no

them

years

the

differ

had suffered so

between

chance

#

that

that

agreements which

our

J Recovery from War

hard

on

confessed

encouraging

ferences.-

suspect/ however,

more

Board

poration

deflation of economic

The last five

values.

present situation, leaves much to
be desired, but-in-some respects

the : unpleasant

where
in¬

have

to

less

war

corporation to another should also
be eliminated

War has become

scale.

prise so large and so expensive,
involving as it does whole popu¬

The

accompanied

ability

-

the
employment of risk capital.
We certainly
; do not wish to give special tax

,

horrified by
the modern

which

liquidation

Notice

ARUNDEL

December

sive after-effects of the inevitable

severely restrictive

-

Criminatory,, but unwise.
•
We ' want
to - encourage

or
on

psychologically

It

nerves

is not only unjust and dis-

once,
.,

war

the

of

pro¬

of

market

Baltimore,

seek¬

were-many,

important

realism in international relations.

it is almost sure to be accelerated

elimination of the double
of dividends should, bs

of

costs

this

for

most

ties. j Fiscal and financial organi¬

and

next

-

.

destroyed, while

principal item cn the
docket.
It is generally recognized the early post-war period involve
that the present plan of twice
severe economic strains and dis¬
taxing
corporate
income
dis~ locations. It would be surprising
tributed as dividends, while other if conditions were otherwise but
forms cf income are taxed only there is ;reason to hope that this

"

-

in

have nearly always been
rapid than at first seemed
possible.
We know that many
countries are attacking their fis¬
cal
problems
vigorously.
De¬
mobilization is proceeding rapidly

taxation
the

world is exhaused

of this

Dividend

the people's wants
high, but private investment
not
respond. ' • • While • the

idealism

of

Dividend Taxation Unjust
'The

destroyed

men

Estimates

war.

THE

and

in others they are paralyzed be¬
cause
of organizational difficul¬

as

<

mechanisms

-

are

more

excise
taxation as an important element
in their fiscal plans. ; Since the
subject is a highly controversial
one, Congress will need to devote
a good deal of time to it.y

but

seem

recoveries

been wiser in maintaining

warfare.
The
are not only de¬
their war potential is
and" the. rest .of the

nations

areas.

system entirely, since our revenue
system in the past has suffered
from, too great dependence on in¬
come taxation.. The British have

globaj
nations

productive

that the
months ahead will bring signifi¬
cant; improvement
in all these

general" application.
It
abandon the

quite

a

some

/

would be well not to

for

Government, labor and business.

I

system for the adminis¬
tration of a series of sales taxes
of

feated

and

set up a

that

The

has

Bureau of Internal Revenue

how

to

as

period is apt to be chilled by
realities: of the
present../V |;;?■ y; >,-■

consumption
should sales taxes be levied? -The
more

nations

victorious

uncertain

pretty picture.

although both may be slightly re¬
duced.
On what other articles of
*

The
be

to

expecting

for

s

mobil¬

was

DIVIDEND NOTICES

Everyone
expansion;

for

millions of

were

the

was

lations. and complete industrial
mobilization, that it; will take a
generation or more before the
major nations, even if they were
so disposed, could be ready for it
again.
Another factor is that we

of

and

taxes

the tobacco taxes will be

turbulent.

are

should

zations

*

■1.

times

to determine the relative roles of

revision

revenue

the

the

organize the peace.
Inside almost every nation great
ideological battles are under way

nevertheless, a good
items which should be in-

in

gaged

But

seem

There are,

many

there

the; need

reasons

\

;

considerable period in the future
the world will-not again be en¬
aggressor

they

y;:

for

reason

of
a - period
which
might
bring
great■*. economic
develop ment, higher standards of living
and
accelerated, social progress.

world.

year

perhaps

ri/""',. .>*/'

/

the thresh¬

on

Bloody
fighting fis still under
in
several
areas
of
the

Taxation Needs Review

Excise
<

f

current ;

billion

are

way

of
another
deficit for the fiscal year 19461947 of a good many billions of
the

$31

-

£

Can

we

old

budget. One test will come next
year when Congress undertakes
general revenue revi¬
take?

that

senses

•■//.//

reasoning. For example, the "ex¬
factor"
is
a
/ haustion
powerful

ities for peace and prosperity are
present
and ;: almost
everyone

of

sensed

did

or

^

•

;> We all know that the potentials

even

volume increased.

ness

health, on which our
economic health greatly depends.

to
hajs

considerably, depending upon
but it is of great
;
(Continued on page 3047)
j

early 30s out of our psycho¬
logical system.
In the later 30s
investment in new and improved
production by American industry
responded only feebly when busi¬

of

the task of

-

condition to Fed¬

refer

nation

organization

the

fiscal

eral

(Continued from-page 3003)

a

•

administration

sion.

essential

I

which

their, source,

restrained

for

the

when

ductive

pe¬

ized

reason

large.
demand

in recent years be¬
production in our durable
goods industries was

shut off

have

optimism concerning the economic
outlook is that we seem finally to
have liquidated the deflation of

Whither the Economic Trend?

I advocate is one of

and

prudent

vision

we

is

accumulated
cause

Deflation of 30s Liquidated

"Another

were

greatly

a:

\ Congressional Test Next Year

.

if

considerably reduced
watch expenditures.
That

it

magnitude

ing jobs

prosperous.

*

taxes

rates can be

is the

.

The

will . re¬
higher level
-than
during the'Thirties;
and,
second,- that the budget should
really be balanced three years
from now.-r,;:/

•

at

system

Federal

expenditures

agement,

main

reduce expenditures" arid

ally be balanced.

lowered, for we must remember
first that, even with careful man¬

to -pay

a

but

.deferred

consumers'

riod of time..

expenditures are kept under reas¬
onable control, taxes need not be
excessive.
Many more citizens
,

the

warfare, we
get the first real revival in
we

If

have

to

does-diminish

renewed

long

care¬

expenditures.

future
of

experienced fori quite

of
The

will

be

to main¬
approxi¬
mately its present productivity
until the Federal budget can actu¬

precipitately

be

aim should

The

revenues.

We

the

by the threat of war.

international investment

(_

'

tne

threat

year

6us*ness activity,"
balanced budget is

one

confronted

could

budget

a

urally becomes timid when it is
If

fiscal

and

tax

3045

KEMP,

•

Treasurer-,

NOTICE

TARLET Afe STATIONERY
CORPORATION

Notice is hereby

given 'hat, a dividend

at the

$0.59 per share on the issued and out¬
scares
without
oar
value
of
the
fWmmrn Sh>ck of W«»«t/"-n Tab'et. to Stationery

rate of

standing

Corporation has been declared pavatfe on .Tammy
10
1946. to the..holders of record of such shares
at the close of-business ,nn-D»cm'ib°r 27. .1945.
E. H. BACH, Treasurer.

NEW FILINGS

days

ago,

were

registration statements

which

en

whose registration
filed less than twenty
grouped according to dates
issues

of

Uil

statements

'

norma! course become effective,
less accelerated at the discretion el

In

will

un¬

tno

SEC.

shares

as

change

SATURDAY, DEC. 22
registration statement for
■70,000 shares 55 cent cumulative convert¬
ible preferred and 100,000 shares common
Stock $1 par.
Details—See issue of Dec.

Offering—Preferred stock $10,

■

Underwriters—First Colony
Linburn & Co., Childs,

s-i.

