Full text of Commercial and Financial Chronicle : December 22, 1949, Vol. 170, No. 4866

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BUS.

AONl«

DEC 2

library

3 1949

Investment- Bankers Association Convention Issue

r\

Reg. U. S. Pat. Office

Volume

170

New

Number 4866

Price 30 Cents

York, N. Y., Thursday, December 22, 1949

a

Copy

EDITORIAL

The Investment Bankers Association of America Holds

As We See It
-

■

•

■

'

'

Communism
From

vs.

'f

' J

•

'

*

38th Annual Convention in

.

Point Four

Meets

President-elect Albert T. Armitage and

Washington and Florida comes word

that the President and his advisers have of late

McDonald, Chairman of the SEC; Sir Oliver Franks, British Ambassador, and Arthur
Chilgren, Chicago attorney. Receives Committee Reports.

been

giving considerable thought to ways and
of implementing "Point Four." This orig¬
inal proposal of the President about lending a
helping hand to the "backward peoples" of the
world has a strange history. According to what
appears to be a reliable report it was inserted
for political reasons into the President's message
before anyone, even the President himself,J had
developed any clear idea of what it was really
all about. It made good reading, appealed to the
imagination, as they say; and so it was included
—and that was that.
'
\
means

,

Almost
to

assign

ever

has

The 38th Annual Convention of the Investment Bank¬

Association

ers

Beach

of

America

Hotel,

Hollywood,

The

Association

clusive.

ensuing

Fla.,

from .Dec.

elected

as

4

9,

and

Pancoast, of San Antonio.

dents elected
&

were

Hazen S. Arnold of Braun,i Bosworth

Co., Toledo; Mark C. Elworthy of Elworthy & Co., San

Francisco; John F. F.ennelly of Glore, Forgan & Co., Chi¬
Joseph ; J.

cago;

Johnson of the Milwaukee Company,

:

the

facts

of

eastward to the Pacific.

of

all

overrun

China

the

to

Indo-China border for considerable

is

from

the

The

coast.

(Continued

Chicago, presented the report of
Association's auditors, Messrs.
&

Anderson

that

during

while the figure

which

Co.,

the

past fiscal

Albert T. Armitage

(Eljnsinutg

regime

for this year includes the $12,500 for

pension plan, but does not include any anti-trust
This year, anti-trust suit expenses were
charged directly to surplus and totaled $15,250. Federal
Taxation Committee expenses totaling $2,855; in excess
suit expenses.

of the committee's

$1,000 budget appropriation were also

V

charged directly to surplus. ,
(Continued on page 90)

83)

on page

^

The Finance Committee, under the

the

making his arrangements (or should we say
Kremlin is making them for him) with the

\

issue

-

$13,067 authorized by the Board of Governors.
For the
previous fiscal year, income was $187,628 and expendi¬
tures were $193,508, leaving an operating deficit of $5,880.
It should be noted, though, that the expediture figures
are
not strictly comparable.
The figure for the year
before this includes $9,478 of anti-trust suit expenses;

the

5

this

j

the Association's income totaled
$184,428.
Expenditures were $194,245, leaving an oper¬
ating deficit of $9,817, against a budgeted deficit of

French

that

■

year

distance in¬

of

head

contained! in

showed

The Chinese communists

have

land

are

Arthur

situation?

this

incoming President,
British AmStates; Harry

mission, and Arthur! D. Chilgren,.
Attorney with Gardner, Carton and
Douglas, * Chicago.
All these ad-'

the

Broadly speaking, the Soviet Union is now more
or less
supreme from about the center of Europe
now

the

Sir Oliver Franks,

A. McDonald, the new Chairman of
the Securities and Exchange Com¬

of

aspects.
are

M.

Chairmanship of Francis M. Knight
of the Continental Illinois National

always been smooth. I It is not smooth
Someone, however, has apparently hit
upon the idea of linking these rather vague gen¬
eral notions to the competitive struggle against
the imperialism of Soviet Russia. Until one stops
to inquire precisely what is intended and how it
is to be accomplished, this suggestion appears
almost to be an inspiration—at least in its po¬
what

Laurence

bassador to the United

;

not

.But

Armitage,
were

Finances

The going

them from oblivion.

save

of

principal speakers at the Convention, in addition
the retiring President, and Albert T.

of the "Chronicle."

since effort has been under way

Marks

to Hal H. Dewar,
-

dresses

,

today.

litical

The

the

The Vice-Presi¬

M.
York City.

Laurence

and

Marks & Co., New

in¬

for

to

President

Inc., Boston, who succeeds Hal H. Dewar, of Dewar, Rob¬
ertson

Milwaukee,

held at the Hollywood

Armitage, of Coffin and Burr,

Albert T.

year

was

concrete meaning to these phrases

some

and thus to

Hollywood Beach Hotel, Hollywood, Fla., Dec. 4-9. Hears addresses by
Hal H. Dewar, retiring President; Harry A.

at

/

<£-

Candid shots taken during the

Bankers

Association

included

are

Van

at

in

course

the

of the 38th Annual Convention of the

Investment

officers and governors,
16-page IBA Pictorial Section which starts on page 41.

Hollywood,

Fla.,

also

pictures

of new

State and

Camp Sea Food

Company, Inc.

across

R. H. Johnson & Co.
Bought

-

Sold

Quoted

•

Established 1927
1

Prospectus available

on

Municipal

550 Branches

Common Stock

\

'

request

'•

V•'

.'

V

■'/•'}f ■'

•

v.-v.v

Canada

Monthly Commercial Letter

Bonds
?

upon request

INVESTMENT SECURITIES

.THE
64 Wall

Bond Department

its"''

•:-t

Street, New York 5

THE NATIONAL CITY BANK
BOSTON

Members New York Stock

Exchange

Wall Street, New York 5

40

Troy

Albany

Buffalo

Chicago

OF NEW YORK

OF COMMERCE

Harrisburg

Providence

Scranton

Wilkes-Barre

Boston

CANADIAN BANK

Bond Dept.

Washington, D. C.

Teletype: NY 1-708

New York

Agency: 20 Exchange

Prospectus for this

Open-End

Investment Com/Kiny may

be obtained

from authorized dealers, or

-

N. Y.

V.F.S.D, No. 21
Underwriters and
Distributors of Municipal
and

Due December 1,

OTIS & CO.

BOSTONNEW

BONDS & STOCKS

LOS

ANGELES

Prices to




Cincinnati

Goodbody
MEMBERS NEW YORK

115 BROADWAY

Chicago
Columbus

England

An

interesting workout situation
Booklet available for

yield 2.35%-2.40%

Denver
Toledo

&

Co.

STOCK EXCH.

CLEVELAND
New York

New

Public Service Co.

1972-75

ESTABLISHED 1891

1899

(Incorporated)

CHICAGO

YORK

CANADIAN

institutions and Dealers

Corporate Securities

Established

CITY OF NEW YORK

San Francisco Loo Angeles

2.60% Bonds

VANCK, SANDKItS
COMPANY'

THE

OF

PI,

$105,000

;

OYSTER BAY,

SJund

NATIONAL BANK

Head Office: Toronto

Williamsport

Seattle Portland, Ore.

<lJ)(jUoh

THE CHASE

PHILADELPHIA

Dallas
Buffalo

NEW YORK

105 W.

DoMunox Securities
Grporatioti
40 Exchange Place, New York 5.N.Y.

ADAMS ST.

CHICAGO

IRA HAUPT&CO.
and

111

other Principal

Broadway, N. Y. 6

WOrth 4-6000

Teletype NY 1-702-3

WHitehall 4-8161

Exchange
Exchanges

Members New York Stock

Boston

Teletype NY 1-2708

Telephone: Enterprise 1820

'

2

COMMERCIAL

THE

(2486)

&

FINANCIAL CHRONICLE

Thursday, December 22, x949

the company's large Wyom¬
and Montana acreage gives
promise of becoming an impor¬

that

MARKETS

TRADING

The

IN

American Natural Gas

continuous fprnui in which/ each week, a different group
of experts in the investment and advisory field from all sections of
the country participate and give their reasons for favoring a particular
security. Some selections may be suitable for individuals, some for
Constituting

Northern States Power

United Light
New

& Railways

England Elec. System
NET PRICES

The

security
is

we

like

best

Baker, Weeks &

the

Technological

de

&

which

*

120

York

one-

fourth of a

Exchange
Exchange

Stock
Curb

share

Tel. REctor 2-7815

of Gen¬

eral

BROADWAY, NEW YORK 5

Motors

its

of

George P. Bissell

for

common

each

own

<

,

;
in
.

outstanding

shown

has

Pont

Common

Black Star Coal Corp.

and today has resources
some
one-and-a-third billion

of

•5

is ^continuing

Kentucky Stone Co.

the

as

in

volume

sales

growth
company's

This phenomenal

dollars.

Common

the

decade

last

conducted by any
the country today.
More than 50% of the sales of the
du Pont Company in 1949 were of
products not in existence 20 years

search programs

Incorporated

Home Life Bldg.
KENTUCKY

'

ago.

Bell Tele. LS 186

Long Distance 238-9

in

company

™I BANKERS BOND
2,

Stocks—Ralph

A.

The

about

5.6%.;

If one has sufficient
can

at

of

a

buy du Pont's common stock
discount through the purchase

Christiana

Securities

common

which

magic of chemistry has led forth between Christiana and du
indus¬ Pont when the discounts are fa¬

new

sponsible for the maintainance of added risk.
excellent profit margins.
Recent
progress in synthetic fibres, plas¬
PIERRE BRETEY
tics and organic chemicals sug¬
gests that further growth is ahead. Analyst, Baker, Weeks & Harden,

Minute Maid Corp.

Associated Transport, Inc.
Reports on request

Not only is

this company's posi¬

tion well entrenched in the chem¬
ical

industry, but it is well en¬
trenched
financially.
It has no

WM. J. MERICKA & CO.
Incorporated

Member

Midwest

Stock

Exchange

CLEVELAND

cumulative

preferred

stock

un¬

derlying the 44.8 million common
shares.
Its current financial posi¬
tion is excellent with the June 30,

1949, current ratio

shown

as

7.1

to 1 and cash alone equal to more

three

than

ties.

Stix & Co.

times

The

strong

excellent
entitle

liabili¬

financial position
growth .potentiali¬

du

stock to sell at
street

a

Ppnt's

common

high price-earn¬

At its current level of
about 61 the stock is now selling

ings ratio.

Norfolk

as

&

Western

and

F e,. Southern
Pacific
and

"

in

the

light of historical priceearnings relationships for this out-

\< *

t

/

Kansas

City
Southern,
to

those

expanding

an

tive

but

erable
such

Exchange

York 4, N. Y.

HAnover 2-0700

NY 1-1557

Mobile, Ala.

•

Direct wires

t,o our-branch offices

of growth, all too rare among
Class I railroads.
Finances .are

strongj and over the past decade,'
equipment and rental credits have
averaged over $4 million annually,

A

Pacific

is

its

equity
in undistributed earnings of sub¬
sidiaries.

Jointly

Northern it

owns

with

H. Hentz & Co.
;,v

7-'7-:-7.",7'■

Northern

sibilities
years,

■'

/

v

no

of

Inc.
Trade

And other Exchanges

N. Y. Cotton Exchange Bldg.
NEW YORK 4, N. Y.

,

CHICAGO

DETROIT

/

PITTSBURGH

GENEVA, SWITZERLAND

Great

830,179 shares ol

LAMB0RN & CO., Inc.
/59

STREET

WALL

NEW YORK 5, N. Y.

through the income account but
credited directly to surplus.

are

From its own

operations,
past decade

the

ings for
averaged

SUGAR

»

iiaw

earn¬

have
share.
Most
of these earnings have been rein¬
$4.48

v

—

Kefiiied

—

//f
Liquid

Exports—Imports—Futures

per

vested

during this period, average
dividends
totaling but 66c per
share.
In 1947 earnings amounted
to $4.97 per Share, and this year,
notwithstanding
declaration
of
only $5 in dividends by the Bur¬
lington ($7.00 in 1948), earnings
should exceed $3.00 per share.

DIgby 4-2727

,

In

1948, Northern Pacific's equity

Royal Bank of Scotland
Incorporated by Royal Charter 1727

undistributed earnings of sub¬

in

sidiaries

to" $4.69

amounted

HEAD OFFICE—Edinburgh

per

earnings

share

in

$6.25

LONDON OFFICES:

therefore

$9.57

Branches throughout Scotland.

in

and

to

should

reach

Prospects

earnings

per

for
for

3

Smithfield, E. C. 1

.49 Charing Cross, S.W.I

moderately
1950

Bishopsgate, E. C. 2

8 West

Burlington Gardens, W. 1

appear

64 New Bond Street,

of 38V2-33/4,

and

W. 1

TOTAL ASSETS

af--

£155,175,898

are

if for

Exchange

Exchange,

Board

These earnings are not put

year "range

over

Exchange

New Orleans Cotton Exchange

,

7

Exchange

Curb!

Commodity
Chicago

Selling at 19, midway in a ten

Pacific.
While all

Stock

Cotton

York

New

•

Members

York

New

:

.V.,

York

New

bright...;

Seaboard

and

7

from the sale of lands and oil roy¬

alties.

1949.

Den¬

ver,

:./\vv

Established 1856

,

particular element of strength

Northern

in

higher

appeal

as

the

next

other

fording

reason

than

a

present

liberal yield of 7.89%

dividend^ of

$1.50

on

/

per

the
.

*

Bank, Ltd.

Glyn, Mills & Co.

greater than average potentialities
for

Associated Banks:

Williams Deacon's

share, the stock appears to offer

several

patient investor.

(Continued

on page

74)

Stockholder

N. Q. B.

Relations
We

invite

officers

LOCAL STOCKS

inquiries

and

OVER-THE-COUNTER
from

directors of'

INDUSTRIAL STOCK INDEX

~

corporations.
Specific outline of

request

program

10-Year Performance of
on

request.

35 Industrial Stocks

Stockholder Relations Department

The

Robinson-Humphrey Company

ZIPPIN & COMPANY
Teletype AT 288

ATLANTA

1, GEORGIA

Long Distance 421

-

•

*

ON

uv

REQUEST

Stanley Heller & Co.
Members New

RHODES-HAVERTY BLDG.

.

BOOKLET

Members

Established 1894

208 South La Salle St., Chicago 4




Stock

ure

1948

pos¬

CORPORATE BONDS

Bought—Sold—Quoted

Tel. CG 451

York

New

New Orleans, La. - Birmingham, Ala.

territory

amounted

tedly specula¬

i

rTele. RAndoIph 6-4696

7.-

f

Mexican Eagle Oil

on

to

appear

disabilities

Consolidated

admit¬

STATE AND .MUNICIPAL BONDS

Memorandum

\l:

;,r-

25 Broad St, New

($3.16 from the Burlington
alone)
and
in
1949, its equity
should .exceed $3.50 per share.

Pierre Bretey
i n
approximately 15 times the .attractive
respec/1
$4.04
earned
through
the,
12 their
months ended Sept. 30, 1949.' The tive classes, Northern Pacific can
be singled out as the one issue
price-earnings -ratio
may seem
high in today's market but is low with the greatest speculative pos¬

Members

■"

v7

share

at

St.Louis l.Mo,

Midwest Stock Exchange

such

sessing consid¬

ties

INVESTMENT SECURITIES

current

/,/

and

ouve

Railroad equities run the gamut
of the highest quality

from those

debt; capitalization con¬ Union Pacific; and from those of
sists solely of some
1.7 million intermed¬
shares $4.50 cumulative preferred iate
quality
and one million shares of $3.50 such as Santa

Union Commerce Building

509

N. Y. City, Members N. Y. S. E.

funded

New York

:

in

few

Northern Pacific ope¬

Burlington, or 48.59%, and 50% of
the Seattle, Portland & Spokane.
Christiana sells at a discount, one
Northern Pacific also .owns all of
can actually obtain ^,a higher re¬
the stock of' Northwestern Im¬
turn by buying du Pont in the
form of Christiana than by buying provement Company, whose eat¬
ings in the past severa] vear|
du Pont directly.
o
And the alert
investor, by shifting back and averaged $1.5 million annually

The continuing development vorable, can supplement his in¬
products and techniques is come /return by
occasionally
the basis for the company's growth "picking up" a few shares of du
and able cost control has been re¬ Point free and without incurring

Oxford Paper Company

Broadway

strength which

mentioned.

Members

factory Jievels below 38.

try.

of

'A,-

*

Steiner, Rouse & Co,

ele¬

numerous

are

outweigh- these

capital, he

Pont into almost every

du

150

ments of

of its competitors.

some

there

standing equity.

currently sells for about
has more than tripled. The growth $4,000 a share.
Christiana is over
stems from one of the largest re¬ 98% du Pont common and because

5% Preferred

:

fore Federal income taxes exceed¬

growth

LOUISVILLE

as

Yet

This year's $3.40
ing that shown by Great Northern,
dividend on the common, adjusted
From
a
modest beginning
St. Paul and Northwestern in ..re¬
for the 4-for-l split-up, affords a
1915, with a business that was
cent yearii
Transportation ratio
return .on the current price of
originally founded in J802, du
has also been -maintained at satis¬

American Air Filter Co.

1st Floor, Kentucky

Duncan,

shares

common

outstanding.

•

extent

equivalent to 40% of current fixed
charges.
Property has not been
neglected, a total of $150 million
West Virginia Water Service Co.— having been expended in the past
John L. Shea, Jr., Shea & Co., decade so -that its efficiency com¬
pares favorably with many com¬
Inc., Boston, Mass.
.
tpanies operating ih its territory,
percent of gross carried through to
net railway operating income be¬

owns

about

Members
York

Bought—Sold—Quoted

from $14.49 million

Rotnem, Harris, Upham & Co.,
New York City.

Company

New

North

of

G.

Janney & Co., Philadelphia, Pa.

I.

E.

to

Nemours

frjC PONNELL & CO

Company

We

Pont

du

decade the company has

reducing
(although fixed charges have

rates

America—Stephen

this

company;
refer

Insurance

prod¬

of

Louisiana Securities

and therefore possesses some meas¬

could do with¬

Since 1917

Bretey,
Harden, New

York City.

,

Rights & Scrip

Pacific—Pierre

Northern

industry

ucts

certain

are

other railroads in

as

been reduced

for

that nei¬

out

there

to

the public

nor

Admittedly

$10.29 million in that period),
nor has it Dieselized to the same

safe

ther

Specialists in

New

Participants and
Their Selections

Indeed,

seems

to say

'

Forum

George P. Bissell, Laird, Bissell
& Meeds, Wilmington, Del.

it

Alabama &

earnings.

1

are

lives.

in

weaknesses in Northern Pacific. In

debt

E. I. du Pont.de Nemours & Co.—

one

increase

not made as much financial prog¬

directly or indirectly encoun¬
tered by most of us every day of our

future

sible

ress

whose products

the

York 5

Teletype NY 1-583

BArclay 7-5660

*

Partner, Laird, Bissell & Meeds,
Wilmington, Del.

Corporation
120 Broadway, New

tant oil-bearing area with increas¬

ing oil royalties providing a pos¬

the past

GEORGE P. BISSELL

New York Hanseatic
'

a

and others for institutions.

trustees

*

AT

Security I Like Best

ing

New

York Stock
York

30 Pine Street,

Curb

Exchange
Exchange

New York 5

Telephone WHitehall 4-9200

<

National Quotation Bureao
Incorporated

46 Front Street

New York 4,

N. Y.

■

Volume 170

I

I

I

& FINANCIAL" CHRONICLE

COMMERCIAL

THE

Number 4866

I

I

-nr.il

i

in

I

j

If

m

I'll

•

In' w

M

i

n

v"

1

'i»

INDEX

Good Intentions

Articles and News
In

Pajte

Selling, Bullish Behavior Brings Business—Ollie F. Minor

An

Interpretation

4
,

—Winfield W.

______

'

■

—Robert S.

4
8

Direct

Placement

of

Securities- Lead

Corporation

to

Restore Equity

—S.

L.

Capital Flow by Lowering Tax

Sholley

11

_

before

the

Here

are

How. to Increase Equity

Capital—Winthrop H. Smith

13

13

Will We Spend Our Way Into Socialism?
—Sen. John

Bricker

W.

14

The Policy Holder's Stake in Sound

Economics—Asa V. Call__ 14

1950?—Emerson P. Schmidt*

What About Business in

35

Golf and Tennis Tournament Winners at The Investment
Bankers Association

77

Convention
*

*

We

Best

2

'

Poll Shows GIs Will Spend Insurance Dividend Slowly___

Urges Removal of Restraints

on

7

Foreign Trade___

Association

;

.

Stop worrying about those ob-

at

soletes ! We'll pay

'

fraternity to find any relief
v■' "

banking

ascendancy.
Even

84

__i._

Spahr Denies Return to Gold Standard Will Drain Our Gold__

■

in

Proposes New Rent Law

84

him

needs in the' securities field.

some

discussion I have heard about the bill—and there has been
REPORTS "

COMMITTEE

1

good deal—in all this discussion I have never once heard
the stated objectives of the bill criticized."
Y-.
The only explanation we can find is that Mr. McDonald
just doesn't get around,- or perhaps, like the politician who
talks only with his own party members, Mr. McDonald has
been exchanging views only with those of his own convic¬

17

Investment Banker and Nation's Economy—Hal H. Dewar

A Plea For Sensible Blue

—Arthur D. Chilgren

20

i X iuancial and Trading

Sterling and Dollar Areas—-A.

The

18

Umpire—Harry A. McDonald-- 19-

Sky

Oil and Natural Gas Industry and the Investor

25

_

Expects Continued Large Volume of Municipals

26

Analyzes Financing by Public Utilities—.—

27

Reports

on

Exchange Activities

Stock

,

List of Those in Attendance at Convention

Cites Weakness

Railroad

in

Walter J.

29

-

-

well-rounded, large and distinct body of

12

Business Man's Bookshelf

79

off their

Canadian Securities

30 FEDERAL

Cover

(Editorial)
i-i.

Coming Events in the Investment Field—

>

Teletype-BS 128

Novo Available—
AN ANALYSIS

Dealer-Broker—Investment Recommendations

8

Einzig—"No Second Devaluation of Sterling"

15

Ahead of the News—Carlisle Bargeron_**_i.

either

6

Activity

News About Banks and Bankers

RIVERSIDE CEMENT CO.
CALIFORNIA

.

CLASS D (common) STOCK

V
t

V

.
.

and

' 7

brief review of

a

the Cement Industry.
Earned

1948

Selling about

$8.00

$5.22*
r'j*disregarding
and accelerated

arrears to Class

A,7

depreciation of $1.74

7

LERNER & CO.
Investment Securities

10 Post Office
•'

Square, Boston 9, Mass.
/

,1: Tel. HUbbard 2-1990

,

BUY

S.

U.

SAVINGS

and

the

BONDS

market

over-the-counter

wronged

we

could come to its defense impartially.
unimpaired and believe the SEC should

15

91

market

auction

We need them both

88

NSTA Notes

'

OF

have developed side by side, each with some distinct char¬
acteristics and both have served our economy well. Were

5

___.

Indications of Business

V

,

guard many of those who are endangered.

The

8

Dealer Briefs

From Washington

1923

STREET, BOSTON 10

HUbbard 2-3790

14

Regular Features
Bank and Insurance Stocks

Connolly & Co.

INCORPORATED

nonlisted securities certain
requirements and characteristics which now govern listed
securities, sometimes called equalization.

28

Picture

/

•

,

The perniciousness of this attempted legislation is dis¬
guised by its protagonists under such deceptive words and
phrases as "disclosure," "equalization," and "in the public
interest."
The hypnosis of these, unfortunately, is taking

As We See It

Stock

Bought—Sold—Quoted

This it would do by attaching to

28

_—____

a

•;

public opinion which is opposed to the principle and the
objectives of the bill and is committed to its defeat.
Behind the Frear Bill is the readily discernible inten¬
tion to abolish by gradations! the over-the-counter market.

24

and Business!

;

'

There exists

22

23

Financing

Discusses Rise in Government Securities Prices
Tax Cuts Will Help Government

tions.

21

Relations—Sir Oliver Franks____—

Stock Market Key to Industrial

CORP.

a

Securities Industry Must Unite in Striving for Better Public

The SEC Serves As Financial

PRENTICE

Common

Listen to

"I daresay that we all agree as to the principleYand
objectives of the bill. As a matter of fact, in all the

the

91

December 27-30

Relations—Albert T. Armitage—

REED

the Frear Bill:

on

Joint Allied Social Science Groups' Meeting in New York

AND

STREET, NEW YORK

Telephone: WHitehall 4-6551

his

Mr. McDonald shows himself deficient in his

now

appraisal of

84

ADDRESSES

any

thing—in a -true spirit of
goodwill to all mankind.
>

75

Stepping-Up Britain's Export Drive___

IBA

cash for

old

99 WALL

;

are

investment

; 39

i;

Nadler Cites Government Impact on Business

Bankers

dissenter, there will be small opportunity for the oppressed

8

Taft Sees No Slide to Socialism;

♦

are

intentions

Cover

Convention

Investment

GENTLEMEN!

prepared to believe that Chairman McDonald's
completely straightforward and honorable.
However, when the Commission is through briefing and
indoctrinating him as its head, unless he becomes a great

Investment Bankers Association of America Holds 38th Annual

The Security I Like

GOD
REST YOU MERRY

.

firmly believe tha»t those who sit in judgment over
a
regulatory body should have a: sen£e: of realism. They
should have maturity and a sympathetic attitude."
"You, of the investment -fraternity/are certainly en¬
titled to know my thinking, and as far as I can reflect it,
the thinking of the other Commissioners."
"Of this you may be sure, it is the definite desire of
the Commission to see to it that your needs are as promptly
and properly met as humanly possible."

More Confidence in Business Needed for More Equity Capital

—Winthrop H. Smiths

„

"I

U 12

—i-_—

an oppressed investment
banking industry.*»

excerpts: |

some

Stable Prices—Main Objective of Monetary and Fiscal Policies
—Allen B. Kiine-____-

AND COMPANY

/

ap-

Hollywood, Fla.
L•; ^7.7';;;,'!: (:'/
■/
•; It fairly oozed conciliation and reassurance.

Dividends!

on

Frear Bill

an address by Harry A.' McDonald, Chair¬
of the Securities and Exchange Commission, recently

delivered

9

between

as

We advert to

;

man

-

Control?—Haughton Bell

x

i

A

—Julius Hirsch
Does

:*'■

6

Byfield

impartiality

*

hmmm

"

praised. Suggested changes in aid of

The Welfare State in the Light of Recent European Experience

What's Ahead for 1950—Inflation, Roomlet or Recession?;r

Claim of Commission

listed and over-the-counter markets discounted.

i

4

.

discussed.

man

•

.

Address before Investment Bankers Association of SEC Chair¬

Economic Outlook

of National

3

(2487)

i

do nothing to

Mutual Funds

Observations—A Wilfred May
Our

Reporter's Report__

Our Reporter on

:

_________

46

:_

.13

Governments

Prospective Security Offerings

•

over-the-counter
that

Securities Salesman's Corner

70

Securities Now in Registration—;

92

Industry__________

Mr.

2

Tomorrow's Markets (Walter Whyte Says)

you

82

96
Drapers'

land,

and

COMMERCIAL

The

FINANCIAL

CHRONICLE

Reg. U. S. Patent Office

k

PILLIAM B.
25

Park

WILLIAM

WILLIAM

v'';> -c.:

DANA
D.

Thursday, December 22,

1879.

8,

Publisher

McDonald,

(

Manager

Thursday (general news and adand every Monday (comissue — market quotation
ecords, corporation news, bank clearings,
tate and city news, etc.). .. ,,
,
Every

hicago

3.

Til.

135-

S.

Salle
St.,
State 0613);

La

(Telephone:




'

in

I ;';

•

United

Territories

Pan-American

Union,

Dominion

Canada,

Other

of

Countries,
Other

$25.00

and
per

Monthly
$25.00
,

per

Note—On

the

rate

of

and

per

$38.00
per

(Foreign

We

;

U.

year;

per

made

in

page

82)

of

York

towns

and

11,000

villages

turn

means

in

interested

all

audience

over

an
the

invest. And

airplane delivery of The Times

Spencer Xrask & Co.
Members

New

25

Broad Street, New
HAnover
i'.'

'

^Albany

2-4300

50 Congress Street, Boston 8

York 4

\

Hubbard 2-8200

Teletype—NY

1
-

Chicago

-

puts

it

on

cation in

sale the day of publi¬

more

than

100

key cities.

Members Ney York Curb Exchange

York Stock Exchange

extra.)

the fluctuations

advertising is read by

U. S. with money to

PREFERRED STOCKS

in

—
Monthly,
postage extra.)

funds.

they want all the news,

community leaders in

New York Times/That

interested in offerings of

High Grade Public Utility and Industrial

year.

Monthly,

postage

from their interest
Because

cities,

of

exchange, remittances for for¬
New

in this instance

your

year.

—

are

8.

eign subscriptions sn^ a^-e^isements must
be

sorry,

taking sides, then why, in ceron

YOU PROFIT

regularly and confidently to The

Record

(Foreign

account

but

you,

(Continued

■

Publications

Earnings
year.

like

trying to in¬

party."

Febru¬

Members

$35.00

$42.00

'

8tates,

Quotation Record

year.

or

Eng¬

post office at New
the Act ol
March

*
Subscription Rates

1949

ertising issue)
lete statistical

Offices:

C.,

accused of taking

security can be better served
vice versa. May I assure you

has studiously avoided

we

or

;■

Smith.

at the
under
-

Possessions,

Bank

Other

E.

second-class matter

Subscriptions

President

SEIBERT,

RIGGS, Business

as

25, 1942,
York,
N.
Y.,

ary

to 9576

HERBERT D. SEIBERT, Editor &

Edwards &

c/o

Reentered

Publisher
Place, New York 8, N. Y.
2-9570

London,

listed,

If the Commission isn't

Copyright 1949 by William B. Dana
Company

^

DANA COMPANY,

REctor

Gardens,

V-,

just don't know what you are talking about.

L...
1

Weekly

Twice

or

Commission

the

*

either unknowing

have been

Commission

terfere with the interests of either

5

Best__

Washington and You
Published

the

78

___*

The State of Trade and

at

to whether or not a

as

71

Railroad Securities

The Security I Like

"We

sides

94

Public Utility Securities

been

talking with tongue in cheek when he said:

5

-____

diminish the usefulness of either.

McDonald must have

Mr.

Glens Falls

-

0lj£ Hear fork SimcjJ
"All

1-5

Schenectady

-

Worcester

the News That's

Fit to Print"

-

4

>(2488)

THE

COMMERCIAL

you

In

Selling, Bullish Behavior
Brings Business

r.
i,*

•

You

out

York Division, Shell Oil Company

with

'

.

signment after

bullish attitude toward

a

difficult

as¬

outstanding

au¬

a

an

thority like Kelso Sutton takes
[subject like "Salesmanship"
discusses it

business—th?

First of

a

all, I feel that

from

ness,

ness

reason

then

[heard

and

you

from

he

had

tail

you

the

United

buildings,
These

also

sell

and

them

had

O. F. Minor

petroleum

for

my

"Salesmanship!"
I know how

now

Gypsy Rose

I

encore.

the

on

am

totem

yelling for another
definitely low man
pole

and

I

would

have welcomed the
opportunity to
be the first man in this series of

lectures.

I would have

enjoyed it
a lot, more,
because it's only the
lead dog in the dog team that
gets a change of scenery.

So, the only thing I have left
;to talk about is the oil business.
Now, I could probably stand
here for

forty,
give
not

next

you

a

oil

facturing

minutes

which

invited

me

the

verbal

that

me

down here

to

gentlemen

a

cocktail

will

be

on

both

salesmanship
palatable

stimulating, and that is
going to do.

and

what

I

am

However, to lend
ground to my

a

i

So, you

talk

ship, I must tell

on

salesman¬

ii

^Stenographic report of lecture
by Mr. Minor, 13th in a series on

Investment
sored

of

by

New

Salesmanship,

Investment

York,

all

New

of

sell

our

sell

them

business,

we

teries

and

is

mention

' cially to

are

having

the

Those

are

-

a

his

operators,

stock

loss.

we

must

proper

giving

beneficial

in

intangibles

is. I

ly

am

down

mere¬

Cabe of the Federal Reserve Sys¬

another

not

tem

omist—

econ

astrol¬

an

I

oger.

can

only attempt
to
give
you

pect that the

being prepared, will make
tinct contribution to

personal
view of what

we

may

pect. I

and

ex¬

uses

more

than

whatever it is

"

.

'

,

■"

II
NEW YORK

r'

>

aspects of the
picture which give me a fair de¬
gree
of
confidence
and
some

can

MINNEAPOLIS

PORTLAND, ME.

if

he

oil,

as

a

the

uses

recom¬

and preserves his

profit and

a

see

a

piece of

that

So,

paper.

our

salesmen

they have to be so adaptable
that they must be just as much
at

home out in

service

station

the

others

that

make

me

country in a
a
pot¬

before

some

activi¬

completely ab¬
time
and 1 attention
these past three months.
I refer
sorbed

OMAHA




KANSAS ClTY"

WATERLOO

FLINT

to the inquiry into our Federal
monetary, credit, and fiscal poli¬
cies that is being conducted cur¬
rently by a subcommittee of the
Joint Congressional Committee on

the

Economic

Report.

This

in¬

quiry was authorized by the last
Congress, and, on the day that I
first

received

the

invitation

to

up

a

chance to "come

no

for air" before the talk itself,

which

then

the future.

Saturday
working

fell

It

three

was

that
on

I

months

not until

in

last

finished

with

the hearings. It

was a

most worthwhile

experience,

even

new

tech¬

'hough it absorbed all of my time
the detriment of the polishto

mention

the

context—of

this talk to you this afternoon.
The issues with which the
mittee

is

dealing, essentially in¬

are

so

abstract and

so

tech¬

nical that I have often wondered
how a democracy, operating

would find in its

individuals

has

and

the

undoubtedly

.presentation

and

closed the sale for you.
1
But at the-riskv of. being repe-

its

I

own.

withdraw

with

of

technical

the

inquiry

prepared

these

with technical

membership

press an

am

The committee

person

own

on

page

64)

true

press

as

as

widely
of

some

much more significant to a
appraisal of the national out¬

Economy

Turning to that outlook in the
narrower

that

now

fundamental

more

our

quently,

.

-.

lived

that

ably serviced
aid, notably in the
V.

but
member of the committee,
was
headed
by Senator
Douglas of Illinois, was personally
every

which

(Riefler be¬

fore the National Industrial Con-

foroneu Board Meeting,

Cleveland,

Ohio, Dec. 13, 1949/ .-y?*

*.» >

-

the

which be¬

recovery

will

summer

be

short¬

not and whether it will

or

replaced by

a resumption of
readjustment. In any

there is a considerable de¬
of agreement at present, for

case,
gree

whatever that may be worth, that
the immediate outlook, say, until

the middle of 1950 at least, is for

rising levels of output.
The readjustment

through which
just passed was by no
negligible.
Between No¬

have

we

means

1943

and July
1949 in¬
production,
as
meas¬
ured
by
the
Federal
Reserve
index, declined roughly 17 %; dur¬
ing the same period wholesale
prices, as measured by the allcommodity index, dropped 6%,

dustrial

and

business

declined

inventory

5%.

industrial

These

holdings

declines

in

activity and prices, to¬

gether

with

credit

demands

other

smaller

lending

prompted

business
banks

on

and

institutions,

several

monetary

and

credit actions by the Federal Re¬

System

serve

and

summer

during

of 1949.

ment and repayment
on

gradually

were

the

spring

Down

pay¬

requirements

instalment

consumer

loans

moderated

prior
of Regulation
Margin requirements on stock
exchange loans were decreased
the

termination

substantially,
tions

.

in

successive

reserve

member

banks

reduc¬

requirements
were

of

instituted,

and

a policy of flexibility in
open
market operations to permit freer

play of 'general

credit

forces

in

the determination of market rates
and

by Dr.

lie ahead. Just now
analysts are' wondering

W.

Chandler of Amherst College,

*An address

in

may

this

gan

weakness

Many feel, conse¬
further readjust¬

economy.

most

to

apprehensions.

Lester

now seems clear

moderate

recession^ in
activity which we expe¬
rienced during the first half of this
year reflected primarily inventory
and price readjustment and not

to

was

Professor

it

sense,

the

business

on

.

(Continued

ever,

vember

com¬

flation and deflation, are of course
basic.
They run to the heart of
the whole future of business in

background to

new phases
selling which arise every day.

Sutton

i

to

not

sues

approach,

*

not

are

more

my

this country as it is affected by
monetary, credit, and fiscal poli¬
cies.
At the same time, these is¬

probable talked to you about the

MILWAUKEE

mone¬

spectacular and political
sidelights with a Washington date¬
line. They are frequently, how¬

apprehen¬

v"v

on

the

downward

answering objections and, last
but not least, I'm sure that he

PHILADELPHIA'

this

reported in the

I would have

and

Kelso

CHICAGO
BOSTON

dis¬

creation

operations of commit¬
as

in¬
and

given you all
of
the
general,
fundamentals of salesmanship. He
has undoubtedly talked
to you

Incorporated

tees such

Winfield W. Riefler

be

about the preapproach, of
getting
your
sales tools ready. He has

'

the

cause

worth, those

the remotest idea at the time that

have to be very adaptable, to sell

Railroad

I

the

now

.

no

outline, for

niques, and all of the

A:C.ALLYN«roCOMEANY

com¬

a

preservation of sound

we

an

crankcase

salesmen in all of the

unicipal

our

tary, credit, and fiscal policies in
this country.
•.
I hope you will forgive me this
digression. I have included it be¬

do

can

of

M

report of the

my own pure¬

trious, because we are in the most
competitive and vigorous industry necessarily in a political atmos¬
in this country and it all adds
up phere, could organize itself to deal
to
a
big job of sales training, with them. I have felt that here
which is, as far as we are con¬ was a field where a
democracy
must rely upon experts. It hardly
cerned, a never-ending job.
We are constantly training our seemed... possible
that < Congress

I nd ustrial

that

ly

questionnaire which the
committee had sent to the Federal
Reserve System.
I did not have

ready

These salesmen must be indus¬

Public Utility

The whole expe¬

assurance

mittee, which I understand is

office.

"

gave

democracy can function effective¬
ly.
There is every reason to ex¬

bellied stove, as they are here in
the city in somebody's panelled

SECURITIES

interesting.

rience

whether

this heterogeneous array of
buyers
and this wide variety of
products,

espe¬

INVESTMENT

aspects of

the

on

answer

dividend.

you

intangibles, and I

gentlemen, because

versed in the technical

subject. It was a searching in¬
this assign¬ quiry, conducted on a
very high
ment because of my ignorance of
plane. If you care to go into it, I
what the na¬
think you might find the state¬
tional outlook
ments submitted by Chairman Mcto fall

sure

ments

And the only thing our man has

that

or

My assignment is to interpret
the national outlook to
you.
I am

speak to you here today, I was
engaged in assembling material to

bearings, he has
of

us,

sold to him is

tires and bat¬

factor

there

bearings, then he has
a

in the

\

man

But

kind

mended by

to

we

give

the dividends that

in

so we

we

performance,

product
use.

his

that

when

equipment, and when

oil

definite

these
you

Buyers

effect economies

out

accessories,

all

we

of their

burns

bringing back business.
Those

satisfactory

for them to

of

or

a

to

business and

dividends

give them. If

more

in

give them the convenience of

we

have rather

nite advantage in selling, or that
the display of merchandise will

courtesy

declare

when

that the clean¬
liness of their premises is a defi¬

help them sell

our

give them comfort, when

ferior

is

continue

we

Dividends

station dealers

idea

service

do

We continue in

use

spon¬

York .City,

Declaring

intangibles in
Because practically

the

economy will be faced
readjustments. Doubts probability of renewed in¬
flation and wage-price
spiral, and stresses importance of
external forces in shaping framework of future
economy.

with serious

No Fundamental Weakness in Our

many

cannot dictate to them

-

look.

How

business? ' And, how do we
continue to improve our business?

direct¬

top

omist foresees, at least until middle of
1950, rising levels of
industrial output. Warns end of current
extraordinary demand
for new construction may mean national

want to comment
ties
that
have

seen

our

•„

on

merely result
readjustments, Federal Reserve econ¬

of inventory and price

First, and this is less of a di¬
gression than it •< may. appear, I

gress?

and

' :>V

and,

service

merchandise

our

System

was

sive.

never

them

s.

independent

are

Association

Dec. 15, 1949.

we

business.

our

their

something

you

that,

to

of

by. declaring dividends for the
people who use our products, and

can see we

products

bulk

of Federal Reserve

recent moderate business recession

they are selling pieces of paper.
Now, since they
are
selling
pieces of papter, how do we pro¬

wide variety of people that we

a

that merchandise.

.

Selling Intangibles

•

they

continue to improve our business

we

[:

'■

that

The

sell to water

we

Asserting

by anybody, and it
goes
up
into thin air, so our
people have nothing that they can
put down on a man's desk—so

consumers.

J.-.',. 'Tv

the prod¬
And I'm go¬

have

we

companies,

fuel oil that

proper

little back¬

Then,

that

transportation

sell

Selling in Oil Industry

is

farm products to the farmers and
even

you

to

up

services.

or¬

or

-The

airlines, both
unchartered, and

and

marine oils

and

sell..

see

and processors,
a line of special

have

writing

are

ever, see

airport operators, and to the

ly to the

down

our

sell to the

chartered
armed

sell

They invited

plants

job

wholesaler,, or into the
crankcases of equipment and so on,
I'll tell you that farely, if ever,
does anybody in the whole world

acces¬

With

They

rarely, if

tion

oils, these men
on large manu¬

call

we

we

or

here.

serve

some

products for the paint and varnish
industry, and another for the dry
cleaning business, and then, we
have asphalt products which we
sell to large contractors, munici¬
palities, State and Federal Gov¬
ernments, and aviation products

nice interesting story
business, but that, is

why they

out. and

go

up

thirty-five,

forty-five

or

the

on

the

products.

industrial

of

and then

Lee would feel if she got all the
-way down to her "G"-String and
the boys were

line

a

Assistant to the Chairman

Board of Governors

I

sell, and the
products that are being used, han¬
dled
by jobbers and everybody
else, all along the line, from pro¬
duction to refinery to distributing
depots, right up to the under¬
ground tanks of every service sta¬

also expected to

are

it,

see

then i' my : sales
lot easier."

that they

products

sories, and our men also contact
jobber accounts, wholesalers of

their subject "Salesmanship" and
now I am here, and what is

subject?

men

be

could

ing to go further than that.

combination of the

or a

tires and batteries and

a

expert,
all of

So

station

or

that

By WINFIELD W. RIEFLER*
»

ucts

two.

Co.,

who is

j

ground,

Economic Outlook

the

and dramatize

men

a

some

Interpretation of National

offices,

Yes, but I am going to say
something right now that is going
to startle you fellows. Our sales¬

the

will be

States

Rubber
sales

and

you that
expected to go

are

of

ders and you may say that all that
leads up to product.

financial arrangement con¬

a

cerning

man

from

today,

he

and

franchises;

dealer, with all of
its ramifications. It may involve
the leasing of property. It may en¬

was

a

America

franchise to

good,

then

and

busi¬

stand¬

out and to sell the service

Tulip Cup Co.,
very

our

that I feel that way

salesmen

our

tor of the Lily
and

busi¬

clear when I tell

very

a

Sales Direc¬

a

in

down

out

probably look upon us, in
our business, as product
salesmen,
or
commodity salesmen,
but
I
must tell you that our salesmen
are just as much paper salesmen
—they are selling pieces of paper,
just-like you gentlemen are. They
are
selling contracts.
They are
selling leases.
They are selling

point, is the most diversified busi¬

during 10 lecture s,

An

your¬

you are

You

oil

salesman's

a

him,

would

ness.

and

and

prospect's'desk

think

selling.

our

about

and

up

in

and

Thursday, December 22, 1949

in¬

:

beating

for

(1) good healthy and sincere smiles; (2) an enthusiastic atti¬
tude in presentation; (3) getting in step with your prospect;
(4) a correct approach toward your customers; (5) knowl¬
edge of your prouuct, and (6) instilling motive of comfort in
sales talk. Also stresses importance of hard work, coupled
indeed

selling

sense,

CHRONICLE

"Boy, if I had a product, some¬
thing that I could put down on

industry sales expert, after describing selling problems
connected with his own business, lists as factors in selling:

is

a
•

might have said to

street

Oil

"This

FINANCIAL

self, during the times that

my

:

in

are,

tangibles.

By OLLIE F. MINOR*
Sales Manager, New

&

I

yields
think

monetary

was

adopted.

these

and

(Continued

moves

credit
on page

in

the

field
66)

to
,.

,

>

COMMERCIAL

THE

Number 4866

Volume 170

&

FINANCIAL

CHRONICLE

5

(2489)

\

c

Steel

;;:The

DEALER

■ ■

Production

Electric Output
.

.

"

Carloadings

..

<<■.

-Y

Retail Trade

State of Trade

Commodity Price Index

and Industry

BRIEFS

Business Failures

Food Price

By A. WILFRED MAY

Index

Auto Production

J

Company Information ?

Hartford, Conn.
issues

Insurance
'

bearing out their post-war prommarket-wise.
Twenty years

V ise

splits the Hartford companies
generally are capitalizing a portion of surplus and most of them

paying

are

increased

an

moderate
for the

divi-

Contrary to the general tendency,

this year by

previous all-time iiigh point set on Jan. 29 of

ceeded the

Inc.

... ■

nor

Let

us

consider the

first

information

concrete

is available

that

for the

Aluminum

production across the nation. The increase also reflected
seasonal rise in electrical kilowatt production
which is expected to continue for the next two weeks if the normal

7,/

.

mainly attributed to the settlement of the
Co. of America strike which resulted in the resumption

New Haven, Conn.

f

1949 has

been

good

a

stantial volume of

>

in Cona submunicipal

new

market responsive
to ' realistic / pricing.
Many favorable stockholder ex¬
periences, particularly in the inY

the

with

financing

stimulated
The outstand-

investor interest.

;::Y ing feature

of the

stocks

the

on

year

buying

widespread
'

vestors.—Marshall

has been
of / local
in¬
Williams,

of

part

new

H.

Inc.

Day, Stoddard & Williams,

ingot output also advanced in the week beginning Dec. 12.
It rose to 94.1 % of capacity. This was the same rate as that attained
in the week beginning May 23. The previous high rate was 95.6%
established in the week of May 16 last.
For the current week the
scheduled rate is set at 94.5% or an increase of 0.4 point from last
week.

As

today's

see

we

will

T business

is

com-

believe that
exceedingly

We

months.

Yy ing

it

picture

be

good and that corporate profits
will be higher and we do not
feel that most of the good un-

*

'

show

listed stocks have begun to

the

marketwise

appreciation to

entitled based

which they are

"

on

the present conditions and outlook for the coming months. —

Y

Dawkinst Waters

y. P. Da whins,

••

'

& Co.,

Inc.

strong

a

Tax-exempts,

State

and

Local

"~"y, ■
demand for

yy:

still is

There

especially;: in the better credits.
In spite of the fact the supply
will be substantially increased in
•

Authority issues,

'

eral

Housing

expect only
the gen-

we

in

fluctuations

minor

f

by

particularly

1950,
*

price level, as there are inthe long-terms will be

dications

"L

■priced to attract
buyers.;^/y;y

yy'Y Yy'
customers,
while

investment

Our

""•*

b

have

•cautious,

/'y V

buying

e e n

companies

sound

of

equities

of

new sources

experienced a postwar
adjustment and have demonstrated their earning ability
have

which

-

'

'

under

condi-

competitive

fully

tions.

Local
Y>

Stocks

firm, while Fire and

but

quiet

Casualties
in

.

an

have

We

active and strong

are

advancing market.
noticed recently

speculative

newed

especially

re¬

a

interest

stocks

in

of

substantial

estimated 86,624

com¬

progress

last

units from the previous week's three-year low

an

of

52,514 units, Ward's Automotive Reports state.

increase by General
preceding week to more
gain by Chrysler from 7,000 to 16,000

Chief factors in the rise in output were an

from less than 4,000 units in the

Motors Corp.

23,000 last week and a

company

managements'

endeavors

counter¬

to

act that investor attitude.

Information

The

.

'

Available

Is

-

The hard factual data for keeping the share¬
holder informed about his company's operations
a

H

and
been

for the
made

making of investing decisions have
here to an extent unprec¬

available

edented in this

other country, throngn <■

or any

management of parents and subsidiaries,
business, the business experience of ex¬
ecutive officers, remuneration — including , fees, : salaries, bonuses,
pension and retirement payments—of officers and directors, manage¬
ment's personal interests in transactions, principal holders and total
number of holders of equity securities, option warrants and.rights

ownership

ization,

material

and

changes in

the

detailed

balance

The National Coal Association reported soft coal dug in
Dec. 10 totaled 9,200,000 tons.
This compares with

tonnage.

the week ended

12,249,000 tons in the like week last year.
Thus daily output is
running 20% above a period when Lewis allowed a five-day week.
Industry sources said the increased productivity was due to less
absenteeism, greater effort by miners on piece-work and full opera¬
tions in non-union mines and those which have signed new contracts
with Lewis.

-

:

■

\

consolidated

statements.
In addition to this annual

r

•

the year as

follows:

Under

^

the companies.'':y^/\"/
J
'/ . /.• V!, ^
materialized from last week's hard coal contract
Registered companies must also supply, continuing information
negotiations.* Discussions were resumed on Monday of this week. regarding changes in the security-holdings in their companies by
Both sides reported "no conclusions" after two weeks of bargaining.
officers,, directors, and "controlling persons"; and copies of proxy-

No agreement

Vice-President solicitation material used—conforming to Sections 14 and 16 of the
.
t
,,
.
.
: ^ f..
•' ■
chief union bargainer, said "there's been some Securities Exchange Act.
progress to the extent that there has been further clarification with 7
These reporting regulations apply to all companies fully-listed
respect to the position of both parties."
But he emphasized, and on exchanges. Furthermore, this disclosure net is gradually catching
the operators agreed, that neither party has yet given any ground. additional
companies under other of the New Deal securities laws,
Y.''*•'Yy yYy ■'.../■$■/'"«Yy * ;Y-YyY vYY':-V; Y'V
■; which provide for equivalent reporting. These include the Public
Steel prices will be advanced shortly by Youngstown Sheet & Utility Holding Company Act, the Investment Company Act, and tha
Tube Co.
In this connection, Frank Purnell,-, president, stated the Securities Act of 1933 under which all companies having outstanding
increases are necessitated by "rising costs of materials, services and $2 million or more of securities must undertake to report permalabor."
Youngstown thus became the second major steel producer nently after they have made a new offering.
to announce formally that price boosts were being made.
/ Although the SEC's reporting compulsion does not apply to the
Late last
Thursday, U. S. Steel Corp. disclosed it was raising steel prices an 356 stock and 86 bond issues unregistered but permitted to remain
on the New York Curb as "issues admitted to unlisted trading privi¬
average of $4 a ton.
Wheeling Steel Corp. indicated that it also will
!

After

two-hour meeting on Friday last U.M.W.

a

Thomas Kennedy,

increase its steel

prices

leges,"

soon.

higher price schedules are not believed likely to have any
immediate effect on demand.
Unshipped tonnage on mill books will
The

take the new

prices since contracts stipulate prices in effect at time

of delivery.

.

;:

as

provided by a special amendment to the Securities
.

-

*

•

'

v

•

strict

Federal

(Continued

on

page

86)

CALIF.

—

Corp. and

charges announced last week by U. S. Steel
the revision in base prices mean much more than

just a moderate and not unexpected increase in average steel prices,
according to "The Iron Age," national metalworking weekly, in its
current review of the
steel trade.
They reveal a revolutionary
method

of

arriving

...

,

:

at

charges

extra

apparently

and

show

a

f

December 15, 1949

y

new

V

(Continued on page 86)

•;

;

6m?m
GO.

McGINNIS,

Hall

will be

the retirement of

of Raymond
Helm Building,
changed to Hall & Hall.

211 South Beverly

ize

KELLOGG CO

in

with

tax-exempt

Industry Shares,

New York Office, this

our

a

-u

$2.35

Per

Share

Bringing Total For 1949
.

The

new-office

the admission to

It w-ill also distribute Trusteed
Mutual Fund, and will finance or purchase

under

he

will

the

MR. WALTER T. GARDEN

To $3.75-

Detroit Stock Exchange

of

y

B.

DETROIT
—

26,

Lansing

MICH.
—

'

:

a

change in firm name to

f McGinnis & Company
Members New York Stock Exchange

61
*7

-

61

Underwriters and Distributors of Investment Securities
Broadway

77.

'v

«

.

y.Y

J

< i

a

r

New York 6, N. Yi

Muskegon




and

Cantor,' President

-

Penobscot Building

Bay City

■

Coaet.

personal direction

Moreland & Co.
1051

general partnership of

of /Cantor, Fitzgerald & Co., Inc.
Associated with him will be Paul J. Koughan, former UNRRA

Gerald

Administrator.

Member

*

branch will special¬

securities.

going industrial organizations on the West
Declared
*

-

-

MR. BENJAMIN E. BAMPTON

Drive

BEVERLY HILLS, CAL
common

•

A BRANCH OFFICE AT

I

Effective

In

:

r

ANNOUNCING THE OPENING OF

Sons,

&

J

f

announce:

*

Jan. 1 the firm name

E.

y

94.5% OF CAPACITY

The changes in extra
Steel

Name to Be Hall & Hall
FRESNO,

if*

„

,

reporting regulations do not apply to the
vast number of issues dealt in over-the-counter, which are not under
The

-

OUTPUT ADVANCES TO

Ex¬

voluntarily report directly

change Act of 1934, these companies all
to their stockholders.
"
/

& Sherrerd.

Butcher

Jr.,

;.

■"

they must issue quarterly sales figures and

••

rerd,

^

report, the registered companies must

the revised 9-K form
operating revenue; under
8-K they must at anytime during the year in which they may occur,
disclose capital changes, option arrangements, litigation proceedings;
and also at any time during the year, under 8-A they must disclose
the registration of additional securities. .Quarterly or semi-annual
earnings statements are not prescribed by the SEC, but are in most
cases obtained through the Stock Exchanges' listing agreements with
during

report

panies which have an interest in
natural gas.—William D. Sher'

and income

sheet

Y.' '•'<

and

outstanding,

of them working only three days a week
under orders from John L. Lewis, are producing an amazingly large

e

SEC. The
content and timing of continuing information to
be given
by all companies registered on exA. Wilfred May 7
changes is ordered by the SEC in detail unde~ U57
forms 10-K, 9-K, 8-A and 8-K, as revised Nov. 2 last.
Registered
companies are required under 10-K to report annually as to capital¬

efforts of the stock exchanges and the

explained.

Soft coal miners, most

—

rail

second-grade

in

and

bonds

generally

are

made

to

STEEL

Bank

also

industry

notwithstanding the overall picture of moderately lower pro¬
duction.
Car and truck output in the United States and Canada rose
week

units, the agency

good outlook for the

full of

,

automotive

The

than

Philadelphia, Pa.

;y;;^ V

pattern is followed.;".'.y

Steel

have

field,

surance

seasonal

year

There has been

necticut.

of

benefit

shareholder, second his indifference thereto,
and third the hodgepodge situation resulting: ro.U

The record output was

next

company

the

of aluminum

some

the

in

'

'

the attitudes of the investor himself.

the*' pre-Christmas

•

should be realized that this

It

Commission,

and absorption of investment
is not the fault of the
of the companies, but stems from
,
the distribution

of

status

isfactory

information.

■}: .;

y '

electrical output of the coun¬

71,326,000 kwh.

expect

atatements

<

-

reporting rules prescribed by
Commission highlights the still unsat¬

Securities and Exchange

the

try's electric light and power industry for the week ended Dec. 10
established a new all-time high record at 5,881,360,000 kwh. It ex¬

record
few
weeks.—Coburn & Middlebrook,
We

dend.

.»

J-

corresponding period one year ago. ;

for 1

after their simultaneous 10

'

production for the nation as a whole showed a
decline last week and was noticeably under the high level

Total industrial

revision of corporate

recent

The

handsomely

are

Stockholder Be Spoon-Fed His

Must the

.{■1:

NEW YORK 6, N.

BROADWAY

Telephone DIgby 4-4933

-

'

y

Bell Teletype NY

Y.

1-310

v

THE

(2490)

6

COMMERCIAL

&

FINANCIAL

language of prejudice.

The Welfare State in the Light of
Recent European Experience
By ROBERT S. BYFIELD*

i

In

in

1933

late

I

happened

talk with

bank

in

But

that

State.

America

its weak

well

he

had

spent
life

it?

,

his

again to Rome.

N

a

York

e w

bank.

him

for

in

our

Byfield

most

businessmen
and

and

a

emphatic
Re¬

will
You
with their

let's

^e,u

book of
this

a

are

heel of
bugs in
formula

formulas

.'ri-y-Vv B,

take

little

a

"The

cuss

r™

people
I.

you or

Make

who

have

As

a

people

earn>

nor
we

said

that

is

government

a

talcing

jdevice ior
money out of
Webbs and Harold Laski. And
so, one set of
pockets and putting it
I feel that present trends and deinto another. In other
words, as
That's where we may
significant clues. Ac¬
cordingly, when it was my good

fortune
Town

to

be

Hall

member

a

'Round

Seminar last

of

the

summer

the

World

along with

25 other representatives of va¬
rious well known groups, includ¬
ing the American Farm Bureau

Federation, the American Bankers
Association, the CIO, the AFL, the
Lions

International

and

others, I

tried to keep alert for such clues.
•

iIt.r

wasn't just another trip or
junket.
We met a great many
officials

government

and

leaders

of

opinion, as well as our own
American diplomatic representa¬
tives in the countries
We had our Town

visited.

we

Meeting radio

debates in each capital and a se¬
ries of round table discussions or

"Seminars"
numbers

with

our

but mutual interest.

I

in Europe many times

beginning

over

this

the

time

at

an

We

previously,

were

were

unending

tions,

cocktail

really

entertained

series

parties

of
and

recep¬

other

functions. The U. S. Army was

willing
Berlin
us

and
and

painstaking host
Vienna,

in General

is

an

apparatus of

activity

our

in

transporting

Clay's former C-54

Welfare

talk

ness

Dec.

by Mr. Byfield before
Harvard Busi¬

Group,

School

Club

of

New

14, 1949.




govern-

coercion.

comprising

heading of

State V is

from

person,

from

class

y

the

;■

to

group

to

class

group

or

political

a

—

transfer, most of the time with

an

to the ballot box. A part of
this transfer is direct in the form
of checks and the balance con¬

eye

cealed
tax

in

I

the

form

exemption

of

subsidies,

and

uncollectible
If I wanted to be
facetious,

loans.

would

State

charactezie

as

social

a

the

Welfare

framework

in

which the strong
carry the weak,
the rich carry or
guarantee the

the

poor,

landlords

carry

the

tenants, the young guarantee the
old

and

the

well

carry

York,

send

Most

indeed,

cion

into

it.

ployer

before

Even

Labor

the

Relations

passage

while

as

have been
moved

we

Taft-Hartley

come

to

,

give

Act
the

the

em-f

much broader latitude in the matter of freedom of speech.
Taft-Hartley Act, this correspondent is becoming ac¬
quainted with an increasing .number of employers who are unhesi¬
the

doing to Britain.

It is doing this through a series of "information
in the plants. Pamphlets on how to raise
annuals and prepare steaks are for good will
purposes, of course,

our

government is advancing towards
the usurpation of all the

racks"

reserved. to

while the controversial pamphlets such as an attack on socialized
medicine prepared by the American Medical
Association, and a series
of articles defending the profit system by
Phelps

rights

the

consolidation
powers

states

in

and

the

of

all

itself

.

which,

.

by

.

if

limits to

placed

around

constructions,
leave no correspondent of the New York

legitimate,

their power.

right to do

..

.

lazy and the shift¬

the

"Sun,"

investor

in

prop¬

Needless to say, the dollar
to lose its purchas¬

is guaranteed

V:

power.

Words
not

as

V%

whatever they say an attack on the union and are not intended to weaken it in
any way.
pretend will be for the general But they are bold presentations of
management's story and thus
welfare."' When,
in the recent! of the conservative's story, as opposed to that of the New Dealers.
.

.

.

or

elections

of

some

welfare

our

socialists

prominent1

taunted

their

Republican opponents as being 160
behind the times I am afraid

In

popularity, the "Home and Garden" pamphlets rate highest with
35.8%, but an article by a disillusioned former British Socialist,
"Lessons From Britain's Socialist Experiment" rated 19.5%.

'What

.

General

Motors

Independence that has
its

pungent

appeal

never

lost

though

even

George III is a long time dead. It
is, "He has erected a multitude of
new

offices,

people,

and

stance."
And

and
sent
bitter
Officers to harass our

of

swarms

out

eat

sub¬

our

finally,

in

Court

did

the general purpose for which the

people

.

There is

designed to
more

ordained

government
or

on

and

established

in the

that

labels
Messrs.

United

States

I

haven't

much

counter

propaganda
"Statism"
used
by

like

Dulles

and

Byrnes are
going to be very effective., Polls
few

people

means.

admit

"Statism"

is

correct

word.

correctness

derstand

and

extent

to

which

meanings of words
as

claim

incomprehensible,

a

it

but

less true, that most
of

is

weapon

almost

neverthe¬
us

are

not

that there already exists

a

the

sanction
of

such

Its
of

an

I'll

of life and to me it is a shame that
down to the workers. A system such as
one way of getting it down and it is to be
hoped that
employers will throw off their timidity and adopt it.
of

it

preserve

is

our

way

not getting

and

means

of

getting it down to him.

perhaps; certainly in
can

understand

that

some

the

way

any

or

Spencer,
contemporary econ¬

phrase whose

mean¬

ing is not instantly obvious, but
has instead to be

continued

explained, is feeon page

much

it is

as

so-called

project is of

anybody else,

t

letter

writing campaign,

welfare

state

For example,

is

benefit to him, but he has to help pay for it.

no

enough political pull to get into
on

one.

Yet

we

find the AFL leader¬

to the CIO leadership in advocacy of it.

ilarly, under socialized medicine the CIO and AFL
the

bill

wage

The

housing project is of benefit only to the favored few with

ship tagging right

along with the rest of

chondriac.

defrauding him

subsidized housing

a

The

weekly

income

us,

Sim¬

member will pay

for the shirker and the hypo¬

tax

deductions

from

the

worker's

envelope have undoubtedly caused him to think the employer

has

Herbert

as Hayek
and von Mises.
it smacks of the library, and

word

as

A

he should be told in, language he

entirely is
paying his tax but the fact remains that he would "take home"

omists
But

issued these days,

that at GM is

subsidized

of its departments."

any

■-.■"■■"•7'i,

.

tremendous amount of stuff
being

a

It strikes me, in fact, that the Republican National Committee
1905,- the Su¬
actually rule: should adapt its
publicity output to the worker and devise ways

emphasize is that we, as business¬
men, have perhaps failed in the
highest degree to measure or un¬

I

J N

munist dominated unions, you will find
very little difference in the
CIO curriculum and that of the domestic Communists.
Their lit¬
erature reads alike to me.
;
<

more

..

to analyze or philosophize
beyond this brief definition ,or have shown that too
identification.
What I wish
to know what this word

used

•

is

American people that they were But it reflects the determination of a growing number of employers
not to leave the education of the workers
entirely to the union. The
peddling- hoary and discredited
labor unions, particularly those of the
CIO, now lay great stress
stuff, and had been answered by
on "education" of the workers.
Jefferson 124, years ago.
They publish newspapers, magazines,
Of course, if we want to go books; they exhibit motion pictures, they conduct workers' "schools"
and libraries. And although Phil
back 163 years ago, there's one
Murray and Walter Reuther and
phrase from the Declaration of some others are now going through the motions of expelling Com¬

Incidentally,

ever,

been

V;

years

hope

Weapons

here this noon, how¬

the

are

.

be it corporate securities, the Constitution, it has never been
deposits, real estate or life regarded as the source of any sub¬
insurance, is guaranteed a head¬ stantive power conferred on the

aware

we

a

Under

bank

us.

of. the
had

Board

coer¬

to those who

which the Federal branch of

preme

against

bureaucratic

good morning

But for almost a year General Motors has been
circulating its
workers with pamphlets on a wide range of subjects—from how to
raise annuals and prepare steaks to what the Labor Government is

"Although the Preamble indicates

am

these days of

to

However, in more recent years
from that state of affairs about as fast

away

National

who in

dared

say
worked for him.

Carlisle Bargeron

moving

as

approach of big government, he
said, "I see with the deepest af¬
fliction
the
rapid strides with

the sick.

so good, but,
unfortunately,
energetic will also have to

guarantee the

I

happen.
Wagner Act and it became

.

the

ing

should

anything he said or did might be
seeking to influence the employee
against the labor union. It was a hardy employer,

con¬

So far

ache.

that candidate

or

that

unfair labor practice for the employer
the employee a Christmas card Or a

construed

gen¬

is to

so

this
or

an

Valentine.

tax-secured,
hand-out scheme
To do

this

or

the

doing is, of course, a long way from
a
compulsory they got away with it because I
urging the employee to vote for or' against a particular candidate^
from person to didn't hear of anyone telling the

transfer of income

have
*A

to

the idea

.

words and the

Financial

the

and

erty,

local

talked, in¬
cluding Chancellors, Foreign Min¬
isters
and
waiters, porters and
taxi drivers.

ment

Every

of

had been

Lots of people

open.

Churchill characterizes it,

less

30 years ago, but
doors

1

opposite

subjects

upon

almost

came

put

Adams, Washington
designed to give the
Aided \yorker the facts of life and make him less susceptible to demagogic
can we consume more by a little sophistry on the words labor and political leadership.
The pamphlets—the racks are fre¬
'general welfare' [they claim] a quently replenished with new and timely material—are in no wise
produce.
Voltaire " has

mistake.

no

aptly

out, beginning with
Marx, Engels and Hegel and con-

some

Hamil¬

if

consequences

be elected

Then there

to

envelope predict¬

tatingly expressing themselves ■, to; their employees on social and
and devised a multitude
economic matters and in general, tolling^their sidh of the story; "And
ingenious safeguards to keep it what
is very heartening is that the workers appear quite interested.1
under control. They would have
>A notable instance is the experiment which General Motors is
been horrified at the present
day
complex that we, as a nation, can currently conducting among its employees. It was'in General Motors'
that the sit-down strike was introduced in this country and
achieve
salvation- by
in the
legislation
and appropriation. In
fact, Thomas ensuing bitterness one would have had to be a rare optimist to think
there would ever again be any communication between
Jefferson was remarkably clair¬
employer
and employee except through the union.
voyant when in 1825, fearing the

The Welfare

or as a nation it is a truism that
we cannot spend more than we
than

stand

all started.

Madison

dire

should

So

employer

an

ernment

been much closer to this sort of
thing than

y°°iS °L Whn H- ha?*3flinf
Qto*r'.ve,l? ?
State lie in Western
Europe, from which a score of

find

imagine

through the '20s for

of

anything away because it creates nothing and
produces nothing.
It can only conthe more interesting aspects of sume.
For example, it can't "give"
our
present day social and ecoj the States anything such as aid to
nomic revolution. After all, most
education except what
it must
of the philosophical and
intellec-j first take away from the States.!

That's where it

ing

for which the

you

under the

didn't get elected.

man,

It was not uncommon at all in those days and

sets

established.

Franklin,

common

notices in the employee's wage

it

when

purposes

Can

the

fess ignorance of the political and
social concepts of these men as

sides of the

"give"

us.

least, the rabble rouser, this particular friend of

:

both

my Swiss friend state has
assets, that no one can
Your program
com-, deny, but it must also have liasuggested that I dis- bilities. The Federal Government
Welfare State in the can't

important to

agement that the employees were to be generally advised that if a
particular candidate for governor should be elected, business would
become bad and many of them would lose their
jobs. It appeared to have considerable effect. At

"promote the

say

was

comes

closer

Light of Recent European Experience," and-1 think this is one of

names

the

rerth

eral welfare?

prophetic
has

does

welfare"

egalitarian,

for

proved to be.
mittee

preamble

ton..

leaf out o{ the

on

Curtain,

early youth I worked for a few weeks on the Katy Rail¬
Ran.
One aay orders came down from top man¬

^arsons,

down

other signers supporting
that the present day

lot of Europeans I met

a

at

Of course, the

what?

successor

a

In my
road

But
not
only do the propa¬
gandists know this full well, but

Constitution

are

take

summer

Iron

I have often reflected since then

how

any

as

previous

Now,

you.

techniques."

a

automati¬

advertise it.

you

of the News

By CARLISLE BARGERON

are

socialist

look

they

out-talk

will not be able to cope

must

you

you

It is set-forth in the Federalist papers
blueprint, a planned and a multitude of historical doc¬
economy of a particularly benev¬ uments, including the 1924 work
olent type.
It's a kind of prag¬ of James 1VI. Beck, famous consti¬
matic or operating Utopia—at least tutional
lawyer and former So¬
according to the adherents of the licitor
General
of
the
United
Fair Deal of 1949 vintage.
States.
They feared strong gov¬

ferring to the radicals, the leftish
politicians and the reformers he
said, "They are going to out-smart
you

Are there

all

a

'

out-write

what

Has it

if

so,

found to be socially unj ust.

coun¬

answer.

it"

general

supposed to
have proven inadequate, are out¬
moded., have failed or have been

his

try, he had

and

is, it

points?'

To begin with it is

to

opinion of the

S.

What

abundance, which

social and po¬
litical
trends

Robert

Welfare

petition with and

When I asked

Ahead

they have twisted a phrase in tne
preamble of the Constitution to

for national abundance offered- by
its friends and backers in com¬

working

for

"for

peat this laoel

Let's get

Achilles?

some

of

years

hungry, and

Washington

food

or

be cruel, selfish and hard¬
hearted,
and
propaganda-wise,
you
already V, have
two
strikes
agginst you. Every time you re¬

so-called

this

to

city. He knew
as

the

not

much for that.

so

bacK

From

a

comforting, warm, friendly word
like/home, family, fireside, love
mother. To be against "wel¬
fare" is like denying alms to the

suit their purposes.

leading

a

self-serving,

"Welfare" is

cally

An Achilles Heel?

of the managers of

one

i

—

effective,

propaganda label.

to

and I had

ness

The very
constitute

"Welfare State"

a' highly;

poor, medicine to the sick

the airlift, then

via

to Tulln and out

Switzerland, on busi¬
a very interesting

Zurich,

Tempelnoi

to

be

to

Thursday, December 22, 1949

and

Warning business men that words are important weapons being
used against them, Economist states their first task is to
become fully aware of the tactics of deceit which are being
used to change our social structure. Maintains there must be
not only courage to stand up and be counted, but organization
to explain our economic system to the vast lay public, as has
the Nationalist Party in New Zealand.

,

words

CHRONICLE

72)

more

if it

not for these taxes.

were

The American
the

CIO

leaders

worker is being

who

are

ambitions, and the AFL

using

goes

sold

him

along.

an

as

I

a

awful bill of goods by
pawn

in

doubt there

their
are

political

many

em¬

ployers who would cooperate with the Republicans in getting this
story down to the workers but there are surely other ways it can
be done.

.

•

•

'

B. v..

.Volume 170

-

THE

Number 4866

COMMERCIAL

only after a considerable lag. Even
if it originally went to pay debts,

Spend Insurance
Dividend Slowly

into

dividend

say they intend to use

at stores within six

it

refunds to pay

bulk

As

then,

a

^

make possible later pur¬
chases through expanding individ¬

retail sales of the

on

diffused

over

a

good

many

This conclusion

months1, according
just

to an analysis
completed 'by the National

is

based

both

fifths

ter

such

windfalls

are

used

The^

39% of the
off mortgage, con¬

the

of

that

1947

bonds

on

somewhat
the

1936

lower

were

bonus, only a

less went to retail'stores
six months.

i; '

be

spent

months."

dividend

of

of

personal in¬

dealers

may

also

what

extent.

Hard

to about 2% to

than sales of soft

3%, in comparison

goods."

The Port of New York Authority
General and Refunding Bonds

or

in part,

inclusive

York Authority
% of 1 % for each twelve month period or fraction

is not redeemable prior to maturity. Series 15, due 1954-64 inclusive, is redeemable at the option of The Port of New

Series 14, due 1950-53 inclusive,
in whole

;

.

Due $3,600,000 annually December 15, 1950-64

•

by lot, on December 15, 1960, or on any interest payment date thereafter, at par plus' a premium of
redemption to maturity. Plus accrued interest in each case.

thereof from the date of

Coupon bonds, $1,000 denomination, registerable as to principal only or as to both principal and interest.

v

Registered bonds reconvertible into coupon bonds at

the principal

Principal and semi-annual interest (June 15 and December 15) payable in lawful money of the United States of America at
Chase National Bank of the City of New York, New York City, Paying Agent. Manufacturers Trust Company, Registrar.

holder's expense.

office of The

Exempt from Federal income taxes in opinion of General Counsel and Bond Counsel under existing statutes of the United States (except estate,
inheritance and gift taxes) as thus far construed by the Courts. Exempt in opinion of General Counsel and Bond Counsel of The
Port of New York Authority, from any and all taxation (except estate, inheritance and gift taxes) now or hereafter
imposed by the states of New York and New Jersey. (
■:.r,

♦

,

*

^

;

•

v

-

\

,<

•„

,

^:. i;\i 'I

/'*•$; /

companies, trustees and other fiduciaries, and eligible for deposit with state or municipal officers or
which bonds of such state,

respectively,

may

be deposited.

i

/-

'

Legal investments under the acts authorizing their issuance, in New York and New Jersey for state

'

>,

.

.

.

.

and municipal officers, banks, and savings banks, insurances
agencies in New York and New Jersey, for any purpose for,

V ; '

1

1

■

MATURITIES, COUPON RATES, YIELDS AND PRICES
(accrued interest

to

be added)

Coupon

Yield oi*

Rate

Price

Due

Rate

Price

1950

4 %0

0.60%

1955

w2%

1951

4

0.70

1956

v/2

Yield

Coupon
Due

°

->

.

1952

4

0.80

1957

0.90

1958

1.05

1959

4

1953
1954

.

or

-f

iy2

We offer these Bonds, when, as

and if issued and received by

us

for The Port of New.York Authority,
It is

For information

V.

1.15%

I960
1961

lJ/2
V/

1

1962

-

1

1.45
100

1V2

'

;

Smith, Barney & Co.

97%

V/2

.

97

m

and subject to the approval of all legal proceedings by Leander I, Shelley, General Counsel

the Official Statement
Copies of such Official
may legally offer these Bonds in such state.

underwriters, including the undersigned, as

Blyth & Co., Inc.

The First Boston Corporation

v

Kidder, Peabody & Co.

Harris, Hall & Company
..

(Incorporated)

Hemphill, Noyes, Graham, Parsons & Co.

L. F. Rothschild & Co.
v.:

Bacon, Stevenson & Co.

Dominick & Dominick

Baker, Weeks & Harden

Wood, Struthers & Co.
.

Lehman Brothers

Goldman, Sachs & Co.

Equitable Securities Corporation

Pressprich & Co.




98l/2

-:■!%

and by Messrs. Wood, King and Dawson, New York, Bond Counsel.

Ripley & Co.

Paine, Webber, Jackson & Curtis

December 21, 1949.

99

Incorporated

Stone & Webster Securities Corporation

The Illinois Company

991/2

'.

expected that delivery in the form of Temporary Bonds will be made on January 3, 1950.

be obtained from only such of the

.

'<•

,

1963

'

relating to The Port of New York Authority and to these General Refunding Bonds, reference is made to
Authority, dated December 9, 1949, which should be read prior to any purchase of these Bonds.

Harriman

R. W.

-

or

Price

a

iM '
iy2

-1964

.

of The Port of New York

Statement may

Rate

-y: 1.25 :
1.35

Yield

Coupon
Due

William R. Staats Co.

Lazard Freres & Co.

White, Weld & Co.

Estabrook & Co.
W. E. Hutton & Co.

F. S.

Salomon Bros. & Hutzler
Lee Higginson Corporation

Alex. Brown & Sons

A. G. Becker & Co. V Chas. E. Weigold & Co.
Incorporated

First of Michigan Corporation

-

Eldredge & Co.
Incorporated

R. H, Moulton & Company " Yarhall & Co.
Martin, Burns & Corbett, Inc.

Incorporated

Phelps, Fenn & Co.

Union Securities Corporation

Moseley & Co.

Geo. B. Gibbons & Company
Incorporated

R. S. Dickson & Company
Incorporated

Whiting, Weeks & Stubbs

Heller, Bruce & Co.

benefit,

goods

$54,000,000

«

in¬

Reynolds & Co.

Dean Witter & Co.

W. H. Morton & Co.
Incorporated

sales,

general, should be spurred more

New Issue

Dated December 15, 1949

benefit

dividend

but it is difficult to determine to

in

Series 14 and 15

1947

nearly

home

income, the 1950 dividend amounts

J

the

sales

veterans'

the

mobile

per¬

of ..six-months', personal

centage

for

furnishings, apparel,
and general merchandise.
"Auto¬

1947, bhf is considerably smaller
a

immediate

the

clude

nation, the 1950 divi¬

"As

2%

retail lines that should share most

from

1936 bonus.

than

7

Judging from past spending pat¬
terns, the analysis continues, the

The

checks will

somewhat larger than that

than the

less

payment to veterans, but
5% for the 1936 bonus."

the first three or four

in the

dend is

withiri

"windfalls" of 1947 and 1936.-

to

come

fourth or

obi What th6 veterans did With the

the

probably

In relation to total

Of

proportion.

with

months of the year.

twcn

reported

of

will

out in

go

though retail sales data indicate &

their 1959 dividends and

use

of savings.

the .evidence at

the board, "a range of

say

from one-third to one-half of the

and other debts.

Industrial Conference Board.

"Retail sales benefit months af¬

"According to

spent at stores within six months;

what veterans say about how they

will

form

some

Veterans

evidence, says the
board, to justify looking for a ma¬
jor and immediate impact oil sales.

paid to 16 million veterans in
1950 is likely to

the

to

recent

sumer

There is little

the first half of
be

may

ual credit."

$2.8 billion insurance dividend to
be

(2491)

hand,"

vested in bonds. This money,

is likely to be used to buy things

The effect

CHRONICLE

veterans' intentions,
poll indicates that they
will put 67% of their dividends

build up bank accounts or are in¬

Poll Shows GIs Will

«

FINANCIAL

&

Darby & Co.

(2492)

8

COMMERCIAL

THE

By JULIUS HIRSCH*

Dr. Hirsch predicts coming year will see neither another boom
and inflation, nor mass unemployment. Asserts inflation and
boom potentials have been

permanently stopped by country's
productive capacity. Believes budget deficit under
$6 billion will not entail higher price level. Maintains our rising
productivity must be consumed domestically rather than by
Forecasting—A

Danger

we

but

are

an

Unavoidable One
A famous

what

will

Steel

be

"Mr.

the

March

on

was

Fuerstenberg,

quotation

thing."

of U.

15th

of

S.

next

year?"

a

min¬

shouted

into

ute,"

and

postwar

those

years

prophets who

"Please give

who

were

wrong

facts.

wrong

were

were

so

By this I

disapt:

The

'They
working
today."

A security
analyst in the
cannot

evade

economists

who

have

been

fore¬

so

What

casting that easily. If he hesitates
answer, the situation he finds

have

always reminds me of
the girl who asked her aunt: "Tell
what kind of weather will

me,

have

tomorrow?"

aunt

said, "How

fore

address

N.

Y.

Analysts,
16, 1949.

miraculous, periods of

history.
creased

some-

Society

of

Security
City, Dec.

York

of the most prosperous,

one

the

when

by Dr. Hirsch be¬

New

enced

almost

I know?", the

And

can

child returned, "Then guess
''An

we

in

Since

1939

have

we

our

in¬

by about
13%, but our labor force has risen
by more than 30%, from 46 mil¬

lion

to

Over

volume of

our

by around 60%, not in dol-

rose

(Continued

on

89)

page

Urges Removal of Restraints

Foreign Trade

on

holders world markets of North American Continent
ened by restrictions which are
make purchases in

improved

reports

that

nounce

Bofgs

William

H.

Boggs is

associated with them

now

of

ager

the

trading

Mr. Boggs has

as man¬

and

The recent

general revaluation
international currencies "must

of

be assisted

by

ficial restraints

larly

on

of arti¬

trade, particu¬

to

nanced by the
of

be

&

Co.

Ches. & Ohio Ry. 2Vs%

Equip. Trusts Offered
by Salomon Bros. Group

e

as

of

making

emergency

imply

"that

the

situation

is

immediate
dark."

He

<

;
in

Canada

has

been

bears striking evidence of the ex¬
tent to which Canada's productive

Bank, said

capacity has

the

improved in recent
years.
Generally speaking, pro¬
duction, trade and capital invest¬

annual

meeting of

ment continue at levels above, or
not far
below, the high marks at¬
tained in 1948. Whether this will

stockholders
in Toronto
Dec.

on

14.

hold remains to be
seen, but none
of us doubt
that the Canadian

Warning
that

"there

uncertainty"
for Canada
ican

Robert

is

Rae

;

•

•

,

and the North Amer¬

Continent in

world

markets,
European nations,
which traditionally have been our
export markets, are -str uggling to
Mr.

said.

Rae

make

themselves

self-reliant

and

seeking to conserve dollars by
making their purchases as far as
are

have

schemes

"we

the adoption of various

seen

aimed

to

facilitate

the

economic recovery of

Europe, and

countries

and

courage

the

elsewhere,

to

en¬

multilateral trade among
The
demand
from

nations.

abroad for the products of Canada
and the United States has been
enormous

during this period.

movement of

tinent

has

The

goods from this Con¬

largely

had

to




be

posed."
C.

fi¬

1

to

of

and

2.45%

and

issued

are

Of¬

Interstate

Com¬

told

ager,

the

meeting

that

the

bank's total assets, loans and de¬
posits reached all-time highs dur¬

ing the past

year as

continued

the

bank

growth.
79th

the business
its

holders.

Associated
Drexel

&

in

Co.,

the

offering

Union

to

stock¬

V'

in the statement at

advance

of-

$83,000,000, or
$15,000,000 over

last year and
representing 20.86%
of liabilities to the
public. ..De¬

posits at $388,000,000
increase
mand

of

showed

$30,000,000, with

deposits

up

an

Southeastern

about $9,000,000

Public

Service

Southern Pacific Co.—Analysis
—Eastman, Dillon & Co., 15 Broad

Biscuit

United

Company

America.

of
.

Standard

Cap

Seal

&

„

Corp.—

— Bendix,
Luitweiler &
Co., 52 Wall Street, New York 5,

i-,•V'■ :T

N; Yi

Tide Water Power Co.—Recent

;

Co.,

Inc.,

York

A.

Pine

Saxton

&

5, N. Y.

70

Street,

New

Westinghouse Electric Corpora¬
tion—

Summary

Hutton &

opinion

—

E.

F.

Co., 61 Broadway, New

N. Y.

6,

Utility Stocks for Possible 1950
Wisconsin Electric Power Co.—

Analysis—Loewi & Co., 225 East
Mason Street, Milwaukee 2, Wis.

Also
dum

available

is

memoran¬

a

Yale

Du Mont Laboratories.

on

*

American

*

Stores

—

EVENTS

New York.

In

Summary
and opinion—Dreyfus & Co., 50
Broadway, New York 4, N. Y.
Also available

Kaiser-Frazer

Beaver

June

and

Chicago

Hentz

McQinnis &

Gompany

Memorandum

Bampton

of

the

New

—

&

Light

Boenning

Co.—

&

Stock

Ex¬

change,

announce the retirement
Benjamin E. Bampton, the ad¬
mission to geenral partnership of

Club,

Meeting at

Montebello,

Sept. 26-30, 1950 (Virginia Beach,
Va.)

Co.,

tional

Convention

Security

tion at

of the Na¬

Traders

the Cavalier

Associa¬

Hotel.

Street, Philadelphia

J. A. K. Marshall Elected

&

York

Association

of Canada 34th Annual

—

Co.,

3, Pa.

Co., 61
!3roadwayKNew York City, mem¬
bers

Walnut

1606

Is flew Firm Name
McGinnis,

Power

(Canada)

Seigniory
Quebec.

60
Street, New York 4, N.-Y.

Florida

Field

Dealers

the

Co.

&

5-8, 1950

Investment

discussions of

are

Corp.

H.

—

Investment

—

Chesapeake & Ohio Railway

Analysis

&

COMING

analysis—Stanley Heller &
Co., 30 Pine Street, New York 5,

Brass

Walker

Y.

N.

Bangor & Aroostook Railroad—

Bridgeport

Manufacturing

Co., 63 Wall Street, New York 5,

New

are

.

Towne

&

Co.—Analysis—Wood,

*

Special sur¬
vey—Ira Haupt & Co., Ill Broad¬
way, New York 6, N. Y.

Food Fair
Emanuel

James

Stores, Inc.—Circular

Deetjen

&

Co., 120
Broadway, New York 5, N. Y. ;

of

General Instrument Corp.—Cir¬

of

A.

K. Marshall, partner
Struthers & Co., has

Wood,

been elected to the board of trus¬
of

tees

American

announced by
President.
was

Surety Co., it
A. F. Lafrentz,

.

Walter
in

T.

firm

Garden, and

name

to

a

change

McGinnis

Co.

&

cular—Richard E. Kohn &

Home Insurance

Perry T. Blaine Opens

Co., 31

Clinton Street, Newark 2, N. J.
Co.

—

Circular

(Special to The Financial Chronicle)

Marshall

Mr.
the

—Hornhlower & Weeks, 134 So. La
Salle Street, Chicago 3, iii.

New

and

nam

member

a

Stock

of

Exchange

director of the National Rail¬

a

way

is

York

Publication Co. and the Put¬
Trust

Co.

ASHTABULA, OHIO—Perry T.
Blaine

has

Center

opened
to

Street

offices
engage

at

the

Kentucky

221

in

Revised

securities

business.- He

local

was

for¬

representative

Utilities

analysis

—

Company

Lindsay

Light &

Chemical Co.

—Analysis—Fahnestock & Co., 65

to

The

Financial

Broadway, New York 6, N. Y.

Chronicle)

Mexican
dum

—

Eagle

South La Salle

Co., Huntington

Building.

(Special to

The

Financial

is

connected

Dean

Witter

Building.,

&

Co.,

—

Alton

&

Co., 1004 Baltimore Ave¬
He was formerly with George

Joins
(Special

Street, Chicago 4.

McDonald, Evans
to

The

KANSAS

C.

Financial

Chronicle)

CITY,. MO.—Herbert

Campbell has become associ¬
McDonald, Evans & Co.,

1009

Homes

Corporation

Baltimore Avenue.

He

was

—

Study—Kiser, Cohn & Shumaker,

formerly with B. C.
& Co.

Christopher

;

Inc., Circle Tower, Indianapolis 4,
Ind.

Chronicle)

Bache Adds
New

now

MO.

with A. H. Ben¬

K. Baum & Co.

Oil—Memoran¬

portland, ore.—Terry e.
Metcalf

now

ated with

National

With Dean Witter & Co.

Chronicle)

Financial

CITY,

¬

111.

Bank

nue.

Zippin & Company, 208

Morris has become affiliated with

to The

Gumbiner is
nett

Saunders, Stiver & Co.