Si¬

Corp.,

mons,

Jeffries &

&

Co.,

filed

common

SUNDAY, DEC. 23

Richmond

Street,.

Ontario,

Toronto,

MAREMONT AUTOMOTIVE PRODUCTS,
on Dec.
4 filed a registration .state¬
for $1,000,000 4 r'o sinking fund de¬

41

—

East;

Canada.

June
25,
1945/
done superficial explorat¬
properties. ;;'■■■
'*•'
- * i-

date

has

and

ment

ion work

bentures, due Dec.

authorized
capital of $40,000, divided into 8,000 shares
(par
$5).
There have been issued
for
property, 2,000 shares, in escrow; issued

Offered by

to be

1. I960. Price to
amendment.

public

public to be offered

Offering—Price to

McCormtck & Co.,

STORES CORP. on Dec. 4
registration statement for 60,000
shares of cumulative convertible preferred
Stock,
par
$100, and 150,000 shares of
common stock, par SI.
In addition 150,000
a

of

registered which

were

common

conversion of the pre¬
ferred stock.
The dividend rate on the
preferred will be filed by amendment.
Details—See issue of Dec. 13.
Offering—The 60,000 shares of preferred
Will be initially offered to holders of Its
common
stock of record Dec. 27. Holders
pf a certain number of common shares
for

reserved

are

'<including United Stores

Corporation) have

waive their rights to subscribe
and the shares of new preferred to which
they would otherwise be entitled to sub¬
scribe
will be sold to the underwriters,
except for a small number of shares to
the remaining bommon 'stockholders so as
to make possible the ratio which will be
filed
bp* amendment.
The underwriters
Jr^ve agreed
tp purchase any shares of
3T3W 'preferred
which are not subscribed
agreed

to

stockholders. The under¬
$22 per share
any
of
the
150.000 shares of common
which are not purchased by the holders
©f o'-'c cumulative preferred stock pursuant
to
the common stock purchase warrants
attached to such shares of stock, except
the shares of common reserved for issuance
upon exercise of fractional warrants which
will remain valid until December 1, 1946.
According
to the registration statement
the company
on Dec.
14, 1945, will re¬
deem
all of Its $2,625,000 3V*%
sinking
fund debentures, and will call for redemp¬
tion all its 5% cumulative preferred.
•
The offering price of the new preferred

for

by

common

writers also

will

amendment.
Merrill
Lynch,
Pierce,
Beane and Kidder, Peabody &
by

Underwriters
Fenner

&

Co., head the

—

underwriting group.

MONDAY, DEO. 24
NEW YORK DOCK CO. on

Dec. 5 filed a

registration statement for $12,000,000 first
mortgage 3Vz% bonds due Dec. 15, 1970.
Details—See issue of Dee. 13.
Offering—The price to the public will
by amendment.
Underwriters—The
underwriting

be filed

by Hayden, Stone
Stuart & Co., Inc.

headed

be

will

in

treasury 5,720

being offered at par for

are

subscription.
Proceeds—The proceeds of this issue will
enable
the
company
to
do all required,
assessment work, pay the government dues

and Haisey,

21-year renewable lease on
the company's mining claims.
The inten¬
tion is to continue exploration work pre¬
liminary to the incorporation of a 3,000,000
and

acquire

shares

over

shares

125

share

$5

and development company
this company on the basis of

mining

take

to

a

the

of

new

each

for

company

of this company.

i

Underwriters—None named,

Registration Statement No. 2-6040. Form
S-3.

(12-10-45).

■;

FUND, INC. has filed a
statement with the SEC cov¬
ering 10,000 full paid certificates in units
each

$100

of

and

installment pay¬
of $100 each of

10,000

certificates in units

ment

Associated

Fund.

Trust

Street,

Olive

Address—506

^ i
Louis 1,

.

St.

\;!i

Trust.

Business—Investment

named.

Underwriters—None

'

?

C-l.

(12-10-45).

group

& Co.,

V

:

GRAHAM-NEWMAN
capital

stock,

$50 per

share.

has filed a
14,999 shares of
stated value of

minimum

York, N. Y.
Business — Diversified
management in¬
vestment company of the open-end type.
Offering—Of
the
14,099 shares being
registered, additional shares in a number
as
yet undetermined, but estimated to be
no less than 6,250 and np more than 7,500,
will
be
offered to all
stockholders, pro
rata, at a price of $100 per share which
is less than pet asset value, and this offer
will expire on Jan. 30, 1946.
Any stock
not subscribed for will be ^registered and
Address—52 Wall Street, New

will not be issued.

BISCUIT CO.

has filed

registration statement for 80,750 shares
of common stock, par $1.
■ ■
|
Address—1465 West 37th Street, Chicago,,
a

.

HI.

V

f

■

-

Business

—

Manufacture

sale

and

of

crackers.
to

Offering—The new stock will be offered
common
stockholders of record some
in

time

at

$10

per

share

for

each

January

of

ratio

one

share in the
four shares

held.

"between $625,00o and $750,000 except any
of such proceeds used to repurchase shares
and except
any
amount included as ac¬
dividends
or

in

price

the

of

Shares

repurchased, will be held in cash

expects to use
the proceeds for the purpose of enlarging
its Chicago plant and for the purchase of
additional machinery and equipment
for
Its
Chicago and West Roxbury
(Boston)
plants, and for working capital.
The total
costs of additions will range from $550,000
to

company

$750,000.

equivalent, pending investment in
securities, arbitrage opera¬
tions,
self-liquidating situations, and in
conformity with the corporation's stated
investment policies.

named.
Registration Statement No. 2-6038. Form
Underwriters—None
S-5.

(12-7-45).

(12-12-45).

has

ICA

filed

..

a

of

UNION

GAS

CO.

has

CANTEEN

CO.

AMER¬

OF

registration statement for
of common stock, par $5.
Merchandise
Mart,
222

Address—1430

Chicago 54, 111.;
is
automatic
mer¬

chandising of food products.
Offering—Price to public will be filed
Proceeds—Proceeds will be

Address —1104

Burt

Building,

Business—-Public

Dallas,

machines.

Underwriters—Hornblower & Weeks and
Central

Republic

Inc.

Corp.,

Registration Statement No. 2-6043. Form
S-I.

(12-12-45).
NIAGARA ELECTRIC CORP.
registration statement for 350,preferred stock ($100 par).
dividend rate will be tiled by amend¬

BUFFALO
has filed

a

shares cf

000
The

'




owned

by

parent

of

will

sale

received

will

be sold

.

there

special

Offering—The
for

sale

at

stock will be offered
bidding 4 and the

new

competitive

offering price filed by amendment.
">oceed«—The

net

proceeds,

funds of the company,
ward

the

.

its

to

Sept.

on

.* -1

;• ;•

,

underwriting

redemption

with

other

will be applied to¬
in

February.

1946,

of the presently
outstanding 350,000 shares
of preferred stock, 5%
series, at the re¬

demption price of $105 per share plus

ac¬

"v

& Co. heads

Loeb

(12-14-45).

.