COLUMBUS, OHIO—Thomas B.

CSpecial

KANSAS

Salle

La

for

With John B. Joyce & Co.

Joins A. H. Bennett

—

Doyle, O'Con¬

&

Co., 135 South
Street, Chicago 3 ,111. nor

with

England

Co.—Special
de¬

10

Dividend Increases—Discussion of

Securities

Corp. and Stroud & Co., Inc.

(Special

Pointing to the strong liquid
position, cash assets were reported
an

Industrial

Booklet recording

—

John B. Joyce &

statement

Co.,

Company—Analysis—Cohu & Co.,
1 Wall Street, New York 5, N. Y.

York

steady

He presented the bank's

annual

Counter

Great Western Railway

Commission.

Ashforth, General Man¬ merly

of

possible in the Sterling Area.
"Since the war," he stated

economy is in a good position to
withstand some of the adverse in¬
fluences'to which it may be ex¬

A.

Co.—Analysis
Post Office
Square, Boston 9, Mass.
&

Annual

affected by the growing difficul¬
ties
of
international
trade
but

at

$6,750,000

serial certificates maturing

approval of the

said, however, this does

"Business

Tne

offering

fering is being made subject to

depletion of dollar

loans

explained:

f f i-

of

2V8%

1.15%

Dominion

ident

22)

followed emergency."

domestic

ciently," Rob¬
ert Rae, Pres¬

(Dec.

under the Philadelphia Plan.

are

devel¬

oped

gifts and

not

the world's

position

Riverside Cement

—Lerner

12 stocks—Goodbody & Co., 115
Broadway, New York 6, N. Y. v

Cohu

merce

Mr. Rae

States,

resources

threat¬

are

and gold reserves and the

in ihe

United
if

removal

a

liquid

strong
Dominion Bank.

S.

-and

trial stocks—National
Quotation
Bureau, Inc., 46 Front Street, Ne\v
York 4, N. Y.

department.

recently been with

July 1 from July
1, 1950 to Jan. 1, 1965. The cer¬
tificates are priced to yield from

driving European nations to
Sterling Area. General Manager Ashforth

earnings

Railway Agree -

Arnhold

—

-

Stock Index

each Jan.

Rae, President of Dominion Bank, Canada, tells share¬

on

10-year performance of 35 indus¬

H.

Wm.

A
banking group headed by
Salomon Bros. & Hutzler is today

Robert

the

-

about 60

million, and the
national production

circular

a

memorandum— G.

population

our

Treated?—Discus¬

Mexican

ment—Study

our

Where do

himself in

Share¬

Bleichroeder, Inc., 30 Broad Street,
New York 4, N. Y.

un¬

question:
development
in
1950?
we go from here?
We
the past decade experi¬

to

Also

Analysis

never

right without this

to

is

—

Street, New York 5, N. Y.
Also available is an analysis of

Well* Have

Been

New

foreseeable fact.

And

How

foresaw

splendid times ahead would

available

Circular

—

&

Co., Inc., 150
Broadway, New York 7, N. Y.

sion—Laird, Bissell & Meeds, 120
Broadway, New York 5, N. Y.

rearmament and the Cold War.

"Oh !

Co., Ill Broadway, New York 6,

holders

person could have foreseen,
namely, the huge amounts spent

aren't

profit through tax-exempt state
municipal bonds—Ira Haupt

Just

say:

on

to

Paper Co.

Mericka

J.

and

n. y.

single

m en

Street, New York 5, N'. Y.

How to Profit Through Tax Ex¬
emption—Booklet explaining how

&

to

And

poin t

Wall

so

with

great

States

an-

for the

mean

Oxford
Wm.

Tecumseh Products Co.

priced securities—Bache & Co., 36

and those

reasons,

ment."

United

City,

York

New

Broadway,

then,

Hirsch

Hills, Thompson & Co.

the prophets who turned out
to be right since 1946 were right
because of something which not a

Depart¬

ecy

Julius

William H. Boggs With

economic

right

were

Mo.

15 Stocks Below 15—List of low

will appreciate the humor
the fact that during the first

for the wrong

Proph¬

should
with the
certain Presi¬
as

Right for Wrong Reasons

the telephone:

me our

profit and loss account, which now
amounts of $1,355,704."

us.

You

in

firms mentioned will he pleased
the following literature'.

interested parties

which

Hill, Thompson & Co., Inc., 120

He

send

to

Ceiling Rising, Visibility Clear
to provide dividends
to $700,000. being at Brochure analyzing Mid Continent
the rate of $l
per share.
This Airlines—White & Co., Mississippi
leaves $301,195
to be added to Valley Trust Building, St. Louis 1,

election, I have yet to
errors spoiling the busi¬
the poll forecasters.

of

It is understood that the

guess

wrong,
a

Recommendations and Literature

appropriations to contingency re¬
serves, setting aside $835,000 for
government
taxes
and
writing
$395,475 off bank premises (which
is $148,000 more than last year),
the
net
profits were $1,001,195
amounting

such

ness

easy!

Wait

be

polls concerning
dential
see

answered,"Oh,
that's

if the

And
to

prove

European banker

asked:

one

helping to compete with

Mr.

observe

with

enormous

foreign countries whom

will

Dealer-Broker Investment

at our earning posi¬
Ashforth stated, "you
that after making

"Looking

Recession?

or

Thursday, December 22, 1949

ing $18,000,000.

tion,"

Inflation, Boomlet

CHRONICLE

deposits bearing interest ris¬

and

What's Ahead For 1950-

FINANCIAL

&

Equitable
..

Public

Service

survey—Ira

Haupt

&

Co., Ill Broadway, New York
6, N. Y
.......

(Sneciai

to

The

to

Financial

Staff
Chronicle)

CHARLOTTE, N. C. —William
joined the staff of

B. Woodson has

Bache

&

Co., Johnston Building.

,

Volume 170

-Number 4866

Does Direct Placement of Securities

exercise

of

rect

BELL*

By HAUGHTON

of New York

i,' The

a

the

to

3

9

8

by
C h urchill
1

R o dg e r

the

*

which,

as

method
Haughton Bell

in

eleven

the

since that

the insurance

companies are getting control and
exercising domination over
American industry.
How serious¬
ly this charge is made is not very
clear.
The charge comes as a

surprise,
the

life

I

am

to those in
and

sure,

insurance

business,

particularly to those of us who, as

concerned with the
negotiations with prospective bor¬

lawyers,
rowers

are

with the preparation

and

under which di¬
rectly placed securities are issued.
Nevertheless, if the criticism were

of the agreements

serious mat¬
ter, indeed, and the mere fact that
valid, it would be a

it has been made

makes it neces¬

and

I think, that it be very fully
completely examined by the

life

insurance

sary,

It is,

companies.

therefore, to that question that I
address
these
comments,

shall

though doing so involves a
which you

even

review of matters with
are

thoroughly familiar.

; ?

c'

general perspective the part which
direct
placements
play in the
financing of American industry;
second, by examining the relative
positions of the parties in the ap¬
proach to the negotiations leading
up to
a
direct placement; and,
or

examining

by

ments

the

I

agree¬

indentures under which

shall

endeavor

to

analyze

covenants,

and the effect of

the covenants,

which the institu-

the

1 "Purchase

by

Life

Insurance

Com¬

of Securities Privately Offered,"
read by Churchill Rodgers, then
General Counsel, Metropolitan
Life Insurance Company, before the As¬
sociation, Nov. 29, 1938; 52 Harvard Law
panies

a

is

distributed,

now

tion

4 Ibid.

corporate
Figures

paper

placements alone

are

not

773.

address

by Mr.

Bell at

City, Dec. 14, 1949.




v

relative

ad¬

Materials

Private Investments,

of

assembled
the Sub-committee on
Investment, Joint Committee on the Eco¬
nomic Report," U. S. Government Print¬
ing Office, 1949, page 111.
on

given.

Investment

by

bond

the

the

Staff

Problem,

also

according
SEC;

period,
of

the

leave

out

Bulletin

Volume and Sta

Affecting

6 "Factors

bility

bonds and notes

offered during

the Statistical
$15.9 billion
and total stock offered was $4.7 billion.
If these gross figures are substituted for
the Department of Commerce net figures,
bond and
note issues
supplied » little
over
%
of the funds supplied' by fi¬
nancing sources. The SEC figures, how¬
ever^ include all borrowing for a term
of more than 1 year.
The gross figures
this

amortization

of

of

to

were

account,

payments,

of

been

(Continued

on page

that
has
overemphasized.

greatly

Professor Fraine estimated, on
basis

the

corporate bond statistics

of

prepared and published under the
direction of the National Bureau
1900 and

tween

that

Research,

Economic

of

be¬

THE DOMINION BANK

sive, there had been over $1 bil¬
lion in corporate bonds distrib¬

ROBERT

RAE/

A'

'

r'■

Head Office—Toronto

R.S.McLAUGHLIN,
T

A. C.

Vice-President

-

ASHFORTH,

; ,

Generat Manager

Since
1938,
in which

total.

the

of

3%

CANADA

■

President

against
approximately $35.6 billion by
public offering, or approximately
by direct placement

uted

;

Established 1871

1933, both inclu¬

there has been no year

place¬
fell be¬
low 20% of total corporate bond
placements. In 1948, according to
the 14th Annual Report of the Se¬
curities and Exchange Commis¬
sion^ they had attained a total
volume of $2,613,000,000, substan¬
the

direct

of

proportion

CONDENSED STATEMENT as at

ments of corporate bonds

previous
though the total is subject

31st OCTOBER, 1949

ASSETS

Cash

on

Hand and in Banks, including

$ 83,009,578
158,481,399
7,564,633

Bank of Canada

Government and other Securities

Call Loans

—

$249,055,610

tially larger than in any
year,

to

some

discount

because

of the

depreciation of the dollar meas¬
ured
by - prewar - values.
How¬
ever,
direct placement still con¬
stituted a little less than half of
the

bond

corporate

total

Commercial Loans
Bank

and Discounts

and

place¬

160,967,812
6,105,351

1_

L:J

Premises

Acceptances, Letters of Credit

Liabilities of Customers under

10,509,211

Sundry other Assets
Assets

Total

i_$426,637,984

-

LIABILITIES

popularity of direct corpo¬
placements, whether
measured in dollar volume or in
The

bond

rate

percentage of total corporate bond
placements, is undoubtedly due to
the fact
that many issuers, at

believe

least,
ments

than

that

direct

greater

have

public offerings.

dom of choice of some

limited

not

dustrial

If the free¬
issuers was

by

field

alone,

choice is unrestricted,
1948

volume of total

where

Journal

of

3

a
of

the
S.

498,329

Credit, Acceptances and Sundry

other Liabilities—

10,702,121
$408,282,279

Capital Paid Up
Reserve

Total

...

$ 7,000,000

_

10,000,000
1,355,705

Fund

Undivided

Profits

A COPY OF OUR ANNUAL

18,355,705
$426,637,984

Liabilities

REPORT BOOKLET WILL BE SENT ON REQUEST

«

j

the
Branches and Correspondents across

63% of the

placements,

London, England, Branch: 3

Appendix, Table 2, Part 2. For much
statistical material in this paper,
author is indebted to Mrs. Eleanor

Bagley, Exec. Research Division, The
of New York.

Canada

King William Street, E. C. 4

A. W. RICE,

Vol¬

the

<S>

NEW YORK AGENCY: 49 WALL STREET

Sale
of
Security
Issues,"
the American Association of

Mutual Life Ins. Co.

$388,605,051
8,476,778

Circulation

in

Letters of

including both stocks and bonds,
2 "Direct

—

place¬

advantages

by the fact that in the in¬

cated

Deposits
Deposits by other Banks
Notes

•

R.G. HOGG,

Assistant Agent

course,

maturities,

demptions and exchanges.

1933, and the importance of
in causing their growth

Act

University Teachers of Insurance,
ume XVI, No. 1, page 40.

meeting of the Association of Life
Insurance
Counsel,
New ■- York

7 The

popular conception, they were
far from unknown prior to the
enactment of the Securities Act in

*

<!An

are

appar¬

industrial

the

of

it

Department of Commerce table
shows a discrepancy of $2.6 billion be¬
tween sources and uses of funds.
;

type of financing—that

discussions

constitute only

part of the total bond issues,

a

8 Total

borrowers still

for

direct placements

from

direct placements and pub¬
see Rodgers. supra; Fraine.
supra;
and comments by the present
author on Professor Fraine's paper, Jour,
nal of the American Association of Unl
versity Teachers of Insurance, Volume
XVI, No. 1, Page 63.

even

of

source

vantages of
lic offerings,

in the industrial field,
indicates that a substantial, por¬

ently

no

5 For

portion of corporate debt obliga¬
tions

Assistant

Review,

volve

the

funds were derived,

that sources which in¬

it appears

The fact

offerings

them, / public

to

these

to

competitive bid¬
directly placed securities are is¬
ding requirements, an even great¬
sued. I shall do this in some detail,
er number and greater percentage
since it is around them that the
of
issuers
would
undoubtedly
new criticism necessarily centers,
choose this method.
This is indi¬
and

Turning
which

ments, 47% to be exact.

to examine the criti¬
cism, first, by trying to place in
I propose

third,

Suf¬

here that, contrary

it to say

fice

written direct place¬
ments, because of their simplicity,
small
expenses
and flexibility,
have come
to play a relatively
more important part in long-term
financing by corporations than
they then did; but in the last year
or two, a new criticism has been
leveled against them.
The new
criticism
is
that
through
this
method of financing

joint meet¬

December .2

last

Association

years

rent assets.

still the method by which a large

ing of the American Association
of University Teachers of Insur¬
ance
and the American Finance

nancing, were
then
being

was

paper

disparity between

the market conditions favor¬

ing

University of Wisconsin, in an ex¬
cellent paper before a

fi¬

against them.

raised
In

of

This is the total constitute a type of financing by
investment in plant stockholders, it is found that these
and equipment,
(b) increase in sources furnished a total of $53.5
inventories, and (c) increase in billions, of which net bond issues
trade receivables and other cur¬
supplied only about 1/6.8- Since

that, despite the knowledge of the
advantages of direct placements
and

retained

sources

volume of (a)

investors

'

and

sources,

billion.

$82.3

de¬

investment

the bond market.

from

possible way.
already been done by
Professor Harold G. Fraine, of the

new

any

of

,

'institutional

termed financing
including in these
earnings, which

be

might

this 3-year period was

in

rations

ranks of individual investors away

has

That

of

case

recent

Taking into account only what

1946,

1948,"6 it appears that the
total uses for funds by all corpo¬

yield on corporate bonds and
onequities, especially common
stocks, which has at least tempo¬
rarily driven the tax-decimated

cept in the briefest

criticisms

the

direct

bond placements have
grown greatly in popularity in re¬
cent years.
I shall not try to trace
the history of their growth or the
reasons which lay behind it, ex¬

fully did it

answer

that

doubt

no

corporate

it

their

cover

is

There

technique and
so

of

mand

and the market

Growth of Private Placement

com¬

so

pletely did

combination

4.6%, and mortgage
billion, or 21/z%.
The
bond
issues amounted to $8.9 billions,
or less than 11% of the total.7
or

net funds derived from new

1947,

favorable to direct
This is due to the

been
placements.

a

in

have

conditions

years

Funds,

Corporate

of

Uses

the

to

be said at that

time,

per¬

carried out.

are

years,
and
well known.

of

Furthermore, on the whole, mar¬
ket

general

the

period

their advantages are

In this, I shall hope to
sense of the environ¬
in which these transactions

ment

s.i It

little

left

get in the
emphasize try

or

$2.1

loans

Report in its study of investments,
in a table entitled "Sources and

con¬

a

billions,

about 8Vz%* Net new
supplied another $3.8

or

billions,

issued by the
Committee on the Economic

Joint

$31.6

Long- and shortconstituted $7.1

loans

stock issues

publication

cent

of

38%.

bank

billions,

the Department of Com¬
and appearing in the re¬

merce

accepted

for

financing

term

statistics pub¬

basis of

the

together supplied over

amount

another

lished by

different standpoint,
Direct placements have

of

method

the

Corporate Funds

Sources of

On

lia¬

current

other

and

—

$31.4 billion, or about 38% of the
total.
By far the largest single
source
was retained
earnings in

requirements.

plying its financial

ultimate

and

bilities

likelihood,

r<

.

the

common

a

siderable

all

of

spective.
develop

Association in

'

-

slightly

been

get.
First

one

of

question

however.

investors try to
I

from

comes

less

that any form of debt

moreover,

play in long-term corporate debt
financing must be looked at from

,

full details of all

indentures—and

placements of securities
delivered before this

of direct
was

paper

but

even

financing will become the prin¬
cipal reliance of industry for sup¬

place which direct placements will

control in insurance com¬

tional

which dealt
comprehensively with the subject
"first

The

victims,

wholly different sources.

is

There

tax

come

placing public offerings.

by the

far as I: know,

so

alleged

panies, which have no predisposition to interfere in manage¬
ment of borrowing firms. Holds insurance companies seek only

prudent loans and advocates public be given
directly negotiated loans.

issuer were

placements would scarcely be

made,

of securities with in¬
surance companies, Mr. Bell contends this new phase of secur¬
ities marketing, because it provides only small part of total
capital used by corporations, will not displace public offerings

Answering criticisms of direct placement

and will not concentrate corporate

the

over

expected; and it is significant that
the
criticism
has
never
been

Assistant General Counsel
Mutual Life Insurance Co.

and economic

control

valid, this continuing and some¬
what increasing popularity of di¬

Corporation Control?

A

with

that direct placements

domination

Lead to

lie is to say, sources which include
public offerings.5
In view the use of holdings of cash and
of the figures quoted, there seems United States Government Securi¬
depreciation,
increase
in
little likelihood that direct place¬ ties,
ments are in the process of dis¬ trade payables and increase in¬
the overall advantage to

find

the criticism
lead to the

direct.4 Now, if

were

9"

(2493)

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

-

Agent

E. A. QUACKENBUSH, Assistant Agent

67)

re¬

U

(2494)

THE

your

upon

(NATIONAL

or

off

&

Just

pany..

CORPORATION

hat to you.

our

[

•

(1) Were

your

=

capital

you may

out badly?

■

.

•

;v

-

V..

.

there

is

:

.

their

has spent since the

'

know

how

single share of

war.

do

to

it.. Most farmers don't

common

stock and

when

kind of stony look and

a

of

bankers:

even if they
to furnish the capital my one company
Industry has to turn to the farmer and we

resources,

they

know
come

how

recommendation

a

to

buy

a

to "you people,
to

their

put

in a savings account. If you want private enterprise to con¬
tinue, do somethin gto educate the people to buy a share of common
stock.'The farmer doesn't know how to buy
anything but land and
you fellows don't help."—From "These Things- Seemed
Important,"
issued by Selected Investments Company of
Chicago.
;
•
money

market

available cash?

all

they get

(3) Have you ever gotten "cold feet" at the bottom of a bear
and either sold stocks or refused to buy more with

*

B.

pooled
don't

"O'

.

.

C.

Randall, Inland Steel President, to a group
"There aren't enough rich people in the United
States,

have invested

''V"-' -:\v- ■t.--'

x-' v

(2) Have you ever been "sold" a security and purchased it
against your better judgment—only to see your investment turn

;

r

Equity Money

J.

:'ry:'"v''Vu,^,

1

,

'

"'You see'my meaning,' said the father. *' 'In union
strength.'"—From George Putnam's "Prudent Investor."

securities holdings worth more 10 years ago {

during the interim?
■

'■«v

son.

;'v' '>■'
j
'Now, break them!' he commanded, and this they were able to
do with ease.
>'/.
=

each question "yes" or "no."

than today, adjusting for any new

BROADWAY, NEW YORK 5. N. Y.

Each

single stick

to each

If you don't pass, you will have plenty of com¬

answer

Thursday,- December 22, 1949

together—and asked each son in turn to break the fagot.
strained with all his might, but was unable to break it.
"
'Untie the fagot,' ordered the
father, and handed a

investor and can pass the following quiz, we take

If you are an

from

SECURITIES

RESEARCH
120

request from

investment dealer,

CHRONICLE

Quiz for Investors

.

Prospectus

FINANCIAL

By HENR1T HUNT

SECURITIES .SERIES
>

&

Mutual Funds

JATIONAL

.

COMMERCIAL

,r

.

Bullock Fund

Dividend Shares

Nation-Wide

"■

■

j

!

Securities

influence

(4) Have you ever let radio commentators
investment judgment?{,
.
i'.v :"t
y

(5) Have

.'

sold

you ever

your

Insurance Stocks Underpriced?
j

stock after some bad news only to

a

(6) Have
top of

ever

you

stocks.

Briefly, this resulted from the insurance companies' experi¬
encing high loss and expense ratios largely due to conditions created
by the war and its aftermath. During this period their rates

borrowed money to buy stocks near the

bull market?

a

(7) Assuming you need income, have you ever bought a nondividend paying stock "just for. a quick

in relation to risks assumed, were
the lowest in over
at the same time an
inflationary price trend was

turn"?
manipulate

(8)
stock

"From 1942 until 1948, insurance earnings and the
performance
stocks were unfavorable in comparison with industrial

^

of insurance

find that you got out close to its bottom price?

,

Do you believe that big market operators
prices today? V.
V I

of

risk

vided

*

"f
|

(9) Do

v.

(10) Has

„

good job?

a

need

•

or more

investment

outside

help.

Half-Century
*

send

today

for the latest

prospectus and other

"The advent of the New Year is of more than usual

it marks the end of

arid the beginning of
the second half of the 20th Century. The usual taking stock of past
performance and future prospects should perhaps be extended to
take a longer look—to pay less attention to the ripples and waves
and more to the hroad flow of the tide.

descriptive material about
_Y'; ;,-v

t,y

{Fundamental

Investors, Inc.

;
!

r

{

\

,A Registered

.

"A factual review of American

establishes

dition.

a

Except for the sub-normal decline of the '30s, these trend
,

a

persistent upward pattern.

"Two broad-scale

Investment Company J

<

^

indicators of national well-being

i

shown

are

below—National Income and Industrial Production.,

Available

from

authorized

any

investment dealer

or

The established
50-year trend is projected to 1960 to demonstrate what a continua¬

tion of the trend would produce:

from

1900 1905 1&10 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960
♦National Income

Hugh W. Long

Company

and

tF.

INCORPORATED

Wall

48

R.

Street, New York 5
^

CHICAGO

*

LOSANCELES

17.4

^ 1-

B. Index of

Ind.

Prod

"Billions

of

25

dollars.

30.4

37

69.5

50

59

75

''

''
25

;

43

73.7

75

56.8

91

87

81.3 182.7

220

250

300

170

200

235

-

91

125

203

-

progress do
of the

*

buggy industry and the entrenchment of the automobile

dominant factor in

our

economy.

currents the broad flow
"It

Despite these contradictory

appears

t :

*"

»•

?<

greeted

of the tide is clear.

:

;

<

r;

•

as

"It

f *

to

Funds

- s

done to

the people of a

IN
BONDS

on

from

or

his

J

'(Series Kl-K.2)

(Series S1-S2-S5-S4)
Prospectus
.

may
•

be obtained from

'• /

generation

to

Each

to

50

history and, of
estimates, their 1949 earnings

cur

60%

higher than last year, compared with an
earnings of industrial companies of about 20%.
superior performance of insurance stocks
during
the last two years, it is
apparent that they are still materially under¬
valued; in other words, their price as yet has risen to
only a very
minor extent when
compared with their susbtantially increased earn¬
ings and net asset values and their decidedly favorable outlook
average decline in the

"Despite

the

for

indefinite period.

an

"To

illustrate, insurance stocks historically sell on an average
earning yield of around 7%, whereas earnings and not asset values
are
up so sharply this year that we estimate
that, around current
market prices, the
stocks, in which Insurance Group Shares provides
ownership, are now selling on an earning yield of as much as
18%

and at

a

discount of

much as 20%

as

from their net quick assets

advance

new

"Compared with 1945, their 1949 business volume
increase of

"An old-man, feeling that the
sons

First Boston

Corp.

Security Analysts of

The

is

board

of

directors of The

Corp., 100 Broadway,

SAN

FRANCISCO, CALIF.—
Security Analysts of San
Francisco, an affiliate of J:he Na¬
The

tional

Federation

'

Congress Street

-

following officers for
President, Rich¬
Lambourne, Partner of

coming

ard

for

2,500

years

W.

PUTNAM
FUND

&

Vice-President,

Cox.

Investment

Walker

&

Co.,

1

Wall

Street, members of the New York

Exchange, will admit Clif¬

ford

P.

Clarke

Walker

McKinney,
to

W.

Simonds

partnership

Ronald

and
on

Louis

Jan. 1.

All have been associated with the
Putnam Fund Distributors. Inc.
50 State

Street, Boston

firm
ney

for

some

time, Mr. McKin¬

in St. Louis, Mr. Walker in

Hartford, Conn., and Messrs. Gill
and

Simonds in

Providence," K, I.

.

Man¬

John

R.¬

Beckett,

of Blyth & Co.; Secre¬
tary-Treasurer, William P. Held

approaching, called
always .work harmoni¬

was

Gill,

Jj/jodtcn




year:

Dodge

is

Admitting Four to Firm
H.

Financial'

elected the

of J.

S.

Strauss & Co.

The

officers

are

on

of Governors which

Herbert-

G. H. Walker & Co. {

,

Boston 9, Massachusetts

of

Analysts Societies, at its Annual
Meeting held on Dec. 15, 1949,'

.

£7/ie

or

an

Names Johnson, Walsh San Francisco Elect

.

to his bedside and counseled them to

show

over

agers;

V
{
end of life
.

will

100% and their net earnings an increase of around
200%, while the market value of their stocks, as
yet, has increased
by only 21.6% since 1945."—From a bulletin
by Hare's Ltd.

First Boston

generation

Stock
•

of Boston

j

,

40

nation."—From "Keynotes,"

G.

| Tke Keystone Company

i

from

(Series B1-B2-B3-B4)

COMMON STOCKS

I

the highest in their very
long

were

importance, in accord with
be

+

|

J
1

more

will

ously together.
:
"To impress them with the fact that in unity there is strength,
he had a servant
bring him a fagot—a bundle of sticks bound firmly

!

|

written, these com¬
panies today have reserves to such an extent that
they are in position
to invest in securities an amount
nearly twice their capital and sur¬
plus, and, consequently, their income from investments also is
rising.
As a result,
during 1948 their earnings from underwriting and in¬

Stocks by the Bundle

PREFERRED STOCKS

i

alarm.

Aesop's fable 'The Bundle of Sticks.'
.y

investing their capital

y

ever

"Passed

m

,

,

volume of -business

the

"

j

of

approaching disaster.

Sticks

INVESTMENT FUNDS

<

source

increased

issued by The Keystone Company of Boston.

Certificates of Participation

;

constant

the

is

disservice

f

a

to

beginning to look as though the dispassionate clarity of
history will reveal that this doctrine of insecurity, which has so
successfully been sold to America in recent years,ris the most terrible

f'l Custodian

!

be

"Due

a

is

as an omen of

r

i

J

cross¬

significant that what looked high in 1900 looked low in
1910; that what looked high in 1930 looked low in 1940. Despite much
more than a
half-century of growth, the continuation of this trend

eystone

replacement costs, the premium business volume written
by these
companies increased during the last three years more than their
net increase during the previous 25
years.
This resulted in their
expense ratio falling, as the nature of their business is such
that
expense does not rise in ratio to increased volume.
During the last
one and one-half
years, fire losses, and particularly the
burning ratio,
i.e. fire losses to premiums
written, have been declining and, as a
result, their loss ratio also has shown a continuing declifte.
-

liquidating values.

11935-1939=100.

"It must be kept in mind that the broad measures of national
not apply to individual industries—a fact that misleads
many... The period reviewed above witnessed both the elimination
{

sufficient amount of insurance coverage.

a

vestment income

business history for the past 50

long-term growth trend notable for its freedom
from prolonged interruption.
Broad indicators such as national in¬
come, industrial production, corporate earnings and personal savings
prove that this country is in excellent business and financial con¬
years

lines have shown

1

significance:

eventful half-century,

an

increasing their cost
adequately pro¬

not

.

any

answered "Yes" to six

you

were

first in

of the above questions, you
You might well consider
the advisability of placing your capital under the supervision of ex¬
perienced investment managers—such as the men who manage mutual
fundSj one of America's fastest growing businesses.
If

?

probably

by

Conversely, risks

"Commencing in 1947, insurance rates were nominally increased,
one and then in most of the
important states; fire equipment
was improved, personnel
strengthened, and fire prevention methods
accelerated. To cover new
construction, inventories and the higher

trustee keeps the principal of

a

mutual investment company passed a dividend
during the past 15 years?
>
'

,.v

:

Established 1894

think that if

you

.

trust fund intact, he has done

a

»

CALVIN BULLOCK

J

;

-

replacements.

for

charged,

100 years, and

Vinton C. Johnson

New York

Thomas E. Walsh

City, has elected Vinton

Co.

&

announced.

Both

Mr.

Johnson,

corporation
ized in
and

time.

in

{

V

joined

who

the

has special¬

1929,

the general field of bank

insurance
Mr.

stocks

Walsh

has

Assistant

Vice-:

and

Earl

Mejia.

L.

Earl

Sever

Sever

of

is

Davies;
the

tiring President.

To Be

./

Ross, Blanchard Co.

mitted

to

partnership in Ross &

Co., 1 Wall Street, New York City,

since

that

on

Jan. 1, and the firm name will

been

with

be

changed to Ross, Blanchard &,

since 1930.

partner in Blanchard & Co,"

.

..

j

.

re-:

I. Munro Blanchard will be ad¬

Co. Mr. Blanchard

.

<

v.'. ,,/v,:v J.

the government bond department
.

/

execu¬

tives, former assistant vice-presi¬
dents, are with the corporation's
New York office.

r

Eidell of Shuman, Agnew &
Co.;;
Earle Richards of Dean Witter &

vice-presidents of the corporation,
was

Board

includes-

President of the Anglo-California
National Bank of S. F.; John G.

C. Johnson and Thomas E. Walsh

it

Drake,

the

also

:

u

'

was

formerly
.

a

Volume 170

'THE -COMMERCIAL

Number 4866

FINANCIAL

&

CHRONICLE

,

It would

Restore

Equity Capital Flow by
Lowering Tax on Dividends!

of

be

and claim it as a

Executive of Urge investment
market for

citing unprecedented

company,

Received Credit for taxpayers in all

brackets.

;,

*

effective

pay

57%

~

come.

stake in the

ownership of

Our economists have estimated
that we now require $5 billion of
new equity
capital each year over

tem

the next 10 years to maintain our

stocks and the answers were about

system of free

evenly divided between those who

enterprise in a

,

thought

our sys¬

stocks

who

"risky"

were

nothing

knew

timeg

business
\

on

subject to
77% would

man

of

rate

dividend income.

The

It is evident that the bene¬

increasingly

important
92 lower bracket taxpayers. •, :

The

enterprise.

is

fit

asked why they did not own

those

and

sound

free

of

were

credit to

these

of

tax

development.

,

.

.

.

and

about

The problem here

What
tax

a

in

are

to be made up

;.

incentive

will

be

effective

billions
equity capital that is needed?
want

the

$5

of

nairing

As

our

rate

of

lion dollars to

finance

new

.Ventures,

t o
small

enable
*

business '

t o

rate

for a
-growing popu¬

able to the

lation

$3.3

to

and

>p r o v

i d

States

a

e

S. L.

Sholley

avail¬

equity market. Another

on

obligations.

Sav¬

ings and loan associations account

taxable securities and the gross

return

billion
went
into
United
Savings Bonds and state

municipal

and

•steadily grow¬
ing tax base

is not

It

investment.

debt

;j obs

tax free securities.

on

As the balance

equity

r

stands, our
deprived of

now

markets are

billions of dollars of needed cap¬

the government collects
billion. This, too, is all
no tax.
A 20% Dividend Received
It cannot flow into
Credit might well bring hundreds
the equity market as productive
of millions of dollars of this cap¬
capital. A total of $1.7 billion did
are interesting about this $5 bilital out of hiding and into pro¬
•lion figure.1 The first is that it is finally find its way into corporate
ductive use where it would again
but
since .the
total
a larger amount of equity
capital securities,
also contribute tax revenue.
"than' we have ever raised in any equity issues of last year were
We have another demonstration
•single year in our history.
The only $500 million, it is obvious

•for

the

sup-

for

~

port
of
the
government.
There - are
two
things
that

$1.1

debt

-

business and employment
has risen sharply. Prices are high¬
It takes more

capital to run a
business and it will require ex¬
er.

panding amounts as we grow/
The second observation is that
total new common stock fi¬

our

nancing
half

last

amounted

year

billion dollars

a

or

of this requirement.
Our large established
tions

are

corpora¬

Smaller

issues.

market

of

capital
is also clearly indicated in

busi¬

our

the markets themselves. The flood

of

the

effectiveness

of

in-

tax

centive in the field of petroleum

exploration and development. rIn
order to encourage risk capital to
engage

for

new

ed to pay

30% to 40%. This plow¬
ing back of earnings may solve the
problem for an individual com¬
pany if the earnings are sufficient¬
ly large to finance the needed

growth and expansion, but a small¬
business which needs to double

a

yet, has no earnings at all. If
"the problem is left to the plowing
of

nesses

money

equity investment with other

Dividend

has

earnings,.

must get
businesses

our

bigger

big

busi¬

and

will find

our

it in¬

contrast, the lack of interest in
equities is revealed by the fact
that common stocks of our leading

versions
in

of

the

tax

present

our

which

and

respited
law under!

earnings

equity capital needs. Why then
survey

received

when
in

Since

the

'families out of 100 have

no

direct

the

Sholley be¬

Sub-Committee ; on

vestment of

the

In¬

Joint Committee

the Economic Rennet,

Washing¬
ton, D. C., Dec.-14, 1949/ r
*




of
indj?

vidual tax bracket is now 20%, he
of capital and savings into
equities will expand many small said, a Dividend Received Credit
businesses and create many new will, in effect, restore the statu&
that existed prior to the oversight
businesses with a consequent in¬
in 1936.
crease
in employment and total
'V '
"
y
'

f

payrolls..; / Objectively,
it
will
greatly broaden and strengthen

^

;.

.

the

Reynolds & Go. to

which future cor¬

base from

porate and individual taxes must
come.

But

above

all

Admit Three Partners

\ '" / / ' ■'/•'
else, it will do

Reynolds & Co., 120 Broadway,
York City, members of the
York Stock Exchange, will
admit John L. Moore, William J.
B. Smith, and LeRoy
Smith to

American

New

system of capitalism and free en¬

New

much

to"

the

maintain

terprise and thus insure the con¬
tinued growth'and prosperity of
our

country.

partnership
been with

•In answer to

of the more

of

on

Jan.

1,

the firm for

All have
a

some

years,

Mr.

William

number

Smith

of

and

$6,750,000

Equipment Trust of 1950
2Vs% Serial

unusually generous
current return in dividends, why
should he assume greater risks in
a

gain

business

Equipment Trust Certificates

an

Dated January 1, 1950.
from

smaller and less well established
and

why

should

additional

the

sume

.

Chesapeake and Ohio Railway

i

he

hazards

Maturing $225,000 each January 1 and July 1

July I, 1950 to January 1, 1965

"

*

■■

'■

i

'

'

v...',."/.

\v

as¬

Issued under the Philadelphia Plan

that

present in every new venture?

are

businesses and
the

of

stocks

nesses

high

new

were

prices

established

selling
and

MATURITIES AND YIELDS

ventures when

at

on

a

busi¬

July 1, 1950
Jan. 1, 1951

relatively
low yield

stream has left its

we

can

restore

a

more

July 1, 1955

1.25

Jan. 1,

July 1, 1951
Jan. 1, 1952

nor¬

1.30

July 1, 1952
Jan. 1, 1953

basis.
a

1.15%

July 1,
Jan. 1,
July 1,
Jan. 1,
July 1,
Jan. 1,

1.40

*

1.45 f.

1953

1.50

1954

1.55

July 1, 1954
Jan. 1, 1955

1.60

July 1,
Jan. 1,

1.65

These certificates

are

July 1, 1960
Jan. 1, 1961
July 1, 1961
Jan. 1, 1962
1, 1962
an.
1, 1963
July 1, 1963
Jan. li 1964
July 1, 1964
Jan. 1, 1965

1.70%

1956

1.75

1956

1.80

1957

1.85

1957

1.90

1958

1.95

1958

2.00

1959

2.05

July I,
Jan. 1, 1960

1.35

2.10
2.15

2.20%
2.25

2.30
2.35

2.375
2.40
2.40

2.425
2.425
2.45

ps and if issued and
approval of the Interstate Conimerce Commission.

offered subject to prior sale, when,

received by us, subject to

normal

of equity capital through a
simple tax incentive. I refer spe¬

The

individual would include

Salomon Bros. & Hutzler
Drexel & Co.

come

and

ly

he does today.

as

would
tax-

be

one

more

which

Then there
line

on

be

December 22, 1949.

the

would

labeled Dividend Received Credit.

.

Union Securities Corporation

[LcaeMm

;

Incorporated

compute his tax exact¬

return

;

Stroud & Company

all

dividends received with other in¬
Statement by Mr.

by

form

first

our

flow

recently completed

are

the hands of cor¬

shareholder

the

dividends.

Senate

and

bill

tax

corporate

taxed twice—in

porations

a

House

NEW ISSUE

cifically to a Dividend Received
by the Federal Reserve Bank tells
Credit.
us that eight families, or spending
Under such a plan a corporation
units, out of .100 own common
stocks, and half of these own less would make its tax return and
than
$1,000
worth. .Ninety-two pay its tax just as it does today.

on

the

level of 2.9%.

and

'does our equity market starve?

fore

explained that

between

the hazardous search
supplies of oil, Congress

deduction

force it back into the old one
The accumulated liquid
of the American people or we can deepen and widen the
old channel so that it will be easy
.total $175 billion.
The savings of
the
American people last year for the water to flow where we
want it to flow. And I believe that
were $12 billion—more than twice

*

He

figure,

arbitrary/
1936'mix-up

nor

In

Now if

plenty.
savings

The

Credit

flow

provided tax incentives—the

Our equity capital market is ob¬ mal channel there are two things
viously starving
and
ironically that can be done about it. We cam
enough it is starving in the face of try to dam up the new channel

-

Received

is neither accidental

.

creasingly difficult to survive.

our

.

Sholley added that the 20%

its

as

/small

billipn dol-*

3% increase in the corporate tax*
Mr.

far as the Treasury is concerned.
The restoration of a more normal

capital cannot do it Historically, money has only been
opt of the earnings as the venture, available in quantity for smaller
treble

back

a

rate.

in

exceptional earnings businesses are selling at substan¬
.and an urgent need for more capi¬ tially less than 10 times
earnings
tal are finding it next to impossi¬ as compared with normal ratios of
from
15
to
20
times
ble to get equity money.. Those
earnings.
with sound ideas who need only a Stocks that have paid dividends
■limited amount of money for a without interruption for 20 or 30
-venture are facing a blank wall.
years can be bought with current
The larger corporations are tem¬ yields of 6%, 7% and 8%. If the
porarily solving the problem by investor who has capital for equity
plowing
back
earnings.
These investment can buy into the own¬
businesses normally pay 60% to ership of a large and established
.70% of their earnings as divi¬ business at the lowest price on
dends. This year they are expect¬ record in relation to its earnings

or

half

1% of tax. The Dividend

with

nesses

er

a

about

in
development . ex¬ obvious questions regarding his charge of the Lancaster,; Pa., of¬
banks
and
other
channels
has
pense, a full tax
credit; for all proposal, such as what it will cost fice, and Mr. LeRoy Smith as
created a demand for debt secur¬ losses on "dry holes" and a de¬ the
government
in taxes,
Mr.
Manager of the Allentown, Pa.,
ities that has driven interest rates
pletion allowance on income re¬ Sholley has stated that the Treas¬
■/, /...
J
on high-grade corporate
bonds to ceived from producing wells. As ury Department estimates that a office.

that is flowing through
insurance
companies, savings

of

the historically low

finding it difficult to sell

stock

new

to

one-tenth

imbalance

The

-Hj&e of

and

money.

total was $4.4 that more than two-thirds of this
investment went into
billion. Yet the $5 billion figure corporate
is not unrealsitic. Our:total vol- debt securities.

highest- previous

ital

of

lars per

Received Credit could be offset by

;

-expand,
to
'make
enough

he pointed out

present corporate tax
38%
produces approxir

mafely $19 billion annually at the

ifi clearly ignorance. The Ameri¬ the effectiveness of a tax incen* forms of investment with which
can
people understand life insur¬ tive, we need look no further than they are already familiar., It will
ance., That is why $6.9 billion of our present market for tax free take less than one-half of our cur¬
the
$12 billion saved last year bonds. -Here we find $36 billions rent national savings to supply
went into insurance.
But insur¬ earning a very low rate of return. all of the equity capital we need.
ance company investments are re¬
Money flows in and out of the
> And the theoretical cost of such
stricted almost entirely to bonds. tax free market on the delicate a Dividend Received Credit may
This money, therefore, must seek balance between the net return well
turn out to be a profit so

pare

the second,

to

that

They will then be able to com¬

demonstration of

This is two

to three times the amount needed.

what it represents.

them whatever.

a

of the functions of th§

any

Federal Government.

inquiring taxpayers will,
a divi¬
is, where it comes from, and

tion.

we

the other of two

through elimination of waste and

And* in

Ihealthy condi¬
Five bil¬

immediately, could

one or

increase in efficiency without im-*

of necessity, find out what

,

Credit

taxes

Report indicates that $3 to $5 bil¬
annually
can
be
saved

the process of finding out, several

dend

*

lion

interesting. • Every tax¬

to find out about it.

*,

The Hoover Commission

sources.

payer

ness

from

come

million

the chances that such

attracting

If

to

—si

billion

ninety-two families who own no
stake in our productive system is
even more

individual

reduce

.

.

$1.4
annually.
.■
This deficit, he said, if needed

for the hazardous
oil
exploration and

hag a natural and keen in¬
taxpayer with an effective rate of terest in any benefit or credit that
40% would pay 20% on dividend
the law allows him in connection
income.
The
taxpayer with a with his taxes. If he hears of such
small income who now pays 20%
a benefit or credit that he- doesn't
would pay no tax on dividend in¬
understand, he makes it his busi¬

attention to imbalance in capital market, caused by demand
for debt securities, and advocates as remedy, a 20% Dividend

&

The

the

Calls

stock is starving in face of plenty.

common

all

at

by 20% for taxpayers in all

come

equity capital, tells Congressional Committee

more

will

of

,

Received

Dividend

20%

result

a

the

in

deducted from the tax due.

tax brackets.

need for

included

dividends

incentives

ample capital has been available

amount equal to 20%

an

This would, in effect, reduce the
The probable effect of a Divi¬
Federal tax rate on dividend in-! dend
Received
Credit
on 1 our

President, Keystone Custodian Funds, Inc.

.

.

the

return

By S. L. SHOLLEY*
,

instruct the taxpayer to

compute

li

(2495)

;

12

COMMERCIAL

THE

(2496)

'

'

'

"

•

.

=

i

1

-

.

FINANCIAL

=====

I" * n

Week—Bank Stocks

As the end of the year

approaches the question arises as to how
investors in New York City bank shares have fared during 1949.

generally reduced volume and profit margins, the stable record of
earnings can be viewed with a certain amount of satisfaction.
Concerning dividends, there have been
increases in distributions over those paid in
J. P. Morgan &

Co.,

notable

1948 during the year.

of the first to enlarge its payment, raised
to $10.00 a share in the first quarter of

ore

The others waited until the final period for such consid¬

the year.

eration.
">'■

number of

a

rate from $8.00

the annual

"ii••

■

/y/v.

$2.00. Guaranty Trust paid an extra of $2.00 raising the total payment

against $12.00 a year ago. Irving Trust, by paying a
increased the 1949 dividend to 90 cents from 80 cents
previous year. Also; Public National Bank declared a 10%
stock dividend, which, providing the same dividend of $2.00 is con¬
tinued on the new stock, would amount to $2.20 on the present shares.
$14.00

as

10-cent extra,

the

in

The

pay¬

ment of National

City was of particular interest both because of the
of the bank and the fact that it had long been anticipated. The

si?e

declaration of

20-cent extra raised the payment for the year 1949

a

to $1.80 as compared with the $1.60 of the previous period. At the
same time National City also changed from
a semi-annual method
of paying stockholders to a quarterly basis.
A 45-cent quarterly
dividend payable next year has already been declared, indicating an
annual rate of $1.80 for next year.

In the

i.v

early part of the

dividend of

Manufacturers Trust paid

stock

share for each eleven held and continued the

one

a

same

year

cash payment on

the increased shares. Also Bank of Manhattan paid
10-cent extra at the beginning of the year and in June offered

a

rights to shareholders to subscribe to additional shares.

/

'

/

;Once again while the dividend record has not been so favorable

industries, conversely, there have not been any reductions
Then too, there is a possibility that one or two of the
other banks that have, not participated in recent increases, may take
action in the first part of next year.
*'
*
/
"

as

some

in payments.

//'

The foregoing factors combined with a generally rising equity
improved pricqs for bank shares. As a

market has been reflected in

result current prices in most cases are at the highest levels reached
over two years.
Compared with those at the end of 1948, current

in

market
such

values

show

fair

a

quality.

amount

' '

" *

/ The following
above discussion.

of

appreciation for equities of
~

/

■

tabulation attempts to

summarize some of the
of dividends giving recent changes

A comparison

is shown and the price range for each of the past two years. The price
at the end i of last year is compared with the present price and the

changes since that time, shown,..,,
■—Dividends—
Curr.

///^.•yy

i.;

,

Prev.

Price Range

Pay-

of

$1.30

$1.30

$25%

$21%

1.80

45 %

36%

42

5.00

5.00

152

97%

117

4.00

4.CO

101%

82%

93

1.60

1.60

30%

Trust

National

Chem.

Bank

1949

■.

Change
•

$22%

$25 %

$25 y4

36%

38%

43%

95

98

81%

83%

'

J

5%

+

+ 49

147

96

+

12%

32%

37

32%

33%

35

1.80

1.80

44%

37%

43%

38%

40%

41%

+

%

2.00

51

38

44%

37

38 %

49

+

etary,

+

4%

Manufacturers

2.80

2 80

57

8000

80.00 1.300

14.00

12.00

0.90

__

0.80

-

;

49%

1,145

295

56%

50

1,335

252

17%

;

14%

52%

1,150

286

254

57

14%

*287

15%

1%

+

+ 40

1,150 ; 1,190

247

16%

!-Y

17%

+

2%

Tr.

2.40

P.___._

10.00

8.00

243

1.80

1.60

45

37%

41%

35%

37%

44%

+

6%

Trust—

4.00

4.00

90%

80

90

79%

81

85

+

National—

2.00

2.00

44%

37

41

/■ Y 36%

37%

44%

+

7

35.00

35.00

York

Trust.

gotiable

Federal
system

this committee

—

2.40
;

54'/8

050

47
"

53%

199

1

45%

240

problems in these important
areas.
Our organization has given

special study in the past to many
of the Policy questions raised in
the
questionnaire submitted by
your committee.
And since 1946
have

540

600

•

-

+37:

238 ;

,201

"

510

•

540

660

•

like to quote from the resolutions

adopted at
"We

last year's Annual

our

Convention.

reiterate

position

our

'•

In Florida in 1950

Gruntal & Co., 30 Broad

New York
York

on

Street,

City, members of the
Stock

Milton

Exchange, will

Goldberg

Jan. 2.

to

part¬

Mr. Goldberg

formerly with Stern & Co.

stabilizing the general
price level. We urge Congress to
establish a bipartisan joint con¬
gressional monetary study com¬

mission, charged with the

respon¬

sibility of making studies and sub¬

mitting recommendations to the
Congress on means/of- bringing
greater stability to the value of
The

money.

commission

sufficient

funds

should

to

employ
competent technical personnel.
"We will continue to solicit the

cooperation

dealing

of

with

other

groups

in

this basic

problem.
It is our belief that monetary and
fiscal policies should be reviewed
in

the

The

Again

light of changes resulting
war;
A monetary study
commission would bring about a
better

understanding of the prob¬

lem.

"In

the

for

of

America

has

Hotel,

been

will

Our

hold

its

The

date will be determined

later.

Just How Weil Have

of INDIA/LIMITED

Bank Shareholders

Bankers to the Government in

Been Treated?
be

sent

on

Kenya Colony and Uganda
■-

request.

Head Office: 26,

Bishopsgate,
London, E. C.

Branches in India, Burma, Ceylon, Kenya

Colony, Kerlcho, Kenya, and Aden
and

Laird, Bisseil & Meeds
New

York

120 BROADWAY,

Stork

NEW

YORK

Telephone: BArclay
Teletype—NY

Exchange
5,

Federal

Govern¬

(L. A. Gibbs, Manager Trading Dept.)




£2,000,000

Fund

£2,500,000

The Bank conducts
every description of

banking and exchange business' *

Trusteeships

magnitude of the
and

the

greater effect on prices and
production than in the past. The
to make the maximum

as

The

contri¬

minimum cost.

to

&

economy.

expenditures and

construction should tend to

ing
of

prosperous

essential

eliminated

be

periods^ A

three

Ail

Fenner & Beane,

rapidly in periods of good busi¬
ness activity, while during periods
of depression it may be necessary
to

deficit

resort to

and Executorships
also undertaken

of A.

The poli¬

regulated

authority

far

as

index,

be

feasible

as

should

by

upon an

which

would

established
direct

the

authority to take action when the
index

reached

order

certain

stabilize

to

the

levels,

in

proposed monetary author¬
have the power to
change the gold content of the
dollar within the prescribed limits
should

of the International

Monetary Or¬
.Y/ 'V;/,.;y / '■///' /:/,./

ganization.

"This Nation

should

various

the

given responsibil¬

and

credit appropriate to

and

for

bringing

about

greater

international

nominated

more

fectively the expansion and
traction of credit. More
made

credit

of

use

additional

Keegan is on the present
board, while the other men will
be new governors. Class B gov¬

ernors

controls.;

should
these

them

partners of Curb member firms.
*

E. fR.

or¬

now

like

to

proposals
relation

in

elaborate

bank credit during

of depression

and

the

to

major

In order to conserve time

I have taken the

liberty of group¬
ing the questions into several
main categories.
Likewise, I have
omitted'

discussion

a

technical

questions

certain

of

to

which

we

opportunity to give
to this time.

up

Not
At

a

Cheap Money Program /

the

inflation

emphasize
proposals,

that

in

we are

money program.

making

not for

a

We want

a

these
cheap
sound

monetary system which maintains

purchasing

for

re¬

banks

fore

statement by Mr. Kline be¬
the

subcommittee

on

Mone¬

tary, Credit and Fiscal Policy of
the Joint Committee
nomic Report,
Dec.

1, 1949.

on

the

Wa^hingtbrf,

Eco¬

D. C.,

currently

F.

Browning, Jr., is Chair-^
Nominating Commit¬
prepared the slate for

the Exchange

Frank L. Walin.

Mr.

Landsberg first served on
Governing Board back

Curb

the

1923

has

and

active

been

board

a

affairs

the

in

of
of the
intervening years.
His present
term of three years began this
the Exchange during most

February. In 1925 Mr. Landsberg
was
appointed Assistant Treasrof the Curb and was elected

urer

Treasurer

that

later

serv¬

year,

pacity.

of the Amer¬

Neither

are

we

ask¬

new areas

be

'//Y'/Z:// 7■'">'.//f '■ ////■:;

In addition to his

Board
a

postion

Mr. Landsberg is

on

th?

currently

member of the Executive Com¬

mittee

the

of

of the Committee

and

a

on

Chair¬

Exchange,

man

on

Finance

the Committee

member of

Securities and the Realty Com¬

mittee.

'

;y

/.;/

y;...y

granted the Federal Government.
The

control

and fiscal
*A.

power

pros¬

threatens,

requirements

is

He

of the

which

tee

outset, I should like to

ing that authority in

"When

fund.

as

Exchange

ing twelve times in the latter car

ican dollar.

expansion during periods of

O.
man

in

undue

perity.

Presi¬

Chairman of the Trustees.

member

the

periods

first

Exchange after

Curb

the

of

gratuity

discuss

and

,

of money and

Curb

the slate for relection

on

trustee

mittee.

should

policy to prevent the contraction

McCormick,

questions submitted by your com¬

ef¬

It should be the

chosen from among as¬

are

sociate member and non-member

con¬

selective

gov¬

.

I

special study

be

Class B

as

of the Curb Exchange. Mr.

membership. Other
exchange of goods and services committee members include Frank
the nations of the world B. A'Hearn, Charles J. Bocklet,
upon
a
self-perpetuating
and Jacob Feinstein, William A. Pidsound financial basis."
:/yy
aeon,
Newell
E.
Thomas
and

stability in the general price level.
should

Keegan

among

The

authority

Van

it moved indoors in 1921, is nomi¬

designed to stimulate the

have not had

proper

H.

dent; of the

cooperate

stability of prices, the

zations

on

agency of govern¬

proper

Co., and
of
C. Masterson & Co., have

Frank
been

Irving H. Sher¬

Van
"The

ity

purchasing

of the dollar.

the

G. Becker &

Benjamin

ernors

financing.

of

&

man

reduced

governors.

members

national

be

new

has

other

The

C.
Bench, of Clark,
Co., Michael W. Mc¬
Carthy of Merrill Lynch, Pierce,

derly / adjustment
of
exchange
rates, and expanded foreign trade.
Where necessary, v/e should ad¬
just our domestic policies and co¬
operate with international organi¬

this

regular

Dodge

authority, with members ap¬
pointed by the President and con¬
of

past.

will be

men

Baird

Mr.

the

be
maintained, to be activated
during business recessions. : The

should

gov¬

Edward

shelf

public works should

debt

proposes

the

Exchange.

dur¬

a

cies

and

in

are

nated

firmed by the Senate.

announced

members of

Co., Charles W. Halden of H. L.

served

expenditures for deferrable public
works should

A

members

coun¬

terbalance fluctuations in private
business and employment.
Public

Wood, Board

& Co., David S. Jack¬
Joseph Klee and Mr. Werle.
Andrew Baird of Josephthal &
Co. is proposed for one year as a
Class A
governor.
Mr. Cushing
and Mr. Werle are present board

•.

"Government

&

son,

price level
expanding domestic-

an

*

•

Buchanan

stable general

more

and

y

erning board for three-year terms
Carl F. Cushing of W. E. Bumet

A long¬
policy should be
adopted which will contribute to
a

slate

Class

as

price sta¬
bility, rather than to finance the
a

'

the

Werle of Johnson

bution to economic and

debt at

Landsberg

Chairman for the past three years.

handled

so

of

Mortimer

i-

e s

the Exchange, announced. Mr.
Landberg will succeed Edward C-

a

national debt should be

the

Trus-

dent

tax

tional

one

serve*

Paid-up

Capital

debt

agencies to bring about interna¬

£4,000,000

N. Y

7-3500

1-1248-49

Zanzibar

Subscribed Capital
Reserve

Adams

low, P r

load,
management of fiscal policies will
have

with

the

it provided for influencing

exact

NATIONAL BANK

Circular

national

policies.of

money

Hollywood, Fla.,

announced.

the

to

for

Francis

addition¬

an

mem¬

at

election in

ment should be coordinated under

the production needs of the Nation

1950 convention at the Hollywood
Beach

"Due

bringing
about a more stable general price
level,
consideration
should .be
given to the following; The eofa7
trol of money, credit, and fiscal
program

ity for maintaining the supply of

Investment Bankers Asso¬

ciation

possible

a

ex¬

February,

a

credit expansion.

from the

be

Bell

on

methods of

have

to

such

the

annual

time Federal tax

t.

ment should be

jNilton Goldberg

Members

I should

areas.

+ 120

IBA Convention

will

urging

constantly been

for action in these

makes

move

al

the

52%

52%

198

Grunlai & Co. to Admit

nership

es¬

tablished to give consideration to

bonds

one

n

bership

the

banking

because

o

action

Steps should be taken to prevent

bility to the general economy and
price level. We are

to the general

Curb

change

ne¬

"The

admit

policy

the

for

ernors

further shift of non-bank-held

see

the

year

fields in order to add greater sta¬

power

was

fiscal

4

J.

National

New

and

formula, based

+ 33

•

City——.

Morgan,

Public

credit

nomi¬

to

slate presented

adjustments in the bank holdings
eligible to be counted as reserves.

mon¬

10%

National

S.

$25%

1948

2.00

Guaranty Trust
Irving Trust

New

Low

Tr.

&

___

Exchange...

First

-

—Bid Price-

1948—

High

of

should be raised, with appropriate

steps should be taken in the

Ex¬

Board of Gov¬
-

,

Natl._

•Commercial

U.

Low

Hanover__

Chase

Corn

High

Trust

Brooklyn
Central

Payment

2.00

Manhattan

Bankers

•

:;

Price Range
1949

ment

Blc.

/

Farm

that

Chairmanship

to

American

of

has

been
nated

Bureau

we

/C. The increase in dividend and the change in the method of

change,

Federation believes that agressive

happy to

//••'•

increased the annual rate from $1.80 to

Bankers Trust recently

to

policy and advocates more coordination in our monetary, credit and fiscal policies. Calls for flexibility in govern¬
ment expenditures to offset booms and
depressions.

money

current Governor

a

Vice-Chairman

and

•

single governmental authority have responsibility of regulat¬
ing money and credit supply of nation. Does not want cheap

of the more volatile industries, but in a year of

some

since 1917 and
j

spokesman, urging national monetary commission to
study means of greater stability to value of money, proposes

respect to earnings the record has generally been favorable.

earnings of

Mortimer Landsberg, a member
New York Curb Exchange

Farmers'

Operating earnings of the principal New York City banks to be
published within the next few weeks will show little change from
the figures of the previous year. * Of course there will be individual
variations but in most cases they will be of minor significance. Banks,
because of the nature cf their operations, do not show the fluctuation
in

Head NY Curb Board

KLINE*

ALLEN B.

President, American Farm Bureau Federation

■

\iT; With

Landsberg Named to *

Objective oi

of the

By

This

*

Thursday, December 22, 1949

and Fiscal Policies

f

By IL E. JOHNSON

CHRONICLE

Stable Prices—Main

Bank and Insurance Stocks
*

fc

of

policy

monetary,
now

credit,

rests in the

hands of the Federal Government,
as

is prescribed

tion.

The

by the Constitu¬

problem is not

one

of

delegating additional authority to
(Continued

on

page 80)

Burnham & Co. to Admit
Burnham

&

Co., 15 Broad St.,

New

York

City, members of the

New

York

Stock

admit

Rhonie H.

Exchange,
Klee

B. Raiss to limited

the firm

on

Jan. 1.

will
Jacie

and

partnership ia
.

-

<//

THE

Number 4866 !;

Volume. 170

How to Increase

COMMERCIAL

Pierce, Fenner & Beane

(1)

ment

leadership
.

.

the

hearing speeches and reading ar¬

the

ticles dealing

ing

Most

with venture capital.
the discussion is based

thing. What is this equity capital,

of

the

on

as¬

is

there

a

venture

or

stock

sumption that

talking

and

'

seems

about

capital,

capital

the

same

in

portfolios.

:

•

of

This,

capital.
of

is

course,

simply not so.
is

There

plenty of
capital: and
still

is

there

alive much of
the

venture¬

spirit.

think

I

we

this

answer

can

accumulated

bank

So

far

as

you

are

o

considered to¬

day, even by
willing! to bear risk, as an
Many peo¬
ple who have money either are
completely ignorant of
invest¬
ment principles or actually be¬
those

outlet for their funds.

lieve

that

ment

is

invest¬

stock

common
sure

a

way

to lose their

I

,

and

stabilize

fore the Subcommittee
the

of

ment

the Economic

invests

on

Committee

Joint

on

Report, Washington,

D. C., Dec. 16, 1949.

.

There'is

.

.

no

take place in

notified the New York Stock

doubt

the

primary

.

capital

is

state

a

J

of

the

In

a

very

regulation

was

designed to protect

him. The government did a good
job. Those who framed the legis¬
lation had their eyes on the right

(Continued

;

ities.

.

.

certain

as

as

they have been.

.

FORECAST

rates are to be allowed

well

as

as

.

upon suc¬

condemnation and

government market.

the

leading people into feeling
risk is frightening to them. Calls upon
government to foster confidence in business, and advocates
acquisition of equities by insurance companies and fiduciaries.

We

stated.

a

group of

several

of

equity capital. That
be qualified, for

hundreds

a

of the restricted bonds have been In
responded to the buying, which has

middle maturities of the

mil¬

are

lions

whose

arid

wire

and

afi(|

system connecting all offices

correspondents.

.-,i

1-

^

1

t

-i

'

•,

*

u. s.

.

...

.

.

;«'3 I:

/■<;

TREASURY

vr
★

many

very

home.

a

successfully dis¬
tributed for years. Whether in the
lecent past the heavy demand for
such equity;.money would have
glutted the markets had not cor¬

thou sands.

ineligibles.

intermediate maturities of taps are well

The

underwritten and

There

Chicagt^

Montreal,

operates an extensive private

the

as
dividend-paying or¬
ganizations. With very minor ex¬
ceptions such shares have been

of

York

spree

records

even

or

California;

purchases have been with new funds, but the bulk of it has come
■from switches out of eligible obligations.
.
.
The 1966/71s, the
1964/69s and the 1965/70s have been the leaders in the recent buying

inter¬

equities of large suc¬
corporations
with
long

leading- repre¬

Angeles, Beverly Hills and

of the tap issues followed by the 1963/68s. . . . The 2V4S of
1959/62 have had some buying but reports indicate there has also
been considerable switching of these issues in order to move into

must

firm's

Orleans

New

cessful

to

of the

Pasadena,

ested in the

num¬

thousands
tens

lack

the public is and has been

from

ber

about,to speak to you on

am

the

at

our

I
the

and

iip

Chicago office in- >1919 and lis

mainly from savings institutions, fire and casualty companies
few of the smaller life insurance companies. ... Some of these

come

re¬

associated

Hammill & Co.

with Shearson

in Los

sizable demand and prices have

1

statement

point of making a very
great increase
in

flect that fact.

in¬

thousand
vestors

are

bership does and will always

.

.,

became

Rees

In addition to its two New

*

maturities

.Intermediate

:

v

offices, the firm maintains offices

CURRENT MARKET ACTIVITY

of security, so that any

,

sentatives in that district.

low interest cost,

a

a nun>r

National'"City

the

predecessors,

MrJ

for

and with one' of its

of years

one'

refunding operations and the need to finance
opinions are being expressed
more
freely that important developments are in the making
which will tend to make less certain future price movements in
deficit at

uri-

Prior to

war,,service, he had been witty

Co., for 6 years.

its

contends benevolent government is

important that the incen¬
brings
the
Investors
League
before
you. be
briefly

department.

ber

the

Despite

Defends speculation and

belittlement of business executives.

institutional' arid

derwriting

Harriman Ripley & Co.

unpegged short-term rates could influence the
longer end of the list sufficiently so as to result in quite sizable price
changes, depending upon the kind and amount of leeway Federal
might give to near-term rates.,. . .
: y
.
.
the

equity securities to current trend of looking

;

believe will be the case, then support of

.

Com*

the/ firm's

authorities,

some

leqving

mander in 1946 and is Manager Of

'/VKp

\

has

the United States Navy as a

long-term rates should also be more flexible.
. To be sure, as long
as very low interest rates are to prevail, which seems to be in the
cards for some time yet, rate changes and price quotations for longterm Treasuries cannot be too pronounced.
Yet, it is believed by

Former prominent investment banker lays inadequate invest¬

people with suspicion,

.•

%
be.en^asso'r

effective Jap,

ciated with the firm since

to fluctuate more in the

.

cessful

partners

Mr.: Krusen

1950.

his

Equity Capital

ment in

limited

.

..

^if..': ?;•'/y-fX':

.

UNCERTAIN PRICE- MOVEMENTS

76);

on page

a narrow range.

would be enough fluctuations up
uncertainty which would not make rate

Rates would be allowed
within limits, to seek their own levels, with interference by
Federal only to keep them within the limits on either side,■
which would have been agreed upon by the monetary aiuthor-

patterns

securities

of

.

within

other hand, there

the

and down to create some

important fellow.

whole -fabric

move

-

eyes of the SEC the in¬

vestor is

would

be stabilization because rates

By ALLAN M. POPE*

that

re¬

.

.

.

Venture

mind.

President, Investors League, Inc.

is

announced the

also

.

.

.

■

It

,1,

resident in Chicago!

D. Rees, to be
The firm

Jan.

on

.

Needed for More

*

partners

Accordingly, the Treasury always prevails, in spite of
tirements, effective Dec. 31, 1949^
.>. However, it is believed b,y not a few
ownership — common stocks, for the objections of Federal.
of Warren P. Smith, general part¬
example. If you as an individual money market followers, Jhe points of disagreement between the
ner in the
New York office arid
decide to put it into debt — an Treasury and Federal are quite likely to be worked out satisfactorily
Darrel J. Bogardus, special 'partJ
The opinion is held that short-term rates will be
annuity, for example—that $1,000 to both parties.
ner
in Los Angeles.
J. Hairy
the first point upon which agreement will be reached, and this is
is not equity capital. Tne $1,000
Steinkampf, E. Townsend Irviri
doesn't change., It is your deci¬ likely to result in less pegging of near-term rates. . . . Some of the
and
Wentworth
P.
Mackenzie,
inflexibility and rigidity of a set pattern for short-term rates would
sion that counts.
,•
?
partners,
will
become
be removed by allowing them to fluctuate.
.
There would still general
agencies.

volition decide to put it into

More Confidence in Business

tive

general

as

especially whem the chips are down, is to serve the Treasury in all
monetary operations, despite the conflict over policies between these

future, as some seem to

.....

New York Stock

Exchange and other leading stock
and commodity exchanges, have

1950, of H. Stanley Krusen, to be
resident in New York, and George

grow.

or

If short-term

yatipl a-A-vJ-yV

RECONCILED

objective of Federal,

-

■

New

Street,

future.

you

Our

1 *A statement by Mr. Smith be¬

Wall

*

-id /.

•;

•

.

& Co.,'-14
York
City,

Hammill

Shearson,

.

George D. Rees

•.■

for

is

this committee

increase

to

VIEWS

Considerable discussion goes on about what may

On

know that

whole market.

*.

-1

change of the proposed admission

savings.
anxious

H. Stanley Kruscn

r

want to put it to work so
that it can either earn something

own

d

,

the

and you

m

e

brought.
also had

list. ... Nonetheless,
before the recent announcethe

members of the

con¬

1

s

Winthrop H. Smith

of

position of the

TREASURY

AND

FEDERAL

is lying fallow

is

stock

rest

government market during the coming months, since it is be¬
lieved in some quarters the breach between Federal and the Treasury
over the level of interest rates will be resolved in the not too distant

cerned the money

ownership

But

Jower yield for new bills

the

had improved the technical

•

That $1,000 of
yours is equity capital if you, in¬
dividually, personally and of your

some

upon

above your

account

reserve.

effect

salutary

ment; because the favorable response to the December operation ;

-

in your
normal

$1,000

by the Treasury last Monday for the

the market was in good shape even

question only in terms of people.
Assume that you have, through
the exercise of reasonable frugal¬
ity

«

...

considerable demand into the near-term market, which
a

shortage

.

.

financing and the

.January

everybody

that

.

.

.

Opening of the book

interested in these days?

so

.

government market and indications are this will be the case, until
end of the year, because many adjustments still have to be made

common

or

obligations continue

.

.

the flow of

equity capital. I won¬

months I have been

many

J

1

the

of

.

der, however, if we are all think¬

For

To Admit Two

on the constructive side
intermediate maturities of- the ineligible
obligations.
,
There has also been a good demand for the longer
eligible issues, but the buying of these securities has not been as
sizable as that of the tap bonds.
Savings institutions and fire and
casualty companies have dominated the action in the restricted ob- j
ligations.
Considerable switching is being done from both longs j
and shorts in the 1%% notes, as well as from the eligibles into the;
restricted issues.
The volume and activity have stepped up in

explaining investments.

SEC issue literature

or

By JOHN T. CHIPPENDALE, JR.

Prices of Treasury

under

government; and (2) positive action by government to
tax burden on investor.
Urges either Commerce Depart¬

ease

Governments

on

,

education regarding investment by industry

more

Reporter

,

Ascribing diminishing flow of equity capital to public's lack
investment knowledge and individual s .fear of taking a
chance under our tax structure, Mr. Smith advocates as reme¬
and

SHearson, Hammill Co.

,

of

dies:

13

(2497)

(V

i

Members, New York Stock Exchange

CHRONICLE

■

Our

SMITH*

By WINTHROP H.

Managing Partner, Merrill Lynch,
f

j

Equity Capital

FINANCIAL

&

.

market.

.

★

★

.

bonds, are floating around in the market looking for
As a" result, it is indicated several trades have

BILLS

...

made at prices

been

held and not

.

.

?

above those which were

prevailing in the

CERTIFICATES

&

/
"NOTES

LONG

Zy2s IN DEMAND

./J;/:"

porate : earnings ; : been

ploughed
improvements and ad¬

...Zs

BONDS

Out-of-town commercial banks

have been rather persistent buy¬

non-bank
represent
ditions and had not earnings been investors, the former have been able to pick up the longest eligible
eve n
no w./
'extremely ; high; is - a; question issue without too much effect upon quotations of this bond. . .. How¬
Anyone
who
probably to be answered by say¬ ever, recently the sellers have been holding out for better prices
Allan M. Pope
directly or in¬
ing that rebuilding an industry and have
gotten them, because it seems as though the demand was
directly in¬
would .probably:, have ; cost
far
vests, for example, in securilies of more and would have been long more sizable than it had appeared to be at first. ... ; The hew 1%%
any kind, in a
business of any delayed
had
all
equity
been note continues to attract more buyers and there is very sizable
in t

resijwe;

e

back

into

an

a

pension

or

retirement

an insurance policy is
investor and has a financial
or

stake

There
the

in

or

in

in

future

the

are

lower

far

more

income

In the higher.

of

America.

investors

brackets

Obviously

in

switching from all maturities in order

may

iton.

<•*A statement

by Col. Pope be¬

the Economic Report,
Washington, D. C., Dc. 15, 1949.

gress

on




.

rectly ahead of us when we can
least afford to wait. ;

There
crease

of

fore tne Joint Committee of Con¬

in the open market. We
be facing this long delay di¬

sought

than

our mem-

9/15/67-72 and because of swaps by

*

»

Size

plan

the 2Vzs due

of

ers

until

new.

several
as,

has

been

now

small

a

'

'

steady

.

mostly

due

lieved there will be no

to

.

.

transient,

The 2%s due

.

tiajly-exempts

for example, trie loans to vet¬
to set up their new business

week
-

on page

77)

Aubrey G. Lanston

V-

"

accumulation

center deposit banks and it is be-

'

;

•

'

were

let-up in this demand for some time

and

fairly

"MERRY

;

,

CHRISTMAS!"

* '

.

_

...

;

INCORPORATED

N. Y,

>

Telephone WHitehall 3-1200 ; !

•]

Teletype N. Y. 1-3690

"

K

*

>

15 Broad St., New York 5,

sizable blocks which appeared this
quickly.

t

-

1960/65 continue to be the leaders of the par-

put away very
•

yet.

/

Sc Co.
.
,

erans

(Continued

>

r

1952/54 have been under

by several of the large money

in¬

to go into the 414 year obliga-

r"*

.

.The December 2s due

in the formation

industries

causes,

.

;

-

•

v.

.

.

-•

i-.

14

(2498)

THE

COMMERCIAL

&

FINANCIAL

Will We

Canadian Securities

CHRONICLE

Thursday, December 22, 1949

Blair-E. H. Rollins

Spend Ou Way

Firms to

Into Socialism?

By WILLIAM J. McKAY i

Consolidation of the business of
two

By HON. JOHN W. BRICKER*
Canada

now

stands at the crossroads with regard

trade policy. Vital decisions must
crisis which would inevitably

that

the

conditions

fashion

of

detrimental

external

trade

In

the

outlook

for

the

disposal of the growing sur¬
pluses of grain and other farm
products is becoming increasingly

gloomy.

U.

S. efforts to place
portion of the^ huge
surpluses are meeting

a

domestic
with little

following alter¬
impose still
more
rigorous exchange controls
and import restrictions;
in this
way the Dominion would defeat
natives.

its

Either

ultimate

own

plan to barter wheat
against Indian minerals has fallen

latter

almost

be

of

even

Canada

hitherto
able

the

for

it is

been

in U.
of

S.

farm

her

rBritish

will

be

catastro-

phically curtailed. In addition,

un¬

adoption

sacrifice

of

disguise

and

the

immediate

cept inconvertible sterling would

market.

-f:

The fundamental precariousness
of the Canadian

which

economy,

-has been obscured of recent years
-as a.

result of the almost insatiable

world

demand

for

agricultural
products during and shortly after
the war, is now becoming more

evident. The Achilles Heel of the
-Canadian,

has

always
(been the Dominion's dependence
on adequate outlets for its enor¬
economy

mous

exportable surpluses of agri¬
cultural products on the one hand
and sterling convertibility on the
other.

Until

is achieved

healthier

a

as a

development of natural
such

balance

result of the fuller
resources

Alberta oil and Labrador

as

iron together

with

greatly ex¬
panded population, the Canadian
.economy will remain highly vul¬
nerable

to

the

favorable
vital

a

influence

external

of

un¬

The

events.

bearing of the huge agricul¬

tural

surpluses

on

the

Canadian

situation in general is emphasized
by the fact that all previous eco¬

nomic

depressions in the past few

decades have been preceded by a
-marked fall in the price of wheat

,and other farm products.
In

order

......

to

meet
..

x.

the

rapidly

^

,

detenoratmg situation Canada

.

in,

the

further

Canadian
correct

devaluation

dollar,

both the

of

would

' the

tend

Canadian deficit

foreign trade _■ account with
this country and the British deficit
in

trade'

with

Canada.. Looking
further -ahead also the
possibility
can
not be ignored that sterling
will not
always be a depressed
currehcy. The acquisition of sterl¬
ing at its present lowly level'
could

ultimately

profitable

prove

if

only as a result of an eventual
rise in the U. S. gold
price.

During the week there

was

of

as

a

and

our

ferings.

the

The

PROVINCIAL
MUNICIPAL

rate

the

in later sessions and Bell
also

following the
pany's

reacted

news

application

mediate

rate

boost

sharply

that the

had

com¬

WORTH 4-2400

NY

Y.

1-1045




thought of

on

political

our

78)

page

Policyholder's Stake in Sound

L.

Blair

&

Co.,
of

50
the

S.

Congress

1920, the
Co., Inc., wai
adopted. When Blair & Dp;, inc.*/
merged with the securities affili¬

;

&

ate of The Bank of Ameiica

New

Mose¬

York

and

Boston Stock

Exchanges, will

ad¬

A.

and

Fred

Joseph

Richardson

May, 1929, the name Bancamerica-Blair Corporation was adopted.
1939

the

company

i

everted

In addition to partici¬
pating in the construction and fi¬
nancing of the country's railroads,
Blair

&

Co., Inc., and

Life insurance executive maintains

of America

conditions of continuous deficit

nation

no

financing,

others

can

E.

tion of facts about the economic * structure and its
and
we

We have

crossroads,
Before

us,

and

hackneyed
are

at

a

to

cross¬

always been at a
always will be.

firm

lands

may

prove

to

and

green

viting,

or

literally

we

ened

the

to

so

have

Board, and Warren H. Snow, as
President, has been conducted b#

cer¬

en¬

forms that

become

dead¬

meaning of the
words of warning. Yet each of us
is always keenly aware of the fact

be

in¬

they

that

very

business has

our

a

great deal

at stake in this matter of
govern¬
ment trends and policies and ac¬

tions.

We

banking

& Company

ton A, Howe, as Chairman of the

have heard it

many

the investment

merged. Since 1931 the busi*
hess, under the direction of Burf

government

We .all

us.

often and in

so

Those

of Howe, Snow

E. H. Rollins & Sons

Incorporated*

the title adopted at that time.
The present Blair organization

has nine

of

many

were

;

story

of

any

lands of the

and

firm

history and our
have .taught uS

reasonably expected

as

Rollins & Sons

1876, has been active in mu¬
nicipal, railroad, public utility and
financing. In 1929 the

croachment on our personal and
individual liberties is not new to

uncharted

future.

may be

tainties.
The

turn,

we

experience

own

no

matter; which
are

few things which

well

as

internationally known.

H.

industrial

dangers.

trite

branch offices

through-*

out the United States and the Rol¬

lins

firm

23

branch

commenting
Dardi

tion

is in line

said:

"The

with

to partnership
on Jan.
1. Both have been asso¬
ciated with the firm for some

time,

Mr.

Schwarzkopf in
Chicago office, at 135 South
Salle

Street.

the
La

Iri

consolida*

the

ment's

anticipation
capital'market and
of

offices.

the consolidation,

on

Mr.

of
a

manage*

activd

an

steady flow

capital to industry for modern*

ization

and

enlargement

nation's productive

th4

of

facilities.

The

prestige and facilities of E. H. Rol*
lins & Sons Incorporated will con*

ous;

they

treacher¬

with the future, for we deal with

tribute to and accelerate the

desert

futures, not of cotton or oats or
wheat, but of human beings. We

rent

>

may

but

swamp,
will

sell

not

Asa

V.

Call

I need not remind
you that
business - of
life
insurance

is, perhaps
business

more

of

than any other,

scanning

tain future and trying to

nearly

as

an

uncer¬

establish,

humanly possible,

no

a

tangibles

receive

Insurance Association of
America,
New York

City, Dec. 15, 1949.

today

when

a
life insurance policy,
do, in effect, sell today the
tangibles of tomorrow. The money

we

will

builds

up

assets

that

distribute, in the form of

money, on some
the way that we

far-off
are

dayj

in

directed to

distribute it by those who pay the
We

will

do

be

when

furthered

'*/ """•

Inc."
The

main

will

firms
New

by

York

be¬

&

Co.*
*

Blair

v

office of the

be

at

44

City, the

merge4

Wall

Street*

current ad-*

dress of Blair1 & Co., Inc.
branch
in

cur¬

now

offices

Boston,

will

Major1,

be .continued

Philadelphia,

Pitts¬

now.

not

what

know

bought with that

we

expansion program

ing

we

we

of

concerned

write

but

premiums
*An address by Mr. Call at the
43rd Annual
Meeting of the Life

much

are

we

monoto¬

our

a

or

of

since

possible
explana¬

is

development

perience in the securities business

broadening subbond prices, and a pol¬
ever

cational campaign within the
business; (2) use of all
media to influence all segments of
public; and (3)

It

and

Incorpor¬
ated, Which benefits from an ex¬

survive under

tidies, artificial support of government
icy of penalizing production. Says unless we have sound cur¬
rency* life insurance business will be destroyed, and to awaken
public interest against present trends, recommends: (1) edu¬

point out that

its prede¬
prominent in the or¬

were

corporations,

President, Life Insurance Association

as

Schwarzkopf

N.AT

in

many nationally known industrial

President, Pacific Mutual Life Insurance, Los Angeles

nous,

Street,

the

at

banking firm of Wil¬

Blair

of

title

ganization
By ASA V. CALL*

be

mit

N.

that

n

cessors

they

members

5,

John

capping a successful
career in banking, railroad build¬
ing and retailing, established the
firm of Blair & Co.
Upon the
merger of Blair & Co. with the

to political

way

(Continued

and mountain¬

Moseley & Go.

BOSTON, MASS.—F.
ley

STREET

when

be

F. S.

It

a

Co., Inc.

The

ous

WALL

1890

In

re¬
'

Board

back to its former title of Blair &"

been

Two New Partners for

YORK

light the

We have

City, December 8, 1949.

may be rough

CANADIAN STOCKS

TWO

Manufacturers, New

im¬

fused.

INCORPORATED

of

an

for

6

ea C

system^ in terms of free rein it

York

way

steady

the

age of 90 and

as

sociation

roads.

Telephone

bearer of the b

would

country

our

freedom for the rest of the world.

on

golds

of

President.

as

wholly-owned subsidiary
of Blair Holdings Corporation.
Blair & Co., Inc., dates back to

state controlled

*An address by Sen. Bricker at
the 54th Congress of American In¬
dustry, sponsored by National As¬
>

stock-split accounted for a large
proportion of the earlier heavy
turnover. The market
subsequent¬
ly
turned
downwards-, - but the

pressure

a

Snow

investment

market

under

consummation of

than

liam Salomon & Co. in

at 13%-

The

will be

if not to the actual

still

the industrial
averages at a threeyear peak level. Steel
company of
Canada on reports of an iminent

were

the

Chairman

as

Mr.

tofore thought of

strong in earlier sessions with

particular

and

which

more

ing would have been averted and

a weaker under¬
tone to this section of the
market.
The

in

A. E. AMES & CO.

Communism

firm,
of

resources

malignancy of the philosophy of
pan-slavism, much human suffer¬

tending to impart

discount. The stock

and

power government of

verge,

about Jan.

or

consolidated

Dardi

responsibility for our eco¬
nomic wellbeing has brought lis
the

on

$2,750,000, will be headed by Mr.-

direct

to

The merger will

political body. To many of us our
present political plight is a dis¬
tressing realization. We have here¬

were also dull and inactive
with
the continued decline of free
funds

tinued to advance
strongly.
base-metals and the senior

CORPORATION

NEW

of

ness

paucity of new of¬
Dominion internals

corporate-arbitrage

Bricker

leadership under¬
stood the full story of the vicious-

consequence

the other hand held firm

W.

American

Canadian policy of con¬
tinued redemption of the external
and

John

Blair.& Co.-E,-:

as

Rollins, Inc.

The

by

sumption by

dictators

The combined firm

known

will have

the state in our every
day economic affairs and the as¬

made. Had

be

15, 1950..

The doctrine of direct interven¬

tion

V. D. Dardi

become effective

'

the

are

Western oils led by Pacific Petro¬
leum and
Anglo-Canadian con¬

GOVERNMENT

/fellow

the

debt

H,

lapse, human suffering and tem¬
porary loss of freedom.

an
unsatisfied
demand
for ex¬
ternal bonds the market for which
in recent years has become
in¬

creasingly thin

will

to the dead ond of economic col¬

,is

f

of

Rollins

tive business.

moving down the
which many nations

for

to

on

was

<

especially in the event of

serves,
a

has] 12%

CANADIAN BONDS

sterling for U. S. dollars
Canadian
exchange re¬

are

over

o

board

firm, is retir¬
ing from ac¬

men will agree
the road to funda¬

The

by which
ruthless kings

dian dollar. Moreover the substi¬
tution of

We

highway

on

Howe,

the

have marched to the police state,

stuff

during

era

are

human

man.

ac¬

the

age and gen¬

our

A.

hereto fore

and

the

one's

an

internationally

soul.

arbitrarily deter¬

Rol¬
Bur¬

chairman

thoughtful

we

ciety.

imperishable

an

of

both

All

over

of
Mr.

ton

again

to be free

another phase of that

wage

the

Warren

lins.

eration.

for freedom is

The

end

that

yearn

that

mined

the

and

mental changes in our political so¬

decline below

mark

and

'

yearning

greed

of

man

board of Blair,

bitter conflict.

power

to

by V. D.
Dardi, chair¬

The

in

joint state¬

a

ment

H.Snow, Pres¬

apparent

domestically in

a

recurring and

which artificial manipulation and
not natural economic trends has
determined the level of the Cana¬

the glaring
domestic

been

now

people who

battle

ment power

eco¬

ly

handicapped by
inadequacy of her

must

liberty

signed in order to prevent their
decision

is

It

govern¬

has

to

policy has been largely de¬

level.

again. In

over

yesterday

ident

the

and

even

-

in

and deficit
power

announc¬

ed

possibly the dangers of war dis¬
pelled for quite a long time.

m a n

the

prove

political system

our

Attacks government spending

every age the battle between hu-

necessarily
of exchange

but this could

in

farm

like this country Canada is grave¬
*

principles.

It .has been said that
any gener¬
that does not read history

has been paid to the level of the
Canadian Foreign / Exchange re¬
serves

market

world

its

to

financing, and lays down slogan "Exalt government
you suppress human liberty/'

should it entail further devalua¬
tion of the Canadian dollar.
:
In recent years undue attention

nomic

accept inconvertible sterling
previously vast dependable

for

would

blessing

a

Kingdom

United

market

The

a

reserves,

clear that unless Canada

now

•will

has

exports

products to the

is

Whereas

payment

its

the

situation

Dominion

obtain

to

dollars

the

serious.

more

nomic

sterling
the indispens¬

retain

policy

involve

case

to

British

growing embarrassment
of
unwidely
stocks
of
perishable
agricultural commodities* are of
In

our

will have to live it

order

was

real threat

ation

surpluses.

deaf ears. Other indications of

occurrence.

in

a

—

says

responsibilities placed on government under so-called
measures.
Urges educating youth in unshakable faith
system of government and spreading instruction in eco¬

trade and currency,
convertibility,
Or to accept inconvertible

able

the

daily

objective..

return to freer multilateral

S.*

welfare

to

in

The State De¬

success.

partment
on

lies in

the choice of the

particular

abroad

istic trends in U.

Canadian^

to

interests.
,

to recognize
definitely changed in a

have

banking firms, Blair & Co.,
Inc., and E. H. Rollins & Sons,
Incorporated,

Prominent Republican statesman, while
deploring recent Social¬

result from refusal

the nation's oldest invest¬

of

ment

U. S. Senator from Ohio

be made in order to prevent

soon

the

to her foreign

(

Merge

pay

it out.

(Continued

on

things
money

That is not

page

81)

burgh,

Angeles,
as

Chicago,
San

offices

St.

Louis,

Francisco,

in

as

principal

throughout the country.

Los

well
cities
_

_

Volume 170

Number 4866

:

THE

COMMERCIAL

FINANCIAL

&

.

CHRONICLE

Bankers

and

ETC.

;

Central

Hanover

Co.

of

New

nounced the

fice

of

Bank

York

and

has

Donovan, Walter P. Wimer, Wil¬
liam J. Schmidt, Arthur F. Mc-

an¬

promotion to the of¬

Vice-President

of

Allen, Robert P. Furey and Fred
P. McKenzie. The

following

William

dent:

G.

Allen,

Walter

were

At

the

V.

Millett, Paul A. Williams.

Both

Savings
Trustees

of

elected
and

Assistant

the

of

was

Edison

Central Savings as junior
Clerk in March, 1925. He became
Assistant
Manager in
the
De¬

joined

positors Department in 1943. Mr.
Lee

also

has

announced

the fol¬

lowing additional promotions: to
Assistant Treasurer,
August P.

Eckel, with the bank since 1928;
to Assistant Manager of the De¬
positors' Department, William C.
Lathrope, formerly Officers' As¬
sistant
1927.

and

All

with

bank

Vice-Presidents.

isters

British

big

prevent its sale at

in

that
And

inspired
now

little

It

he is hardly

(Sir

ally denied in

cisely because the devaluation

Par 1 iament

periment

that

the

ing

appointed

were

Assistant

sterling

New

York

dealt

was

it

^

if it does exist

Sven

Einais

Paul

John
C.
Siagle, John E. Thilly, Clarence
S. Welch, Thomas R. Wilcox and
Allen F. Maybee. The following
were
appointed Assistant Cash¬
Jensen,

Borup

Nunn, William E. Preston and

P.

F.

Robert

Arthur

%

%

President

Bunker,

H.

significance.

With

policy of taking the line of
by devaluing with
comfortable "safety margin" has
failed to produce the desired re¬
sults. The next move must lie in

questionable logic, however, those

British

who

necessary

mention the nonexistent

even

insignificant dealings

or

nounced

for

are

de¬

trying to undermine

confidence in the stability of ster¬

ling.

The

truth of the

of the fall

cance

ex¬

the

produce

matter

is

in the unofficial

exports
once

devaluation.

to

more

circumstances

it

in

to resort to
the

would

existing
be

the

~

height of folly to repeat an ex¬
perience. which does not produce
the desired results. It is not as if
the

extent

the devaluation

of

had

sterling

not

been

face

taking hard and unpopular de¬
cisions, and the sooner this is done

gravely handicap
it might become

But

opposite direction. Sooner or
the government will have
the imperative need for

later

of

rium that would

much

is too

The

prices should result in disequilib¬

without

that official quarters are
only ioo
well aware of the grave signifi¬

Stanton.
❖

effect

Curtis

Goodwin,

M.

Robert

iers:

is

there

Sterling

a

it will not be

results

because

and

least resistance

That is to say, if in the
a
few years a rise in
British prices or a fall in world

course

Dr.

or

Vice-Presidents: Leland S. Brown,

desired

to

British

of

in¬

inadequate

the

of

Dollar Area is not sufficient.

repeated.

in

$2.50);

failed

has

is

answer

sterling about that the volume of
goods available for export to the

position to claim credit for

a

Cripps actu¬

at

the

Area exports to the Dollar Area.

ening discount
against the of¬

in

also to

conviction.

Stafford

Exchange
Department
and Mr. Gerry, who is stationed in
Paris, represents the bank on the
Continent of Europe. The follow¬

discount. This

enthusiasm

Mr.

of 20 years.
Mr.
Bohen is in charge of the bank's

a

the

that
and

crease

July or the totally different
Cripps of September?
■> u
One thing is quite certain. Pre¬

one

the

be

problem

of

Gerry

but
in

wid¬

11 i-

a

exist

service

a

conditions

of

would

$2.80 does not

Mr. Bohen having

situation lies

devaluation

repeated
creation

the

sterling would command
confidence, and in which its sup¬
ply-would be sufficiently scarce to

having been right, for if he did,
it would be permissible to
ask
which Cripps was right, the Cripps

with

been

further discount.

which

would have emerged

ficial parity of

have

and

in

sterling

with his prestige considerably en¬
hanced. Instead, he plunged him¬
self into the new policy with an

tude is to pre¬

tend

in

at any rate had he agreed under
protest to apply the policy of de¬
valuation imposed on him against

his will, he

a

devaluing

..The remedy of the

not

the

Vice-Presi¬

Assistant

were

since

take

the

promotions

Gerry

Foreign

Depositors'
Mr.

S.

Harvey

in London with growing concern.
The
official

by

time the unofficial rate reg¬

.

record of more than 33 years and

meeting of

Vice-President

bank.

Dec.

on

and

appointed

reers,

Department at the Broadway Of¬
fice

di¬

change markets abroad is viewed

rate

every

bank for their entire business ca¬

York,

Edison

the

of

Manager

New
a

Arthur

Bohen

dents

President of Cen¬

has announced that at

the

New

were

*

Bank

regular meeting of

'■

.

20, James

of

tral

%;.<■'

■

■

York,

Thomas

James T. Lee,

*

City Bank

DeLaney, Paul J. Hanna, Sey¬
mour
L.
Johnson, Frederick J.
*

*

rectors of The National

F.

*

.

.

*

'

n

promoted to Assistant Vice-Presi¬

••

Alfred R. Wentworth
J. Woodger, Jr.
:

Cormack,
and

Ernest

LONDON, ENGLAND—The de¬
cline of sterling in the foreign ex¬

us

ficial

Einzig, maintaining there is not the slightest risk of wit¬
a second devaluation of sterling despite the selling of
sterling at discount, holds desired results of devaluation have
not been achieved and experiment of further devaluation will
not be repeated. Says next move must be in opposite direction.
nessing

CAPITALIZATIONS

Trust

Sterling

Dr.

BRANCHES

REVISED

of the results
against the repetition of the experiment. It would
be utterly pointless to try to ad¬
just the official rate to the unof¬
safeguards

By PAUL EINZIG

CONSOLIDATIONS
NEW

NEW OFFICERS,

15

inadequacy

very

No Second Devaluation of

News About Banks

'

(2499)

of

adequate.

the better.

Edgar IN. Morris Opens
Own Snv. Offices
GREENVILLE, S. C.—Edgar M.

his own office
National Bank
Building to engage in the invest¬

Norris has opened
in

the

ment

Peoples

Mr.

business.

Norris

was

sterling. They fully realize A cut of 30% exceeded the expec¬ formerly an officer of R. S. Dick¬
the possibilities it reopens for the tations of most experts. Had ster¬ son & Co., Inc.
resumption of practices which, be-? ling. been devalued by, say, 15%
Werner Kiefer has been elected
fore the devaluation of sterling, or 20% it might have been argu¬
a
General
Manager
of ' Swiss Commercial National Bank 2 and
Bank
Corporation, effective on Trust Co. of New York, on Dec. resulted in the loss of the large able that the unsatisfactory re¬
J an. 1, according to cable advices 15, it was announced by Walter part of t the: dollar : proceeds ~ of sults were due to the inadequate
received on Dec. 16 by the Corpo¬ G.
Kimball,
Chairman
of the Sterling Area exports to the Dol¬ extent of its devaluation; that the
lar Area.* *
reason why there was no increase
BALTIMORE, MD. —John M.
ration's New;; York Agencyv - D?. Board.
Mr. Bunker is also a di¬
Fritz Burkart and Armin Laub- rector of the American Metal Co.,
This danger of a resumption by of the dollar proceeds of exports Hoffman has formed John M. Hoff¬
man Co. with offices in the Mer¬
scher have been named Managers Ltd., the Lehman Corp. and the countries
outside' the
Sterling and, why the unofficial rate of
at the Corporation's head office
Area of the practice of buying sterling was once more at a big cantile Trust Building to engage
Firth Steel and Carbide' Corp.
in the securities business. Mr. Hoff¬
discount was that it was not de¬
*
❖
❖
in Basle, Switzerland, it was also
rubber, wool and other raw'mate
valued sufficiently.
But after a man was formerly with Amott,
announced.
Election of three new officers rials with the aid df cheap stea¬
Baker & Co. and was an officer of
ling and exporting them to the cut of 30% nobody could reason¬
by the Industrial Bank of Com¬
Mitchell-Hoffman & Co.
!
Thk board of directors of J. P. merce of New York was ] an¬ United States is now opce rhore ably argue in that sense.
JVIorgah & Co. Inc., on Dec. 7 ap- nounced on Dec. 19 by Walter E. very real. Should the practice as¬
There is no reason whatever to
Joins Morgan & Co.
pointed\Erank J. Smollon, John Kolb,' President. Godfrey D. sume its pre-devaluation dimen¬ suppose—indeed it has not been
(Special to The Financial Chronicle)
H. Reilly, Daniel J. McNulty and
from any quarters —
Hveem was elected Assistant Sec¬ sions it would wipe out most of suggested
LOS ANGELES, CALIF. — Jerthe advantages that were sought that if sterling had been devalued
Roger Maynard to be Assistant
retary and Otto A. Euteneuer, As¬
Secretaries
of
the
firm
while
to be gained through the devalua¬
to
$2.50 instead of $2.80 things rome Goldsmith has joined the
sistant Treasurer in
of Jan.

as

1.

«•

-

i; Director

of ; the
Climax
Molybdenum Co., was elected to
the board of -directors of The
and

rate of

,

John M. Hoffman Is

Forming Own Company

■

H.

Robert

Gaunt, Jr.

was

_

named

Promotions
Bank

an&.appointments-on Banking Division.
of

York

New

were

effective Jan. 1.
Mr.
Bates,
formerly
Assistant
Comptroller, will be in charge of
the bank's auditing program; .
-

Vice-Presidents;
Einar

C.

J-;',-

■.

Funck and Otto T. Kreuser, Sec¬
ond Vice-Presidents in the

department,

promoted to
appointed

were

Vice-Presidents.
Vice-Presidents

foreign

Also
were

Woodruff

Johnson of the commercial bank¬

ing department, Edgar H. Hall of
the branch administration depart¬

John

and

ment,

Revene,

D.

in

charge of the bank's Times Square
branch.

Promoted to Second Vice-Presi¬
dents

Harry P. Hillen and
of the foreign

were

David

A.

Scott

department, George B. L. Hostetter of the
district banking or¬
ganization, and Guillermo E. Carreras
of
the
Havanna
branch.

Hughes was advanced
Assistant Cashier in the foreign

George J.
to

department and Franklin R. Otto,
Assistant
Manager
at the San
Juan,
'

Puerto

Rico

branch,

was

promoted
to
Manager. Newlyappointed Assistant Cashiers from
the clerical staff were: Vincent G.

George
Gabelman, Eugene J. Olson, John
H. Stockdale, and George H. Sut¬
ton.
New Assistant Managers in
C. Best, Floyd M. Brown,

head

office

branches

Arthur

were:

B.

•

departments

and

Edward P. Ahrens,

Chester,




Thomas

C.

of trus¬
W: Bates to the

George

office of Auditor,

and Thomas H. McKittrick, Vice-President, were ap¬

Senior

Savings Bank

*

*

*

'

1

the past 25
Manager of the Montague
office, in Brooklyn, N.t Y.,

John J. Hayes,: for

an

distribution

initial

liquidation of $25 per share of
capital stock to stockholders of

in

record

as

of the close of business

Dec.

27, payable on Jan. 3. It is
pointed out that in order to re¬
ceive payment it will be necessary
for each stockholder to present his
stock certificate(s)

either person¬

ally at, or by mail to,, Manufactur¬
ers Trust Co., Corporate Trust De¬

partment, 55
The

York.

Broad
notice

Street, New
to

the

stock¬

holders adds:
"A

will be added to
certificate of the fact and
amount of payment and the cer¬
legend

every

tificate

will

be

(Continued

returned
on

page

to

85)

the

have

been

better.

Nor

staff of Morgan

& Co., 634 South

Spring Street, members of

icy.

that if sterling were to be
devalued once more, this time to

Angeles

pose

Having said all this, it is neces
to

a

as

second

devaluation

of

$2.50

or

even

would be any

was

formerly

the results Shearson, Hammill &
better. Indeed, the John B. Dunbar & Co.
$2.00,

Co.

sterling

pound

notes

or

transferable ster¬

ling in New York and other

over¬

markets.

seas

facts

of

Indeed, the very
the largely negative re¬

sults of the devaluation that have
been

the

registered to date rule out

possibility

more
as

far

the

to
as

of

same

resorting once
solution.

For,

it is

exports

the

to

Dollar

Area

And there is

no

reason

Lee Higginson Corporation

INVESTMENT SECURITIES

by

30%, but this meant a decline of
the dollar proceeds by some 9%.

Underwriters, Distributors

to suppose

that the total exports of the

and

Dealers

entire

Sterling Area to the Dollar Area
present a different picture.
The results registered up to now
have

completely vindicated the
policy pursued by Sir Stafford
Cripps until August.' From the
point of view of his personal rep¬
utation it is a pity that he did not
have the political courage and in¬
tellectual

his

honesty of persisting in
even after his policy

attitude

overruled by the government
while he was away in Switzer¬

was

land.; Had

he then

resigned, or

NEW YORK

•

BOSTON

•

the Los
Mr.r

Exchange.

Stock

Goldsmith

result of the depreciation of

a

possible to judge on
years
the basis of three months' experi¬
Street
ence,
Sir
Stafford' Cripps has
of the Manufacturers Trust Co. of
proved to have been right in rig¬
New York, died on Dec. 13. Mr.
idly opposing devaluation until he
Hayes
was
an
Assistant Vice- was overruled by the government
President of the company, with in
August. He said that a devalua¬
which he had been connected for tion would not improve the Brit¬
31 years.
ish balance of payments, and that
it might even widen the dollar
On Dec. 9 the directors of The
gap. How right he was! The Oc¬
National
Bronx
Bank
of
New tober
figures show an increase of
York, at 360 East 149th Street, the sterling proceeds of British
authorized

would

would there be any reason to sup¬

emphasize that there is
•••/;*.•. ,'.''1':.;*
not the slightest risk of witnessing

the election by the board
of

To seek to deny or minimize

this danger is an ostrich-like pol

t

-p

York, announced, on Dec. 15,

tees

tion,

sary

«

Eighth Avenue and 14th Street

New

department,

Rockefeller,

and

••N

-

*

The New York
at

.

David

#

.

announced, on Dec. 16, by Winthrop W. Aldrich, Chairman of
the
Board, as follows: Charles
Cain,
Jr.,
Vice-President
and
Executive Officer of the foreign

pointed

the bank's

Division

A. Onderdonk, Assistant
Treasurer
in
the
Commercial
George

the official staff of the Chase Na¬

tional

Credit

Consumer

Assistant Trust Officer.

••

CHICAGO

with

and

'»

16

t

(2500)

THE

COMMERCIAL

FINANCIAL

&

Thursday, December 22, 1949

CHRONICLE

'V:1

A-v\*V.r'-V

TheiChase




as
Transfer Agent
For

many years,

the Stock Transfer Department of the Chase has served

hundreds of

corporations

corporations

as

well

national security exchanges, investment dealers

as to

and stock brokers that it

transfer agent. It has proved to these

as

be relLed

can

upon to

furnish

outstanding service, freeing the companies from
and

responsibility.

This

handle all
-

.

consistently

burden

a constant

'

performance has been made possible through the painstaking

development of
:-V:

a

highly trained and versatile staff qualified

a

phases of transfer work.

*

•

./

>

;,

'

r

to

v

■

'«

'

:;;vr
•V

The fees for Chase stock transfer services and for its other
services
a

are

moderate and

corporation to maintain

Among the trust and
Transfer agent

Dividend

agency

of stock

a

department

to

cost

do these jobs.

services offered by the Chase

are

the following:

Registrar of stock

disbursing agent

Trustee of mortgage

usually much less than it would

agency

Subscription agent

bonds, debentures and notes

Paying agent for principal and interest
Registrar of bonds and debentures
Depositary-exchange agent under reorganizations,
recapitalizations and

mergers /■

i

Agent for trustees under voting trust agreements
Agent under

THE

escrow agreements

CHASE
OF

:

.

.

,

.

•

7

BANK

THE CITY OF NEW YORK

:

TRUST DEPARTMENT

11 Broad

.

NATIONAL
-

Street, New York 15, N. Y.

Member Federal Deposit Insurance Corporation

,

f j' :

V.

Volume 170

THE

Number 4866

COMMERCIAL

&

FINANCIAL

CHRONICLE

(2501)

17

Securities Industry Must Unite in Striving for
Better Public Relations
During the
Association

past ten

has

this

years

V'

.

with

few

a

trade

"

~

In

cardinal

prin¬
of fair

ciples

V'V'A

all

of

common

denominator

into a
organi¬

Interest"

substituted

which

zation

gradually
beginning to

T. Armitage

be

an

The

belong.
growth

nec¬

essarily must be slow because of
limited

our

And let
a

financial

resources.

here that I
balanced budget.
Much
me

say

accomplished
volunteer
we

tion.

by

for

am
can

be

enthusiastic

an

organization,

provided

headed in the right direc¬

are

To

me,

in
the
Congressional
Washington.

halls

matter

term

of public

relations.

"Equity Capital" and

Wants

urges

our

number

one

is to unite the various
segments of the industry in the
problem

ment

banking business—an indus¬
try so essential in maintaining a
free economy for the nation,
A

a

concentrated attack upon the

"Ownership

lems

"a concentrated

must
us.

problems which beset

our

of that "Charity begins at home,"

so
I recommend that all our member

industry/'

political ramifications.
means,

Let

us

take number

one:

V- We

the

therefore,

we

By proper

must

find

of making our influence felt

38th

Annual

Investment

.

This

in turn may lead them to a num¬

problems may be sum¬
marized in terms of the necessity
of creating a background of un¬

houses give immediate thought to

ber

-

derstanding

and

cooperation

by

of

financial

Convention

Bankers

of

Associa¬

newspaper

so

vital

little
that

to

business

our

understood
we

—

continue

I

and

so

recommend

our

activities

under the

demonstrated

so

ably his fitness

tion of

for this work.

Dec.

England (and perhaps elsewhere)

America, Hollywood, Fla.,
9, 1949.
*




condition—both for

the
Clubs, the National Association of the duties of underwriting, the their profits, that unearned pen¬
present and for future expansion.
Companies, and the distribution of shares of stock and sions, handouts, and free services
Our free economy is indeed on
National Security Traders' Asso¬ mortgage bonds, and the financ¬ are likewise destructive.
Let us agree on some new ex¬ trial; it is subject to attacks from
ciation.
Among our members are ing of municipalities and public
pression that defines more prop¬ all sides, and that important seg¬
probably some who are affiliated works.
with all these organizations, and
"equity
capital," such as ment—the investment banking
Let us see if we cannot evolve erly
business—certainly needs an ad¬
most of us with a number.
We some term more
appealing to the "ownership interest" or "owners'
vocate.
What better vehicle is
should strive, therefore, to find a
public than the little understood participation" — something that
denotes possession of a live asset there than the IBA, which is free
common
denominator for these words
"equity capital."
I have
organizations in the matter of tried to read all the
by the individual who is about to from * dictation by any special
Investment

leadership of Joseph T.
Johnson, who has agreed to serve
*
Address by Mr. Armitage be¬ for the
coming year and who has

fore

prob¬

which beset our industry
be launched by each one of

These

interest in that business.

an

acquaint these law¬
Washington with the

difficulties confronting the invest¬

embark in this form of invest¬
public relations, tax structure, and advertisements
pertaining
to
regulation. With united effort, we equity capital—some of them pre¬ ment. This again implements pub¬
correlated matters of regulation, can make
headway in all these pared with great care and by able lic relations.
education, tax reduction, and pub¬ situations, but if we continue to
And we must keep in mind the
staffs—-but I confess that most of
lic
relations; our second is to be divided by different opinions,
them leave me cold by their lack lessons of 1929 and study care¬
maintain profits; and last, but not there
is
but
one' answer—con¬
of appeal to public understanding. fully the size and quality of the
least, is the political aspect.
As tinued confusion, which may spell
We are trying to reach a new security offered to the untrained
we
We should not only be
study our economy, almost defeat.
class of investor—one that is un¬ investor.
In the field of public relations— trained and unfamiliar with the energetic salesmen, but wise coun¬
everything now is found to have

ways

in

both the public and the govern¬
convictions, namely,.,„ that
effective - ad- have the New York Stock Ex¬
educating their entire staff, from strikes hurt their investment, that ment, which will enable the in¬
vestment banking industry to raise
vocate for the
budgets
and .loose
change, New York Curb, the As¬ chief accountant and sales man¬ unbalanced
industry
to sociation of Stock Exchange Firms, ager down to clerk and office boy. spending by municipalities and sufficient capital to place the cor¬
which we all the
porations of this country in sound
NASD, the Municipal Bond Explain to them the profit motive, other governmental bodies drain
should

Albert

and

-—

that

one

for

attack upon

is

mature

in

to

makers

organizations and segments in securities industry in striving to find

change
trade

sonnel,

Association of America

inaugural address, newly elected 1BA President pleads for united front of

ex-

-

by the* partners and officers of
these firms but by the entire per¬

•

Coffin & Burr, Inc., Boston

Incoming President, Investment Bankers

and

ideas,

By ALBERT T. ARMITAGE*
*

slowly from
the position of a
pleasant semi-trade organization,
<

j

itself

worked

They

say

in New

procedures incident to capital fi¬
nancing—and to teach them what

selors.

is

house and efforts made, not only

'-"V:

and is engaged solely in
trying to better the conditions of
our country and our industry.
A
little self-analysis within our Or¬
ganization may bring forth some
group

ideas

which

strengthen
make it

tive.

would

our

more

enable

us

membership

to

and

inclusive and effec¬

This is another way of say¬

ing, "More unity in

our

industry."

These ideas may not be possible
pointed out, many of
of accomplishment in one year or
investment means. These prospec¬ our problems stem from the po¬
two years, but it is my firm belief
tive investors should be made to litical, and I believe we should
see
that they are purchasing a work diligently to improve this that, if we continue to point and
to work in this direction, those
partnership interest in some going relationship. A painstaking study
unusual and versatile individuals
business, or in a business that is of the make-up of the Congress
who for many years have carried
be
conducted
about to be started.
Our problem should
by every the title of "bond salesmen" shall
to

arouse

their

desire

to

own

As I have

not

perish from the earth.

I

-.

18

THE

(2502)

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, December 22, 1949

Investment; Banker and the Nation's Economy
I wish that

'/■'i \;

mileage represented

•achievement, for I have travelled

By HAL II. DEWAR*

it is still with

Retiring President of Investment Bankers Association of America
Partner, Dewar, Robertson & Pancoast, San Antonio

60,000 this year, visiting va¬
receiving boun-

some

In reviewing

pitality.
Un¬
fortunately, it
does not, but
such

an

give

tegic role of investment banker in struggle to maintain

one

a

on

problem, and

'compre¬

hensive'

developments in securities industry, Mr. Dewar points

demns apathy

ex-;
does

perience

says

and dealer

at how this in-

part of some members.

our

solution lies in overcoming

chine

as

a

merchant of, securities

competitive bidding and

ma¬

of

and

economy
to

con¬

equity capital

interference,

government

practices,

urges

individuals.

to

Attacks

extensive public education

unified front of till segments of securities

tax

The

for !the

well

taken

haps, what the

vides

place in recent years pro¬ With the help of others, except as
fertile ground for the use they may relate to some current
men
who are
of this tool.
It is reasonable to IBA activity,
I shall not go into
1 • .running
t he assume that a citizen with a stake these joint problems because I
machinery are thinking.
I have in the
free
enterprise
system think the practical solution may
mixed emotions about what I have
through the direct ownership of be something within
our
own
seen
and heard.
On the credit
securities is going to be a protag¬ grasp and if this is true they be¬
:
side
of the
ledger, we have "a onist for that system.
As I see
We need come a trifle academic.
group in this business whom We more of them to fight the battle. it, the solution lies in our over¬
'are proud to call our associates
The lack of interest of the Amer¬ riding tax impediments, govern¬
> because of their
integrity, ability ican public concerning these mat¬ ment' interference and all the
; and fine spirit. On the debit side ters and the overwhelming -em¬ other obstacles, tough as
they may
of the ledger, however, I have
phasis on\ security above every¬ be—and reestablishing this busi¬
found a large amount of apathy
thing else in our economy has al¬ ness as a merchant of securities
about the broader problems of our
lowed socialistic schemes to creep to the individual.
national economy and the service
in on us gradually.
Only by a
This is a tall order.
As an in¬
-which
investment
banking
can consciousness of what is
really go¬ dustry we have not been as alert
render it.
But there is reason for
ing on can these forces be stopped. as we should have been in sens¬
hope because it is quite apparent This consciousness will not come
ing the shift in wealth and na¬
that more and more are showing
without the stimulus of a direct
tional income which has taken
greater and greater interest in the bread-and-butter stake in the
pic¬ place in the recent
past and in
fundamentals of our system.
The ture. Securities can be the means
adapting our machinery to tap
question is how to speed up the of
accomplishing this.
,
this large new class of potential
tempo of this so that we can be a
investors. It therefore means mar¬
vital factor in the current struggle
Equity Capital Problem
ket research, longer hours, harder
; against forces that are antagonis¬
To this end we have directed work, all the good brains we can
tic to our way of life.
*
a

'

Wednesday—75% of
units

stocks.

The

as

To

What

whip

:

spending

or

solution

don't

afraid oi

the only realistic

equity

Certainly

we

capital

need

a re¬

vised tax structure—and the bugs
of the securities acts — and

out

'

'

-

"

,

5

'

peculiarly strategic role in this
I say this because ownership of wealth in the form of

a

contest.

securities

is

a

tool

that

can

be

'

used

with

further
of

our

effectiveness to
democratic processes

great

the

society.

tribution

of

The broader dis¬

wealth

which

has

messages

♦Presidential
vention
ers

at

the

address
38th

by

of

Mr.

Annual

uniform

and

—

state laws, and all the other things
we are

tinue

working on, and must

to

know

work

how

con¬

But do you

on.

be the

across our

Specifically, what

of the Investment Bank¬

Association of America, Holly¬

We know

wood, Fla., Dec. 5, 1949.

not

our

recite

economy.
can

we

we

must

You

know

ahead of lis.

do?

ures

obstacles and I shall

those

A Challenge

means

stopping the various -"isms" in

their track

Con¬

can

For

ending

the

13

June

rather routine

affair

stablilized

eliminated

is

Neverthe¬

one or

ard

arti-

rates

large element

a

of the market hazard.

less,

and

interest

two notable instances
have proved that this market haz¬
far

from

eliminated,
back

being
when

and

entirely
one

goes

bit in financial history and

a

discovers that public utility bonds
of the very highest rating have
,

fluctuated
20

over

gross

in

30-day period

one

times

the

amount

of

a

profit of $5, it would seem
this is hardly adequate for

going to get
that
them?
We are going to get them
market risks, much less over-head
by securing a lot more partners
and compensation for the 17,009
in American industry
first, and so
people who particiated in the fi¬
providing a more favorable cli¬
nancing I have mentioned. Julien
mate for their advent.
Let's not
Collins gave you last year elo¬
mix up the horse and the cart. It's
quent testimony on the experience
not going to move if we do.
we

are

of

Are we making any progress?
Decidedly so. I think. A year ago
there weren't many people talk¬
ing about the equity capital prob¬

firm

one

Around

the

the

business

have

these

in

country
all

say

heads

our

matters.

the
we

men

in

ought to

examined

spending

time

these

for

this basis,

and

taking
but we
still go on. ■
:v:f'/. .7/;.
The problem here is allied very
our
risks on

closely to the problem of the in¬
stitutionalization
have told

is

there

of

savings.

I

of the groups that

some

little

we

can

do

about

,

.

capital problem

Dewar

bidding

com¬

this year primarily muster within and without our
to the equity capital problem. We present shops to apply to our sales
have done this because its solu¬ problems, a revised
concept of lem.
Today there are thousands.
tion lies at the heart of the ac¬ profits, a
drowning of defensive Ingenious merchandising methods
complishment of our broader pur¬ psychology, a sound public educa¬ are
cropping up everywhere.
It
poses. It is necessary for our busi¬ tion
program,
and, finally, an was very inspiring to me to at¬
ness welfare and it is highly im¬
over-powering belief that the job tend our two-day Public Educa¬
portant to the nation, but tran¬ can be done by us alone. It can. tion Forum
and to hear all of the
scending all this is the still greater It is being done in individual new sales devices and
techniques
purpose
that solving the equity cases.
that are being pursued;
It takes
our

The investment banker occupies

■'

"compulsory" taken out of
petitive

a

fically

merchandising

the

time.

bonds
averaged less than $5 a
$1,000 bond.It is true that the
selling of such bonds has become

have

this
me

of

are

challenge!

a

problem is to
problem.

either

rest

know about them

them.

our

little

a

30,
1949, there were over $600 million
in public utility bonds sold by the
compulsory competitive bidding
process.
The gross profit on these

life insurance—8% own

own

first

are

considers them

one

months' period

problems.

out

mathematics

startling when

compulsory

program as

industry in working

has been contended,

as

but rather is creating new monop*
olies.

ours

work In g

and, more im¬
portant
per¬

Hal H. Dewar

compulsory competitive
because it represents a
government encroachment on the
private enterprise system which
is not destructive of monopolistic

Calk attention

vestment

is

The

have

bidding

out stra¬

impediments and ot^er obstacles. Wants reestablishment of investment banker

look

banking

I

opposed

tiful IB A hos¬

„

_

is yet to come.

test

real

rious groups and
.

in spite of modi¬

us

fication in special instances.

.

.and you

the

the

field

time for these efforts to bear fruit,
we

have

You know the fig¬

going to hear
background con¬

are

interesting
tackle cerning them from Dr. Likert

on

but

the

planted
come.

I'm

seeds

being

well

harvest

will

are

the

and

,

.

going to talk about

few

a

working on
particularly those that
involved
in
merchandising.

are

problem in a positive way,
other than through the processes
of public education which I shall

—

Others you will hear about in the

reports that will follow.

refer to later.

There

something that

Ik-S,-

of the obstacles we're
anyway

this

we can

in

negative way and that is that

a

we

can

petitive
our

Competitive

We still have with

partners

<S5

compulso¬

are

willing to bid on
fairly for our

basis that pays us
time and risk.
;
still

are

defensive

profits—ridiculously
many

of our

about

We hear
members attack the
so.

investment trusts, not on funda¬
mental
ences in recent years would seem
principles
but
because
to break down the case for this they say the profit is too large.
type of operation.
Independent Yet, it is profit that has been the
for
the
studies
have
been
development, of;
made which reason
have shown the fundamental fal¬ this type of investment medium

ry

Underwriters and Distributors

us

Bidding

simply drop out of com¬
bidding accounts unless

a

We

Compulsory

is, however,
do to help

competitive

bidding.

Experi¬

*

lacies
of

(IF:

:

v..

...

v

inherent

in

this

extension

and 4 think

government fiat. Nevertheless,

should be grateful'

we

(Continued

on

page

36)

'kk(k-'k

'■ '

Investment Securities

Underwriters

Brokers

•

•;

;

LISTED

—

Dealers

*

'

.

UNLISTED

SECURITIES

MUNICIPAL

Union Securities
65

Corporation

Broadway, New York 6

W. E. HUTTON &
"

■

"i

■

.••ifc

BONDS

CO.

ESTABLISHED 1886

Telephone: HAnover 2-4800
Members New York Stock Exchange
and other

'

:

BOSTON

BUFFALO

; "":•

CLEVELAND

NEW

HARTFORD




PHILADELPHIA

SYRACUSE

Philadelphia
Easton, Pa.

.

'

•

leading exchanges

•••'.

Baltimore

;

Kr-k;I: '"OF,
CINCINNATI

YORK

Portland, Me.

j

-!'■

Bcston

Dayton

Lewiston, Me.

/

Lexington, Ky.
Hartford, Conn.

Volume 170

THE

Number 4866

COMMERCIAL

The SEC Serves
As I

man

new

to-

*

v<

New SEC Chairman asserting securities
tinue under permanent

a

nity

problems of applying

de¬

what

might

be

tion

as

proper

holds Frear Bill requiring

a
"get
acquainted"
talk. My elec¬

full cooperation

i

However,
"I quickly
"

n

g

to

includ-

myself.

once offered the post,
accepted the nomination.

who know me,
what I stand for.
I hope I bring to the chairmanship
a
working knowledge of the se¬
curities business.
I have a very
of

Those

you

know pretty well

that your indus¬

deep conviction

and does, play an ex¬
important role in the
economy of this great country of
ours.
Please believe me when I
"tell you, I have a humble and
has,
tremely
try

definite
to

sense

serve

of

my

and to

to stay

opportunity

and I shall strive to so

on

con¬

excited

much

so

public

control

The prophets of doom and
the counsels of despair were every-;
where.
And
yet, now that the

Also calls attention to

security offerings before effective

registration for large unlisted companies.

umpire

as

well

as

smoke

A

enjoying

views

express

so

that you might

appraise Commission thinking.
also

shall

discuss

some

of

ity

industry

our

problems. You, of
fraternity, are cer¬
tainly entitled to know my think¬

the investment

ing, and as far as I can reflect it,
thinking of the other commis¬

the

sioners.

V'

Regulation To Be Permanent
Your

industry

has

been

regu¬

all
regulation
came into being, would not only
be repetitious, but boring. We, as
well as you, assume its perma¬
nency and accept its principles-rthe Congress, back in 1933 and
1934, of course, spoke and dic¬
tated
the
statutes.
We, of the
Commission, possess great latitude
lated for

over

15 years—to go

some

the history Of how

do, to the utmost.' The securities
business, (like every other com¬
petitive business, needs
elbow
room
in which to work and to
develop.
The fundamental good and discretion in the administra¬
sense of the laws under which the
tion of some of the sections of
Securities and Exchange Commis¬ the statutes and
very
little in
sion regulates the securities busi¬ others. Of
course, where the Com¬
ness, is that those laws assume mission is
given
discretion
is
your
value.
If these laws are where the greatest trouble comes.
fairly and properly administered,
Regulation,
properly
conceived
they can give you, in keeping and administered, is an enlarge¬
with
public confidence and the ment of the old accepted principle

public interest, a full opportunity of law and order. Facetiously, we
to develop and to profit, through
are
sometimes reminded of the
personalized service to the old adage that, "Most people be¬
investor.
Regulation, at best, is lieve in law and order so long as
not very pleasant to those who are
they are laying down the law and
regulated—I know from my own giving the orders."
personal experience.
What we
At the Commission, we run the
must do is make regulations as
gamut of the financial world. We
palatable as possible.
go from the problem of the in¬
I
firmly
believe
that those
vestment adviser, who forecast by

these

crackpot

schemes

to

American

investors

$26

million,

able

to

serve

because investors

sumers

an

are

con-*

will-!

And when

mean

that they are anxious to buy

into play.

comes

In that connec¬

reminded so many times,
when the various points of view

tion, I

am

securities

companies.
which

of

For

Florida Power
serves

I

say

good

willing,

operating

The

example,

& Light Company,
the area in which

we are now visiting.
The Florida
of the
Power & Light Company, accord-,
Abe
ing to the American Power &
Lincoln, when he stated, "The
opinion V of men depends upon Light Company plan, will be dividended out to stockholders some-*
whose ox is being gored."
time in January. It will be an in¬
Of this you may be sure, it is
the definite desire mf the Com¬ dependently owned, independent-,
with a labor union to show their mission to
see
to -it that your ly operated and financed electric
true and immediate past service needs are as promptly and prop¬ utility. (My good friend and Pres-!
ident
of
the Florida
Power
&;
liability without considering the erly met as humanly possible.
Light Company, McGregor Smith,!
continuing entity of the corpora¬ v After my election as Chairman
happens to be in attendance with
tion, it could easily wipe out their of this Commission, the newspa¬
us this morning.
I am not going!
entire surplus.
This is a problem pers quoted me as saying that I
to ask him to state whether or'
with which the accounting pro¬ wanted 'the Securities and
Ex¬
not his company prefers to be an'
fession is working feverishly and
change Commission to be consid¬
independent, as I can draw upon;
in the very near future the Com¬ ered
the best place in town to do
the examples of many others who!
mission will have to adopt a for¬ business. !:! mean that. I want the
have expressed themselves, and I
mula that will govern.
public, and particularly you in the do not mean to embarrass
him.) ;
They are our problems and they industry, to get the best treatment
Furthermore,
as
unnecessary
are also your problems. Naturally,
possible: fair, courteous and ex
holding companies are eliminated,'
some
of you are, at times, dis¬ peditious.
hundreds of millions of dollars of
appointed at Commission deci¬
• f ■
Public Utility Holding Act
choice operating company securi-.
sions.
A different result would (

such
fundamental
problems as to how the United
States Steel pension plan can be
properly reflected in a balance
sheet or in a proxy statement.
Were
corporations - today
who
have signed a
pension contract
on

to

of problems ate presented,

wise old adage expressed by

•

*

not be
is

natural.

Each

one

your

own

in such

ity'

personal business, and

cases

securities

group,

;there is;,no
that

mind

self-interest always

handled

you

■

util¬ ties

With the amount of public

of you

intent upon the prosecution of

"

by

your

doubt in ony

lic.

are

'

being released to the pub¬

The result is that the invest-:

ment

fraternity is busy doing its'
(Continued

would like that I

on page

36)

honest

who sit in judgment over a regu¬

body should have a sense
They should have ma¬

latory

of realism.

the

the

and

stars

handed

someone

a

Incidentally,
*Aii

address

Convention
Bankers

at

of

Commissioner

by

38th

the

the

Association

Annual

want

to

nickel

for

dicted

of

almost

Hollywood, Fla., Dec. 7, 1949.

of

New York

a

London

Chicago

may
Because

you

his code.

in 1946,

Investment

America,

some

learn

Established 1850

Annie

turity and a sympathetic attitude.
newspaper, his "code" told him
Experience should be a prime
this meant something was happen¬
requisite.
ing in- International Nickel; or if
Today I do not intend to preach, she should happen to trip on a
I do not intend to scold, to ad¬
rock, rock is a stone and that was
monish or advise you, nor will I a reference to Stone and Webster.

McDonald

Hallsar.cn .V Co

comic

of

aid

Orphan

When

strips.

Sept.

believe it or not, he pre¬
major market turn
the day, including the
3 break.
Our work runs
every

to

AM*/

CANADIAN

and

Government, Municipal and

Municipal Bonds

Corporation Bonds

Municipal Bond Department
TELETYPE NYl-708

F. B. Ashplant & Co.
Two Wall Street

Rector 2-1545

NEW YORK 5, N. Y.

THE NATIONAL CITY BANK OF NEW YORK

Head Office:
55 Wall

1

.

67

branches

in Greater New York

Street, New York

Bell System Teletype—N Y 1-69




t

ing.

policeman.

the Tucker dream-car which cost

I right

mutual

very

from

cleared, what do we
public utility industry
finest
financial

the

health in its entire history. A util-^

Promises
as

has

find?

up¬

the

Truman's, was
speak in high sounding platitudes.
a
complete I choose only to talk to
you, to
many,

restrictions

Chair¬

surprise
Harry A. McDonald

business is here

with securities industry, and holds SEC-should act

man, like that
of
President

i

refer
briefly to the Public UtilityHolding Company Act of 1935.
Except, possibly, for the TaftHartley Act, there has never been
another piece of legislation which-

■

registration date. Takes neutral position regarding compulsory listing, but

called

,

\

regulation, explains problems relating to Public Utility

Holding Act and compulsory competitive bidding.

such

to

lft

versy.

opportu¬

liver

•

,

Chainnan

use

an

(2503)

Chairman, Securities and Exchange Commission

'change Commission.
It is, I be¬
lieve,
tradi¬
for

CHRONICLE

Financial Umpire

as

■

my public debut as Chair¬
of the
Securities and Ex-

is

tional

FINANCIAL

By HARRY A. McDONALD*

it, this talk today, in a

see

f

sense,

&

MEMBER

FEDERAL

DEPOSIT

INSURANCE

CORPORATION

|i

20

(2504)

COMMERCIAL

THE
4

'

-/t,A/*

'•<

»,im«r

&

A'1*

FINANCIAL

'~r*

CHRONICLE
•

-

A Plea For Sensible Blue
Your
industry
and
investing
public will soon have completed

which

during

years

Securities

both

jority

been

the
have

of

rities sold.

should be ade¬

to

able

some

progress

and

Urges licensees file prospectuses and offering circulars

fair

community

a

It has been my good or
(my majority stock¬

expenses.

fortune

per¬

attain

to

sons

holder thinks it bad

as

leading to

virtual abandonment of wife

and

of view, pred- child, but you can form your own
i^ated on the conclusions) to have specialized in
Arthur D. Chilgren
corporate financial work for ap¬
„ate
assumpproaching a quarter of a century.
\
Lion that Fed¬
While I can no longer lay claim
eral legislation is here to stay, as
to the intimate acquaintance with
to the basic type of State secur¬
Blue Sky laws which I was once
ities act best qualified to
safe¬
accustomed to profess, I do feel
guard the public interest.
fully qualified to say:;,that the
"y When we consider the lack of over-all State Blue
Sky situation
uniformity in present regulation,
is as cluttered as a news stand in
the endless duplication of require¬
Albuquerque and perhaps is ex¬
ments and the needless attendant
ceeded in its assininity only by
expense, it does indeed seem full
the laxity of our criminal statutes.
time that the high priests of the
Your various district legislative
cult which favors the individual
State approach bow to the plain committees have worked long and
hard to bring about uniformity
common sense of uniformity. and
simplification provided that result coupled with reasonable freedom

without

to the

public interest.

seems

that the need

damage

And it also
for affirma¬

tive

:;and aggressive
clearly indicated.

is

action

-Y..'

,

Existing State Blue Sky laws
nothing less than a hodge¬
podge. They vary through the full
regulatory acts, the fraud acts, the
notification statutes, the dealer li¬
censing laws, the old speculative
are

securities acts, to some premature

conceptions
stillborn)
ciples
is

might

I

(and

add,

of the disclosure prin¬

upon

based.

which the Federal Act

There

is

concentric

no

a

trivia of vexatious restric¬

thwarted

by

theme, but the

lingers

on

of

interest

combination of lack

a

in the form of legislatures,

the

on

trading and

local

of

part

of

the Investment Bankers

ciation

bility from

Admittedly such

issues.

intelligent

of

America,
Fla., Dec. 7, 1949.

Asso¬

Hollywood,

tive

system

of

so-called

democ¬

ciples.

is

a

law requires

it imposes

on past observance of decent prin¬
sult
under
personal disillusionments as ciples and subject to recall on evi¬
laws.
No
to the merits of the local legisla¬ dence of deviation from such prin¬

achieve

a

administration,

administrative

if achieved at the expense of

even

per¬

financial responsi¬
seeking to become a

licensed dealer in the State.

on secu¬

on new

examining

meager

no

burdens

existing

many

but

in

greater

than

re¬

Blue

securities

maximum of

Sky

law

will

success

if it

administered

by incompetents,
Based on this foundation and appointed
for
purely
political
It would be an impertinence for taking
into account the domain considerations, and by the discards
me to suggest thai; the Investment
now
allocated to
the Securities of
industry. The degree of success
Bankers
Association
should and Exchange Commission, it is attained
by our existing labyrinth
espouse-any
particular type of my conviction that modern Blue of securities laws has been
largely
law. I doubt that from the point Sky laws should take the form of due to
common sense administra¬
;

racy.

of

j.

self-interest

it

would

>;

be

wise

a

effective for you to attempt to
insist on any single form of law.

limited

statute

and

or

continued

to

the

scrutiny

licensing

tion and not

of

the letter of the law.

those

infrequent flexing of
It is not too

engaged in the sale of securities naive to hope, even in this
day of
It seems better for you to be in a With no jurisdiction or quasi-in- the 5
percenter, that State super¬
more
flexible
tactical
position. vestment adviser relationship at¬ vision of the securities business
For example, perhaps 90% of your taching to securities themselves.
may continue to be relatively as
problems in any State having a
The type of law which I envis¬ politically
untouchable
as
has
regulatory act would be solved if age
would * rest
on
provisions been the case. It is not difficult
issues registered
with the SEC somewhat as follows:
to cite instances in which a State
were exempted. However, honesty
Governor has selected as commis¬
:;i-(I) Dealers, brokers arid sales¬
compels me to say that such an men
sioner a man of unquestioned in¬
•

would be licensed for annual

exemption,

if merely grafted

on

the

political

part

of

the

commissions

•

personnel

to

of

abandon

horse

on

un¬

the

State

familiar

administrative procedures. Never¬

theless,

there

has

exception, I

have found

but

and disregardsfly-by-night se¬ the
established principle of pre¬
a sharp
shooter ventive
medicine.
People
commit
The combined
frauds; or too
stupid to be at large.
dealer
securities do not. People make er¬
registration,
notification
Mi(3) Licensees would be subject and regulatory law is a "Jack of
rors of
commission and omission;
to > "surprise'?
investigations and all trades and master of none.**
securities do not. It most certainly
audits,
Too little actual emphasis is
was not any share of Tucker stock
jd
I
'$ .
v
given
that didn't build the dream cars
(4) Licensees would be required to the registration and continuing
one

"The

answer:

human

ele¬

State ment."

deplorable, if

a

derstandable, unwillingness
*An address by Mr. Chilgren be¬
fore the 38th Annual Convention

ex¬

»

no

figurative bruises and very actual

the

as

insurance

periods under licensing procedure tegrity and ability, perhaps of op¬
average
existing State lav/,
posing political faith, given him
tions which are in no sense neces¬ would not produce an over-all re¬ involving intensive character scru¬
carte blanche in the organization,
tiny.
The- administrative
body
sary for the public welfare. I ven¬ sult which would 4be in the/irtrblie
would have authority to deny any and operation of the department
ture to question whether many of interest.
and let it be known in the neces¬
application for a license, or to
you are aware of the time and ef¬
I shall accept this opportunity
suspend or revoke any license, in sary quarters that the department
fort
demands
imposed by this to express my personal opinion as
is a shrine which is not to be
each case for j ust cause.
legislative
committee
work
or to the most desirable
touched by unclean hands. I am
type of State
(2) Licensees would file peri¬
the frequently discouraging char¬
securities
law. > The
conviction
sufficiently credulous to believe
acter of the results. The average
odic, perhaps monthly, reports of that
hereinafter
expressed -has
not
qualified men are available
iecurities sold with the adminis¬
State legislature is no more quali¬
been hastily reached but has de¬
as public servants but not as
po¬
fied
to
deal
intelligently with veloped over a lengthy period. trative agency, the purpose being litical domestics.
' /
that the quality of the securities
problems of securities than is the For
The dealer
years, commencing after the
licensing law is riot
sold would give the State agency
average person to prepare a Kinspectacular crash in 1929, I have
subject to the infirmities of other
important character and intelli¬
sey report on the Lamas of Tibet. asked
myself this question: "What
types of State securities act. For
Too often sincere and public spir¬
gence
clues as to the licensee.
is the soft spot in State securities
example, a fraud act, to use a
ited efforts to bring about im¬
Parenthetically, it is perhaps axi¬ trite
regulation?" Inevitably and with¬
phrase, "locks the barn after
omatic that the fellow who is reg¬
proved
Blue -v Sky
laws
are out
the horse is stolen"
from

pattern, there is
memory

or

discouraging the

this respect

bad

■

of

son

en¬

and

minded

tendencies

adequate

an

staff and of

reason¬

able

obtained

support

of law which would require periodic

type

proposes a

character scrutiny and provision for regular reports and investigations

experience
quate

fraud

(7) Licensing fees would be rel¬
atively high for the dual purpose
of providing revenues sufficient to

hodgepodge, Chicago attorney

are a

licensing of dealers, brokers and salesmen under procedure involving intensive

effect.

range

to

competent bank

pleads for uniformity and simplification of existing legislation. Notes there has

in

of

been in

be

ity

aminer.

great ma¬

States

can

Sky Laws

Douglas, Attorneys at Law, Chicago

Asserting existing State Blue Sky laws

Sky

legislation

This

fr

■

By ARTHUR D. CIIILGltEN*
Of Gardner, Carton &

the

Act

Blue

the

>>4

the

and

if"!'1

been progress

didn't

Tucker

turn

out.

No

share

of phony gold mine stock ever sold
itself.

ularly

handling

curities is either

file

to

circulars

prospectuses or offering
as to new issues prior to

supervision of dealers and sales¬

and the scrutiny of individual
offering thereof in the State. security issues tends to decline to
the level of application of a series
administrative body
would
Now if this conclusion is correct,
and
it
seems
incontrovertible, have authority to issue stop orders of hard and fast rules which offer
if it appeared that the sale of any but little in the
doesn't it add up that the controls
way of real pro¬
tection of the public. The language
of securities should be based upon issues would work a fraud.
of many such laws enables the ad¬
and limited to observance of the
(5) Issuers selling their own se¬
men

any

The

Under vrrters and Distributors
uf

principle that there is no substi¬
integrity. Those engaged
origination and distribution

ment

in the

themselves

of

and Dealers in the Securities of

securities—whether

dealers,
have

INDUSTRIAL
PUBLIC

CORPORATIONS

UTILITIES

•

a

issuers,
salesmen —

type

RAILROADS

of

responsibility

which

shirk,

hedge

otherwise seek to evade. Why not

MUNICIPALITIES

then limit the entire

CANADIAN GOVERNMENT

PROVINCES

'

Our Facilities
•

-

MUNICIPALITIES

•

FOREIGN GOVERNMENTS

INSTITUTIONS

will

are

INDIVIDUALS

•

•

a

a

of

license to sell

as

ministrator, if

would

agents

in

required to be li¬
dealers; the procedure

the

so

minded, to nest

inaction and avoid affirmative

decisions.
have done

therefor would apply substantially

Of

course,

cense.-"-,.

se¬

character loan, based

become

'.f:

needless

burdens.

agency

consist of

a

would

the States.

largely

staff of trained inves¬

»

tigators having the same sensitiv¬

30 Pine

As

a

practical matter

:

.

(Continued

.

on

Street, New York 5

63 \. ail
BOSTON

Commercial Paper
J

Incorporated

V

V

*

...

'

Commercial & Travelers Letters of Credit

Street, New York 5, N. Y.
PHILADELPHIA

•

•

Foreign Exchange

CHICAGO

Reoresentattves in other Cities




203

1416

So.

La Salle

Chestnut St.,

dis¬

it could not function side by side

;

Ripley & Co.

I

(6) The personnel of the admin¬ miss the disclosure type of act for

Investment Securities

Harriman

laws

standards

same

Goldman, Sachs & Co.
-

such

good—that should!

some

for intrastate

the istrative

CORPORATIONS

DEALERS

censed

as

be

.

Available, to

BANKS

curities is

of State

application

to

concept that

area

houses

of disclosure be admitted without
debate—but,
offerings as are re¬ with the entrenchment of the Se¬
quired for Federal registration;
curities
and
no
Exchange Commis¬
and the undesirable issuer would
or simply be refused a dealer's li¬ sion, many of their features have

that of honesty and due care, the

regulation
THE

as

brokers or
great moral responsibility,

gentleman
STATES

curities directly or through invest¬

tute for

Capital Issues

'.

17

Federal

Thursday,* December 22, 1949

(»•>

St., Chicago 4

Philadelphia 2

-

-75

314

Federal

North

Street, Boston lO —

Broadway, St. Louis 2

page 60)

'

Volume

Number 4866

170

THE

The

COMMERCIAL

FINANCIAL

&

1949

believe

be

to

world

year

first

the

is

It

war.

imports of sterling

in

good

the free world
shifted

has
from

of
dealing with
the
a

i

t

range of prob¬
lems and dif¬

contained

Oliver

done.

Franks

velopment
stable

a

new

and ' build

in

so

had been reached. But the
second remained to be tackled, a

covery

we

up

been

was

The first stage of re¬

the world.

de¬

have to find if

we

discover

to

are

-had

this

Europe, the one I know
best of the war-ravaged areas of

in

national

;

least

At

Western

pat¬
tern of inter-

<

reconstruction

war

ficulties, those

Sir

of

as

be solved in

can

stage neither less difficult nor less
important than the first. <-77

a

peacetime world.

not very

I

patterm of development so far as
it

be

by giving
some
account
and
analysis of
those Washington conversations at
which I had the good fortune to
be.present.
.7-,...
.7
can

now

will

You

seen

remember

the

that

profitable; but good

came

the crisis

way

United States

1949 is

a

I

gan.

This year in Western Eu¬

them include
most of the problems to be sur¬

Mr. i

sense.

far

So

rope

a

affairs

are

it seems to me that
transitional year in this

have

we

time

political

as

new

seen

first

for the

German Government

taking its
fi rst
steps
of, association 7 with
other European governments un¬
der
the
guidance of the three
High
Commissioners
from
the
United States, France and Britain.
in

In

Western

Middle

the

war

Germany

East

state

the

of

between Israel and the Arab

countries

has

ended

and

peace¬

think,

between
this

in

mounted

second

stage of

There is first what is
to be the pattern of economic de¬
recovery.

tries
are

the

economies of the

coun¬

in that part of the world
producing again. That is the

problem to which Mr. Paul Hoff¬
man addressed himself on his re¬
cent visit to Paris. Then there is
of financial and trad¬

the pattern

problems fill the stage. It is
that Mr. Nehru, Prime
Minister of the largest of the new

ing relations to be developed be¬
tween
the
sterling
and
dollar
areas.
This
issue
too
emerged

nations around the Indian Ocean,

more

time

in this year

was

able

to

leave

a

stable

coun¬

try to make his State visit to the
United
States.
In
South-East

Asia, too, this year has seen the
ending of the long and difficult
postwar problem of Indonesia. The
Indonesians

the

and

Dutch

have

clearly in 1949 and was the

subject of talks in September be¬
tween the United States, Canada
and Britain. And lastly, there is

of economic develop¬

the pattern
ment

to

out

worked

be

between

the industrialized nations oh both
of

sides

the

Atlantic and

North

been able to arrive at agreement
about the constitutional arrange¬

the unindustrialized or only

ments for the new union of states

world.

in
'

For the first time

Indonesia.

since the

end of

this rich

and

islands

the

World

populous

War

group

of

begin to face and solve

can

the problems

of peace.

,

■77 But what seems to me likely in

political affairs, seems to me cer¬
in the economic sphere. The

tain

recovery

of the free world from
world war has

the

effects of the

two

great stages,

that of recon¬

struction of the immediate after¬
math

of the war and that of ad¬

justment to the new normal which
has to be discovered and worked
cut. if the

economic, financial and

trading relationships of our coun¬
tries are to be based on an endur¬

ing and stable foundation

By the
beginning of 1949, it seems to me,
the great part of immediate post-

This, too, has commanded
attention in 1949 as the need

more

address

Franks

before

Convention
Bankers

of

by
Sir
Oliver
the 38th Annual
the

Association

Investment
of

America,

Hollywood, Fla., Dec. 5, 19,49.

for

development,

economic

for

example, in. Asia, in the Middle
East, around the Indian Ocean and
in South-East Asia, has been more

Hume

if some

found

In

early

there

July

had

been

met

day it was obvious
that the atmosphere was friendly
and
good.
The meetings were
informal.

ford Cripps in London. There had

sire

also been

dent.

,

of

the

a

Ministers

of

British Commonwealth. There

was

Parliament.

anxiety

were

aroused. It

erally known there
The

reserves

was

of gold

in the Bank of

the conversations had been

and dollars
were run¬

Why

ning out.
! ;;v.::r'V:',:7; 7;>'77:*v/*7
7-As August went by this feeling
of uncertainty and anxiety found

dollar,,

expression

England

of

reserves

England
Not

this?

was

were

The
the

The
and

suc¬

gold

and

been finished

cheerful.

despair- and
There

of

still running out.
of
the
com¬

good and 30%

countercharges

corded

to the way

made. Some

were

thought the crisis

the

mainly due

was

use

on

were re¬

removing limitations in

of aid under the

European

affairs in Britain had Recovery Program for British dol¬

been managed.

•

lar

Others suggested

expenditures

on

goods

and

that in part American policies had

services,

been at faplt. This discussion was

prewar.

the increase of

reserve

them.

Production-.

Productivity

I

gene

one

this

morning

talk

to

Bache

of these patterns of de¬

velopment in which the second
phase of world recovery can be
traced, that between the sterling
dollar

and
not

areas

going to offer

solutions

to

trade.

of
a

the

Our

exports,

were/

(Continued

not

LEADING

a

met with

COMMOOITY

7

EXCHANGES

Participating Distributors & Dealers

be answered

i

in General Market Securities

be identified. I think most of them

we

AND

Stock, Bond and Commodity Brokers

in the next year or two can now

when

STOCK

in¬

waste of

time, for the solutions are

identified

Co.

YORK STOCK EXCHANGE AND OTHER

list of quick

yet worked out. But the ques¬

were

&

in

and Mutual Funds

^

September

yourselves and

Corporation, Municipal and State Bonds
DICK & MERLE-SMITH
-

Branches in most

principal cities with

Also in London,

Railroad

•ruceS

-

VWe offer

-

our

services

wire

our own

system.

England and I'aris, France
to

institutions, hanks, dealers,

corporations and individuals.'

.

Continuing the security business of*,
ROOSEVELT & SON
30 Pine




founded 1797

36 Wall Street
New

Street, New York 5, N. Y.

'

-

•'

York 5r N, Y.
-

'

i v

135 So-

./i **M

'P

•

<

*

^

<k

*

«

I

t

e

**

J,

*

jfc-

t

t

r

,*?, t#l. it

I'

tlx-

La Salle Street

Chicago .3, III.

£-

going

had

everr.;59%

on page

am

problems

volved. That would be
your

I

MEMBERS NEW

was

at the rate of 4 to 5%,

up

of the world.

'wish

was

the year output per man-hour

Sterling-Dollar Areas Trade Crisis
about

j

by volume above

understood
and
more
clearly seen to hold the key to
the political stability of this great
area

ap¬

all wrong. 7TK7

quite fast. In the first-half of

up

stocks of rubber and tin in Cap.ada

on

means

the

full

without

both

on

crisis

employment in
country. We had about 20-mil^
lion workers in jobs and only
just
one-quarter
of
a
million
was

this. Important decisions

press

If

the

munique seemed directly to affect

the

was

breadlines,

sides of the Atlantic. Charges and

in

and somp

going tipf.
parks were gay with flower^
neat and trim. People denied

pearances were

.much

very

everything, I thought,

construction

more

a

Bank

of

variety in the shops. A great

had

age
new

/7 'H:7:7'7.77/V;;.7;

cess.

news¬

aware

shone and

deal of repair work on war dam-

conversations

going well. Confidence in¬
the time the final
communique was issued on Sept.
12 it was generally agreed that

crisis.

sun

more

got

soon

been

looked much better than thereat*
before. There seemed to be rather

creased and by

was gen¬
a

the

in England for the month

in London

just said what

impression

that:

was

July. Any reader of the

the crisis. Yet the

were

British
Publicr curiosity and

two-day debate in the

a

The

around

the

People

These

papers must have

in their minds. A strong de¬
to be constructive was evi¬

was

conference in London

Finance

I

of

From the first

preliminary meeting > of Mr.
Snyder, Mr. Abbott and Sir Staf¬

a

Sept. 7 under the
of
Mr.
Snyder.

on

and

obstacles

create

modified.

decisions
and prospects \tere important, but
were
they enough to meet thp
problem?
7 ' 7: 7 "i-7 ■' .*'■• 7
"■ ' >

7

Chairmanship

dol¬

more

customs procedures were

to

*

were

days before the conversations be¬
We

earn

widely

tions which have to

:.v *An

partly

industrialized countries of the free

Mr.

and

Wrong, their Ambassador in
Washington; Britain by Mr. Staf¬
ford Cripps, Mr. Bevin and my¬
self. 7<'77/;;7;.•,7777777:7■.7 •'
:7 ■

velopment in Western Europe now
that

Pearson

to

pendencies, and she might also in¬
crease her dollar
earnings from
direct exports to the United States

the speech delivered by President
Truman
at Philadelphia a few

concerned,

represented by
Mr. Snyder, Mr. Acheson and Mr.
Hoffman; Canada by Mr. Abbott,
were

able

ably be

by

During 1949 three patterns of
development in the free world
have emerged more clearly which,

.

the dollars

lars by an increased sale of rubber
and tin from her overseas de¬

handled.

was

reinforced

was

use

Britain

economically. Britain would prob¬

not be weakened but strengthened

attitude

then

future

which game to he^"'under the
ropean Recovery Program. morfe

began to emphasize their, concern
and
their
strong
desire
that
Anglo-American relations should

This

the

For

Responsible organs of opin¬
ion both in Britain and America

by the

f;

procedures.

of it.

therefore to trace this

propose

alsfr

was

that might be created, by customs

to promote

would be able to

the Canadians in Washington; and

It

ernment was contemplating cptisiructive steps to remove obstacles

solution, lower¬

way

modification of Government

synthetic rubber;

stated that the United States Gov->

Sees current difficulty due to

and suggests,

area,

a

order relating to the consumption

new

to

the

ing

health and prosperity of democratic world.

the

a

imports from dollar

ing of U. S. tariffs. Concludes problem

after¬

of

of British

excess

mm e-

e

math
war

maintains Britain has made

envoy

to
open
to
substantial addi¬

a

tional area of competition includ¬

of U. S. aid, and expansion of British production has been achieved

use

along with balance of exports and imports.

the

problems

d i

goods, British

area

natural rubber

reduced U. S.

reserve to

parts of

many

Government

States

Ascribing heavy decline in Britain's gold and dollar

at-

tention

by the Canadian Government and
cn
the readiness of the United

British Ambassador to the United States

year

which

in

21

Trading Relations

By SIR OLIVER FRANKS*

of
transition
in the history of the
free world after the second great
a

(2505)

Sterling and Dollar Areas

Their Financial and
1

CHRONICLE

38)

~

22

(2506)

THE

&

COMMERCIAL

CHRONICLE

FINANCIAL

Thursday, December 22, 1949

Oil and Natural Gas Industry and the Investor
The
and

second

report

of

the

Oil

Oil and Natural Gas Committee,

Natural Gas Securities Com¬

mittee, created by the Investment
Bankers

Association

ago

nual

pre-

was

Sented

two

report,

headed by John H. Rauscher, in second

production,
which
was
accelerated, was chan¬
nelled chiefly to the United States
sharply

business, despite hazardous nature, and

rapid growth of

note3

zuelan

an¬

years

and
the

war,

Analyzes foreign and Canadian oil developments

''

to

points out both favorable and unfavorable aspects from standpoint of investor.

by

come

ments in
gas

transmission of natural

well

as

requirements.

transmission lines from regulation by Federal Power Commission.

drilled at Titusville in West¬

depth

Pennsylvania at a
GdVz feet.
Today there

are

than
in

440,000

the

most

produce

million

ihe

one

of
John Rather

the

in

250,000

service

The full text of the Committee's

years

lows:

over

The

Oil and Natural Gas Com¬

mittee

created

just two years
Mr. Carl Naumburg was the

ago.

was

Chairman.

first

That

report covered the
data

cal

and

was

in all details.

excellent

basic statisti¬
most

complete

In this present re¬

port we will not attempt to pre¬

exhaustive analysis of the

pare an

business

but

only

supplement

that report with the most impor¬
tant

changes in the business which

The oil and gas

the

all-time

of

oil

each

day;

industry is

giants.

In

one

service

-

and
stations

estimated

an

$6 billion into the business.

competitive.

the reader to

Over¬

when

ago,

avoid

reduction

a

crude oil.

Near

East

has

been

the

an

Out

this

of

vast

lems,'

were

"headaches."

Without meaning to

be
pessimistic, it appears that
they should be pointed out and
examined.
The
21lke depletion
charge against Federal income tax

product^ the gas

It

that

would have

wasted

not

was

the

curtailment

ing.

of. wildcat

drill¬

'

Oil

men

will tell you that, the

production of oil and natural gas
a

hazardous

Dry holes

business

at

best.

trillions of

costly.

The indus-

feet

of

gas

and

were

phase

of

business

the

most

The

:

operates
ucts

and

all

its

the

over

world

its definite influence

be touched

With

the

in this

on

a

U. S. GOVERNMENT

to

formulate

any

recommendations.

'

STATE

ply
of

a
a

in the

this

near

troversial

and

?

•

sible,

will

be

as

far

avoided,

There';; have
new

case,

future.

States,

the

Middle

Latin American

—

the

East

United

and

the

countries, chiefly

Oil is found in many
countries and is consumed

other

country.
The principal
the United States and

every

are

Europe. The United States is self *
sufficient

or

oil

with

respect

requirements.

It

to

crude

imports

a

the

con¬

Venezuela, with

primarily
some

pro¬

duction from the Middle East and
With

the

war,

Vene-

must

impact
;

be

consid¬

this whole

on

*

of t American

terms

methods

of American

world

whole,

prices;-

oil

prices

have been related to those in the
Western Hemisphere and
finally
to the

The interests of European coun¬

particularly

in Middle

able

East

and

also

is

other

Great

oil

Britain,
fairly siz¬

are

important

owned

Latin

However,

in

production

Venezuela

American

British

and

countries.

other

and

Eu¬

ropean markets buy dollar oil on
balance.
This includes oil pro¬
Ihe

by American

Middle

East

countries

and

in

Venezuela.*

American producers of
are'

foreign oil
in their
to preserve to some extent

important

areas

enough

balance of supply and demand
foreign markets through cur¬
tailment of production if it is de¬
a

in

sirable
the

rather

than

price of oil.

Venezuela

and

reduction

Output in
the

However,
i t i

of

both

Middle

hafe been restrained
this basis over the

East

times

at

recent

on

past.

in reflection of comconditions mentioned

v e

the price

of

Middle

was

barrel

shortly before devaluation

the

about

cut

British

13

two factors

the

cents

and

pound

foreign currencies in
The

a

other-

September.

which

competitive

compli-:

pattern

in

the foreign oil market are the re¬

MUNICIPAL

cent

SPECIALISTS

—

devaluation

factors

United States Government

On

Securities

are

currencies

basis,

rule

which

of

thumb

of

oil

products,

in, European

consumers

in

coun¬
currencies,

devalued

relationship to the pound theo¬

retically
as

'.

related.

simple
the price

a

.

tries

☆

of

and
the program of substantial
expansion of refinery facilities in
Europe.
To some extent these

IN—

to

increased

was

result

a

of

by

the extent transportation

fining costs

44%

devaluation.

affected

were

To

and

re¬

by the*

devaluation, this increase in price

State and

Municipal Bonds

DEPARTMENT

is

moderated.

Most

their
net

Chemical,

selling prices to reflect the
effect

of

devaluation,




are

uniformly higher in terms of local
Prior

C.J. DEVINE

CO.

&

p e

t i t i

to

devaluation

v e

enough.

INC.

TRUST COMPANY
Broadway, New York 15, N. Y.

and

consumers

currencies.

bank

165

European:

countries, however, have increased

prices to Eurooean

Founded 1824

-

East

crude

cate

BOND

-

United States.

tries,

of

elsewhere.

.

BONDS

its

basis

above,

from

this;

Although

Middle East production and for¬
eign operations of American com¬
panies are conducted largely on

p e t

served

andl

of

American oil company interests
dominate
both
Venezuelan
and

Europe

was

midst

process.

problem.

small amount of oil and exports
less.
Prior to
the
recent war,

as pos¬

allowing

in

duced

Venezuela.

attempting

Furthermore,

questions,

Canada has proven

the world

in

areas

important industry at

time.

ered

some

Excluding Russia, there are now
three
principal
oil
producing

un¬

statement of the conditions
most

this basis for

any
direct, public financing of
foreign oil operations undertaken

the

It will be sim¬

In

but noth¬
This, however,
to be the likely area of

appears

has

conclusions

on

few small instances of

in

without

indicated.

exception.

markets

angle

been

come.

mild

standpoint of the investor, point¬
ing; out both the favorable and
biased

has

financing in this
outstanding.

report.

an

domestic

channelling
their foreign op¬

the

production

in

unfavorable

aspects from

for

in

now

the

ing

prod¬

from

struggle..

a

immediate factor, Canadian

an

and

been

statements
mind, the Committee took the
position that this report will ap¬

subject

are

On

a

foregoing

the

primarily

time to

in

proach

as has been done by
companies has been ear¬

be handled

fare, stability and future pros¬
pects of the business, all of which
will

we

oil

pro¬

and

without

competition,

not

probability, financing of for¬
eign operations will continue to

the wel¬

on

considerable

all

industry

produces

A

foreign service, particularly in

erations

romantic

petroleum

relinquished

of new funds to

episodes in the history of indus¬
trial development in the United
States.

development,

European
markets
held
by
Venezuelan producers will not be

needs and little direct

The growth of

the

of

one

a

competitive

yet.

as

marked

conservation

Gas-producing com¬
panies, through the great trans¬
mission lines, now enable the gas
utility industry to serve over 22
this

Such

The whole matter will have to besettled through

these

laws enacted.

million customers.

Western

however, is not settled by decree.

as

financing

estimated

profitable market

a

developed

vides
are

until

is

primarily

prob¬

time

major
American oil companies carrying
on
the
work
involved.
Such

allowed to
go to waste in the air, burned by
flaring, or the well was plugged
abandoned.

seek

and

same

the past few years, but the bulk
of this has been furnished from
the general funds of the

was

and

to

markets.

amount of money has been placed

in that

produced only gas.
There being
little market for this so-called by¬

is continually under fire.
Should
this
allowance
be
reduced
it

far-reaching effect on
only the net earnings but also

came

have

many

in

accompanied by large amounts of

wells

Hemisphere
that production in
Hemisphere would

Western

business

com¬

natural gas, or

profitable businesses, has its

the

at

Eastern

and

Looking at the matter from the
point of view of the investment
banker, there has not been much

highly important industry

only in its infancy.
Many
pleted producing oil wells

other

as

holds

uncertainties

but

sphere of

no

It Was clear years
East
oil
re¬

Middle

becoming
better
understood, that this oil reservoir
ultimately would serve Europe

the

promise for the long-range
future as the foreign field.

developed that appears to be

was

Situation

much

for oil,

quest

likelihood,

oil-industry

current

ever-present threat and the new
Canadian field may have its fur¬
ther impact in the future.
another

con¬

and

Oil

Foreign

all

In

The importation of oil

the

from

own

Middle

were

markets

The

,

the price of

in

form his

clusion.

of the greatest

one

threats, but it has been somewhat
lessened by proration, which may

The oil industry, like other sound

1859,

ninety years ago, the first oil well

over

highly
production is

and

have taken place in the past year.

of

earth,
approximately

40,500,000
vehicles.
In the past three
the industry plowed back

motor

report to the 1BA Convention fol¬
•i-

the

2 billion barrels of oil per year,
over

investment field.
.

barrels

into

34,000 oil companies produce

all-time

giants

States,

miles

more

wells
some
al¬

producing

United

four

which

ing it

of

oil

ern

is

try

Since

the

to

sources

was

in

rapidly and has
provide the larger part
European and Far Eastern oil

of

Looks for legislation exempting natural

gas.

service.

war

output

East has mounted

develop¬

current

as

direct

problem
Trade

the

was

comsevere

had;

sources

thought that total consumption of
48 Wall Street, New
Chicago

Boston

•

Cleveland

f

' :

■

.

-

•

/:

HAnover 2-2727

York 5

,

.

„•

•

in

world

sufficiently

Philadelphia.*

•

Cincinnati

oil

Washington,

St. Louis
•,

>

Direct Wires to all Offices

•

Pittsburgh

San Francisco

•

.

•.

'

;

growth

in

products
crease

in

markets

to

would

absorb

crude

output.

the

and

With

consumer

.

rise

rapid

refined

this

in-*

prices there is

the question of whether this rela¬

tionship
demand

of

growing

will

be

(Continued

on

supply

preserved.
page

30)

and
If

'

Number 4866 "

Volume 170

THE

*

Stock Market
In
analyzing the volume and
composition of industrial financ¬

J-mittee
I

B

A,

tory selling price which
common

-gene P.

compared with only 18% in 1945. Comments
in

Barry,

s

t

t

a

Frankenstein
is

that

e s

preemptive rights offerings and

b 1

e

both manager underwriters and

to

participants"

many

callable

rounding

stocks

"stock

the

market

volume
such

ing

in

decline

incentive

ir?

ties. At-f:

1.948

years,

and

•capital

1949

for

was

purposes

As

new

to

order

in

the report notes
that 85% of the total borrowings
in

in

A

a

issue

the

-i'

same

corollary to this

volume

of

corporate

difference

1947

pnd

their ownership.
ities

and

1949

ranges

The high is
high in 1946. Sell¬

and not

as good as in
the first half of
business and commod¬

with

ductive to

ferings.

market
new

the

was

common

indus¬

not

con¬

stock of¬

In the last few

however,

primarily
by -government agencies or
by thousands of individual in¬
vestors. : Many industrial compa¬

declining,

stock

months,
improving stock mar¬

nies,

the /time

factor

in

obtain¬

plant and equipment.
Both
had tremendous postwar
expansion
programs.
What
in¬

however, a major part
expansion pro¬
gram was completed by the end
of 1948.
In the utility industry,
on the other hand, it is doubtful
the

has

ket

common

number

an

led

to

some

increase

in

stock
of

financing and a
offerings have been

however, are owned by a distributed successfully.
single individual, family or small I
In looking forward to the pos¬
sible industrial securities offer¬
group. As has been the'case for
ings in 1950, it seems likely that
many years, we can expect an ir¬
expenditures on newregular flow of new security of¬ corporate
ferings representing the transfer plan and equipment will be some¬
of industrial companies from pri¬
what smaller than in the current1
vate to public ownership.
year.
Assuming that next year
The
sale
of
privately owned
does not witness a sharp rise in
companies to the public is nor¬
(Continued on page 32)
mally dependent upon a satisfac¬ 1?

dustrials,
of

are

owned

abnormal

security offerings to provide new
with only 18% for that purpose
that facilities will be normal until
money has risen from 18% in 1945?
in 1945.
A section of the report
and 48% in 1946, to as muchu as at least the end of 1952.
bearing the capition "Some Com¬ 85% in 1948 and 1949.
Fundamentally,
perhaps,
the
V
ments on Financing via Preemp¬
greatest difference in the corpo¬
In this connection it is impor¬
tive Rights," discusses the present
tant to note that since the war
CORPORATE SECURITIES OFFERINGS
method
of
handling
stand-bys.
This financing plan, it is said, has there has been a marked differ¬
(SEC Data)
! - :
;
developed into "a Frankenstein to ence in the financial requirements Including Private Placements and Unregistered Issues But Excluding Commercial Bank
of industrial corporations and of
both
the
manager
underwriters
(000's omitted) —
"
Up to 1949 indus¬
and the participants," because the public utilities.
.

.

the

as

During

prices

trial

Our public util¬

railroads

and

1948,

1946.

security offerings of indus¬
trial companies is to be found in

between

be¬

This is

1948.

stand-bys.

rate

to

has

year

193.62.

ing opportunities therefore have
been about the same as in 1947

groups

'

contrasted

as

important

so

and

well below the

ing

securi¬

V^V-fe

necessary

factor,

senior

second

been

stock

common

retire

to

is

the post-war requirements of in¬
dustrials and public utilities has

stock

common

which

industrials.

prices to levels well below the
1946 highs virtually removed the

Eugene P. Barry

of

significant proportions. Discuss¬
ing the composition of borrowings
recent

level

preferred
possible, and in
years this form of

few

last

The

1950
be

and

financing had represented a stead¬
ily declining share of the total.

of

financ¬

•could

bonds

wherever

The Dow-

this

range

161.60

turn

level of

Average

in

the market risk

as

clearly disproportionate to the compensation obtained in

a

virtually the

"lay-off"-system

present

on

as

in

the general

Industrial

ity

sur¬

conditions, the

to

stock prices.

in

tween

given favor"a

related

moved

new money

this financing plan has become "a

says

in

Shields & Co.,
♦New York,
•

1

general stock market conditions, and if current advance

on

borrowings accounted for 85% of the total financing in 1948 and 1949

of

■p a r t n er

is

Jones

Eu-

is

23

Key to Industrial Financing

continues, the volume of security flotations could be large. Notes

•

the

which

(2507)

<

S

-

8c
CHRONICLE

pends primarily

the

of

'Chairman
>

"

Com-

FINANCIAL

Industrial Securities Committee of IB A holds outlook for 1950 offerings de¬

ing during the past several years,
'the report of the Industrial Se-curities

COMMERCIAL

.

.

Term

Loans

—

-

market risk in many instances-is

clearly

disproportionate

compensation
The

to ' the

obtained.

only
financing to take care of their
major post-war plant expansion

lywood, Fla.,

follows:

,

also

addi¬

needed

tional amounts of working capital
to finance the increase in inven¬
tories

and

receivables

resulting

corporate security
offerings including private place¬
ments have in the past four years
varied between $5.9 billion and

$7.0 billion.

'

•>,

'

8 Mos. End.

All

rising level of commod¬
prices.
During the current
however, the general price
has declined modestly and
this factor, together with more
careful inventory control, resulted
in a decline in corporate inven¬

year,
level

to

33%.

A number

tors account for the

of fac¬

equipm't

Working capital

_

Retirement

declining im¬

this

new

the past three years.

out

Of

in ac¬
counting for this decline is the de¬
importance

primary

cline

the

in

Whereas

volume

as

much

of

offerings
issues.

other

retire

to

made

as

tional

lion

79% of total

and

1949.

By

companies
of

low

the

end

had

interest

of

taken
rates

1946

most

advantage
to

refund

equipment

working

of

over

1944

19451

1943

1949

this

1,079,844

V 656,967

48.53

18.30

20.91

26.85

45,43,

2,825,511
562,560

4,241,775
1,722,330

3,408,523

637,803

251,757

140,889

287,039

1,182,017

2,114,682
1,164,146

442,042

405,210

167,069

186,613

795,722
;.j: 11.38

1,707,931

3,246,302

4,688,823

2,438,063

811,685

533,703

26.42

48.05

79.45

77.60

70.77

51.19

1,155,191
356,304

4,116,897
134,009
437,917

2,037,505
49,071
351,486

666,657

365,819

72,538

137,543

19-6,436

2,391,919
378,786
475,597

72,490

30,341

133,076

46,818

27,271

35,201

2.25

1.49

2.38

3.38

1,969,294

1,033,392

497,439

527,185

12.39

239,961

Other

361,170

12,010

488,278
67,484

119,747

234,044

167,582

231,452

3.35

2.59

3.42

2,750,532

2,685,903

3,600,777

debt

<

2.99

1,340,952

r

,

'

.307,958*

—

41.54

53.29

33.37

32.89

43.37

50.57

2,189,314

810,516

453,664

227,587

292,651

425,987

1,973,818
649,565

2,200,869

298,306

Retirements

39.33

946,537

207,741

62,520

1,107,002
51,775

252,659

135,231

1,230,693
169,216

551,617

96,109

28,111

17,193

26,793

33.49

1

All at SEC

addi¬

.

with figures 8 months Aug. 31,

1949

$1.1

$1.7 bil¬

offer¬

figure declined to only

utilities

on

the

Underwriters

other

—

Distributors

—

Dealers

hand normally operate with com¬

paratively

little

working

capital

that their working capital

re¬

quirements have been almost

un¬

so

affected

by the commodity price

PUBLIC
Trading Markets in

UTILITY, RAILROAD

and INDUSTRIAL SECURITIES

Corporation Bonds
Preferred and Unlisted Common Stocks
State and

Municipal Bonds

KIDDER, PEABODY ¥ CO.
FOUNDED

1865

W. C.

-Members

!Njw York and "Boston Stock Exchanges
andMjw York Qtirb Exchange
Boston

New York

Chicago

Philadelphia

)

Sales

Albany

Altoona

Providence

Baltimore

Reading

Correspondent Wires to:




and

Branch

;

Langley & Co.

Members New York Stock Exchange

Offices

Lowell

Scranton

New Bedford

Springfield

Newport

Wilkes-Barre

Dallas, Seattle, Atlanta, Washington, D. C., Buffalo

473,652

3,278,828

$562 million.
Public

1942

70.99

i

require¬
over

security

corporate

^

•„

4,590,540

5,964,105

84.62

122,798;

Other purposes

■''•

■

1946

Funded debt

with¬

for

capital

In 1946 and 1947

for

'

ings were to provide working cap¬
ital.
In the first eight months of

preferred

stock, this figure declined to
$1.7 billion or 11% in 1948 and
12% in the first eight months of

depreciation
available

allowance

billion, and in 1948

in

retirement of debt

been

and

material

ments.

1945 and
48%
in
1946 were'to provide funds for the

offerings

have

plant

the

and

money

reserves

1947

1948

'

85.28

3,338,071

Percent of total—

money

portance in industrial offerings in

v

495,978

New money
Percent of total—

}
Preferred stock—
In the face of these
rather stable overall figures, the tories in the first half of 1949 of Other purposes
©fferings of industrial securities $2.8 billions and in receivables.of
Percent of total—
bave declined from a high of 53%
$1.6 billion. Inasmuch as the ex¬ Industrial
df the total in 1946 to 39% in 1948, cess of
earnings over dividends
Percent of totaland in the first eight months of has continued
to be large, most of
New

1949

•

$4,003,796 $6,993,871 $6,466,053 $6,75-6,582 $5,901,744 $3,141,847 $1,146,914 $1,042,556

corporate

Plant &

'

"

7%%-%:

8-31-49

from the

ity

overall

The

but

programs,

full text of the Committee's

report, as presented to the 38th
Annual Convention of the Investment Bankers Association at Hot-

Proposed Uses of Net Proceeds:

trial corporations needed not

115

Broadway

New York 6, N. Y.

24

THE

(2508)

COMMERCIAL

FINANCIAL

&

CHRONICLE

Thursday, December 22, 1949

Discusses Rise in Government Securities Prices
George

B.

Vice-Presi¬
National

Kneass,

IBA Committee

on

dent of the Philadelphia

Bank,

notes

as

Chairman

eral

Govern¬

I

the

of

n v e

demns

ciation

America,
sented

port

to

re¬

the

Annual

Convention at
H

11 y wood,

o

Fla. The prin¬

cipal
of

George B. Kneass

t

themes

the

"v*e

report

the *dow

the

2y4s

and

December, 1959-62 had risen substantially by the end
20 basis points of June, at which time the Federal
the Victory 2J/2S due De¬ ceased its sales of bonds. The Fed¬

lower

on

than

cember,

The

yield

on

1967-72.
obtainable

maximum
marketable

Governments

restricted

is

now

about 2.125%.

tion,

reversal

prices

and

con¬

demnation of the Federal low in¬

policy.

The text of the Committee's re¬

port follovis:
The

during the first half of
accompanied by an eight

1949,

months'

loans,

decline

in

commercial

contributed

to an upward
prices in the medium
and long-term Government bond
pressure on

market which has

occasional

continued, with
interruptions, through

the past year.
At the time of our
meeting in 1948, the restricted
2y4s and 2Vzs were resting on

their

pegs

of

}00 and 10014,

re¬

spectively. They now show an ap¬
preciation of better than three
points, with the result that yields
are now 35 basis points lower on

of

a

the

policies of credit
restraint followed by the Federal
Reserve
Board
throughout 1947
and 1948.
This changed attitude
evidenced

was

margins

business adjustment which

occurred

Open Market Committee, ap¬
parently
that
feeling
previous
steps directed toward stimulating

the

impact of deflationary in¬

on

by

a

lowering of

security loans, liberal¬

ization of time payments on con¬

goods financing and succes¬
reductions in required re¬

sumer

sive

serves

three

has

years

shrunk

75%

to only slightly more than
billion, of which 11 billion were
owned by the banks on Aug. 31,

In

issued

policy

to the demand for
securities, the Federal

response

Open Market Committee, in the
first half of 1949, reduced its hold¬
ings of bonds maturing beyond
five years by $3,500,000,000.
Al¬
most all its bank-eligible bonds
in this category were included in
this
liquidation in addition to
larger amounts of ineligible bonds.

However, in spite of the dampen¬
of this

effect

selling,

prices

than

statement

new

this

evidence

flexibility
recent

of

policy;

of

months

not appear reasonable to tempor¬
ize
by confining new offerings

opposite extreme of starving the

either for refunding or deficit fi¬

nancing to the

Federal

has

not

gone

to

to

the

If too

announced

view of

today

high levels are reached, the
Treasury will find it so much

increasing the

supply of funds available in
market to meet the needs of

the

vestment

of

investors

in

April,
the

effect of

the

has

the

absorbing

market

at

Govern¬

when

which

had

been

the

to

pears

availability

of

credit

in

also

terpret the statement to

mean

if at

straint

is

future time
in

order,

then

toward

the

in

reserves

of
the

difficult

more

a

bank

credit

at

time

a

when

increase may not be in
interests of the entire

an

best

Snyder's subsequent
August of inten¬

announcement in

with

the

cember

We

are

a

note in connection

bond

was'

refunding in De¬
highly encouraging.

strongly of

the

majority

favor

an

and

G

bonds

for

the

to

order

Open

of

>?

members

our

increase

-

in

the

the purchase of

on

in

1950

limita¬

Series F

to

present

perhaps

amounts

in

provide greater latitude

the

investment

trust funds.

centive to

Also,

of

as

personal*
added in¬

an

the

continuity of
ings bond holding, we again

urge

active consideration of

issue

be

to

sav¬

a new

offered

only to owners of
Series D and E bonds.

maturing

conclusion that

our

interest

of issue

would

inducement

able

security

a

2.90%

at

be

to

from

reason¬

a

keep

these

funds at work for the government.

This step should be taken

in

soon

view of the steep rise in amount
of
maturities which
will
occur
after

$6

1950,

reaching amounts of
billion a year in 1952

$7

to

to 1955.
Due

largely to their yield ad¬
over marketable obliga¬

opinion

vantage

tions: of

of

re¬

year.

the return of insurance pre¬
miums to the veterans next year.

The

that this should be the beginning

that

this

recommend

as

date

in

tions to offer

Savings

a

program for the

issuance

longer Treasury obligations

Market Committee policy will be

directed

of

economy. Mr.

in¬

credit

some

market¬

sharply
to

Savings

timed to take advantage

accruing

the

period

a

we

of

readily exercise control

volume

such

in

While the emphasis ap¬
be upon increasing the

of business recession,

distribution

E

satisfactorily
ana
G sales

inflationary developments

It is

of

both the money and Treasury se¬
curities markets during the war
and after.

"drives"
of such

double

position to regulate the expansion

rigidity

maintained

Series

declined

authorities

effort toward obtain¬

from

of

continue

maturities, it places the monetary

ambiguous and inevi¬
tably subject to widely varying
interpretations. .^It can be con¬
as an

to

have
We

banking system. So long as the
bank eligible debt consists of such
a
heavy preponderance of short

wording of the above state¬

ing', relaxation

sales

net

tions

the

was

strued

meeting in

recommended

we

Treasury that it depart from

more

the

creased."

The

1949,

able debt and make it possible for
the Open Market Committee to

availability of credit should be in¬

ment

Committee

a

healthier

from

reserves

consumer

maturities, and offer from time to
time longer notes or bonds. Such
a
policy would bring about a

con¬

undesirable

time

a

to

its practice of refunding maturing
callable bonds with very short

relatively fixed pat¬

a

of rates

Despite availability of

goods and higher costs of living,

or

present conditions the main¬

tenance of

-

t

ment bonds will be continued. Un¬

der

also

.

After

orderly conditions in the Govern¬
fidence

and

intensifying support prob¬
lems in future periods of market
weakness." ■'
7 v,
1 ^

primary regard to the

security market and the

demand

avoid

general business and credit situa¬
tion.
The policy of maintaining
ment

maturity

;

difficult to price new issues
Bonds
have
been
bonds, both in relation to in¬ maintained; but F

of

exchanges of Government se¬
by the Federal Reserve

Banks with

shortest

area.

more

com¬

merce, business, and agriculture,
it will be the policy of the Com¬
mittee to direct purchases, sales,
and

year
mar¬

the

wonder

to

unwarrantedly higher
price levels by withholding its
potential supply so completely.

a

eligible in 1952, a
heavy maturities both in

ketable and savings bonds, it does

more

begun

Open
Market
Committee, after consultation with

Treasury,

become
of

we

the

of

Federal

that with

of this year. While it is true that

nearly 14 billion restricted bonds

whether

have

augmenta¬

June 28:

on

"The

tern

ing

a

in

but

rather

market

needed

economy

welcome

increasing

curities

of member banks.

Treasury

We

eral

2.25% and on bank eligible bonds

The

of orderly markets
rigid price supports.

due

more

ernment

rate

beyond
15

fluences early this year caused

terest

of the War, the amount of
bank-eligible securities maturing

end

conver-

sion of government short-term obligations into medium-term issues.