''

.

registration

of cumulative

for 120,000 shares

be

/ i

Street, Syra¬

•':
conditioning, refrigeration

,"

N. Y.

Business—Air

offer the
preferred stock to the holders of its com¬
mon stock on a pro rata basis upon terms
and at a price to. be filed by amendment,
Offering—The

will

company

of

pre¬

ferred for each 100 shares of common

held.

the

on

of

basis

so

shares

many

as

tp purchase
are not sub¬

common

stockholders,

underwriters have agreed

The

shares

scribed

for

preferred

of

the

by

together with the balance of the authorised
120,000 shares which are not offered to
stockholders.
The
public offering price
be

will

filed

will,
upon
call for re¬
demption
all
of
its
then
unconverted
cumulative preferred
stock,
series.
Such
stock is
convertible into ; commph
stock, but the company pointed out it is
impossible to determine at this time how
much of the proceeds pf the sale of new
stock will be required to redeem uncon¬
verted 4 V2 % ' preferred stock.
Assuming
for

no

the

substantial

corporation
new

demption,

amount

stock,

is

it is proposed

required for re¬
tp make the fol¬

lowing expenditures: $2,500,000 for acquisi¬
tion of new machinery, equipment,
etc.;

working capital
inventories and

$1,100,000 for additions to
to carry receivables and

$2,000,000 for the construction and equip?
ment pf a new factory in the Syracuse
;

area.

Underwriters—Harriman

"

Ripley

.

&

.

Co.

Jbead the
!
Registration Statement No. 2-6049. Form

Inc.

and Hemphill, Noyes is Cq.

underwriting group.
8-1.

(12-14-45).

crued dividends.
names

will

be

filed

amendment.
Ci-

S-l.

Statement No. 2-6044. Form

<12-12-45).

SIBLING ENGINE CO. has filed a
istration

statement

55

cumulative

cent

mon

($8 par)

stock

for

100,000

convertible

reg¬

shares

of

preferred

and 150,000 shares of com¬

($1 par).

ATLANTIC

REFINING

CO.

has filed

2,595,000
%'.
*

4.

Finance,

Ltd.,
to

(Canadian companies), at

not

Shares

generally

acquired

so

public.

the

to

not

geologist, of$i:

Details—See

'from

Noel
group!

&

Alstyne,

-5

?

par,

$1,

ago,

more

or

not

have

by amendment.
The
includes 100,000 shares
conversion of
The 160,000 shares of com¬

stock

issued

is

bat whose
been deter!

be

price

of

common

underwriting

CORP.

Oct.

on

Offering—The
$5.50

price

1960.

the

CABOT

LTD., on
ment for
par

$1.

efforts

1,1

of

MINES.
Nov. ,13 filed a registration state¬
1,000,000 shares of common stock,
;
YELLOWKNIFE

GOLD

Details—See issue of Nov.

Offering—The

22.

Is 30
!
Langs
is

William

principal underwriter. V

!

r'

LIGHT CO. on
registration statement tox
100,000 shares pf preferred stock, par $100.
The dividend rate will be filed by amend¬
CENTRAL

Npv.

23 filed

ment.

POWER ' &
a

;

,

Details—See issue of Nov.

29.
&1 Light

Co.,
Mass., proposes to offer the holders of its
1%
and 6 %
preferred stock an oppor¬
tunity to exchange their shares for shares
of the new Texas concern on a share for
share basis plus cash.
The dividend rate
on the new preferred will be specified by
underwriters in connection - with the sale
at competitive bidding.
It is expected the
exchange offer will be in effect for about
ten days and that the shares of the old
preferred stock not exchanged will be re¬
deemed, on Feb. i, 1946, at $120 per share
and accrued dividends, in the case of the
7% preferred, and at $110 per share and
accrued dividends in the case of the 6%
Offering—Central

Power

preferred.

writers will be filed
THE

by amendment.

CONSOLIDATED, INCORPORATED,

Consolidada, S. A., a
on Nov. 28 filed a
statement for 166,667 Ameri¬

Snglish name of La
Mexican

corporation,

registration

7:.>

'■ i

:

amendment.

.

1

Underwriters

—

y

public will
7,
7 '

the

price to

,

.

Securities" Corp.

Union

'

heads the underwriting group.

SERVICE CO., INC., bn
Nov. 28 filed a registration statement for
312,500 shares pf common stock ,{$4 par)The shares are issued and are bein8
GULF

PUBLIC

certain stockholders.

by

>

price

Offering—The
be

filed

ment.

be

/

.

■;

'

77^;

' |he public will
u: *.
amend¬

to

by amendment.

Underwriters—To

7

6. 7

Details—See issue of Dec.

price to the public

per share,
Underwriters—John

named

7-';V!

Offering—The
be filed by

shares

r

7

Details—See Issue of Dec. 6. ;

,

will be sold
the directors and
employees of the corporation.
Underwriters—-The

through

,

.

public

is

share.^;7:;"7^vl-

SHAREHOLDING CORP. pn
Nov. 29 filed a registration statement, for
$2,650,000
3To 7 debentures, - due Pec. <1,

.

the

to

^

the "public

to

price

GENERAL

■-v;';.'f'--

share.

per

11.

issue of Oct.

$5.

4.

Oct.

of

issue

'Underwriters—General Finance Co., At¬
Ga., is fiscal agent.
;»

cumul¬

of

non-voting shares.

ative preferred

: *
CORP. on Sept.

lanta,

PALESTINE TRAD¬
filed a registration

3

..'V

registration statement for 200,-

a

$7.50 per

;

statement for 400,000 shares

filed

Offering—The

price

AMPAL-AMERICAN
ING

;

;

wjll

7.,

SECURITIES

Details—See

.

„

(

,i

.

/filed by amendment. >

28

stock (par $1).
of Nov. 8.
r'-;/

group.

>

the 'public

to

000, shares of commpn stock, par

to public, $16
-./:■
70- /■'
Underwriters—R. H. Johnsqn & Co, beads

the

,

Underwriters—^Bury & Co. heads the un¬

INC. on Oct. 31
statement for 125,000

issue

Details—See

and

outstanding

and

Issue." of Nov. 1.

Offering—The

AIRLINES,

registration

CORP. on Oct.

issuance .upon

for

GENERAL

a

is tfce

registered

derwriting group.

ALASKA

:

filed

be

Details—See

mlped or are unknown to as.

filed

Co.,

being sold by certain stockholders.

present below a list of issue*
whose registration statements were filed
We

dates

v

&
;

260,000 shares pf common,
dividend rate on fthe pre¬

and
The

will

the-preferred.

stock. Series B, par $100.
The interest and
dividend rates will be filed by amendment
Address—260 South Broad Street, Phila¬

all

cumulative

mon

Underwriters—The shares will be offered
tor sale under the Commission's competi¬
tive bidding rule, and the names of under¬

Pa.

a

shares

$20

of

registration statement for 60,000
convertible preferred,

25 filed

par

v,/

7

stock

.7

underwriter."...

GENERAL INSTRUMENT

{

OF OFFERING
UNDETERMINED

days

•

Underwriters—Hallgarten
principal

DATES

twenty

29/

common

"to subscribe to new
per share on basis
share for each five shares held.

of one new

reserved

offering

of

Rights expire Dec. 26..

Co.

.

amendment^;

of Nov.

issue

Offering—Holders

1945.#

statement for

registration

a

stock, without par value, the num¬

common

common

j

METALLURGICAL CORP. On

filed

20

Nov.

statement for $25,000,000 20year
debentures due Jan. 15, 1966 an
102,000
shares
of
cumulative preferred

Business—Engaged in substantially
branches pf the petroleum business.

-

option

FANSTEEL

registration

delphia,

x

commitment

17,

jents

amendment.

by

Proceeds—The

payment

firm

by. the company
employees.
' >;

and

ferred

Details—See

heating business.

industrial

Mines

a

money.

the

purchased
ctais

will

rate

stock.
The dividend
be filed by amendment.
■ •
/ ■,v
preferred

/•?

Oct.

record given 1 he fight
common
stock at $61

Offering/—Offering
per share.

■*■

CARRIER CORP. has filed a,
statement

of

ber of shares-to be (iled by

proceeds

(12-14-45),

shares

group.

Registration Statement No. 2-6048. Form
S-2.

,<?
the

^

be exercised by
Toronto Mines Finance, Ltd., the compapy
Itself will make the offering, as aforesaid.
The remaining' 195,000 shares'are to.be

Registration Statement No. 2?6051. Form
S-l.

business

Underwriters—Kuhn,

for

par $1.

stockholders

underwriting

the

...

manufac?
tiire and sale of lines of insulation/ rail¬
road specialties, and other products ?whieh
constituted
its
principal business during
the pre-war period, and, in additionj from
time to time to introduce new products.
Offering—The price to,the public will be
filed by amendment! '
Proceeds—The proceeds go to the selling
stockholders,

Ltd.

offered

be

will

Should

an additional
15,000 shares
issued and delivered by the

Proceeds—The

heads

registration statement for 217,384
common
stock (par $5).
The
shares are issued and outstanding and are

war

■

Price- is

Canadian

of

Chicago, 111.
Business—Post

7

7

head

.77"7,;

share,. and; to
Eureka stock¬
expressed, in terms pf

per

holders.

to Lee Industries, Inc.; on Aug'.
1945, Buffalo Bolt acquired the assets

a

shares

^
Co.

jnade among the shareholders of
Ltd., Frobisher,
Ltd., and La

Mines,

$1.25

line

may

be

to

Luz

York!,

New

nuts,r and

addition

Underwriters—Van.

f1

RUBBER CO. has

&

•

sale of
43.386
shares
of its common stock,
to¬
gether with $1,500,000 from a bank loan
will be applied to the payment in full of
the $550,000 funded debt outstanding Sept.
30, 1945, and toward the payment of $1,600,000 short term bank loans.
j
-

' ?■ '
•
* ■ *
;
■„
Registration Statement No! 2-6047. Form
(12-13-45).
-»
i

ASBESTOS

common,

dissolved

bidding.

UNION

''1

the 15,000
shares of Buffalo Bolt common which, at
the then market value of $10 per share,
were
worth $150,000,
Lee Industries was

•

WEDNESDAY, JAN. 2

a

of

distributed

at competitive

s-i.

into

entered

Ventures,

subject to liabilities of Eclipse Lawn Mower
from Lee Industries for 15,000 shares
of
Buffalo
Bolt common.
Lee Industries

J}'

stated.

Underwriters—To

is

of

Co.

sale

;V;

Electric.

of

Proceeds—Not

of

part

or

10,

subsidiary or an

to be a

cease

the

of

consummation

Upon

Light.

v.
&

statement
issue

Offering—Toronto

and rivets, v >
■
underwriters are offering
at a price to be filed by

In

any

subscribed

purchase
480,000
shares
at-7 $-1.23
per
share,, and has an .option on
1,920,000
shares at the same price.
"The offering

regis*

a

shares
-

against

not

company

Electric Power &

by

for share hasre.

Details—See

eventually offered under the prospectus all

& Light Co.,
proceeds from the

and

Dallas,
be

issued

shares

shares-of common,

screws

sharzs

43,386

presently

are

—

be

pre-

be

registration

ft;

has

complete

a

per

commojv

EUREKA CORP., LTD., on Sept. 28 filed

Offering—The

local street railway
Dallas, Texas and

.

Washing¬

Address—Electric Building, 535
ton Street, Buffalo, N. Y.
Business—Public utility-

stock

utility,

added to the

company's general funds and will be avail¬
able
for
any
post-war requirements,
in¬
cluding
purchase
of
automatic
vending

$100.

Texas.

in

The
shares
Electric Power

Offering

such

by

amendment.

filed

registration statement for 27,000 shares
4'/a% cumulative preferred stock, par

service

coach

58,386

and

bolts

of cap

lines

of

Business—Supplies
and

has

for

stock,

standard

of

CO.

TERMINAL

&

Will

166 667

pesos

basis.. American

rata

'

at -75

Mexican

-

filed

CO.

Business-—Manufactures

vicinity.

and

..

a

shares

129,966

by

SATURDAY, DEC. 29

statement

par $1.
; Address—-North Tonawanda,

-■

registration statement for 162,common stock
(par $20).
Address—Jnterurban Building, Dallas 1,
Texas. '
:.!
....
' r

cuse,.

Registration Statement No. 2-6042. Form
S-I.

Underwriters—The

SOUTHERN

BOLT

BUFFALO
tration
common

a

shares

Address—300 South Geddes

Underwriters—None mentioned.

its

under-valued

RAILWAY

DALLAS

the

Proceeds—The

ment.

Proceeds—The proceeds, estimated to be

or

;.

j

and

v["

amendment.

500

will

of

Underwriters—Shields

V

-

pro

shares

and

a'share

Registration Statement No. 2-CQ50. Forth
s-i. (12-14-45). \
...-v.y;'"/:.

sold by certain stockholders.
••• t
Address—310
South
Michigan Avenue,

MONDAY, DEC. 31
CONSOLIDATED

Business—Business

CORP.

registration statement for

underwriting group.

a

offering

shares

-

holders

'

agrement is Dec. 10, 1950.
Registration Statement No. 2-6046. Form
F-l. (12-13-45). ' ;
V

has filed

bank Joans

of

the

Underwriting group..7?

being

AUTOMATIC

WEDNESDAY, DEC. 26

crued

the

the

filed

Registration Statement No. 2-6041. Form

repayment

;

shares
are
convertible
to, and
Dec. -31; 1950, unless-previously
redeemed, into America# common stock on

devotee!

be

r

including

as

funds may

such

*.

6.

preferred,

for

time

to

Dec.

purohased by the under¬
writers for offering in the'United States
at a price, to be filed by amendment.
The

the board of
Included in the

purposes

determine.

of

Mexican; preferred
for

obligations, the acquisition and de|
velopment
of additional
production and
the expansion of refining, transportation
and
marketing facilities.
.'..Wvi/
j
Underwriters—Smith, Barney & Co. head

Purpose—The voting trust is for a period
five years, and no provision is made in
the agreement for earlier termination and
the holders of certificates have no power
of termination.The termination date of

'••

Missouri,

the

time

used- from

may

which

to

are:

Avenue,

TCs

on

other

of

affiliate
ASSOCIATED

registration

West North Bank Drive,

issued

■

York, N, Y.

New

Dallas

will purchase at

filed

be

an

"l

Stock
ferred

net

preferred

-

to

.general"funds of the company

corporate

directors
uses

Fifth

Mexican

share

debentures

be

will

.

such

pesos, v r

Issue

Offering—Company "is

stock]

,

and

CO.,

Issuer—522

of

Details—See

to

debentures, due Sept. 1, 1953, at, 101 Vai
balance of the net proceeds is To ba

3%
The

25

par

cqmmon,

8.

agreed

:' :,\y ./.>'• ,j
proceeds from the
and preferred stock
Will, be applied as follows! $25,375,000 for
the redemption of $25,000,000 fifteen year
of the

sale

public

McCRORY

shares

and

shares

280

shares which

Chicago.

filed

cash

for

amendment.
Underwriters—Kebbon,

has

Offering—Company

Details—See issue of Dec. 6.
by

on

BRUSH

o

Jan.

on

\*C'rh•*.