^

rise during the last year of Gov¬
bond

lions. In the four years since the

Con¬

of
pre¬

his

the Treasury to

government

policy of rigidity in government bond market and recommends

stment

Bankers Asso-

38th

Open Market Committee unload its holdings of long-term

obligations, prices of government securities continued upward in 1949.

mental Secur¬

ities

have been the failure of
offer longer than
one-year obligations in its June
and September refunding operayear may

despite anti-deflationary policy of Federal Reserve Board by having Fed¬

of

the Committee
on

uting to the bond price rise this

Governmental Securities, headed by George B. Kneass,

of

in¬

dicated by investment preferences.

maintenance

An

important

factor

contrib-

Notes

in

sales
as

Ihree-year life, Series D
this

billion.

have

fiscal

The

pace

shown

net

$2V2

of

year

to

appears

be

slackening but the notes will

re¬

main

in¬

attractive
We

vestors.

to

see

corporate

no

reasons

why

the terms of these

should

Savings Notes
changed under present

ne

circumstances.

SEVENTY YEARS

The

Committee

in

October

NVESTMENT

for the Treasury Department con¬

SECURITIES

taining suggestions
cember

the

SECURITIES

note

change

SECURITIES and

favored

consensus

1%%

FOREIGN

be

to

for

maturing

EUROPEAN

that .the

INVESTMENTS

$4 4/10ths
It

latter

emphasized
included

were

of

saw

curities of

certificates.
no

reason

moderate

MINNEAPOLIS

"exchange value," and

7

:

30 Broad Street, New York 4, N* Y.

\ Telephone Wllitehall

3-9200

i:

^

M
iM
tm

md

LYNN
MILWAUKEE

BEVERLY HILLS
-

.

'

*

*

..

.

i

.

!•'

.Cv'r.C

-V.' 7-7




NEW YORK

CHICAGO

»-7

^

if

at

money

j

further

j

later

a

date

a

should!

rates

below-par quotations, tb-*?
Federal authorities should be con-* j
tent to

see

small discounts

ligations of this type.
The
and

*

on

7

ob-j
t

7.7 77 7

Representative in Europe: '"
16 St. Peterstrasse

•

"

'

j

problems facing the fiscal?

monetary

authorities

in

the

rifcxt several years

ADLER & CO., A. G., Banquiers, Zurich, Switzerland

BOSTON

^

Teletype NY 1-515

;;
•'

a

PASADENA
WORCESTER

in

negligible

we

cause

SPRINGFIELD
LOS ANGELES

that

change

PROVIDENCE
ST. PAUL

HARTFORD

j

artdtj.

believe

GRAND RAPIDS

se¬

term

the current market with

DULUTH

The

why

should;
not be offered at prices close to!

\V

v.

_

as

development of unwar¬
exchange values on future

maturities

AKRON

of

$519 million

was

V

•

CONCORD

ex¬

any

members
'1

raiLWEtPM,A

in

billion

simplification of this financing
and that the Treasury should issue
an appropriate statement
to pre¬
vent

CLEVELAND

414-year

a

ranted

DETROIT

a

offered

bonds and

of certificates.

COMMODITIES

to the De¬

as

financing. Based on the
existing at the time,

market level

Specialists in

LISTED, UNLISTED

!

of

this year prepared a memorandum

IN FINANCE

j

will apparently
complicated by the need to fi¬
nance
sizable deficits and at the1'
be

same

on

time keep a firm check-rein

any

which

inflationary

could

well

(Continued

on

be

tendencies

present

page

31),

in

1

Tax Cuts Will
•

In

ted

Annual

38th

the

Help Government and Business!

and holds similar results would follow revisions of present

tion at Holly¬

in

wood, Fla., the

burdensome taxes.. Recommends maximum individual tax rate of

Federal

Tax¬

of

Investment

Bankers

America,

higher

;

deduction of 10% of the

Courts,

C.

they

of

That

would

Co.,

enabled

a
dividends

is Chairman,

nated

point

overdue
toward
justice;
eventually double taxation of cor¬
porate income should be elimi¬

recommended

Ga.,

Atlanta,

which

among

.

limitation

are

incomes

elimination of
and

to

excise taxes;

some

of the Committee's re¬

i The

situation

regarding

today

that

to

respects,

many

pre¬

vailing after the close of World
Then,

taxation

economists

funds

relief

as

as

was

Three

hostilities

in

after the close of
World War I, tax
.

enacted.

was

after the close of hostilities
World
War II,
tax revision
is on the threshold of the

again

future.

'

inaugurated
in
1921 and continued over the eight
revision

Tax

burden

was
eased, the greatest
prosperity this country had ever
.known
ensued.
Risk
capital
walked with confident tread into

tific

present time.

Amazing scien¬
great expansion of

enterprise.
progress,

business

activities

full

and

em¬

ployment for all swept in on the
train of tax relief.

fabes at least

reduction

more

one

of deficit financing.

that time,
in

the

arrangement

V/

.

political

of

revenue

A re¬
sources

taxation, however, not only is
possible but probable.
political

Immediate

situation

is

im¬

tion

.

business

tax rates."

uting to the prospect is complex
varied, yet pressing

hard upon the

national

A

property; also a liberalization of
the carry-forward provision of the
Internal Revenue Code.

of

less

not

$194,-billion must be main¬
annually to avert serious
business difficulties and to enable

and

tained

the

government to meet its fixed

tional

similar

possibilities for no

reductions

3%

f

levy.

.

will

when

come

is

also

we

.:

into

level of na-

toward

at

•

of tax reduction. The

string is insistence that there must
be no substantial lessening in to
tal

revenue

Treasury
In

be derived

to

from

to

corporation

the

Thus, if
raised

were

4

the

and

Ways

42%, the Treasury would re¬
from that source approxi¬

mately $1 billion more than under

taxation.

present rates; and that $1

other words, if excise taxes

*

to

be

reduced,

takes

all

other

(Continued

taxes

on page

present

pressure

Underwriters—Distributorsu

re¬

for excise

tax reduction but they do

not nec-

Members

Chicago Board of Trade

New York Curb Exchange

New York Cotton Exchange

v

Commodity Exchange, Inc.

,

no

Underwriters and Distributors
'

°f

make

120 BROADWAY

•

NEW YORK 5, N. Y.

Investment Securities

fair
tax

to which our organ iza.tion is subscribing in the interest
program
of

Branch

solving the equity capital prob¬
This includes:

lem.

v

(1)

i

The

individual

maximum

Ewpte State Svujmkg

■-■■■■ V'-

combined normal and surtax rate
should

not exceed 50%.

No tax¬

should be required to give
the
government more than ~ 50
cents of any dollar he earns.
(2) Changes in tax treatment of
capital gains: A top levy on longterm gains not to exceed 10%; a
shortening to three months of
ithe holding period; a deduction
•against other income of $5,000 a
year
for losses.
Capital gains
^should be taxed not at all; the

Philadelphia, Pa.

•

Offices
•

New York 1, N. Y.

Chicago, III.

Aicentown, Pa.

Lancaster,

payer

changes proposed are but a
erate minimum.

(3) Relief from double
of

corporate

income;




mod¬

taxation
this by

Scranton, Pa.:
...

7

f

.•

•

I

"''if

Carl M. Loeb, Rhoades
61

BROADWAY

i

,

■

-

"

& Co.

East Orange. N. J.

Syracuse, N. Y.

Mowustown, N. J.
Winston-Salem, N. C

Bridgbton,
Luvberton,

NEW YORK 6, N. Y.

Direct Private Wires la Detroit, Mich.,
Lincoln and Omaha,

Pa.

York, Pa.

PoTTSVILLB, Pa.

Baltimore, Md.,

Neb., Sioux City, la.

billion

60)

Reynolds-& (So.

revision

tax

up

of

rate

ceive

by the

(a

Means

tax

percentage points,

<

so—the

least

doing

current

of

basis

yield
an
increase of approxi¬
and retail sales of jewelry, furs, mately $250 million would result
toilet preparations and luggage. in Treasury receipts for each per¬
There is, however, a stout string centage point of increase in the
attached by the Administration to corporation income tax rate.

be essarily constitute the full scope

business must

the

law—or

start

to excise
developed

Philadelphia-Baltimore Stock Exchange

parallels cited, we
find abundant reason to believe
that opportunity offers, for the
first time in a decade, to translate
in

On ,the

Congress for cuts in the war¬
time tax increase on admissions

on

New York Stock Exchange

striking

But

tax

strong

offset

Congressional lead¬
for increasing the present 38%
on corporation income.
some

W///////////////////////////////////////////////////////////////////////////////////////////////S///////////////*

between conditions
now and then, and these we shall
.outline presently. > 7.c; \:l"i:>■
>

ers

less

possible

a

cuts sentiment has

among

firmly

differences

are

As

tax

Midwest Stock Exchange

ing, sessions of Congress.
There

increase

15

Treasury receipts.

repeal of the
: }V;-

hardly

in¬

pre¬

tax re¬

ahead

.believe, can be transmuted into
living realities by the enactment
of wise and intelligent tax legisla¬
tion at the coming, and succeed¬

less

j,:-

the

But

certainly
immediate offset

reductions. It would
months before the
would
be
reflected in

at least

be

next

come

no

of

tax.
taxes

to excise tax

Reduction

Pressure

less beneficial results in the years

just ahead.
These
possibilities,

will
to

afford

would

transpprtation fares.

consideration

estate

evenly
Republicans.

Committee

flect

income,

and

in

crease

(both telephone and tele¬

graph)

repeal

to

transportation

3%

none

at all.

To maintain such a

cations

offset

an

as

are

mini¬ early in 1950.; Pending bills

charges and expenses with
mum' deficit
financing or

The President has recommended
increase in estate and gift taxes

an

in
excise
divided al¬
between Democrats

Sponsors

duction
else

of

The yardstick also measures ex¬
cise tax reductions on communi¬

in

facing it.

have

bills

Senate)

in the

cutting

requirement

well be realistic

as

Corporation Rate Likely to Rise

Administration

by
the

may

revision

Consideration of excise

than

to

Such is the

we

reductions

scribing
levies.

on

in

.

excise
taxes.
The 3% transportation tax
is measured by that yardstick.
leaders

are

in the House

introduced

number .also

on

any program

recently recom¬
mended to Congress repeal of the
3% tax on the transportation of

most

government.

income

Cuts

President

The

been

and somewhat

by the

imposed

and

of need, we are
good authority, will

applied

to be reduced

are

amount.

con¬

yardstick

mani¬

is

for Excise Tax

Pressure

be

increase,

$1 billion there¬

of Congress when it under¬

informed

reduction

Administration's

If excise taxes

will

takes revision.

tax

immediate

as

the

be

be

offsetting

any

of

believe

by any amount certain other taxes
must be increased by .the same

Stout String Attached to

the burden of Federal taxa¬
on

high

as

members
Senate

policy
is
likely to be followed by Congress.
Why?
Because revision not in
accord with the President's policy
undoubtedly would be vetoed.

,

,

running

fore

'

.

concern

will

.

reduction

tax

no

by the President, his eco¬
nomic advisers, his fiscal subordi¬
nates and the leaders of Congress
over

perhaps

These

concern

plicit in the Administration's de¬
That was Item No. 1
sire to accomplish some measure
of tax reduction affecting a sub¬ agenda.
stantial number of individual tax¬
Approximately 150
The economic situation contrib¬

'

interest with

obviously is a

revision thus
of

enter¬

fested

burden of

likely.

expand

venture

::

wartime excise

for

The

'

product

at least, no

total
is

con¬

expand.

revision, if enacted in 1950,

Tax

holds

at,a time when the gov¬

culated

into

less than economic.

conditions, one polit¬
economic, now

Two main

Never

possibly

The government's

tax

unfolded to the

it has

as

of

steady investment of pri¬

funds

,

succeeding years brought about a
startling change for good in the
nation's economy.
When the tax

free

revision

payers

Projecting the Parallel

cannot

prise.

bearings now and

look ahead at the program for tax

During

Now, somewhat more than four

V

our

Federal taxation

years

near

goal,

With that objective as our

fiscal year

the demand for

now,

it

vate

investment

of

nation-wide.

years

revision

in

Sees Revision Now

ernment

a

venture capital.

to

Then,

•

tract if not encouraged to

every

barrier to
and
had

was

flow

the

dammed

.

of

recognized

of

burden

prosperity

greater

•

part

And

take

flow

stimulated.

be

must

ment

without

us

step fur¬

a

increase in the

an

Excise

A

intelligent static, business volume will

and

the

on

encour¬

equity capital into private invest¬

impress congressional thinking as
to tax revision. Tax cuts are cal¬

the

now,

as

Federal

by

ther,

ical and the other

War I.
:

be

can

member.

let

tax revision is strikingly parallel,
in

hard

by

As Congress

port follows:
i

and

ness

rate word,
50%; work

capital gains.

The text

should

the

cern

political

be

business must
aged to expand.

reduction to 10% of rate of

a

lax on
.

maximum

of

individual

on

j

Administration

the

peril,

only by diligent alert¬
vigorous effort; in a

stand¬

.

.

and

House

there

of revision to which Congress

devote attention.

;

economic

an

which

above

or

,

,

Following this logic

objectives

above

achieved

Malon C. Courts

at

disregard only with

can

in entirety.

The

series of tax

revisions, chief

from

Thus

long

&

continue

to

its present volume.

on common stocks.
be but a short step

receive

partner

a

50%, but

Wants capital gains tax reduced to 10%.

revenues.

taxpayers

individual

granting

of

Malon

Courts

both

As¬

sociation* of

ivhich

high and

possible increase in corporation rates. Points out lower rates may mean

sees

the

to provide re¬

placement yield,
Although
many

without

ation Committee

be increased

must

inaugurated

Conven¬

1921

25

(2509)

CHRONICLE

FINANCIAL

&

IB A Federal Taxation Committee cites benefits of tax reductions

report submit¬

elaborate

an

to

COMMERCIAL

THE

Number 4866

170

Volume

N. jr.

N. C

26

(2510)

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, December 22, 1949

Expects Continued Large Volume of Municipals
The Municipal Securities Com^mittee of the IBA, . under the
Chairmanship of William H.
•Morton, of W. H. Morton & Co.,
Inc.,
New
York, in prei

t

n

e

s

n

its

report

the

38th

nual

I

estmen,t

Association
o

1

at

ly wood,

Fla.,

pointed

,

that

out

well

*

the

of

issuance

in

1949, with
Morton

spect

to

re¬

both

the volume of

financing and the level of prices,
has followed closely the pattern
,which

prevailed

year.

in

the

'

earlier
;,

u

of

approximated

'during
~

a

to

$2,469,000,000
as
about $2,644,200,000

like period in 1948.

The records show

accumulation

housing authorities are expected
be very active as a result of

work of

Revenue Bonds.

this

enactment

of

year

the

Housing Act which became

new

law last July.... Further reference
will be made to this Act later on
in

this report..

j

,

.

,

j

Market

-

„

Despite

the weight of

new

is¬

port

-

devoted

was

our

riods

entirely to the
Special Committee on
,.

appointed

was

the average for bonds of 20 large

municipal units
Bond

shown by The

as

Buyer's Index

was

2.20%
2.11%

a

It

includes

now

substantial

a

but

unissued municipal bonds.
At the
last general election on Nov. '8
there were approximately $1,335,-

000,000

of

favorably

voted

-electorate.
about

municipal

new

issues

by

upon

This

compares

$838,000,000

last

year

the
with

and

with approximately $1,100,000,000
approved at the general election
in

1947.

the

On Nov.

the projects are making.

City.

17 it

was

a

accompanying tabulation.
»t
yield bases shown above

particularly
bank

LeRoy

as

of the first of each month

The all-time record low of
shown

as

index,

the

by

that it will be

invites the

:.4"•

Special Committee

Revenue

on

JSonds
two

?that there should be

ris

During the

year

submitted

we

interim reports to the

Board

contribution

to

the

HOW

PROFIT

TO

_

Robie

whenever

THROUGH

TAX

EXEMPTION

to

Banks at Reno, Nevada. The
of his address

Mitchell

of

Mitchell

&

Municipal Research for
Bradstreet; Austin Tobin,

investment merit
is for

a

high today—may

get higher

If

tomorrow.

you're in a fairly high bracket

March

corporate bond.

Authority;
Phillips
who at the time was

Barbour,

Special Commit¬

our

tee

no

more

difficulty in appraising
security of a municipal rev¬

the

bond

enue

and

widely

were

publi¬

^ "A

1.85%

1.42%

1945

1.62%

1.83

1.31

1.53

1.99

1.29

1.46

1.90

;

1944
r

1.77%

.1943

2.17%

during the depression of the 1930s
—perhaps

the worst. depression
this country ever experienced —•
were

trivial compared to those

so

incurred by investors in

public utility

through tax exempt securi¬
ties, NOW IS THE TIME
TO LEARN!
If your taxable income is

$16,000

over

you

be

may

than

which

laws, of from 40% to 90%
some

1.29

1.38

1.65

2.08

2.10

2.33

1.89

1.37

1.35

1.69

2.01

2.21

2.23

1.83

1.37

1.43

1.65

1.93

July
August

2.18

2.27

1.81

2.13

2.33

1.81

2.12

2.39

2.16

November

2.13

as

you as

OUR

many

NEW

your

bonds

can

be

1.64

1.86

1.59

1.83,

1.82

1.58

1.64

1.59

1.81;

ments

1.84

1.73

1.72

1.66

1.79

2.45

2.03

Rogers also expressed the opinion

1.66

1.56

1.64

1.69

that the

2.31

2.09

1.90

1.51

1.63

1.82

tion

were

to

you.

There's

today.

INDUSTRIAL, PUBLIC UTILITY, RAILROAD

HAUPT

Ill BROADWAY, NEW YORK 6, N. Y.

MEMBERS.

NEW

YORK

STOCK

EXCHANGE AND

CO.

under¬

bonds.

;

municipal

and

marketing

issues-, is

This

most

two

year

im¬

requests

for cooperation have been made to
these bond attorneys.

One concerns the
problem aris¬

UNLISTED TRADING DEPARTMENT

rent

practice

sales
of

Laurence M. Marks & Co.
1*

...»

-

.

:

.

.

'

.

.1—

New

^

^

^

.

xJ.

>

„•

wTT

York' Stock

New York Curb

*

•

-

.

Jti

Exchange

Exchange. (Associate)

<.

i

scheduling bond
Tuesdays. The selection

on

general

seller

&

cur¬

of

Tuesday for sales has become

against
are

prevalent

very

that

the~best

it

is

working

interest

and\xhe\purchaser.

three

of

the

There

unfavorable

inadequate

results: (1)
tim<j for the figuring

of bids and the holding of syndi¬
cate meetings, (2) low bids result¬

ing from

large

bidding commitr
(3) the creation of a
problem caused by the si¬
multaneous offering of numerous
issues.^ Many sales of corporate
securities are also held on Tuesr
meats and

WORTH 4-6000
OTHER PRINCIPAL

EXCHANGES
,

INFORMATION IS THE FOUNDATION OF SOUND INVESTMENT,




of his Associa¬

broader

a

revenue

ing from the

1

&

have

help of municipal bond at¬

portant.

and MUNICIPAL SECURITIES

Members

IRA

members

now

improve the credit
of

obligation.

..V

com¬

torneys in recommending to mu¬
nicipalities r features intended to

' • *'

......

favorable

very

Mr. Wood's address. Mr.

on

Municipal Bond Attorneys,

TAX-EXEMPTION"

no

many

The

explains in plain language

worth

the best municipal securi¬

1.40

need for tax exemption, tells how much tax-exempt

Send for your copy

in

classed

»We are pleased to learn from
Mr. A. A. Rogers, President of the
National Association of Supervi¬
sors
of State
Banks, that there

se
-

be

v;

standing of

BOOKLET, "HOW TO

PROFIT THROUGH

projects,

to

1.46

much net

or more.

soundly
are

of

bonds,
conceived

revenue

managed

cases

invest¬

are

minimum

a

1.42

taxable securities

yielding 8%

to

2.43

—

such investments

bring

weather

can

1.51

*

Municipal bonds.

can

from

well

among

May

investigation of tax-exempt
on

it

often; fatal

bonds

involving

ties.":

You may be well repaid by an

return

and

on

Yields

can

form of private

risk, and municipal

of your investments.

State and

or

any

finance

of

are

"Municipal
ments

2.12

paying taxes, under present

,

mortgages, that

student

almost any

2.08

June

December

industrial,

railroad bonds

or

hardly fail to admit that the mu¬
nicipal bond is far more secure

1.70

October

profit

.

mu¬

disclose

1.65

September

and don't know how to

.

study of the history of

contributed

Russell Mclnnes, also of Wood,
King & Dawson, and Daniel Goldburg, Senior Attorney of the Port

2.44

-

ap¬

materially private investments. Don't over¬
to the better understanding that is look the fact that the life of the
private
being sought.
4,-/ average
corporation
is
fairly short, whereas, with few ex¬
Phillips • Barbour and Robert
Mikesell of our Special Committee ceptions, the life of a municipality
is measured in
centuries..
on
Revenue
Bonds, along with
cized

2.36%
2.47

in

In each case the same basic
information is necessary and. there
is tto reason why such information
cannot be obtained
by the investor
if he insists upon
getting it.
;

storms

articles

1946

2.42

is

tion.

the

1947

2.21

there

investment, and that

1948

2.16

than

praising the security of the bond
of a private public
utility corpora¬

on Revenue Bonds, and others.
Copies of these addresses and of

2.17

__

Each must

appraised upon its merits, but
I wish to emphasize that there is

unbiased

York •;

Chairman of

purpose.

April

municipal

a

be

New

2.19%

January
February

of

bond any more than there

revenue

payable
are

closing,
1

simple test of the

no

in real estate

1949

Taxes

In

Mr. Wood said in part:

"There is

topic

"Revenue Bonds

was

Bank Investments."

Executive Director of the Port of

producing

that

be

of

Dun &

collections

for

L.

rector

they become available

the "paper

service

well

New York; Frederick L. Bird, Di¬

revenue

tax

as

New York; David M.
Wood of Wood, King & Dawson,

It has established

gas

bonds

Pershing,

a

revenue

of valuable

that

An4

the

at

us.

nicipal finance in this country will
that municipal
bonds, as
ten and addresses made during the a
class, rank next to the bonds of
year on the subject, of revenue the United States so far
as cer¬
bonds. Among them were one or tainty of
payment is concerned.
more by J. L. Robertson, Deputy
The losses which were incurred
Comptroller
of
the
Currency; by investors in municipal bonds

department which will pub¬
skeletonized reports of pub¬

licly owned
projects and

recommend

Many articles have been writ¬

a new

lish

reports

represented

.

Moulton, San Francisco;
Aaron W. Pleasants,
Denver; Rob¬
ert O. Shepard,
Cleveland; Fred
D. Stone, Jr., New York.-

bond program.

of

ly utilized by investors in munici¬
pal revenue bonds. «
V "
V *

S.

fine

in

as. by municipal
dealers, and that, the skeletonized
reports and comparisons be broad¬

H.

Buyer" is making

aid to them

submission

strongly

this offer
nue

M.

The "Bond

an

of

is hoped

availed of by the issuers of reve¬

William H.

of Governors—one in the forepart

substantial

a

We

5.69%, Kalloch, Boston; Chester W. Laing,
in Chicago; Mark A. Lucas, Jr., Kan¬
sas City, Mo.; Robert S.
Mikesell,
Toledo; J. W. Means, Atlanta; Fer¬

authorizations,
'along with others already made
or expected to be made, indicate

it

and

regular intervals.

at

was

May, 1*933..*

These

Oscar

portfolios,

readers,

managers

keeping up-to-date information in
their
files
regarding *• projects
whose bonds they own. The paper

least

at

among

Wood

nual Conference of the National
Association of Supervisors of State

as

•:

>

is for the information of

Apgar, New York;
Bergman, Minneapolis;
Clark, Cleveland; Wal¬
for the years 1943, 1944 and 1945,; ter W.
Craigie, Richmond; E. W.
and as of the first Thursday in Darmstatter,
St. Louis; O. Paul
each month for subsequent years. Decker,
Chicago; Everett S. Emer¬
The highest price (lowest yield) son, San Antonio; Herbert V. B.
of 1.29% as of March 7 and April
Gallager,
Philadelphia; William
4, 1946, is the all-time record top. C. Jackson, Jr., Dallas; Elmus M
The

is

The operation of the department

-

member in each Federal Re¬

serve

it

informa¬

familiar with such reports to
an idea of the progress which

one

spring meeting of the Munici?
pal Securities Committee in May.
1948, with Phillips Barbour as
Chairman., As :0ur reports, have

larged.,

and

form

at

the

one

available,

that, sufficient

tion will be given to enable any¬

,

.

It will* be recalled that this Spe¬

cial .Committee

when

intended

shown, this Committee has done "an
sues during the
year, the market
outstanding fine job in the un¬
did not fluctuate materially.
It
dertaking. The first of this year
ranged considerably higher than
the Committee was materially em
in 1948.
At the opening of 1949

are

authorized

of

May. That Association's quarterly
publication, Municipal Finance, issued in May, was devoted
entirely

*

Further, current figures are to be to revenue bond financing.
Recently .on Oct.;27, David M.
compared with those of past pe¬ \

February and the other the
part of May. The May re¬

latter

Following the spring meeting
Following is the text of the basis. The year's high up to that this year, Phillips Barbour re¬
Committee's report:
signed the chairmanship and Fran¬
')
date was a 2.10%
basis in the
cis Gallagher of Kidder, Peabody
Again, this year there has been first two weeks of May.
a
On occasions in the' past "we & Co., New York, was appointed
very substantial amount of new
issues
of
long-term
municipal have set forth for review,; com¬ Chairman.;' We are pleased to re¬
securities. It is crowding closely parison and later reference the port that the' constructive work
of the Committee has continued.
the all-time record high volume
monthly prices as shown by the
figure of 1948.
During the first above index for the past several In addition to Chairman Gallagher
19 months
of 1949, the' amount years.
Such a listing appears in the Special Committee consists of:

•compared

subject of revenue bonds at their
Annual Conference in Detroit last

as

legislation affecting municipal bonds.

the

basis.

■

year of public im¬
bond sMunicipal

to

municipal
market
H.

decisions and

court

the

trend

William

State

as

Revenue Bonds and reviews Housing Act of 1949

on

Authority, addressed

the members of the Municipal Fi¬
nance Officers Association on the

offerings and price level of 1948. Notes work of

new

next

provement

the

Bankers
H

Special Committee

of New York

at
An¬

of

a v

Afrom the volume of

g

Conven¬

tion

Report of Municipal Securities Committee of IBA shows slight change in 1949

49 Wall

Street, New York 5, New York

Telephone HAnover

2-9500

Teletype N.Y. 1-344

sales

days and increase the difficulties
(Continued

on

page

59)

Volume 170

Number 4866

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

27

(2511)

Analyzes Financing by Public Utilities
i,'. At the 38th Annual Convention
the

of

Investment

ciation at Hollywood, Fla., Robert

Mason,

Vice-President

Resi¬

aiid

dent

and percentage

and dollar value of issues

New

York office of

Central

the

Republic
(I

Co.

n c o r p o-

rated), made
public the rep o r t
of the
IBA

Public

Service Secur¬
ities

Commit¬

which

of

tee,

he is the chair¬
man.

The

port

contains

utility
financing
for
public

-

;

the

first

•,

•

months

10

re¬

analysis of

an

Robert Mason

1949

of

Reviews Federal utilities legislation.;

5

r T

.

The full text

We believe

;

the

will

be

conscious

Debt Securities—

of

Most striking is the in¬
equity financing as fore¬
cast in earlier reports of this Com¬

It will be noted that pre¬
stock
financing increased

in

sold

were

the first

this

in

Par Value

Issues

"

72

Sold

i 107
X

(2) (3)

87:

\62

$1,803,532,000
47,828,000
t
304,725,000

153

$2,156,085,000

4

31,146,400
515,990,000

394,372,900

185

Offered stockholders

$1,966,586,300

.

Par Value

Issues

$1,025,077,000

5

—

year and the par
value of such sales increased over

$211,000,000.

The following tabu¬

lation

a

shows

breakdown

the

of

private placement issues by type
■
"*.<■'V-.
t'
utility:

of

Sold

Sold

?!

l

_ _

15
-

_ -

L

_ _ -

$74,500,000

7

25

_

142,744,000

22

4-

privately (1)___v—

9,000,000

$67,100,000
107,131,000
;
1,000,000

1

w

,

■

•*.

V.'TNo.

i $226,244,000

44

Companies—
Issues
Par Value
$50,000,000
and
common
Electric, and
gas
L!-.' G4
$234,580,000
financing over $285,000,000.
Pipeline
8
234,500.000
Total equity financing accounted
Independent Telephone™ J 19
30,345,000
for 25V2% of all public utility fi¬ Water —16
16,565,000
nancing in the first 11 months of
107 i, $515,990,000
this-year compared to 13.7% in
Exclusive of the eight issues of
the first 11 months of last year. If
we excluded financing of the Bell
pipeline companies, most of the
System, the percentages are re¬ issues privately placed were small,
spectively 30.9% and 18.8%. In with 28 being for less than $1,000,this connection it is interesting to 000 each and 57 between $1,000,000
note that except for $60,000,000, and $5,000,000.
This would seem
the Bell System financing in 1949 to indicate that in the majority of
consisted entirely of the large is¬ cases private placement was re¬
over

$175,231,000

30\

stock

of convertible

sue

debentures of¬

sorted to in order to avoid the

fered to stockholders last Spring,
of which approximately one-third
or

$123,000,000

over

amount

has

been

since

stock

common

nection

the

into

privilege became effective
Sept. 1.

on

with

related to small issues.

conver¬

sion

1

Most of the

were

_

The amount of

for

subscription,

of the 73

of 1949 has exceeded

and

by approxi¬

mately $150,000,000 the amount in

of

the first

Of

months of

accompanying
the

for

the

two

of

The

periods.

decline

in

the

issues being so handled

accounting

the

the

for

issues

$338,383,200

stock

common

Offered stocknolders
f

,43.

j

"..1
(3X—

j:

8

t

223,443,900
56,820,700

.■

56,161,900

1

(4)'.

-

3-

.<

offered

is all the

remedial

*

$14,550,000

'

73

$449,619,300

36

$164,121,000

302

-

$2,642,449,600

219

$2,495,437,000

■

-

wise

Excl. ATT

Incl.ATT

Percentages—

Incl: ATT

Excl. ATT

'

$.

Debt Securities

-

74.5

Preferred Stocks
Common Stocks

%V;"

69.1%,

17.0

.-—

6.6

.9.7

7.1

20.6

>

8i.2%:

86.3%

;

10.3

8.5

f.

have

prevailed; in a reduc¬
profit to underwriters to
point where they have not
been
properly compensated for
capital risk and time and effort

tion

in

holders

have

,v%

.

...

.

...

,

.

4

9.1

,

,,

j" (1) On basis of published information, which

.

may

be incomplete.

(2) Offering of American Telephone & Telegraph Co. convertible
3Vs debentures, 1959.,
;",^j
;

I

(3) Offered to stockholders without underwriting,

j

•

(4) Figures are approximate, based
(Figures

Digest.)

compiled

from

on

respective offering prices.

information in

the

;I -;

in

and

attractiveness
of

in

reducing the
existing stock-

to

additional

The

many

Investment

Dealers'

^

'

the

hfid

negotiation,
but
the
disadvan¬
tages have outweighed the advan- '
tage of the higher price which
been

share

small -in

terms

of

per

gain to the stockholders.

-The subject of competitive bid-

Financing Utility CapRequirements and the con¬

ital

on

are

of

the

Joint

of each

\
;
,

Committee

of special interest to all of
case

»

,

type of

us.

secur-

*

ity, the Joint Committee arrived ?
af conclusions, first, from the f
standpoint of the issuing company, 4
second, from the standpoint of the
the

from

vestor.

banker,
standpoint

investment

of

third, :
the

in¬

concluding that om
grade bond issues of

medium size

000)

and

While

"where

($10,000,000-$35,000,- i
special

no

complicate the
(Continued

situation
on

page

factors
and

j

re-!

34)

stock¬

to

shows

financing

measure, accounted for by

in

reduced
In

regard

financing of the Bell System.

been

the first 11 months of 1948, oper¬

to

spreads.

There

s

1

has

little

which

change in the-pattern
spreads have followed in

in the v System the past two or three years except
aggregating $675,- in the case of competitive bidding
000,000, whereas, in the first 11 for common stocks to be offered
months of this year, they sold only first to stockholders. In this field,

companies

10

received

cases

higher net prices than
issue been sold through

; - In previous reports, the Com¬
mittee has furnished information

sold

of¬

companies

financing.
•

issues and par value of debt secur¬
ities sold competitively is, in large

ating

stock

issuing

somewhat

investment

Notes: i,;'

_

the

In the

5

taken;

be

Competitive bidding for utility i
equities, particularly common,
stocks has usually resulted in the
buying public paying a somewhat '
higher price than would other¬

clusions
Totals

]

Imperative that 1

action

promptly.

mittee
■

more

29
115,348,000 ding has recently been studied by
—--'V!/a. joint
Edison Electric Institute4 ' ; 34,223,000 American .Gas Association Com-

'

stock deals

total of 53 out

a

competitively
Negotiated
Dealer-manager basis

V- >':'•!); (4)
15
i,$113,192,300

j

holders, 10 were sold competi¬
tively, 28 on a negotiated basis,
seven on
a
dealer-manager basis
) ,
^
and eight without underwriting.
number of

this

'

The

t1948.

tabulation

breakdown

common

Sold

I

offered first to stockholders

public utility fi¬
nancing during the first 11 months

11

ex¬

con¬

public sale, both of
which under the present system,
are
extremely burdensome when

principal

converted

and work involved in

pense

it

has

^Common Stocks—

likeli-

plied through the sale of stocks,

expended;

~

competitively

the

even

an

ments of the utilities will be
sup-

ferings. ;

Preferred Stocks—

Negotiated

equities and

that

■

months of

11

year than in the correspond¬

interveningl*

larger per- '
centage of future capital require- >

ing period of last

of

crease in

ferred

manner

comments 'on

below

been

issues

more

this

interest.

mittee.

45

•»«

tabulation

all

the increase in private placement

of the Committee's

sorne

hood

■.

have

competitively
of utility debt securities, but many Negotiated
: of you may not have realized that Sold privately (1)

report follows!

through

?

A further study of

We

the

months to

change the opinion of
the Committee on this subject. In- :]
deed, with the increasing amount
of
utility financing being, done

aggregating: $60,000,- there,; has been- a definite trend our comments on three subjects
the debt toward narrowing of spreads, with affecting utilities and utility fi¬
securities sold competitively re¬ at least one case where the spread nancing. r '
veals that of the 72 issues, 19 were was
less
than
Stock * Exchange
7The Committee has in the past
between $1,000,000 and $5,000,000 commission.
expressed the opinion that com¬
each, 15. between $5,000,000 and
t
We now wish to present to you petitive bidding as presently re$10,000,000, ~ 26 "between $10,000,000:-and $25,000,000 and only 12
Public Utility Financing Jan. 1 to Nov. 30
over $25,000,000. The favorite fig¬
1949
1948
ure was $10,000,000—15 issues be¬
No.
No.
ing for this amount.
V

and

'

4

in

occurred

issues

two

000.

1948, along with a wealth of other
data affecting utilities and utility

financing.

of debt securities. Notes sharp increase

over last year in number
placed privately and says that continuing experi¬
ence has reinforced the Committee's
opinion that compulsory competitive bid¬
ding for utility equities is: unsound and * contrary to the public interest.

Manager

the

of

quired for utility equities is un¬
sound
and in its report to the
spring meeting set forth the jeasons for this opinion.
Nothing has

Report of Public Service Securities Committee of IBA provides data showing
increased volume of common stock offerings and reduction in both amount

Asso¬

Bankers

MUNICIPAL

issues

.A

and

CORPORATION
Underwriters and&Distributors

,

.

-'vf?;'V

•

'

■

■

■*.'

of

'

■

^

-r

.

v

•*

fi.

.•

*

*

j

*

fir

'■

j.*

v

.-.-V
'

'

V-'

.'•
•

'

MUNICIPAL BONDS

Direct Wire to Chicago and Miami
s

.

B.

BONDS

State, General Market, and Public Revenue

.

.

.

...

J. Van

i

.

Ingen

Municipal

;

'

!

♦

g

•''

& Co.

inc.

bonds

Phelps, Fenn & Go.
i

/

«

M
s

du

,

57 WlLLIAM

pont building

Miami 32, Fla.

-




STREET

NEW YORK 5

I

;•

135 So. La salle st.

Chicago 3, III.

COMMERCIAL

THE

(2512)

28

Thursday, December 22, 194&

CHRONICLE

FINANCIAL

&

BONNIWELL, D. R.
Government
Development

♦ATWILL, Jr.j WILLIAM **
'
\ Atwill
and Company, Miami Beach

Reports

Stock Exchange Activities

on

H

presents

International

♦BAL5D, ANDREW

^

the follow¬
Stock Exchange at the 38th Annual Convention of

"■

this

resented

t h

tee has been

to

member-

e

.

E

Stock

x-

■

Irving d. Fish

7*

d"w

'

recommendations.

"

*

The contract with the

voted
n
by a

was

gle improvement being one where¬
by the offerer has the right to
allot up to 50% of the stock to be
offered on a basis of "first come,

effect is

"

ABRAMS, Jr., JAMES S.
Allen & Company,- New York

♦AINSWORTH, WALTER W.
Metropolitan St. Louis Co., St.
'

New

between

65%

Journal

and

77.

.7-' ."

•

' 7 /...:7

Baker,

New

-

Exchange

Stock

York

ALLYN, ARTHUR C.
A. C. Allyn and Company,

"'

is also considerable agitation, par¬

ticularly among

members of the

Chicago

.

7

-

"7

Bank

the

of

City

BLACK, EUGENE R.

,

.,

BUSCAGLLA,

SECURITIES, INC.

H.

ANDERSON, Jr., WILLIAM J.
Equitable Securities Corporation,

M.

Byllesby

i

7v

BLYTH.

'

-New

The

^

Bosworth & Co,

Braun,

BOEHMLER,

.

ERWIN

Investment

Incorporated,
J

E.

Arries

&

'

CARDWELL,

7 J/7'

:

■/.-!

CARPENTER,

;7,7 77

'•>

Orleans

v

♦ARTHURS,

ADDISON

f

Tampa

Ohio

The

-

BOLGER,

7'

Lee

F.

B.

Ashplant & Co., New York

:

7-

Pittsburgh

: I "

%

CASSIN, PETER
r
British Embassy, Washington

of

names

SECURITIES

CHILDRESS, FRANCIS B.
Childress and Company,

BALANCED
INSTITUTIONAL SERIES

BOND SERIES

LOW-PRICED BOND SERIES

BALANCED

SERIES

♦CHILES,

INCOME SERIES

•

SPECIAL

7.'J|'|:'7'

7

J

♦CLARK,
.

'

Electrical

Institutional Bond
•7

Mining

Food

Equipment •

;

•

•

STOCK

Industrial Machinery

Merchandising
"■
7-" i '
$
'■
Railroad Bond

SERIES

7

INDUSTRIAL STOCKS SERIES

■

.

'•

• •

Petroleum •

Tobacco •

■

■

"
AUTOMOBILE SHARES

Equipment

•

Steel

Railroad Stock •

•

Utilities

SHARES

.

RETAIL TRADE

CHEMICAL SHARES

METAL SHARES

BUILDING SHARES.

V- 7 7.77.'i..7 7 £

7 OIL SHARES

7.

I.

V

4 .RAILROAD SHARES

Toronto

♦CLARK, ROBERT E.
Calvin Bullock, New York
CLARK.

♦CLARKE.
Atlanta

CLARK,
•y.

John

P/ease send for prospectus and information on any
or

FIRST

MUTUAL TRUST

FUND

•

investment dealer

or

Prospectus

•»

upon

request

■'

JOHN

W.

Incorporated,

Clarke,

W,

Chicago

C. COMSTOCK
Clayton Securities Corp., Bcston

CLAYTON.

alt of these classes of Croup Securities, fnc.
to your

*7 7-

& Co., Cleveland

HAGOOD

Johnson, Lane, Space & Co., Inc.,

STEEL SHARES

.

WTLLIAM H.

Merrill, Turben

SHARES

RAILROAD EQUIPMENT SHARES

JOSEPH W. G.
Dealers Association,

Investment

GROUPS SERIES

LOW-PRICED STOCK SERIES

7

INDUSTRIES

York

CLARK.

SELECTED

Investing Company •

•

AVIATION

Railroad

STOCKS

>

;

GEORGE E.
Securities Corporaticn,

Adamex
New

COMMON

Huey Co., Omaha

...

.

Aviation • Building • Chemical

Jacksonville

CHILGREN, ARTHUR D.
Gardner, Carton
Douglas, Chicago

PREFERRED ^STOCKS
PREFERRED STOCK SERIES

-

WARREN D.

Chiles,

1

GENERAL BOND SHARES

>

CHAPMAN, RALPH
Farwell, Chapman & Co., Chicago

SERIES

-

SPECULATIVE SERIES

•

•

CHAPMAN, R. C. *
Maynard H. Murch & Co., Cleveland

NATIONAL
—

...

(A Balanced Fund)

Automobile

Inc.,

Charlottesville

I

BONDS

•

7

'Chicago

♦CASSELL, CLAIR F.
C. F. Cassell & Company,

m

FULLY ADMINISTERED SHARES

Agricultural

77

CHANNER, Jr., GEORGE S.
7 Channer Securities Company, Chicago

indicated by the

•

■

.

Co., Newark

CASEY, J. DOUGLAS
;
i '
7
7 A. C. .Allyn and Company, Incorporated,

p.

LOW PRICED SHARES

&

Jr., HUGH D.
Courts & Co., Atlanta

*'

following classes

Carroll

W.

/

.77 v'

♦CARTER,

%

the

"•

CARSTENSEN, Jr., MRS. H. L.

7

F.

♦BOLTON. FREDERICK J.
7
H. V. Sattley & Co., Inc., Detroit

ASHPLANT, FREDERICK B.

-

Co., Chicago

John Nuveen Js

♦CARROLL, LEE W.

Shillinglaw, Bolger & Co., Chicago

Arthurs, Lestrange & Co., Pittsburgh

H.

FREDERICK

FRANK C.

CARR.

.

Company, Columbus 7.

JOHN

7'%

7--5»

COE. WILLIAM C.
Mackall & Coe, Washington

..

■

,

•>

COELLN, O. 11.
Business

DISTRIBUTORS
UNDERWRITERS
63

WALl

GROUP, INCORPORATED
AND

INVESTMENT

NEW

STREET

MANAGERS

YORK

NATIONAL SECURITIES & RESEARCH CORPORATION
120 Broadway, New York 5, N. Y.

5, N. Y.
Los Angeles 14,

Boston

* '

Chicago^-




*

San Francisco

*

Atlanta ,,'i

Screen

Magazine, Chicago

♦COGGESHALL, GEORGE K.

Schoellkopf, Hutton & Pomeroy, Inc.,>

Service Points
215 W. 7 St.

.

.

:

;.,

,

j

v,;

. ■

•,

7

Boston 9, 10 Post Office Sq.

Chicago 4, 208 S. La Salle St,

_

.7,

.

John Nuveen & Co., Chicago

Jr., H. LAWRENCE

♦BOLES, EWING T.

W.

MARION

7 -: ;

A.

J. J. B. Hilliard & Son, Louisville

j.

i w
'

'

■-

CHARLES A.
Harris Trust & Savings Bank, Chicago

7-

Association,

>■

♦CAREY,

V;

Wy

Bankers

7
Eastman, DilHoii & Co., New York

BOGERT,

i

7
Co.,

:V

B.

City Bank ©f Cleveland,

Cleveland

>

York

ROBERT

National

- •.

PATRICK

Wall Street Journal, New York

7

.•

type or industry

G. JAMES
Phillips Co., St. Paul

J ■. Washington

7

Chicago

♦BLYE, Jr., JOHN H.
7 7
Wurts, Dulles & Co., -Philadelphia

ARNJIOLD, HANS
•
* 7
'
Arnhold & S. Blcichrcedor, Inc.,

D.

1

Caldwell,

CALVERT, GORDON L.
Investment Bankers Association,

CARBERRY.

ARKIES, DON E.

I

CALDW ELL,

7

Inc.,

.•

BLUNT, Itrd, JOHN E.
Blunt Ellis & Simmons,

♦ARNOLD, HA/EN g.

,7

♦CAHN, Jr.,WILLIAM M.

Henry Herman & Co., New York

and Company,

Philadelphia

Nashville

WILSON
Weil & Arnold, New

of securities of the

,

.

Herala Tribune, New York

.

\ BUZBY, Jr.. WILLIAM D. ' 7
j" Butcher & Sherrerd, Philadelphia

-■<

M.

group

7

7

RAFAEL

Government Development Bank,
Puerto Rico V
,,:.7.."'7/.

j

♦BLAKE, SIDNEY S.

'

♦ARNOLD,

Incorporated 1933

a

III, JAMES K.

; BUTLER, W. R.

,r

.

Chicago-

•

v

'

77 u

each invested in

;

JAMES F.

Jr.,

,

BLAKE, JOHN L.
7
Eaton & Howard, Incorporated,

ANDERSON, HERBERT R.
'
Distributors Group, Incorporated,

v;

(lasses of shares,

of

Harris, Upham & Co., New York

.

'

7

Bank, Washington.

•BLALNE, W ALTER F. ,
''
Goldman. Sachs & Co., New York

AICMITACE, ALBERT T. 7. 77 7
Coffin & Burr, Incorporated, Boston

t?

International

Boston

77.7

♦Denotes Mr. and Mrs

with separate

of

S.

Russell, 'Long & Burkholder, Lexington
BURNS,

r r

.

JAMES

Jr.,

! BURKHOLDER,

'■>;

of New York, New York

Bank

Commerce

National

Orleans, New Orleans

•BULLOCK, HUGH
7
Calvin Bullock, New York

j

National

Chase

The

.

•BUECHLER, RICHARD K.
.
/
17 E. F. Hutton & Company, New York

j
7

7'7.7/

The Citizens and Southern National
Bank,, Atlanta
/ '• 7'::7-7/7''7^77;7v 7'

}:

♦BIVINS, ROBERT A.
,

•;

The

; «•

-

;77.;,y'

....7

New

♦BUDD,

7

Whiting, Weeks & Stubbs, Boston

York

New York 7

Incorporated,

Mutual Investment Company

7

BUCKNER, ERROL E.

.

Corporation,- Omaha 7.

♦BISCOE, Jr., HOWARD M.

ANDERSON, EDWARD E.
Discount Corporation of New York,

..

4

GROUP

7

ROBERT F.

Wachob-Bender

BINGHAM, CURTIS H.

ANDERSON, EDWARD C.
.Anderson & Strudwick, Richmond

New

7i7 "7 77--V'

Chicago

j

;
«

BERGMANN, CHARLES L. Sv
R. W. Pressprich & Co., New York

,

on
'

" ...:

•

;:

ANDERSEN, JONAS C. '
Kuhn, Loeb & Co., New York

,

Co., Baltimore

"•

HOMER
The Marine Trust Company of Buffalo,
Buffalo

—

RL SSELL D.
•
'
Greenshields & Co., Inc., Montreal

.

There

Saturdays the year round.

Watts &

'/

& Co., New York

BRYCE, T. JERROLD
Clark, Dodge & Co., New York

:

:
V
' -7\<y:.777 7.. C
& Co.,

BELL,

7

'■ 777/77

•

7777 .77 7'

BARRETT

Pressprich

W.

-

WILLIAM B.

♦ALLNUTT

R.

F.

EDWARD

j BENDER,

•

mittee are in favor of closing the

ROBERT E.
*
.
Guaranty Trust Company of New York,

;7. New York r" '

♦BECKETT, THOMAS
7 i'7 ;.;7
7 First Southwest Company, Dallas

Chicago

Commerce,

S.

♦BROOME,

New York

7

Newboid's Son

H.

Philadelphia

„

*

75% of the members of your com¬

W.

,

Inc., 7
.7, '777, 777

ALLEN, RAY E.
7
'
:
stranahun, Harris & Co., Inc.,

F.

Vance, Sanders & Company, Chicago

BEATTY,

y:"j

.

of

York

GERALD W.
Moseley & Co., New York

BREWSTER.
*

♦BROWNING,

- 7 .
Incorporated,

York

♦AMES, JOHN D.

ALLEMAN, MONROE F.
7
Leedy, Wheeler & Alleman,
.

.

St. Louis

Eingham, Walter & Hurry, Los Angeles

Louis

♦ALDRICH, GEORGE D.
'
The Parker Corporation, Boston

Orlando

..

.

Allyn and Company

C.

B.

♦BREWER, ORLANDO S.
7 Phelps,-Fenn & Co/, New

York

New

BAXTER, MARK L.

Chicago

Aldinger & Co., Detroit

;: Fordon,

change is cooperating in making
improvements in technique
through experience gained in re¬
cent "special" offerings.

HUSSELL

Dominick, New York

&

DONALD

Abbett & Co., New York

Lord,

♦BROWN,

i

A.

Dorninick

&

Eaton

"

ALTGELT. Jr., ERNEST J.
Harris Trust & Savings Bank,

ALDINGER, ALBERT H.

-

♦BATEMAN, FRANK B.
Blair & Co., Inc., New York

;

.

Bache & Co., New York

]

>

.

HUNTER
McCourtney-Breckenridge & Co.

BATCHELLER, Jr., ADAMS
r

.7

♦BRECKENRIDGE,

Hutton & Company,

E.

"

S. WHITNEY
Howard, Incorporated, Boston

♦BRADLEY,

BASSETT, EARL K.
W.

••/*

BRADLEY, MAHLON O.
Paul H. Davis & Co., Chicago

BARTOW, Jr., FRANCIS D.
Bartow, Leeds Co., New York

ertson.

-

-KV'7/ 7-7:

♦ACHESON, GLEN A.
.

a

compromise of the best features of
''secondary" offering and "spe¬
cial" offerings. The staff of the Ex¬

Somewhere

F.

McDonald; Ralph Phillips; Jo¬
seph A. Rushton; Joseph M.
Scribner; John K. Starkweather;
John M. Young; Walter S. Rob¬

ALLYN, JOHN W.
-

a

•

Walter

Taylor;

Benjamin H. Griswold,
3rd; Richard A. Kebbon; Mead
A. Lewis; Robert A. Magowan;
Laurence M. Marks; Charles B.

Exchange

i -

WM.

EUGENE P.
Bhields & Company,

'

'

Co., New York

Brothers &

Co. of Baltimore

Trust
7 7

Baltimore

BRAYSIIAW,

♦BARRY,

In Attendance at IBA Convention

offerings, the most important sin¬

Manufacturers,

of

City

the

♦BOYCE, C. PREVOST
7 Stein Bros & Boyce, Baltimore

SEYMOUR

F.

BARROW,

C.

Bois;

margin of about 2-1. This question was signed last June after very
could come up again at a future little discussion between the man¬
date but for the time being can be agement
of the Exchange and
union leaders.
The policy of the
considered a dead issue, v 7
Exchange at this time is to renew
During the summer the staff of
the contract each year although
the
New York Stock Exchange
worked out a number of refine¬
ments in connection with "special"

first served," which in

BARB,

Roy W. Doolittle; Allen C. Du-

employees'

Stock

the

and

union

"

7'

York

New

Blaine; T. Jerrold Bryce; James
F. Burns, Jr.; Ralph Chapman;
Henry M. Cook; Ralph W. Davis;

after

survey,

JAMES
National Association

Barr

(Chairman);

Fish,

D.

Newbold

which the committee will make its

it

and

wr.ole
;

opinion

public

a

changeasa

Mercantile

BARON,
-

„

1
of

Bank

BOYCE, C. MEREDITH

7

t

Barrow, Leary <fc Co., Shreveport

is the taking of

and the first step

'777'7

7

Buyer, New York-

,
.

New York

of New York,

'7

Committee

appointed by thegov- Irving

j emors of the Exchange to study
all phases of this intricate question

York

i.

National

Chase

The

.

e|

ship of t h
New

-

BAHNETT, Jr., GEORGE E. 7; 7" 7
The National City Bank of New York,
■ New/York-'
-Vv;

Stock Exchange Relations

special Public Relations Commit-

was

poration

7"

♦BARCLAY, Jr., WILLIAM K.
7 V.4?.';
Stein Bros & Boyce, Philadelphia

of the New York Stock memberships during the past year.
Respectfully submitted,

program

Exchange has been constructive
ti on of per¬ and helpful to the industry as a
missive incor¬ whole. It should be noted that a

Bond

The

'

7-

FRANCIS B.

BOWMAN,

-

77'

\

.77-..

BORKLAND, Jr., ERNEST W,
... V
Tucker, Anthony 6c Co., New York

7"

Winnipeg
.,

H.

7 Philadelphia

7-♦

.

BARBOUR, PHILLIPS T.

-

Early

7

WILLARD S.
Rollins & Sons, Incorporated

BOOTHBY,

v

* •

-

.

.

Blyth & Co., Inc., New York

Exchange, to remain open this will probably not be neces¬
Association at on Armistice Day.
:
sary,"' -7,- v'y*-X'4 y" *
There has been no discussion in
A large majority of your com¬
Ho 11 ywood,
of
mittee feel
that the advertising connection ,with-, retirement,
Fla.:
Fail the ques-

'«

BANKS, JOSEPH S..«

Stock

Bankers

Co., Chicago •,

Richardson & Sons,

James

Invest-^

ment

;

M.

Becker &

G.

BAKER, RALPH D.

Exchange Relations Committee, Irving D. Fish, partner

ing report of activities of the New York
the

A.

members of the New York Stock Exchange,,presented

of Smith, barney & Co.,

Bank, Washington

E.

Stock Exchange Relations Committee,,
brief review of New York Stock Exchange developments during year.

As Chairman of the IB A Stock

•

"

Irving D. Fish, Chairman of IBA
"

Bank,

Rico

Puerto

WILLIAM L.

♦AYEBS,

New

York

♦COHEN, MORTIMER A.
Sterne, Agee & Leach, Montgomery

•

•COHU, HENRY WALLACE
Cohu & Co., New York

(Continued

on

page 40)

|

'

railroad earnings,

Loomis,

President of the Illinois Company

good

of

Chicago,
noting con¬
tinued
ward

road net

says

v e

in

squeeze on

to

over-regulated,
subject to unwise

They

are

meet

J. M.

to

sidized

com-

S.

John

t i t i o n."

the

Loomis

costs

your

going to be and

are

"Some

steps have already

are

been

V: •
bureaus and commissions tell you taken to bring about a new policy.
the roads be allowed to earn no when and how much you are to At
the request of the Interstate
less than 6% on their net property
charge for your products, that is Commerce Committee of the House
investment,-the report observes when management finds itself in of Representatives the Transpor¬
that the average of only 3.6% over all kinds of hot water." •
; ;
tation Association of America is
25

past

*

Association at Hollywood, Fla.,

ers

follows:

,.V:

,

•.

report we are not going
developments during
months that have been re¬

In this
to

refer

recent

lated by

to

the newspapers, but will

confine our comments to
road

problem

whole.

a

as

the rail¬

unfortunate that we have to
to it as
.

The

had

a

It is
refer

problem.
a

year,

has

not

but an anal¬

ysis of the downward trend from

again emphasizes the
weakness in its picture. Estimates
for 1949
indicate that operating
revenues
will
be
off approxi¬
mately only 11% but net income
will be off approximately 45%. As
operating revenues in 1948 were
the highest in history and as this
year of 1949 was not the inevitable
"rainy day" we mentioned in our
report a year ago it is not diffi¬
a

year

cult

ago

to

see

trouble

ahead

time, "unless"—and it is
less" that is important,

some

this "un¬
; ^

<:/:■ The railroads cannot build up
sufficient surplus earnings in good

previous report—no
be considered fi¬
nancially healthy unless it can
raise equity capital.
.
i
,
But there are things that can

we

said in

industry

a

can

,

the picture and

be done to change

give

railroad industry that is

us a

strong and efficient, the

kind the

'First wC be¬
Federal regula¬

country must,have.
that

lieve

as

our

the
still
position of monopoly, the

statues

tory

are

based

upon

assumption that the railroads

enjoy

a

whole concept of

way

These

have

earnings

not

new

a

Bodies

be

more

rale

regulation

from

were

subsidization

ernment

take

opposed to

any

is

now

tor

is

the railroads al¬

of

over

the

As to whether wage

of

cost

carrying such standby equipment
and facilities as the Government

be
a

casc3

said

based

are

our

that
on

of
Finding.Boards
difference of opinipn.

Presidential Fmt

there

was

a

may

but

which

1

~

CANADIAN OIL SECURITIES
lu

-

railroad

"Federal

rapid development of the

The

tion to the

Sta¬

oil lands of Alberta has drawn atten¬
securities of companies operating

possibilities inherent in the

in this field.

the assumption

Through
information

....

our
on

Canadian affiliation we are in a

j

position to give pertinent
quote and trade such

Canadian oil securities and to

funds.

securities in American

-

n

LORD-ABBETT
INVESTMENT

COMPANIES
j-\

...

t*

'

•-'!

•

\
\

AFFILIATED

w. c.

FUND, INC.

• «

•

;

Phon*:> V;

AMERICAN BUSINESS
•
-

•

-

<

Prospectuses

SHARES, INC.

'

on

i.

30

Broad Street

Teletyper
NY 1-1979

New York 4

HAnom 2-925 L

«s,

Request

Affiliated With
i.

,

..

•

1

••

■"

W.C. P1TFIELD &

COMPANY, LIMITED

MONTREAL
63 Wall Street, New

CHICAGO




York

V V

LOS AXGSXF.S

should

handled bv the ICC instead

require for national defense
Many however saw merit in hav?,
would otherwise be
ing the same body handle both
abandoned. One suggested tax re¬
wage and rate c^ses.
We believ#
lief and another said that a sug¬
mo?t railroad of "icials would likqt
We asked them what should be gestion had been made that i the
to see an overhauling of the man
railroads "be allowed deductions
done about their subsidized com¬
chinery for the handling of labor,
for tax purposes for expenditures
petition and whether they felt that
disputes in the industry.
the railroads should also receive inade for improvements desirable
There were various opinions ort
some subsidization.
In general the in the public interest, but un¬
the
ques'ion
of
consolidations.
essence
of their replies can be profitable to the railroads, such
Some were opposed.
Others wer^
as grade separations, track eleva¬
summed up as follows:
in favor of consolidations withip
All
forms
of
transportation tions, bridges over streams that limitations and on a voluntari
are required for water navigation,
Shohld 'be placed upon an equally
has IS; This is, of course, a big $64
and similar items."--V
competitive basis. Subsidies should
(Continued on page 63)
At the recent annual convention
be discontinued. ^Highei* taxes and

they did 50 years ago.

tutes

as

should)

flexible.- Transportations:

deal.

looking at

are

Another

the

of

"Railroad

national transpor¬

tation policy—a new

the
country.

needs

any

should be overhauled.

We need

industry

plant capable of meeting

lower rates

to

time, to meet compqtitiorbi
A.
T. Mercier, President of the!
Southern Facile Company, said,

at

Federal laws and

regulation

sufficient to maintain a rail¬

growing

railroad officials we

the

be allowed

should

competitive and a competi-s
greatly handicapped if ho?/
is not free to price his ^product)
though two suggested, as a form
upon the competitive markete r.)
of indirect subsidy, that the Gov¬

heard

be

cannot

All of

-

many of our large corporations.
provided without A member ; of our Committee,
a
continuous
supply of capital Henry S. Sturgis, is a member of
which has not been available to the
Steering Committee of the
this industry and will not be until Transportation - Association,
and
investor'confidence
is
restored Clarence T. Lea, former Chairman
through an assurance of continu¬ of the Interstate Commerce Com¬
ous adequate earning power JWhen
mittee of the House, is Director of
we
v •
say capital we mean equity Governmental Relations.
capital supplied through the sale !" We also asked these Railroad
of common stock. We repeat what Presidents certain other questions.

This

We wrote to approximately 25
to offset the poorer years.
They should be allowed to earn Railroad Presidents about this and
the replies we received were prac¬
no less than 6% on their net prop¬
erty investment but over the past tically unanimous on this point.
said
that
our
Legislative
25 years they have averaged only One
been

of

ther modernization is very great.

years

3.6%.

heads

the

include

Directors

.

industry

railroad

too bad

The need for fur¬

facilities.

and

.

.

has

years

Government;.'
He

the

tolls should be paid for the

not .been
This
squeeze
can
be met by engaged in a nationwide study Of
sufficient to maintain a railway
management in only one way— the transportation problem for the
plant
capable of meeting the increased efficiency. It seems to purpose of submitting to both the
growing needs of the country. be a continual race between in¬ House and the Senate, recom¬
Describing
present
regulatory creasing costs, together with otner mendations for fundamental
statutes as out-of-date, the report difficulties imposed by over regu¬
changes in national policies and a
recommends adoption of a new
lation, and increases in operating new Transportation Act. This As¬ competition, there is an increased
burden put on the remaining rail¬
national transportation policy.
efficiency. « Lower costs can be sociation is supported by over 8,Contract carriers are
The full text of the report, as achieved only through increased 000 enterprises—industries, banks, road traffic.
the worst competition and they
submitted to the 38th Annual Con¬ efficiency resulting from the best insurance companies, farm groups,
vention of the Investment Bank¬ in the way-of plant, equipment trade and transport.
Its Board of are almost wholly unregulated.
the

subsidizing

the form of low mail pay.

,

that

Urging

Government

'

into virtually every transportation

Pennsylvania Railroad, said re¬ service and this competition is the
cently; "When government boards principal regulator insofar as the
<
make decisions that tell you what level Of charges is concerned."

try
sub¬

meet

proper

and

Symes, Vice-President of

the

pointed out that the railroads get1
less for carrying 94% of the interim
city first class mail than the air&j
use
of highways and waterways
lines are paid for carrying thej
which are provided by the gov¬
other 6%.
r-.Vr&l
ernments, State and Federal. These
We also asked
this question:;
charges are not now adequate to "Should railroad rate regulation;
provide
for
the
maintenance, be more flexible? Should all regu-^i
operating costs and a return on lation be removed? Such a change
the public investment. A railroad
is probably impossible but should;
not only provides its own right
only top rates be fixed, with the
of way but pays heavy taxes on
railroads having the right at any
it.
The public pays the bulk of
time to lower rates to meet com¬
the taxes for the construction and
petition (provided they are not;
upkeep
of
the
highways" and discriminatory) ?"
,
iV#
waterways used by the trucks,
All agreed that the rate struck
buses and barge lines.
A large
ture should be more flexible but J
part of the facilities of the air¬
that all regulation should not be
lines is also provided by public
removed. Most felt that only a topi
money.
This
is
discrimination
rate should
be fixed and prac?/
against the railroads.; Because of
tically all felt that the railroads!
the loss of traffic from this unfair

that minute regulation is the sole

union effv*:iive safeguard against rail¬
forced to try to road monopoly. The realistic view
subsidized competition.
As today is tnat competition enters

taxed,
leadership

h i pand

over¬

said tnat if

accept subsidies. He also gave'
example of how the railroads;

in

leader-

p e

only be met by increased efficiency and,

can

American

of

persists in subsidizing competitors,
the railroads eventually may have

altogether dark.

are

over¬

forced

Holds

transportation policy adopted.

an

the

unwise

to

railroad management

new

despite present handicaps, concludes long-term outlook for the industry is not

taxed, subject
union
s

Contends whole concept of Federal

poorer years.

r-regu-

lated,
to

sufficient surplus earnings in

also

earn¬

carriers
"o

the

up

Association

Railroads, Mr. William T. Faricy,
President or the Association, pro¬
tested
against any
proposal for
subsidies for the railroads but he '

rail¬

postwar

ings,

to offset

years

carriers cannot build

regulation must be changed and

down¬

trend

says

the

of

curities

whose Chairman is John S.

29.

(2513)

CHRONICLE

Report of Railroad Securities Committee of IBA, noting downward trend in

report of the Railroad Se¬
Committee of the IBA,

The

FINANCIAL

&

COMMERCIAL

THE

Number 4866

Volume 170

Halifax

Moncton'Edmonton

r

Saint John

•

'<

-

Vancouver

a i

Ottawa

Cornwall

London, England

T oronto
,

,

30

(2514)

THE

Continued

from

page

COMMERCIAL

consumption does not rise suffi¬
ciently, the competitive aspects of
world markets may become most

established
that

in

time

zuela

that

the

has

output

in

Vene¬

risen

rapidly and the
potential
production" of

and integrated

direct

a

large

adian

There are, of course, political
and exchange barriers to foreign

expended

economic factors.

Such

investment which

to

and it

refineries should contribute
the development of product

markets in

that

British

ever,

continent.

expansion

How¬

in

par¬

is

most difficult to

ize direct

ticular is believed to be aimed at

financing of operations

optimistic
lems.

whole

the

markets.

intensity

of

On

the

competi¬

tion for world oil markets may be

sharpened by this program.

of

area

views

great

which

ment

will

call

funds

for

markets

ing

not

to

tunities

fields.

not be

can

minimized. It

unimaginative, however,
the

see

for

long-range

expansion

Unless

oppor¬

in foreign
A

by ex¬
by the many

be

achieved.

In

of this year total crude

outside of

the

United

at about 4,400,000 bar¬
daily, compared with 4,900,barrels daily in the United
States, a total of 9,300,000 barrels.
The United States thus provides
only a little more than half of the
world supply.
As long ago as
Dr.

E.

De

Commission

to

the

to the Middle East at
date

and

would

some

become

area.

appraisal for the coming years of

shift

future

respective

industries,

With

but few

espe¬

of

the

lessor

domestic

excep¬

producing

desire

"Prairie
to have

ploration

industry

Provinces."
stake

a

The

in oil

ex¬

not confined to the

was

to

and

of
individuals
groups

even

This

"oil

rush"

was

some

degree comparable to
similar ; phases in the exploration
and production of oil in certain
of the United States, notably

areas

Ranger

Field, > Burkburnett,
Cushing Field, etc., which had

■

the

inevitable result

the prices of

of

small and

numerous

heretofore unknown

inflating

oil

stocks to

prices which could only be justi¬
fied by the most
extravagantly
optimistic hopes based upon wild¬
possibilities.

The

sobering note
equally wildcat
a

to

insofar

comitments

These

are

cautionary

obviously do not apply
Canadian oil companies

previously explained,
large stake in the Cana¬
as

oil

In

such

as

those domestic corporations
a

these

industry
be

but

it

appears

our

incomplete

report

without

observations.

dian

oil

tries

it

the

and

natural

should

gas indus¬
borne in mind

be

major as well as the
present problem is that of trans¬
portation—or perhaps more prop¬
erly expressed—lack of transpor¬
tation. The discovery of the Leduc
field and the exploration and sur¬
veys incident thereto cannot and
must

not

Dominick Corporation of Canada
MONTREAL

minimized

in

any

the

as

Saskatchewan,

that

prove

"

be

potentials of the
"Prairie Provinces,"
notably Al¬
manner,

berta and

Affiliate

has received

company

16-inch

a

pipe line of 100,000 barrels daily
capacity which may be in opera¬
before the close of 1950. This

project when completed, will
the

eventually
largest

in

production

this

is.

much

of

territory

become

point

of

in

well
may

the

among

both

South America.

that

;

may

reserves

North

Canadian

shut

Great

run

Lakes

completion of this

however,

found

does

not

by

in the

relatively small

of eastern Canada which is
about 2.000 miles from major
pro¬
duction.
While ; population
will
area

increase in

western

Canada, it is
years
will
allowing for liberal
immigration, before the aforemen¬
cbvious

that,

elapse,:
tioned

many

even

ratio

of

Canadian

con¬

sumption undergoes sufficient
change to modify the transpor¬
tation problem as
constituting the
bottleneck

present
its

and

lessen

to

far-reaching and ever-present

importance.
It

.

.

tthat within

.

.

.

.

reasonably

appears

;

certain

5- to 10-year

a

Canada will reach

sufficiency,

period,
stage of self-,
an
indetermi¬

a

plus
nate export surplus to the United
States, probably to mid-west areas

and

much

to

sions

that

reserve

parts

of

at

are

an

will

volume,

in

it

is

impossible

to

oil economy

our

mention

that

except

to

certain

integrated
companies with mid-west refining
and

marketing organizations, are
considering Canadian oil in terms
of their refinery programs.
Any estimates of crude oil
in

serves

Canada

are

re¬

subject

to

tend

At this

and

uncertainties

oil situation

in broad
has

only be discussed!

can

and

general terms.

As

been

said, its ultimate and!
gieat importance is best attested!
by the very large actual and po¬
tential capital investments in Ca—
nadian oil but its effects upon the
world and domestic markets are

still

matter of estimate and

a

jecture.

Meanwhile,

the

to

construction

lines

but

con¬

nearer

term is dependent upon the
lem of transportation, not

prob¬

only as
major pipe

of

the

building of
gathering lines.
The laying of a'
pipe line to the Canadian PacificCoast which might also reach our
upon

Pacific

own

Northwest

is

seriously considered and
be justified by potential
but

being

seems

to.

reserves

it must be

repeated that the
present bottleneck of transporta¬
is

the

and

will

be

be

a

governing
by years

measured

months.

shut-in

Meanwhile

production

is

re¬

a

assuring fact to those who
seriously concerned with oil

are

re¬

sources in relation to the defense
of the North American continent."

The

Canadian
and

serves

natural

production

gas

re¬

natu-x

are

rally subject to the same problem
of transportation as that which
faces crude oil. The fact that the.
natural
gas > supply
is;

present

wide variations which might well
be
altered
by new discoveries
even
before this report is pre¬

tion and faces

sented.

raised

cated

in

The

further

problem

by the

is compli¬
similarities

geological structure with

cer¬

tain

producing oil fields in the
United States, plus the many mil¬
lion

acres

the

Alberta,

production

oil

mated

remain

Field

proven

reserves

at

near

found

Edmonton,

Canadian

crude

in

far

and

sparsely

from

roughly

million

.

estL

barrels.

areas

of

makes

comments"

any

merely
matters
of
conjecture,,
especially as no reliable estimate
of

is available.

reserves

The
and

immensity of Canada's oil

natural

indicated

in

potentials

gas

recent

a

was

address

by
Link, who stated that;

Dr. Theo. A.

891,000
were

200

settled

centers

popula¬
an export problem
certain political ele¬

by

ments

unex¬

Prior to the discovery in

Leduc

off

which

square

pective

oil

.miles

and

gas

is

a

pros¬

"con¬

area

taining sedimentary rocks capable
of generating and storing oil and/,
or
gas in the form of oil fields
pools

.

which

.

.

is

greater

of Texas,
California, Oklahoma, Kansas and

RAILROAD
PUBLIC UTILITY

INDUSTRIAL, RAILROAD, PUBLIC UTILITY
FOREIGN SECURITIES

It

would
oil

crude

much

UNLISTED TRADING DEPARTMENT

BROKERS

as

Wertheim & Co.

show

4%

York Curb

Exchange

New York 5, N. Y.
HAnover 2-7900

Teletype:

NY 1-911

the

of

as

1948 level.

petroleum products and
industry endeavor, in the face

this

failure

New

New Yorb Curb
N. Y.

Exchange

York Stock

New York Produce

Chicago Board of Trade

N. Y. Cocoa Exch., Inc.

Exchange

:

Teletype: NY 1-483

Commodity Exch., Inc.

Chicago Mercantile Exchange

120 Broadway

1-484

1-485

New York
REctor

stocks

in¬

to

of

re¬

In all of the four

are

those

Stocks

5

of

gasoline

a

2-2300

year

those

ago.

about

are

of

a

15%

year

above

of

higher

ago.

while

demand

for

shows

increase of less than 5%.

the

Cables: Wertma New York
an

Inventories
Telephone:

demand

ucts present inventories

Exchange

N. Y. Cotton Exchange

Coffee & Sugar Excli., Inc.

of

reduce

fined products.

than

49 Wall Street

decline

a

from

major categories of refined prod¬

MEMBERS

Exchange

domestic

refined
the
of

Members New York Stock

that

This decline represents in part the
lack of an increase in demand for

crease,'to

Vilas & Hickey

Operations

appear

refining operations this

will

year

BOND and STOCK

area

Louisiana."

Refinery

AND

INDUSTRIAL




as

previously outlined, the Canadiau

than the combined

Telephone:

high

increase

time, because of the in-"

tangibles

or

Members New

to

rather than lessen.

than

and

make* any definite forecast as to
the effect of Canadian production

"un¬

an

unprecedentediy

and

rather

transportation

remain

quantity" for some years
come.
Exploration
activities

to

problem of
point of time

great.'
adjacent

known

factor

of the

field-reveal

will

tion

view

be

possibilities in other
"Prairie Provinces"

the

and

well.

In

This,

well

very

potentials * in

and the

areas

are

could

:

approxi-'

an

higher." Since the: first
discovery,
added
exten¬

near
the Canadian border, pos¬
sibly to the Pacific Northwest as

plored.

to

The

the

70% of Canada's requirements

and

due

of

any means solve the problem. It
has been stated that approximate¬

and

The fact remains

necessity,

head

pipe, line,

upon

discussion of the Cana->

any

that

Canadian

figure is only

Leduc

history of

similar past excesses should sound

would

14 Wall Street, New York 5

latter

nadian oil

are

corporations,

dian

t

been adaed to;

Canada.

of

reserves

mation

smaller

to your committee that

:v-y.

due

permission to construct

con-

barrels of oil have

cognizance has been
taken of this problem is indicated
by the fact tnat the largest^ Ca¬

ly

have

Exchange

That

very

the

present

day .demands. ■"-*'?! ''i''"/:'v

larger companies but extended to

which,

Members New York Stock

must took

meet

upon

A.

level

the

to major

DOMINICK

to

based

by Dr. Theo-.
Link,
formerly
cnief
geologist of Imperial Oil, Ltd.,*
"more than three-quarter billion'
dore

Ontario.

or

&

this time

sources

and

| servative estimates

to

comments

Established 1870

Leduc

in

concerned.

DOMINICK

other

discovery well in Leduc
brought in Feo. 13,

was

1947.

where, during the open water sea¬
son, oil may be tanked to southern

cat

tions, most of the major and many

firmly

to

which

to

the

neighboring Dominion. The future
inportance of these fields must be
given due weight in an over-all

East,

the

at

consumer

very

of

and Since the

February, 1947 with its
very large production and great
potentials, focused the attention

the

has

a

transportation

by the entrance of major
American capital, the
Canadian

of any

case

of

uicated

tion

discovery

Field

) become

cially oil.

would

of

great

a

The

themselves.

ity

output

As in the

area.

individuals

the

world

the

potentiali¬
point of ultimate produc¬

predicted that the center of grav¬

of

Provinces"

capital

the

ing factors.

available to develop these impor¬
tant
natural
resources
in
the

Petroleum

Middle

oil": in

Canada, which has focused

unlimited

Golyer, heading

States

"Prairie

stint-in

major discovery of

to

It is of special interest to note
for the first time in the history of
Canadian oil and natural gas, that

rels

United

for

tion and reserves in that

was

estimated

1944.

so-called

"search

wide

ties in

000

the

the

without

leasing of vast acreage and the
resulting * exploration of a very

deal of attention to the

September
protection
States

such

noteworthy development has

been

funds

lack

of all divisions of the oil

of

'

Canadian Developments

governments involved, a working
basis
of
competitive operations
will

exploitation

properties.

crippled

cessive interference

the

on

has resulted in
heretofore
lacking being

pro¬

whether

vided
directly
by
public
fi¬
nancing or indirectly through the
major American companies carry¬

briefly summarized above, the

would be

Thursday, December 22, 194<>

nearby, refining capacity.
It. fol¬
lows
that
despite the properly
optimistic future outlook as in-

play"

little attention to other surround¬

use

uncertainties and problems of
world oil production and world

As

oil

of

such

prob¬
this is an
potential develop¬
on

the

in

inportant natural resource, perhaps too
great emphasis has been given to
the
dramatic,* spectacular
and
speculative
elements
with
too

Nevertheless,

substantial

"

visual¬

in the foreign field with the most

.serving

other

formidable

are

interest

acreage.
The competi¬
tion to have a stake in the "Can¬

Canada has become better known.

as

oil companies have

indirect

or

Canadian

The rapid expansion of refinery
facilities in Europe involves po¬
well

CHRONICLE

Industry and the Investor
Since

area.

severe.

as

FINANCIAL

22

Oil and Natural Gas

litical

&

of

year

to

distillate

date

fuels,,

primarily household heating oils,
are

15%

higher than

a

year

ago

Volume 170

Number 4866

COMMERCIAL

"THE

FINANCIAL

&

CHRONICLE
Continued

and

failure

the

of

cold

weather

to

appear on a nationwide basis
has slowed up the expected sea¬
sonal rise of, demand for this

"inoduct

Stocks' of residual, fuel

this-development continue, and in
taking inventory of the value of

mission

the securities of "these

under the

available

bohipartfes

in ,the

market is
there- anything/hew cfr important
now

about'10% higher than a which should be considered? r
year ago but the situation in CaliDuring the last two sessions of
"fornia in this product is disturb¬
Congress, Bills have "been pro¬
"oil

are

than

eral

the

chance

substantial

brought about

competition

between

this fuel and natural gas.

V

;:

the field

by a producer to

natil-1

a

ral

gas transmission line. Tn the
1947-1948 Congress this Bill was

Typical refiners' margins defeated principally on the testi¬
preached their peak in July and mony of Leland Olds,, then a
August 1948 and had already member of the Federal Power
""slipped at the time our last an¬ Commission, to the effect that if
nual report was made..
The de¬ the Federal Power Commission!
cline in evidence since the late did not have jurisdiction bf such

//

,

"Summer of

1948 continued

at an

sales

the

and

prices

that

the

charged
price of gas
might be

'accelerated pace through the first

thereunder

/six months of 1949 and while it

to the ultimate consumer

has

tended

to

stabilize

in

recent

^months, the refinery spread has
/stabilized

at very

low levels. As

a

matter

of fact, the present level
refinery spread indicates that
"few large refining companies are
of

"able to produce net income from

refinery

operations

today.

Fig¬
of the

reported, by many
smaller companies primarily
ures

gaged

in

the

refining

en¬

business

forced

by the demands of the
producers in the field.
Senator
Homer
M.
Ferguson, of Michi¬
gan, for instance, who had been
in favor of the bill, changed his
position after Olds had testified,
slating that consumers in Michi¬
gan would pay higher prices un¬
less

up

the

Commission had author¬

over

ity

the

the prices and therefore

rate, of

return

to. be

allowed

producers in the field.

/support this Conclusion.

uct

the

to

peak

Commission.

Power

The

withdrawal of this gas from the
market
with

has

the

mand

acted

law

of

make

to

in

accordance,

supply arid de¬
gas scarcer: and

been

almost

nominal in character. The present
level of gasoline inventories and

higher prices for natural
gas in the field - also present a
problem for existing lines, be¬
cause as such prices advance the
of

returns

of

the

present
lines are reduced unless, (1) they
some

expanding into

are

"the

expected

which

will

seasonal
in

occur

build-up

these

indi¬

cates, at this time, the proba¬
bility that considerable pressure

the wholesale gasoline price

;on

will

structure

in
coming
be described as
'almost intense by the time that
gasoline stocks reach their peak

months

next

and

Spring.

Prices

v

the

at

decline

not

occur

may

level

retail
much

as

in

did

1949

as

being served and in
markets which pipe lines

other

proposed to serve.
This has hap¬
pened in spite of a sharp drop in

new

markets

from

secures

Federal

the

Power

rate

return.

of

This may ;

the

prospects for little

or

points to the possibility that com¬
petition at the retail level in 1950
will be much greater than in 1949.
Prices for natural

/ for

gasoline and
petroleum
gases

liquefied
also

generally weak this
Natural gasolinevprices ex¬

were

year.

their

hibited

usual

seasonal

'now

the fall but

in

occurred

its

lost

of

oil

can

for

use as

compete with natural gas
boiler fuel.
Boiler fuel

with most

lines, however, is only
important as an outlet for the offpeak load of gas in Summer and
weather when there is less

warm

would
the

mixed

er

drill for

heating

and

industrial
poses

various

of

control

the

believe that

of f lexibility

a

is

their

the

gas

did

Others

take

to

their

Respectfully submitted,
*

debt

tween

•

••

'

■

{

respon¬

management

and

•

Governmental

Securities

B.

George

Robert B.

an

/

f

Bi|hiy

Aims C. Coney, Robert H.

Craft^

Stewart A. Dunn, Robert R. Gil-

-

only be achieved by the recogni¬

Chairman;

Kneass,

Blyth, Oscar L.

Jr.,

bert,

Hardin

Hawes,

H.

Francis M.

Knight, Winston L:

Molander,

by the fiscal

Robert

'

authorities of the necessity of pay¬
•

ing

the higher cost 'involved in.

obtaining

H.

Morris,

C.

Emil

MoUlton,

stability in ownership of Treasury

fer, Aaron W. Pleasants,

securities.

colm

This report makes
the

discuss

and

testi-

dolf

Smutny, J. W. Speas. "

market.

as

markets

three to

gas

as

often

one

runs

Another

/

-

major

oil

,•

gas

mendous

reserves

of

resources

Natural

submitted,
Gas

H.

Thomas
-

A.

Rauscher,
Beckett,

William

W.

natural

gas

'•••.

Fuller; Gail Golliday; Theo¬

John C. Legg, III;

have refused to sell gas for trans¬

&

Chairmah;

Jr.;

nan;

tre¬

a

Securities

dore

with

for

his money.

for

Several of the

compahies

good

a

Committee
John

failure of the passage of the bills
referred to above.

to find

is the

reason

price of

on

Respectfully

<

Oil and

for manufactured

important

large

G% return

north¬

as-high

against natural gas.-

the rise in the

the best operator four

dry holes

sueh

ture

/«/f

The ratio of this cost in
ern

Investment Bonds

why he would not want to ven¬

pur¬

than that of natural gas delivered
to

After all, con¬

Hawes;

Francis

Ker-

Glenn

L/Milburn; Carl T. Naumburg;
/

Richard M. Newell;

Ludlow F.

North; Winfield H.

Perdun; E.

Jedd Roe; Edward Rotan;
ald Royce;

Don¬

John M. Spurdle.

:

United States Government Securities

r

"/.<*

I

..

*.'•••'

»-

•••

•--•••> V;

•'

•

.;•••

'

/''/'"

1

-

'

State, Municipal and Revenue Bonds

Industrial

Public Utility

>

*

Railroad

Bonds and Stocks

J.

B.

ROLL

&

CO.

INCORPORATED

r

Canadian and Foreign Bonds

./-■>

full cuts of liquids found markets

entirely
to

absent

burn large

fied

petroleum

Current

and

were

forced

quantities of lique¬
gases,

jbecUe>tl

.

Developments

as

They

/?■/ Have Affected Gas Transmis¬

United States.Government

sion Companies
The rapid

development of long¬

distance natural

gas

Bank and Insurance Stocks

in

Securities

Underwriter
;V

transmission

Distributor

*
_

\ : ;

:

•

Dealer
"

'

companies during the latter part
;of and since

•stimulus

country
sented

as

to

the

war

a

whole and has
,

the security

investment

has been

the economy of

to

and

dium which has been

pre¬

buyers

speculative

an

me¬

interesting

to underwriters and dealers. Will




York

a

the

ONE WALL STREET

NEW YORK 5. N.Y.

"

Philadelphia

Boston

Mal¬

Sumner

L.'

Pruyne, Herbert N. "Repp, Ru¬

attempt to

no

statements

S.' Prosser,

of

the fact that it usually

even

six

J.

Pattberg, Jr., Delmont K; Pfef-

better distribution and

a

Robert

and assure an ever-

increasing* supply.

sidering

,

Committee

effective system of debt policy can

tion and acceptance

*.

to

Specialized

is still substantially greater

stream all of the

continue

the

authorities to

broader

powers

business.

in open market oper¬
enable

the

responsibilities of the Federal
Reserve System to adjust credit
controls to the changing needs of

system, -and

to

of

and

re¬

greater degree

essential

out

carry

of

definition

better

effective

volume

in the banking

serves
we

gaining more

Over

well, it is readily understandable

commercial

or

gas

incentive

operators

the

and

space

for cooking,

gas

maintain

producers

for

possible liquid fractions.
.who

terest

low that they did not take

were so

to hope that out of this
public discussion will emerge a
reason

debt

the

"

liquefied petroleum gases reached
"extremely low levels and in many
cases operators found that prices
out

for

•

transmission

has

Prices

force.

this

carrying

price of fuel oil in all mar¬ 'eral Power Commission. It would
kets during the last year 4o a make large reserves of gas al¬
point where in most places fuel ready discovered available, and it

ten¬

dency to decline in the Spring
,and early Summer months but the
decline this year was greater than
/seasonal. The seasonal upturn has

of

the

no

change in over-all demand in 1950

factor

-lines
the bills
proposed in Congress to make it
clear that the producers are ex¬
empt from regulation by the Fed-

to

-and

bullish

would be the passage of

takes

"

piony before the subcommittee of
the Joint Committee on the Eco¬

of

Commission permission to charge sibilities. Progress toward a rec¬
higher prices to maintain its per-! onciliation of the conflicts be¬

ing; and the cost of manufactured

This

of the

cost

fiscal and monetary

demand for house and space heat¬

wholesale.

at

some

control

should be subordinated in the in¬

existing consumers on that line,
or
(2) the particular company

bene¬

fited

the

ations

integrated com¬
panies
in V that
the
widening
spread between wholesale and re¬
tail prices tended to off est some
rof the narrowing spread between
"the price of etude oil and the
wholesale price level for products.
The increasing investment of the
industry in -marketing facilities

those

teffecti-ve

which will pay higher prices than

mitted

now

an

.

The

due

markets

situation'/Tt is difficult to

a"

visualize

-the* volume of credit in the "bank¬

,

The; most
primarily to the vora¬
cious demand for gas in air the natural ' gas

been

(such

nomic Report because of the voluing system* if debt management piinuous nature of the material
.policy requires a pattern of yields that has so lately become avail¬
on
government securities within able. We do, however, applaud
paragraph has made it most diffi-: the narrow range we have seen the contribution that the Commit¬
cult "to: successfully organize any in the
tee -is making toward a better un¬
past few years, '
new-large pipe 'lines, and although
Tn achieving a set Of circum¬ derstanding in both governmental
normal development of -present
stances best suited to the needs bnd banking opinion of the sig-r
pipe lines should continue there iof the
of
debt
management
economy, the responsibili¬ hific&nce
is doubt whether, with the excep¬
ties 'of the Federal Reserve Board policies in the workings of our
tion of the line to Chicago, there
This testimony
smd the Treasury Department ex¬ whole economy.
will be many other large new lines.
tend far beyond the maintenance should be as widely disseminated
until these reserves held by ma¬
•of" a low 'interest
rate pattern. as possible, and we commend it to
jors .are released.
There are circumstances in which your study.
There is also goOd

of

have

date

m

jurisdiction of the Fed¬

not be too serious as many of
; In the 1948-1949 Congress the
refinery
margins of over a year ago to the bill was passed by the House but "the lines are expanding to meet
present time, the products show¬ never came out of the: Senate new markets, and because of the
-•
high prices for coal and the high
ing the greatest decline in prices Committee.
Tiave been in the fuel oil category.
The price of gas hi the field has price of labor, the cost of manu¬
factured gas shows no near sign
^Gasoline has remained relatively gone up rather substantially dur-:
of coming down substantially.
firm and the declines in this prod¬
ing the last two years.
This has
From

H

of coming

ing and is exerting strong down¬ posed which Would have made higher priced.
ward pressure on the price of clear that the
The very fact of large reserves
jurisdiction of the
;heavy crude nil in that State and "Federal Power ' CommiSsioh did of gas being unavailable for the
; the
sharp decline in prices for not extend*tb the sale of gas in; reasons Stated in the preceding
residual fuel oil has

from page 24

state lines rather

across

take

,31

(2515)

Pittsburgh

Cleveland

Teletype NY 1-2743-WHiteIiall 3 8833
Private Wires to all offices

Chicago

San Francisco

:

Continued

COMMERCIAL

THE

(2516)

32

from

proposed uses of the proceeds of
such offerings.

commodity prices, and that corpo¬
earnings
are
fairly
well

rate

then retained earn¬
depreciation reserves
should provide at least as large a
part of the necessary funds as in
the year just ending. Money rates
would have to decline materially
maintained,

In the Summer of 1946 the idea
was
new

1950

primarily

is

It

now

the

three

over

favorable
bution

new

for

market

of

companies

to

expanded

undoubtedly

their

erations and established

an

was

support of

prepared

were

issue market

new

breaks

just prior to
1937

of

and

studies

running back

as

were

far

the

consisted

the

new

vertised

op¬

and

of

tabulation

a

the

in

New York

comparison

a

of

issue

distribution

vailing
1937.

personal needs of private owners
have

also

built

of

group

up

issue market had collapsed.

underwritings.

new

This data revealed that the

whole price structure of the

potential

a

Given favorable surrounding mar¬

common

ket

33!£%

conditions, the volume of

cfferings could be large.
the

moment
more

market

favorable to

at any

new

At the

is

perhaps

time since 1946.