Proceeds?—The

at

77V7/r;,{.T

^

held

common

business

public offering prices of the deben?
and preferred will be filed by amend*

ment.

INC.—Alfred
Robinson McEven, Benjamin L. Shuff and
Luke
Lockwood,
trustees .under
Vincent
the
voting trust of capital stock of Ox
Fibre Brush Co., Inc., have filed a regis?
tration statement lor voting trust certifi¬
cates covering 18,694 shares of the com¬
pany's capital stock, par $100.
Address

INC.

;'/■

pf

of

close

underwriters^ have

>

added to the

TUESDAY, JAN
FIBRE

OX

Business—Incorporated
to

tures

bank indebtedness . and Tor
working capital, v . " '■
Inc., 57 Wil¬

(12-12-45),

sr.;..

(par $51.
Address

The

Registration Statement No. 2-6045. Form
S-2.

shares

the

purchase any unsnbscribed'preferred

Street, New York 5, N. Y.

liam

registration
stock

a

shares

5,720

to

-shares.
The
underlying
shares
166,667 shares of 6cumulative
preferred, par 75 pesos, and 614,667 shares

common

a

26

The

Underwriters—Burr & -Co.,

sH-

has

for

statement

convertible

is

preferred shares and 614,667 American

can

of

each
at

outstanding com?
share.
The common
for conversion of pre*

preferred

$400,000

additions

GOLD

YELLOWKNIFE

LTD.,

MINES,

Co.

Rice &

tire

(12-10-45).

BERYLACA

Middlebrook. Grubbs,
Hirsch & Co. and Irving J.

Thorndike. Coburn &
Scott

5,479
stater

The

Registration Statement No. 2-6039. Form

.

The

is offered

for

record

time into I1,a shares of common stpek;
Proceeds—Proceeds will, be used to re¬

any

stock

consist of

1946.

a

reserved

are

ferred.

to working capital.
Underwriters—E. H. Rollins & Sons, Inc.,
heads the underwriting group.
: 'i'

common

j

stock $5.

shares

added

6.

are

at $10

shares

mon

at

price to be filed by amend
ment at the rate of one share of preferre

both

100,000
shares of pre-,
to be offered first to thb

holders of the company's

proceeds will be used to retire
any
unexchanged debentures at the rer
demption price of 100 plus accrued inter?
est.
The balance of net proceeds will be

filed

3

Deo.

and
the additional
by the registration

offer
covered

shares
ment.

CORP. OF AMERICA on

ELECTRONIC

stock

ferred

govern?

use,

stock

mon

land.

on

Offering—The

ex?

the

under

issued

not

are

and

sea

for

private

and

industrial

mental,
at

in¬

sells

and

engines

combustion

ternal

Offering—The preferred

by the company to the holders of its com?

falo, N. Y.
Business—Manufactures

;
Proceeds—The company is offering hold¬
ers
of its $2,152,183
outstanding 25-year
sinking fund 6 c/c debentures, due Nov. 1,
1967, the right to exchange their holdings
for shares of
the 4Yz%
cumulative pre*
ferred stock on the basis of one share of
preferred for each $100 principal amount
of debentures, with a cash adjustment. The
offering amounts to 21,521 shares and the
underwriters have agreed to purchase such
amendment.

by

Niagara Street, Buf¬

Address—1252-1270

Offering—The price to the public will be
filed

Thursday, December 20, 1945

CHRONICLE

THE COMMERCIAL & FINANCIAL

3046

named by

7

' ■■

■"

PRODUCTS CO. On
Oct. 29 filed a registration statement: for
$1,000,000 12-year 5% sinking fund de¬
STEEL

INDIANA

warrants to purchase com¬
and 40,000 shares of commbn
reserved for exercise #£ .common
purchase warrants.
;
*
with

bentures

stock,

mon

(par $1),

stock

Details—See issue of Dec. 6.
of

outstanding shares of 6%
preferred stock, which have

its

convertible

called

been

at the

preferred
share,

per

at

par,

redemption

for

opportunity

the

1945,

W.

.

offering tp the

Offering—The company is
holders

to

Dec.

29,

redemption price of ^22

debentures,

for

on

exchange (the
with warrants,

with cash adjustments for

accriied

preferred and accrued interest
debentures.
The underwriters are

dividend on

the

on

initially

offering'$340,000

at

a

not

price to
less

than

of debentures,
the public

for cash sale to

with warrants,

be filed by

amendment but

IO2V2.

Underwriters—Brailsford & Co., Chicago,
and Kalman

& Co., Inc..

This list

St. Paul.

is incomplete

this week.

Volume 162

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4448

but

Whither the Economic Trend?
(Continued from page 3045)

«significance

establishment.

/large.

tion

that " they are all
Deferred demand is sizable
enough to require the mainte¬

part responsible for the build¬
ing boom .of the 20s and there, is
good reason for believing that this
migration, factor will provide a
market for a much larger number
of new homes in the period ahead.
That this is. not' an unimportant
element in the building outlook
is clear .from the doubling up of
families Which is so prevalent to¬
day and from the fact that people
are still living in trailers in many
sections of the country.
The; final market to which I
Would like to direct your atten¬

to two years in many

one

'industries and in others the time

required to catch up with pent-up
t demand
is three or even four

"if^ars; A related factor is the de¬
terioration and obsolescence which
■has

in

occurred

'transportation
;

establishments.

industrial,

our

and
distribution
Through the en¬

of our manufacturing
service industries there are

tire range
and

;hiige expenditures of these types
have

Which

long period
can be met.

been

deferred

for a

tion

and now must and
Here is another big

in

is to be
demand for

productive machinery.

tion, which "are enormous,, almost
/everyone familiar with conditions
iq the world outside this country
agrees that there is a crying, need
for widespread industrialization.
.Foreign industry needs to catch up
j/'vdth- American productive prog¬
ress and we know it will make
'

'Production.

an

market

toward this goal,
should be placed on
economy
in Government opera¬
tions wherever possible because it
is highly desirable as a second
requirement, that we further re¬
vise the tax system in a manner
which Will provide increased in¬
centive for saving and for the
In

working

of

owners

of

risks

capital to

increase in

■'L :/.<■;>

business

new

In time of war,

for all to

now

ventures.

everything

of

paying for them.
But
the emergency is over it is

means
once

equally important for us to

rec¬
structure the

coming

funds

for

expansion in
without a fur¬

years

ther increase in

an

already
supply.

over-

Another

to

condition

which

must

see

that

It is clear
need not do

we

contradiction

have

shall

we

and

have
self-

confusion
be

to

that

extremely

careful lest we let ail historic op¬
produc¬
portunity to achieve productive
capacity quickly and h:.ve.
prosperity slip away from us.
demonstrated that if the job is With such a
potential we should
s
broken down into its component
be able in the years ahead to
parts relatively unskilled labor realize a
long period of high level
soon
can be trained to tend the
prosperity interrupted • only in¬
machines
in
an
assembly line
frequently by brief corrective de¬
Our great productive output dur¬
pression-readj ustments; it will be
ing the war was made possible by a shame if, instead, we return to
the
use
of housewives/ people
the conditions of the 30s when we
from
clerical
occupations
and
"know how- to build new

sults in

ply.
about

increased money sup¬

an

We

need

instead

increase

an

in

ties and a reduction in

Jan, 1,

give

serious consideration
such increases In coupon rates

to
on

Government securities and to such

changes
make

in

need

their

them

non-bank

form

investors,

the

most

will

as

attractive

more

to have real
Let

me

prosperity.

in which the potential for a long
period of prosperity is very great.
That fact must, I think, dominate
Government

our

policies,

for

will be the economic crime of

it

our

ings

ditional

credit

Gerard

S.

Smith will

be

consid¬

ered by the Exchange on Dec. 27.
It is understood that Mr, Smith

will

act

as

broker.

an

individual

floor

'

Transfer of the Exchange mem¬

bership of Henry S. Sternberg to
Eugene M Geddes will be consid¬
ered

Dec. 27. Mr. Geddes will

on

continue

as

a

in

partner

Clark,

Dodge & Co.

available to

busi-

elaborate and complex machinery
of modern

industry.

only moderately good business,

But they did

industry's produc¬
executives divided the work
into parts so small that they could
easily be performed; by Workers
Without long training.
Thus, it
the job because

tion

seems

clear that

we

are

nqwjn

position to help the world catch
up with the industrial revolution
and to provide a great market (for
a

out industry

in doing:

so.

; L

;

Devising Economic and Fiscal
.,

The

,,

•,

Dec.

He

27.

will

partner in Whitney &

Elwell.

Park

ize

the

on

us

potentialities

Murin will be considered on
Dec, 27. Mr. Murin will continue
& CO.

unless

we

provide

favorable

I'",
' L
•
Charles E, Brady, limited part-

an

enough

so

that

basic

First among these is balance in
the budget of the Federal Govern¬

In effect, they were
raised from the pauper class to the
middle class.
This is a fact of

ment.

-massive
significance, for these:
people, who were diving, rather
close to the-subsistence ley el after
ithey lost their jobs, homes,, insur¬
ance,
bank deposits
and selfrespect in the great depression
of the early 30s, now have a very

sizable stake in cash, deposits and
War Bonds, in addition to the

prospect for

continual

employ¬

Thus they represent a vast
new market for all of the goods
&nd services which go to make up
ment.

the

American standard of living.

The Domestic Migration Factor

f Another

marekt of

lesser

im¬

portance

has its origin in the mi¬
gration pf people from the farm
to

the

city, and, from smaller to

communities

which came
about because of wartime changes,
larger

With the potentialities for
good business gs favorable as they
appear to be in the years imme¬
diately ahead, a balanced budget
is feasible, but it will require a

firm resolve to resist the demands
Of

pressure

expenses

cessive

groups

and

to

Which

the

"debt

has

heariy $300 billions,

grown " to

a

balanced

8,

N.

Y.

(C. P. A.) Available
Specializes
Room

Special Situations.

on

1125,

201

West

74th

St.,

New York 23, N. Y.

C. P. A.
Desires to make

on

connection

na¬

keep its credit standing
inviolate.
Conversely, if at. this

juncture we as a nation are un¬
willing to set the early balancing
of the budget as an unalterable
goal, we Will put to test 'our claim
to financial integrity in fiscal af¬
fairs.

We should, of course, plan

for ja

budget surplus large enough




to

permit so#me retirement of debt

will

retire

from

Stillman, May-

on

Dec, 31.

Purcell

m

New Location

Edward A. Purcell & Co., mem¬
bers of the New York Stock Ex¬

change and other Exchanges,

an¬

nounce the removal of their of¬
fices to 50,Broadway, New York 4,
New York.

Earl K. Madsen
OMAHA, NEB.—Earl K. Madhas

rejoined

Buffett

&

Co.,

National Bank Building.
Prior to serving in the U. S. Army
he was trading manager for the

The

Whig-Federalist

At

last—pure right-wing poli¬
Get acquainted. Free in¬
formation.

with

detective operatives and veter¬
ans

merchandising

Duties include the preparation
of all financial tax, stockhold¬
and

operating
to

and

offices

ARGYLE-STUART
516 Fifth Avenue, N. Y. C. 18

em¬

Only an accountant fully quali¬
fied by both education and ex¬

perience

and

having demon¬
ability and
leadership need apply. To such
person there is presented an
unusual
opportunity with
a
progressive organization. In re¬
plying, please provide full in¬
formation regarding qualifica¬
tions. Your reply will be held
strated

executive

Statistician Wanted
Thoroughly experienced
investment ' ban

Full
HM

nancial

Chronicle,

accountant

stock

and with

with
as

excellent diversi¬

background desires connection
large member Stock Ex¬
change firm as accountant or
auditor.
Experienced all de¬
partments.
/Recent question¬
and

Will travel

audit
or

N. Y.

:

for:

Two Traders

•

Two Assistant Traders

We

in

are

our

of

installing four additional trading positions

Trading Department and require the services

two

traders

high grade traders
or

service

Mr.

experience.

as

well

as

two assistant

men.

Write or telephone"
Joseph H. Young, partner.

,

locate anywhere.

Moderate salary

25

specialist

brokerage accounting
an

Chronicle,

Place, New York 8,

•

many

Box

1220, Commercial &

We have opportunities

Brokerage

experience

Park

25

king.

part time.

or

Place, New York 8, N. Y.

Senior

naire

branch

in
of

ploying several hundred people.

Accountant-Auditor
in

reports

management

of Army and Navy Intelli¬

gence.

New York 23, N. Y.

Stock

years

company.

Financial

Writer

special

Room

merchants, brokers
and
bankers; also skilled private

Treasurer for large, old estab¬

requirements.

Available January 1st. Address

J. Arthur Warner & Co.

Box

CN1213, Commercial
&
Financial
Chronicle, 25 Park
Place, New York 8, N. Y.

120

BROADWAY, NEW YORK 5
Telephone COrtlandt 7-9400

,

ih the location of our productive

on

nard & Co.

Park

Letter

with

to

F. S. Moseley & Co.

m

1st.

Robert W, Morgan, a member of
the Exchange, and Arvid E. Taube

Box II1210, Commercial & Fi¬

Market

and financial circles for it would
attest the determination of the

Jan.

in strictest confidence.

as

budget

tion

nership

situations for broker.
1125, 201 West 74th
St.,

broker

fied public accounting and tax

would carry pore, .than,
ordinary significance in business

on

4,

.»

Herbert F. Boynton and Ernest
L. Ward. Jr. will retire from
part¬

lished

pare

drastically.
After suc¬
of deficits during

years

Dec. 31.

ing

NEEDED

main

prosperity
environment

the depressed years of the 30s,|
obtained well-paying jobs in. the
period.

York

durable

and

ship in Francis I. du Pont & Co.

'

ers'

have

^
Another new market for the incentives to economic expansion
post-war period has its origin in ;■ again can be activated, y A few
the fact that close to ten millions major elements
of a program
of I; our people, who were com-; looking in this direction are men¬
pletely or partially unemployed in tioned below.

war

New

described is not an- easy one, but
I submit that we cannot have pro¬

ductive

John J. Neff and William P.
Travers will retire from partner¬

partner in David A. Noyes

addition

'

to real¬

I

Place,

Market Letter Writer

problem of devising poli¬

a

firm.

E,

a

Diefendorf, limited
Co., will be¬
general partner, effective

1.

con¬

as

R.

Needed: Salesmen for contact¬

dress replies to Box CFC 7, Com¬
mercial & Financial Chronicle, 25

Policies

cies which will enable

come

Jan.

sidered

Senior Accountant
'Complete Wall Street experience
—Questionnaires, Balance Sheets,
etc.
Available January 1st. Ad¬

'

:■:.