Attached

hereto

is

below.

list

of

Cor¬

(SEC

100

lost

condition

market

erally known

nor

commercial

loans from

eight

bank

term

1.942 through the first

months

of

1949,

with

the

closer

or

of the
gen¬

realized because

most .underwriters

confined

haps to the issues of

cluding

to

issue

not

was

studies to their

ex¬

25%

selling at 90

were

and

issues, but

Many

original

data) including private placement

unregistered

new

preferred stocks is¬

.Yet this

issue

new

porate Securities Offerings

their

some

sued at

had

stocks

of

prices;

issues than

new

pre¬

July 1, and on Aug. 1,

on

their

issues

or per¬

some

own

of their

competitors rather than to

making

study of the market

a

bull

a

its

in

market,

later

stages,

important

issue

every

at best

was

a

since June 10, 1946
partial failure, some

more

conspicuous and more costly

than

others.

quite general.
It prevailed irre¬
spective of the standing of the

at

premium

a

When

such

as a

whole.

selling
the issue price.

over

are

issues

new

issue

class

a

below their original
price, it normally eliminates

substantial segment

a

as

selling

are

buyers.

sue

cludes

the

ditional

of

This, in
successful

is¬

new

time,
sale

pre¬

of

ad¬

issues and

results in

underwriters

having

unsalable

inventories

their hands.

new

on

historically

now

in

clear

new

It is

that

obvious signal that a bear

an

ket

was near

The

the

Summer

sion

for

in

and

the

most

of

after

this

occa¬

particular

part unexpected

several

as

below their issue

I and 8 or 80%
of Aug. 1.

below

were

as

collapsing of the

market

issue

new

the

of

210

at

2

or

market

high.

Dow-Jones

1946 when the
selling

1946

selling

the

new

entirely

lapsed.

had

V J J,.

/

of this evidence of a

All

pend¬

ing bear market was spread upon
the record for any one to see

weeks before the low of 167 was

small

a

portion of

securities which they had under¬
written.

This

ly suggested
to

the

in

1937

for

of determining if the

issue market
were

was

again

the
new

collapsing and if

on

the

of

eve

an¬

issue

price

current

price

studies that

1937,

an

of

the

reception

of

market
made

were

investigation

same

in

ESTAB I.I SHED 1845

gation

offered.

Studies made at

later date re¬

a

vealed that the same factors in the
issue market

prior
bear

were

the

to

prevailing

Alexander

markets.

:

Dana

Noyes in his "Financial His¬

revealed

It

might properly be asked here,

is this just a new mechanism for

the turn in the market,
possible interest can it

calling

what

and

have to

people mainly engaged in
underwriting business. It is

the

that

being

in

relationship between

collapsing
impend¬
ing bear market, has an important
lesson for everyone in this busi¬

EAIRD

BENNETT,

SMITH

&

CO,

IRVING

Wis.

Detroit,

San

the

panic of

1903

The
of

&

CO.

was

of new securities

promotion

mergers and

of

a

series

of

1902-1903.

combinations during

Popular apathy toward

basic

BIDDLE,

WHELEN & CO.

Philadelphia,

&

Washington,

market

Pa.

A.

V

E.

MASTEN

&

The

ELLIS

Chicago,

&

Pittsburgh,

SIMMONS

W.

Illinois

-

HOUSE

Cleveland,

Ohio

Cincinnati,

CO.

NEWHARD,
St.

COMPANY.'*.,

&

Louis,

SCOTT

Ohio

HUTCHINS

Boston,

&

&

The

new

finance

the

(2)

PARKINSON

Mass.

Eoston,

SON

&

'' ''J' .'J JyJJ J
of

issues when

high.

stock prices are
indication
of this

(Some

volume is

gained by realizing that
five-day period from June
14, 1946, 10,000,000 new
shares

offered

were

to

This compares with a
the

on

riod

New

sec¬

Stock

York

the total volume
Stock

VAN ALSTYNE, NOEL a CO.
Members

New York Stock

indicate

STUBBS

52 Wall

Mass.

Street, New York (5)

>

the

This

end

high

of

bull

a

volume

may

last for several years. The impor¬
tant factor is to determine when

these
New York Curb Exchange

Exchange

5,191,-

was

However, the mere presence of
large volume of new issues does

not

CO.

the New

on

Exchange

shares).

market.

&

factors, there
large volume of

will always be a

York

Pa.

WEEKS

? J":

these

Exchange of approximately 5,000,shares.
During the same pe¬

CO.

Va.

WHITING,

to

causes

Because

Pa.

STRINGPELLOW

Richmond,

order

000

Mo.

&

securities in

high volume of busi¬

The

prices

CO.

&

are:

high

ness.

872

COOK

for this

yearly volume of specials and

Securities

NEWBOLD'S

Philadelphia,

CURT1SS,

HARRISON

H.

simple.

very

level of business
activity
causes
corporations
to
raise
additional
capital
by the

a

BLUNT

is

issues of securities.

new

reasons

ondaries

CO.

C.
&

indication

as an

trends

number of

common

COE

D.

principle behind the

issue market

10 to June

Francisco, Cal.

MACKALL

Mich.

an

At the final stage of a bull market
there
has
always been a • large

underwriting houses

Investment

LUNDBORG

a

issue market with

new

in the

CORRESPONDENTS
W.

sub¬

evidence

interest.

the

LONDON

Milwaukee,

the

mitted here of the direct and close

the public.

ROBERT

Big

ket large blocks

that

issues

practically

con¬

touched off by an attempt to mar¬

out

acquired by

that

prices
distributed

high level of stock
private owners • of
companies to sell part ownership
to the public because they are at¬
tracted by the high price which
they can obtain for their equity

Street, New York 5, N. Y.

NEWARK

of

beginning

other

made

investi¬

market

Board.

sale of
new

just

was

Such

the

and

beginning to decline
to the action of the

trary

new

currently

of

months

in those issues already

(1)

tory of the United States," points

making the

and

six

established.

prompt¬

study comparable

made

one

purpose

we

condition

a

stalemate

were

new

writing. Underwriters found they
but

early

the

in

Again

1929, the market for new issues of
securities was quietly reaching a

col-

that

doubt

no

could

sell

and later James J. Hill, re¬
Jo
these
undistributed
blocks as "indigestible securities.**

ferred

ness.

practically
under¬

the

22

were

200.50, and at that time there

at

be

June,

July

On

averages

market

successful

in

points from the bull

issue

of

clear

was

Dow-Jones Averages were

started

of

It was at the time that J. P. Mor¬
gan

that the

It is interesting to note

evidence

could

other bear market.

Clark, Dodge & Co.

were

of July

20%

or

under¬

years

continuously

2

price

major

week

four

Of 10 preferred stocks,

August 1.

mark-downs,

issued in

stocks

common

failures

These

first

the

Of 42

despite subsequent
made itself felt in
the general market with the re¬
sultant sharp market price decline.
thece offerings,

believed

The

1946.

of

made in

were

prompted by the sudden

writings.
in

mar¬

was

June, 11 or 26% were below their
issue price as of July 1; 20 or 47%
were below their issue price as of

the middle of June,

selecting

year was

failure

was

by.

studies

same

the

condition

This

underwriter, or the quality of the
issue being underwritten.

issue market

July and in August of 1937

In addition to

CI Wall

particularly

an

part of the new issue sales are
the result of "trade-offs" of issues

papers

the

price with the market price

The

all

of

stock issues ad¬

common

Industrial Financing

In

condition of the

In the 1937 market these studies

earn¬

ownership.

the

as

ing power which warrants public
and

a

beginning

bear market of 1903.

companies have

privately owned

In

Additional

1946.

During this period many

public.

market

studies

market

made

distri¬

the

idea,

concerning the

since we have had a really

years

collapsing

a

for the three months

stock

general

the

equity

bear market.

a

this

depends

for

on

market.

of

offerings

securities

industrial

issue

that

advanced

reliable evidence of the

any

outlook

The

Issue

New

Market

sizable volume of
refunding operations.
of

Thursday, December 22, 1949

CHRONICLE

previously sold which

Stock

Common

The

and

to warrant

FINANCIAL

23

page

Stock Market Key to
ings

&

issues

new

have

started

to

become unsuccessful; that is, when
the issues have failed to be sold

completely
completely
sell at

after having been
distributed, promptly

or,

substantial discount from

a

the original issue price. When this
condition occurs in more than oc¬

casional,

The

Corporate and Municipal Securities

isolated

it

cases,

the

is

beginning of the end.

Underwriters, Distributors and Dealers in

Rights

Scrip -Warrants

,

-

of

purpose

historical

this

review of the

new

to induce

■it!

people in this busi¬

to

ness

Net Markets

to

H

the

Institutions and Dealers in

CorporateStocksandBondsandForeignlssues

V

REORGANIZATION SECURITIES

should

to

just

issues

&

i

i

a

Street, New \ York 4, N. Y.

'

Donnell &

i

Telephone: HAnover 2-0600

i;

Teletype: N.Y. 1-210

-

.

| Members J

New York Stock
New

J:

1624 Eye

135 S. LaSalle St.
'

CHICAGO

3

St., N. W.

-

Keyser Building

WASHINGTON 6

*

Tel: STate 2-8770

,

LONDON, ENGLAND

.

Tel; Lexington 7861

—

GENEVA, SWITZERLAND

Direct Wire Service—New York,




York

;

ffo

,

Exchange

Curb Exchange

120 BROADWAY, NEW YORK 5
Tel. REctor 2-7800

(Representative)

Chicago, Washington and Baltimore

as

a

casual

some

but

of

should

whole.

a

their

confine
own

study

their

issues

the

of

competi¬

keep continuous

records

all

of

issues.

A

monthly tabulation of subsequent
market
is

sues

of

performance
one

of

determining

the

current

the

the

new

of

best

such

condition

issue

is-'

methods

of

market.

<

BALTIMORE 2

Tel: National 2545

•

.

T

of

monthly

Tor]{ SloeExchange and Other Exchanges

25 Broad

•

.

tors,

CO.

Members \cm

not

studies merely to their
or

HIRSCH

scientifically

more

issue market

new

They

the

study

issue market is

Detroit Office: Buhl Building, Detroit, Mich..

However, it is feared that in the
past, these records have been kept

merely

as a

guide to underwriting

spreads, rather than
cal

study

posej

that

has

as an

for

the- determination

analyti¬

its

of

pur-

the

Volume

potential reception of
in the

issues

new

future.

near

...'

If such a policy is followed in¬
telligently, there will be less orig¬
ination of new issues at the peak
of prices,

and there will be a re¬
duction of losses not only for cus¬
tomers but for the underwriters.
Since
made

index

market

issues

new

on

the

issue

new

this

works

If the collapse

the UP-SIDE.

of

been

whether

determine

to

have

studies

1936

market

is

COMMERCIAL

THE

Number 4866

170

con¬

of : 2,269,000
Gulf Oil Common
Stock draws attention to the fact
the

that

underlying 'strength of
as
evidenced by the
new issue index does not preclude
the possibility of a trading move¬
ment in the opposite direction.
While this offering was one of
the

market

the

unusual

most

instances of

stock financ¬

ing in history, the market subse¬
quently broke some 10 points in
the ensuing two weeks and then
rallied

market,

low

briefly before making its
in
mid-March.
However,

not

even

in

clusive

proof of the nearby bear

as it is believed, does it
logically follow that a bull

succession

a

successful

of

equity

offerings?
studies

Such
and

have

been

made

the

of

the

break

though

market, has indicated
is not going to
new
low ground. Al¬
it is

as

condition of the
is

new

of

forerunner

a

the

in
not

point

low

around

the weeks immediately

there has

riod

follows:

as

are

' X'.

Shares

:

Price

Company

800,000

Southern

1,345,000

Columbia

Gas

Edison

Calif.

32%

irrespective

the

there

issues.

of

other

In

"ENOUGH."

Via
In

on

Financing

1946

Special Commmittee
appointed to make a study of
Preemptive Rights Offerings and
the present "lay-off" system now
being used in the handling of pre¬
emptive
rights • offerings
was
a

was

adopted.
At
that time
thought by many to be

idea;

and

for about
it was.

half years,

This

be

to

up

a

to both the manager

the

and

was

good

a

participants.

In

saying

reference is being made to
those
stand-by
underwritings
where the profits of underwriters
a

ridiculous spread and not

to those

stand-bys in which profits

at

bear

reasonably intelligent rela¬

a

tion to the risk involved.
The

utility industry is in the
process of a $5 billion capital rais¬
ing program, and we underwriters
are in the process of raising that
capital for them for nothing.
:(
In order to illustrate this

let

take

point,

hypothetical under¬
writing involving 1,000,000 shares
of a utility common stock selling
at $10.
The underwriters stand
us

a

10

by

on

500,000

Bank of Manhattan-——

22%

for

a

new

the

issue market which gave

220,000

Consolidated Gas of Bait.

60

this offering for two weeks
compensation that is
less than a Stock Exchange com¬

150,000

Clinton

26%

mission.

of

evidence

underlying/strength

listed

the

market, let us

ex¬

issues

amine the reception of new

'

This

Industries

the

witnessed

period

same

successful distribution of the fol¬

profit¬

consideration

of the Truslow plan for an overall
increase in commission rates with

paid

a

pnly

sion, but
are

new

and

.taken

is less than

non-member

Registered Exchanges, where¬

by blocks of securities could be
created.
A committee specially

sion.

appointed;

it

should obtain

This should be the end, but
will not be for many. In fact,

there

are

who

some

tions

ready to

are

speculate

about

might

capital

become,

a

W.

ter

of

mann;

text

the

./It

spreads
affect

low

Chappell;

Evans;

T.

Hunt;; B. P.
Masterson;

McDonald.

,

Henry

Jr.;

,

on

pation,

secondary ^

the

low

point

the

spreads

industry

to

Parker; John J. Quail; Murray

for

demand

gen¬

Ward.

.

a

in

years.

<25,000

Ohio

24'A

is going

to take a similar commit¬

1947, the Industrial Average
made its low around 162 on May

275,000

Socony Vacuum

15

ment in

a

25,000

Standard Oil of Indiana.

37%

ilar commission

the height

of

35,000

Standard Oil of N. J

64

the market and, let us say, as

in

In

Among the various offerings

17.

following

immediately

point,

we

of 500.000
way

this

low

snares

Equipment at 12%, and of
shares of Koppers Co. at
During the
of

stances

same

period in¬

distribution

successful

offerings include the

of secondary

Shares

-

25,000

-

I—X

successful offerings at or near the

successive low points in the past
three years appears to be more
than coincidental.
While the evi¬
is

dence

in

the

Corp.

32%

—_

again reached

a

low

again there are a number of in¬
of

successful distribution

registered

] Among

point.

low

this

around

which were

offerings

successfully sold around this time

"5'X/X-x

were:
Shares 1

687,000

Pacilic

Gas

West

Interstate

a

number

&

1

X

Price

Electric—

Power

other

of

action

issue

new

of the

securi¬

of bearish influ¬

absence

/X/XX//XX'X

ences.

while

1

loss

U. S. Governments

of

is

can

Municipals
■\

be 25 to

;

-.

;

.

'

*

'

,

may

not

that

as

reliable indication

a

drastic

no

long term down¬

The purpose

to

*

This

new

issue index should be

be of great value to the securities
business.

It

can

used

be

as

an

important guide in the timing of
stock issues, and it

particular

value

is of

connection

in

rights offer¬

ings in industrial securities.

public

There

bull

lowing the successful distribution

comes

NOT

decide

to

in

time

a

it

when

market

the

reduce

risk

amount of

the ^ history

sidering

underwrite

to
the

"

■

"

•*

in

of

Industrials

recent

stand-by business it is quite clear

'

"X

i k-,'

i

.?

XX

<

unwarranted confidence is

an

'

iff

.

■

< •' t

'

.*?'"•

b'

:

:

V •'

'

<t

ii/

Railroads

being placed in this new method

If

preemptive rights of¬
one

erages

over
one

f

considers the mar¬

~

the past big market
can

readily

the

see

r

•;

*

-L.f

.

X'

Canadians

potential risk in these stand-bys.
In

1937

ages

a

f.v

utility aver¬

Dow-Jones

declined

37.54 to

:X'";

Equipment Trusts

Dow-Jones Av¬

ket history of the

from

a

high

•

**

i-'f,

of

X

-"V'1*! 7<

^

.f

*•'

Preferred Stocks

low of 19.65, or a 47J/2%

decline. In 1946 Dow-Jones utility
averages were

at a high of 43.74

Bank

and declined to a low of 33.20, or a
per

every

wise

is

••

Public Utilities

behind the original

stand-by business. However, con¬

breaks,'

trend is materializing.

V.

plan in the "lay-off" system was

of handling

believed,

1 ..it-

against the participants.

ferings.

with the preemptive

fol¬

So the odds

"when!"

sharp upturn, it does serve, it is

$7.35

of the market

sim¬

question of "will this hap¬
pen?"—it is only a question of

that

''''V

.

this index

25
L

a

a

a

accurately foretell the advent of a

common

25

sustain

1946,

or

at

"f

utility common stock offerings.
The

the

X""

•

Power

Penn

100,000

555,000

and

''

X

Company

f

of

1948, the Indus¬

neighborhood of 162, and

stances

entirely conclusive,

readiness

And

trial Average

not

21Va

16,

of

ties in large volume is indicative

71%

U. S. Potash

March

On

series

similar stock for

about two points or $100,000. It

53

——

these

market to digest blocks of

Laboratories--—

Visking

53,000
x

of

69%

Standard Oil of N. J
Abbott

7,000

incidence

Price

Company

-

Petroleum

Phillips

1937

not

The

the

following:
125.000

40,000

$28.99

Power

of Standard Rail¬

200,000

25%.

Illinois

243,000

fmd the successful sales

Oil

cent decline

of

24%.

It is

Acceptances

believed that this "lay-off" system

will continue to work in a slowly

declining

market,

but

not

in

a

Salomon Bros. & Hutzler
•"

Members New York Stock Exchange

///

Co.

,

vs *' V;

NEW YORK
»

■

,,

•




?

j.

*

1

n

."v*-.*/

^ v'.x-x:;.:

.

'

-

i

'

;

•

X. "

\

.

X

NbwYOM5.N.Y.
Prirjitc Wires to

BOSTON

.-X;/.

SIXTY WALL STREET

.\X.-

-

Members Aew York Stock Exchange

'v.

NEW

X:

CHICAGO

A.
N.

pin S. Newhard; E. Cummings

when

offerings ; around lowing secondary and special of¬ ing
make about $4,000 gross.
the Industrial ferings:
Averages in each of the past three
Some day this same participant
Shares
Company
Price
and

Lester;

Minor; Paul L. Mullaney; Cha->

50,000 share

a

or

Her¬

industrial

in

spreads

partici¬
commitment involv¬
$500,000, a participant will

taxes,

Rex

Harry

Stanley

and

expenses

W.

Matthew J. Hickey, Jr.;

Janson

Neill

;

the

K.

Earl

Caldwell;

in utility stand-bys will

the

financing
capital

E.

-

s

that

inevitable

is

been X

book / have

B.

A.

ment

theories

adopted in Wall Street.

<

Cromwell; Louis J., Cross; Cle¬

\

paying for the privilege of under¬

of

James

G.

William

that under¬

The

Ainsworth;

Bassett;

writing X' securities.

..

ap¬

Eugene P. Barrv. Chairman; Wal¬

warehouse for storing furniture.

writers have reached the stage

new

Committee

Securities

Industrial

require

It would appear now

a

Respectfully submitted,

deposits

on

would

that

sec¬

is only

It

country.

securities.

of any size,
depositors to
pay rent to the banks in the same
manner in which one pays rent to
but

subject
all

to the security business
developed to offset the

be

ductive that banks would not pay

interest

this

present gradual but persistent re¬
duction of profit in underwriting

unpro¬

so

study

ideas from

manner

proach
can

to

the

of

this

in

that

idea

the

dealers;

revision of the Specialist System

on

large commitments
the compensation

brokerage commis¬

a

rebate to

a

commis¬

brokerage

a

gross

After

a

underwriting carefully.
It
was bad
enough when we were
taking commitments and being

take
stand-by commitments for
no compensation..,
plan has
Some
years
ago there was a
Frankenstein school of economists who used to

underwriters

should be

studies

cus¬

On the agenda for such

tomers.

two-and-a-

this,

are

ties to merchandise to their

.

Jt is time to look at this

not wait for this

happen but immediately start
exploring constructive ideas for
creating a supply of sound securi¬

financing

new

grown

it

1

in

engaged

to

as

less

Preemptive Rights

People

business should

tained.

Some Comments

erally.

precipi¬

they are currently being
conducted, is clearly dispropor¬
tionate to the compensation ob¬

times in every bull mar¬

are

ket to say

declines

;

The market risk in these stand-

bys

words,

illustration of activity in

As

System—_

tously.

an

type.

in

11%

—

Regis Paper—$10.65

161.
In
preceding
the low in mid-June, the new is¬
sue
index gave ample evidence
that no major bear market trend
was developing.
Instances of suc¬
cessful new deals during this pe¬

year

issues, the market will not sell
substantially lower on a trading
basis in the nearby future (and
this is an important qualification),
but it does mean that we are not

•

13 V*

Again in June, 1949, the Indus¬
Average touched the three

does

facing in the immediate future a
major break of the 1937 and 1946

—X

Greyhound
St.

iii

trial

large number of successful

a

48

Public Serv. of N. Mexico

344,000

higher prices

that because

Powder—

300,000

healthy

This

Price

„

Hercules

340,000

issue market

market.

listed

mean

been

the

Company

111,006

is not as
the bear side,

on

that

believed

is

Shares

evidence

this

conclusive
it

offerings around this time were:

market

into

a

Among the successful secondary

the successful offering
of equity issues at or about the
that

such

of

the offing.

they reveal that in the past

few years

low

sale-

the

large block of
common
stock served as a good
indication
that
a
major break¬
through of the old lows was not in

ability of

when there is

market has started

instance

this

acter

which

market

charprices by
the quality
any

current level of market

successful

and

common

stand-by agreements of

M

(2517)

CHRONICLE

FINANCIAL

&

HAVEN

FHILADELFHIA

CHICAGO

HARTFORD

.

CLEVELAND
SAN FRANCISCO

(2518)

,34

THE

Continued

from

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, December 22, 1949

27

page

Analyzes Financing by Public Utilities
petitive

quire no special sales effort, com¬
petitive bidding has been satisfac^
tory," the Joint Committee sug¬

has

temporarily suspend
"the applicability of Rule U-50 to
sales of electric and gas utility
preferred and common stocks, and
adopt a new rule providing that
such sales may be made by any

certainly con¬
of this joint

in the findings

EEI-AGA Committee.

vious

reports

forth

its views

legislation,

this

has set
subject of

year

the

on

of

enactment

which

would serve further to extend the

activities of the Federal Govern¬
the

ment into

utility field.
With
cooperation of the office of

the

the General Counsel of the

the

ciation,

deavored

Committee
follow

to

Power

vate

con¬

the passage in
before ad¬

endorsed by the President in
special message to Congress last
Spring.
The Committee believes

government, and investment op-:
portunities for capital. In the light,

journment, of legislation provid¬

that all

current

ing for loans under the REA Act

tion

veloped

incidental to flood
trol and similar projects. v
second

last

the

Asso¬

has

en¬

various

the., Committee's

for

additional

service

have

the 1950 Federal

During

present time.

have

crease

petitive bidding
from

tne

on

of

debt transac¬
level

present

year.

states that while it did not discuss

procedure known

around"

as

lation

com¬

bills
both

serious

indicative

as

in

of

v'"-'

legis¬

permitting TVA to construct

steam

a

generating plant, an action

which went

"shopping

"maintenance of

or

and

The first of these was the

Committee

The

consider

we

the trend.

$1,000,000 to $3,000,000 in any one
calendar

which

themselves

of

such

two

contrary to the whole

concept claimed

the basis for

as

the
.

We

census.

Committee

committees

their

such

as

from

by

was

the
We pointed out that

$1,200,000,000.

lation

cost

was

at

time

such

when

possible

a

the

justification for

expansion program

power

During the

of

man

ing

National

holding

companies.

-

integrated holding

or

have

Come

through

on

pro

the

wealth
been

Resources

&

Corp.; have
subscription to
the holding com¬

in the

case

Public

Utility Corp.;

sold

in the

as

com¬

of Common¬

for

stockholders of
as

holding

case

Southern

offered

panies

either,

rata distributions to

in the

as

companies

market

stockholders of the

panies

case

of General

or

have been

of Cities Service

Company. According to plans
before

the

anticipate

Commission,
that in

the

we

now

may

relatively

future there will be further

near

additions to the list of

utility com¬
arising from this source,
thereby broadening potential in¬
mons

vestor interest in

figures taken from the "Congresit sets forth the

pany

total cost at

pany

over

of

up

Stocks of the operating companies

on

the

t

further prog¬

year,

has been made in the break¬

ress

unwise to enact legis¬ ; sional't Record,"

entailing

at

We contended

no

the*

is currently being planned in*
Washington.
'

duced to indicate that the pri¬ Committee of the Hoover Com¬
This article appeared in
vately owned telephone companies mission.
are
able to do and are doing a the May 14,1949, issue of the "Sat¬
capable job in extending service urday Evening Post" and was sum¬
to rural areas where there is de¬ marized in the
August "Reader's
mand for services.
Our testimony Digest."
Without touching on the
was the only testimony entered in
social aspects of the government
the record showing the potential power
projects, it strikingly sets
cost of the program proposed in forth the terrific cost of
projects
the rural telephone bill/ which po¬ already
Completed, those under
tential cost we figured at a possi¬ 'way and those proposed.
From

ble

a

and

position of the'
Committee be-"

as

time

hearings on such
legislation in opposition thereto.
We recommend particularly that
each of you, if he has not already
done so, read an article entitled
"The Bill That Squanders
Bil¬
lions", by Leslie A. Miller, Chair¬

con¬

legislation

unnecessary

the

lieves there is

constituted, subject to the
judgment of General Counsel, ap¬
pear before the Senate and House

telephone

determined

in

is

considerations
financial

government,

to time

ample testimony had been intro¬

that it

MUNICIPAL

rural

been

whatever

these

,

curities

bill, at
least until the basic requirements

satisfactory.

year,

recognize the import
legislation and

to oppose it.
We recom¬
mend that the Public Service Se¬

Ag¬

on

do

power

riculture in opposition to the pas¬

and

the

the

to

sage of the rural telephone

that

been enacted into law,

report

fore the Senate Committee

tended

Further, the
suggests, an in¬
in the exemption from com¬

As forecast in

Spring, meeting, the 4 Committee
through its chairman appeared be¬

Committee

,

should

of

Associa¬

of this and similar

unwise

a

it

members of the

should

bills introduced in Congress which

was

a

rush

lines and services.

might affect the utility industry.

which

Joint

was

minute

rates, jobs for employees in pri-*
industry, additional tax reve-'
nues for normal activities of the'

was

,;

The

return to

there

ticular

namely,

importance is the bill for
the proposed creation of a Colum¬
bia Valley Administration which

determined

sion found
conditions

projects,

for construction of rural telephone

-

Committee in its two pre^

The

Federal

the disposition of water power de¬

the

Your Committee
curs

two years, but that it could be re¬
voked at any time if the Commis¬

the

and that experience
proved it unsatisfactory in a

number of cases.

method, stipulating that the Com¬
mission retains jurisdiction over
the reasonableness of price and
spread."
The Joint Committee
goes on to suggest that the sus¬
pension should be made perma¬
nent if the new procedure is found
satisfactory after a trial period of

tions

it

Commission; "no

the

financing,"

gests "on the basis of the record'that the SEC

were

conditions,"

suggests
longer
order this method used in equity
that

57Vz billion dol¬

operating

com¬

and integrated holding com¬
stocks.
1
: *

lars, of which works already com¬ j
The Committee is concerned
operating at a deficit. The pleted account for approximately iwith the recent insistence of the
SEC on prompt listing of utility
legislation was passed, -but as 4.8 billions, projects under conpassed, embodied various amend¬ |strtiction 4.6 billions, projects def¬ commons thus coming into the
ments recommended by represent¬ initely
planned 19 billions and hands of the public for the first
atives of the telephone industry projects
planned
for
the
long time. We believe that this insist¬
and by your Committee, including
range future 29 billions.
Of this ence on listing prior to distribu¬
a

govern¬

ment is

BONDS

which we proposed barring 1574/3 billion total, Over 24 billions
lending of government funds are earmarked for government
for the purpose of building com¬
development
of
hydro-electric
peting or duplicating facilities.
power.
,
The Senate Appropriations Com¬
The Committee
one

Boland, Saff in
Established

1920

TELEPHONE

NEW YORK 5, N. Y.

"

recipients of such stocks
companies whose stocks

or

are

dis¬

tributed.

that

the

.

mittee

20 PINE ST.

Bell

Co

&

tion is not in the interests of the

the

WHITEHALL 3-3414

*

System Teletype—NY 1-535

recommended

that

a

sim¬

ilar

prohibition against the build¬
ing of competing or duplicating
facilities be incorporated in the
1949 Interior Department Appro¬
priation Bill, but the full Senate
omitted this restriction in adopt¬
ing the bill in its final form.
We
believe

that

should be

Underwriters

Distributors

all

future

ing

—

the

a

When

BONDS

appropriations involv¬
expenditure of public

Congress

ment

the

on

planning service

reorganization

We

which, in the opinion of
would

adversely

This

for

Cities,

service

expansion program in the history
of the industry.
While for one
brief period the reserve margin of

capacity in the industry
low

existing

relations.

SECURITIES.

be¬
serious

was

were no

deficiencies of power and the re¬

has

serve

now

been

what is considered
The program
owned
and

a

built

,

to

up

safe level.

companies has contributed

will

be

listed, if at all.

Presumably the decision of the
SEC to insist

on listing is based on
assumption that listing will as¬
sure
a
ready market and avail¬
an

ability of periodic reports. All of
in the industry know that until

us

stock is

contribute

market than does the listed
a

We

great
which

viding ample service at reasonable

tively

Of par¬

know

that

States and

debt

new

for

'leeeam

other

REGISTRATION STATEMENTS

WE

DO

:

financing,

structures,

NOT

PROSPECTUSES

.

planning

ANNUAL REPORTS

PROXY

•

STATEMENTS

and financial

BUY

OR

and all related documents

SELL

We are pleased to cooperate with finan¬

4

;

v.'i-vv

vt..

*r.

institutions and investment houses.
-

'

--

■

'

*.

>

.;

.t

«i

.

.

i

¥

y-'Y;K

1

22 THAMES ST.,

If'-'H

Wainwright, Ramsey &. Lancaster

71 CLINTON
Established

70 Pine Street

NEW YORK 6

ST., NEWARK, NJ.

New York 5, N. Y.

Telephone WHitehall 4-3540




192S

A

QUARTER

CENTURY

OF

there

mar¬

are

a

utility
commons
years
have been ac¬
traded over the counter

-many

pro¬

economy.

seasoned, the over-theprovides a better

counter market

ket.

continue, to

whose stock is involved.

justification for dictat¬
ing to the management of a utility
company or any other company
where or when its securities should

a

of the privately-

in the

see no

greatly to public welfare in

•

cial

normal, there

con¬

a

includes experienced

development' of plans for
of

render

we

the financing of self-liquidating
projects,

public

met

Municipalities

Municipal Finance

governmental units.
in

company

have

Municipal Finance

A Constructive Service to

assistance

be given to
privately-owned
the
require¬
ments for power throughout the
war and
postwar years and are
presently engaged in the largest
utilities

other bills, the enact¬

Committee,

should

the fact that the

HAnover 2-5620

Consultants

on

consideration

of the

province of the SEC to
decide,
but is purely a matter to be de¬
cided by the management of the

STREET, NEW YORK 5, N. Y.

■

As Consultants

the cal¬

with
the
proposed
expenditures greater

whole national

INCORPORATE OS

structive

of

on

in

connection
mammoth

believe

question of listing is not

affect the utility industry and the

MORTON fit CO.

15 BROAD

reconvenes

January, it will have
endar many

H.

restriction

a

funds for power development and
related purposes.

STATE and MUNICIPAL

W.

such

standard provision-of

believe^ that in

We

SERVICE

Volume 170

with

markets

close

In

closer

THE r COMMERCIAL

listed utility

financing being done through sale
of r equities will continue in 1950,

great many cases

and with stock market conditions

as

than the markets
commons.

J

Number 4866

a

on

or

loss

favorable

than those-

the

no

out of

over-the-counter

market

if

they
there is

decided to sell, since
customarily no odd-lot differen¬
tial in over-the-counter trading.

the

7 From

standpoint of man¬
agement, there is a decided loss
from
immediate listing,
Every
utility management is interested
in having a substantial amount of
the company's stock'held in the
territory served by the company.
Such distribution Will almost in¬

variably result from the activity
of houses in the over-the-counter
market

to

very much greater
extent than if a stock is listed as
a

Soon as it becomes available to the

public for the first time. Perhaps
of even more importance is the
effect

the

on

nancing. If

company's future fi+
stock is immediately

a

listed and does not have the bene¬
fit

of

common

['

the seasoning provided by
over-the-counter market, it

has

tendency to become "lost in

a

the shuffle" and for

protracted
period of time to sell out of line
with

other

similar

a

stocks.

therefore

further

a

stockholders.

disservice to

:,

*

J

.

*

on listing
making periodic re¬
ports available to stockholders, we
believe sight is being lost of the
fact that most companies whose

based

are

quired

by

distributed

so

are

last

on

of

the

management

method .has
times

this

as

with

certain

but also to the

issuing companies

SEC,

in

holding

connection
company

refunding higher

purpose of

the

■

7U7

ff

levels

of

1946-47

;

7 ty;

deals

during the coming

several

more

:

that

with

Rex;

Woodward; Robert M. Work.

Economic Research Director, Chamber of Commerce of the U.

good business

savings, effect
Sentiment of most

dred

tried

and

7

-

.

size

to

not be inflationary. ^

may

good

as

1949

over

;
t

as

have data have run sub¬

v77;yyyyy,.y v;-7

•

Nineteen

hundred

forty-

and

'

Export Surplus Down

>

'

7

ulative effect

| Because of the recent high level
of

there

starts

will

be

large
backlog of eonstruction-in*prog¬
ress to carry over into 1950.
r
and

in

tures

a

Public

year.

7

is

last

in

1950

antici¬

favorable.

looks

half

dominant
on a

V

expected

was

'[[.,[•' ^ /y'7V/7';

b

the

of

some

7

to

that

so

1950 may close

less buoyant note

than it will

open.

Permanent Destruction

Yet, it must not be overlooked

portant

ity,

sec¬

s u

Dealers in

Dr. E. P. Schmidt

ings of

A substantial part of this

and

will

production

a

few

others.

loss

by

of

the

^Reprinted from "Business Ac¬
tion," Dec. 16, 1949, published by

required. The Committee believes

the Chamber of Commerce of the

that the trend toward more of this

United States.

Underwriters

expenditures

and

•(.

-

•.■*-.

4 •

'

'

'

•

" "

•

•

v

'•

••

.

1

..

Sewer
Toll
-77

:

•

,'

;[;[

Electric

■

Distributors
:

■■■'7;:::7':777i.:;7

■

7

'

.

•

•

■

Bridge

Housing

y:-y

•

'

77:7 \;,;[

'

Municipal

y

-77

70 Niagara Street, Buffalo 2

BOwling Green 9-2070

Washington 8060

Teletype NY 1-2*27

Teletype BU 122
Wire Between Offices

'Municipal Department
'
'

■

.

.

SCHOELLKOPF, HCTTON & POMEROY, INC.

Private

Water
:

Corporate profits after taxes are
more
than 25%.
A larger

Utility -: 77Railroad'7 7

Street, New York 5

the

down

INVESTMENT SECURITIES
Industrial

in

remarkable performance.

OF

Public

MUNICIPAL REVENUE BONDS

ago.

fully explicable but if we can be¬
lieve the figures, it is indeed a

a

considerable amount of financing

year

quarter of 1949 in spite of
unemployment and strikes were
almost equal to the average levels
attained
throughout
1948 — our
greatest year of prosperity in his¬
tory. This income behavior is not

unfilled

Because

created

stabil¬

third

mobiles, steel,

money

a

Personal

of

orders—auto¬

de¬

remarkable

dividuals

demand-

large

GENERAL OBLIGATION [ MUNICIPAL BONDS

that income earned by in¬
in November Was just

so

a

about equal to the average earn¬

bstantial

backlogs

with

1

;

f

-

•

'

V

-

-.'77

V

-

7

'.-7

U-

:

•

.

7

.

4

.

,

:

qAllen & Company
Established 1922

30 Broad Street

In

more

into the period ahead.

tained

on

bearish factors may become more

construction

On net balance the construction

industry

balance

the

pre¬

that

the first part of 1950

net

will be up moderately.
'

;;7

,

In sum,

equipment expendi¬
probably will be

1950

substantially down from the
vious

pated.

buying by non*

on

countries

dollar

that these strikes themselves per¬

al¬

and

severali im¬

$12,000,000,000




we

,

mands.

...

This de¬

into the income stream.

flationary force may be partly
offset by the "hotness" of the pros¬
stantially ahead of both 1947 and
1948,* in a season when- starts pective veterans' insurance divi¬
normally decline.
7 ; 7 *
'
.7 dend.
V

certainly manently destroyed hundreds of
not
equal ' to millions, of dollars of wage and
the levels set other income. -;7vy'-['77'", 77
In spite of this year's decline in
in 1948.
7
A year ago production from previous levels,
we still had
personal income has been main¬

1953 to provide for plant expansion

.

In the first quarter of 1950 the

;

government is likely to take more

people who steel, coal, and other strikes, some
the year backlog of demand will be carried

fifty should be a good
year, not quite

The

but there will still be

-

have assumed.

run, as some

up

to be: Nineteen hun¬

seems

the

internal

the deficit may

reason

j

inflationary, in the short1

starts in the last three months for

which

,

five-year period ending in

from

?
l j

money away from the people and
business than it will turn back

'

the electric and gas utilities must

:

S.

as

upward, and because Federal budget deficit

the

growing

money.

The construction industry prob¬
ably will continue turning in its
remarkable performance. Housing

be offset by investment in production through individual

may

future

years.

•-For this
not be as

!

;

though slightly below 1949. Says financial 77

year,

indicators point

have

of

new

May Not Be Inflationary

for

'l;'■4

Plant

Despite several adverse factors, Dr. Schmidt foresees 1959

with

63 Wall

Jr.;

Lawrence B.

By EMERSON P. SCHMIDT*

in

7

W. 7 Pressprich,
M.

What About Business in 1950?

tors

sources,

Gilbreath, Jr.; James

creation of

Construction Ahead

-

,

[ Our export surplus is shrinking.
gest year in residential construc¬
tion in history.
Devaluation has not had the stim¬
H . r j
-1 \
.
.,

economy

arise

Fahey;

budget deficit is
Since private savings may
fully absorbed by invest-1
ment in production and other fa*'
eilities, the forthcoming Federal;
budget deficits may be financed:
to a greater degree out of money >
savings rather than through the

be less

nine may turn out to be our big¬

viously referred to indicates that

meet

J.

McCurdy; George L. Perin;

William

outstanding

presently

are

Leslie

Lee; Edgar J. Loftus; Wallace

7 Reginald
7

clines. •
j

f

Federal

rising.

expenditures
price de¬
7•' ■ : ;■ "7.• f '

government
little room

leaves

most

of the last two

to

M.

J.

regarding privately placed issues,

report of the Joint Committee pre¬

sufficient

W. Sydnor

Dis¬

year.

Edwards;

ri d

a

is

The

'

been

has

The continuation of high taxes

;

Mason, (Chairman); Rob-

=

[-refunding

be

there

Securities

Committee; 7:7 /'' 7

F; Edward Bosson; William

,N,

the

treasonably to anticipate that there

There is plenty of evidence that

a

bonds which

erf. W. Baird; Edward F. Beat-

-

round

of wage in¬
moderate, but
added to the pensions and social
insurance costs agreed' to -and
about to be agreed to, it is diffi¬
cult to see any great decline in
costs for 1950. This added to agri¬
cultural artificial price props does
not indicate any great breaks for
the-consumer in the year ahead.

important place

Service

;;

Robert

continues, it is

utility financing will continue at

over

an

Market Indicators Up

The fourth

creases

financing.

Public
,

cou¬

bond market ^ toward

plans, abandon

raise approximately

company

little harder to

a

get in 1950 than in 1949.

sev¬

1* Agricultural.; prices, * by
and first part of the year, have begun
large, are ^ resting on or close to to expand again. The money supfloor levels;
ply is increasing.

fake

If the present trend fr L. Day; Carl H. Doerge; William

bonds.

pon

the policy of insistence on listing.

pace

7;

large utility bond issues for the

Impo¬

effects

urge

in 1948

There have recently been, two

TV

therefore,

improve¬

advantageous

and their stockholders.

of

spring in¬
major part

only to investment bankers, 7*77 Respectfully submitted,

not

|

of

this form rather than the sale of

not

moderately.
Jobs will be

.

debentures

tem in the near future may

occupied such

above outlined.

We,

This

a

some¬

•

oper¬

success

so

is true of

same

4

slinking

On the financial side, most of *
Thq stock market currently has
a favorable coloration for the pe¬
the market indicators are pointing;
riod ahead; Experts are uncertain upward.
whether the,recent rise is due to
Instalment credit, $10.2 billion,.
an. anticipation of bette* earnings is UP three times oyer
1929, and •
for 1950, or merely a correction of
approximately 230% of the 1930:
prior ©vereaution, but it is more figure, and; is expanding rapidly. >
likelythe latter*
<
Bank loans, after declining in the *.

financing of the Bell Sys¬

dealers,

"

::/•

of the

entirely satisfactory to investment
ments should prove

of

The

'

Farm income,

what in 1949, will continue to <d<M

eral months.

financing

The

,

dicates that at least

several

and while

year,-

April.

offering

current year.

Fairly Stable

wholesale prices in the last

System

to

listing condition

a

.

public

no

operating

ahead

imposition of

used

been

ATT^

The

i

to its stockholders last

and

basis.

compensation

a

being distributed make

unfavorable

the

supervision of investment bankers

sition of this condition would not
the

available,

whose

periodic reports available.

have

not

since

offering additional securities

stockholders, should avail them¬

If considered necessary, it would
seem that the Commission could

are

is

for

industry generally fol¬
lows the practice of making re¬
ports available at even more fre¬
quent intervals than required of
companies whose stocks are listed.

stocks

the

done

selves

1950

nancing program of the- Bell Sys¬

have

to

ward drift.

35

equal approximately 95% of thei

Consumer prices have remained
fairly stable with a slight down¬

Information concerning the fi¬

•

conventional underwriting method

the utility

companies

in

re¬

State Commissions

that

refunded

ating companies in that

able at frequent intervals and that

require

be

may

tem

detailed information avail¬

make

seem unrea¬

unless market conditions change.

to

use

Prices

anticipate that most of

ity companies, who do not

on

stocks

these

[n 7!■•

,

It does not

sonable to

The Committee repeats its com¬

may

If the SEC's insistence

coupons.

ments of last year that public util¬

This

obviously makes any future com¬
mon stock financing of the
com¬
pany
more
expensive, and is,

stocks

-

'''. ■■' ('4

.

of

the

is

offerings

bonds with 3Ya, 3% or ZV2V0

pany

re¬

(2519)

proportion of corporate earnings
is being paid out in dividends.

of AA rated electric and gas com¬

likely to b6 raised: through further
stockholders.

CHRONICLE:

FINANCIAL

$500,000,009 principal amount

over

cently prevailing, a substantial
part of the additional capital is

recipients of stocks,coming
holding companies receive
such stocks in Odd lots and Would
actually
be
better off in
the

&

New York 4

36

the

(2520) l

Continued

has been followed consistently and
that is that we have-advocated

from page 1S]

Investment Banker and
The Nation's Economy

Continued

private, enterprise,.atrevery turn
of the road arid have opposed the
over-extension of government into
business.
Therfe. are- many who

The SEC

feel

that

our

has

failed

to

are

our

economy

years have proven the case for a
the pool the thoughts and energies free economy more than any simi¬
ahead and money of these various pro¬ lar period in history. The great
but they certainly occupy grams into one project, I believe industrial system built by * free

the complete

answer

to

fundamental job we have
of

us,

a useful role in this

we

picture. Many

others outside of our business who

tackling

are

the

capital

equity

problem, such as Chairman Mcof

Cabe

Federal

the

Reserve

have publicly recognized

Board,

the contribution they are making.
America has been built on prof¬

its

to the fellow who goes out

and

gets the job done.
The profits
to the savings institutions and life
insurance companies do not show
up

in

its

on

a

direct way as do the prof¬
the sale of securities, but

analyses that have been made re¬
veal that they substantially ex¬
ceed
the
profit on investment
trusts. I do not see them blushing

would

progress,

much

make

Scarcely

a

greater

day passes

that some

pamphlet or some re¬
quest for funds to support a new
movement
for
free
enterprise
doesn't appear on executive desks
throughout the country. Most of
these
pamphlets are good and
most of these projects are worthy,
but they are not doing an effec¬
tive job.
They hit the wastebasket quickly.
A person such
as I, who is vitally interested in
such efforts, doesn't have a chance
to read a tenth of them.
They are
never seen at all
by the people
who really should see them.

enterprise

has given us

matched standard- of

an

un¬

living and it

far out-weighed any other factor
in establishing our military su¬
distress

War II.

in World

premacy

of

our

has

hand

other

The

economy, on the
been occasioned

by interferences with the free play
of economic forces.
I

do

not

I don't
they should, because

it, however, and

It

to

mean

condone

the

assigned job, which is selling ser proved utterly impracticable;: The
Few were able to foresee next approach was a rule which
these benefits back in 1935. prohibited any compensation to'
Everyone is happy to accept them an affiliate; That proved imprac¬
now.
But m between, there has ticable too, and; only" resulted in a
been more than a decade of care¬ lot of litigatiom
v
i
ful,prudent, judicious administra¬
Finally, in 194L after a- full and.
tion of the statute.
If time per¬ careful
study, the competitive
mitted and I would recount them, bidding rule was adopted.
The Securities and Exchange
you would be amazed at the num¬
ber of supposedly insurmountable Commission has no exclusive- on
obstacles which were overcome in competitive bidding; As you know
the administration of the Holding several State Commissions require
Company Act. There are, of course, competitive bidding for utility is¬
many
problems
still
pending, sues to a greater or less- degree.
The District of Columbia adopted
awaiting solution.
Now I want to speak upon a its competitive bidding rule over
curities.
all

,

tected

man

there should

and

.

be

ade¬

quate public control of monopo¬
lies.
But, it is highly important
that these controls be by rules of

seems

.

.

-

20 years ago.

...

:

■

The ICC has

required competi¬
tive bidding for equipment trust
know, is the competitive bidding certificates since 1926; and- in 1944
rule. Following that I am going it applied the competitive bidding
to talk about negotiated deals and rule to most senior railroad secur¬
j
compulsory competitive listing of ities.,.
utility stocks.
*
" ;
U
The Federal Power Commission,

sponsors

made barriers to such

19

page

rampant with all of very pertinent subject and I am
his selfishness at work. Competi¬ going to speak frankly, that is
tive processes should be fully pro¬ about Rule U-50, which as you
economic

to me that the leading law and not subject ot the caprishould initiate an organ¬ ciousnesS of those who gain gov¬
know that
ized effort to pool all projects. ernment : power;
The economic
they are rendering a fine service Careful editing of words and ideas man develops best in an atmos¬
and they should be adequately
•a selection of the wheat from phere
of freedom. History has
compensated.
We should take a the chaff-—could produce a really proven the case for this, but it is
page out of their notebook and big program ' and the net cost disregarded today: by those
in
apply it to our defensive concept would be a great deal less, even power who have laid top great
Of
though
t h e:-*- combined
project a stress on economic * security
profits. i';t !-:'Yr'vyV.;
And now to our public educa¬ would be tremendous in scope, without realizing: the enervation
tion program.
such a
suggestion is of character that goes along with
As you all know, Perhaps
If is the activity on which we have naive. I realize that pride of au¬ it.1 v.:> /
f.:
laid the greatest emphasis this thorship, some trade association i I believe that most of our pub¬
bureaucracies
and
lic servants are men of good will,
promotional
year because it is basic to the so¬
lution of every problem that we profits are very potent enemies of but judging from some of their
have. We are handicapped by the such cooperation. Still, the need is actions they are being led grad¬
lack7 of adequate funds to" do the so great that the leaders of indus¬ ually
and! blindly ; into
social
sort of job that is- really needed, try and finance who support these schemes that can only end in un¬
but within the limit of these funds programs should ride- down the dermining our national character.

about

front

capitalistic system
serve

the of these programs on the market well in
the last two decades and
broader distribution of securities and there is a resulting diffusion that the
role of government should
I should like to see a
which they are bringing into our of effort.
be further extended. To me, these
If we could
economy. I do not mean that they great amalgamation.
the investment trusts for

to

Thursday; December 22, 1949

commercial: &. financial: chronicle

requires

The Competitive Bidding Rule

;

j.;i

competitive

bidding

in.

individual cases; and you of course

don't think there is any longer know, that municipals

were al¬
legality of ways sold on that basis. "
bidding
rule.
;" The shopping around technique
There is still much argument over
was suggested by the industry as
the wisdom of the rule and its

much doubt about the

,

the

competitive

.

ap¬

a
substitute for sealed bidding
particular cases, al¬
When an exemption is permissible/
though even here I think the Com¬
but the Commission stilt Has to be
mission has treated requests for
sure
competitive conditions are
exemption very realistically. The
being maintained. '
/
v
[
discussion these days, seems to be
We have never laid out a blue¬
more on the subject of the tech¬
The Commission
nique employed where the Com¬ print on this.
mission has granted a requested has never said just how it had to

plication

in

be done.

\

;'/•v(.;]/

exemption and permitted a nego¬
tiated underwriting, on condition

I: We have, to

that

pended upon

t

competitive

maintained.

conditions
;

be

>

;

large extent, de¬
you. of the industry;
a

to come up with the ideas, ,• The.
Now just what, do we mean by Commissioir has only said that
Tied in with this is the great stances - which prove the trend
remarkable
and
self-sacrificing need for the various elements in that is taking place. The insidi¬ the maintenance of competitive certain things could not be done.
work of Joe Johnson and his Pub¬ our industrial and financial com¬ ous thing is that these changes are conditions and how do you achieve ! The result has been that
the,
lic. Education Committee, -together munity to work out their internal so gradual that we will not real¬ competitive conditions? . This is a technique employed is confusing.
with the splendid and thoughtful problems together and present a ize the sum total of their effect situation which has given me no In the recent Ohio Edison deal*
end of trouble. Of course, in con¬
' i,1
work of our Public Education Di¬ unified front in their social and until it is too late. > 1 i
which is currently being offered,
I have .been concerned about the sidering
it you must take into it is very difficult to distinguishrector; Erwin Boehmler. I cannot political endeavors.
That
they

it

seems

to

great strides.

me

we

have

a

movement.

We

can

all

cite

numerous

in¬

-

:

This is due to the

enough:tribute to these men, have not done so is a source of apparent complacency in so many
particularly considering the hand¬ great comfort to the enemies of quarters about the size of the Fed¬
icaps under under which they our system. We are examining in eral debt. We have been able to
have worked. I am sure that those our forum tomorrow the question take it in our stride in recent
oLyou* who attended the Public of unity in our approach as far as years because of unprecedented
Education Forum and have been ther securities end of the financial business activity, but this should
pay

following the literature will agree
With this.
We are trying as best
we can to bring this work down
to the grass roots level, where it
certainly belongs.
Many of our
gfoup committees are taking hold
in fine fashion, and again 1 think
We are engaged in an undertaking
that will bear fruit.
-

consideration the statutory back¬

V'

ground. :V
"In
all

matters

affecting

the

Commission's activities, we must
always go* first-to the statute con¬
trolling. After all,, that is the law.

what took place-from: what wouldhave taken place under full com¬

petitive bidding.

>

These

techniques may not nec¬
essarily be the best way of finaiic-:
ing where you have an exemption.
comfortable The law is the basis of the Com¬

community is concerned. It is my not lure us into aI want to make it clear that we,
hope that in time we can extend feeling about it. That, the comfort¬ mission's powers.
on foe Commission* are not pleased
found, according to
such discussions to the commercial able feeling exists, however, no one. I Congress
with this procedure.
The staff is
can deny.
It is by such processes Section l<bl of the '35 Act, that
banks, the insurance companies
not pleased. We feel that the- in¬
is the public interest may be ad¬
and other members of the finan¬ that "the social welfare state
dustry has in a large measure de¬
cial community.- There should be born, We must ever be on guard versely affected:
veloped these techniques.
Our
for complacency of this sort.
"(2) When subsidiary public
no fundamental
quarrel between
concern
is, first, last and always
In closing, I should like to pay utility companies
enter into
any of us.
Each segment has its
.

•

.

place inour scheme of things. Mu¬ tribute to our Staff. No President,
Committeeman or any other Offi¬
: Part
of this work is done v in tual understanding and recogni¬
cer of the Association could possi¬
conjunction with other groups tion of the role of each by the
who are telling the story of free other can be a tremendous factor bly do any kind of a job without
the great service which they are
enterprise because after all,* the in the task ahead. \
In reviewing the history of the rendering. I shan't name them all
;story of investment banking is the
but there is no one in our organ¬
story of free enterprise.
Here I IB A, it is interesting to note how
ization who is not doing a fine
should like to repeat something we have laid emphasis on differ¬
piece of work. My contacts this
that I have said often and that is, ent things in different years.
in my opinion, there are too many There is, however, one policy that year have been primarily with
Bob Stevenson, Alden Little and
Murray / Hanson.
Bob works - so
quietly and unobtrusively that it

FIFTY-EIGHTH YEAR OF DEALING IN

1
j

is

until

not

him around

one
a

starts following

bit that one sees the

great efficiency of his operations.
I have never seen it surpassed in
any organization.
:
) i

.

.

transactions in which evils result
from

absence

of

arms-length
bargaining or from restraint of
free
and
independent" competi¬
tion"; and further
;

an

"(5) When in

there is

.

.

.

any other respect
lack of economies in

-

these

attacked

lems first, in Section 7,

ing the Commission to

by

by requir¬

shall

registered

be

minimum

I know you

the

of

have heard it that in:
a
negotiated deal;
so-called
shopping,

the

around

process

then

standards

Some say and

of

case

where

.

becomes

a

is

employed,

case

it.

of-the best

12(d),

We appreciate the ;
significance of this and I think I,
can speak, frankly for the Com¬
mission—we

at the

state

for

any

company

.

-

But

are

in such,

to make this reference

somewhat in order. Much
of - the

.

not for it.

proceeding

a

as

-

,

are

present^time, the mechanics,

of such
a

unlawful

holding

the

spread,

Section

which provides that /
""It

prob¬

pass on

reasonableness of price and
and secondly,

the

the statute be met.

liar winning.

the raising of capital."

Congress

that

Commission- has

criticism]
resulted.]

.

I personally, and I feel that I can
to sell any security
in con¬
travelling
speak for the Commission/ would
companion on many of my jour¬ travention of such rules and regu¬
neys—the Merry Emeritus, as we lations or orders regarding the welcome any practical suggestion"
have dubbed him
I am very
from the industry that would help
consideration to be received for
grateful. We have paid tribute to
clarify - this situation and would |
Alden in the past in v more elo¬ such sale, maintenance of com¬

To

Alden

Little,

.

my

.

.

—

SECURITIES

quent

Primary Markets
Statistical

:

'

great affection.

'"VVC;

CHAS. W. SCRANTON

&

n
CO.

ME MBERS NEW YORK STOCK EXCHANGE

209 CHURCH STREET, NEW HAVEN 7, CONN.
Bell Teletype—NH 194

Telephones: New Haven 6-0171
New York CAnal 6-3662




than

I.

can

muster,

and I subscribe to all of them. He
has
raised
this organization
of
ours from a pup, and he has our

Information
*

-

terms

,

Hartford 7-2669

It

is

inspiring

petitive conditions, fees and

missions,
interest,
the

accounts,

disclosure

of

matters

the

Commission

to-

safely within the meaning ef

stay

the,

as

and -similar

Commission

allow

com¬

statute.

deems necessary

or appropriate in the public inter¬
to work with
His clarity of est or for the protection of inves¬

Compulsory Lktingp of Portfolio

j

Stocks

There is another- problem which
Murray Hanson.
I think has given a number of you
mind, broad vision and delightful tors or consumers."
personality make our road seem
You who have lived through some concern in recent weeks.
I]
much easier. I cannot begimto tell
this know how the Commission refer to" compulsory listing , of j
you of the immeasurable help he
has been to me,
has struggled with this respon¬ portfolio stocks. This is a matter
']
^
To the Staff/my fellow officers, sibility given it by Congress.' For
Governors,
Committeemen
and a number of years the Commis¬
the loyal and cooperative mem¬
sion actually passed on each case,berships T" am" veYy " grateful f6r
making my year such a pleasant one at a time, and tried to deter¬
and interesting one. Thank you all. mine if the statute was met. That

-

which sometimes, falls within the

discretion of the

the company: which is

has filed

a

{

Commission^ -If j
liquidating

Section 11 plan which;

calls for the voluntary listing of

THE

Number 4866

Volume 170'

COMMERCIAL

FINANCIAL .CHRONICLE

&

37

(2521)

portfolio stocks, being either sold how far has this so-called "mu¬ the things which Congress for the look at the problem as a whole— ments, and ever increasing costs
almost most part corrected back in 1934 as a nation-wide problem.
dividended out, to be listed, then tual" program come in
of doing business.
the Commission nas no prooiem. nine years? Not very far we must as to all listed companies. The
I
desire
to
comment
briefly
As the Chairman of the Com¬
admit.
'
1
Frear Bill would similarly apply about the staff of the Commission
If the stock, however, of me hold¬
mission which regulates your in-,
to unlisted companies with wide¬
The industry, unable to agree
and the part they play in the over¬
ing company being liquidated is
dustry I would like to give you
listed
on
an
Excnange and the among themselves as to an amend¬ ly distributed securities.
all administration of the statutes. the assurance not only of
myself,,
I daresay that we all agree as
ment program, is still compelled
plan does not provide for volun¬
As you know, there is such a tre¬ but I am sure of the other com¬
tary ,• immediate or delayed list¬ to, what is sometimes called, "live to the principle and the objectives
missioners that it is our keen and
mendous amount of items of work
For years, distributors of the bill. As a matter of fact, in
ing,
then
the
Commission,
of in sin."
firm desire to help in the problems
which is done by the Commission
necessity, must decide, in defer¬ have complained that the restric¬ all the discussion I have heard
of an industry which, as I stated
ence
to tne requirements of the tions on offering before effective¬ about
the
bill—and
there
has as a whole, that it is impossible
before, plays such an important
investor, whether or not listing ness are artificial; and, because been a good deal—in all this dis¬ for the Commission themselves to
part in supplying capital to that
should oe required, eitner imme¬ these restrictions do not take into cussion I have never once heard
get anything, other than the con¬
diate or delayed.
In wnich case, account the natural competitive the stated objectives of the bill
great institution called American
tested
cases
and
decide policy.
the
Commission
might require and risk factors of the business, criticized.
Business.
The other items are handled by
that the plan be amended to pro¬ that it is difficult to obey them.
What is being criticized about
As our civilization
gets more
vide for such listing.
On the other hand, we have had the bill is the obvious fact that the the staff. Now this is where you,
complicated, we are bound to have
'We
at
the
Commission have to recognize that the prospectus imposition of these standards is as an industry come in.
more
regulation.
When I was a
been accused of taking sides as to has not lived up to the purpose bound to inject into the existing
If you do not like what the staff
In many cases, it distribution of business among the
whether or not a security can be intended for it.
boy there was just one umpire in
a
lawyer's nightmare rather several different markets, a dis¬ is requiring of you, you should tell a ball
better served over-the-counter or is
game, and he stood behind
than a piece of plain talk, and, turbing element of unknown
We would like to
pro¬ us about it.
listed, or vice versa. May I assure
the pitcher. Today there are five
under present practice condoned
know.
In many, cases, that,is the
portions. : : / * :■'
you that the Commission has stu¬
of them, in fact they are all over
diously avoided trying to> inter¬ by the law, it gets to the investor,
"Mixed right into the middle of
only way we can find out. In those
the
place.
I daresay it hasn't
fere with the interests of eitner not only too late to be of any use, this situation is Section 12 (f) (3)
situations where you are entitled
but in such form as to be hardly
party. From my own practical ex¬
of the Exchange Act, which gives
spoiled our enjoyment of the na¬
understandable.
- v
to relief, you will get it.
perience, I am convinced that to
the Commission power to extend
tional sport.
■
It has long been my feeling and unlisted
list a security which does not have
trading privileges at the
A Hopeful Note.
I attended a football game in
all the qualities necessary for list¬ contention that, if you will reach request of an exchange or other
Let we
end my talk'. on this Washington
on
Sunday,
and
I
ing and does not lend itself to into the industry and pick out
certain
circum¬

or

•

■

-

...

Sunder

person

listing, is
company,

bad, not only for the
but for the investor. On

other

we must admit
its advantages as
well. I came across a short article
in the "'Investment Dealers Di¬

the

hand,

that listing has

gest," entitled "Premature List¬
ings of Utility Stock," and I think

that which the

know, hopeful note—The securities busi¬ think I counted nine or ten offi¬
cials, including the linesmen. Were
handful nesses not "all through.''
officials
not
The securities business has gone these
present the
Perhaps this is the sec¬

high purposed and stances. This power, as
ethical houses do, in actual prac¬
has been used in only

tice, and make it law, you will
have

of

cases.

something which will pro¬
investing public in ac¬ tion which

the

tect

with

cordance

intended

the

pur¬

of the '33 Act..

pose

the

can

a

through

provide the key to

controversy

Bill;/

you

over

/

the

transitional period

a

;

...

Something needs to be done
Last year there was $6V2 billion
We cannot dispose of the con¬
important about restrictions in the waiting
cern
over
the Frear Bill as ex¬ of new industrials offered for sale.
point of view. I will read it:
jv period in recognition of the com¬
There were almost $3 billion of
petitive and risk factors of the pressed by the industry by label¬
"Premature Listings of Utility
business. Something must be done ing their claims as selfish.
In addition to
They new municipals.
v:-;,;,
Stocks y'V
'J."-.]' .. about the expense and trouble of
are
real and must be considered, which, there were countless mil¬
f "Representatives of both the in¬
preparing, printing and distrib¬
of
equity > capital plowed
I would think it most inappropri¬ lions
vestment fraternity and the util¬
uting a prospectus that is often
ity industry have expressed con- useless to investors. That, in basic ate for the Commission to appear back into industry-as a result of
pern about the recent SEC insist¬ terms,
is the problem we face. in hearings in support of the bill retained earnings. '
ence
on prompt
listing of utility What are we going to do about it?
Does this sound like an indus¬
without having considered fully all
common
stocks coming into the
It has been my constant belief of the
problems which it creates in try that has nothing to do? hands of the public for the first
that one of the primary benefits of
I know you, individually and as
time.
This concern seems well
the possible reallocation of secur¬
registration is that it screens out
warranted for if a new stock is
an / industry,
are / worried
about
the frauds that would wither in ities among the various markets.
immediately listed it loses the
things.
You are worried
the light of publicity and that it The various segments of the in¬ many

umpires

ditional

that it expresses a very

"

but I

,

^

,

the

of

benefit

distributing

fine

distributor himself

the

to

affords

dealers who han¬ more information about the issuer
in the over-thethan he has ever had before.
eounter market.
This sort of dis¬
I am indebted to my good friend
tribution • is a
tremendous con¬
Mr. Arthur Dean, of Sullivan and
tribution to seasoning.
A num¬
ber of utility stocks which have Cromwell, for calling to my at¬
.

prematurely listed have had

been

tendency to become .'lost in the
shuffle' and have never attracted
a

the following they deserve.
'"We believe that the SEC

:

be

not

radamant

so

might

they
through

ment

about

responsibil¬

them.

for

your

garp§,

needed

was -

being,

came

into

your

industry

and

it

when
douftf

I

would ..now

itself

voluntarily dispense with it.
In

a

sense

the

Securities and

servfe/hs

Exchange's function is to
financial umpire.

curities

I want the/Sb*

Exchange

and

Corrwpisr

sion to be more than a policeman

I want it to' be

for the industry.

affirmative

an

influence

in

the

price and spread, which di¬ financial world.. Our objective ,1s

regulation without persecution, ; I
Our objective should be a re¬ rectly affects profits. I assure you
thank you for inviting me hefe to
that produces harmony and that the Commission cannot help

ity.
sult

you

well-being among all markets in
the best interests of the

Z in

solving/: such

This, to

public.

statement made by Jus-

a

all sorts
to

saying that some type of

ating

problems

to be

me, appears

with, the

fraught

problem

an oper¬

I salute you as rep¬

address you,

resentatives
and I salute

of

a

great

industry

you—each one of you,

We, at the Commission do not,
as a factor in American business,
and we must not take the position usual ravages of competition. It is
memoirs, which is apropos here—
You seeking to preserve our way of
of determining whieh is the bet¬ fraught with over-anxiety.
"No regulation or law can be en¬
life.
' '
:■
forced which is not, in itself, rea¬ ter market for a security. We must are concerned about private place¬
tice^Brandeis and recorded in his

sonable."

'

this issue

on

could see "the problem
the eyes of the invest¬
men and thentility manage¬

if

tention

dustry have a similar

am

regulation

..

powers of the
dle
securities

best

known

devices

However, I am not advocating ad¬

gone.*;,

...

players might■: resorb' to

still be in it, but it is not of

it may

Frear

=5=<=n

have any fore¬
most objective for my administra¬
tion as Chairman, it is to work out
'For myself,-if- I

if,,

I!1\V

■m

Section 5 in a manner satisfactory
would, accordingly, like
to you who have to live with it,
the President of the IBA
and to the Commission that has to
and the President of the Edison
administer it in the interests of
Electric Institute to make jointly

ment. We
to urge

appointment with the SEC to
this problem over in person.
We believe that if the matter were

investors.

an

talk

approached, the SEC might
better understand why listing of

I

Drexel & Co.

definitely ask your help.
The Frear Bill

thus

/Congress convenes
industry and the
Commis¬
of a handicap to a company in its
sion will probably be confronted
financing and a disservice to its with another problem of signifi¬
cant proportions. I am referring to
stockholders.
:. ;

much

stock too early may be very

When

the

Established 1838

next month your

Securities and Exchange

;

are

SEC Com¬

readily available.

missioners

data

supporting

."Compelling

-

available

always

are

based on our own observa¬

and,

tions, are always open to convic¬
Messrs. Dewar and Lindseth

tion.

the

introduced

bill

by

protective pro¬
to
security

sion to extend the

visions

the

holders in listed companies to

larger

Industrial, Railroad, Municipal Securities

given

now

This

companies.

unlisted

and

proposal has naturally aroused a

Equipment Trust Certificates.

persuasive. good deal of controversy for it
perhaps be won by touches on a problem we have all

command respect, are
Much

such

could

meeting."

a

'

<

;

Act"
/

but

known existed for many years

Amending the "Gun Jumping

,

have been reluctant to face.
Most

...

will agree

everyone

that

V
V.

-Now let us take a look at an¬ the rules of full disclosure should
other

problem

Commission's

upon

has

been

the

general public

focused for some time., It is Sec¬ ficant interest.

V

tion

the

of

;known

still,
The

'act."

as

'33

Act,

or

better doubt have

has

unworkability

of the in which

a

.

many

on

a

r>

Members

,\/ New1 York
;

signi¬

times sought

;■

Stock Exchange

New York Curb

Exchange (Assoc.)

Philadelphia-Baltimore Stock Exchange

re¬

company

customer had expressed

only

-the statute has been apparent for nothing was

to

be., told

that

Philadelphia i,

available.;: How often

.

9

,

years.

iabout

the

Since 1941 we have talked
a

have you

mutual program between siders

Commission

and

representa¬ that

tive members of the industry for

the

felt that management in¬

were

you

up

were

customers

^

-

.

I;

vV


'.•M-

+

you

had

in

*

.

•'New York

5

r

?

14 Wall Street

good

These are

'

••••

»!>••
J

*

,
r

helpless to protect

=

•

-•

_

r

1

; 1500 Walnut St.

.

to something but

<amending the; section.But just faith put into the stock?
v/

.

•

You yourselves no

the "gun-jumping liable information

present techniques established in interest,

any

i„

-

:•»...

the apply to/any corporation in which

which

attention

of Public Utility,

Underwriters and Distributors

Senator

Frear of Delaware at the last ses¬

1

..

.,5,

jr v,

f

■>

It

iV

..4

1 ,

Ti

/ ;..■

••

*~
£»';

'

■

'

> * 1 .1 t .1

-1J

jj
J

}

Mi

s
.

•

-v.I

...
*

-

<v?t

v'

, -:t v •.*
'

*

*

Jf

:

-

t

i\' j

f

-4

4*/*

>1*

*

THE

(2522)

38

Continued

The

from

page

portant

balance

seller's to

a

a

By itself it
the

and

enjoyed

of trade for

to

her

not
to

her

of

the

were

as

the

lacked

abroad.

goods

Many

countries turned to her for capital
loans and came to use the general

a

run

In

facilities

time

closely

sources

and

rely

of the

balances in
the

upon

of

Bank

In this way the Bank of

by

history

rather

than

the

came

to

number of countries whose

foreign
the

as

trade

was

central

bank

conducted

pound sterling. These

in

coun¬

tries include with the

send

the

members

United

exception of
self-governing

.free

of

the

Commonwealth:

clude

the

In

the

overseas

dependencies

second quarter of 1949 her exports
to the United States

four

depends for foodstuffs and for im¬

closely connected r with Britain:
Ireland, Burma, Iraq and Iceland.

declined, not
greatly, but significantly. Britain

change

from

came

of

Britain.

They .include further

countries

whose

the

of

effects.

North

States

the

the

They

difficult to
to

United

sell

of

Canada.

and

dependent

United
the

rubber

as

States.

of

1949
tin

the

same

North

America.

As

trade

is

ages and

which

over

terials

the

area

with

the

America

dollars

of

trade

of -

dollar-area

became

North

unfavorable

'

_

1342 Walnut

; ■ •

-

,

•'

■,

of

reserves

change

in

the

Bank

Britain's

-T

f

industry,

North

American

because

the

reserves

Continent.; It ;is
of

of

England

this
cumulative t effect
crisis developed. The crisis

in

the

relations

of

the

very

raw

The

i

ma¬

British

the

America
of

and

Britain

if"

V

but

achieved.

'

''

'

.-i

.

<

/
,

,

/•.

the British the test is whether out
of what we produce we can send

enough to other countries to
tor

our

ices

to

of

exported

by

as

this

test

1948

as

pay

this.

goods and

imported.

we

simple

Judged
but fundamental

had completed

we

did

we

many

reconstruction: of

the broad

the

economy,

the first phase of
recovery. That
much is solid achievement: to the
credit of the British people and a

good

use

of the American aid

re¬

ceived. Nor

was the reconstruction
of the economy on this test a mere
flash in the pan. The
trading re¬

sults of the first-half of

first by

peat the story:

through

to

we

Britishin bal-

was

She

balance"

not

was

goods and

many

to

of

out

was

so.

North

needed

America

from

get

1949

re¬

have been able

export broadly as many goods

with

trade

the

she

United

the

dollar

area

on

was

masked in the general account by

surplus

a

with

the

of

rest

the

world approximately equal in size.
But in a world where because of

this

unbalance of trade converti¬

bility of other currencies with the
dollar is not possible, the money
by

be

not

In

surplus

of

used to

the

deficit

this

rest

of Britain
-

of

trade

world

the

could

offset

the

deficit

dollar account.

on

second-half of 1948 this;

broadly offset by aid
European
Recovery-

was

under

the

Program. The hope was this dollar:
gap would narrow. But in 1943*
the

widened. To the experi¬

gap

of Britain

ence

added that of

was

the other countries of the
As

area.

this

cumulative

sterlings
experi¬

in trade with the dollar

ence

recorded in the

area

rapidly fall¬

at the Bank of Eng¬

reserves

sec¬

ond-quarter of the year that th&
deficit was becoming greater than
aid under the European Recovery
Program could meet.

Despite the general reconstruc¬

tion

of her

economy

Britain

was

vulnerable to

a modest change in
the conditions of world trade. She

had to face
trade

produce

adjustment of her

an

that, while continuing to

so

gocds and

as many

serv¬

ices for export to the countries of
the world, these goods and serv¬
ices flowed more rapidly and in
greater volume to the dollar area.
The

fundamental
problemof
Britain's adjustment after achiev¬
ing postwar reconstruction is to
close the dollar gap and pay with
earned in trade for the

dollars

goods

she needs from the dollar
This

area.

_

ex¬

serv¬

'as

States and Canada. This deficit

large imports. In the 1

very

second-half

mid-1949

of.

from

land, it became clear in the

great trading nation like

a

months

general balance
specialized but vital

area

badly
porting as

ing

Balanced

■'

For

12

emerged
result

a

this
a

and

was

British International Trade

•

to

very large sums
people have given

the war,

"/

services

the

American

were

~

suddenly in 1949? I think the
concern

have made good

industrial

tion

Britain had seemed to be mak¬

of

great

machine/ As 1948
passed great increases in produc¬

American Aid Has Not Failed

be

our

we

damage repaired: most of the
shortages and bottlenecks out of

We

must

simply
we

help

your

war

two

great trading currencies of the
World, the pound and the dollar.

For

of it. We have got most of the

use

the

lecorded
a

made.

gratitude. But

of

direct

thermometer

in the Bank

dollar

with the

express

change in the trade of one-quarter
of the world's population, of the
whole
sterling area," withti the

the British loan and then
V

nearly all the

of

Britain

trade with North America but the

tc Britain since

i

import

the

as

The trade of Britain with the

gap.

earned

'

'

to

ports needed to get the economy
sterling functioning fully again. They were
therefore turned to the Bank the foundation of the great effort

their dollar trade. The gold and

the

has

in

the

of

on

lay

occurred

have

and

to

concealed

ain to go ahead and finance the im¬

England to finance the deficits

that

this

earned.

countries

of

the

short¬

In

But

loan and aid under the European
Recovery Program enabled Brit¬

as

of 1949 passed. Fewer

were

The
area

balance

summer.

of

half the food for its inhabi¬

ling

because

Exchange
New
York
Curb
Exchange
Philadelphia-Baltimore Stock Exchange

island

tants and

tween

Stock

And

most of the countries of the ster¬

question

MEMBERS

kinds.

an

in

full

bottlenecks—hold-ups of

all

to

the American people not only be¬
cause
of the close relations be¬

NEWBURGER & CO.

following
was

economy

that

war

war.

ance..

fuel,

disastrous

a

The

way

result,

a

had

we

affairs

mid-1948

en¬

the

to

economy

trade with the world

in the winter of

us

and

the

war

Nature

harvest in the

the

less

exported

production.

of her

since .the

econ¬

essential

only

patterns of world trade and

world

reconversion

our

against

1946-47

self-governing members of the

Comomnwealth

coal,

not

justment
new

After

get the national

of Britain
her postwar

recovery

reconstruction but the postwar ad¬

essen¬

steel, the backbone of modern

went

in

sold

to

to

industrial

materials

raw

and

In

Some

territories

second-quarter

such

so

'•

and

have imported.

as we

full

involves

job of

war

and

the

to

unreal, if this situation could arise

•

was

great

a

the

But

latter

plants to civilian uses,
damage was repaired. The

good,1 progress towards re¬
covery in 1948: was the progress

•

the

reconstruction.

demobilization

,

ing

York

Britain

1948

postwar

the

found

America,

much less of their

\

New

Until

not.

tially engaged in

England,!
England were like a thermometer:
design,1 What
they recorded was not only

for

a

act

re-J,

woolens

like.

the

England.* dollar

States: she exports finished prodwets
such
as
china, > whisky,
the

As

more

Britain;

with

their

keep

London

,

Australia, New Zealand, South
Africa, India, Pakistan, Ceylon
and Southern Rhodesia. They in¬

and

England. Together
they form the largest area of free

byi the months
\

countries

the

associated

to

came

provided
\..S

Canada

herself

manufactured

pay for them. Britain
surplus to finance the

her

used

invest¬

countries

many

undeveloped,

sale

a

does

a

overseas

were

needed

means

rubber, tin and

materials

part of

of the Bank of

multilateral trade in the world.

believe

in

yet

competition increased.
Britain

I

going disclosed basic short¬

which

tendency to
buy rather fewer finished goods
irom
abroad
and
questions of
price and delivery became deci¬
sive, especially as many American
prices were being brought down

raw

trade and they rely for gold and
dollars upon the central reserves

ages

goods but, because they

down, orders for future delivery
less freely placed. American
imports were affected. For the
time being there was a halt or a
slowing down in the purchase of

as

as

omy

favorable
balance of trade with the world,
she used her surplus on the bal¬

were

was

sterling

international

it

banking

There

pound
their

of

their prod¬

manufactured

London.

materials like

to Britain to help her to recover.
Have they failed in that purpose?

the

use

basis

ucts

ventories

somewhat

They
the

and services

have been made available

more

phase of economic adjustment: in¬
were

money

felt

of

exporter

goods

of

was

quarter of the world's population.

deavor

ment. There

there

the Economic Cooperation Admin¬
istration.
These
large sums of

one-

est

buyer's market had

result

the ster¬

They account for

area.

tury when Britain was the great¬

shift from

United States in the first-half

These countries form

ling

Bank of

the

of

the sterling area

serve

ance

wool.

Thursday, December 22, 1949

seller's to the buyer's market, all
these countries in varying degrees

they also

capital goods of all kinds, so
strong for nearly four years after
the end of the war, had begun to
abate. People were beginning to
pick and choose: they became
selective
in
their
buying. This
tendency was noticeable in the

raw

CHRONICLE

countries. In the Nineteenth Cen¬

petite of the world for consumer

a

not a large call.

was

reserves

and

As

unfavor¬

England do not serve Britain only:

become evident. The voracious ap¬

1949.

the

across

more

of imports over

excess

the central reserves of Britain.

But

crisis? As 1948
moved into 1949 a gradual change
had come over the economy of
A

trade

the

so

exports had to be paid for in gold
dollars.
This was the first call

a

world.

These

or

on

Cause of the Crisis

western

her

became

The

the

on

diminished,

not

of

Atlantic
able.

time between the two world wars,

there

had

needs

re-equipment proceeding at full
pressure, and a very considerable
part of the physical destruction
of wartime now put right."

was

materials

raw

United States and Canada.

of the picture: record production,
rising productivity, exports nearer
to balancing imports than at any

the

FINANCIAL

Sterling and Dollar Areas-Their Financial and Trading Relations

Washington: "That is one side

Why

&

21

greater in volume than before the
war. As Sir Stafford
Cripps said
at

COMMERCIAL

is

what

the

crisis

of

the first-half of 1949 revealed.

Street, Philadelphia 7

It

is the general problem of the ad¬

justment of trade between Britain
NEW YORK 5

HARRISBURG

14 Wall Street

Telegraph Bldg.

—'

LEBANON

V

and
ATLANTIC CITY

Farmers Trust Building

Central Pier

THOMAS
UNION

ti
COMPANY
19,

sterling

on

the

one

the

countries

of

the

on

and

dollar

TRUST. BUILDING

PITTSBURGH

the

hand

the other.

area

area

The prewar world has gone. The

past offers

PA.

pattern for the fur

no

ture. Before the

war

Britain bal¬

anced her accounts in trade with

UNDERWRITERS, DEALERS

the dollar area,
direct exports,

and BROKERS

Investment Securities

Pennsylvania Municipal Bonds
'*

Public

partly from
earned

Utility—Railroad—Industrial

A

BONDS and STOCKS

& Co.

Members of

„

New York Stock Exchange

Philadelphia-Baltimore Stock Exchange
Exchange (/issocj

New York Curb
1521* WALNUT




ST., PHILADELPHIA 2, PA.

dollars
of

the

Trade

Needed

Britain

are

largely

used up in

gone.
They
fighting the war

when Britain stood alone. And the

HERBERT H. BLIZZARD & CO,
1421

Chestnut

Street

Philadelphia 2, Pa.

countries

of
the-sterling area,
together, are in deficit on
dollars, not in surplus. They are
taken

in deficit because
from

Market

Records

tain the fabric of these

on

Unlisted

Securities have cumulated since 1922
Just

name

it

—

we

have

a

spot

Teletype PH 520

new

states

with rapidly growing populations
and
an
insistent
demand
for

higher standards of living. These'
are facts. They show that
the past is dead. New ways to
solve the problems of the sterling
things

area

Telephone LOcust 7-6619

and especially in
countries like India and

Pakistan, capital gocds to main¬

UNLISTED SECURITIES
Our

new

they need goods

America,

great

TRADING
IN

Yarnall

of

countries

Balancing of Sterling-Dollar
Areas

Specializing in

Pennsylvania
Property Tax

surplus

in their trade with

United States.

were

Personal

a

the

area

Today the dollar investments of
———

Issues Free of the

by

sterling
the

partly by her own
partly by her in¬

from dollar investments and

come

and the

dollar

area

have

to

be found.
For

those

who

believe

in

the

unity of the free world and wish

THE

Number 4866

Volume 170

COMMERCIAL

&

FINANCIAL

CHRONICLE

British be confident that the
op¬ they are associated in the demo¬
political plane to se¬ portunity Would be open to them cratic world. 'No' exclusive club
to earn more dollars in America?
or
cure the common defense, such as
organization is being set up.
The talks were concerned with There is simply continuous con¬
the Atlantic Pact, strengthened and
all
these
reinforced
aspects of the! crises. sultation, the steady talking out
by fruitful economic
relationships, the problem of the Their tone was set by the friendly of these problems between the
pound and the dollar and the re¬ welcome given in President Tru¬ countries immediately concerned.
It is this spirit which animated
lationships of the great trading man's speech at Philadelphia. That
to

the steps which have been

see

taken

which

areas

of

are

the

on

these

use

currencies

Trade

importance.

great

always be balanced at

can

level

and

problem is

peoples going
need.
The

the

by

what

without

low

a

they

balance

to

be¬

trade

tween the

.at

sterling and dollar areas
high level, to the profit and

a

enrichment of both, and to ensure

the free

that

world does not fall

apart because divided into
rate

trading

tries
to

cf

the

at

It

areas.

concern

mon

sepa¬

the

was

three

the

com¬
coun¬

Washington

talks

discussion

the

of

crisis

at

the talks therefore served also

as

of

means

dealing with

mutual

All

and

trust

through

issue

an

confidence.

1948 and the
earlier part of 1949 Britain, in the

1947,

attempt to narrow the dollar gap
in her

all

trade, had bougnt

overseas

she could

from

side the dollar

countries out¬
At times this

area.

had meant paying a little more for
raw
materials in order to-save
dollar expenditure. Bilateral trad¬

ing agreements

were

made when

both Britain and the country with

whom she

trading

was

of dollars and
assured

them

that

would

essential

trade

the

to

in

needs

be

goods

of

both

Britain's

postwar

the reasons for
which
were
understood,
might
nevertheless settle insensibly into
pattern

a

large

of trade,

long-term fixation of direction;

whether the necessary attempt to

buy in non-dollar markets and the
conclusion of long-term bilateral
agreements with non-dollar coun¬
tries might not, if continued with
all their present features, divide'
the trade of the western world in

measure

the other
nadians

the dollar.

on

Americans

the

and

The Ca¬

felt

whole

the

democratic

of

creating
goods and
freely.

and

in which
alike passed
'

money

'V

British

The

world

world

one

on

the

other hand

the long-

were

preoccupied with

term

prospects of the American
The attempt to narrow

market.

session

the

about

British

decision

Government

that the

realities

being

were

In my

the

of

British to enter the

American market

on a

wider scale

No doubt there
problems that Britain had to

stay there.

and
were

deal with in this respect,

problems
of producing goods of a kind and
quality and in sufficient numbers
to

attract

But if

a

Britain
America
done

in

the

American

buyer.

dollar export
was
once

drive from
successful,
would
again, as she had

the past,

barriers to

an

raise her tariff

extent which would

make the effort vain?

Could the

is

British

faced

that

and

health and

judgment they
There

is

of

reserves

Sen. Robert A. Taft

were con¬

now

gold and dol¬

manageable.

more

assisted

be

dollar

-

This

process

by the
decided

imports

cuts

on

by the
British Government in July as a
necessary measure to lessen the
outflow.

It will be helped by the
decisions
recorded
in the
com¬

munique.

It

foundation

has

by

been

the

given

alteration

a

of

the exchange rate of the pound to
dollar.
This should kill off

the

speculation; about' the
the pound

future

provide

incentive

an

manufacturers
enter

of

which has been rife in

the earlier months of 1949.

the

and

It will

British

to

exporters

to

market.

It

American

will lessen the difficulties

issue

price

on

convictioin

the

in

world

one

well

that

Dec.

14,

which
sions

issued

he

they

but

of the problems of trade between

sterling

under

v

dollar

and

to ttjis end.

necessary

illifsion

no

such

deep

which

is

areas

They

making

that

problems
in history
much of the

span

so

the

Ohio

of

a

quickly or
But they believe this can
begun at the
talks; these problems of common
be done in the way

concern

speech-

weak

position compared to
businessman and that'
government
assistance is,

a

needed

how

ple

the

"I

as
a

was

shown

labor

and

num¬

a

The rest have

propaganda,

newspaper

I believe most of
open
to
persuasion

are.

are

they can be ireached by
Nor do I think that

workmen

are

Many

our

Robert A. Taft

past and present policy in

My impression is that the

people

thoroughly

approve

of

a

This
but

is

tual

grassroots movement,
imposed by the intellec¬

lefjwingers employed by Mr.