Robert

Omaha

a

gen¬

partner in Riter &

sen

as

Rosenthal,,

partner in Ladenburg,, Thal& Co,, will become a lim¬
ited partner on Jan; 1.
mann

con¬

tinue

•

eral

to William P. Burke will be
on

general partner effective
Marshall

tics!

experienced
chronic depression
"youngsters, who had no previous punctuated now and then by halfexperience or skill in tending the hearted and short-lived periods of
,

Goodbody & Co., will be¬
a

With Buffett

tive

•

in

ner

come

Transfer of the Exchange mem¬
bership of Thomas H. P. Whitney

bership of David A. Noyes to Paul

that banks may make ad¬

so

i—

of

as

Hetheringtqn II, Ex¬
change member, and limited part¬

Paul

up by saying we
threshold of a period

partner

James A,

shall

sum

the

on

general

a

cour¬

ageous management of the public
debt in the period ahead if we are

are

come

Jan. 1.

We

skillful and

to

non-bank

bank hold¬

J. Marshall Booker, member of

the Exchange, and a limited part¬
in Corlies & Booker will be¬

money
The
time has come for the authorities

Transfer of the Exchange mem¬

investment in Government securi¬

a

to

bring

to

in Carrere & Co., will become
general partner effective Jan, 1.

ner

ner

prop¬

erly becomes subordinate to the
all-embracing needs of the State
for the; sinews of war and the

are

but our economic policies
become such a patchwork of

Lie

Lave

available

now

industry

so,

yond anything we believed feas¬
Wc

the

the

business

new.

characterized the 30s.

fact

before/

assume

,

frequently lost sight
of is that the war taught us Low
to industrialize at *a" rate far be¬
ible

is the

expanded

be present if we are to translate
capable of
the potentialities of the future
reducing/ the real' cost of quite a
into actual prosperity is balance
large number of familiar goods
in the money supply.
Enterprise
and this, - in -turn, means wider
cannot thrive in an atmosphere
markets.
We are perhaps in a
of violent credit inflation or credit
new phase in the industrial revo¬
deflation.
If these two threats to
lution with amazing new markets
economic
progress
and stability
to be developed.
y
;
are to be avoided, it is necessary
These new markets add up to a
that
government
monetary
and
tremendous
potential
but
the
banking authorities adopt policies
problemr we * still must ». face is
which will prevent a further con¬
whether that potential
will be
centration of the Government debt
realized or whether once again we
in the commercial banking sys¬
will settle back into the bleak
tem, for such concentration re¬
stagnation and frustration which

The New "Know How" Capacity
One

the

materials

American

repaid are much greater—
know from experience—if

the loan results in

produce

raw

better markets for us if our for¬
eign customers are prosperous.
The underlying purpose of the
international economic and finan¬
cial
organizations
which
have
been proposed is to provide for¬
eign nations possessing usable re¬
sources With the means to exploit
them and the chances that a loan
we

It

flationary boom,:

aggressive

—

Aside from needs for rehabilita¬

as

old-fashioned

good,

provide

the

emphasis

3047

ognize in our tax
generation if those potentialities
facilities
great motivating force underlying are not realized.
goods and
our free enterprise system, namely,
gadgets which are now ready for
the profit incentive to expand pro¬
New York Stock Exchange
development as a* result of the
duction and employ people.
This
technological progress of the past
is, essential if we are fully to capi¬ Weekly Firm Changes
few years.
We have a long list
talize upon the potentialities for
The New York Stock Exchange
of new things which the American
good business that lie within our has announced the following firm
people will want; they represent
grasp.
•
■
changes:
vv;'
our new industries of the future.
Transfer of the Exchange mem¬
Then, too, it must be remembered
Money and Credit Policy
bership of Clarence F, Gould to
that the new processes and new
to

market

the foreign

American

will be

.

one.

and

ness

future is indis¬
pensable if we are to experience
real prosperity instead of an in¬
near

for machinery and new

another

Still

fdund

the

is

American

market.
•1

A smaller migra¬

following World War I was

in

nance of capacity production for

)!|rom

condition of balance in the

a

reasonably

•

,

Direct Private Wires to

Boston, Philadelphia a.nd Hartford

THE COMMERCIAL & FINANCIAL CHRONICLE

3048

than 8%

n

New York Trust Company

some years

about

4%.

Solution

and

an

serts "The

lication

of

problems,,

trade

somewhere

40%

Normally,
in the neighborhood of
banking.

.and

ance

as¬

Index," quarterly pub¬
the New York Trust

imports

Britain's

of

and serv¬
that these factors
have an important bearing upon
cepted," the study says, "that for
the British trade position. During
political reasons, both interna¬
the war, however, Britain
sold
tional and domestic, a way must
some of her investment
holdings
be found to assist Great Britain
in
this
country and ; elsewhere,
in the present
emergency, and
that without such help, exchange thereby ' reducing her income in
addition to the cut suffered' by
rates- cannot
be stabilized, ■ ex¬
"The

assumption

change and trade
not be removed,

be

may ;

ice

ac¬

income,

exports. Jv'1

loss of

restrictions can¬

so

confidence ;;j "Even before the war the need
of a major reorganization of the
among nations and foreign traders
basic exporting industries had be¬
restored;
^
come plain if Britain was to con¬
"However, the clear fact remains
tinue to carry on the volume of
that in the long run Great Britain
still must solve the basic problem foreign trade upon which her ex¬
and

increasing world' consumption
British
goods
and
services,
which must be satisfactory as to
of

of

quality and price."
'
The study points out that Brit¬
ain" must import even a major
portion of the raw materials re¬
quired for the
functioning of
modern industry within the Brit¬
ish Isles, and must import agricul¬
tural foodstuffs in large volume
to live,"
Before the war, Great
Britain imported approximately
of

two-thirds

her

food

require-

ments.

purchases " the analysis

continues, "were paid for by "ex¬
services

such

investments; and
as shipping, insur¬

overseas

as

major

a

de¬

power

Technical improvements
and
drive for markets begun.
Some

pended.
were
a

made in these industries

success

the

the

in

unemployment

"Another

loans,

which

is

I "In

of

collectibility

the

in

Bank

"V

any

general there is

States in reaching stability

area

in in¬

Britain's

mendations
Mutual

.'vly*

.

/.y.i....

Reporter on Governments.

Tomorrow's

of

all

function, the stabiliza¬

can

exchange rates and release
forms of governmental

U. S. Finishing

Comer:..?... 3029

:...

Michigan

•;

Mexican

3031

..........

Connecticut

and

curities*

sections

Missouri

on

page

on

pages

se¬

M. S. WlEN & Co.

3012;

3013.

and

a

dollar

calamity

-

a

eco¬

sterling
be

would

area

with

Sequences."

An

far-reaching
*-

a

con-

N.

Dealers Ass'n

N.

Y.

HA. 2-8780

1-1397

Chicago Bd. of Trade to
Close Early Dec. 24

Sardik's Inc.

The Chicago Board of Trade

:

Keyes Fibre Co.

an¬

Halle Mines Inc.

nounced that dealings will be sus¬

pended at

noon

on

preceding,; Christmas
Year's and resumed

following

nesdays

-

.

'■

Waltham Watch Co.

the Mondays
and

New

the Wed¬

on

celebra¬

the

■:- ■ *:■

;vV"%v

Telecommunications

Finch

Oklahoma Interstate Mining

Airplane & Marine Instruments
Schoeilkopf Hutton & Pomeroy

attended these efforts but

prevented definite evi¬
being returned that would

RALPH F. CARR & CO.

Trading Markets in

BOSTON

show whether Great Britain is to

major competitor
in foreign trade, especially in the
freer foreign markets proposed in
continue to be a

Agreement."

the Bretton Woods

United States trade with Great

Amalgamated Sugar
Artcraft

Int'I Resist 6%

sterling,area, the study shows,

Mfg. Com. & Pfd.

Baltimore Porcelain Steel

Ironrite Ironer Com. & Pfd.
Lear Inc.

Teletype

Hubbard 6442

H.no.er 2-7913

BS 328

We

Helicopter

Bendix Home

V'".-.'-!--''-

Telecoin

constitutes about 25% of our

Du Mont Laboratories

Wilcox &

specialize in all

Insurance and Bank Stocks

Majestic Radio & Television

Appliances

Clyde Porcelain Steel

poor

New York

Pfd. & Com.

Bendix

peacetime

through good and

/

Industrial Issues

Corporation

Investment Trust Issues

Gay

Securities with

Kobbe, Gearhart & Company
l':'-*

"

"

New

York

;'r;: %%:•■

incorporatso

Security

Dealers

NASSAU

45

telephone

MARKETS

STREET,

YORK

.

Enterprise

5

6015

new

york

a

New Eng. Market

1-576

~;
XjriHsted Securities

STREET, BOSTON 10

Established In 1922
Tel. HANcock 8715^

Tele. BOston 22

;

Teletype
NY

V

1-97!

::■:

f!ARI MARKS & pa 1HC
'.';r! SPECIALISTS
Telephone

50 Broad Street

For Christmas

^

-FOREIGN SECURITIES

*'

•<'

'

•
'

'

^

V;

For Always

AFFILIATE: CARI MARKS & CO. Inc. CHICAGO

2-0050

$67.50

For New Year

New York 4, N.Y.

•. •

HAnover

■V

:

Specialists In

24 FEDERAL

Bell Teletype

telephone

philadelphia

.

REctor 2-3600

NEW

;

Frederick C. Adams & Co.

■

Association

New England

Foreign Securities

:

Public Utility Stocks and Bonds;
TEXTILE SECURITIES

foreign trade which is in itself less

Members

MASS.

9,

Boston

'

Globe Aircraft

Britain and the other countries of

years

Yv Security

Exchange PL, N. Y. 5
Teletvoe

tions.

r

1919

ESTABLISHED

Members

1

international trade.

nomic conflict between

Corp.»

Cinema

40

re¬

strictions and controls which ham¬
per

Majestic Radio

?

-

Markets—Walter Whyte

Says

to

Jan. 1st.

England Public Service

Securities... iv..»*.»... 3008

Salesman's

Securities

L,

Connell

Bendix Helicopter

•....»...........3016

Securities

Estate

on

B.

City,
Stock

Robert

Gaumont-British "A"

.3015

....

Utility Securities.....>?,'*-..3006

Railroad
Real

New

.3011

Report,......!.... .3040

Reporter's

Our

John

and

partnership

Recom¬

admit

v.'/i...3022

NSTA Notes

Our

will

Literature, j..... 3010

and

Funds

.3014

.....

Broker' Inv^rment

York

of the New York

Hollins

-

New

Street,

Canadian Securities V."......

Dealer

posi¬

Jn which the free enterprise

tion of

Whitney, Goadby & Co.,

members

tion, the enlargement of the world

system

N.

Wall

Exchange,

ternational economic relations, the
of

Stocks...%..3018

H.
49

recogni¬

a

tion of the interest of the United

reconstruction

Page

,f:\

"

Calendar of New Security Flotations.3046

uncertain.

way

'■

Insurance

and

Public

considera¬

practical

tion is our own capacity to con¬
tinue grants in aid on very longterm

'

•

/,

war

dence

the

-"These

ports,

istence

to

made, con¬

United States?

were

paid for by investments

?.■ ■,v -b,.f

Company; > ■-

:

tribute

V The

nancial. and

of

view

area, if the loan is not

Sterling Areas Would Be a Calamity.
proposed loan of about $4.4 billion to Great Britain by the
United States may be of temporary assistance but is not a permanent
solution for Britain's post-war. fi- »
:

practical

tially to employment in this coun¬
try? Will the loss of a portion of
our
business
with
the
sterling

Solve Basic Problem of

index

'■

"Will the loan contribute substan¬

Publication Points Out Loan Represents

Whitney, Goadby Changes

amounts to only

the loan
proposal would take this into con¬
sideration,"
"The
Index"
says.

Emergen*^ Remedy, and That Great Britain Still Must
Increasing Consumption of British Goods
Services Abroad.
Says Economic Conflict Between Dollar and

Only

domestic business

our

and in

1 "A

Permanent

of

Thursday, December 20, 1945

'

BEST WiSHES

*

ARREARS

fllfif.

par

on

the 5% $100

preferred stock of a

New

Eng.and Company

i

established in 18ft.

NEW- ENGLAND

F. 94. HOLLER &
TEX T I LE S:

;X

j::, :

.

111

New

BROADWAY, NEW YORK

BArclay 7-0570

England Local Securities

CO., Inc.

Members N. Y. Security Dealers Ass'n 7:>:A
6, N. Y.

7 NY 1-1026

-

1944 Earn.

Bef. Taxes

1944 Earn.

After Taxes

INCORPORATED

1923

''

taxes.

Telephone Hubbard

*

%

Write

Bell System

Pressurelube, Inc.
U. S.

Radiator, Pfd.

Smith

&

Wesson

PUBLIC UTILITY

—

INSURANCE

Founded

2. Net book value $20.63

per

per

New

York 5

Telephone COrtlandt 7-0744
Bell Teletype NY 1-886




—

REAL ESTATE

Mass.

State St., Boston 9,
Tel. CAPttoi 0425

^

f

Y

sh.

BONDS, PREFERRED AND

COMMON STOCKS

WANTED

share.

3. Current assets 4.35 times current

SOUGHT

—

SOLD

—

QUOTED

liabilities.

4. Current yearly dividend $1.00.
5. Average earnings 5
bank

yrs.

No preferred

loans.

about $3.
stock.

•

mat, MITCHELL & REITZEL, INC.
208 So.

7. A low-priced stock to yield

Broadway

INDUSTRIAL

1897

1. Net current assets $13.56

No

120

—

LUMBER & TIMBER

Works

No bonds.

W. T. BONN & CO.

call for Analysis
M.C.P.

148

Sunshine Consolidated

or

-

Teletype BS-128

Northern Engineering
Parts

"

Specializing in Unlisted Securities

BANK

Columbus Auto

5b

( O.

-

STREET, BOSTON 10, MASS.

3790

from
after

■r
*

■

24 FEDERAL

.#64.43
21.88

..

Earnings unce 1939 range
$12.82 to $57.33 a share

Recent Price:

WALTER .J. C ONNOLLY

...

about

6%.

RANdolph 3736

Special Report Available Upon Request
WESTERN" UNION

Amos Treat & Co.
40

Wail St.

of Securities

La Salle St., Chicago 4

New York 5, N. Y.

BOwling Green 9-4613

TELEPRINTER
"WUX"

BELL SYSTEM TELETYPE

CG-989

Hill, Thompson & Co., Inc.
Markets

and

Situations

for

Dealers

120 Broadway, New York 5
Tel. REctor 2-2020

Tele. NY 1-2660

I