"The

;

program

and controlled

spending

much

but that

not

they question the wisdom

loans

to

European

support that policy.

rate, they hope that the

any

necessity for such

rapidly

come

There

to

seems

an

spending may

and

of medical

that

fixing

the nationalization

care

interest

agree

fear

of price

business, of deficit
and other services

little support,

excites

to

means per-r

Green and Mr. Murray.

ism, both in Europe and in China,

and

any

no

one

vigorous policy against Commun¬

gifts

by

planned economy, 'Handout State'
principles supported today by the
C.I.O. and A.F. of L. leadership.

the

countries

"In

and

abundant

,

Ohio

*

*

toward

voters

socialism'

but

rather

as

and not as

it should.

I do

at all with those who
the

In the last

workmen

in¬

are

that

did not

they

which will be

anyone

many

from

can

talked

be

answers

finally determined'

by the votes cast for

President

a

Congress.
The most encour-.
aging factor in the situation was
the great interest and intelligent
questions asked by college stu¬
dents and

"My

high school students.
*
job and that of others

own

with the preservation
Liberty and the American sys-?
bring the issues directly
and forcefully to the people. That
is not an easy task and has not
been well done in the past. Even
when
these
issues
are
clearly
stated, it is a difficult job to reach
concerned

of

tem is to

those

who

have

show

little

If the issue is

terest.

no

doubt

or

no

It is

for

whatever

that

desire

to

forward within the

go

principles

of

American

govern¬

ment, of Liberty and equal justiceunder

law, under which

we

160 years,

rather than

discard that system for the regu¬

Federal bureau.

idea that the Ohio farmer can be

lations

and

government

controls

of any Handout State."

that

Underwriters and Distributors

ing consultation.
The problems of trade between
the
are,

sterling and the dollar areas
as the communique says, in

first

instance

the

concern

governments which
tres

of

these

two

of

the

the

cen¬

currency

sys¬

are

But all three countries be¬

tems.

lieve

that

their

attack

on

these

Railroad, Public Utility,

problems is of the greatest impor¬
to

tance

world.

they

the

They

whole
are

sure

Industrial

democratic

and

that what

Municipal Issues

accomplish will benefit the

many

other countries with whom

STROUD & COMPANY
Incorporated

Philadelphia 2, Pa.

<v

SOUTH BROAD STREET

t

PHILADELPHIA 9

•

PITTSBURGH

•

ALLENTOWN

have

extraordinary progress

through

reason

a

great majority of the people will

begin to emerge
that

in¬

presented, I

the welter of facts and sta¬

tistics.

issues-

Socialism,

and

to the three countries can

and

others

and

in the last

a

for

and

might

and I'm.

so

the crucial

realize

between -Liberty

promises them free services from

vote

peoplepolicy.

election in Ohio more'

have voted failed to do
sure

con¬

Washington is

than one-third of those who

made such

to

governmental

too far away and too many
feel helpless to determine

who

clined

"So also with the farmers.The

end:

to be no question¬

against

on
the table, made the
subject of frank and free discus¬

sion

any

among
resent¬

a

put

until the

a,

ag¬

short, I do not detect

'slide

suaded in favor of the socialistic,

re¬

China.

At

substantial

a

unable to state what their

are

them

fairs, except perhaps the danger

of

Taft-Hartley

argument.

to

loss, and

selling the products of

efficient

is lack of interest.

govern¬

lated

in

!j!

whenever

questions

suffer

riculture.

of

ment.

would

he

more

*

the

I believe

objections

and the spend¬

of

vice

prejudice against it, growing out

but

public debt

the

*

in their interest.

of

about

the size of the

ing "policy

an

'through government aid and ad-v

much
higher
per
cent
of non-union
workmen, approve" the law today

con-

c e r n

i

ber of union members,

"The

greatest

,

regarding

Law.

ing.
Accord¬
ing to Sen;
Taft:

secure

through

some

'which

talked to many work¬

have

men

peo¬

think¬

are

equality of*
support prices)
reasonable point belovr

to

position,

•
*

last¬

NEW YORK




can plant, and how.
hogs, sheep and cattle he can

many

trol and taxation. The real danger

nVELLINGTON^VH

request

jeach crop he

ment

expense.

123

upon

a

taining adequate armed forces,
particularly in the air, regardless

impres¬

ing 13 weeks,

world

easily.

government

me

of

from

during

tour

are

roots

to

ifeed. I think he does feel that be¬

(R., O.), on*in
ing of the necessity of our main¬

Established 1928

Prospectus

prosperity of the demo¬

statement

a

disclosed

gathered

economically

politically, and that the
progressive solution

as

gradual

been

countries

ffieend

\

a

the

to

by

handout
complete fallacy.
His most definite thought is re¬
sistance to production controls by
the
Department of Agriculture,
telling him how many acres of

at

man-

has

three

All

out.

share

British

some

confidence

of

talked

be

be

can

cratic 'world..

possibility and necessity of adopt¬
u%cturers and exporters in North ing the Hoover Report.
"The spending of money in loans
America.
and
gifts to
foreign
countries
On the broader aspects of pol¬
seems
to be also their principal
icy thrown into relief by the crisis
concern in the field of foreign af¬
the talks were also fruitful.
The

and

It

-

contribution

great

regarding speech-making tour through
Ohio, he indicates workmen are not, persuaded in favor of
socialistic, planned economy,) "Handout State" principles.
Says opposition to Taft-Hartley Law arises from prejudice
and propaganda.

the

lars has lessened and become much

with

small matter.

no

very

In statement to press

situation

the dollar the communique
identifies
the
gapyclearly involved a vigorous main problems and agrees that ar¬
and'prolonged endeavor on the rangements be made for continu¬

of the

1

devalue

to

ground
for thinking that the drain on the

the

begun

bought

seems

sofne

talks would be constructive.

live

have

they

will lead in time to solutions. This

Tait Sees No Slide to Socialism

contributed greatly to the feeling

as

what

that

ing

believ¬

»

the average

the

of

and eventually to close

part

once

of the

proof of the success
talks and the warrant for

ts irr

able to make at the first informal

will

It is at

the

,

that they wished to be clear that1 international trade of
the long-term views
of British can be worked out

policy were in favor of the pro¬
gressive freeing of the trade of

the September talks.

friendly ; and wise chair¬
manship of Mr. Snyder. Tne state¬
ment/necessarily secret, ; which
Sir Stafford Cripps, the British
Chancellor of the Exchequer, was

the

long run into two great sys¬
tems, one based on the pound and

throughout,
thanks to the

frank,

therefore grew encountered
by
and Canadian

American
whether

minds

to

between

enough

yield

short

were

both wished

the

countries. A query
up

maintained

was

structive.

The

of

in

the problem in that

approach

light.

a

tone

(2523)

•

SCRANTON

•

LANCASTER

COMMERCIAL

THE

(2524)

4«

Continued

from

FINANCIAL

&

CHRONICLE

28

page

edward

george,

Harriman

In Attendance at IBA Convention
DAYTON, Jr., JOHN W.
Clark, Dodge St Co., New

♦COLE, WALTER I.

Beecroft, Cole & Co., Topeka
COLLIER, W. T.

American

Chicago

♦COLLINS, JULIEN H.
Jillien Collins St Company, Chicago

The

First

♦CONNELY,

EMMETT

RICHARD
Boston

F.

Corp., Chicago

CORKING TON,

Paine,

Jackson

Curtis,

At

J. Mericka

♦COUFFER,

JAMES

Peoples National

G.

B. J. Van Ingen At

Bank,

♦COURTS,
Courts

MALON
At

Co.,

C.

Atlanta

Union Securities

.

♦CRAFT. ROBERT H.
Guaranty Trust Company of New York,

FISH,

Robert

♦CRANFOHD, JAMES A.
Atlantic

National

Bank

'

of

Jacksonville, Jacksonville

>

'

Ripley

Co.,

CROUTER, GORDON
DeHaven & Townsend,

Incorporated,

•>.' >: New York

Crouter

E.

Ames

DALENZ,
Calvin

JOHN

At

v

Co.,

'

',

Co.,

of

JAMES

,

>

A\

;

':' A

E.

Corporation,

■:
'

R.

J.

San

Bankers

"

Edwards, Inc.,

AAA".'^
Company,

AA L

'"A-r-V. •!; A

E.

•/

A.

E.

&

Ames

A

'

Bell,
*

Francisco

f'■

ESCHER, JAMES H.
New

St

&

&

Investment

Group,

Incorporated,

Co.,

Washington
Hartford

iiapp,

♦HUGHES, W. SHANNON

&

Raffensperger,
1

&

York

New

♦HULME,

The

a.

HUNT,

W.

harris.

W.

Bank

♦JENKS,

Incorporated,

harrison, james l.

Sutro

Municipal Bonds and Notes

G.

Co., San Francisco

Becker &

/

v

tication and financial

The

municipalities

on

authen¬

*

byron
Parker Corporation,

The

★

Purchasers and wholesalers of
and Notes.

Municipal Bonds

Specializing in New England

of

of

York,

hawes.
Harris

BOSTON

hardin

hayden.

names.
★

1784

KyN

*

'

The

City

the

of

Neighborhood Bank That Serves The World

MILK

STREET

A. T. & T. TELETYPE

Savings Bank, Chicago

First Boston

Corp., New York

♦JOHNSON, THOMAS M.

♦JOHNSON.

H.

charles

Lane,

Space

&

Rollins & Sons

New York

•

Incorporated,
>•

.

New

York

WILLIAM A.

Moran & Co., Milwaukee

FREDERICK W.
Distributors Group, Incorporated,

:
JONES.

,

;

-

'

'1

EDWARD D.
D. Jones St Co.,

St. Louis

PAUL

Times,

New York

' V '

\

_

..

.

(Continued

on

page

EATON & HOWARD

BE OBTAINED BY

LYONS & SHAFTO
Incorporated
.

REQUEST TO YOUR INVESTMENT DEALER OR TO

r
v

EATON

&

1924

.

.

r
*

i

HOWARD

INCORPORATED

BOSTON

State and
.1949

.

Municipal Bonds

TWENTY-FIVE YEARS OF INVESTMENT MANAGEMENT

24 Federal Street

BOSTON *




333

;

:

j

v

.

Montgomery Street

SAN

FRANCISCO

Inc.,

JOHNSTON,

'

<»•.

Edward

•HEFFERNAN,

PROSPECTUSES OF THESE TWO MANAGED INVESTMENT FUNDS MAY

Co.,

F.

Chicago

STOCK FUND

Milwaukee

♦JOHNSON, WILBUR E.
Johnson & Johnson, Pittsburgh

w.

Dempsey-Tegeler & Co., Los Angeles

BALANCED FUND

T.

Company,

Savannah

♦hecht, john c.

EATON & HOWARD

JOSEPH

Johnson,

Baltimore

E.

BSl

Chicago

F.

& Co., Chicago

Milwaukee

Mason,

The

Company,

FREDERICK

Kindred

Baumgartner, Downing & Co.,.
hazelvvood,

45

.

Chicago,

JOHNSON, THOMAS J.

Atlanta

h.

donald

of

Burr, Incorporated, Boston

Milwaukee

The

New York

Trust &

J.
National Bank

PLINY
&

JOHNSON,

Boston

Jr., robert l.
Chase National Bank

New

♦JEWELL.

Barcus,

hatcher

NATIONAL BANK

First

♦JOHNSON,

Co., Chicago:,

♦IIATCHER, LLOYD b.
Trust Company of Georgia,

"FIRST

operations.

MORTON

Jenks, Kirkland & Co., Philadelphia

The

hastings.

★ Complete facilities for

York

EARLE
Co., Los Angeles

JOHANIGMAN. STERLING E.

hassman, elmer g.
A.

JOHN
Staats

W.

New

JENNETT. EDWARD

Coffin

robert l.

&

A.

Co.,

Chicago

Bank of New York,

New York

harter,

R.

&

.<

_

Harris,

City

Hutton

E.

The

National

JOSEPH

JEFFERS, WELLINGTON
Globe and Mail, Toronto

of

Chicago
The

JAMES M.
.
& Co., Cincinnati

Hutton

William

j.

&

JANSEN

Weld & Co., New York

•JARDINE, Jr.,

National

david

E.

W.

New York

Louis

Fairman

Sills,

E.

BUTTON. Jr.,

paul

St.

G.

MacGregor, Inc., Pittsburgh

IGLEIIART,

robert b.
Co., Boston

Boatmen's

&

White,

Company, New York

Louis.

Inc.

HUMPHREY, Jr., ARTHUR F.
Geo. G. Applegate St Co., Pittsburgh

Estabrook &

St.

Inc.,

S.

St Durst,

MILTON

Glover

Association,

harder, louis b.
Harris, Upliam & Co.,

Philadelphia

WILLIAM

Wagenseller
Angeles

harder, F. william
Allen

Co.,

&

Los

,

william

Hughes

Indianapolis

♦HUGHES.

Globe-Democrat, St. Louis

GEDDES, EUGENE M.
Clark, Dodge St Co., New York

York

•HUGHES, ALBERT R.
Lord, Abbett & Co., New York

if

r.

Bankers

& Co., New Haven )

Limited,

♦hanraiian, paul b.
Hanrahan & Co., Worcester
Wertheim

W. Scranton

♦HUDSON, FRED W.
Ball, Burge & Kraus, Cleveland

Company,

douglas

Legg St Company, Baltimore

WILBUR G.

Chas.

'

sV'

JOSEPH

C.

HOYE,

;
'

,

A. Webster Dougherty & Co.,
Philadelphia

HOWELL,

Incorporated,

Co.,

.•

PAUL D.

John

'

Gouinlock

harper.

<

•

Toronto

GATES, Jr., THOMAS S.
Drexel & Co., Philadelphia

Company,

HOWE.

•

WILLIAM H.

iiarkness.

Trust

y ■]
-

1

L. L. J.
Nuveen St Co., Chicago.

John

hampton, percy r.

■■•/:

GALLAGHER, FRANCIS P.
Kidder, Peabody & Co., New York

Distributors

Mrs.

y

Inc.,

St. Louis

HOWE.

'

hanson. murray

Toronto

Co.,

;

v

.

GALLAGER. HERBERT V. B.
St

r

,

s.

Bosworth

hansel,

Co., Limited, Toronto

GAERSTE, JOHN L.
Cooley & Company,

•'

/=;

-

.

♦HOUSTON. Jr., JOSEPH C.
:.. - Calvin Bullock, Chicago *

-v

Hanrahan, New York

♦GAIRDNER, JAMES A.
Gairdner and Company Limited,

.

V

ri

hanrahan, edmokd m.
Sullivan, Donovan, Heenehan

FURLONG. THOMAS R.
Chicago Tribune, Chicago

Yarnall

i"

'5

Incorporated, Boston

FULKF.RSON. Jr., W. NEAL
Bankers Trust Company, New York

Francisco

American

San Francisco

-

S

Co., St. Louis

,

Inc.

HORNING, BERT H.
Stifel,. Nicolaus St Company,

■■

Braun,

<
Incorporated,

Co.,

Lynchburg

Inc.,

Stanley St Co., New York

HAMMOND,

&

York

IIORNBLOWER, Jr., RALPH
Hornblower & Weeks, New York

♦hallowell, henry r.
*
Hallowell, Sulzberger •& Co),
I Philadelphia y;':Sr

-

FULLERTON, C. G.

♦ELKINS, Jr., GEORGE WA •
; '
Elkins, Morris & Co., Philadelphia

San

and

herbert

Morgan

Co., Inc., Chicago

Morgan

♦HORNER, EDWIN B.
Scott. Horner St Mason,

•

EMPEY, LESTER H.

'

Mr.

Oklahoma City

Elworthy & Co., San Francisco

'

DAVIS, JOSHUA A.
Reynolds & Co., New York

Walker &

EMERSON, SUMNER B.
Morgan Stanley & Co., New York

Association,

Chicago

DAVIS, GEORGE W.
Davis, Skaggs At Co.,

Burr,

H,

St

P.

New

;

carter

Chicago

White, Weld & Co., New York

ELWORTHY, MARK C.

';

'-"'A'

».

J.

j v'■ '4

JOHN C.
Mason-Hagan, Inc., Richmond

G.

Association,

ROBERT L.

Blair

,

Corporation,

Scott, Horner & Mason,
Lynchburg - - - -

hall,

-

FUGLESTAD, ARNE

j

EDWARDS. JOHN H.

ellsworth, SHERMAN
Wm. P. Harper & Son & Co., Seattle

.

Detroit

DAVIS, ARTHUR G.

♦Denotes

Coffin &

•'

Int., New York

♦DAVIDS, MARK
Lester & Co., Los Angeles
Investment

w

^

;

FRANCIS

'*

|

y

-

First California

A

MeG.

Michigan

Washington

HOLT.

HOPKINS. JOHN E.

Hanseatic
„>

Bankers

Washington

♦hagemann, ev kenneth

Labouisse, Friedrichs Si Co.,
iNew Orleans
'
(.

FROTHING HAM,
••

Co., New York

Hartford

ELAINE

Investment

.

Co., St.. Louis
-

HOLMES,

HAIGHT, Jr.; C. M.
Tripp & Co., Inc., New York

A'

♦FRIEND,' ARTHUR S.
A'"A
Folger, Nolan Incorporated,

'-A

EGAN, JOHN F.

Los Angeles

G.

Bullock, New York

DANAHER.
First

At

■

;

Ac

■

♦CSOWELL, WARREN H.

A.

"N

Howerd,

EATON, Jr., CHAS. F.
Eaton & Howard, Incorporated, AA '
Boston

V.

City

♦HAGEN, Jr.,

j A.\

FRIFDKICHS, G. SHELBY

♦DUVAfy GORDON B.
*
Guaranty Trust Company of New York,

;

Bodine, Philadelphia

Weedon

-

A

the U. S. A.

F.

the

of

M.

York

gunn, m.

.A)v';VA,"

Ambassador to

FRICK, Jr., BENJAMIN

;

„

WILLIAM G.

St

william ii.
Gregory, New York

York

Incorporated,

Company, Inc., San Antonio

Putnam & Co.,

,

'-.A.".'-'->'"'0

,

OLIVER

Washington

-

.

New

,

&

CROUSE, CHARLES B.
Crouse St Company, Detroit

ANDREW

SIR

British
i

Company, New York

♦DURYEA, WRIGHT

New York

Crowell,

Indianapolis
•FRANKS,

Glore, Forgan & Co., New York

CROSS, MILTON C.

CURRY,

Bankers Trust

<

Raul H. Davis At Co., Chicago

Harriman

!

Stix &

-DUNSTAN, E. F.\

Co., Inc., New York

;

Bank

National

M.

New

'

♦FORREY, GEORGE C.
*
Indianapolis Bond St Share Corporation;

♦DUNN, STEWART A.
A C. J. Devine & Co., Inc., New York

«

CROSS, JOSEPH
J.

Baltimore

&

Brothers

Jr.,

&

V

Co.,

HOLMAN, WM. D.

grunebaum. kurt h.

.

A

FORDON, RALPH
j
A
,
Fordon, Aldinger St Co., Detroit

.

CROMWELL. W. Rex
Dallas Rupe St Son, Dallas

At

Sons,

' 'A''

♦DUNN, RICHARD P.*
\
Auchincloss, Parker St Redpath,
A Washington
""A'A

■

LOUIS

St

.

.

A

/,

Garrett

Baltimore

FLYNN, GEORGE T.
J \
A
Hornblower St Weeks, New York '» -

'

&

York

IIOLI.AN, JOHN

Company,

r.

Grubbs, Scott St Company, Inc.,
Pittsburgh 1
'

/;

DUNN, HERBERT I.
A
;
Schwab&cher St Co., San Francisco

♦CBEELY, WALTER J.
Gdldman, Sachs At Co., St. Louis

C. J. Devine

,.A.'

Bosworth

HOBBS, Jr

griswold, iii, benjamin h.
Alex. Brown St Sons, Baltimore

N.

CHARLES J.'
Hanrahan St Co., Worcester

:

•«

Bonner

i

/.

York, New York

GRUBBS,

FISHER. W. LLOYD
r
Baiter, Watts <fc Co.,

•

Co., New York

DUNN. EDWARD K.,

Craigie At Co., Richmond

CROSS,

*

,

.

Wertbeim &

CHARLES

Chase

♦gregory

New York

Barney & Co.,

♦FLEMING,

♦Dubois, allen c.

♦CRAIGIE, WALTER W.

The

Corporation,

'

,

Braun,

Barr

New

of

Chicago

Singer, Deane St Scribner, Pittsburgh

.

Chicago

Charlottesville

HERMAN A.

IRVING D.

-Smith,

♦FISHER,

DROBN1S, GEORGE J.

♦CRAGO, JOHN H.
Smith, Moore At Co., St. Louis

F. W.

Pittsburgh

New York

New York

The

Co., New York

S.

HIPKINS, CLIFTON A.

New York

henry w.
Robinson-Humphrey

♦green, sheldon

&

Peoples National Bank,

Russ

Co., Pittsburgh

Steele &

LESLIE
American,

duPont

♦HILDRETII, W.

Bank, Los Angeles

Journal

♦FINNEY, Jr., HOWARD
Bear, Stearns & Co., New York

Downey, Norman S.

»

gould,

'•

I.

grady, Jr.,

FENNELLY, JOHN F.
Glore, Forgan & Co.,

Charlottesville

DORBRITZ, ERNEST O.
Moore, Leonard St Lynch,

New York

A

The

.

At Co.,

Hirsch

i

Corp., New York

;

CHARLES L.

Francis

Atlanta

.

COUIG, J. DAI.TON

Boston

HEWITT.

New

\

Gcyer & Co., Inc., New York

•DOOLITTLE, ROY W.
Doolittle & Co., Buffalo

Co., Inc., New York

First

WILBUR E.
Fridley St Hess, Houston

,

♦goldsmith, bertram m.
Ira Haupt & Co., New York

F. D.

FELDMANN,

Co., Inc., Cleveland

♦DONNALLY. JESSE P.

Chicago

Nashville

HESS.

glover, w. wayne

JOSEPH H.

Fauset,

&

DOMINICK, 2nd. BAYARD
Dominick St Dominick, New York

W.

JOHN

Webber,

Win.

HENDRIX, WILLARD R.
Equitable Securities Corporation,

Allyn and Company, Inc.,

California

Kansas City

♦FAUSET,

♦HENDERSHOT, RALPH
World-Telegram, New York

Inc.,

Company,

glavin, charles c.

Co., Wheeling

City National Bank St Trust Co.,

•

&

J.

LESLIE

FARRELL,

*DOERGE, CARL H.

♦COOK. ROBERT H.
B. J. Van Ingen At Co., Inc., Miami

E. Masten St

W.

Smith, Barney St Co., Chicago

Commerce, Chicago

Gibbons

glassmeyer, Jr., edward
Blyth St Co., Inc., New York

FARRAR, HOLDEN K.

Antonio

Journal of

C.

The

DILLMAN, DAVID

♦COOK, HAROLD H.
Spencer Trask Ac Co., New York

1

Fabey, Clark St Co., Cleveland

•DEWEY, Jr., GEORGE A.
R. h. Johnson & Co., New York

POWHATAN M.
Bond Co., Inc., Louisville

Bankers

The

A.

B.

CHARLES F.
Illinois Company, Chicago

The

New York

St

Bank

Chicago, Chicago

♦EWING. ROBERT

Dewar, Robertson & Pancoast,
Ban

Cunningham St Co., Cleveland

National

-■

•DEWAR, H. H.

CONNORS, HARRY

♦CONWAY,

Trust Co. of

♦FAHEY,

♦HEMENWAY,

george b.

Jr.,

gillies, george j.

EVANS, THOMAS W.
Continental
Illinois

Incorporated,

e.

Loeb, Rhoades & Co., New York

New York

t

Inc.,

A.

York

New

Corporation,

Company,

&

Atlanta

M.

DeSTAKBLKR, EUGENE L.
Bills, Fairman St Harris,

York

New

A.

Evans

A.

"--Cincinnati

*

.

,

CLEMENT

Clement

Newhard, Cook & Co., St. Louis

Ingen St Co., Inc., Chicago

American Securities

EVANS,

DUMONT G.

♦DEMPSEY.

Inc., Chicago

♦CONDON. RAYMOND V.
Van

Co.

Chicago, Chicago

DELAFIELD,

♦CONDON, JOSEPH P.

J.

Trust

&

HElMERDINGER, JOHN G.
Walter, Woody St Heimerdinger,

Incorporated,
' V

Co.,
-•

frank

Carl M.

gibbons,
Geo.

Bank

National

St

"V*-

gernon,

.

of

B.

Chicago

c.

Ripley

'

EVANS, CARNOT W.
Harris, Hall & Company (Incorporated)

York

♦DECKER, O. PAUL

K.

Collier, Norris St Quinlan, Montreal

McDougal St Condon,

Thursday, December 22, 1949

BOSTON

,

HARTFORD

NEW YORK

57)

'

1

uJiK^lLyA^aflfft.^ rin Tt&lIiV5£lKiXklJiWi^^.fc3S«i^^^iiiMS^*,.aJUW^

Volume 170

-

^»k^rjyWUf#wittr»rtt MWM

Number 4866

j&giWfi IW. y jiwji r

BHilWi«5W«Hrttt*k'M»

THE

itAWW^MWHwrtafrUttiftwWifcfe^ h

COMMERCIAL

&

FINANCIAL

CHRONICLE

(2525)

41

INVESTMENT BANKERS ASSOCIATION
,

OF AMERICA

OFFICERS 1949-1950
?y'-'. *v;YY^Nr YY

President

•Y

*

Vice-President

Vice-President

Albert T.

Armitage

Coffin & Burr, Incorporated
Boston

Mark C.

Hazen S. Arnold

Elworthy

Braun, Bosworth & Company

Elworthy & Co.

T oledo

San Francisco

Vice-President

John F. Fennelly
Glore, t organ Si Co.

Chicago




V ice-President

Joseph T. Johnson
The

Milwaukee Company
Milwaukee

Vice-President

Laurence M. Marks
Laurence M. Marks

New

York

Si Co,

42

THE

(2526)

1

COMMERCIAL

&

FINANCIAL

Thursday, December 22, 1949

CHRONICLE

IBA GOVERNORS

Andrew
G.

A.

M.

Becker

Baird
&

Howard M.

Co.,

Incorporated, Chicago

Hal

H.

& Stubbs,

Dewar

Edward K. Dunn

Robertson &

Dewar,

Robt. Garrett & Sons,

Pancoast, San Antonio

Baltimore

&

A.

Company,

Inc., Topeka

S

R




Ames

Pvttio

!

&

Co.

Toronto

Richard P. Dunn

'

&

M. M. Grubbs

Inc.,

John S. Linen

Continental III. Nat'l
Bk• & Trust C° >

The Chase Nafl Bk.
°f Me City of N. Y.,

Chicago

New York

Co.,

& Son
Seattle

"" '

Morgan Stanley & Co.,
New York

Edward

E. K. Hagemann

G.

;
;

:

H.

Walker

&

Linsley

„

Norbert W. Markus
Smith, Barney & Co.,

'■

City

Henshaw

San Francisco

First Boston Corp.,

New York

C.

Brush, Slocumb & Co.,

Co.,

St. Louis

Duncan R.

& Co.,

Sumner B. Emerson

Sherman Ellsworth

.

Skaggs

San Francisco

Wm. P. Harper

Redpath, Wash.

Scott & Co.,
Pittsburgh

Davis,

St. Paul

Auchincloss, Parker

Grubbs,

George W. Davis

Caldwell

Caldwell, Phillips Co.,

Ohio Company,
Columbus

Francis M. Knight

KirkDatrirk

KirCnntrtrl
S £
Co., Omahg

E.

Limited.

'

&

C. G. Fullerton

Wayne J. Estes
Estes

'The

Weeks
Boston

G. James

Ewing Thomas Boles

Biscoe,Jr.

W hitting,

Philadelphia

■«a»44

dlWrtff*

uUuUuI *t*

Volume 170

niww

M

,,' mn^»

Number 4866

^^»«^wwto»lwMi.iw«i

■

iMtwfMfiXu#

w^^^iwuuwvu^wMKUkwwi^^^

THE

.

COMMERCIAL

&

FINANCIAL

IB A GOVERNORS

Harold

M.

Murphey

Charles B. McDonald

Martin

Favre,

McDonald &

Inc.,

W.

Moss

Preston, Moss & Co.,

George
"

Earl

M.
M.

F. Noyes

Ralph

Phillips

Dean Witter &

Raymond

D.

Stitzer

Equitable Securities
Corporation, N. Y. C.




;

;

Joseph A. Thomas
Lehman Brothers,
New York

Benjamin

Blunt Ellis &

A.

Walter

Riter & Co.,

&

Co., New York

New York

Ralph W. Simonds

Philip

Baker, Simonds & Co.,

Simmons, Chicago

Bingham, Walter &
Hurry, Los Angeles

Henry G. Riter, 3rd

R. W. Pressprich

Richard W. Simmons

«

Hayden, Stone & Co.,
New York

Atlanta

R. W. Pressprich, Jr

Co.,

.

& Co., Denver

Humphrey Co.,

Moreland, Galveston

Los Angeles

Wickliffe Shreve

Scanlan

E.

The Robinson-

iRotan,' Mosle and

St. Louis

Chicago

Scanlan

Earl

Joseph L. Morris
3. Marvin Moreland

Newhard, Cook & Co.,

The Illinois Company,

Boston

(2527)

(Continued)

Andrew S. Mills

'

Cleveland

Spokane

James

Co.,

CHRONICLE

Harry H. White
White, Hattier &
San ford,

New Orleans

M.

Estabrook

Detroit

Stearns
<fr

Co.,

Boston

Alfred

S. Wiltberger

Blyth & Co., Inc.,
Chicago

Edward

H. York, Jr.

Drexel

&

Co.,

Philadelphia

43

44

THE

(2528)

COMMERCIAL

&

Thursday, December 22, 1949

FINANCIAL CHRONICLE

New President Takes Office

Albert

T.

Armitage, Coffin & Burr, Inc.,

Boston, the new President of the

receiving badge of office from the retiring President,
Dewar, Robertson & Pancoast, San Antonio,

Installation of New

Coffin & Burr, Inc., President;

Bosworth
Co., Toledo; John F. Fennelly, Glore, Forgan & Co., Chicago; Laurence M. Marks,
Laurence M. Marks & Co., New York City; Joseph T. Johnson, The Milwaukee
Company, Milwaukee, Vice-Presidents (Johnson not in picture)

Mark C.
&

Officers: Albert T. Armitage,

IBA,

Hal H. Dewar,
Tex.

Elworthy, Elworthy & Co., San Francisco; Hazen S. Arnold, Braun,

Installation of New

.

Round Table on

Noyes, Illinois Company of
Chilgren, Gardner, Carton & Douglas, Chicago; Charles S. Vrtis,
Glore, Forgan & Co., Chicago

Horizons in Blue Sky Work: George F.

Chicago; Arthur D.

Cooperation within the Securities Industry:

Francis Truslow Adams,

of the New York Curb Exchange; Dorsey Richardson, Lehman Corporation,
New York City; Hal H. Dewar, Dewar, Robertson & Pancoast, San Antonio, Tex.;
President

Benjamin H. Griswold, 3rd, Alex. Brown & Sons, Baltimore;
Clement A. Evans & Co., Atlanta, Ga.

Presidential receiving

Governors

Pliny Jewell, Coffin & Burr, Boston, Mass.; Mrs. and Mr. Hal H. Dewar,
Dewar, Robertson & Pancoast, San Antonio




Forum on New

Peter

Clement A. Evans,

line

Cassin, British Embassy, Washington, D. C.; Lady Barbara Franks;
Ambassador to the U. S. A., Washington, D. C.;

Sir Oliver Franks, British

Major C. B. Ormerod, British Information Services, New York City

Volume 170

Number .4866.

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(2529)

45

At Investment Bankers Association Convention

Edmond M.

Hanrahan, Sullivan, Donovan, Heenehan & Hanrahan, New York City;
Harry A. MacDoriald, Securities and Exchange Commission, Washington, D. C.;
Murray Hanson, Securities and Exchange Commission, Washington, D. C.;
Charles B. McDonald, McDonald & Co., Cleveland, Ohio

i

Percy
G.

R.

James

Hampton, Bell, Gouiftlock & Co., Toronto;
isCaldwell, Caldwell-Phillips Co., St. Paul,

Minn.; William S. Macfadden, Piper, Jaffray & Hopwood,
Minneapolis, Minn.; George Putnam, Putnam Fund
Distributors, Boston, Mass.

Chicago;

Fishman, Atwill & Co., Miami Beach, Fla.

Shepard, Prescott, Hawley, Shepard & Co., Cleveland;
Shreve, Hayden Stone & Co., New York City ~

Wickliffe




Hutzler, New York

John W. Corrington,

Browning, Marine Trust Company, Buffalo, N. Y.;
Philip J. Rhoads; Mrs. Homer Browning; Philip J.
Rhoads, First National Bank & Trust Co.,
Oklahoma City, Okla.

Emerson, Morgan Stanley & Co., New York City; Mr. and Mrs. Kenneth
Wells, Freedoms Foundation, Inc., Valley Forge, Pa.; Mr. and Mrs.
Robert O.

.Van Hart, Salomon Bros. &

Mrs.

Sumner B.
D.

Bros. &

Homer

Mrs. Henry M. Fishman, Miami Beach; Mr. and Mrs. George P. Rutherford,
Dominion Securities Corp., New York; Mr. and Mrs. James,,A. Gairdner,
Gairdner & Co., Toronto; Henry M.

York; Mr. and Mrs.
M. Work, Salomon
Hutzler, Chicago; Louis G. Mudge, International Bank, New York; George

Mr. and Mrs. Rudolf Smutny, Salomon Bros. & Hutzler, New
Geo. F. Noyes, Illinois Company, Chicago; (standing) Robert

,

Paine, Webber, Jackson & Curtis,
Mrs. C. G. Kaufman, Chicago; Robert W.
MacArthur, Paine, Webber, Jackson & Curtis, Boston;
C. G. Kaufman, Shields & Co., Chicago

George S. Channer, Jr., Channer Securities Company, Chicago; Mr, & Mrs. J. P.
Condon, McDougal & Condon, Chicago; George Martin, Martin, Burns & Corbett,

)

Walter F;

Chicago; E. Kenneth Hagemann, G. H. Walker & Co., St. Louis

Blaine, Goldman, Sachs'& Co., New York City; Mr. and Mrs. Julien H.
Collins, Julien Collins & Co., Chicago; Jean C, Witter, Dean Witter & Co.,
San Francisco; Mrs. John C. Hagan, Jr., Richmond, Va.; George V. Davis,
Davis, Skaggs & Co., San Francisco

46

THE

'

(2530)

In

&

COMMERCIAL

New

York

City;

Mrs.

Noel, Van Alstyne, Noel & Co.,

and

Mr.

G.

Shelby

Friedrichs,

Thomas Beckett, First Southwest Company, Dallas;
Mrs. Fred Hudson, Cleveland; Mrs. Harry G. Kraus;

Mr. and Mrs. Alonzo H. Lee, Sterne, Agee & Leach,

Cleveland; Mrs. Thomas Beckett

Sterne, Agee & Leach, Montgomery, Ala.

Howard, Labouisse, Friedrichs & Co., New Orleans

Hal

H.

me

Mac)

Pancoast, San Antonio, Tex.; Joseph T. (call
Company, Milwaukee, Wis.; Richard S. Wright,

Dewar, Dewar, Robertson &

Johnson,
General

Milwaukee

Manager Hollywood
Investment Bankers

Mr.

Chicago; C. Meredith Boyce, Mercantile Trust Company, Baltimore

New York; Albert J. T. Wall, E. M. Newton & Co., Boston

Mrs. and Mr. Richard C.

and

Mrs.

Paul K.

Fred

Van

F.

Harold

M.

Beach Hotel; Alden H. Little,

Association, Chicago

Johnson,

Barcus, Kindred & Co., Chicago; Mr. and Mrs.
Wheelock & Cummins, Inc., Chicago; Mr. and Mrs.
Martin, Murphey-Favre, Inc., Spokane, Wash.

Winkle,




Thursday, December 22, 1949

Joseph S. Banks, Blyth & Co., Inc., New York City; Mr. and Mrs. Lloyd B. Hatcher,
Trust Company of Georgia, Atlanta; Harold J. Schluter, First NaPonal Bank of

Security-First National Bank, Los Angeles; Leo A. Kane, National City
Bank of

„

Hollywood Beach, Florida

Abrams, Jr., Allen & Co., New York City; Franklin Ftockbridge,

James S.

FINANCIAL CHRONICLE

.

Birmingham, Ala.; Mr. and Mrs. Mortimer A. Cohen,

Milton S. Trost, Stein Bros. & Boyce, Louisville, Ky.; Charles R. Perrigo,
Hornblower & Weeks, Chicago; Edward C. George, Harriman Ripley & Co.,
Chicago; Mrs. Milton C. Trost; William R. Rovensky,
Hornblower & Weeks, New York City

Walter V. Moffitt, Kidder, Peabody & Co., New York City; Mrs. Alfred Rauch*
Edward Glassmeyer, Jr., Blyth & Co., Inc., New York City; Mrs. Walter V. Moffitt;
Alfred Rauch, Kidder, Peabody & Co., Philadelphia

1

K.irti# fnWWertr Wrtft2S»»*Wl»rMWW W»W ■$«?(•" H<WWtoeV>WWiMPMK*

Voiume 1*70

li'i-yKWIjlWiiW WW*1 >WMl

4

'i

J

Mri

*

II

UW»<lNIWWWWi«yw>r*4tt^ttFSWrtlt*4JWliWi|tVtfcltiW!Rttwyt

rtiisVMfttttftW WMrtWiMH
pi

tHfe

Number 4866

COMMERCIAL & FINANCIAL

December 4 to December

Schmidt, Schmidt, Poole & Co., Philadelphia; Mrs. Robert G. Rowe,
Philadelphia; Herbert V. B. Gallager, Yarnall & Co., Philadelphia;
Edward D. Jones, Edward D. Jones & Co., St. Louis

Walter A.

Robert B. Blyth, National City Bank,
H.

Cleveland; William

Clark, Merrill, Turben & Co., Cleveland;

Hess

& Hess, Houston; Paul L.
Mullaney, Wells & Co., Chicago

Fridley

Wilbur E.
Mullaney,

Kelton

E.

White, G. H. Walker & Co., St. Louis,

Mo.; Mrs. Esther Baker, Miami

Beach, Fla.; Mrs. Kelton E. White; Julius W. Reinholdt, Jr., Reinholdt & Gardner,
St
Louis, Mo.; Miss Mary Lincoln, Investment Bankers Association, Chicago;
Walter J. Creely, Goldman, Sachs & Co., St. Louis; Mrs. Harry Theis,
Albert Theis & Sons,

Mrs.

■■■"> Kalman & Co., Minneapolis -'

George W. Elkins, Jr., Elkins,




E. Jansen

St. Louis

Mr.

47

9, 1949

Hunt, White, Weld & Co., New York City; Mrs. Charles B. White;
Mr. Murray Ward, Hill Richards & Co., Los Angeles;
Charles B. White, Chas. B. White & Co., Houston, Tex.

and

Robert W. MacArthur, Paine, Webber, Jackson & Curtis,
Boston; John W. Corrington, Paine, Webber, Jackson &
Curtis, Chicago; Mr. and Mrs. Donald E. McFarland,

Morris & Co., Philadelphia; Mrs. J. Emerson
Thors, New York City; Mr. & Mrs. Robert G. Rowe, Stroud & Co., Inc., Philadelphia

Mr. & Mrs.

(2531)

CHRONICLE

Mr. & Mrs. William H. Morton, W. H Morton & Co.,
New York City; F. D Farrell, City Natioml Bank &
Trust Co., Kansas City, Mo.; Francis P. Gallagher,

v.Kidder, Peabody & Co., New York City

and

Mrs.

Carl

N.

Stutz, White-Phillips Co., Davenport, Iowa;
Phillips, Jr., White-Phillips Co., Chicago

Mrs. and Mr. Blair A.

F. Blaine, Goldman,
Co., New York;
George J. Gillies, A. C. Allyn & Co., New York City; Norman M. Tucker,
International Bank, New York; Mrs. Malon Courts, Atlanta;
F. Kenneth Stephenson, Goldman, Sachs & Co., New York

George L. Martin, Martin, Burns & Corbett, Chicago; Walter
Sachs & Co., New York; Earl K. Bassett, W. E. Hutton &

48

(2532)

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, December 22, 1949

Membership Attendance at New Record

Adolph

Woolner,

Walter &

Mr.

Bache & Co., New York City; Curtis H.
Bingham, Bingham,
Hurry, Los Angeles; Mrs. Robert E. Clark; Mrs. Adolph Woolner;
Robert E. Clark, Calvin
Bullock, New York City

Mrs. Wilbur E. Johnson, Johnson &
Johnson,
Pittsburgh; Mr. and Mrs. George A. Dewey, Jr.,
R. H. Johnson &
Co., New York City
and

Mr.

and

Mrs.

W.

S.

Hildreth,

Co., Chicago; George D. Aldrich,
Corporation, Boston




Peoples

National

Bank,

v

Ingen & Co., New York City

Mrs.

and Mr.- Stewart A. Dunn, C. J. Devine & Co.,
New York City; Mrs. Frank T. Kennedy, New York City;

Mrs. Comer J. Kimball, Miami

Walter H. Weed, Jr., Union Securities
Corporation, New York City; Frank B. Reid,
Maynard H. Murch & Co., Cleveland, Ohio; Elisha Riggs
Jones, E. R. Jones & Co.,
Baltimore, Md.; Norman S. Downey,- Union Securities Corporation, New York City;
Paul

Heffernan,

„

W. Rex Cromwell, Dallas
Rupe & Son, Dallas; Mrs. J. Marvin Moreland
Galveston, Tex.; Mrs. Charles J. Fleming,
Worcester, Mass.; Mr. and Mrs!
Paul Hanrahan, Hanrahan &
Co., Worcester, Mass (standing); Charles J.
Fleming, Hanrahan & Co., Worcester, Mass.; J. Marvin
Moreland, Rotan
Mosle & Moreland,
Galveston; Carl T. Naumburg, Stem, Lauer & Co.,

New York City

B. J. Van

Charlottesville, Va.; Mr. and Mrs. Roderick D. Moore,
Branch, Cabell & Co., Richmond Va. r ^
;

William A. Parker, Parker
Corporation, Boston; Mrs. and Mr. H. Virgil Sherrill,
Shields & Co., New York City; Mrs.
George D. Aldrich, Boston; J. Denney May,
Parker
Corporation, Boston; Mrs. Macrae Sykes, Shields & Co., New York City;
C. G. Kaufman, Shields &
The Parker

Mr. and Mrs. Frank H. Morse, Lehman Brothers, New York; Edward M. McLaughlin,
Paine, Webber, Jackson & Curtis, New York; Mr. and Mrs. James G. Couffer,

New

York

Times; R.

C.

Chapman,

Maynard

H;

Murch

&

Co.,

Cleveland

Mrs.

Pliny Jewell; John A. Prescott, Prescott, Wright, Snider
Co., Kansas City, Mo.;
S.«
Robertson, Scott & Stringfellow, Richmond, Va.; Peter Cassin,
British Embassy,
Washington, D. C.; Pliny Jewell, Coffin & Burr, Inc.,
Boston, Mass.
Walter

IT'

ft'r

^Jeiu" ' drrnnivH?!

j.T

llM

iMU+

,»**»^1TJf"l,WTV*tf'""'rii,-l*^""»''l,u"1<^-'tf"1ni1-f^-iim"TmiA>f tlh.rfiV^rfiliil-fXii

»<.1

'

'•

i

.

Volume 170-. Number-4866

,,

'■

THE

•

i •

-.;

'.

V

'

.

,

'

•

COMMERCIAL

,

,

#i,.itfni,MWi>|i|j<n,^i,>rtj-r<rir,irnnnmirn-1 rnI rttintiii^inlfr fi^v'i'

FINANCIAL

&

I.

,

.

'

*

,

•'

•

*

>

•

K. P.

Tsolainos, Baker, Weeks & Harden, New York City; George F. Noyes, Illinois
Company of Chicago; Guy G. Wedthoff, First of Michigan Corporation, Detroit;
Robert Stevenson, Investment Bankers Association, Chicago; Laurence M. Marks,
Laurence M. Marks & Co., New York City

Edward

H.

Robinson,

Schwabacher

&

Co.,

New

York

Mrs.

City; Richard M. Newell, Dillon, Read & Co., New York
'

City; Joshua A. Davis, Reynolds & Co., New York City

and

Mr.

Walter

L.

William

B.

Horner,

Scott,

Horner

&

Mason, Lynchburg,

Va.;

Clifton

A.

Hipkins,

Braun, Bosworth & Co., New York City; M. Carter Gunn, Scott, Horner & Mason,

Lynchburg, Va.; Mrs. Edwin B. Horner; Sherman
Wm. P. Harper & Son & Co., Seattle




Ellsworth,

49

.

.

Attended

B

Allnutt,

Baker,

Watts

&

Co., Baltimore;

Benjamin D. Williams,

Co., New York City; John H. Rauscher, Rauscher, Pierce & Co.,
Dallas, Tex.; W. Lloyd Fisher, Baker, Watts & Co., Baltimore;
Louis J. Kocurek, Rauscher, Pierce & Co., San Antonio, Tex.

W. D. Hutton &

Morgan,

Wellington

Fund,

Mr. and Mrs. Howard Kresge (guests); Palmer Watling,
*

Watling, Lerchen & Co., Detroit; Arne Fuglestad,
'
"White, Weld & Co., New York

Warren D. Chiles, Chiles, Huey Co., Omaha, Neb.; Walter I. Cole, Beecroft-Cole & Co.,

Topeka, Kan.; Mrs. Warren D. Chiles; Byron Hastings,

Parker Corporation, Boston; Mrs. Walter I. Cole

Mrs. Paul Rowen;

Edwin

(2533)

**

Securities & Exchange Commission, Washington, D. C.; John J. Quail,
Quail & Co., Davenport, Iowa; Ralph Phillips, Dean Witter & Co., Los Angeles;
James Parker Nolan, Folger, Nolan, Inc., Washington,. D. C.

ril.lwnifcVa'inbU^iVrt^n^hWu

.

Philadelphia; Mrs. John H. Blye, Jr., Philadelphia;
Mrs. Sidney S. Blake, Philadelphia

Paul R. Rowen,

fi' v

I

CHRONICLE

Business Meetings Heavily
\

it '.rr-t^ ',iQ i

In the

picture: Carl T. Naumburg, Stern, Lauer & Co., New York City; Walter F.

Blaine, Goldman, Sachs & Co., New York City; William M. Cahn, Jr., Henry Herrman
& Co., New York City; Ralph Fordon, Fordon, Aldinger & Co., Detroit; Albert H.
Aldinger, Fordon, Aldinger & Co., Detroit;.Walter J. Creely, Goldman, Sachs & Co.,

St. Louis

50

THE

(2534)

COMMERCIAL

&

FINANCIAL

Cala Evenings at

James L.

Harrison, National City Bank of New York; Mr. and Mrs. K. P. Tsolainos,
Baker, Weeks & Harden, New York City; Mr. and Mrs. Duncan R. Linsley,
First Boston Corporation, New York City

John T. Knox, Federal Land Banks, New York; James

CHRONICLE

Convention

Maurice Meyer, Hirsch & Co., Ne1^ York City; F. Seymour Barr, Barr Brothers & Co.,
New York City; Daniel T. Pierce, Jr., Hirsch & Co., New York City;
Mrs. and Mr. Frank L. Lucke, Laidlaw & Co., New York City

Chicago; George J. Schaust, First National Bank of
Minneapolis

Edward F. Thompson, Union Planters National Bank,
Memphis, Tenn.; Mrs. Alfred J. Stalker, New York City;
G. Gordon Meeks, Meeks, Reddoch & Co., Memphis,
Tenn.; James N. Reddoch, Meeks, Reddoch & Co.,
Memphis, Tenn.

Duffy's Tavern:

George

Quigg, Paine, Webber,
George S. Channer, Jr.,

F.

Jackson & Curtis, Chicago;
Channer Securities Company,

Louis J.

Cross, Mahlon

Paul H. Davis &

Bradley

and

S.

McEwan,

Emmett F. Connelly, American Securities Corporation,
New York; David L. Skinner, Harriman Ripley & Co.,
New York City; Eugene R. Black, International Bank,

Washington, D. C.; Irving D. Fish, Smith, Barney & Co.,
New York City

St. Louis Room—Celebrated its 30th anniversary this year

of

Co., Chicago, proprietors

New Jim Daisies (standing): Harry Theis, Albert Theis & Sons, St. Louis; Frank L.
Lucke, Laidlaw & Co., New York; Samuel L. Varnedoe, Varnedoe, Chisholm & Co.,
Savannah; Walter H. Weed, Jr., Union Securities Corporation, New York; Paul L.
Mullaney, Mullaney, Wells & Co., Chicago; (seated): James E. Roddy, Scharff &

Jones, New Orleans; Edward C. George, Harriman Ripley & Co., Chicago; J. Emerson
Thors, Kuhn, Loeb & Co., New York City; George F. Noyes, The Illinois Company,
Chicago; Charles B. White, Chas. B. White & Co., Houston




Thursday, December 22, 1949

New

Jim

Daisies (standing): Eugene P. Barry, Shields & Co., New York City;
Armitage, Coffin & Burr, Inc., Boston; George B. Kneass, Philadelphia
National Bank, Philadelphia; Arthur Wiesenberger, Arthur Wiesenberger & Co., New
York; (seated): Ewing T. Boles, The Ohio Company, Columbus; Mark C. Elworthy,,
Elworthy & Co., San Francisco; George W. Davis, Davis, Skaggs & Co., San Fran¬
cisco; Paul Rowen, Securities and Exchange Commission, Washington, D. C.;
Albert

T.

Edward Glassmeyer, Jr., Blyth &

Co., Inc., New York

♦1H4A.N "TJW

"r

Volume 170

»

y.

>

.

•

r

-

•

f *

Number 4866 *

r

*

THE

f

M

t

COMMERCIAL

&

FINANCIAL

CHRONICLE

(2535)

51

The Rebel Room

Joseph L.

Morris, Robinson-Humphrey Co., Atlanta, Ga.; Mrs. Mortimer Cohen,
Montgomery, Ala.; Mrs. James W. Means, Atlanta; Mrs. Hugh D. Carter, Atlanta;
Mrs. Alonzo H. Lee, Birmingham, Ala.; Hugh D.Carter, Jr., Courts &
Co., Atlanta

Thomas

Whiteside, Chace, Whiteside, Warren & Sears.
Boston; Hempstead Washburne, Harris, Hall & Co.,
Chicago; James W. Moss, Preston, Moss & Co., Boston;
Arthur Nelson, Burnham & Co., New York City

J. Altgelt, Jr., Harris Trust & Savings Bank, New
York; W. Wayne Glover, California Bank, Los Angeles;
Frederick T. Seving, Butcher & Sherrerd, Philadelphia;
Clement A. Evans, Clement A. Evans & Co., Atlanta, Ga.

L. Varnedoe, Varnedoe, Chisholm & Co., Savannah,
Ga.; Alonzo H. Lee,
Sterne, Agee & Leach, Birmingham, Ala.; Wayne Martin, Milhous, Martin & Co.,
Atlanta; Mortimer A. Cohen, Sterne, Agee & Leach, Montgomery, Ala.

Clarke, Johnson, Lane, Space & Co., Atlanta; F. Vincent Reilly,
Commercial & Financial Chronicle, New York; Mrs. and Mr. James S. Budd, Jr.,
Citizens & Southern National Bank, Atlanta, Ga.




St. Louis; Mrs.

E.

Samuel

Mr. and Mrs. Hagood

Co., Atlanta; Chapin S. Newhard, Newhard, Cook & Co.,
Arthur Nelson, New York City; Marion H. Cardwell,
'■ »
J. J. B. Hilliard & Son, Louisville, Ky.

James W. Means, Courts &

C. Courtney Keller, Blair & Co., New York City; Nancie

Morrison, Ranson-Davidson & Co., Miami;
D. Finlay McRae, Blair & Co., Atlanta, Ga.

Mr. and Mrs. Albert R.

Hughes, Lord, Abbett & Co., New York City; Mr. and Mrs.
Harry I. Prankard 2nd, Lord, Abbett & Co., New York; Herman A. Feldmann,

Geyer & Co., Inc., New York City

Walter W. Craigie, F. W. Craigie & Co.. Richmond, Va.; Mrs. William P. King,
New York City; Mrs. Walter W. Craigie; Mrs. Dudley C. Smith, Chicago;

Robert L. Hatcher, Chase National Bank of the City of New York

52

THE

(2536)

COMMERCIAL &

Thursday, December 22, 1949

FINANCIAL CHRONICLE

Conventioneers Bask in the Sun

Peter

Co., Montreal; Mr. & Mrs. Emmett F. Connely,
York City; Russell Bell, Greenshields & Co.,
Montreal; Mr. & Mrs. Julien H. Collins, Julien Collins & Co., Chicago
Kilburn,

Greenshields

&

American Securities Corporation, New

Andrew

Mills,

S.

Newhard, Cook & Co., St. Louis;
Mercantile-Commerce Bank

Mrs. and Mr. W. P. Sharpe,

of St. Louis; W. Paul Harper, Boatmen's

Thomas H. Jones, Jr., T. H. Jones & Co., Cleveland; Mrs. Myron Ratcliffe, Bache &

Co., Chicago; Mrs. Wickliffe Shreve, New York City; Frederick B. Ashplant,
F. B. Ashplant & Co., New York City; Mrs. Charles McK. Lynch, Pittsburgh

Thomas J. Reis, Seasongood & Mayer, Cincinnati;
Mrs. Frederick Straus, Chicago; Mrs. and Mr. Bertram M.

Goldsmith, Ira Haupt & Co., New York City

National Bank,

St. Louis

Richard K. Buechler, E. F. Hutton & Co., New York
City; Harold X. Schreder, Distributors Group, Inc., New
York City;

Vnrk-

Russell Siefert, Stern Brothers & Co.,
Russell Sipfprt St.*™. Rmthorc a rv>
Kansas City, Mo.

Hobbs, Jr., Russ & Co., San Antonio, Tex.; Mrs. Leon L. Lee&, Jr., New
City; A. G. Pickard, C. F. Childs & Co., Chicago; Mr. and Mrs. Paul K.
Van Winkle, Wheelock & Cummins, Inc., Chicago; Edward D.
Muir,
Russ & Co., San Antonio, Tex.
v
;
;
i;

W. Fenton Johnston, Smith, Barney & Co., New York; Mrs. Reginald W. Pressprich,
Jr., New York City; Mrs. William B. Allnutt, Baltimore; Mrs. and Mr. George J.
;
Leness, Merrill Lynch, Pierce, Fenner & Beane, New York City

George T. Purves, Hemphill, Noyes, Graham, Parspnq & Co., New York City; John L.
•Gaerste, Cooley & Co., Hartford, Conn.; J. Raymond Smith, Weeden & Co., New
York City; Ernest W. Borkland, Jr., Tucker, Anthony & Co., New York City; Spencer
Phillips, Emanuel, Deetjen & Co., New York City; RaymondlB. Stitzer,

Mrs. V. Theodore Low, New York City; Howard Finney, Jr., Bear, Stearns & Co.,
New York City; Mrs. William M. Cahn, Jr., New York City; Walter W.
Craigie,
F. W. Craigie & Co., Richmond, Va.; Mrs. Howard Finney

'William G.
"York

~

,

.

Equitable Securities Corporation, New York City r '




tt.ztyr&ui a't«e',2Xj«;in# te«r»is,

1

(1 iK

Volume 170

THE

Number 4866

COMMERCIAL

&

FINANCIAL

(2537)

CHRONICLE

53

Enjoying the Beach and the Pool

Mrs.

William

H.

Gregory, Jr., New York City; Mrs. Joseph W. Sener, Baltimore;

William H. Gregory, Jr., Bonner & Gregory, New York City; Mrs. Eugene Treuhold,
New York;
(standing) Jerome F. Tegeler, Dempsey-Tegeler & Co., St. Louis;

Eugene

Treuhold,

L.

*

Mr. &

Mrs. David B.

F. Rothschild & Co., New York City;
Baker, Weeks & Harden, New York City

McElroy, J. P. Morgan & Co. Inc.,

New York; H. Lawrence

Bogert, Jr., Eastman, Dillon &

Co., New York; Wells Brown, Bankers Trust Company,
New York City

Mrs. George L.

William

R.

Kaelin,

Richard B. Walbert, Lehman Brothers,

&

Franklin Maroney, Blair & Co., Pittsburgh; Frank
Lynch, Blair & Co., New York City; C. Courtney Keller,

Robert E. Clark, Calvin Bullock, New York; Benjamin
D. Williams, W. E. Hutton & Co., New York City; Major

Blair & Co., New York City

C. B. Ormerod, British Information Services, New York;
Edward K. Dunn, Robert Garrett & Sons, Baltimore

Martin, Chicago; Mrs. E. Kenneth Hagemann, St. Louis; Clifton A.

Mrs. Alfred J. Ross,

Mr. & Mrs. Hunter

Breckenridge, McCourtney-Breckenridge & Co., St. Louis; Bert

St. Louis; Richard C. Morey, A. G. Edwards &
Sons, St. Louis; Mr. & Mrs. Walter J. Creely, Goldman, Sachs & Co., St. Louis;
Julius W. Reinholdt, Jr., Reinholdt & Gardner, St. Louis




New York City; Mrs. and Mr.

New York

Hipkins, Braun, Bosworth & Co., New York City; Julius W. Reinholdt, Jr., Reinholdt
& Gardner, St. Louis; George L. Martin, Martin, Burns & Corbett, Chicago

Horning, Stifel, Nicolaus & Co., Inc.,

Chicago; W. Shannon Hughes, Raffensperger,

Co., Indianapolis; Mrs. G. William Raffensperger; Mrs. W. Shannon
Hughes; Frank L. Reissner, Indianapolis Bond & Share Corp., Indianapolis;
G. William Raffensperger, Raffensperger, Hughes & Co., Indianapolis

Hughes

Mrs.

Atlanta; James W. Means, Courts & Co., Atlanta; Mrs. & Mr.
Noel, Van Alstyne, Noel & Co., New York; Mrs. James W. Means;
& Mrs. Warren H. Crowell, Crowell, Weedon & Co., Los Angeles

Hugh Carter,

Richard C.
Mr.

Henry G. Riter, 3rd, Riter & Co.,

City; Mrs. Wallace M. McCurdy, Philadelphia;
Mrs. Henry R. Hallowell, Philadelphia

jArtWruwaf^.

_

1i*t,tMlW^

54

M*

r*M l«Wt (•MtyMM'VMlMM

^ iNsiit,^ Rrtw^fW*

THE

(2538);

COMMERCIAL

&

'Wt^CM »l,

,«v ♦' j'-fi* •» |1

FINANCIAL

-

CHRONICLE

Golfers Have Field

William Russell
Barrow, Barrow, Leary
Harris Trust & Savings Bank, Chicago;
New York

& Co., Shreveport, La.; Hardin H. Hawes,
W. Neal Fulkerson, Jr., Bankers Trust Co.,
City; W. P. Sharpe, Mercantile-Commerce Bank & Trust Co., St. Louis

Edward

J. Phillips, Samuel K. Phillips & Co., Philadelphia; Harry L. Walters, Girard Trust Company,
Philadelphia

Joseph L. Morris, Robinson-Humphrey Co., Atlanta; J. W. Speas, First National Bank,
Atlanta; Errol E. Buckner, National Bank of Commerce, New Orleans;
J. P. Donnally, Peoples National Bank, Charlottesville, Va.
> •

David M. Wood, Wood, King & Dawson, New. Ycrk City;

Macrae Sykes, Shields & Co., New York City; William

York City; Monroe
Poole, Geo. B. Gibbons & Co., New York City; John

Hickey, United Corporation, New York City; Cornelius
Shields, Shields & Co., New York City; John Quinn, guest

V.

Linen, Chase National Bank of New York

Albert

H. Aldinger, Fordon, Aldinger & Co., Detroit, Mich.; Warren D. Chiles,
Chiles, Huey Co., Omaha, Neb.; Walter I. Cole, Beecroft, Cole & Co., Topeka, Kan.

Clement

A.

Evans, Cletnent A. Evans & Co., Atlanta;
Cranford, Atlantic National Bank, Jacksonville,
Fla.; D. Finlay McRae, Blair & Co., Atlanta, Ga.;
Wayne Martin, Milhous, Martin & Co., Atlanta




Day

J. Dalton Couig, Hirsch & Co., New
S.

James A.

Thursday, December 22, 1949

Mrs^ Carl H. Doerge, Cleveland; Mrs. George J. Schaust, Minneapolis;
Mrs.vJ. Earle Jardine, Jr., Los Angeles; Mrs. William S. Hughes, Los Angeles

Bayard Dominick 2nd, Dominick & Dominick, New York
City; Harry G. Kraus, Ball, Burge & Kraus, Cleveland,
Ohio; Arthur if. Humphrey, Jr., Geo. G. Applegate & Co.,
Pittsburgh, Pa.; Fred W. Hudson, Ball, Burge & Kraus,
Cleveland

-

<.

Robert H.

Warren, Geyer & Co., Inc., Boston; Herman
B. Joseph, T. H. Jones & Co., Cleveland; H. Lawrence
Bogert, Jr;• Eastman, Dillon & Co., New York City;
Maurice H. Sandberg, A. E. Weltner & Co.,
New York City
:
?
;

1*0 • / \> «*

Volume 170

Robert

Staats

WRfltFrtm#, K iu

.

MrM' r*VV

Number 4866

Alt*.,

****** kMM

THE

jttftl'JttlU.'nd* *i>Vl!iWwtii6 Uuu4u4MMB«M>tU<tM|iv;V CMlbUIU&ttUA.

COMMERCIAL

&

L. Harter, Sutro & Co., San Francisco; J. Earle Jardine, Jr., William ft.
Co., Los Angeles; Edward H. Nelson, Kidder, Peabody & Co., New York City;
John H. Rauscher, Rauscher, Pierce & Co., Dallas

P.

FINANCIAL

W. Carroll

W.

F. D. Farrell, City National Bank &

.

■

Sharpe, Mercantile-Commerce

Mead, Mead, Miller & Co., Baltimore, Md.; W. Peyton May, Investment
Va,; William C. Coe, Mackall & Coe, Washington, D. C.;

C. T. Peterson, Riter & Co., New York City; Wilbur G.
Hoye, Chas. W. Scranton & Co., New /Haven, Conn.;

City, Mo.; Robert V. Wehrheim, Philadelphia National
Bank, Philadelphia

Leo A. Kane^ National City Bank of New York; James F.
Burns, Jr., Harris, Upham & Co., New York City

t

Escher,
Distributors Group, Inc., New York City; Charles J. Fleming, Hanrahan & Co.,
Worcester, Mass.; Paul B. Hanrahan, Hanrahan & Co., Worcester, Mass.

Pohlhaus, John C. Legg & Co., Baltimore; William H. Gregory, Jr., Bonner
New York City; Joseph W. Sener, John C. Legg & Company, Baltimore;
Mrs
Milton Trost, Baltimore; Mrs. Frederick W. Straus, Chicago; Mrs. Walter
Pohlhaus* Mrs. Joseph W. Sener; Robert A. Podesta, Cruttenden & Co., Chicago
Walter C




.

Bank, St. Louis;
Trust Co., Kansas

Anderson, Distributors Group, Inc., New York City; James H.

& Gregory

55

Frank E. Gernon, Carl M. Loeb, Rhoades & Co,, New York City

Charles F. Hazelwood, E. H. Rollins & Sons, Inc., New

Herbert R.

(2539)

Corporation, Norfolk,

York

City; Mrs. Thomas M. Johnson; Charles L. Bergt
mann, ft. W. Pressprich & Co., New York City; Thomas
M. Johnson, Johnson, Lane, Space & Co., .Savannah, Qa.

CHRONICLE

■

/

>

Mrs. Charles McK. Lynch, Jr., Pittsburgh; Mrs. F. Brian Reuter, Pittsburgh;
Mrs. Fred W. Hudson, Cleveland; Mrs. Milton G. Hulme, Pittsburgh

Errol E.

Buckner, National Bank of Commerce, New Orleans; Harry White, White,
Orleans; Wm. Russell Barrow, Barrow, Leary & Co., Shrevepprt, La.; James Roddy, Scharff & Jones, New Orleans; Wayne Martin,
Milhous, Martin & Co., Atlanta

Hattier & Sanford*, New

56

THE

(2540)

COMMERCIAL

&

FINANCIAL

Thursday, December 22; 1949

CHRONICLE

Fishing and Tennis Popular

Grubbs, Grubbs, Scott & Co., Pittsburgh; Mrs. Arthur F. Humphrey, Jr.;
Mrs* Charles McK. Lynch, Jr., Moore, Leonard & Lynch, Pittsburgh;
Arthur F. Humphrey, Jr., Geo. G.Applegate & Co., Pittsburgh; Mr. Lynch's sailfish
M.

Mr.

M.

and

Mason B.

C. J. Devlne & Co., New York City; Ellsworth M. Shafto,
New York City; Mrs. Morse's sailfish

Raymond d. Stitzer, Equitable Securities Corp., New
York City; Ernest W. Borkland, Jr., Tucker, Anthony &
Co., New York City; Frank M. Stanton, First Boston
Corporation, New York City; John L. Gaerste,
v-Cooley & Co., Hartford

Starring, A. C. Allyn & Co., New York City;

C. Provost Boyce, Stein Bros. & Boyce,
Arthur C. Allyn, A. C. Allyn & Co.,
■vv

Baltimore;
Chicago

Mr. and Mrs. Arthur C. Turner, New York Hanseatic Corporation, New York;
Kurt H. Grunebaum, New York Hanseatic Corporation, New York City

Mr. and Mrs. Robert W. Ewing, A. E. Masten & Co., Wheeling, W\ Va.; Martin Buxby,
tennis pro of the Hollywood Beach Hotel; Mr. and Mrs. Kimball Valentine,




Vance, Sanders & Co., Boston

Cross,
Lyons & Shafto,

Mr. and Mrs. Walter Morse, Lehman Bros., New York City; Joseph

f.

x

Vincent Reilly, Commercial & Financial Chronicle,
New York; William W. Mackall, Mackall & Coe,

Washington, D. C.

Mrs. Carl H.

Doerge, Cleveland; D. Dean McCormick, Kebbon, McCormick & Co.
Chicago; Mrs. and Mr. John S. Loomis, The Illinois Company, Chicago

Mrs. Ewing T.

York

Boles, Columbus, Ohio; Wickliffe Shreve, Hayden, Stone & Co., New
City; Mrs. Kenneth D. Wells, Valley Forge, Pa.; Mr. & Mrs. Robert O. Shepard,
Prescott, Hawley, Shepard & Co., Cleveland
-

Volume 170
Continued

from

COMMERCIAL

THE

Number 4866

•MORELAND, J. MARVIN
Rotan, Mosle and Moreland, Galveston

Wertheim &

T. H,

T.

Cleveland

A.

H. Jones & Company, Cleveland

Moore,

Blair

KANE, LEO A.

City Bank

of New

*

KASSALOW, EVERETT M.
-

•KAUFMAN. C. G.
Shields

,

&

KEVIN T.

Co., Inc., New York

•

MAGNUS,

Greenshields

&

Union Securities

Merrill

T.
;
National
•

.

>

V;;.V'.;.

New York

Continental

Trust

'

Bank,

Blair

National

Bank

&

Martin,

Bank

Company, St. Louis

;

&

Trust

'
f

•KNOPP. BERNARD B.
First
St.

National

Paul-

r

V

Bank of St.

Paul,,

-.'I';■

Inc.,
'■

s.

/, V-'-

Parker

Cleveland
MAY.
;

;

-'-V

"M}

'

■

Z

laemmel, williams g.

f

Trust

National

Union

•McCORMICK,

v';

•• •,

Riter

Chase

of New

y

Montreal

Chicago

National

Bank

of

the

City

Norfolk

Collier,

Robert

STUART C.
'•'<
Harris, Hall & Company (Incorporated)

LAW,

New

York

Washington
McDONALD

'■

•NOYES.

Boettcher

DAVID F.
and

-

' '

Company, Denver

EMMETT
/.V' XZZh.ZX:
Carl M. Loeb, Rhoades & Co., New York

LAWSHE,

•LEE, ALONZO
Sterne,

v/'X.

H.

Agee

&

Leach,

Higginson

Corporation,

Paul

York

New

.

'•*
Chronicle,"®

r

■

.

r

/

-

.

.

r

r

REIS,

3

'

.

'

Seasongood

Manufacturers

t-

'

,•

Norris

W.

" V:'•'''

P.

V1

'■

'

;

RICE

Legg & Company, Baltimore

.'

'

ll

'■ iX)

•'!

RIEPE,
Alex.

'
POSTLETIIWAITE,

v;. •*j

,

7*:

Irving Lundborg & Co., San Francisco

•PRANKHARD.
'

II,

&

HARRY

*

Company, Inc.,

J.

Corporation, New York
CREIGIITON

'

J

..

Brown

&

Sons,' Baltimore

ROBERTSON,
Scott

&

WALTER

S.

'

j

J

.

,

,

•RITER, Srd. HENRY G.
Riter & Co., New York

'
•

V'A

...

.

»

»

Stringfellow, Richmond

I

(Continued

Lord, Abbett & .Co., New York

•'}"( €-'■

-•

RUSSELL

•POTTER, A. C.
Bacon, Whipple & Co.; New York

GEORGE F.

Company, Chicago

J.

'

•'

Emanuel, Deetjen & Co., New York

Co., Incorporated,

Trust Company,

RICHARDSON, DORSEY
Lehman

PORZELT, PAUL

,

.....

v

-

&

J.

Rice

J.

Co;,

..

City

IRVING

Irving

Trust

J.

Bank

,t

St.-Paul

:

New York

V

PHILIP

-> -

.,

&

*

-

Share

....

National

Oklahoma

;

V

Vv

Montreal

& Quinlan,

Pittsburgh

Co., Chicago

POOLE, MONROE V. ^ i
; \
!
Gqo. B. Gibbons & Company, Inc.,

Incorporated,

Indianapolis

First

.

; ;

:

I

and

F. BRIAN
National Bank

•RHOADS,

Vv'. V.',

•POHLHAUS, WALTER C.
C.

V

...

•

,3

Bond

•REUTER,

-

¥

L.T

New York

Co.,

Corporation,

C.

Baird &

The Illinois

&

Trust

Indianapolis

,

t'T

Cincinnati

R^ISSNER, FRANK L.
'

News, San Francisco

PODESTA, ROBERTA.

:

i

.

T

Mellon
,

Mayer,

'

' ' -'V
4

&

r

REISLER, JOSEPH T.

,

Republic Company, Chicago

Limited,

/

THOMAS J.

on

page

58)^

..'.i'-,

*,
;

■

-

•

,

Incorporated,

'v'

;

McEWAN, GEORGE S.

x'r:

LEEMING, CHARLES E.
'
Chicago Tribune, Chicago;;.

York

,

a

Francisco

...,

V/ *
ClevelamJ

b.X.,-

Morgan & Co.

New York

Birmingham

lee, james j.
Lee

•Mcelroy, david
P.

'

i,

Detroit

McELHINEY, LESTER b.
Loewi & Co., Milwaukee
J.

'

i

HARRY A.

,

McDonald-Moore & Co.,

LAWRENCE,

,

St. Louis

REINHOLDT, Jr;4 JULIUS W.
^
Reinholdt & Gardner, St,
Louis.,.,.

.

G.

'

San

Corpn.,

O'BRIEN, GEORGE E.
^
S. R. Livingstone & Co., Detroit

v-•

Jr

-

Hirsch & Co., New York

E,

HERBERT B.

Milwaukee

^

McDONALD, HARRY A.
Securities & Exchange Commission,

York

New

•'

Alnt.yne, Noel & Co., New York

*NORKTS,

.....

Company,

'• *.

Fol<?er, Nolan,
Washington

D. DEAN

McDONALD, CHARLES B.
..
McDonald & Company, Cleveland

wells

Trust

•

John

•,

Bankers

A.

Cruttenaen

Van

Pittsburgh

Bank,

Memphis

GUY

F. VINCENT.""'''
"•
"Commercial
&
Financial

Chil.cjs and Company, Chicago

Central

Securities

NOLAN, JAMES

Norfolk,

W,

Edwards & Sons,

FRANK B. 1

New

Co., Los Angeles

'

New York

•NOEL, RICHARD

-

•McGURDY, WALLACE M.
/
?
Thayer, Baker & Co., Philadelphia

.

C. F.

j.:

Co.,

•NORTH. LUDLOW F.

Co., New York
.

York, New York

laud-brown.

&

NIXON, STANLEY

>

.

RE ILLY,

;

',

,v

'

:

&

PIPER, JOHN S.
1

Chicago

Co.,

-*•_ Maynard H. Murch & Co.,

PHILLIPS, SPENCER
'' •' T'r! 1 *
;;'
Emanuel/ Deetjen & Co., New York

Walker & Co., St. Louis

H.

'

,

lane. arthur D.
The

GEORGE A;

nix, allfn

'

>

G.

REID,

„

rZ'-Z

Phillips & Co., Philadelphia

Dean Witter

1

CHAPIN S.

Kebbon, McCormick & Co., Chicago

;

K.

-

F.

REFSNES, JOSEPH E.
: ~ J - - f
Refsnes, Ely, Beck & Co., Phoenix

^
Inc.,

xv/X

PIGOTT, JAMES M.

Louis

McCAGUE, ROBERT H.

Shearson, Hammill & Co., New York

Samuel

'

•

»

•PIERCE, Jr., DANIEL T.

Company,

of

Corp.

.•»'

-■

,

Son, LoulsviUe

ALFRED

REDMAN,
A.

;

NICHOLS, Jr., DONALD E.
;,Vf
Journal of Commerce, Chicago
V ;

*

PEYTON

W.

NORMAN

./yl'

Newhard, Cook & Co., St. Louis

G.

Corporation, Boston

Investment

.

Chicago

PICKARD,

V

?

KRUSEN, H. STANLEY

Trust

DENNY

MAY, J.
The

KRUSE, JOHN A.
Otis & Co., Cleveland

&

,<

•NEWTON,

.

Spokane

& Co., St.

Northern

The

Antonio

Bank

'

,

MAXWELL. JOHN M.

•KRAUS, HARRY G.
Ball, Burge & Kraus,

Chemical

/

&

MYRON

REDDOCH, JAMES N.
Meeks, Reddoch & Company,
•

•PniLLlPS, Jr., BLAIR A. •
:
The White-Phillips Company,

-\:

.

.v.1

!>

NEWELL, RICHARD M.
Dilldn, Read & Co. Inc., New York

Dominion

Co.,

New York

New York

"

"

•NEWHARD,

MATTISON, LEWIS C.
Calvin Bullock, Boston

,

,V

ARTHUR
and Company,

E.

*

.

•

Equitable Securities Corporation,

Lincoln

■

&

'

•RAUSCHER, JOHN H.
Rauscher, Pierce & Co., Dallas

Co., New York

PETERSON,

:V

4
1

<

Kidder, Peabody & Co., Philadelphia

'

PHILLIPS, RALPH E.

>,

>

,

-

NEUIIAUS, PHILIP R.
v
■
Underwood, Neuhaus & Co., Houston

Burns & Corbett, Inc., Chicago

H. Walker

Detroit

-

A.

Hilliard

B.

•RAUCH,

PETERSON, C. T.

•PHILLIPS, EDWARD J.
.

;

^

!

Detroit,

Kidder, Peabody ;& Co., New York

^

J.

V

•PETERS, GERALD P.
Peters, Writer & Christensen, Inc.

Riter &

of

J.

Weeks, Chicago

.,

1
]

Co.,

1

•

DILLMAN

RASH,

•RATCLIFFE,

_

&

IRVIN T.
'
Robinson-Humphrey Company/

America, N. T. & S. A.,

Denver

.

WILLIAM

Hughes

Indianapolis

Atlanta

Francisco

Hornblower &

Company, Pittsburgh

NELSON, EDWARD H.

MATTHEWS, ROBERT H.

r
.i
Banks, New York

•KOCUREK, LOUIS J.
Rausclier, Pierce &
San

-

Co., Inc., Pittsburgh

&

Bank

Burnham

"

G.

Masten

•NELSON,

MARTIN, WAYNE
Milhous, Martin «fe Co., Atlanta

''

■■■■■

KNOX, JOHN T.
Federal Land

>

•MARTIN, HAROLD M.
Murphey Favre, Inc.,

KNIGHT, NEWELL S.

-

;

Stern, Lauer & Co., New York

York,

NORBERT W.
Barney & Co., Philadelphia

•MARTIN, GEORGE L.

E.

,

PERRIGO, CHARLES R.

V

V

G.

Paul.' '

•RAGSDALE,

'

Bache

NAUMBURG, CARL T.

f,, •:•"'

First Trust Co. of Lincoln,

X

;

Mercantile-Commerce

,'

MARTIN. BENNETT S.

M.

Illinois

&

"

of Chicago,' Chicago "TN

Co.

Bank of
San

,

'
•

Incorporated,

•

D.

...

.

Curtis

&

Wood & Co., St.

E.

Raffensperger,

•PERRY, II. TAYLOR

Company, Inc., San Antonio

National

MARONEY, FRANKLIN

W]':.

,

FRANCIS

Smith,

''v.V,

National

Philadelphia

MARK US,

"

STEWART R.
'
Kirkpatrick-Pettis Co., Omaha

KNIGHT,

Boston

•

,

*

•RAFFENSPERGER,

The

MURRAY, RAY H.

Company,

•MARKS. LAURENCE M.
^
Laurence M. Marks & Co., New York

Jenks, Kirklftnd & Co., Philadelphia

KNEASS. GEORGE B.

Trust

A.

Harold

The .First Boston Corp., New York

MULLINS, FREDERIC 1*.

■

KIRKPATBICK.

*

<fc

York

.

Jackson

QUIST, LEO L.

Parker Corporation, Boston

New

Mullaney, Wells & Company, Chicago

Lynch, Pierce, Fenner & Beane,

MARCKWALD, ANDREW*.
Discount Corporation of New

i
of

'X'Z'X, !JXZ:

SAMUEL N.

ROBERT A.

MALICK, JOHN S.
Fidelity-Philadelphia
Philadelphia

*

,

Bank

The

■

.

PARRY; SIDNEY L.
Assn. of Stock Exchange Firms,

Bank, New York

EDWARD

Russ

u

-

.

Philadelphia

M.

New York

Corporation, New York

■

Y

HERMAN

MAGOWAN,

•KING, WILLIAM P.
King, Quirk & Co., Incorporated,
New York
*•
-

Boston, Boston

International

*

,

PATTBERG, Jr., EMIL J.

& Co.,

Moss

Webber,
Chicago

PARKER, WILLIAM A.

Incorporated,

Co.,

Paine,

,.

MULLANEY, rAUL L.

KING. JOSEPH H.

KIRKLAND.

&
'

&

Magnus & Company, Cincinnati

Co., Inc., Montreal

•KING, WILLIAM
Rockland-Atias

Morton

Preston,

MUIR,

Bacon, Whipple & Co., Chicago

r

;

.

QUIGG, JAMES F.

•PARKER, NATHAN K.
Kay, Richards & Co., Pittsburgh

MOSS, JAMES W.

Association,

WILLIAM W.
Coe., Washington

Mackall

KERR, WILLIAM D.

KILBURN. PETER

'

•

Distributors, Inc,, BostOja

QUAIL, JOHN J.
Quail & Co., Davenport

York

;

MUDGE, LOUIS G.

MACK ALL,

Devine & Co., Inc., New York

H.

W.

New York

•KENNEDY, FRANK T.
C. J.

*• ;

",

GEORGE

Putnam Fund

!

;

'

Bank, Seattle
"

Hemphill, Noyes, Graham, Parsons & Co.,

'

'

•

/

S.

National

GEORGE T.

New York

•PARKER, E. CUMMINGS
Glo're, Forgan & Co., Chicago

•MORTON, WILLIAM H.

Minneapolis

Week, New York

PARKER, Jr., CHARLES S.

II.

•MORSE, WALTER E.
Lehman Brothers, New York

York

New

\

-

Prcssprich & Co., New York

PUTNAM,

Chemical Bank & Trust Co., New

Lehman Brothers, New York

Curtis,

Piper, Jaffray & Hopwood,
Bankers

1

W.

PURVIIS,

/•

Business

Wright, Snider Co.,

Seattle-First

•PACE, CLARK R.

'■

Co., Miami

,

•MORSE, FRANK

MACK. Jr., JOHN B.
American

Nashville

i

i

City

•PROSSER, MALCOLM

Company, Minneapolis
'
Securities Corporation,

Er.uitable

,

&

New York

WILLIAM S.

MACFADDEN,

COURTENY

■'

-

B.

A.

Morrison

R.

York

New

Buyer,

OWEN, RALPH

Hemphill, Noyes, Graham, Parsons & Co,.

.....

.

Boston

Lyons & Co., Louisville

B.

Kansas

Allisons-Williams

MORSE, Jr., CHARLES L.

MACARTHUR. ROBERT W.
;
Paine, Webber, Jackson &

G.

LEWIS

KELLER, Jr., C.
Blair

A.

Jr., WILLIAM L.
W. L. Lyons & Co., Louisville

Company,-Chicago

:

•MORRISON,

Co., Inc., New York

LYONS,

Congress of Industrial Organizations

Washington

W. L.

Atlanta

Prescott,

•OWEN, IRA D.

'

Lyons & Shafto, Inc., Boston

New York

•KAYE,

&

LYONS,

York,

CHARLES

FRANK

LYNCH.

The Bond

'

PRESSPRICH, Jr., REGINALD W.

•OTIS, C. RAKRON

*

Sbepard & Co.,

PRESCOTT, JOHN A.

"

i

MORRIS, JOSEPH L.
The Robinson-Humphrey Company,

McK.
Leonard & Lynch, Pittsburgh

Jr.,

•LYNCH,

KALES, DAVIS
Wood, Gundy & Co., Inc., New York
National

and Company, Incorporated,

C. Allyn

Chicago

Prescott, Hawley,
Cleveland '■

Distributors, Inc., Boston

OSTRANDLR, LEE H.
William. Blair & Company, Chicago

Inc.,

•MORONEY, ROBERT E.
Morcney, Beissner & Co.j Houston

LYKLEMA, WALTER C.

Fund

Putnam

•MORGAN, II, WILLIAM B.
S) rcud & Company, Incorporated,
Philadelphia

Dillon, Read & Co. Inc., New York

KAELIN, WILLIAM R.
Baker, Weeks & Harden, New York

The

57

PRESCOTT, EDWARD P.

Services, New York

OSBORN, RICHARD

!

Distributors,
Philadelphia

LUDIN, JOSEPH

HERMAN B.

Brit ish Information

L.

Wellington

•LUCKE, FRANK L.
Laidlaw & Co., New York

Co., New York

THOMAS H.

Jones & Company,

JOSEPH,

•MORGAN, W.

Bear, Stearns & Co., New York

Co., Baltimore

•JONES, GEORGE S.

JONES, Jr.,

(2541)

MAJOR C. B.

ORMEROD,

MOREY, Jr., RICHARD
A. G. Edwards
Sons, St. Louis

•LOW, V. THEODORE

JONES, ELISHA RIGGS
Jones &

CHRONICLE

40

page

In Attendance at IBA Convention
E. R.

FINANCIAL

&

H.

Davis

&

Chicago

Co.,

;

•McFARLAND, DONALD E.
Kalman

&

Company, Inc.,

.

'

;

Minneapolis

/'y;-;
•McGREW, EDWARD D.

•LEES. Jr.. J EON L.
• Ira Haupt & Co., New York

*

The Northern

Trust Company,

.

'

New York

HUDSON B.
^
;
Morgan Stanley & Co., New York

.

LEMKAU,

McK IE,

STANLEY G.
Weil, Roth & Irving Co.,

The

•LEMON, JAMES H.
Johnston, Lemon &
GEORGE

•LENESS
Merrill
,

?

i

Lynch, Pierce, Fenner & Beane,
<

.<

•LEWIS, MEAD
&

Dr.

Z *.'■"i *c

cj.'i

LINEN, JOHN S.
of New

York,

New

Hirsch

,

City

York

First Boston

& Co., New

■

A

Corp.', New York" "

I 5

•MIKESELL, ROBERT S.

Stranahan, Harris & Co., Inc., Toledo

'I 'I
:

Prospectus

-

MILLER, LEWIS

LITTLE. ALDEN H.
Investment

' —

The

Bankers Association,

Chicago

R.

S.

EDGAR

Dickson

J.

'

Chase

,

Jr.,'SIDNEY J.

J

-

National

Bank

of

Northwestern

National

Bank

of

Minneapolis, Minneapolis
the

City

Associated Press,

New York

,

tDenotes Mr. *ml Mrs.




'

be obtained from
■

v

^

■

local investment dealer

'

"

:

r'

or

THE

PARKER

CORPORATION

WINSTON L.

MONTGOMERY, HARRY T.

York, New York

your

may

■

Newhard, Cook & Co., St. Louis

•MOLANDER,

Chicago

'

'J

•MILLS, ANDREW S.

Inc., New York

LOVE. E. L.
The

Chicago,

Thornton, Mohr & Co., Montgomery

& Co.,

<LOOMIS; JOHN S.
The Illinois Company,

of New

of

/

"'1

•MOHR,
•LOFTUS.

«

First National Bank

Chicago
'

LIVINGSTONE, SEABOURN R.
S. R. Livingstone & Co., Detroit

Diversified Investment Company

?

York

MILLER, GALEN
Hayden, Miller & Co., Cleveland

•LINSLEY, DUNCAN R.
The

Atlanta

Means,

•MEYER, Jr., MAURICE

;./•;>

of ithe

Bank

<

-:.<X-As

;

National

W.

James

Association,
'*•'t *

.

Courts & Co., Atlanta

<MEEKS, G. GORDON J
Meeks, Reddoch & Company, Memphis

4

R.

Bankers

Chicago ;.../j j

Chase

Miller & Co., Baltimore

MEANS, MRS. JAMES W.

y-

RENSIS

LINCOLN,, MARY

The

Co., Inc., Atlanta

W. CARROLL

•MEAD,

MEANS, JAMES W.

University of Michigan, Ann Arbor

Investment

&

Mead,

A.

Bear, Stearns & Co., New York
•LIKERT,

I

D. FINLAY

Blair

Curtis,

&

Merle-Smith, New York

•lewis. salim l.

;«

"

,
,

Dick

•

McI^UGHLIN, EDWARD M.
Paine, Webber, Jackson & Curtis,
New Yoik
,'
McRAE,

LEWIS, DAVID J.
Paine. Webber, Jackson
York

*•••-

Washington

Co.,

J.

New York

New

Cincinnati

•MOORE, RODERICK D.
Branch, Cabell & Co., Richmond

200 BERKELEY

ST., BOSTON 16, MASS.

v

!

58

(2542)

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, December 22, i949

Conitnued jrom page 57

IBA

In Attendance at IB A Convention
ROBINSON, ARTHUR R.
Fidelity Union Trust Company, Newark
ROBINSON. EDWARD H.
JAMES

Scharff &

Butcher

E.

B.

ROSEN,

&

Co., Inc., New

York

JUDITH S.
Bankers Association,

•

Investment

American

WILLIAM

Securities

York

.,
,

.

ALFRED J.

Dick

&

•STEEL,

♦SHEPARD,
Prescott,

*

Reserve

Bank,

New

Hornblower

&

Weeks,

New

Shields

•ROWE, ROBERT G.

♦

&

Company, Incorporated,
Philadelphia
Winston & Co.,

•ROWEN, PAUL R.
Securities & Exchange
Washington

SHIELDS,

International

W.

•RYONS. JOSEPH

Pacific
Los

ST.

Company

Angeles

of

'

MAURICE
Weltner Si Co.,

EARL M.
Earl M. Scanlan &

GEORGE

National Bank of

New York

Minneapolis,

Merrill

National

J.
Bank

of

Chicago,

Blosser,

New

Chicago

Co.,

|

j

C.

i

Association,
j

&

H.

York

•SPEAS.
First

SCOTT, BUFORD

Stringfellow, Richmond

Robert

New

ADAMS

'

ARTHUR

York

WENDT,

York

'.' '

^''7

;

Co., Incorporated,
\7

7-7,

|

.

:

''

Brothers,

HART,

,

VAN

V

-

Russ

<

r

.

t;

&

WEST,

.

.

Company, Inc., San Antonio

GERALD

B.

Stone & Webster Securities
Corporation,
New York

•WHEELER, HOWARD S.
Leedy, Wheeler & Alleman, Inc., Orlando

"'A j

Boston

WHIPPLE, JAY N.
Bacon, Whipple & Co., Chicago

&

•WHITBECK, BRAINERD
The

Hutzler, New York

?

7

Chas.

Commerce, New York

7

&

Cummins, Inc., Chicago

SAMUEL L.
Chisholm & Co., Inc.,

VINSON,

EGERTON
DeHaven Si

G.

7.

National

Bank &

Bodine,

Trust

New

Glore, Forgan

WALBERT,
Lehman

♦THORS, J. EMERSON
Kuhn, Loeb & Co., New York;
ANTHONY

Company,

The

RICHARD

Pittsburgh/ 77

!

Walker

•WALTERS,
Girard

&

•

.y

"*\'7'

H.

Co., New York

W.

.

7;

" "''77

A.

&

Co., New York

"Investment Dealers Digest," New York

M.

JAMES

Kidder

W.

&

A.

Baltimore

Boyce,

BENJAMIN

Hutton

Union

H.

&

D.

.

Co., New York

WARREN

Securities

Corporation, New York

y

Bank,

WILSON, WALTER W.
Morgan Stanley & Co., New York

Nashville

MURRAY
Richards & Co., Los Angeles

WARREN,

E.

•WILSON,

•WARD.
Hill

Co., St. Louis

ALBERT

LeROY

Bros.

WILLIAMS,

L.

C.

National

Si

Trusts, Philadelphia

Stein

Company, Philadelphia

7

EUGENE

Rothschild

JAMES

Third

.

WILLARD, FRANK A.
Reynolds & Co., New York

.

WARD.

Robinson-Humphrey Company,

Walker

WILBUR,

B.

Chicago

HARRY

Trust

7

New Orleans

WIESENBERGER, ARTHUR
Arthur Wiesenberger Si
Co., New York

S.

& Co., Chicago

/ ...7! •WALKER, Jr., GEORGE
H.

Co., Houston

Pennsylvania Company for Banking

and

'

E.

&

H.

Boston

B.

Brothers,

York

KELTON E.

H.

WHITTLESEY,

York

VRTIS, CHARLES

New

WHITESIDE, THOMAS
Chace, Whiteside, Warren & Sears, Inc.,

■

Townsend, Crouter &

Co., Memphis

White

HARRY

•WHITE,

Savannah

York

: '

II.

Corp.,

White, Hattier & Sanford,

VERMILLION, ROBERT
United Press, Miami

New

Boston

B.

WHITE,

WINKLE, PAUL K.

Wheelock

•VARNEDOE,

First

7

•WHITE, CHARLES B.

MILTON

of

Varnedoe,

TRIPP. JEROME C. L.
Tripp & Co., Inc., New York

•STALKER, ALFRED J.
Shields & Company, New York

Chicago,

•WEST, CHARLES L.

Corporation,

GEORGE

Bros.

SLYCK,

Journal
•VAN

•TRIGGER, RAYMOND
■

*

of

Chicago

•VANDERPOEL. ROBERT P.
Herald-American, Chicago
Salomon

Sons, Inc., St. Louis

Montreal

&

GEORGE B.
First National Bank

The

,

THOMAS, JOSEPH A.

F.

D.

Foundation, Inc., Valley Forge

C.

Hanseatic

KIMBALL
Sanders & Company,

Vance,

Brothers, New York

•TREUIIOLD,

Hopkinson, Jr.

KENNETH
Freedoms

•VALENTINE,

TORREY, ARTHUR S.
W. C, Pitfield Si Company,
Ltd.,

'

E.

•WELLS

Exchange, New York

UFFORD, HENRY M.
Calvin Bullock, Atlanta

MRS. HARRY
with Harry Theis, St. Louis

L.

Boston

i

•TURNER,

THEIS,

The

•STABLER, C. NORMAN
Herald Tribune, New York

•SENER. JOSEPH W.
John C. Legg &
Company, Baltimore

1
,

ROBERT L.

&

Curb

TUCKER, NORMAN M.
International Bank, New York

Company, New York

Planters

York

New York

Atlanta

Bank, Atlanta

Hawkins

of

N.

HARRY
Theis &

H. Collins

TOMPKINS, HENRY B.

Hutzler, New York

SPENCE, W. FREDERICK

•SCRIBNER, JOSEPH M.
Singer, Deane & Scribner, Pittsburgh

Denotes Mr. and Mrs.

J. W.
National

Albert

Thomas

Johnson, Lane, Space & Co., Inc.,;

HAMILTON D.
F. 8. Smithers
Si-Co., New

Bank

G.

Savannah

SCHWARZ,

Lehman

Julien

♦TSOLAINOS, K. P.
Baker, Weeks Si Harden, New

VAN

THAYER,

Dewar

TRUSLOW, FRANCIS

•TEGELER, JEROME F.
Dempsey-Tegeler Si Co., St. Louis

•TOMASIC,

•SPACE, Jr., JULIAN A.

York

Corporation,

THORNBURGH, ROBERT W.
The W. C. Thornburgh Co., Cincinnati

RUDOLF
Bros.

&

H.

D.
New

MACRAE V

Union

York

Salomon

Hal

THOMPSON, EDWARD F.

Lynch, Pierce, Fenner Si Beane,

♦SMUTNY.

SCHREDER, HAROLD X.
Distributors Group,
Incorporated,

Company, El Paso

SWANEY. JOHN

Lehman

Lynch, Pierce, Fenner Si Beane,

WINTHROP

8.
Si

White-Phillips Company, Inc.,

THEIS,

Incorporated,

SMUCKER, OTTO M.
Sun-Times, Chicago

SCHMIDT, WALTER A.
Schmidt, Poole & Co., Philadelphia

*

■'■v|
,7.

York

SMITH,

Stewart

CARL

Shields

j

.

Bankers

HAROLD

Century Distributors, Boston

t

SMITH, NORMAN P.
New

York

Davenport

,

Corporation,
.77.7. 77
.4;

' '

DUDLEY

Merrill

&

The

SMITH, J. RAYMOND
Weeden Si Co., Inc., New York

SCHMICK, FRANKLIN B.

Scott

Providence

Chicago
Inc.,

Chicago

&

STUTZ,

'•

7

Investment

J.

SCHLUTER, HAROLD

New

York

•SMITH,

New

•STRAUS. FREDERICK W.
Straus Si Blosser, Chicago

Simmons, Chicago

New York

Co., Denver

7

Co.,

W.

SKINNER, DAVID L.
Harriman
Ripley &
Montreal

Minneapolis

Straus

&

Inc., New York

SCHAPIRO, MORRIS A.
M. A. Schapiro Si
Co.,

First

Ellis

SIPP, PAUL L.
First of Michigan
New

7
York

New

York

♦SYKES,

♦SCANLAN,

The

RICHARD

SIMPSON, Jr., F. BRADFORD
Lee Higginson Corporation, New
York;

H.

Co.,

STOCKBRIDGE, FRANKLIN
The
Security-First National
Los Angeles, Los Angeles

,

SAVARD, J. ERNEST
Savard, Hodgson & Co., Inc.,

First

New

'

Examiner, San Francisco

♦SANDBERG,

W.

Trust

RAYMOND
Equitable Securities

•

'*. •.

Si

STITZER.

•SIMONDS, RALPH W.
Baker, Simonds Si Co., Detroit

777'.

7

PETER, CHARLES

•SCHAUST,

Company, New York

Tucson

California,

w

7

.

San Francisco

A. E.

Harold S.

•SIMONDS, GODFREY B.
G. H. Walker Si Co., Providence

L.

EUGENE

Bank

STEWART, PERCY M.
Kuhn, Loeb & Co., New York

<

RYDER, PATRICK J.
Henry Dahlberg and Company,

F. KENNETH
Sachs & Co., New York

Jr.,

•STEWART,

CORNELIUS

•SIMONBS, CLARKE
G. H. Walker Si Co.,

GEORGE P.
Dominion Securities
Corporation,

Co., New York

ROBERT, 3RD
•
Investment Bankers Association, Chicago

VIRGIL

Washington, D. C.

•RUTHERFORD,
New York

Blunt

*

Bank,

Co.,

•SIEFERT, RUSSELL E.
Stern Brothers & Co., Kansas
City

Commission,

,7-

•STEVENSON. G. C.
Bacon, Stevenson Si

♦SHREVE, WICKLIFFE
Hayden, Stone & Co., New York

Houston

&

Chemical

Boston

Company, New York

Si

SIMMONS.

RUSSELL, JAMES

H.

Si

Shields

BOWLES, RUSSELL R.

The

Drexel

STETSON,

&

!

H.

STEVENSON.

•SIIERRILL,

York

WALTER

Goldman,

ROBERT O.
Hawley, Shepard

.1

STEPHENSON,

Trust

SHERBURNE, HAROLD H.
Bacon, Whipple Si Co., New York

York

ROVENSKY, WILLIAM R.

Rowles,

&

Cleveland

ROUSE, ROBERT G.

Stroud

Bank

'

;

.

PHILIP M.
& Co., Boston

SHARPE,

.,

Merle-Smith, New York

Federal

York

Chicago

•SHELLEY. WILLIAM F.
Vance, Sanders & Company,

Corporation,

''

1 946-47

Corp., New York

Estabrook

Company, St, Louis

ROSENWALD,

•ROSS.

New

•STEARNS,

WILLIAM P.
Mercantile-Commerce

Boston

STARRING, MASON B.
A. C. Allyn and Company,
Inc.,

Sherrerd, Philadelphia

York

Chicago

New

Si

SHARP, NATHAN S.
Central Republic Company,

Jones, Inc., New Orleans

Roll

Inc., New York

First

SHAFTO, ELLSWORTH M.
Lyons Si Shafto, Inc., New

•ROLL, JOHN B.
J.

Eberstadt & Co.

The

SEVING, FREDERICK T.

Schwabacher <fc Co., New York

RODDY,

1 947-48

STANTON, FRANK M.

SEVERANCE, CRAIG
F.

PAST PRESIDENTS

1948-49

C.

&

7

WINGADER, LAWRENCE A.
John Nuveen & Co., Chicago
WINDSOR,

3RD,

JAMES

D.

Biddle, Whelen & Co., Philadelphia

Co., New York

WARREN, ROBERT H.
1
Geyer & Co., Inc., Boston

7

WITTER. JEAN C.
-

WASHBURNE.

HEMPSTEAD
Harris, Hall & Company (Incorporated),
Chicago
...7
77;

Dean

Witter

&

Co., San Francisco

WOLL. ALBERT J. T.
E.

M.

Newton

&

Co., Boston

.

Watllng,

Lerchen

&

Co.,

HARLEY

M.

(

A.

7

Detroit
WOOD,

WATSON,

DAVID

Wood, King Si Dawson, New York

WATLING, PALMER

•TROST, MILTON S.
Stein Bros. Si
Boyce, Louisville

•WOOD.

HAROLD

Harold

'

E.

E.
&

Wood

Co., St. Paul

Eldredge & Co., Inc., New York
•WOOLNER,
Bache

WEAGLE, C. H.
Otis & Co., Cleveland

Dealers in

WORK.

ADOLPH

Co., New York

ROBERT

M.

Salomon Bros. & Hutzler, Chicago

♦WEGER, BROOKS D.
Davies &

&

•WULBERN, EDWARD

INVESTMENT SECURITIES

WEDTHOFF.
First

of

,

7

Majia, San Francisco
GUY

R.

G.

S.

Dickson

&

B.

Co., Inc.,

Charlotte

>

Michigan Corporation, Detroit
•YANTIS, F. STUART

Members
New

WEED,

of

York, Boston and Chicago Stock Exchanges
New York Curb

Jr.,

WALTER

Union Securities

F. S. Yantis

H.

WELLES.

Co. Incorporated, Chicago

•YORK, Jr., EDWARD H.
Drexel '& Co., Philadelphia

WEHRHEIM, ROBERT V.
The Philadelphia National Bank,
Philadelphia

Exchange

&

Corporation, New York
7

7

*

".

YOUMANS, PAUL E.
7'7 ^-'7
Bosworth, Sullivan & Co.. Denver

RUSSELL

Central Hanover

Bank, New York

•Denotes Mr.

"

and Mrs.

F. S. MOSELEY & CO.
Boston

New York

Chicago

Indianapolis

Underwriters9 Dealers and Brokers

State and
r'AUUIM

O

j

Of TOO

COFFIN & BURR

Municipal

Corporate Bonds

Bonds

Purchasing and Distributing

and Stocks

State, Municipal, Corporation

INCORPORATED

and Public Service
Founded 1898

Company

>

Retail Distribution in New

England

Securities
BOSTON
NEW YORK

HARTFORD

CHICAGO

PORTLAND

General Distributors

BANGOR

NEW ENGLAND FUND
J

MEMBERS —BOSTON STOCK
EXCHANGE
NEW YORK CURB EXCHANGE




(ASSOCIATE)

Chace, Whiteside, Warren & Sears
INCORPORATED

'

Organized 1931

24 Federal

Street, Boston IO

Hospital Trust Bldg., Providence 3

Volume 170

Number 4866

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(2543). 59

Continued from page 26
sponsibility with

Expects Continued Large Volume of Municipals
of those

both

We

■-

firms

which

underwrite

municipals and corporates.
felt

that

it

attorneys

benefit

would

"concerned

everyone

would

if

the

bond

advise

issuers,
When conferring with 1 them on
new issues,
against too extensive
of

use

Tuesdays in selecting the

date for sales of their bonds and
asked

their

help in so advising
municipal
bodies.
The

issuing

from

responses

attorneys

full* cooperation.
The second solicitation

operation relates to
on

bonds.

revenue

our

We

reflect
co¬

program

requested

bond attorneys when
preparing the trust agreement or
resolution

other

or

authority un¬
project is to op¬
erate, to recommend the inclusion
which

securities.

We

for

Originality, Effectiveness and
Leadership in Advertising Mu¬

quote below from

nicipal Securities.'

the published announcement:

"In addition $100 in cash will
be presented to the individual who

"The 'Bond Buyer', as has been
indicated frequently in these col-

we

umns, is in enthusiastic
with the Committee's

lic

the

in

such agreement of a covenant
to the effect that the issuer
pub¬

'

quests

reflected

attorneys'

ap¬

proval of the suggestion and evi¬
denced
the

intent to comply. Ob¬
of the above is in

an

viously,

all

interest

of

Education

broadening the markets for

mu¬

t

and

contest.

the

arouse

interest

of

"In

is to

it

their

pointed out to various states that
it would

assure

confidence among

investors and be helpful to mu¬
nicipal credit, if legislation were
enacted providing that bonds is¬
sued by the state, its
agencies or

instrumentalities,
subdivisions

political

their

or

agencies or
shall
not V be

instrumentalities,
Subject to call

its

or

redemption prior
maturity without
consent of the
bondholders, unless
the right to exercise such call or
redemption is expressly stated 011
to

their

the

face

It

is

or

fixed

of the

bond.

interesting

during

this

to

that

note

the

year

Arizona

State

distribution

cation,
Each

advertisements

to

will

committee

a

which at

one

the most

to

be

'Bond

the

Buyer'

advertiser

The

be

1949

the

act.

new

ject
the

is

cover

not

tended,

scribed,
BOND

The Committee on
Banking and
Currency of the Senate in report¬

ing favorably upon the bill said
regarding its philosophy:
"The bill now being favorably
reported by. your committee is
based upon the firm foundation
that, although the housing prob¬

will

whose

original and

for

the
purposes
in¬
plaque, suitably in¬
to be known as 'THE

Annual

as

enacted directs the

obviously national in scope
fundamentally a local prob¬

lem, and that the first respons¬
ibility for its solution therefore
rests' with

Award

This

the

local

behalf

on

issuance

of

of

bill leaves that

subdivision

district

grams

development of wellintegrated
residential

planned,

(Continued

on

page

60)

Mead, Miller & Co.
York

Stock

Exchange

Active Markets in Local Issues
*

111 E. Redwood St., Baltimore 2, Md.
Telephone: Baltimore

—

Lexington 0210
Bell Teletype

—

New York

-

WHitehall 3-4000

BA 270

BALTIMORE

NEW YORK

JOHN C. LEGG & COMPANY
Established

Members New York

1899

Stock

Exchange

:...

Members Philadelphia-Baltimore Stock Exchange
Associate Members New York Curb Exchange'

Underwriters

Dealers

.

.

Distributors

of

the

state

and

^

^

INVESTMENT BANKERS

political
for

express

United States Government and Municipal Bonds

Railroad,

Public

FIDELITY BUILDING

au¬

Utility and Industrial Issues

BALTIMORE

;

pro¬

proceedings
thorizing such bonds."

of

the

measure was

Maryland Municipal Bonds

the
"•

Telephone Plaza 2484

,t

Bel-1 Teletype

—•

1, MD.

BA 499

Private Telephones to New York and Philadelphia

signed by the

Branch

Office

Governor

on
March
28 'last,
Pershing, Bosworth, Dick & Daw¬

—

Bell

National

Bank

Bldg., Easton, Md.

Teletype—ESTN MD 264

municipal bond attorneys, of
Denver, Colorado, point out that

son,

the obvious purpose of this legis¬
lation is to nullify (of course, as
"to

subsequently issued bonds) the

decision of the Supreme Court of
Arizona in the so-called Maricopa

County
their

case

and

opinion,

tutional.

further that,

the Act

is

^'/v'-'V-:z.'.1

BAKER, WATTS & CO.

in

consti¬

ESTABLISHED

•concerning

the

enactment,

a

bondholder's

consent

consent

of

the

bondholders

Members

Associate

a

'

we

direct

part of the program of our Public
Education

T.

Committee,
Johnson

is

of

which

Chairman,




Exchange

New

York

Curb

Exchange

MEMBERS

County and Municipal Bonds

New York Stock

Listed and Unlisted Stocks and Bonds
Active Market in Local Securities

;

?

;

New York Curb

Exchange

Exchange (Associate)

Philadelphia-Baltimore Stock Exchange
CALVERT & REDWOOD STREETS
BALTIMORE
i

.

West

Virginia

•

'

Representative,

"

3,

MD.
'

•

Union

'•

National

Bank

Bldg.

GARRETT BUILDING

Clarksburg, W. Va.

atten-

tien to its valuable support of that

-Joseph

Members

Maryland

Securities

interested in municipals who may
not
be constant readers of the

Buyer,"

ESTABLISHED 1840

Exchange

are

To the very few of our members

"Bond

Stock

Government and Federal Land Bank Bonds

/field of municipal securities; the
reasons therefor being obvious.
Municipal

York

v

times important factors in the

Advertising

New

Philadelphia-Baltimore Stock

re¬

funding of bonds prior to their
maturity or redemption date if
any. Refundings of issues with the
•at

Members

and

which the attorneys also refer
to,
is that it would apparently
pro¬

hibit

1900

■

One comment that may be made

;

Telephones:

New York—CAnal 6-7162
Bell

BALTIMORE 3
Baltimore—Mulberry 2600

System Teletype—BA 395

and

of encouraging and assist*

the

ing

Insurance Stocks

INCORPORATED

of refunding outstanding

demption under the

This

encouraged

other

or

or

bonds which have not matured or
which
are
not
callable for re¬

visions

be

assisted to undertake positive pro¬

Specializing In

C. T. WILLIAMS & CO.

re¬

city

county,

any

school

.municipal corporation
purpose

shall

community
primary re-

of

funding bonds. Any provision of
law to the contrary notwithstand¬
ing, no bonds shall be issued by or
town,

bodies

enacted

"Limitation

jon

need; and
Appropriate local public

"(3)

policy to be followed in attaining

legislation
(Chapter 122, House Bill No. 109)
providing:
.

of the total

more

be found of interest.

a

BUYER'S

The law

.

assistance

space

the sub¬

partly. We do believe
following general features will

it is

effective

.

Governmental

and effect of

scope

lem is

most

."(2)

shall be utilized where feasible to
enable private enterprise to serve

unchanged.

even

advertisement the Committee has
the

governing body of the com¬
munity, that the project is needed
and where
the
plans for such
project are locally made and lo¬
cally approved.

financing

enactment

There

here, however, to

selected

as

and

There is much that may be said

concerning the

"Each
year
thereafter,
at
a
suitable time, during the Invest¬
ment Bankers Association's annual

the

slums

was

of that act remain

original and effective for

to

1949

substantially the 1937
act, although many basic features

beginning next
December, the
'Daily Bond Buyer', will repro
duce gratis, possibly in reduced
size, the advertisement so chosen.

meeting,

of

broadens

about the middle of the month

present

part.

York Curb Exchange
(Associate)
Philadelphia-Baltimore Stock Exchange

in

thorities.

the purpose mentioned above. On
or

clearance

blighted areas shall be available
only for projects where there has
been a
local determination, by

that will be done during the next
several years by local housing au¬

which

considers

the

Members New

fect upon the amount of

he wishes.

presented

duly

signed by the
July, will, among
ether things, have a material ef¬

contestant may submit as
advertisements for consider¬
as

in

New

which

1949,

President

or may have been pre¬
especially for this contest.

ation

stated

"(1) Private enterprise shall be
locally. It therefore pro¬ encouraged to serve as large a
vides that Federal assistance for part of the total need as it
can;
mined

an

,

Housing Act of

or

many

is

of housing action should be deter¬

The enactment by Congress this
Summer of the Housing Act of

been

"These

be

may

the national housing objective es¬
tablished by the proposed act. It

-.

published in the
'Bond Buyer' or any other publi¬
pared

ways and

a

may

have

this

interesting prospective

enhanced."

suitable

not

of

ideas,

new

in

obviously

attempt to spread more widely a
knowledge and appreciation of
State and municipal securities as
prime investments, to the end that

'Bond Buyer' invites each under¬
writer and distributor of munici¬
send

co-operate
purpose

investors in these securities in

an

securities to

to

The

develop

means

effort, therefore, to aid
the work of the
Committee, espe¬
cially as regards advertising of
the character just referred
to, the

pal

invited

are

pros¬

commun¬

the

distribu¬

municipal securities, large
small, including dealer banks,

and

issued by our States and their
po¬
litical subdivisions.

the

For the past few years we have

and

tors of

will select from them each month

Arizona

~

undewriters

Committee) pur¬
particularly as regards ad¬
vertisements designed to inform

pose,

improving, and

nicipal securities.

winning advertisement.

"All

proof,
for reproduction, of any
licize
at
least
annually,
and advertisement
they have prepared,
cftener in some cases
depending intended to create interest in State
upon the
importance and char¬ and
municipal securities.
acter of the
project, certain per¬
"Such ; advertisement

tinent information
relating to the
operations of the project.
Here again responses to the re¬

advised prepared the
copy

are

in the

sympathy
(IBA's Pub¬

pective investors in the securities
for

municipal

der

relating to advertising securities—
in this case
advertising municipal

local

ities where it belongs.
It recog¬
nizes that the need for any kind

MARYLAND

4

Ai'

*•

60

THE

(2544) '

Continued from page

59

neighborhoods, the development
etnd redevelopment of commun¬
ities, and the production, at lower
costs, of housing of sound stand¬
ards of design, construction, li¬
ability, and size for adequate fam¬

ily life."
past, the interest on

the

the obligations of the local hous¬
ing bonds is exempt from Federal
income taxes.
In the bill origi¬

the amendments
which was in¬
troduced earlier this year, there
proposing

nally

to the housing act

proposal to eliminate this
-exemption.
That proposal, how¬
ever, did not appear in the bill
was

a

finally adopted.
Provision is made in

that
v

was

the

act

whereby

obligations of the local

bousing

authorities,

certain

contracts

or

/specified in the act,
for investment by

by

secured

agreements

eligible

are

national banks

in unlimited amounts and may be

underwritten by such banks; also

by state banks which are members
i

of the Federal Reserve System,
Within

itate

prescribed

limits

the

by

law.

On

exemption
from
Federal income taxes of state and

20

page

consent in the form of a

by the states other than with their
constitu¬

A Plea for Sensible Bine
with

adequately protect their interests
Federal trespass and domi¬

nation.

recognized, the pow¬

is the power to destroy,

to tax

municipal securities issued on and
and even if not utilized to that ex¬
1, 1951.
i
tent it is a sought for power as a
From time to time recommenda¬
medium to dominate and control.
tions are advanced to attempt to
no
government
can
abolish this tax immunity by the Obviously,
continue as a free and indepen¬
enactment of a statute. Little real
dent state without control of its
thought and study, however, are
own financing.
As the Conference
given, by many of those who make
on State Defense has pointed out,
such proposals, to the basis and
this issue transcends the field of
background of the immunity and
taxation or the field of mere fiscal
the proper method of procedure
It rises beyond the
intended to effect its elimination. argument.
niceties of legal debate and dis¬
Some think of the exemption of
tinctions.
If
Congress
has the
state
and
municipal' securities
from Federal levies as a subsidy, power by simple statute to tax
state and municipal bonds, it has
a
privilege, or a grant of some
kind extended to the states by the inevitably the power to control
state and municipal financing.
Federal Government. Clearly it is
It is highly important that we
nothing of the sort. It is a consti¬
all keep firmly in mind this basic
tutional immunity so held by the
after Jan.

fact, especially in the light of all
highest court of our land, just as that is
going on around us. We
is the exemption of Federal secur¬ know that local
government is the
basis of our political democracy
ities from state taxation.
and that our Constitution is dedi¬
; Those advocating the elimina¬
cated to the preservation of these
tion of the intergovernmental tax
little governments of ours.
The
immunity should, give most seri¬ sound principle of our dual form
of constitutional government with
ous
consideration to the method
of

procedure intended to effect the

The

have

states

never

to tax

their obliga¬

checks

valuable

mined

authority to the Federal

government

Morse of

-

its

and

balances

be under¬

must not be allowed to

municipal

and

state

of

Act.

I

law

advocate

object

may

stone,
fee

the

to

is

substantial license

to a

or

or

which

You

you.

frequency of
its corner¬

the

to

supervision

of

some

be

would

tedium

of

monthly

(reports. My

answers are that the
administrative agency will provide
a
minimum of supervision as to

weapons.

the

our

functions

true

business

and

demonstrate

to

ceptance

inherent

trusts
We

light

chore

when

tions

of

security
damage

individual
intangible

qualifying
issues.
Tne
done

the

to

investment

the

in

busi¬

are

free

honest,

tent,

workings

a

ac¬

entirely within our
rights in publicly demanding that
those who regulate us be compe¬
ness.

influences

are

our

responsibilities

the

of

highest standards of conduct, that
a
stout fee is a small price for
good government and that periodic
reports

investment

of

banking and by the conduct of the

those who consistently observe the

compared to the present tribula¬

Sky Laws

It is entirely
capabilities to educate
public mind as regards the

quate
within

unpalatable to

and

of

We

ness.

from

political

versed

in

-the

securities busi¬
must
be
quick
to
the

combat unjust

decisions by every

and we must
publicize inadequacies and impro¬
proper

measure

prieties

administration.

of

,

demand

must

such

regulation

our

We
in

economy

is not inconsis¬

as

banking industry by the few who
apply Forever Amber morals in

tent with the effectiveness thereof.

the sale of securities is

not say

There

will

always

do not leave the

lic

mistakes,

be

collapse

and

stringent

and

the

result

which

of

sharp

about
legisla¬

bring

misguided

of retaliation.

Much

could be avoided

damage

adequate administration

by

the

from

disclosure

and

practices

tion by way

in the pub¬

scars

which

mind

of

enormous.

honest mistakes of judgment

but

of

a

statute which is dedicated to loans

character

collateral

Any attempt to remove the im¬
munity

the

on

circumvented.

or

big brother, the Federal

Perhaps various of the features
of

As is well

its

Securities

from

er

granted

Immunity

30 Senator

Sept.

from

Thursday, December 22, 1949

tional amendment—one that would

the

eliminate

change.
Tax

t,

munity must not be surrendered

.

in

CHRONICLE
Continued

Expects Continued Large
Volume of Municipals

'As

FINANCIAL

&

COMMERCIAL

flatly

and

security

as

treats

of secondary

value.

I would be less than frank if I did

that in

my

opinion invest¬

ment bankers have not done a

these

in

job
often,

Too

respects.

perhaps from fear of retaliation,
perhaps from inertia, or perhaps
from consideration of the profits
in?

reluctance to challenge the

a

administrative

agency
or
other¬
publicity. Just as long

wise accept

-

ourselves servile in the

are

we

as

has

there

deal,

particular

a

been

of incompetence or poitical servility will we have gov¬
ernmental representatives who are
themselves incompetent or politi¬
presence

and finan¬ cally subservient.
The standards
numerically of disclosure and probity of con¬
weak as a segment in our national
duct required of investment bank¬
states in the form of a reciprocal
?ax Adjustment Act of 1950."
We are convenient
It right to the states. The states with¬ and nondiscriminatory constitu¬ political life.
ers could well be required of all
held extending such authority to tional amendment—one containing whipping boys for the politicos.
/as referred to the Committee on
•
However, we are not without ade- public officials. v
finance. The bill consists of six the Federal government for their provisions that would properly

Oregon introduced
mate—S.

a

tions any

the

bill in

fitles. We refer here only
>art of Title V

has

extended

that

preservation in the best in¬

own

to that

which proposes to

than the Federal

more

government

2627, the "Budget and

of

terest

their

citizens.

This

im-

securities

Federal

from

taxation

other than with the consent of the

limit such taxation and

i:

■

■

Specializing in
.►•••*

'

*

.

GEORGIA,
Alabama, Florida,

■

Carolina,

brief

this

to

references

j

certain

to

are

state

South Carolina, and

legislation
tive

-

locally

X

|

|.....

...

New York Representatives
15

BH

Broad Street

Telephone—HAnover 2-1561
Bell

Bell

or

included.

are

Attention is
en¬

decisions, Appen¬

Municipal Securities Committee
William

ATLANTA 2, GA.

H.

Oscar

M.

(

Morton

(Chairman);

Bergman; Orlando S.

P. Taylor Bryan, Jr.;
William
H.
Clark;
John W.
Clarke;
Charles W. Easter;
Brewer;

Thomas

W. Evans;
Arthur S.
Friend; Herbert V. B. Gallager;
John G. Heimerdinger; William
C. Jackson, Jr.; Elmus M. Kalloch;
W. *E.
Knickerbocker;
Mark A. Lucas, Jr.; Ferris S.
Moulton;
D.
T.
Richardson;
James
E.
Roddy; Francis R.
Sehanck, Jr.; Jones B. Shannon;
Walter
H.
Steel;
Harry
J.

Teletype—AT 283

distributors

dealers

:i I

be

applied

as

an

yield $1.5 billion additional. Such
increase

an

is

in

the

K

■

BONDS

-

Congressional leaders.
With
an
increase by either

4

reduction in levies
burdening risk capital.

Congress for
Such

also

rise

a

would

make

possible a narrowing of the wide
margin existing between the cor¬
poration income tax rate and the
top" individual income tax rate.
The narrowing of this margin is
advocated

done, we would have
with capital-gains

provisions of our tax laws, for in¬

other problems

stance, and many

.

present
38%?
»

"Q. At the level of the

likely, leeway would be afforded
now

,

would tend to solve themselves.

corporate tax rates, or

percentage points or 6, as seems

"A. I
ment

contemplated, in my com¬
getting the two tax rates

on

together, some increase in
rate, with a reduc¬
of the individual rate so as

closer

the corporate
tion
to

bring

the

bracket of the
in

top

individual schedule not exactly

line, but more nearly in line,

with

corporate rate."

the

such Congressional Estimated Cost of 50% Limitation

by

Walter
F.
Senator George's idea of reduc¬
Chairman of ing individual tax rates "down
the Finance Comittee, who was closer to the level of the corporate
quoted recently in an authorized rate" .dovetails precisely with one
interview (U. S. News & World of the recommendations of our
Report, Aug. 26, 1949) as follows: committee. The leeway provided
"Q. What do you say about the by increasing the corporate rate
corporation income tax rates? Are to 44%—much in the minds of
they to be changed in the future, Congressional leaders as we have
in your opinion?
stated —* would afford abundant
leaders

of Georgia,

George

"A.

If

crease

Senator

as

we

are

revenue

the most

compelled to in¬ opportunity

through taxation,

productive field is in the

corporate field, and the
serious

rates were

Youmans.

of

were

little difficulty

some

White; Emil C. Williams; Paul

BONDS

minds

rate. If

the level of the corporate
that

percentage points would

Steele; Richard C. Van Houten;
Charles W. Waterfield; Harry H.

CORPORATE

offset to

the corporation

in

increase

An

rate of 6

E.

MUNICIPAL

;

Government and Business!

be

Respectfully submitted,

;

filnder writers

to

dix 1, and legislation, Appendix 2.

Telephone—WAlnut 1671

Teletype—NY 1-2712

considered

the munici¬
of special significance

actments—court

of Georgia

mm

the

directed to these decisions and

Department

Trust Company
.......

enactments

pal trade

'

.

during

of general interest to

MUNICIPALS

Investment

\

Only decisions and legisla¬

year.

General Market

enacted

i

Help

excise and other tax reductions.

report

court decisions rendered and state

.

from page 25

Tax Cuts Will
could

Legislation

Appended

.

North

are

State Court Decisions and

■

,

Continued

throughout the nation. It is of vital
interest to every citizen.

.

.

.

lawyers

otherwise

adequately safeguard and protect
the position and interests of all
concerned
should be vigorously
and
wholeheartedly
opposed
—

...

bankers

Investment

cial

rate

might be
damage

corporate

increased without
if individual tax

brought down closer to

STOCKS

50%

to

rate

to reduce the maxi¬
normal-surtax

individual

mum

without diminishing

present volume of Treasury
receipts.
■ ■■ >C.''r?"-"'-•'•',>
the

This conclusion is

strongly

sup¬

ported by an estimate of Mr. Colin
F. Stam,
Chief of Staff of the
Joint Committee

on

Internal Rev¬

Taxation, contained in a let¬
ter of Aug. 1, 1949, to the Chair¬
man of your Taxation Committee.
Mr. Stam estimates that limiting
enue

COCA

COLA COMPANY

COMMON STOCK

;

BOUGHT

-

State—County—City

CLASS A

-

Bonds

—

Warrants

combined

maximum

the

SOLD

individ¬

ual normal and surtax rate to 50%
would result in

i

Local

Clement A. Evans & Company
t
X

Securities

;

»

First National Bank

*f>:

ATLANTA

3,

STERNE, AGEE & LEACH

GEORGIA

V
Bell Teletype AT 596

Tel.

Main- 1921

&

L.

D.

384

BIRMINGHAM

Teletype BH 97
Augusta

Columbus

Macon

3,

ALA.

,

Long Distance 9983

Savannah

Branch—Montgomery 2, Alabama
PRIVATE

WIRE

TO

KIDDER.

PEABODY

6c

CO.,

NEW

YORK

k

revenue

for the calendar year

is

equivalent to
the

than

less

in

Building

I

a

loss to

the Treasury of only $420 million

of

incorporated
i

t

Corporation

.

an

1949—which

offsetting rise

2

percentage points
corporation, income s tax
v V'

-rate..,.-.'-. -,V

Although the opportunity for
limitation is based partially

50%
on

the

contemplated

rise

in the

corporation rate, experience indi¬
cates strongly that the limitation

==

A-Z
W




a

would

result

in

no

revenue

loss

e "4

•

Volume;l70.,Number 4866

THE COMMERCIAL &

FINANCIAL

CHRONICLE

whatever- beyond the first year of

bracket taxpayers,- to recurring
Lowering the rates alone—^re¬ would result in increasing* Treas¬
i v.
Treasury surpluses and to rapid sulting in wide prosperity for all ury receipts yet was to be proved,
income taxpayers—made possible but the first
On the. contrary, experience in** debt reduction.
showing* of results
the amazing change:
dicates strongly; that such a top
What' had was soTieartening; that .they, wpre
Lower Rates, Higher Revenue 1
been assailed as ^Tax1 Relief for impelled
tax on individual income would
to ^ applyt the formula
result in & substantial: increase in
Considering Only taxpayers with the Rich'7 was .Tax- Relief for again.
T77
7
incomes of $300,000 a year or Everybody.
7
•.
Treasury; re venues, t y especially
j Another reduction was enacted
That is what happened after in 1924, lowering the
more
fromthe
following
tabulation
taxpayers in the higher
(maximum
To even greater Surtax rate lO- percentage points
brackets. - j
7. ,7\
J demonstrates not only the wisdom World War I.
The Future has no better guide of such a policy from a business degree dt could happen again af¬
than the Past. Within a. few years standpoint but the substantial in¬ ter World War II by Use of the j;b 40%. ^The1, estimated loss was
placed at $519 million a year. But
same formula.
'
its

operation.

6ti

(2545)

\

tf Three successive cuts had
ered the maximum rate from 65%

1

,

,

,

.

-

.

..

to

20%-^and had increased Treas--

Ury

receipts by more than $111

million

a

the

that

It

year.
new

believed

was

maximum

rate

of

20%, combined with the, normal

..

.

after the close of World War I a
series of tax reductions led ulti¬

crease

of

mately to greatly increased yields
by
high-bracket
taxpayers,
to
greatly decreased rates on low-

therefrom in

the number

high-bracket incomes able to

contribute venture capital to

on

Top

65%

-

1922
1923

'

50

50
40

1924___

;

1925-

20

1927-

•

■

*

1929

20-

1

414,814,319

posed

394,608,578

The

correctness

the

of

;

-

so

surtax "maximum "rate

In

it proved; as tax

.

...

fiscal

Effect of

Corporate Rate Rise

Nor did the 25% increase in the

Corporate income tax rate—from

In 10% to 12%%

startling in its" result.

1925, Congress voted to slash the
20%.

And

collections continued to rise there¬

proven by the actual

was

results.', 'i

40%

yield.

after.

formula

—and

would produce the maximum tax

to

1927, under this

pose

hardship

on

net income—^im¬

on

those taxpayers,..

The, accompanying

table

i

(from

Statistics of Income, 1941, Part

2)'
But im¬
50% cut, Treasury receipts; soared shows what happened under thOr;
larger base, it would
to $830 million—a rise 0f $98 mil¬ higlier levy.
t
leaving only 56% of
-■
:
t'r •
(Continued on page. 62) A ; ;
profits to the share¬ lion.

on

result

3,250
3,130

"

loss; in fiscal 1926

no

roughly, of one-sixth.

" 1^591
1,988

;

a

in

,

'

7

20"

774

1,578

190,814,324

236,672,805

20

V/

1928__

the present prospect Con¬
contemplates increasing the
rate from 38% to a maximum of
44%,
That would
be
a
rise,
gress

542
.

fate

tax

In

537
". C

income

10% to

shareholders.

330
1

176,263,691

20

v

1926

Individuals

$88,391^446
131,565,210
92,955,461
135,563,635

was

12%%. That was a
r- •'
rise of one-fourth, but it still left
The next reduction was bril¬
87%% of corporate profits to the liant and daring in its conception

Number of

7

there

million.

corporation

from

More)

Yield

Surtax Rate

Year

1921--

or

1

Tax

/-

In that year Congress increased

Revenue after World War I

(Individual Incomes of $300,000
Fiscal

I.

War
the

Effect of Surtax Reduction

at what hap¬

look

us

pened to corporations after World Treasury receipts increased by $61

V "

7 \

ness.

busi¬

.

Now let

tax rate of 5%—a normal-surtax

levy of 25%—was the figure thai

corporate
holders.

.

'"77 77.

Where

A

striking illustration of the power of a low surtax rate to
produce vastly more revenue to the Treasury than a high rate is
shown in the preceding table which is taken from Treasury records

(Statistics of Income, 1921 through 1929).
77-And not only that!
"

;

v.

i

'''V7-77j:7v

As the individual rate

;;

.

,1:

V

.

-7.

.7. 77,.

;
....

■.

lowered, the amount of taxes collected

was

by the government rose correspondingly, > 7.77,7 YvVVn
7
7. In 1921, when the top surtax was 65%, the Treasury collected
$719 million in individual income taxes.
1...
In 1928, when the top normal*surtax rate combination (normal
*

$%, surtax 20%)

was only 25%, the Treasury collected $1,164 million
in individual income taxes.
7,"~ ";
:
7
;
;
*:
Over those eight years, the rate was cut by more thaft 60% and
.

.

..

tax collections rose by more than 60%.:; ,
7
7
:
The following table, based on figures in the Treasury's official
.

Congress; lessened the
shareholders' equity by 3% in
1921, it now is proposed to lessen
that equity by approximately 8 %
of the. shrunken share they are
allowed to keep under the pres¬
ent rate;
' /7
/
Certainly no investor would ad¬
vocate such a course.
Yet there
is every indication that it will be
proposed in full or in part by the
Administration.

prospect;

come

Individual Incomes) > T

77

If

>

I ? • i:
! 'z■ ftc i
vtotbff-i'T" ;*7f • r E\

■':

-

■J

■

■

i

,•

l I. )

;

Year

Top

1

_

'-Number of

1921-

7—,

65%.".:

;•

vb

;

:

rights7 of

shareholders,! the
prospect parallels again the action
taken by: Congress: after World

In -Securities of

'■•'/•■>.> 77;7; -vvL; ;

..vy77y,;7/ '7

Yield

Washington

Corporations

.

Safeguarding National Revenues

3,589,985
7
$719,387,000, <
Congress was; reluctant after
3,681,249 :;:.v;r;o 801,057,000v
^ v
World War I to reduce tax rates;
1923—..
50 ,77
4,270,121 I : ; ■ 661,666,000.
; ^ The needs of the
Treasury then,
40
1924—_
4,489,698 V:: ;
704,265,000 n7
as now, were great.
To the res;
1925__— -_:,;7'-20'77
2,501,166
734,555,000, 0 > ; sponsible officials of the Execu¬
7 2,470,990
7 20
7
:
1926—.
■: - v 732,475,000
, V
tive vBranch "and
Congress
on
1927--—
7 20 >
2,440,941
v
830,639,000
•»/
whom rested the duty of provid?
20
1928— —;
2,523,063
1,164,254,000
;
ing the necessary funds by wise
20
.1929—.
fiscal policies,: any trifling with
2,458,049
,
1,001,938,000
financial safety was distasteful, as
There was no scarcity of critics after World War 1 to assail the
it is now.
progressive scaling down of the tax on higher incomes as "Relief for
i
Revenue needs of the Govern¬
the Rich." What else could it be, they loudly demanded—what else
could it possibly be—when a big-income taxpayer was given a tax ment then, as at present, were
paramount in national impor¬
cut all the way from 65% to 20%. :
7V7:7,77 77VU; ■
tance. It therefore was With much
;
Well, it was something else, Let's combine the two preceding
foreboding that the first tax re¬
tabulations and see what that "something else" really was.
;
duction was voted.
Careful
^

t

DEALERS

'1

'Tax1

Taxable Returns.:

Surtax Rate

,

-

■ • nj,■

Primary Market's

■

*

Fiscal

Washington Stock Exchanges;

DISTRIBUTORS

UNDERWRITERS
"i;. u • t

r iV

-;

r

V

.v.-,,;; J j

committee

With increased severity toward
the

War

;7

*

'

Members New York land

would be wholly blind to realism
were it to disregard this unwel¬

•

publication,' Statistics of Income 1941 Part 1,; tells the irrefutable
story.
7'
..77*<\?f '• "XX.''r vX: Xr.'i:
y;"
Total Individual Income Tax- Collections '7(7;

Your

'1

.

Washington Bldg., Washington 5f D. C.

*

1922^—-7:>-bV507'7;

■

Telephone—Sterling 5924

i

*

3b: b;

t

v '.A

Bell Teletype—"WA 263

—

.

Branch—7006 Wisconsin Ave^

,

New

—

York

Correspondent

—

Chevy Chase, Md.
LAIDLAW & CO;

1

—

_

.

The Peoples National Bank
OF CHARLOTTESVILLE

.

esti¬

I

.

Tax Yield of All Incomes and Rig Incomes after World

Individual

7' ■;
;

Year

7

1921

$719,387,000
861,057,000

1923
'

1924—

1925——

1926—.
,

1927-—
1928

1929—

661,666,000.
704,255,000
:
734,555,000
"732,475,000
J 830,639,000
1,164,254,000
1,001,938,000

v

gress

>

$300,000 of More Tax Yield
«

of

Total

12%

$88,400,000
;
131,500,000:

7-

7792,900,000
135,500,000
7*
v777 176,300,000
7
77
190,800,000 7
7°
236,700,000
77 77
7
414,800,000 < 7 ; vn
: 7
394,600,000 : 7.
.

.

/

;7:"

24

y

The tax
ment

2677;

;

28

;,;7

35

7

39

;

a

tax

reduction

from

law.

no

little

;

*

that

the

fiscal

1923,

•.

,

-'V;

•.

>

.

by
Act of

Specializing in
Virginia, North Carolina^ and West Virginia Municipals

felt in

such loss occurred.
Instead of $663 million,
approxi¬
was

the extent

of the reduction.

Proponents of
tax - reduction
fully justified by this show¬
ing.
Their belief that reduction

were

in rates would not result in sub-i

stantial
out.

two-fifths in 1929.

7 7

loss

was

j

7

no

mately $58 million
over

Dealers in Municipal Bonds

■

experts of the Govern¬

estimated

effect of the law first

f

"Under

with

1921 Would approximate $663 mil¬
lion annually.
But when the full

those years, BigIn 1921, when.:; the reductions Income taxpayers more than trebbled their proportionate share of
started,
the Big - Income
class
ALL income taxes collected. They
yielded but 12% of ALL individ¬ contributed less than one-eighth
ual income taxes collected.
in 1921.
They contributed nearly
65% to 20%

.

proposed

made

enactment of the Revenue

total of 39% of ALL individual

Income taxes collected.

of 7 the

were

apprehension.

19

)

CHARLOTTESVILLE, VA.

the loss

f

14

•"7 - Under this program of progressive tax reduction, Big-Income
<$300,000 or more) taxpayers were putting into the Treasury in 1929
a

'

Con¬

by

as to

that would result from

revenue

These

demanded

were

before it acted

passage

15

i;

7 7;

mates

War I

Percent of

Individual Incomes of

•

Income Tax Yield

.1922

i

:■<

revenue

loss

was

borne

VIRGINIA
WEST VIRGINIA

—

NORTH CAROLINA

Their belief that reductions

j

VIRGINIA-WEST VIRGINIA

NORTH and SOUTH CAROLINA
MUNICIPAL BONDS

Municipal Bonds
J and Corporate Securities

j

Municipal Dept.

Telephone

Corporate Dept.

j

Teletype LY 82

8*2821—

Teletype LY 83

!

Active Markets in Local Unlisted Securities

j

F. W.-

SCOTT, HORNER & MASON, Inc.

CRAIG IE & CO.

Investments

DEALERS IN

STATE and MUNICIPAL BONDS

77" q;. 616 EAST MAIN STREET

LYNCHBURG, VIRGINIA

'

Telephone 3-913?




'•>—

'

!

RICHMOND 15, VIRGINIA
7'

"

,

*

•Teletype RH .83 &

84

Richmond, Va.

Norfolk^ Va;^'

Roanoke, Va.

Biuefield, W, Va. *

I

62

(2546)

THE

Continued

COMMERCIAL

Income and Federal Taxes of

Number of

Fiscal

1922—
1923—
1924—
1925—
1926—
1927—
1928—

1929—

.

258,134

_

259,849

8,981,884

212,535

_

233,339
236,389

.

_

252,334

.

268,783
269,430

_

.

a

ury revenue.

Committee's

also

recommen¬

long-term

gains

should

be

still in effect,

flowered to 10%, that the holding
period should be cut to three
months; and that the amount of
capital loss which may be de¬
ducted by an individual taxpayer

five years.

official

figures showing

the result of these revisions

port.

to

They

you

in

were

last

our

repeated

are

re¬

in the

appended letter of Mr. Stam to
which reference already has been
made.
This
official
tabulation

from

income should be in¬ shows the almost magical increase
in
$5,000.
Treasury revenues resulting
The effect on Treasury revenue from the 1942 changes — a rise
which would be accomplished by from approximately $67 million
these changes is indicated clearly in
1942
to
approximately $720
by the effect of the last revision million three years later, in 1945.
gross
creased to

of

capital

gains

was

Act of 1942.
were

These

That

treatment.

made in the Revenue

The revisions which

written into the law at that

changes

posed when the
1942

were

under

Congress.

of

change in capital

follows:

that

say

hotly

Revenue

op¬

Act

of

consideration by

Yet

they

resulted

and

through the sale of an
perhaps three or four

held

asset

of the present six

E

the

wide

difference

be¬

stockholder?

percentage—say 10%, or
perhaps 16.6%, the amount of the
tax..

provisions.

Ultimately,

empt

dividends

If

should

ence

this

be

wide

differ¬

narrowed,

this

problem would almost resolve it¬
self.
"I

have not regarded, at any
time, capital gains as true income

except
in
those
limited
areas
where business is carried on
solely
or

largely for the purpose of buy¬
ing and selling securities. Never¬
theless, the capital gains provision
is in

our

law, and it is probably

in our law to stay.
That being
true, I think it would be wise to

holding
ened

so

it

and

period

to

cannot

that the

be

owner

buildings

if

see

the

short¬

of securi¬

other proper¬

or

conditions

warranted

the

judgment."

Income

Various formulae for correcting
the inequity of double taxation
have been suggested in elaborate

plans submitted

injustice

measures

on

behalf of

of

a

have not been taken up

situation

individual

income

we should ex¬
from
taxation

completely.

However, that would
cost the
Treasury about $2 billion
a
year
in revenue. We cannot
sacrifice

that

much

revenue

at

committee's

three

pro¬

submitted in the belief

are

that their enactment would break
the tax barriers to the flow of risk

capital

into

Need

private

for

by

voiced

such

many

them

is

the

Board

of

Governors

eral Reserve

McCabe.

were

5

is

high fiscal au¬
Outstanding
among

thorities.

B.

Chairman
of

the

of

the

those

His

personal

views

formally presented last Aug.
the

to

Senate

Committee

on

quote

an

excerpt taken from

his speech:
"As
everyone

lien

teed.
to

a

debt

or

no

Equity

poor

capital is

business

growth
fear

obligation and on
fixed return is guaran¬

and

that

of

it

risk-taking

been

double

on

of

of

capital gains and losses,
several other provi¬

well

as

relief

some

individual

particularly
the
higher

corporate dividends
revision of present treat¬

a

ment

of

rates,
applicable to

as

sions. '

.

New York
-An

Stock Exchange

excellent

Study

statement of

need for incentive to

been

prepared

by
Mr.
President of the

Schram,

York Stock

Emil
New

Exchange, in collabo¬

ration with Franklin Cole & Co.,
Economic Consultants.
f

This

study,

Taxes,"
New

titled

"Jobs
submitted by

was

York

Stock

Exchange

August, 1949, to members of Con¬
the proposals containedtherein

were

well received.

very

Proposals

forthcoming tax program
looks not only to rate changes but
revisions

to

In

technical

therein

changes

They

be revived in the tax bill of

may

1950.

■;

There

is

proposal not

one

bodied in the 1948

em¬

which

measure

strongly appeals to the members
of your committee.
This is the
bill
(H. R. 2064) sponsored by
Representative Daniel A. Reed of
New
be

York, titled, "A bill to per¬
unincorporated businesses to

taxed

as corporations."
Congressman Reed is the senior

minority member of the Ways and
Means

Committee

and

his

spon¬

soring of such a measure carries
much
weight.
Under
his
bill
partnerships with not exceeding
10

members

individuals

and

unincorporated
in

engaged

business

permits

termining whether they should be

without

temporary period of
earnings will mean hardship.

taxed

individuals

as

or

corpora¬

tions.- This bill holds wide appeal
for many businessmen engaged in

The

than

financial activities, but should be

incen¬

borrowed capital by industry ren¬

tive for present day savers or for
those
holding savings accumu¬

ders the economy less vulnerable
to debt liquidation. Moreover, en¬

revised to apply to all partner¬
ships regardless of the number of

lated in the past to invest in

terprises

com¬

stocks.

we

equity

committee
make

a

recommends

start in eliminat¬

get

equity

maintain

credit

if

dividuals;

In

better able to
is needed under

judgment

the

are

it

Thus
flow
of equity capital are of primary
deduction of importance as they relate to the

ing the unjust double taxation of
corporate income by granting in¬

partners and to unincorporated in¬

high

which

ratios

rather

any
economic conditions.
the sources, availability, and

DEALERS

committee's

your

provisions of this
bill should be included among the
technical and

tions of the

administrative

new
*

In

sec¬

law.
*

*

presenting earlier the strik¬
parallel of conditions novir

I,

we

equally striking pointy

of variance.
At that time, no further threat
of early war existed and
only re--

construction lay ahead.
Now. not;
only reconstruction lies ahead but-

Florida Bonds

the

possibility

must

municipal bonds

Firm

of

proposed

mentioned.

were

v

....

some

would be given the option of de¬

BUSINESS ESTABLISHED 1924

—

ad¬

nature.

previous report

our

the

technical and

of

ministrative

referred to

Firm Bids

-

The

with those after World War

COUNTY

the
in

gress and

ing

MUNICIPAL

and-

mean¬

dividual taxpayers a

DISTRIBUTORS

the

supply addi¬

tional risk capital to business has

essential

a

use

because

had

important to him in¬

tax

taxation

mit

recognizes, the
supply of equity or
ownership
capital is of vital importance to
a
dynamic, expanding economy.
By equity capital I mean those
funds
supplied
to
a
business
which do not involve any fixed
which

that

reduction

a

brackets;

Fed¬

System, Mr. Thomas

Banking and Currency and I wish
to

proposals

cluded
income

enterprise.

investment

effect

of

equity
He stated that among the

Administrative

Your

its

of

as to what should be done
about the situation the ones that

once."

posals

view

availability

little

time.

there remains

Your

UNDERWRITERS

re¬

from

In the

to the present

that

Teletype JK 182

the

of

then,

"A.—The law should be changed
to allow a credit to the individual

first-bracket

mon

Jacksonville, Florida

suggested

,

thorough

a

tax

of

the

capital.

-

be maintained in our taxing sys¬
tem, then we should give recon¬
sideration to the capital-gains tax

NAT IO

L

corporation;

certain

while

L

the

upper-bracket income rates is to

^ATLANTIC
BANIC

the

stockholder for taxes already paid
by the corporation. As a starter,
we should provide a credit of a

"A. If

taxing cor¬
high rate and
then
of
taxing dividends paid
from what remains of profits is
recognized virtually by all mem¬
bers of Congress but corrective

Bond Department

the

point

upon

and

feel about the

you

tween the corporate rate and your

porate profits at

Phone 5-7400

as

of

The

♦

I

are

hands

large organizations of taxpayers.
They have made their case, and to
repeat it here would be tedious.

Municipal Bonds

V

interview,

in

tax

N

whose

hands

Double Taxation of Corporate

U. S. Government Securities

S

George,

present system of taxing corpora¬
tion income twice—first, in the

exercise of his free

K,

dividends

capital gains tax ought to be
changed? Might there be a defini¬
tion of a long-term gain as one

Dealers in

C

authorized

Q.—How do

the

ties might be induced to sell when

A

double

the subject, as stated in

on

as

of

corporate

Senator

you

market

J

views

relief

of

of

include

the

seemed most

Advocates

taxation

follows:

ties or

OF

expanding its produc¬

tive capacity.

his

reexamine
was

of

to continue

McCabe

initiate

made

industry is

realized

excess losses for

Congress
view

many

"Q. Would

are

Chairman

It

needed at this time if

ized interview

in certain percentages;
extended the carry-over on

submitted

levy.

stimulate

George, whose views on the
subject are stated in his author¬

By the test of experience,

Latest

this

equity invest¬
ment promptly, which is so
badly

would

gains tax treatment include Sena¬

mitted offsets of short-term gains
and losses against long-term gains

dation is that the maximum rate

of

be

put into effect quickly
with a minimum of administra¬
tive disturbance.
Furthermore, it

tor

and losses

Capital Gains Tax

modest start toward

a

elimination

could

meet with op¬

may

substantial in¬ shortened the holding period from months instead
private enterprise, 18 months to six months and per¬ months?

in

which will further increase Treas¬

revision

forthcoming revi¬

for

taxpayers

the

less

no

Advocates

Our proposal for limitation of the individual normal and surtax
rate to 50% is a modest recommendation.

think this is

in¬

the Treasury.

Most Modest Proposal

it will not only increase Treasury^
revenue but will give opportunity time and which

for

pose, experience shows, will bring
additional millions of revenue to

$701,576
783,776
937,106
881,550
1,170,331
1,229,797
1,130,674
1,184,142
1,193,436

10,617,741
11,658,886

measure

national
objective of economic
stability at high levels of produc¬

comput¬

ing their income tax liability. We tion and employment."

proposed

the

when

brackets. Yet the changes we pro¬

Tax

$4,336,048
6,963,811
8,321,529
7,588,652
9,583,684
9,673,403

sion

in

stock

common

vigorous.
They
may constitute then as in 1942, a
shining target for advocates of
reducing individual rates in low

Total

Income

171,239

_

50% Limit

on

Thursday, December 22, 1949

10% of the dividends they receive
on

taxation.

changes

clusion

position

Corporations

Net

Taxable Returns

Year

1921—.

of

Our

(In thousands of dollars)

Your

CHRONICLE

quickly in nearly 1,000% Increase
in Treasury collections from that
source

Government and Business!

to

FINANCIAL

pom page 61

Says Tax Cuts Will Help

vestment

&

be

of

another

After World War I
ment

DISTRICTS

of

corporate securities
Offerings — Quotations

continued

to

spendings.
peace

Govern¬

our

committed

was

limited

necessity of world
to

war

considered.

a

policy j

Now

recovery

the
and t

has committed u$l

vast expenditures

for

our

own

>

national

defense, and for eco¬
nomic and military aid abroad.
UNLISTED

-

After World War I, our national
stewards
were
concerned

CORPORATE ISSUES

fiscal

ALL LOCAL SECURITIES

LEEDY, WHEELER 6- ALLEMAN
Clyde C. Pierce Corporation
Long Distance 47; 5-3680

JACKSONVILLE 1, FLORIDA




they

concerned

are

billions

of

now

as

quate
10

tens

LONG

of

dif-!

ferences.

ORLANDO, FLORIDA
BELL TELETYPE OR

with

dollars.

These, indeed, are striking

Incorporated
FLORIDA BANK BUILDING

Yet the
Bell Teletype JK 181

j

with receipts and expenditures in:
terms of millions of dollars. Now

DISTANCE 27

same

then:

revenue

need is paramount;

the

need

to

for

maintain

ade¬
the

Government in its routine and its

commitments,
And

though

»

conditions

have

<

Volume 170

Number 4866

THE

COMMERCIAL

&

FINANCIAL

changed,

this year the Class I railrpads in¬ ant annual operating
savings

not.

CHRONICLE

stalled

the economic law has
It will continue to function,

made credit

1,430 new locomotives, a possible by this investment are
greater number than in any cor¬ estimated at $26,000,000."
Under that law, as our officials responding period since 1923.
Of
Obviously it pays to have money
recognize,^ there is
a
Siamese this number 1,381 were diesel and to invest.
twinship between sound Govern¬ 49 were, steam. Last year, during
;
At various times we hear and
ment finance and the prosperity the same period they installed
ltread about the danger of national¬
of Free Enterprise.
If the one is, 012 new locomotives, which in¬
ization of the
railroads, which
not healthy, the .other will suffer. cluded 952 diesel, 56 steam and
would be a calamity to our free
If we have no prosperity, Gov¬ four electric.
Perhaps some
ernment will lack the vital rev¬
Since the end of the war about enterprise system,
of this stems from public state¬
enue required tp carry on.
50% of the total railroad freight
;I
ments of railroad ..officials who
It;seems to your committee that cars has been replaced either with
sometimes paint a bluer picture
theSe ^points of dissimilarity be¬ new cars or those which have
than necessary in order to arouse
tween the present postwar period been rebuilt.
public sympathy in their cause.
end that of World War I are in
A
striking example of what
While this is understandable, it
no sense whatever obstacles to the diesel
power-means in dollars to
seems to us that the brighter side
ddoptioil of Our modest proposals a railroad can be found in this
of the picture should also be told.
in
forthcoming
tax
revision. statement by A. T. Mercier:
We believe
that some railroad
Rather, they constitute most ex¬
"As of June 1,

Unrepealed.
•

help,

of

(2547)

of the railroads and
the way for the day

some

pave

when their

offered.

common

stocks

can

abotit

range

John

the

can

try

our

O. Paul Decker

We have pointed out

Henry C. Evans
George M. Grinnell

handicaps under which they

now

V. Theodore Low

operate but we believe these

be .largely

needs

a

rectified. The
new

policy, but that

Loomis, Chairman

William D. Buzby, Jr.
Thomas T. Coxon

outlook because of the basic

economy.

S.

Ewing T. Boles

optimistic about the long

importance of the railroads to

overcome.

Railroad Securities Committtee

this with successful results.
are

be

Respectfully submitted,

In

some instances public
utility officials have been doing

We

only if the general indiffer¬

ence can

be

62

John A. Prescott

coun¬

transportation

Percy M. Stewart
Henry S. Sturgis

be brought

Edward H. Tevriz

can

.

cellent

reasons
why those
posals should' be adopted.

1949, Southern

pro¬

; Adoption of the very changes,

in substance, which we now rec¬
ommend raised additional revenue
for the Government after World
War I. Those proposals have been

needed

revenue

by

which

could

well

afford

to

on
its lines, or on
conduct a series of meetings, per¬
order, 70 main line freight diesels,
haps in cooperation with invest¬
15 branch liriev diesels,
18 pas¬
ment bankers, to acquaint" inves¬
senger
diesels
and
232
diesel

switchers, a total of 335, at a cost
of about $77,000,000.
The result¬

tors

with

the

roads.

own

It

outlook

would

for

help

DISTRIBUTORS

UNDERWRITERS

DEALERS

their

the

Corporate and Municipal

tested by c the fires of usage and
have proved their worth.
They will prove it again, if
given the chance, by raising the
additional

executives

Pacific had

IBA PAST
1945-48

PRESIDENTS

1943-44-45

Securities

1942-43

is

Government.

our

Respectively submitted,
Federal Taxation Committee
Malon
;

C.

Courts

(Chairman);
Coughlin; Rush S.
Dickson;
Richard
P.
Dunn;
Sumner Emerson; Thomas Graham; John C. Hagan, Jr.; Don¬
ald
W.
Hinton;
Leverett
F.
Hooper; James M. Hutton, Jr.;
S, R. Kirkpatrick; John P. Labourse; Ray L. Lamb; James C.
Lancaster; James H. Lemon;
Herman L. Lind; Frederic P.
Mullins;
Ralph
W.
Simonds;
Carl N. Stutz; Gus B. Walton;
Edward

.

_

•

;

'

B.

Charles

B.

Continued

Fridley

&

Hess

MEMBERS CHICAGO STOCK EXCHANGE

First National Bank Building
HOUSTON 2, TEXAS
Bell Teletype HO 42
John Clifford Folger

Charles S. Garland

Telephone PReston 8101

Jay M. Whipple

White.

from

page

29

Cites Weakness in

Rauscher, Pierce & Co.

Raihoad Pictures
question
hear

and
of

more

There

are

it

in

the

to

future.

UNDERWRITERS

RETAILERS

DISTRIBUTORS

and

certain obstacles in the

Interstate
should

expect

can

we

Act

Commerce

first

be

and, in
addition, certain political difficul¬
ties must be

OF

that

amended

V

overcome.

PUBLIC UTILITY,

RAILROAD, INDUSTRIAL,

TEXAS SECURITIES

The increase in efficiency

is the
bright spot in the picture. ; The
excellent job done by manage¬
ment in
this respect has been
made possible by heavy capital
expenditures financed from earn¬
ings and the sale of a large vol¬
ume
of equipment trust certifi¬
cates. But the net working capital
Of the railroads is how much less
than it was in the days imme¬
diately following the war and, as
we said
before, we hope that in
the-future capital expenditures
will be financed by the sale of
common
some

BANK, INSURANCE, and TEXAS MUNICIPAL
SECURITIES

HOME OFFICE:

Mercantile Bank Bldg.

Dewar, Robertson & Pancoast
MEMBER OF NEW YORK STOCK EXCHANGE

Dallas, Texas
SAN ANTONIO 5

BRANCHES: Houston and San Antonio
TELETYPE SA 3

I.. D. 15

But let's look at

stocks.

efficiency improvement fig¬

ures.

The

average

freight

train

in

This was an
above 1939 and

1948 moved 54.5 cars.

increase

of

12%

TEXAS SECURITIES

42% above 1921. For the first six
months of this year the average
had increased to 56.3 cars,
r
V /
The
1948

ACTIVE TRADING MARKETS

freight train in
1,176 tons, an in¬

average

carried

over

;

;

1921.*

Franklin Life Insurance

on

Pickering Lumber Corp.

Company

El Paso Electric Co., Common

Texas Eastern Transmission Co.
Kirby Lumber Corp.
'
Muehlebach Brewing Co., Com. & Pfd.
Sommers Drug Stores, Com. & Pfd.
Wyatt Metal & Boiler Works
Central & South West Corp.
Texas Utilities Co., (W. D.)
Central Power & Light Co., 4% Pfd.
Texas Gas Transmission

^

Each serviceable freight car in
1948 travelled

Lone Star Brewing Co.
San Antonio Transit Co.

Longhorn Portland Cement Co.
Houston Natural Gas, Com. & Pfd,

crease of 44% over 1939 and 80%

the average 47.2

miles per day, an increase of 30%
over 1939 and 83% over 1921.

,

•

Each freight train in 1948 per¬
formed each hour on the average
a

service

All San Antonio Bank Stocks

equivalent to carrying

18,779 tons of freight for a dis¬
tance of one

40%

over

mile,

1939

an

and

Quick Firm Bids On All

increase of
150%

over

Texas Municipal

1921.

This is only a part of the story
but it helps to give an idea of
what better roadway, better and
bigger freight cars and much more
powerful Ibcomdtives can do,.The
big current improvement and < the
prospect for greater efficiency to
come lies to a large extent in the
extensive
conversion to diesel

Bonds

,

power.'

8c Company
INCORPORATED

,

SA 23 & 53

Alamo National Building
Fannin 4324

SAN ANTONIO 5
Directend'Connecting Wires

tor

Dallas, Houston, Galveston, New York & Los

•

During the first nine months of




Russ

f"-.

.

in*

-

uA".

w^v..

U

^

4*

A. /Hi

M*

* « i"1' «? '

_

■

Angeles

;

(

61

THE

(2548)

Continued

In

from page 4

Thursday, December 22, 1949

the fellow? almost steps aside and

Selling, Bullish Behavior Brings Business

few of my

a

personal desires insofar
are concerned, and

salesmen

our

things that "! want
salesmen to do. These things

are

all

the

of

come

CHRONICLE

FINANCIAL

&

v

titlous, I am going to give you
jos

COMMERCIAL

sales clinics

part of the

enthusiastic. He
it, and anybody can
develop enthusiasm.
is

not naturally

has developed

of

■

the expression,

heard

"He is naturally enthusiastic!" He

which I hold in our own organiza¬
tion.

have

enthusiastic.

to be

fellows

these
You

Smiles—A Selling Tool

(Demonstrates enthusiastic type
presentation.) :h.,
r
,

can

,

.

be

—

in front of the mirror.

They

cast, their

pride

behind

them and say, "I'm going to try
come of this business of smiling."
Of course, there are times when,

if you turn on a smile you might

get slugged,

but I mean at the
time, reflecting the right
Mnd of atmosphere.

right

I started one of the sales clinics

morning, and got up in front
men and just looked around
and smiled at them. Nothing was
caid, but I just stood there and

*>ne

of the

smiled.

We

tabulating
tabulated

hadn't said

had

fellow

a

there

the reactions and he
100% smiles back. I
a

word, and then

we

told the boys exactly what we had
done. Smiling is contatious.A fellow walks down the

street,

approaches and greets another
fellow, near where you are stand¬
ing. He says, with enthusiasm,

"Hi, there, Bill!

How

you!"

are

and he receives the same kind of

greeting in return. Another fel¬
low comes down the street and
you

watch

him

approach

"Well,

hello—",
and
standing there on the

with,

you

are

sidelines

and you say to yourself, "I wonder
when the body is going to arrive."

Enthusiasm
1

Then,

after

the

smile,

I

want

I mean,

He has never heard

of

be¬

me

analogy, of getting cause, too often, we say to a man,
fore, never saw me before, but he*
tune with your pros¬ "When does your contract ex- feels this is
somebody of impor¬
pore?" and he says, "July of this
pect is the best I can think of.
tance from the way you go about
He tells the story about why year," but when we get the papers the introduction.
out, we discover that it expires in
some beggars get more dimes than
And then, after you get there,
other beggars. It's a simple little July, 1952.
the first thing you should do, and
So, to save ourselves a lot of
story, and it has undoubtedly
and we ask our salesmen to do
happened to you fellows here on time, we try first of all, to take
this, is to remove the sales ten¬
a look at that man's papers. In my
the streets of New York.
sion quickly.
You fellows will
You
are
walking down
the early days, I have wasted more never know what goes on in the
time chasing my own tail with
street, concentrating on some par¬
minds of the people that you are
ticular subject, oblivious to the somebody that couldn't buy, be¬
trying to sell.
You will never
cause
I had failed to qualify my
world. You are in a hurry. Then,
know how uneasy many of them
just ahead of you and coming in prospect.

description,

or

in step or in

enthusiastic, any¬
thing I think a good time you want to be, about any¬
salesman should be able to do is thing. It's just as easy as that.
.rmile. If he can't smile, he just You can turn it on or off, like you
isn't going to get anywhere, and turn off the spigot for your water
X am very positive that smiling
if you're allowed to do that
-can be developed. I'm sure that it
these days, in New York City. I your direction, you find
can, because we have had fellows don't know,
I live out in the right in your path, right
He breaks your stride,
In our sales clinics that have told country.
with your progress, and
me that they have developed
a
A salesman has to have a fight¬
good, healthy and sincere smile, ing heart. There is one thing that a dime?" It makes you
You

The first

to himself, "Well, it really is,:
this really is Ollie Minor."

says

in your presence.

are

How do you qualify him in your
somebody
I don't know.
I don't
up to you. business?
interferes think you could take a look at his
says, "Got bank book, or if it would mean
angry.
anything even if you did, but any¬
But then, there is the other type. way, qualify your prospect. Then,
he must stick in his mind all the
if he is a deadhead,
turn him
You are walking along the street
time, every day, and that one
;,.
'
: ''
,7.
in the same hurry, mind fixed on loose.
thing is that opposition is natural
The Approach
certain things. A fellow starts off
and, if it were not for opposition,
there would never be a sales force a few steps behind you. He skips
Now, then, there is the ap¬
some steps, gets in step with you.
of any kind.
proach. That is when you size the
Finally, he comes right up along¬ fellow up. That is when you de¬
It is Opposition which creates
side you. You don't even realize cide whether he is the mental type
your job. Opposition is very na¬
his presence until he starts rub¬ or the motive
type or the vital
tural, because if you did not re¬
bing against you. You look over type, and I know you have gone
ceive
opposition,
the
business and see him.
Now, you haven't all through that, the different
would come in throiigh the tran¬
stopped walking and it hasn't cost types of individuals, but immedi¬
som, while you are out to lunch,
you anything, up to now. He says, ately after that comes something
and there would be no need for
"Could you spare a dime?" You that I think is
very important, and
salesmen.
don't have to stop at all, just keep that is the introduction and the
And, with that fighting heart, right on walking without inter¬ handshake, and how you do that
you must go at these things with ruption and you reach in your is
very important, and I'll prove it
vigor, and don't be afraid to ask pocket and hand him a dime. That to you.
for the business. I have checked is why some
beggars get more
There is a fellow coming into
the newspapers in this town and dimes than others/ because they
my office. The girl says, "Mr. Sonever, in the annals of newspaper get in step with their prospects,
and-So is outside, from Such-andhistory in New York, have they and I think that is a very good such-and-such."
I've forgotten all
ever
had a headline that said, analogy.
that by the time he gets in there.
"John Jones, salesman, was shot
A salesman must be industrious.
So then he comes in and says, "I'm
and killed when ? he asked Bill He has to work hard. He is his
Ollie Minor, of the Amalgamated
Smith, the prospect, for an order." own boss.
Insurance Company of Pottstown',
It never has happened.
There is a big thing in sales¬
Pennsylvania."
manship that permits you to make
Well, that's quite a lot to gather
Getting in Step With Your
more calls every day, and that is
in one breath.
Prospect
the ability to qualify your pros¬
But, if you come right in and
Then, if you have accomplished pect. How do you know that this
all these things—you smile, you fellow can buy from you?- Well, you walk up to the fellow and
in our business, we- endeavor to say, with a feeling of friendliness,
are
enthusiastic
you have a
fighting heart—don't just drive take a look at the prospect's con¬ but yet with importance, "How are
straight ahead, but get in step tract, or his lease, or his franchise, you, sir? I'm Ollie Minor." If you
with your prospect. Get in tune or whatever it happens to be be¬ say it that way, to the point where
.

.

7

—

with him. I think Elmer Wheeler's

have

We

in

organiza¬
when
strangers come in to see them,
trying to sell them something. It's
just their temperament to be that
way, so the best thing to do to
that

tion

avoid

all

tension

men

are

that

is

quickly

as

our

very

uneasy

to

remove

as

possible.

the

Some /

people
advise
talking
weather, and this and
very in¬
teresting statement right off the
bat is the thing to do. Other peo¬
ple like to develop the fellow's
hobby and talk about it. I know
one
fellow who spends his time
talking about the prospect's hob¬
by, and the conversation time he
spends talking about dogs and"
the

about

that.

think that some

I

horses

ally

about

and

sailboats,

usu-:

four to one to the time
that this fellow solicits the busi¬
runs

ness.

The
Then

Presentation

the

comes

This is

,

presentation.

nice fellow that

a

we

are

talking to, and we have relieved
all
the
tension, and we have
gained his interest and now for
the presentation.

,

Product knowledge in the pre¬
sentation is

in

study

a

very

business.

our

important thing
Our

products

many-.new

must

men

constantly because

of

the
are

we

bringing out all the time.
.^7
There is a quick illustration of
product knowledge in selling, the
illustration of the girl in the va¬
riety store who has the 59c and
the

hammer.

79c

The

customer

"What's the difference be¬
tween the two?" and the girl says,,
"Twenty cents," so he buys the

says,

PAST PRESIDENTS

IBA
Underwriters

Distributors

Dealers

1938-39

1939-40-41

1941-42

59c hammer.
But

SOUTHERN
TEXTILE
and

if

7 7

was

hickory handle, and

a

In

77'' v •;

Established 1892

A. M. LAW & COMPANY
:

J

Teletype SPBG 17
John

S. Fleek

Emmett

F. Connely

Jean C. Witter

that it
so on,

the

business, product knowl¬
the knowledge of our
propdsition is very important.
J
We
give our salesmen many
sales tools with which to work. I
have, right here (indicates) a very,
detailed presentation. I am not
going to go through this for you.
This is the thing that we ask ourr
salesmen to use in selling the.
dealer franchise; and here they
are, some 18 items, 18 separate'
and distinct sales features, in this
or

book.

firm Bids

Underwriters

US

FOR

BIDS

words.,
was

of

some

firm

/' '7

<

°n-

Offerings

*

r'

canned sales talk,

a

gentlemen. We ask our salesmen
merely to use this as a guide, and
to put these things into their own;
I

Distributors

•

,

This is not

CALL

79e

77'" *

■

our

edge,

Municipals
General Corporate Securites

sold

have

hammer..

South Carolina

Spartanburg, s- c.

tempered and

would

she

;

that the

had

PROPERTIES

Bell

said

had

metal

SECURITIES

Lony Distance 51

,

she

■

giving
our

a

7

newer

had.never used

\

" ."...

;

■

demonstration to
salesmen who

this—incidentally,;

this brochure is beaten up a little

;

?

bit, but I took it out of a sales¬
car
this morning, whichproves it is being used—but I was
presenting this in my own words
to a group of new salesmen and
man's

Quotations

Dealers

North Carolina

State and

seated in the group

Municipals

United

States

Government

Securities

•

General Market Municipals

half
have

10

dozen

there were

older salesmen

a

who

been'with the company for

years

or

proposition

so. They knew this
backwards and for¬

wards.

I was finished making
presentation and had signed
up the, deal, I said, "Now, could
anyone tell me the 18 features
that are in this presentation?"
One fellow spoke up and said'
When

Branch

Banking & Trust Co.

lag Mr Mmm Uta

wilson; n. c.
Telephone—3020




Bell

of

memphis

he would take

memphis it tennessee

Teletype—WILSON NC

100
TELEPHONES 37-6681

•

LD-311

»

LD-312

TELETYPES ME-283

the

•

ME-284

a

crack at it and he

could get only 14 of them,
goes to prove

welt yeni

which

that no matter how

fcacm yont

need

kind

some

THE

Number 4866

Volume 170

of

guide

a

to

bring out all, of the facets of that

proposition, and if he had been
presenting this thing to a pros¬
pective dealer, it might have been
one of the four things that he for¬
that

got

would

clincher.

-

Therefore,

the

been

have
'

■

feel that if you
have a sales proposition which is
quite
involved and has many
ramifications, you niust have some
kind of a guide. We don't say that
you should develop a canned sales
talk, but we ask our salesmen to
this

use

do

as

we

guide

a

the entire

cover

that they

so

proposition.

We improvise sales presenta¬
tions occasionally. Here is one on
our burner franchise.

This

is

certainly

home-made,

but it tells the complete story in
a

that

manner

no

it, not

even our

could

tell

or

could tell

man

best fuel oil

this

story

man

completely,

70% completely, without

even

this book

as

We ask

guide.

a

our

people to gear their

presentations to the various buy¬
ing motives of the prospects. Un¬

doubtedly, you have covered the
various buying motives such as
the desire to feel important. The
fellow who buys a Cadillac and
can't afford it was motivated by
his desire to feel important. And
then, the one that the experts
call, "monetary gain." That is only
the beginning of some other buy¬
ing motives. The fellow who wants
to

make

profits.

There is

some

other motive behind that. He does
want to make money, that's sure,
but he might want to build a

house

or

to have

oil burner, for

an

greater
comfort,
like that.
^

something

or

.

the

Listerine.

things in

spme

basis

We also sell

business

our

fear.

of

the most of,

right just

not all, but many,

on

Many dealers,
sell tires on the

basis of fear. I'll give you a little

illustration of that.
A

drives into

man

this service

dealer

rubs

the

of

one

tires

a

only

I mention these
develop Cer¬
tain buying signals. When a fel¬
low leans forward and says, "Go
back again to that last page," you
will find that there is something
reason

"Say, your tire is
getting awfully slick. Probably
got only another thousand miles
in it. Maybe you ought to have a
one."

new

when

"And

I

can

like

It's

it out to

send

don't want any."
old story of the

"Well, I

you?"

the

Grand Canyon. I can get you

all
with me that the Grand
Canyon
is
probably
the
most
dramatic hole in the ground in the
whole world, but nobody wants
to buy it.
Or, I have a lollipop and tell
you all about how it is made. You
may agree with me that it is the
best lollipop in the whole world,
but when I say, "How many do
you want?" you don't want any.
to agree

But you

have agreed with me.
So, you have to arouse a desire

to

buy in that fellow. He will
with you, but he doesn't

agree

want to

buy.

Then, we ask our salesmen
while using this presentation, to
use the old "How am I doing?"

technique. That is where, half a
dozen times during the presenta¬
tion,
they ask their prospect,
"How am I doing?"
They don't do it Just exactly
They get up to a certain
and then ask, "Don't you
think that's right?" The fellow
says,
"Yes, that's right. You're
right."

that way.

The

salesman

"How

has, in

a

sense,

doing?" The
prospect in a sense, says, "You're
doing okay. Keep on going." That
is the "How am I doing?" tech¬
said,

nique, and

I

am

you

can

save

an

aw¬

ful lot of time using it to deter¬
mine how you are progressing.
I

get

who

kick out of these boys
afraid to quote prices be¬

a

are

they think they are high.
They gulp a little bit and mention
the price with hesitancy.
But

they don't know one thing,
sometimes price is only a

...

second

or

third.,ixrasideration.

a

prospect says,
"Oh, it's Sometimes when
they think that
going to last a long time." The
price is a consideration, it really
dealer says, "I wasn't thinking so
is not at all. ;A fellow comes in

much about making the sale, but
about your wife, kids and you.
I'd hate to see you get banged up
if that tire blows out

you."

on

The prospect says, "Oh, cut out
stuff. I'll use the tire." So,

that
he

into

gets

his

starts

and

car

hurdles

a

are

there

is

old

an

sometimes

the

turn and

when
he's

slid

he's

he

of it

sure

that

means,
"The Honeymoon in
Over," "The Heat is On."
The
pessimist might read it backward^
"Only I Have Troubles."
•

But the optimist reads it
wards

and

from the country.

He's got on old
overalls and all torn Up. The sales¬

Continued

An

from

page

4

Interpretation of National Economic Outlook

cushion the downturn

defi¬

were a

nite factor in its short duration. It
was

brought out in the testimony

before the Douglas Committee last
week that the termination of the

"grey" market in automobiles and
the sustained

high level of demand
subsequently were
operations of
Regulation W. It was also brought

for automobiles

not unrelated to the
out

that

tained

the

renewed

and

sus¬

activity in home building

wants

to

sell

him

an

old-

joint

of

the

report,

and

Commerce

the

on the part of individuals
automobiles, houses, arid other
only is the de¬
slightly more than the 1948 total
of
$18.8
billion.
These
same mand great, but individuals have
cash or other liquid assets, or are
sources predicted that the total of
able to borrow, to finance pur¬
new construction expenditures in
chases of these goods.
National
1950 will equal that of 1949.
service life insurance premium re¬

tion

put in place during 1949
would
exceed
$19
billion,
or

demands

for

durable goods. Not

,

Problem of Future Construction

funds

during
the
winter
and
spring of 1950 are counted upon to
We must never forget that some bolster corisumer demand, while
gage money that followed the re¬
laxation
of
credit
restrictions day in a future that is ever draw¬ continued large-scale government
earlier in the yeaf.
ing. nearer this extraordinary de¬ expenditures will sustain a de¬
mand for many types of goods and
The prevailing view that" the mand for construction will ebb
The
overall
financial
and that the economy will then services.
in recent months reflects in part
the greater -availability of mort¬

business

situation

will

Ebb

■

'

,/

•

remain

position of business is sound, de¬
spite a substantial increase in
business indebtedness during the
past few years.
In general, the
supply of credit is large and elas¬
tic and the Cost, both of short and
long-term ^credit, relatively - low.
Furthermore, there is a marked
member that we are on the crest fidence is the sustained level of
absence of speculative excesses,
of the wave of the so-called "con¬ consumer expenditures. These ex¬ such as we
had in the late 20s.
struction cycle." The construction penditures on all types of goods
This is the case for the prevail¬
industry is very important in our and services were still running at
an annual rate of $179 in the third
ing expectation of renewed eco¬
economy. Its contribution to em¬
ployment and activity is by no quarter of 1949—less than 2% un¬ nomic expansion in the near term,
face a serious problem of readapthe first half of
tation of its resources to a differ¬
1950 is based, among other things,
ent pattern of use.
It does not
upon the record level of activity
now
appear, however, that this
in the construction industry and
situation will arise in the near
the sustained high level of con¬
term.
sumer expenditure.
In appraising
The other major reason for con¬
the outlook, we should always re¬

strong

through

.

means

adequately

measured

by der the peak annual rate reached

(Continued

67)

on page

the dollar volume of construction

the number
actually employe^ in

.put in place nor by
of

persons

construction.

A new housing de¬
velopment, for example, contrib¬
utes
to
demand
for
utilities,
roads, churches, s c h o o Is, and
school teachers, refrigerators and
ranges,
rugs,
and furniture.
A
great proportion of the wealth of
the mass of our population con¬

sists of owned
the

iharket

is

real estate.

active

In Louisville Since 1872

i

i£

Seventy-seven Years of

When

and

Investment Service

high

prices prevail, this wealth is easily
turned over,

frequently at

a

profit,

and the base of the economy en¬

liquidity that not only
expansion but also fa¬
fashioned ice box, but the follow cilitates adaptation to changes in
walks up and pays cash for a big demand.
A major reason why I person¬
refrigerator.
~
During the presentation ' that ally share the view that levels of
you make, there are going to be output will probably rise during
man

Depart¬ in the fourth quarter of 1948.
De¬ Moreover, recent Federal Reserve
partment of Labor estimated that Board surveys have indicated the
the total value of new construc¬ existence of continued large-scale
recent

ment

joys

a

B.BILLIARD & SON

J. J.

makes for

ESTABLISHED

1872

Members New York and Chicago Stock Exchanges
Associate Members New York Curb

Exchange

Investment Securities

JAckson 0181

419 W. Jefferson St.

HHilard Bldg.

Owensboro, Ky., Office, Masonic Temple

car

But

next

turn,
that it

IKE D. SCHARFF

DANIEL L.

JAMES E. RODDY

SCHARFF

two feet.

So, the next day he goes back
to this fellow in

the service sta¬

tion and says, "Say, John, I hear
that tires are going up next week.
I heard the

like

it

need

rumor.

have

to

yet,

I think I would

new

a

you

don't

I

one,

m

understand—■ "

BANKERS BOND

one

on

why don't

you put

Then,

of

course,

5

,

r

LOUISVILLE 2, KENTUCKY
is

.

.

ma¬

chines and barbells and stuff that
are

on

up

in people's attics

are

sold

the motive of health.
-

Then,

TELETYPE

is the motive

of

comfort; When you see a fat man,

always try to sell him

on

the idea

of .comfort.. His collar is probably

choking him, and his pants

tight, .and

comfort

Scharff L Jones
INCORPORATED

Motive of Comfort

there

KENTUCKY HOME LIFE BLDG,

the
the basis

there

selling which is done on
health. AH the rowing

of

1st FLOOR

of those tires?" He bought

that through fear.

ca

INCORPORATED

he doesn't want to admit that he
is scared—"but

are

too

is the" thing




back¬

says,

Here Today," and

Another
now.

positive

absolutely
over

foot.

a

makes

his

of

end

rear

about

over

It

disarms

driving home. The street is very
and
the weather is quite some
objections. When they oc¬ the months immediately ahead is
good — everything is fine. But cur,
control
yourself.
Control the rate of prospective activity in
when he makes that first turn, he
In a
yourself because objections are the construction industry.
slid

65

sales presen¬ is concerned, I always say to our salesman who. comes in here cer¬
in a hurdle
people that they should close as tainly sells salt!"
race.
It is just as simple as that. soon as
possible. I don't know
So, this job "bf selling in 'our
They are going to be there.
how many pages there are in this shop is a' challenge to us.- It means
When" answering
objections, presentation, 62, or something like simply this (indicates) "THIO."
as

dry

thinks

(2549)

"Opportunity Is
gentlemen, every
signals and then arouse g desire However, when you say that, you into the rural store and saw all day is the time for a bullish attihto buy.
had better have a good answer the shelves lined with salt.
tude towards selling. Opportunity
I have had people to come in
ready because you have then chal¬
He said, "Zeke, I didn't know is here today, and successful sales¬
and tell me, "Boy, here is some¬ lenged him.
men are always bullish.
Now, do
you sold that much salt here."
thing that's wonderful. It's just
Then, as far as closing the sale
Zeke said, "I don't, but that salt you want to buy some oil,, mister?
terrific!" and I agree with them.

that

;

The

CHRONICLE

technique that that, but I say close when you're
the
objector. half-way through, if you can.
Just
say,
"Well, I'm glad you Close as quickly as possible and
on that last page that struck him,
brought that up." The fellow who don't try to oversell the fellow,
and if you can figure out what it brought
up the problem thought because you may get into the same
is and dramatize it, you have sold he was
going to stop you, and
position as the fellow who walked
him. You watch for the buying now you have switched the tables.

cause

little and says,

FINANCIAL

,

The

motives is that they

.

station to get some gasoline. The

&

natural in

as

tation

now.

page

Then, there is curiosity; imita¬
tion, such as keeping up with the
Joneses; security, and then there
is the motive of fear, and on this
motive, they sell Lifebuoy Soap,
Mum and

he would like

COMMERCIAL

INVESTMENT DEPT.

219 CARONDELET ST.

NO 180 & 181

MAGNOLIA 1271

(Ground Floor)

GRAHAM.

THOMAS
H.

W.

NEW ORLEANS

JACKSON, BOSS.
12

E.

Manager

BOHNERT

WILLARD

SHREVEPOBT, LA.

•

INVESTMENT DEPT.

L. D. 235

C.

P. McNAIR

LEWIS

J. M. FETTER

WOOD

HANNAH,

CHARLES
P. 31.

C.

Asst. Mgr.
KING

CONWAl

D. LOUDEN
JOHNSTON, JR.

HOWARD
R. H.

.

:

'66

THE

(2550)

Continued

COMMERCIAL

&

Thursday, December 22, 194

from page t>6

IBA

An

CHRONICLE

FINANCIAL

Interpretation of

PAST

make a

1936-37

1937-38

1935-36

the

view

with

which I agree.

being too seriously affected
This will be particularly true i
those cases where the imports ar
not directly competitive with in

The fairly clear that we have gone a

disquieting ieaUne of uie,long way toward satisfying the
the degree
to which it! immediate postwar demands for
seems to depend on the aistribu- i industrial
plant and equipment,
tion of the so-called GI insurance1 and business inventories. Business
refunds during
the winter and expenditures on new plant and
spring of 1950 and on the excess equipment, which reached a peak
of government expenditures over of $5.4 billion in the fourth quar¬
ter of 1948, are estimated at $4.3
receipts
generally.
There
are
billion for the fourth quarter of
-some, though a minority, I think,
'who feel that because of it we 1949, a decline of about 20%. Busi¬
ness inventories,
which expanded
may face a renewed inflationary
period and a renewal of the wage- by $28 billion between December
price spiral.
I do not personally 1945 and December 1948, have
anticipate a renewal of that kind since declined by roughly $4 bil-

ternal

is

equivalent restriction of ou
exports, the problem of adapta

tion, it seems td me, will be mag
Particularly to the exten

nified.
that

In

a

renewal of the inflation¬

spiral, there is a fairly widespread and considered view that I
late in 1950 we will again face |
serious
problems
of
downward
readjustment. This is based essen-1
tially on pessimism with respect
ary

to

the

and

ers,

remain flexible

During

outlook

for

Bumper

crops

farm

for

business

in

income

expenditures.
many
lines of

agricultural production fore¬
shadow

continued

pressure on

downward

farm incomes, and it is

and

respon-

consumers'
mand fell

this
It

markets

rapidly.

where

this

de-

It is largely for

that final consumption

reason

seems

let-down

our

units remained high.

clear that

we

should bend

economy

Edward

F. E. Frothingham

B. Hall

Orrin G. Wood

lems of equity capital and small
business financing assume new

of

implications of

within

work

which

operate

we

have been external rather than in¬
ternal.

Take

the

problem where

you

incomes

money

have

by
or

been

primarily
either positive

responses,

our

incomes,

real

or

conditioned

negative, to the breakdown in

the

world

order

had

that

pre¬

their

and

effects

upon

econ¬

our

I want only to point
of that broad

omy.

up

the

point

where

the

problem 'of

in¬

ternal

adaptation is not likely to
be much further postponed. Paul
Hoffman -and

Averell

Harriman

stimulate

a more nor

operations.

Tha

be difficult enough
I hope that it is no'

problem will
in any case.

aggravated by loss of foreign
kets that would

in

mar

normally be

our

world economy

characterized
by equilibrium and efficient utili¬
a

zation of

resources.

There

is always,

of course, the
will seek to
avoid this basic problem of inter¬
nal adaptation by continued reli¬

possibility

that

we

on the Treasury.
We can, if
will, postpone the problem of

ance
we

agricultural

output

by

*

internal

take off surplus pro¬
by extending dollar
grants and dollar loans to foreign
buyers, not because they are es¬
to

measures

duction

or

have

given marvelous leadership sential for world reconstruction
to the E. C. A. program, and the but in order to maintain the mar¬
This line of
economy of Western Eurpoe has ket for our exports.
been rebuilt either to the point or

action

close

problem.

the

to

point where it can
produce and part with sufficient

exports
match

a
physical sense to
essential imports.
The

in
its

recent
devaluations,
moreover,
should result in these exports be¬

directly into the fiscal

runs

We

have

now

public

budgets, State, local, and Federal,
equivalent to one-fourth of our
national pro-due t.< Even

gross

though a portion of budgetary re¬
ceipts represent transfer payments

generally compet¬ rather than a drain on resources,
This means that the sheer mechanical problem of
the so-called "dollar gap" during taxation,
of raising such
huge
ing much

itively

more

priced.

the coming year is much more funds, exerts deterrent effects on
likely to measure the willingness the free working of the economy.
importance.
and ability of the American econ¬ Besides, in the present security
(and of course also third situation, if that situation is en¬
in the immediate future, namely, omy
External Forces Controlling
markets where our exports are visaged in the broadest sense, we
the import position.
will probably continue to need all
I would like to turn now to a
Our economy from its very in¬ competitive) to accept European
imports than the inability of West¬ the funds that we can afford for
somewhat larger framework than
ception has been geared to pro¬ ern
Europe to part with goods for defense for a considerable period.
is covered by this perhaps overly mote
exports. We needed exports sale.
To

aspect

one

it seems to me, we face
real problems of broad adaptation

postpone

PrE5cntt.Wriqht.SniderCn.

short domestic
pay

a

variety of

Required Interna! Adaptations

and

luxury

BANKER5

What

supply, but also to

for imports of essential goods
goods

could

we

not

form

such

MUNICIPAL and CORPORATION BONDS

as

imports

stock

to

railroads

tinent, and still
exchange to

PREFERRED STOCKS

dends

on

and

open

pay

later

rolling
the

up

to

con¬

provide

interest and divi¬

the capital

had pre¬

we

viously imported.

Specializing in Unlisted Securities

That need

sult of the
916 BALTIMORE AVE., KANSAS CITY
6, MO.
Teletype—KC 262
Telephone VICTOR

in

as

our

a

re¬

world

of

tive to

our

our

presented

sinc%, the small-

import position rela¬
export industries, has

a

takes.

local

velopment

is

pockets

that

one

of

have

UNDERWRITERS and DISTRIBUTORS
Corporation and Municipal

the

days
our

when

high tariff policy.
mize

we,

difficulties

the

large-scale

foreign

an

a

my

increased volume of imports

pressive policy to pursue.

loans during the 20s that provided

as

economy, our

postponed

our

for

exports, and
time

we

the

broad.

problem of readaptation, the col¬

absorb

a

will make the

we

form worthy of

a

responsible people.
We
side

that

glory
the

of

are

on

curtain

these

as

a

-

we

iron

bated freely

incen¬

cautiously

am

the

where

be de¬

can

and with great heat.

through

the

are

enjoying

They
a

spirited

of

process

I do not mini¬ public debate, but what is impres¬

difficulties but in

these

dollars to pay

for

I

to face and solve its problems in ancl

sought
through

represents probably the least de¬

thus

adaptation in

or

long feared and tried to forestall It is the nature of democracy to

of

outlines,

inflation

of taxation at lev¬

problems.

This de¬ problems such
we

You
i' )

tive

sive

in

.

primary basic prob¬ personal judgment the acceptance neither

all familiar with the main

continued

els that may raise serious

un¬

lem of adaptation to our economy.
are

of

danger

suffi¬ optimistic that

in

accepted

If

employment, pending readaptation

meet

of

solution

will face the problem

we

various

in

ness

the

are

position,

world

Ever

under

arising out of defict financing,

internal the continuance

it,

in the internal economy.

disappeared

reversal

war.

see

a

our

ciently large volume to ease the

economic position during the first
3143

I

As

to

mean

adaptation will be required which¬
ever

help

this

may

economy?

produce at home, for capital goods,

Established 1885

adaptation

these conditions will imply either

rea¬

not only for raw materials in

sons,

INVESTMENT

canvas

where,

badly earlier for

lems

So long who

expanding

an

should

be

considerably

able

to

increased

these

the

the debate

postwar

spirit
on

its

but
cares

our

the

is

economic prob¬

to compare

twenties

struck

years

the heat of

nor

high level.

discussion

our

markets will be very the

Securities

Anyone

the level of

today with that of
to

fail

cannot

be

by the immense education

American

people

have

ac¬

quired in the interval. This is true
of

:

basis

mal

exports o
We
stil

our war

agricultural output to

vailed during the preceding cen¬
a highly
to facilitate tury. It is not necessary to recite
the history of the two world wars

the readjustments that lie ahead,
It is for this reason that the prob-

our

products.

transition from

all our efforts to maintain

competitive

reduces

have to face the

will, limit it if you wish to
last summer, the overall price re- purely economic categories, it re¬
mains
generally
true
that
the
adjustment was small, less than I
had expected, but it was generally major fluctuations of prices, pro¬
duction,
w ages,
employment,
prompt and responsive in those
sive.

opposition to the view that in physical

face

we

basic difficulties if prices, particularly prices offered to consum-

it

agricultural

No orle who is sensitive to

ing of the GI insurance refunds,
Added to the present high level of
eonsumer spending they may give
the appearance of a larger market
than can be expected to persist
over the long run, particularly if
consumer prices show rigidity.
If
this
apprehension should prove
justified, I would expect the reaction to show up after a lag and
probably not in the year 1950.
I

adaptation takes the for

of an

develop-1 lion.
Most observers agree that
further increases in business in- technical discussion of the national lapse of our exports during the
If you really press me 30s when this outflow of invest¬
public trends can fail to have been ventories will be on a much small- outlook.
for the sources of such apprehen¬ ment stopped, and the revival and
impressed by the widespread con- er scale than in the immediate
cern among our people that we are
postwar years.
Many feel that sion and disquietude as I have, I expansion of our export industries
running a deficit during a period business
expenditures on new would say that they lie in a some¬ during the past decade, based es¬
During the sentially upon dollars appropri¬
of great pervasive prosperity. Pos- plant and equipment will continue what different area.
sibly because I share this concern, to decline, particularly in view of period in which I have personally ated by Congress to aid the war
I feel that the situation will be the shortage of equity capital and been exposed to economic prob¬ effort and the postwar effort to
brought under control. I am per- difficulties
in
small
business lems, that is, during the period of build a new secure self-sustaining
my adult and near-adult life, the economy in the Western world.
sonally more apprehensive of the financing.
forces that have really shaped the
economic repercussions that may
I feel that this whole develop¬
These problems are
real but
follow the distribution and spend- they do not necessarily lead to picture and provided the frame¬ ment has now progressed to
a
ment.

production.

If the

inflationary

active

of

indus

local

tries

most
case

vulnerable

without

National Economic Outlook
a

of imports, sufficient t
significant contribution t
narrowing of the dollar ga

volume

PRESIDENTS

the

debate

wherever

important form,

•»" '•

it

takes

within the gov¬

ernment, in the Crongress, in the
and

press

Steffi Brofes
MEMBERS

MIDWEST STOCK

fe

Co.

Estes &

Company, Inc.

EXCHANGE

such
I

a

this today.

as

that

and

the

by

American

that

I

mean

ment, have met their major prob¬

Long Distance 93

lems

responsibly .during;

years.

TOPEKA, KANSAS




exem¬

both the people and their govern¬

OMAHA, NEB —CHICAGO, ILL
Direct Private Wire to

the radio. It is

meeting

believe

democracy,

1009 BALTIMORE AVE., KANSAS CITY
6, MO.
Teletype KC 273 - 4

on

plified by the fact you are holding

and

Chicago Office

recent

Mistakes have been made

the

record

could "be

greatly

improved. Nevertheless the record
as

_L

it stands will bear comparison

with that of any

other people.

Volume 170

Number 4866

THE

COMMERCIAL

&

CHRONICLE

FINANCIAL

(2551)

67

Continued from page 9

IBA

Does Direct Placement of Securities
Lead io
can

even

post-war period

tion

investment by corporations, the
life insurance companies,
which,
in

to

It

the

choose

follow to get

cf

it

course

it needs.
preliminary
withholding earnings

of

Vapidly taking

has

cf

American

the financing

over

industry.

Actually,

been

they probably supplied in this way
something in the neighborhood of

But if

10%

cannot

of

the

corporate

financing

tion

of

required.

Changes in Institutional
Investment Market

bears

most

directly

the

on

criti¬

shows

most

ment

in

take

clearly the environ¬

which

direct placements
comparisons may be

place,

made between the funds of inves¬
tors

seeking investment outlets, on
the one hand, and the
supply of
those

investments

the

on

other.

There has been

a great
change in
supply and demand in the institu¬

tional

investment

past 30 years.

corporate
at $29.1

times

market

in

debt outstanding stood

billions

the

or

than five

more

admitted

assets

of

all

life insurance companies ($5.5 bil¬

lions). Today, those assets actually
exceed the total long-term cor¬
porate debt, by $6 billions—$55.6
billionss against $49.6 billions™ at
the end of 1948.

When the assets

pf other institutions, such as mu¬
tual savings banks and savings
and loan associations, are added to
the admitted assets of the life in¬

companies and

surance

is

son

made

compari¬

a

of the total of these

assets, on the one hand, and total
long-term private debt outstand¬
ing, on the other, it is found that
the end

at

of

tional assets

1948, these institu¬

amounted to

88%

long-term private debt.11

of

jf onjy

14% of the assets of all other types
of

banks,12 which in

also

compete

added

for

the

to

some measure

this

assets

debt,

of

the

are

other

institutions
clude

named—and they in¬
insurance companies ex¬

no

cept life—these institutional assets
the

exceed

debt/

vate

Thus, it

that

appears

have

been

in

made,

pri¬

clearly
placements

very

direct

made, and are being
market in which the

a

demand

long-tlrm

"total

for

investment

not

want

to

or

is

has

whether

through

money

stock

it

around
Allan M. Pope

George W. Bovenizer

Henry T. Ferriss

out

Life
Convention last year,14 pointed to
figures on higher bracket individ¬
ual incomes, which in the
past
have supplied the bulk of new
equity capital. These showed that
the
aggregate net income after
taxes of people with gross incomes
of $50,000 or more is less than lk

more

unless they have funds with which

what
cates

institutional investors. Even

range

they

ers

for this.

reasons

The only

I shall mention now—the oth¬

one

in

appear

footnote13—is that

a

equity financing dilutes the
trol

of

the

rights.

exercise

Sherwin

13 Other

Mainly

reasons

of

result

a

pre-emptive

in

Badger,

principal

as

con¬

existing stockholders,

can

the

the

This

1929.

indi¬

is

much

less

20 years ago

was

able

to exer¬

if this latter route is

tween

can

still be

investors.

lions

nevertheless
and

groups

There

are

stock

to

issues

float

than

issues, whether the debt issue is
the form of a direct placement or of
public offering. According to the 14th
Annual
Report of the SEC (Appendix,
Table
2, Part 2), investment bankers'
commissions, amounted to 10.2% of the
gross
proceeds of common stock regis¬
tered for sale through them to the gen¬
eral public during the fiscal year ended
a

June

30,

involved
or

Economic
showed

Report,

corporation
bonds

Dec.

the

of

instead

raising

of

media

9,> 1949.
saving to

annual
stock

It

which

the

is

hardly

market

a

institutional

borrowers to

ination.
that

economic

capital,

those

and

no

securities

tory

deal is

a

made

rower

has

of the

borrower's

reason

Considering

institutional

approach,

should

mentioned.

be

is that the sole

if the

assume

binding

on

of

the

becomes

the borrower until all

The

of the terms

the

have been fully ne¬

investor seeks to

creditor

a

This is

borrower.

funda¬

All of its rights will be
within

a

debtor-creditor

management

(Continued

position

no

of the

on page

If the borrower chooses to pro¬

through debt fnancing, then
going
investment bankers and using

he has the further choice of
to

Newhard, Cook

their mechanism for public distri¬

bution,

of proceeding, very of¬

or

with

ten

acting

on

investment

an

of

behalf of the borrower

direct

placement

14 "Private

dium

with

Placements—A

one

or

New

Underwriters and

Me¬

Members

Distributors

New

of

Financing," address by Sherwin
C.
Badger, Second Vice-President and
Financial
Secretary, New England Mu¬
tual Life Insurance Company, before the

$10,000,000
by
$460,000.

Co.

his agent, through the method

as

It
the

&

banker

Financial

Section

of

Convention, Oct. 4,

the

American

a

York—Chicago

St. Louis Stock

Listed and

Exchanges

Unlisted Securities

Life

New York Curb

1948.

(Associate)

Business Established 1874

FOURTH AND

OLIVE

SAINT

-

LOUIS

MEMBERS
1Sew

'St.

stitutional lenders from oppressing
those corporations which have se¬

York

Stock

Louis

Stock

Exchange

?.New

Exchange

York

Chicago

Curb

Board

(Assoc.)

of

Trade

:• 1

MID-WESTERN and SOUTHERN

curities for sale.

SECURITIES

/J So much for the general setting
which

direct

placements

Stale and Municipal Bonds

are

carried out.
315 North Fourth

1

i

Relative Position of Parties in

Street

Telephone—Central 3350

Let

look

us

of

now

•

St. Louis 2, Mo.

J,

Direct Placement

positions

Bell Teletype—-SL

United States Government Securities
288

Bonds oi Federal Agencies

at the relative

the

parties in ap¬
proaching the negotiations leading
up to a direct placement,
e

Bell

A. G. EDWARDS & SONS

Every corporate financing takes

place,

of

course,

need of the

because

of

the

The

409

cor¬

moving party and is in

ii 9 1949
!

<

Life

Insurance

Fact

Insurance

Bank

Loaa

Report
rency,

of

Fact

Book, page 48; Home
Trends in the Savings
page
5;
86th Annual
Comptroller of the Cur¬

Board,
Field,
the

1948,

12 86th

61

NEW

Department of Commerce, Survey of
Current Business, October 1949, page 8.
V11 Ibid., Institutional assets: 1949 Life
Loan

page

Annual

troller of the

Tel.

the
p.

Bell

Comp¬

119.




Members

Broadway
YORK,

WHitehall

N.

Y.

New

York

Stock

1,

MO.

to

Correspondent

Chicago

BOND DEPARTMENT

Teletype—SL 475

Myers Bldg.

Exchange

3-9394

New

SPRINGFIELD, ILL.
Tel. 7826

York

Curb

MERCANTILE

-COMMERCE

Bank, and

Trust

ST. LOUIS 1

Company

MISSOURI

Exchange

Midwest Stock Exchange
8015

Forsythe Blvd.

CLAYTON

Tel.

119.

Report of
Currency, 1948,

ST., ST. LOUIS

Enterprise Telephone

New York

Private Wire to Carl M. Loeb, Rhoades & Co.

Book,

10

and

EIGHTH

Long Distance—160

Teletype—SL 186

Private Western Union Telemeter .Service to

posi-

a

46.

page

NO.

1887

Telephone CEntral 4744

poration is, therefore, necessarily
the

Established

*

v.

corporation for addi¬

tional long-term capital.

bor-

68)

institutional

dom¬

exist, it is most certainly not a
problem of trying to prevent in¬

in

first

direct placement is

relationship, giving it
in

points

two

relationship which

the institutional

framed

ever

bor¬

credit.

own

the

investor's

contract under which

issued

the

as

to

believe, with
investment banking advice if hewants it, can be made in the light

mental.

are

con¬

tinue to be open until as satisfac¬

irrevocable,

no means

to them

open

avenues

I. M. SIMON & CO.

figures suggest
investment problem may

an

by

to

they

ceed

was

the

If

avenues

but

in

investors

be able, even if they had
disposition, to subject prospec¬

tive

closed doors to good

borrowers,

raising their long term debt

Municipal Bonds

would
the

no

Moreover, the borrower's initial

bearing a higher interest rate than
public debt obligations is enor¬
mous.

bor¬

a

of

the serious risk of

even

amounts,

difficult for

for

gen¬

favorable

investors.

i

v

this

surrender

nomic domination of

for

that

a

that

surrendering control and subject¬
ing the corporation to the eco¬

,

.

choose the

to

true

were

control

1948,

4.5%

free

are

it

choice

against .6%
for bonds
preferred stocks. (3) Fi¬
nally, there is the well-known tax ad¬
vantage which accrues to a corporation
if
it
finances
by debt rather than by
stock.■'(,
'V;
For
these
three reasons,
besides di¬
luting control of present stockholders,
equity financing also dilutes their in¬
vestment return substantially more than
the relatively inexpensive money burden
assumed through corporate debt financ¬
ing. A striking illustration of this, based
on
an
actual
case
of
a
public utility
company which required
additional cap¬
ital, was given in the statement made
by Robert
B. Patrick,
Financial VicePresident, Bankers' Life Company, Des
Moines, Iowa, before the Subcommittee
on
Investment, Joint Committee on the
and

if

environment

consummated is that of

because

Common

expensive

financ¬

$100 mil¬

credits.

latter,

(2)

more

stock

of

place an offering with
of institutional lenders.

borrowers

used.

far

than

one

to

rower

debt

is

are

ratlier

or

substantial

it is not

in

ing

much

debt

wide

a

alone, provided the credit
good enough.
Many others
willing to lend smaller but

choice is

ration. if

has

of choice, too. ' Any

nancing has yielded as much as it
has
to
debt
financing by
the
method of direct placement, where

therefore,

is,

He

ing to take $50, $75

are

Nevertheless, it would

Therefore, not only is the
eral

have broad

several institutions has been will¬

was

difficult to explain why equity fi¬

paid to investors
lower to the corpo¬

return

market.

willing to provide

tional

come

of where he would be apt to come
out if he chose the public offering

a

the

to

even
shop
negotiations

ahead, both in time and money,

financing on terms acceptable
prospective borrower, he
readily turn to other institu¬

the

may

conduct

and

prospective

stitution is not

cise

pre-emptive
rights
even
rights exist. It must,
therefore, be recognized that di¬
lution of control is likely if equity
financing is chosen.

chosen, there
wide choice be¬
institutions, and if one in¬

is, at the outset,

where such

(1)

Government's

policy, and also perhaps in
some
part as a result of the very large
volume of institutional funds seeking in¬
vestments
within
presently
prescribed
legal limits, the return on common stocks
is much higher than the return on debt
obligations. The annual cost to the cor¬
in

in

was

class

than it

easy-money

poration

it

American

the

quite clearly that the stock¬

holder

his

are:

before

paper

in recent years. There are a num¬
ber of

group of

with several others and still

issuing

will

by borrowing. Stock

or

the

or

institution,

one

satisfy its requirements out
earnings,
the
first
it

investor,

expeditious than
public offerings that a prospective
borrower, disappointed by or un¬
able to get acceptable terms from,

years.

issues have not been very popular

the

In 1917, long-term

does

cer¬

expensive, and

common

recent

is

has initially
commenced his
negotiations.
Furthermore, direct
placements are so much more in¬

that the corpora¬

we assume

the

more

cism under consideration and, from
the standpoint of that criticism,

in

borrower

he

retained

raise

/ To obtain the perspective which

funds

either

choice

;

exceedingly

an

of

source

the

borrower

institutional investors, with whom

them back into the
That, we have just seen,

business.

by

The

tutional

the

from its present stockholders and

ploughing

accepted

tainly not under the slightest com¬
pulsion to continue with the insti¬

will

money

have

may

choice

the

been

himself.

turn, supply only a part, albeit
the/ largest
part,
of
financing
Lirough direct placements, are

•

1930-31

1931-32

Corporation Control?

certainly not be said that

^ring this peak

gotiated, have been set down in
writing, have been studied by his
lawyers, and often by his invest¬
ment banking advisors, and have

PRESIDENTS

PAST

1934

5,

Delmar

Mo.
6692

Chicago Board of Trade
N. Y. Coffee £ Sugar

Exch.

Commodity Exchange, Inc.

Bankers

e'oirm-

Mortgage Bldg.

HOUSTON

2,

TEXAS

Tel. CEntral 8831

NEW YORK CORRESPONDENT
14

WALL STREET

Continued

COMMERCIAL

THE

(2552)

68

from page 67

rower;

life

for

it

insurance

life insur¬
ance companies tor allegedly ex¬
ercising - economic
power
over
American industry
must center.

is traditional that
companies do not

ment

slight¬
est criticism of either the invest¬
ment bankers or commercial bank¬
a

moment to imply the

representatives on
In that

ers

for having

the

boards of customers.

position, they often render ex¬
tremely valuable service and they
■often also represent some impor¬

We

criticism

in

some

detail

of

In this

to

the
the

that, unlike the others through or
whom loans are made, the

from
life

insurance

have and have

companies
never

do

not

sought

any

position in management,

jbuty

of Insurance

Company

As

Prudent Lender

The second and

even

more

im¬

portant point is that in the nego¬
tiations .with a prospective bor¬

the insurance company has

rower,

imperative duty to its thou¬
sands, hundreds of thousands, or
even
millions of policyholders to
proceed as a prudent lender.
Its
first responsibility is to make as
sure as it can that by the end of
the ten, fifteen, twenty or twentyfive years during which the loan
will be outstanding, it will get all
Of its principal back.
It is also
an

Obliged

case

to assure itself, as best it

of

with

borrowers—the lenders

are

able to

get, and also probably need, few
covenants, beyond the basic cove¬
nant to
repay
and generally a

sinking fund provision. But with
corporations whose credit is less
well established, more covenants
are

needed

and

covenants

more

generally obtained, though in
all cases this4s strictly a bargain¬

are

ing matter, and the lenders are not
always able to get what they
would like
It is in the

/-V/r;area

of these

cove¬

volume

of

directly placed

years

been several

t;

■■

at the industrial field than at

publicly regulated utili¬

different

from
the
majority of
public utility and rail loans. Un¬
til 1923, the New York law did
not permit
life insurance com¬

panies to invest in corporate obli¬
gations unless they were
ade¬
quately secured either by physical
property or by collateral security.
Up to that time, according to a
study made last year by Dr. James
J. O'Leary and Dr. Orson H. Hart,
Life Insurance Association

of the

of

America, the corporate invest¬
ments of the 18 largest life insur¬
ance
companies outside the rail
and
utility fields totalled only
$175 millions. What proportion of
these, if any, was unsecured, does
not appear, but it is safe to say
that up to 1928 life insurance com¬
no

in unsecured loans.

experi¬

Further¬

if the 18 companies in the
O'Leary and Hart study may be
taken as typical, the life insurance
companies did not enter the in¬
dustrial field rapidly even after
the amendment in the New York

law, and
seven

>•

small

it

1935—
later—that the very

was

years

not until

volume held

the

at

end

of

time
of

The

intensive

an

in

covenants

growth of this type of in-

15 14th

are

sat¬

careful

a

borrower's

history,

for

market

the

borrower's

In arriving at this
lender necessarily

the

conducts

indentures

its

of

the

only

the

study
not

products,

its
business, but also the fi¬
nancial policies and the practices
or

other

which it has followed. The lender's
decision
on

preparing.

in

the last analysis rests

three factors. The first is that

it is

satisfied

with

the

continued

ability of the borrower's enterprise
Cycle of Criticism
It

to make money;

rather interesting to

is

and

borrower;

the cycle

of criticism to which in¬
companies have been sub¬

surance

the second is

con¬

fidence in the management of the

note

Annual Report of the

with

connection

in

the

third

the

is

willingness of the borrower to
into

ter

early

industrial

years

their

of unsecured

loans, there

risky

an

type
of 7 lending the
insurance
companies were going into. : One
answer to the critics of those days

agreement that it will

Exchange
Commission,
3, Parts 2 and 4.
Investment

16 "The

ican

Life

Convention
of

and

Life

Insurance

sound financial

struc¬

some

was
that indentures were being preserving a sound financial struc¬
greatly improved and covenants ture and sound financial practices.
developed which would go far It is never intended to establish
which would hamper
toward assuring the safety of un¬ standards
secured lending. At that time, the the management of the borrower
insurance companies pointed with in the conduct of the business. It
justifiable pride to the fact that is intended only to set up mini¬

the prime

of

one

direct

new

features of the

ford

out with the

prospective borrowers

than

indentures under which public of¬

ferings
no

distributed

were

investment

by
There
that, with

bankers.

thought

then

;

Except only for the

freedom in the conduct and oper¬

the

ation of the business.

was

the
of direct placements, the

success

practice designed to af¬

adequate margin of safety

protection provided by that mar¬
gin of safety, indentures provide
the management with maximum

in the

appeared

an

for the loan.

better covenants for the industrial
indentures

and

ture

that it enabled them to work

was

standards for financial struc¬

mum

technique

placement

.' The

place¬

in direct

covenants

differ

indentures

ment

compara¬

strengthened covenants would be

tively little in kind, although they

pointed to as instruments of op¬
pression for the borrower — and
again let it be remembered, it is
not the borrowers who are making

do

fering

that accusation now.

neither

that the

Those

who have

inclination

to

critical

be

borrower's

the

off
on

the

10 year

management

.

companies have become
in

the

market

the

indentures

used

narrowed.

Since
little

or

in
no

bank term loans.

In

I may

a

for

in

- 1

;

Covenants

examining indenture coven-

called basic covenants—the covennants

larger
public

the

Indenture

nants,/there would be little pur¬
pose in considering what might be

insurance

the

as

con¬

shorter

exception, quickly

that,

in

margin of safety

restraint

abandoned their criticism.
add

extent

some

the

insist

an

against the unquestioned necessity
of safe-guarding the loan, have, I
believe without

to

in

strength from those which banks
upon
for loans of much
duration, typically five to

completely.

balanced

of i potential

grounds
on

criticism usually ig¬

new

and

provided, from those in public of¬
indentures.
They differ
in kind nor, I believe, in

It is strange

the safety factor

nores

differ

tent

to

repay

the debt, to pay

taxes, to maintain corporate
ence,

types of placements has somewhat

Table

a

sound financial

new

offerings, the difference between

Association

exist¬

not to -merge or consolidate

without binding the successor cor¬

two

poration to the terms of the in¬
not

to

sell all or

sub¬

^'■'?/. y

.

most

denture,

industrial

stantially all of the assets of the

loans,
reliance is placed on

enterprise, to submit periodic re-

America, "Nov. 12, 1948.

T. H.

Jones

&

Company

INVESTMENT SECURITIES

Underwriters and Distributors

1212 Union Commerce Building

Cleveland, Ohio ;;vV;:;..v

State, Municipal and Corporate
■

Securities
.f

"

Underwriters and Dealers i';~.;;7

■

MUNICIPAL and CORPORATION

OTIS

ESTABLISHED

SECURITIES

CO.

&

189*

THE FIRST CLEVELAND CORPORATION

cleveland

MEMBER

NEW YORK

CINCINNATI




CHICAGO

DENVER

•

%

COLUMBUS
...

MIDWEST

STOCK

EXCHANGE

'

DALLAS

NATIONAL CITY E. 6th BLDG.\
<

TOLEDO

BUFFALO

t

Telephone

1

Prospect 1571

CLEVELAND

\

,

14
Teletype

,

"

lit

en¬

approximation of the
practices which it
has followed in the past and which
have made it an eligible credit.
The indenture is chiefly aimed at
future

lit¬

was no

tle comment about the

Securities
Appendix,

and

CLEVELAND

loans

decision,

study

Experience of the
Eighteen Largest Domestic Life Insur¬
ance
Companies in Bonds and Stocks,
1929-1947," Investment Bulletin, Amer¬

Co.

the

that

itself

credit is good.

industrial
obligations,
and particularly unsecured obliga¬
tions, and to develop those coven¬
ants in the direct placement in¬
dentures which they were then

factor

CINCINNATI

make

to

the

also

1928 had doubled."

Field, Rickards

this

during

was

security,

made because the lender has

maintain

more,

Corporate and Municipal

physical
isfied

ture and will also continue in the

ence

SECURITIES

It

from
direct

purchases of industrial securities.

panies had had virtually

OHIO

of

growtn

period that the life insurance com¬
panies commenced for the first

in¬

As you
know, the great ma¬
jority of industrial loans are un¬
secured, and in that respect are

the

rating — generally,
though not necessarily, the larger

for

ties..

involve. In

borrowers

Indentures

such direct placements as may be

credit

best

placements.

rapidly

contemporan¬

was

In those

made by

investors

general way, roughly, but not pre¬
cisely, parallel one another and
both reflect the risk which the in¬
the

securities
recent

so

the

jected

more

interest

vestment is thought to

with

eous

bined,15 and, apparently, the crit¬
icism being considered is directed

get in the agreements.- Both
rates and covenants in a

can

the

increased

and

on

times the volume of public utility
and rail direct placements com

rate, which is deter¬
ownership. In view of mined by the market appraisal of
being made of the borrower's credit, so there is
life insurance companies, how¬ also a difference in the covenants
I do call attention to the fact

in

has

criticism now

ever,

1935

to deal adequately with both.

dustrial

the interest

institutional

vestment

Thursday, December 22, 1949

covering

examination, I intend to

Furthermore,

there is a difference in

the

this

justified.

limitations of time.

now

the

under

agreements.

which

any,

utilities follow quite different pat¬
terns and it would be impossible

tant stock
"

if

extent,

for industrials and indentures

which direct
placements are issued, and partic¬
ularly
the
covenants
in those
as

which

confine myself to industrials, due

then finally to an ex¬

agreements

Just

is

money,

come

amination

what

to

see

plus a factor
put directors on the boards of cor¬
covering the expense of making
porations whose securities they
and -following the investment and
hold.
This is in marked contrast
a
factor to compensate it for the
to the traditional position of in¬
risk which inheres in any cor¬
vestment
bankers and
even
of
commercial bankers. I do not mean porate investment.
its

area,

calls for the closest examination to

a

of

against

Therefore, this is the

return from the invest¬
which compensates it for the

of

can,

levelled

been

Corporation Control?
use

for

CHRONICLE

nants that the criticism which has

Does Direct Placementof Securities
Lead to

FINANCIAL

&

'

Bell System CV 443 & 444

Volume 170

Number. 4866

-.

-

THE

-

ports of the financial condition, to,

IBA

of

characteristics

the

PAST

FINANCIAL

&

CHRONICLE

where the whole character of the

PRESIDENTS
1927-28

1929-30

1926-27

but; perhaps
direct
placement indentures particularly,

such

is that they are drawn with a view

agement

to the

instances of loans to smaller

pro¬

varying covenants they

When

obtain.

in

covenants

they
to

are

there

to

main
In

only

Trowbridge Callaway

the light of the

objectives.
The first and probably the most
important provision which char¬
acterizes direct placement inden¬
tures is that relating to a sinking

of the lessons burned

One

into the consciousness of investors

Henry R. Hayes

from under the loan and therefore

the

depression

value of amortization.

almost

come

direct

in

quire

some

vthe

was

It has be¬

universal practice

a

industrial

loans

amortization.

to
>

r

re¬

Fre ¬

quently the provision is for a com¬
plete pay out by maturity. . There
other

are

out is not

cases

cease

to

be

there,

outer limit of years *

in

such

though

men

will

considered

loan

a

ideal

not

may

from

the

the

both

in which the pay

complete but where pro¬

vision is made for additional sink¬

ing fund payments contingent on
earnings, which will have the ef¬
more rapid and more nearly

fect of

complete pay down than would be

distributions

and

distributions

dends

divi¬

of

placements,
which

one

and

differs

term

bank

•

the loan is, in ef¬

assets

the covenants found in public of¬

for the retirement of stock. There

ferings, is the covenant to main¬
tain working capital either at a
specific figure or at some ratio to

be

can

with

of

interference

no

the

conduct

of

whatever

the

busi¬

involved in these covenants.

Rather

they

the

cover

the

loan.

The

or

(Continued

on

page

70)

against

bility of conflict between the in¬

rower's financial condition and, if
this deterioration reaches a criti¬

terests of the creditors and the in¬

terests of

the

stockholders

vestors but not
covenants

as

managers.

contained

are

cal

in¬

as

in 78

deterioration of the bor¬

a

point,

from the

of

to

enable

enterprise

borrower

indentures examined.

the 85

Bonds

the

Rraun, Bosworth & Co.
Incorporated

lender

either to withdraw its investment

Such

Municipal

of this
warning signal

which there is the greatest possi¬

time

to

or

remedial

.

Municipal Bonds

to give the

take

Toledo

-

New York

Detroit

-

Chicago

-

-

Cincinnati

steps while it still has sufficient
enants restricting future borrow¬ liquid assetsrto do so., This is a
covenant which merely requires
ing: The most usual is a covenant
the continuance by the borrower
placing a limit on total future
There

This is

debt.

in

several types of cov¬

are

all

a

common

of

provision

the

financial condi¬

minimum

tion which

types of

the

was

basis

for

the

<

■

Season good
•"

I

Cr Mayer

V:' /" ★

/.

■'

■;<

"

Established 1887

.

only a partial pay down.In 16
indentures, covering public offer¬
ings of industrials acquired during
the same period, the ratio between
those -containing
some
sinking

rent debt.

of

"?

reached

was

covenants aim at doing
three things.
First, they aim at
maintenance of the equity.; Sec¬
special

ond, they aim at preventing any
dilution of the lender's position in
favor

of

aim

future creditors.

at

Third,

preservation of the

position by the bor¬
rowers and, if this position begins
to
be
impaired, at giving the
lender the right to insist on re¬
current asset

payment of the loan prior to
solvency. ''Vv"'''.,
«; The
maintenance
covenants are

in¬
'

equity
intended to prevent
of

siphoning off of the

equity

er's decision to

protection against exces¬

debt

(t V

.V \

,V.

*

yi

*

other

the

part

debt

the

object

tially all the property and to keep
it
maintained
in
good
repair,

working order and condition "so

on man¬

generally

necessary

business

the

that

agement, but they are restrictions
are

the

erly

advantageously

ducted."

protection of any lender and
generally get before
they will agree to lend. They are
also restrictions which, as I said

common

and

These

coupled with
outside

the

of

in i

other

some

are

on

in

con¬

sometimes

covenant limiting

a

investments

borrower may

before, the borrower is willing to
accept in order to get the loan.
covenant

carried

to connection therewith may be prop¬

which lenders

Another

DIXIE TERMINAL
CINCINNATI 2

the covenants not to sell substan¬

object of the covenants for
of the equity.
The

effect of all these debt covenants

which

403

directly by the covenants.
That the enterprise will remain
the same is indirectly covered by

covenants, and in

be slightly restrictive

MUNICIPAL BONDS

the

reached

of

maintenance

may

in

borrower's management. Yet these
basic
factors
are
seldom

be somewhat analogous

may

to the

as

Walter, Woody & Heimerdinger

and be¬

confidence

has

two

The object is, therefore, in part at
same

he

cause

which matures ahead of the loan.

the

the loan is

because he is
the enterprise will

that

continue to make money

at

least,

make

primarily

satisfied

and, in addition, may
limiting the siphoning off
of liquid assets to pay future debt

"

any

at

sive

only 1 to 7;- a*wuvus:
Generally speaking the other

they

aims

aim

those

.

the borrower's financial condition.

cur¬

IngaHs Bldg.

As I have said, however, the lend¬

7 to 1, but the ratio
requiring complete pay

none was

outs

limiting the creation of

It appeared in only 21
indentures.
This covenant
also

provisions and those contain¬

fund

ing

ant

CINCINNATI 2, OHIO

All of these covenants relate to

the two first mentioned, a coven¬

that the

make in securities

corporations.

finance company

Only

in

indentures,

MUNICIPAL BONDS

STRANAHAN, HARRIS & CO.
-INCORPORATED

MUNICIPAL BONDS

UNDERWRITERS & DISTRIBUTORS

THE W. C. THORNBURGH CO.
-

We

of

a

offer

you

the facilities—developed

over

a

period of

many

years—

Member of

18

115

BROADWAY

REctor

Teletype

Cincinnati Slock Exchange

complete buying and selling organization for Municipal Securities.

NEW YORK 6
2-8270

NY




1-154

TOLEDO 4
101

OHIO

Main

BI DG.

8201-

Teletype TO 282

CHICAGO
135

8.

LA

SALLE

RAntiolph

East

Fourth

Street

3
ST.

6-8950

| |Te?etvpe CO 871

the •'

Cincinnati

2, Ohio
'

•j
•

loan, where renewals *

purpose

covenant is to set A

in

area

be*
'

stand-

from

loan instruments
lender's willingness to makerthe
and is inserted for the purpose of
loan.
Fifty-six indentures con¬
preventing a dilution of the cred¬
cases, the sinking fund will retire
tained this covenant.
itor's position and a weakening of
only a part of the debt by ma¬
These are the usual, or at least
the borrower's financial position
turity.'
:
m-p •
pz:.
the common, covenants in indus¬
Industry itself learned" the same through the creation of excessive
debt.
Seventy-nine of the inden¬ trial indentures involving direct
lesson from the depression as the
tures reviewed contained such a placements.
Because, as I have
lending institutions and these sink¬
covenant.
This covenant is gen¬ already said, in these transactions
ing fund covenants are generally
erally coupled with a covenant the indentures are tailored to fit
accepted as salutary. ■ * -V
the particular case, the covenants
A survey of our own industrial against prior liens or a negative
clause,, the
purpose
of are not identical in form, but gen¬
acquisitions between Jan. 1, 1947, pledge
and Sept. 30, 1949, disclosed that which, whatever form it takes, is erally the objective is the same.
For example, there are the cov¬
out of 85 direct placement inden¬ simply to prevent the management
from making any future loans, ex¬ enants relating to subsidiary action
tures, 22 covering secured issues
and 63 unsecured, all but two con¬ cept; purchase money mortgages, where, as is very frequently the
to which the loan made by the in¬ case, the borrower has subsidiares.
tained sinking fund provisions; 43,
stitutional investor will be sub¬ These simply plug up the loop¬
just over half, required a complete
ordinated.
Seventy-eight inden¬ holes which would otherwise exist
pay out; 19 others provided for a
tures had a covenant of this type. in the main special covenants if
partial mandatory pay down and
the subsidiaries were not specifi¬
There is also often, but much
contingent sinking fund payments
in addition; and 21 provided for less frequently: than in the case of cally covered.
brought about by the fixed sink¬
ing fund payments. In still other

State and

probably

most

Al-:

lender, the borrower evidently regards it as preferable to a short-

re¬

charge of the borrower.
cases,

such

Pliny Jewell

direct

limit

ness

during

they
some

point of either the borrower

that these

particular circumstances, the same

fund.

time

and with

com¬

special
these,

generally intended
out, in

carry

are

addition

the

few

a very

may be unwilling to
long-term loan without

a

assurance

only feasible to discuss
special
covenants
which
what the lender seeks to

typify

In

in the term of the loan also.

make

con¬

It is

those

found.

period

some -

three to six months from

as

the. lender

ing the particular loan, it would
be impossible to deal here with all
tain.

are

within

repayment

panies, whose past success has
been directly attributable to the
ability of one or two individuals,

vide safeguards in the light of the
facts and circumstances surround¬

the

fect, made for the period during
which the one or two key men;
continue in this management, withi
the option in the lender to
require

.

changed

indentures,

particular situation and

69:

might ^ be
radically
with comparative ease,
are
the r e
covenants
against
change.
It i£ seldom that any
enterprise

f

>

.

all

of

(2553)

covenants at all relating to man¬

keep property insured and to keep
it maintained.
Furthermore, since
one

COMMERCIAL

y

k

:

:

70

THE

(2554)

Continued

from

page

COMMERCIAL

Lead to Corporation

$9.5 millions or about 1/7 of 1%
of the total investment in utility
bonds

represented bonds of com¬
panies with assets under $10 mil¬
which
had
been acquired

Control?

have to be arranged each year, or

lions

example, engaging in a new enter¬

to equity financing, and the

prise— the management has the
relatively easy escape of arrang¬

lender
evidently regards it as better than
foregoing the investment entirely.
Only five such covenants were
found, and all were in such small
would scarcely think

critics

vere

it worth

of

"exercising

if

There

direct

two points in connec¬

are

all

with

covenants

agreements

placement

to

particular attention should
be called.
The first is that all of
the covenants are directed simply
at events which affect the financial

No

breach from

difficulty

and

In

agreement becomes operative,
covenants operate automati¬

be

Small

thought, from

any¬

placements may be all right for
large borrower with
solid

and if any credit, but may be rather hard on
the smaller borrower with less
reasonable
well-established
credit,
let me
to anticipate that the loan is or
may be impaired.
At least up to point out, before closing, that di¬
rect placements have given the
that time, none of them requires
smaller corporate borrowers ac¬
or
even
remotely suggests any
cess
to
a
source
of long-term
necessity on the part of the man-*
credit which they did not have be¬
agement of a borrower consulting
fore.
This is very generally rec¬
with the lender on any manage¬
One or two figures may
worth mentioning.
In the ta¬

ognized.

policy.17

be

The second
some

point is that

even

if

covenant should limit man¬

*••

"

1

17 How direct

placement covenants

surance

Fantastic

may

to
operate' in
practice if
deterioration
of
the borrower

mony

discussed

by the author of
this paper last winter.
Journal of the
American Assn. of University Teachers
of Insurance, Vol. XVI, No. 1, page 63.
in

was

of

my

the

that

insurance

companies gain economic control
or
domination over direct place¬
t

men

is

borrowers

anyone

fanstastic

who knows the size of the

companies.
Industrial
mercial management is
detailed

particular business

America

associate,

Donald

portfolios

as

of Dec. 31,

or
a

com¬

of

INCORPORATED

Established

120 SOUTH LA SALLE STREET

CHICAGO

own

management problems; the
borrower's
management has an

NEW YORK

business

other

5

a

interfere

with

borrowers.

The

to
of

on

companies than the life in¬
companies. On the other

surance

hand, the life insurance companies
are not in the
business of giving
so

G.

Becker & Co.
A

a

or

borrower may

loose

approach all loans from the stand¬
point of a prudent lender of other
people's money.
I am sure you will all agree

PARTNERSHIP

Members

~

that

and

of handing it out
play fast
with it.
They simply

money

away

A.

NEW YORK STOCK EXCHANGE

with

MIDWEST STOCK EXCHANGE

can

NEW YORK CURB EXCHANGE

•

me

that

direct

placements

stand the most exacting scru¬

By JOHN DUTTON

clients and their problems?.
really know enough to service their account properly? Things

Do you

have

been

changing in the retail securities business these past few
They are different today. The firms that are doing a good

years.

business

longer are selling securities. They are using an entirely
approach—it is professional—it is personal—it is basedthe same sound foundation as that which exists between a
no

different
upon

Doctor

I
But there is so much to be done
tion.
There is also a great deal of

would

be

surprised

know

is

IX

and

XIL

presented

with

testimony of Donald B. Woodward, Sec¬
ond Vice-Pres., The Mutual Life Insur¬
ance
Company of New York, before the
Subcommittee on Investment, Joint Com¬
mittee

7,

If

you

take

can

the

attitude

...

business

in

Point
lead

a

way

that has

situations

2-7070

on

the

Economic

Report,

1949.

BONDS

as

1—Ask questions

2-1572

been

never

they

come

possible

and

up

if

when you go into

you

your

interview that;

prospect into telling you about HIS PROBLEMS.
Such
questions as: What he wants from his investments—safety of prin¬

know

what

other

securities

they

if

own,

and

any,

family data before

a prescription is written for such
ramifications of this approach are almost endless, and

vital

to

in

success

successfully?

the

all

important

matter

of

all

the

a

case?

SYSTEM

TELETYPE

—

CG

YORK
15
•




BELL

*

Point 2—After you obtain information which
gives you a clue to
the amount of risk a person can take—their investment
objectivespersonal and family history, etc., you then can follow with an analysis
of their present

holdings. When people own stocks and bonds they
usually hold savings accounts, insurance, building and loan invest-:
ments, annuities, etc. All this information is necessary if a com-,
plete analysis of the account is to be prepared that really means
something besides theory. Few people have ever looked at their
securities (and the rest of their estate) as a going concern that needs
into sound shape.

to be put

Most people have bought their securities because someone told:
a good "buy," or
upon the advice of this or that broker or
dealer friend. They have a
haphazard accumulation of
them of

represents

lifetime of effort and yet in most

a

than

a

next

market

break—or

hazardous that
know what
what

cases

hodge-podge of investments that could
were

they

should

are

be

could

consist

be

property that
is nothing more

vulnerable in

TELETYPE-NY

the

of

speculative securities now
originally sound investments. They just don't
doing but they have never had anyone explain

done.

This is the proper approach to investment
If you go out to solve problems, to serve well
job you will find that people will not only listen
but they will TALK.
They will tell you in confidence all that you

salesmanship today.

Dec.

to

do

a

real

help them.
Once you have this confidence you will
control all their business instead of a
part of it.
v
This

takes

patience—work—and

back up the men in the field.

business.

statistical

Upon such

a

assistance

the CASE HISTORY
interpretation of the facts disclosed,
readjustment of portfolios, and constant follow up, are
doing busK
ness
today.

CG

ROCKFORD, ILL.

can

Selling individual stocks, promotions, undervalued bar¬
wanting.
Investment

—

10 South La Salle
1-853

that

foundation you can build

gains and the like has been tried and found
dealers throughout the
country who are .using
method of investment analysis,

Members principal

STREET

SYSTEM

The

they not
investing money

—

Municipal Bonds

Fidelity Fund, Inc.

Paal H.Davis & Go.

368

REPRESENTATIVE

BROAD

other

are

COMP AN Y

BELL

selling
to your

are

brought

are

Underwriters and Distributors

Chicago

•

upon

your

Established

HANOVER

''

call

you

upon

National. Underwriters

«

person

NORTHER N

TRUST

NEW

each

represents

Listed and Unlisted Stocks and Bonds

FRANKLIN

that

AND

MUNICIPAL

But you
that they

believe

people

many

dealer's self interest will dominate his investment advice.

a

THE

how

need to know to

18 Tables

STATE

to

Some of

cannot obtain unbiased advice from their broker or dealer.
Many
investors feel that brokers and dealers must live off of turnover—'
that since commissions are their bread and butter a broker's or.

and

details, the better. The
in giving this pub¬
licity.
There are probably few
things in which the public is less

GOVERNMENT

in the way of investor educa¬
criticism going on constantly

which investment dealers and their salesmen do not hear.
it is justified—most of it is based upon investor illiteracy.

tiny. I personally believe that the
greater the publicity given to them
difficulty

STATES

;

How much do you know about your

in all their

UNITED

reply is by making the real

facts public.

keener interest in doing this
cipal—-income—capital gains. How many in his family—his depen-;
successfully than the lender; and dents if any — his health — his
ability to assume more or less risk.
this, as everyone familiar with the These are general facts that are so
important if you want to really
matter knows, is the way these service an
account. Sometimes people want to buy some securities
matters operate in practice.
for specific purposes—such as to educate children.
Isn't it vital to
even

the contrary, shows that
of all accumulations of capital in
this country there is probably none
which has been less prone to in¬
terfere with the managements of

54 PINE STREET

3

word of ad-"

Securities Salesman's Corner

management policy and solve its
own

record,

1893

my own

management to work out its

the

of Investment Securities

best

individual

predisposition

Underwriters and Distributors

give

vice, I would add that I think the

spoken

attention.''^

long record in
the lending business and certainly
there is nothing in this record
which gives any indication of a

Becker & Co.

a

an opportunity for you to establish a relationship based
the following procedures I believe you will be able to increase
involved- your business and the size of your accounts, as well as control future

knowledge

Furthermore, the insurance com¬

G.

I have

industry

our

service if you take advantage of it.
If I may

Lenders, of course, rely on the
financial interest of the borrower's

panies have had

A.

which

of

a meeting
counsel, I think

insurance

will be doing

you

whenever you come across it and
in a forum which is more likely

highly

involved process which requires

of the Life In¬
of

to

investment staffs of the insurance

most

Woodward, it appears that in the
combined

idea

the

prepared for the investment hear¬
ings in Washington last week, and
which were presented in the testi¬

expected

financial
sets

;

the

Association

held,

Claim of Insurance Domination

The

of life

and a his patient.
They are analyzing—investigating—and;
determining needs before they prescribe. They are setting up a pro¬
gram and fitting individual securities into a working plan.
Once the
program is prepared it is constantly reviewed. It is an investment
't;y•V advisory approach to security salesmanship..
V

Re¬

Investment

the

search Department

agement's freedom of action—for

be

which

ble

we

totalling over $55.5
millions, including two preferred
stock issues, all acquired through
direct placements.

determinable,

tually

company,

investments,

such event occurs, it is

ment

own

1928, only four investments,
totalling less than $1% millions, in
companies with assets under $10
millions.
In 1948, we held 72 such

the

described in the covenants is fac¬

criticism

bond

in

thing that I have said, that direct

cally, the occurrence of the events

our

to attract attention than

corporate financ¬

but there are also probably
few things of which it is more
suspicious.
If, therefore, this in¬
spires any of you to reply to the

place¬

industrial

through
public offerings
again
has
represented about 1/7 of 1% of the
existing
total investment against 8.6% ac¬
it must
quired by direct placement.
face the

to

Borrowers

it

direct

by

the

In

than

ing,

borrower
due

Discrimination Against

Lest

acquired

interested

field, bonds of companies with as¬
sets under $10 millions acquired

After

condition of the borrower.
an

is

breach

been

ments.18

possibility of being forced into the
bankruptcy courts. It is a differ¬
ence which is worth emphasizing.

which

the

the

which

the

on

either repay the loan or

in

the

option

financial

'

tion

ing another financing, if it cannot
the present lender to
modify the covenant and continue
the loan to the enlarged or dif¬
ferent enterprise.
This is quite a
that

eco¬

nomic domination."

through public offerings, whereas
more than $351
millions, or over
5.4%
represented bonds of the
same sized companies which had

persuade

different

lender's while to go to

a

trouble

the

most se¬

our

major United States life
companies, only about

insurance

Does Direct Placement oi Securities

even

Thursday, December 22, 1949

69
1948 of 17

situations that

CHRONICLE

FINANCIAL

&

1916

Stock Exchanges

„

.

.

„

Street, Chicago

405

PEORIA, ILL.

Volume 170

Number 4866

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE.

Paine, Webber Firm

three

new

general

partners, effective Jan. 2, 1950.
*

Harry D. Comer will enter

partner

office,

the

at

25

firm's

Broad

New

Street,

as

a

York

Albert

Pratt and James Fl

Quigg will be¬
partners at the Boston office

come

(24 Federal Street), and Chicago
Office (209 South La Salle Street >

respectively.,
Mr.

.

Comer

firm

firm's

been

with

the

its

and

predecessor, Paine,
Co., for over 20 years

Webber &

-since

has

1943

Manager of the
department. Be¬

as

research

fore entering the brokerage busi¬
ness he had been editor of Stand¬
ard

Statistics

Co.,

Inc.*

of

New

York, and statistician for the Port
of New York

Authority.

■

Public

University of
Minnesota, class of 1922, where
he was elected to Phi Beta Kappa
and other fraternities, Mr. Comer
did

post-graduate

economics

and

work

business

in

adminis¬

Michael

Q'BEieh; ai

J:

general

partner in the firm,; will become
limited partner on Dec. 31. '

are

four

now

the past two

over

panies mentioned.

Comparison of the Southern Utility Companies
There

With

state, has enjoyed

a more rapid rate of
tiiree years than any other of the com¬
aggressive and stock-minded manage¬

or
an

ment, earnings and dividends have steadily improved.
Strangely
enough, the company has been somewhat handicapped this year by

southern

holding companies and several
important operating companies whose stocks are traded on the New excessive
rainfall; it has no hydro-electric power, and with added
Stock Exchange or over-the-counter.
The holding companies rain there has been less irrigation
pumping and has hence less de¬
represent parts of larger systems, which have been split-off as those- mand for rural
power.

York

systems were broken up. Thus Central & South West emerged from
Middle West about two years
ago, and Middle South Utilities came
out of Electric Power &
Light and Southern Company out of Com¬
monwealth & Southern recently. Texas Utilities will
by American Power & Light, probably some time in

be distributed

January.

Of the

operating companies, Southwestern Public Service represents the
integration of an old holding company, Community Power & Light.
Gulf States Utilities was
formerly in the Engineers Public Service
system,

and

Power &

Houston

Light

Light & Power

some

years

divorced

was

National

from

ago.

Southern, Company recently sold 1,500,000 shares through an
underwriting syndicate, without subscription rights. Central & South
West made

l-for-10 stock subscription offering. Electric Bond &
Share offered its own stockholders the
large block of stock in Middle
South (at 12) which it had received in the
a

break-up of Electric
Light, and the company itself is expected to offer some
money stock, possibly early next year.
Southwestern Public

new

Central & South West continues
of about 10 %

by

new

per annum

Improve its net at the rate

stock issues in the past two years. As the company will prob

have

a

Middle

Both

conservative

South

dividend

The

would

share

prospects

earnings may

Utilities

relation

to

are

starting

earnings,

soon

it

as

for Middle

out

to. be

more

improves its cash position

South

are

more

with,

according

indefinite

to

gen-v

some-*

but

it

reasonable to expect some moderate increase in
the $1.10

seem

over

Texas
in

Texas Utilities is expected

to stockholders as

what.

rate

and

rates

semi-official forecasts.
erous

1950

better chance to improve.

the next year

Service

will again be hr the market for common stock
shortly—it
has offered stock in February or March of
1947-8-9. It is also said
that Texas Utilities may decide to sell some
400,000 shares of stock

to

though these gains have been about offset;

ably be able to avoid equity financing in

&

IBA
1925-26

or so.

PAST

PRESIDENTS

1922-23

•

1920-21.

1915-17

in the spring.
A

great deal of information is available in the

issued

University.-sv'/V'

Southwestern Public Service, while serving smaller communities
in the northern part of the

growth

tration at- Minnesota and at New

York.

Securities
Utility
By OWEN ELY

Power

A graduate of the

also

Light & Power has long sold on a "rich" yield basis as
with, other utilities, apparently because of phenomenal
growth and liberal earnings standards.

compared

Paine, Webber, Jackson & Cur¬
tis, members of the New: York
Stock Exchange, have filed with
the Stock Exchange for the ad¬
of

71

Houston

Names 3 New Partners

mission

(2555)

by

Southern

Company, Central &

recent prospectuses

South

West

Middle

and

South, while special statistical brochures have been issued by Texas
Utilities

and

Southwestern

Public

Service.

Officials

of

the

latter

a

recently addressed

company

large group of analysts at the Down¬

a

town Athletic Club and have given

the

Elects New Officers

bond

issued

The members of District No. 11
curities

Dealers,

District

Inc., embracing
Columbia, Mary¬

of

land, North Carolina, Virginia and
West Virginia, have elected the
following to serve on the District
Committee for a three-year term
commencing next Jan, 16:
Edward

Sons, Winstpn*Salem, N. C.
The

above

.

able Eecurities
N.

Corp., Greensboro

C.

ent

Securities
died

Dead

New York. Curb

and- the
r,

at his

Curb

Clearing
home

at

Ex¬

Exchange

Corporation
1053

Carrol

Street, Brooklyn, after a short ill¬
ness.

ernor

Mr.

Moffatt, who

was a gov¬

of the Curb Exchange and a

*

i

of the
Ray Morris

Recent

Dividend

imate

Share

Price

Rate

Yield

Earnings

1l$1.12

5.4%

♦♦$1.95

CM CM

John A, Prescott

Southern

11%

Company

&

So far

Southern

releases
as

well

16

1.88

20

Forma,

Utility

.90

6.4

♦1.33

19

10.5

6.4

2.73

39

12.6

1.20

5.6

1.85

23

11.6

24

12.6

'V

;•

2.20

on

IIExpected

4.7

increased

number

to

increase

on

3.74

to

of

shares,

$1.35

current

or

promptness.

About

the

including

more

during

Industrial

recent

1950,

to

20th

of

of

Bonds

for

record

a

each

month

the

$10,243,000.

cumulative

interim

and

12

months'

results.

For

the

charges approximated $1,351,000
12 months $15,736,000

The per share figure for 12 months

was

H. M.

vs.

(Incorporated),

Member Midwest Stock

135 So. La Salle

Thje system has been specially favored this

by

larger KWH sales.
The stock of Texas

of the most popular

y

Utility

Fort Worth, the two
most

of 8%. and

above

his death, was 61.

municipalities, which

that

a

percentage
are

getting

among

into

Pittsburgh

Minneapolis

the

Texas state law permits

companies have apparently

without

Philadelphia

i

Dallas and

principal cities served, have been

some

CG 273

>

state which

liberal regulatory standards.

rapidly growing cities in. the country.

return

;>

American Power &

Light subsidiaries, probably because of its location in
combines growth with very

St., Chicago 3, 111.
Teletype

Financial 6-4600
New York.

new

Exchange

Telephone

"when distributed'' has proven one

(market-wise) of the

Byllesby and Company

$1.31, but this

is cut down to $1.17 by the increase in the number of shares from

a

Stocks

it

consolidated earnings report covering the previous month,

a

as

compared with $569,000 last year; and for

;

Municipal

earnings is concerned,

to be making something

seems

month of October the balance after

and

Railroad

9.8

issuing information

and

Public

10.0

6.0

2.20

♦Based"

Company

completeness

Ratio

♦1.17

1.10

47

•_
Power

as

Earnings

1947

21%

distributed,

offering.
""Pro
yield 6.4%.

in Rev.
over

6.9

14

-

Light

Lewis B. Franklin

Price

% Increase

34%

._

V.

tWhen

12 Mos.

.80

-18

Houston

Roy C. Osgood

10.8

T21

director of its clearing affiliate a
c

'

-

above-normal watery for hydro-electric operations, cheap
natural gas for boiler fuel at some of its steam plants, increased
rates>

Moffatt, former Presi-

of the

change

Moffatt

sale; of its convertible

•

Recent

year

Fred C.

Lighting

Approx¬

12,020,000 to 13,520,000.

Fred C.

the

.

consult

can

Houston

Indicated

Miller

&
Co.,
Baltimore
Maryland; Robert P. Martin, Da¬
venport & Co., Richmond^ Vir¬
ginia; John T. Warmath, Equit¬

and

following will summarize the current market status

succeed to

the offices held by the
following whose terms expire on
the same date; J. Murrey Atkins,
R. S. Dickson & Co., Inc., Char¬
lotte, N. C.; W. Carroll Mead

November,

stocks:

seven

individuals

named

in

July in connection with

J.

Armstrong,
Stein
Bros. & Boyce, Baltimore, Mary¬
land; W. Erskine Buford, W. E
Buford & Co., Charlottesville, Va.
William D. Croom, First Securi¬
ties Corp., Durham, North Caro¬
lina; Ben S. Willis, Alex. Brown
&

in

one

The

issued

prospectus

debentures.

of the National'Association of Se¬

the

talks before investment groups

in other cities;- Those interested in Gulf States Utilities

NASD District No. 11

earned

difficulties

with

AjOALLYNandCOMPANY

well

Incorporated

the

Investment Securities

the sole rate regulating bodies in that state.

Public

Utility

Railroad

Industrial

Municipal

UNDERWRITERS AND DISTRIBUTORS
:

§SI;,

OF

; ii;r|

:

Affiliated with

INVESTMENT SECURITIES

A.CALLYN 6 CO.
^

;

MILWAUKEE




*

*

•

Members of

'

OMAHA

Street, Chicago

DES MOINES

ST. LOUIS
;

Member of Midwest Stock Exchange

Exchange

Exchange
Exchange (Associate)

100 West Monroe

DENVER

New York

MINNEAPOLIS

-

Midwest Stock

CHICAGO

\

-

New York Curb

(Incorporated)

CLEVELAND

V'.'

New York Stock

Central Republic Company
NEW YORK

.

Boston

Kansas City

Portland), Me.
Waterloo

Milwaukee

Omaha

Aurora

&

Continued f rom page

6

propaganda

The Welfare Stale in the Light

of

Frankly, "Statism" does not know what I mean. In a way I
bestir the emotional and moral have to thank Brig. Gen. Frank

prejudices of the masses. It does Howley of Philadelphia for ad¬
not spell out any clear or present vancing my interest in the seman¬
of anything. I am afraid
then
"Statism" is useless as a label.

danger

for

amid the
degradation, the hope¬

the

ters

dilapidation

the

and

free en¬
terprise and the American way of
edge of how democracy,

it out, toe

been slugging

Ameri¬

the

briefed

his experiences,

many

of

subsequently recounted

he

in
Collier's
Magazine.
Particularly
significant was the time he had
been accused by the Russian-con¬
trolled press of East Berlin of be¬
ing a "reactionary." Next day he
asked his Russian opposite num¬
in

perience there, behind the Iron
Curtain, gave us first hand knowl¬

life has

on

which

of
Berlin, it is conducive to profound
thought and reflection. Our ex¬
lessness

of

for two hours at his headquar¬

us

days last July,

six

ruin,

He was

sector of Berlin and he

can

party did

When one sits, as our

Commander

a

series

recent

of

articles

ber, General Kotikov, the

toe, every day for four years
with Communist totalitarianism.

to

word.

the

meaning

of

Kotikov

told

him

in

official
"Why,"

some

think,

the

know

score

of

who

twisting

words

of

cerebral

embattled

with

social

the

economic

or

which

wisdom

happens

to

When

reactionary.

a

executive

do,

When

tries

a

either

are

you

un¬

to

foster

holder

clear. We were guests of

were

cooperative,

very

if

amazement that

my

Austrians and other

people who live in the proximity

Officers

their

and

to

of

Iron

Curtain

have

almost

immune

to

the

come

you

be¬

Soviet

stockholders
ceed

a

I

I

to

suc¬

Pardon

me,

forgot to tell you—stockholders
referred

to

investors

as

interests."

read

or

a

Now

they

only

are

"selfish

joined

in

chorus.

great

a

condemnatory

Corporate

chanted,

profits, they
extortionate, un¬

were

conscionable and dangerous.
were

The

to

apt

cause

remedy, of course, would be

raise wages, cut

to

They

depression.

a

increase

selling prices,

Federal

taxes.

Oddly

enough, but principally because
the corporations had an excellent
had the courage to defend
themselves with great skill in the
case,

on the radio and before a
Congressional committee, the cam¬
paign miscarried. In the language

press,

of

Broadway and 42nd Street, the

scheme

to

establish

the

label

"Profit

equals Sin" laid an egg.
In 1949, however, still searching
for the worm in the apple, the
hole in the doughnut and the bugs
in
the
machinery of American
business, the Welfare Staters have
unfurled
is

banner

new

a

emblazoned

Badness."

which

on

"Bigness

equals
have du

Already they

Pont, U. S. Rubber, General Mo¬
tors and the A & P

Company over
another.

the barrel in

one

The

going

show

is

way or

right

on

now

and the Federal Trade Commission

these

the

are

individual

has trotted out

some

wicked

new,

officials, labels of the Welfare State and its sounding labels to hang on the
necks of industry as it marches
who is out to make a gain for his
protagonists. There are also group
pet project or controls, put it to labels. When a business managed across the stage in a kind of po¬
lice line-up. I gather we will all
the propaganda test.
electric utility resists public own¬
line-plunging

Federal

.

lion
an

of

the

campaign

is

to

ership it is always referred to as
the "power trust."

the

confuse

$100

Furthermore, the Welfare Stat¬
ers never stand still.
In 1948 they
started

has assets of, say, $50 mil¬
over he is no longer just

If the company

million,

a

rolling

against

Washington of¬
leaders,

ficials of all ranks, labor

monopo¬

labor

economists

dists,

is worth over

operations

its

ball

the

corporate profits.

or

industrialist but is

list.

SCHOOL BONDS

happen

stockholders?

say

anymore,

pany

ilip?

do

they be¬
"gluttons of privilege." Did

aren't

The small
business man, is apparently sort
of a sacred cow, but if his com¬

MUNICIPAL; COUNTY AND

If these

in their objectives,

come

Next time you hear
speech by one of these

smear, degrade
or
business community.

Of

better price for

plain "greedy."

lic opinion."

Part

%pmJ0

rent,

landlords, oil companies or

same

ects, it is merely "marshaling pub¬

found

the Germans,

the Army

Information

I

higher

a

at the well, or a stock¬
higher dividend, they

a

just

are

sur¬

nist."

Things that have puz¬
zled you or that you have had
tioubts
about
suddenly become
posturing.

wants

natural gas

in the government about
it, he is a lobbyist. However, when
the government throws its expen¬
sive, highly geared propaganda
action

want

"social

oil company a

an

to people

into

Ne¬
higher

or

presently fashionable

landlord

a

Federal legislation and
down to Washington to talk

machine

miners

growers,

justice."
whip¬
ping boys get different labels. If

for or
particular endeavor, such as so¬
prise, "in the Soviet Union every¬ cialized medicine, subsidized
against. There are no fellow trav¬
one
knows that a reactionary is
elers, neutrals or pinks.
There
housing or tax-free power proj¬
a
person who is not a Commu¬
can
be nq ideological fakery or

There

groups

planters

seeking

merely

The

friendly
goes

favored
potato

cotton

prices for their products, they are

you are

off

for¬

"cartelist."

a

Maine

silver

vada

some

corporate

ward

to

politically
as

Alabama

popular at

the moment, such as I

he is

that

know

such

legislation

be

to

of

a

eign country, he may be surprised

meanings.
Take this same word
"reactionary" for example. Right
here
in
America,
if you
dis¬
agree

line of business in

similar

emotional

or

"exploiting colonial peoples."
all, if it has ever made
with a company in a

contract

a

their

from

world, it is suspected

Worst of

not
value

accepted dictionary or
meanings
and
giving

generally
them

do

of the

areas

much better than

the propaganda

lot of business in the

a

they

moreover,

Americans

understand

hie.

tics of the Welfare State.

I

deeds.

If it does
depressed

probably "predatory."

they
are
words
with

because

contrast

to

,

many

Experience

Recent European

able

Thursday, December 22. 1949

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(2556)

72

radical

nists

are

and

and

propagan¬

newspaper

colum¬

commentators

radio

hear much of "Oligopoly,"

glomerate

Activities"

"Con¬

"Ad¬

and

ministered Prices" this winter.
These

which

tactics

same

deceit

of

employed
by the Welfare State to place in¬
dividuals and groups on the de¬
relentlessly

are

fensive by labeling
I say mis-labeling
used

them,

or

them,

should

als

are

against specific corporations.

Suppose
we
pin
these
babie
just once and "pull th

down

GROUP CHAIRMEN

IBA

m

books

ROCKY MOUNTAIN

PACIFIC

CALIFORNIA

NORTHWEST

in

tions,

CHICAGO

them."

on

in

tional

39 South La Salle

Teletype CG 540

publica

literature"

in

and

"educa
certain

there

circles,

is

a

sneering reference to the largest
privately - owned corporation in
the world,
the American Tele
phone & Telegraph Co. And why
the AT&T? Well, here is Amer¬

Tenth Floor

RAndolph 6-3900

labor

so-called

some

governmental

Telephone

Again and again

union

certain

Street

ica's

exhibit

its

million

25

de¬

investors ownin

815,000

and

ees

industrial

of

A

with its 650,000 employ¬

mocracy

Here

shares.

is

long and honorable record of div

a

self

105 West Adams St., Chicago 3, Illinois
Joseph L. Ryons

Waldo
Watao

Pacific Co. of Calif.
Los Angeles

&

Amos

Hemphill

C.

Sudler

Ames C. Sudler &

HempnUl

Denver

Co., Seattle

Co.,

BONDS

distribution o
ownership is attested by the fac
that
about
170,000 stockholder

trol

These

30

Teletype: CG 385

Sills, T airman

<s.

Harris

INCORPORATED

Members

Stock

Midwest

~

♦K

t

•

J A-

\

LA

52 WALL STREET

NEW YORK OFFICE:

circula-j
showing
silk-hatted con-j
of

caricature

a

tycoon!

the U. S.
and saying, "See the thousands ol
thrifty little people who own our
company.
They average only 30
shares each."
Pointing to him is
a little man in shop attire saying

Tele. CG 864

2-1421

smea

of very wide
is a cartoon

there

the heavily-built

ventional
DEarborn

the

how

see

boys torture and twist this picture^
In an illustrated article issued in

tion

STREET

CHICAGO 4

W

Th

is a little ove

July, 1948, by the Department of
Education and Research of a labor

Exchange

SALLE

con

t

let's

periodical
209 SOUTH

groups

of A T & T.

holding

shares.
Now

2-6363

each

shares

10

three

51%

over

average

Telephone: DEarborn

to

6

from

shares.

REVENUE BONDS

•

wide

200,000 others own 11 to 25 share
and another 170,000 own 26 to 9

STOCKS

♦

Th

ranks.

the

from

risen

extremely

own

Underwriters and Dealers
MUNICIPAL BONDS

a

cal progress,

Securities

Investment

proud history of techni
excellent service and
public spirited management it

idends,

KETCHAM & NONGARD

pointing

,

to

of

map

a

text

largest shareholders
35,000 shares each." The
of the article makes unkin

and

I

"But your 30
average

MUNICIPAL
BONDS

%

INVESTMENT

—

say

about

some

very

AT&T.

unfair
It im¬

plies that the 30 "big shots" con¬

SECURITIES
Davenport, Iowa

may

remarks

Chicago, III.

trol

the

company.

1948, I have ob
references to thi
situation
in
labor
publications
but not until November, 1949, did;
I
see
in
another medium
the!
Since

July,

served frequent

Underivriters

IOWA-ILLINOIS MUNICIPALS and GENERAL MARKETS
i-

l

We invite




"

,

,

•>

Distributors

*

J

your

offerings

'

;

"

Welsh, Davis and Company
135

SOUTH

LA

SALLE STREET

CHICAGO

3

C

names

and

holdings

stockholders.

headed

"Handful

monopolies"

of

these

3

Below this list and

was a

controls

gianl

paragraph at

tacking the Bell System and in

ferring

that, it

had deliberately

tried to create the illusion of dem

Volume 170

Number 4866

ocratic ownership to
promote
campaign of deception in order

THE

the

a

to

Welfare

State

of

COMMERCIAL

1984

President

no

longer existed.

Bankers

the exact

identity of these

nancial giants and
work

produced

It is my contention that in 1949
we

fi¬

30

to 1984. The

little spade-

a

some

already well

are

being

interesting

and

Here

the

and

what I found:
Of the
the largest owned
70,000
smallest 15,174. 21 were

identifiable
trust

and

custody

was a trust
one

was

accounts,

company in

A

new

sort of

Louisville,

Co.

which

me

you

promptly confirmed to

that the 62,988 shares in its

belonged
and

to

350

of

average

the

600

trust

custodian

Bank -&

66.28

Trust

&

Co.

name

that

represented

shares

54.8

of

304

firm

nor

of

any

the

selves?

or

an

of

average

And

about

view

of

24

system under which

so

The

same

Now

deceiving

wonder

I

whom.

who

But

the

attack

absence
have

of

any

has

its

>

believe

but to

that

into

a

speak.

new

plus two

possible

to

shins

what

makes

by the Nationalist Party in
defeating the Labor Government
of

New
I

Zealand.

optimistic.

am

servative.

In

anarchist

an

The businessmen

about

more

mar¬

libelous.

I

1891

to

man

a

In

1945

a

call

the

optimst until the

an

when
call
or

I

(1)

Our first task

tics

of

used

to

social

fully

We

language which

be

There

ganization.

must

else

con¬

a
a

a

In
am

my

own

field of

happy to note the
of

remarks

the

incoming

pletely eliminated
orthodox

the

word

either

or

still

for

to

Spring¬
o£

number

a

office will

direction,

be under

and

his

will

tax-exempt securities.
act
of

as

R. B. Dimond

personal

specialize

Co., 14 Wall Street,
New York City, members of the
New York Stock Exchange, wilt

It will also

prime western distributor

Trusteed

mutual fund.

Industry
Y

Shares,

\

Y

Partner

as

Carrere &

in

admit

a

Renwick

Dimond

B.

to

partnership on Jan. 2. Mr. Dimond
As investment bankers,. Cantor, was formerly a partner in Byrdt
■
1
.•
Fitzgerald & Co. also expect to Brothers. vY" -i1
finance or purchase going indus¬
Helen C.
Crocker will
retire
trial organizations in this area. *
from the firm on Jan. 2.
;
"

Y

.

-It

#

•••••#•

•

+

«

•

••••••••♦##«•*••♦*

•

'

.1 v'•

•.

•

•

;

1

! '■ v ••

:

.■

Y

•

1

^

INDIANAPOLIS
•
129

MARKET

•

.

-

m

6,

•

•

:i

BUILDING

;
,

INDIANAPOLIS

^

SHARE

BOND AND

CORPORATION
EAST

' ■; ^

.

Z

INDIANA

be

.'Y'.-Y'Y Yy",

if I

a

Investment Dealers and Underwriters.

Specialists

Exempt and Corporate

Securities. We invite your inquiry.

In

Teletype IP-298

Morgan Stanley Go.

Morgan Stanley &
Street,

New

York

Telephone MA-4321

Co., 2 Wall

City, members

of the New York Stock Exchange,
will admit Dudley N.

Schoales to

partnership in the firm
He

has

been

with

on

Jan. 1.

them for

some

Municipal Bonds

.

r

time.

fit]THE MARSHALL

Corporation Securities

CO.
Raffensperger, Hughes & Co.
INCORPORATED

com¬

I

stripped of

meanings. For example,
"free"

Mass.,

day arrives
for libel

deviate from the Party Line, many
are

Pontius

Mr. Brown

Carrere & Co. to Admit

at
211
South
Beverly Drive in
Beverly Hills, California. The new

of

case

To make it impossible to

undesirable words

Clair

Jan. 1.

West Coast branch office

was

^jlllflfllKIIIIIIIIIIIKIIIIKIIIItlllllllllllllllfllllllllllllllllllllllllllllllllXllllllllllllltlii

language called New-

on

Schoales to Be Partner

corruption of

be

and

man

is

black

equals

a

conservative,
Republican.

someone

even

recog¬

somq or¬
Individual effort will

suffice.

endeavor I

must

is accompanying
Y ;:

this process.

recent

to

of the tac¬

deceit; which
are
being
change the pattern of our

structure.

(2)

seems

aware

nize and expose the

not

be sued

can

Exchanges, will admit Nes¬

in issues of Indiana Tax

to become

Bay&Co.to

v

am

socialist

in

Association

years.
open

held libelous in

was

National

the

Brown

field,

Koughan

Spanel vs. Pegler ditto for call¬
ing a man a communist.
I am

you:

ultimate

of

has been with the firm in
Paul J.

the famous suit of Cerveny vs. the

By way of summary, I would
leave the following
thoughts with

five
and evil is good. To implement its
acts, the State gradually trans¬
forms English as we know it today
and which Orwell calls Oldspeak
two

economics.

Summary

thought control for all. By
government fiat men are to be
to

economics

ootimistc and will continue to

and

made

never man¬

kets than men's minds.

stage with security, regimentation

white,

that

political

convincingly without kick¬

anyone's

the

Sales Executives.

tor

mi¬

a

done

out-

anything or merchan¬
anything except question¬

evidently knew

to

reached

is

It

enormous.

of

BOSTON, MASS.—R. L. Day &

and

terms

The

simplified

Commander

Co., Ill Devonshire Street, mem¬
bers of the New-York and Boston

that to call

able

no

selling ideological
comprehend the
tactics
of
deceit by
which the
Welfare State is being sold to the
American
public. Some of you
have undoubtedly read it. Only 35
years from
now
in one of the
three
nations
of
the
world,
.Oceania
(the
other two
being
KUrasia and Eastaisia) the Welfare
State

of

a

finan¬

Admit Brown, Pontius

Chicago "Daily News." In 1915 a
decision in the Ogren case held

best

"1984"

been

District

R.L,

Ask

the economic wheels go round.
It
been done here and it was

hundred

a

in

voters

and

the

businessmen

understood.

business

Too

had

ufactured

One almost needs to read George

Orwell's

and

of

to

courage

counted.
have

has

effective

food

is

con¬

dised

believe, believe and again believe.

satire

and

products have
sloganed by men who

counter¬

alternative

no

is

the

selling automobiles,
toothpaste, beverages,

other

mistake, these 99.9 percenters are
getting away with their propaganda. They reach millions who
in

familiar

for

he

dent

B. G. Cantor

and

be

potency

live.

cigarettes,

was

make

teners
can

mer¬

tires, soap,

owned
by the 30 big shots are
probably owned by 30,000 sepa¬
rate people, so the labor propa¬
gandists were just about 99.9%
wrong.

all

we

induce

J.

Na¬

figure on the Pacific CoastRecently with Lord Abbett & Co.,

Com¬
a

(4) There must be an ability to
explain our economic system to
millions of workers, readers, lis¬

group which has coined

many

slogans

be

to

supposed

to

ing

peculiarly inept at
chandising
and
explaining

be

must

and be
businessmen
up

United

National

Investment

corporate executives to face

and

have been

researches, the

my

shares

businesses

There

m

Paul

American Legion and Vice-Presi¬

crophone.

great

history that the

the

Cantor

be

cial

partnership

is

manufacturers and merchandisers,

so

In

our¬

the

Cantor, President of
Cantor, Fitzgerald & Co., Inc., of
New York
City, is planning to

73

Administrator and

well-known

Gerald

B.

it

show

forth.

1,023,891

of

one

Beveriy Kills Branch

Mr.

will

formerly

Relief

Stock

businessmen, who have been out¬
standing successes and geniuses as

partners

forth and

so

is

American

same

any Telephone stock, but
that they belonged to 1,487 hold¬
ers

It

Koughan.
tions

with

office

new

the program directors of the vari¬
ous radio forums about how hard

into

come

of

guts to say what they think.

of the people.

name

ironies of modern

owned

shares each.

lew

at¬

your

all this for businessmen like

Merrill, Lynch, Pierce, Fenner &
Beane, alleged owner of 35,931
shares, advised that neither the

;

(3)
stand

an

And now, if my viewpoint is
sound, what is the significance of

of

holder.

per

have

in the

power

trust and agency accounts, an av¬
erage

call

me

the

structive attitude.

comparing the in¬

am

collectivisms

an

name

as

Dealers,

panies and others. This is

tention to the fact that all modern

Chemical

advised

feel I

comparable, let

accounts

accounts,

each.

Co.

1-3,443 shares in the

Whitten

,

Securities

instrument of social control. Lest

Weapons," and language

York

Association

movements, and they are all col¬
lectivist, they all must use "words
as

goal for the In¬

Association, the
Stock Exchange, the
Curb
Exchange, the

York

Associated

B. Gerald Cantor Go.

.

of
Stock
Exchange
Firms, the National Association of

they are
Regardless of the

the

.

(2557)

Association

wide differences of objectives and
methods between these collectivist

foreign banks.

common

New

thing. The Welfare Staters
fast.

a

New

still pikers at it but

learning

Investment

vestment Bankers

past masters at this

were

King & Co. is the nominee of
City Bank Farmers Trust

,

cated

attempted to furnish
brief glossary of it.

a

the

Association.

understanding."
He
noted
the
mutuality of interest of and advo¬

propa¬

Russians, the Nazis and the

are

one

estate, two were bro¬
kerage firms, two were insurance
companies, one a private banking
were

have

Fascists

an

house and two

with

The

W

bank nominees

as

I

you

is

names

road

dictionary is already

rewritten.

of

CHRONICLE

.

ganda langauge is being launched

results.

30

the

on

FINANCIAL

He
said,
"Our free
economy is on trial.
We must create a
background of

prevent

public control. It seemed
worthwhile therefore to ascertain

&

1

in

existed

wm

WE MAINTAIN MARKETS

IN

=

I

LOCAL SECURITIES
V-'Mv.V'/i Yj/Y

Y;:

s/Y.V

£■»

y

...

INDIANAPOLIS

Newspeak and could be used to
say

"The sky is free of clouds,"

but

could

sense

of

not

be

used

in its old

"politically free,"

Milwaukee 2, Wis.

r

S

762

NORTH WATER

or

•

E

MARQUETTE 8-8130

"ide¬
=

ologically free"

STREET

"intellectually

free," since these concepts under

E

E

TELETYPE MI 461

;

S. R. LIVINGSTONE U CO.

TiiiiiiiiiiiKiiiiiiiriiriiiifiufiiiiiiiiiiiitiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiitttiiiiitiiiuiiiff?

.

.

Established

...

.

DETROIT STOCK

WATLING, LERCHEN & CO.
*<*<*.

Y..AV Y'Y

.'

••••

.

"

Y

<+

Underwriters

Detroit

Stock

Exchange

Exchange

Distributors

—

Dealers

>

SECURITIES
r

New

y:

CORPORATE and MUNICIPAL

>**'

Members:
York Stock

—

.

EXCHANGE

'

"

Investment Securities
New

1922

"MEMBERS

York Curb

Complete Trading Facilities

Exchange

Chicago Stock Exchange

DETROIT 26, MICH.

DETROIT 26, MICH.
Ann Arbor




-

DE

Jackson

336

Penobscot

Building
WOodward

1-4333

I

74

Continued from page

Shaver & Cook Forming
In Si. Petersburg

tional

Shaver

Cook.

be

C. Shaver

firm

as

with

Increase in
Year

Capitalization—

increased

the

of

insurance

pro¬

tection

immensely

benefit

of

Owned

nies, with accompanying substan¬

Subscription
Price

1925

$5,000,000 to $7,500,000

50

10

1928

$7,500,000 to $10,000,000.^

20

a

30

Constitution

had

States

of

been

the

the United
Furthermore, on the basis
31, 1948, data, it is the

and

as

voluntary
in

size

assets,

reserves,
the basis

the third
of

amount

in

pre¬

original capitalization

$600,000.

Through

allotments

increased

C. Let

MO. —Robert

us

was

to

this

successive
figure

$3,000,000

in

was

1882.

examine the experience of

Lesser will retire from partner¬

a

ship in Friedman, Brokaw & Les¬

chased the company's capital stock

711 St. Charles Street,

bers of the New

at

mem¬

York Stock

Ex¬

will

be

investor

price of 22

(1.900

Dec. 31, and on Jan. 1

the firm's name

mythical

a

price

who

Jan. 2,

on

24

range,

pur¬

1900

high;

20

low), has retained his stock dur¬

changed

ing »the- halt century*

Friedman, Brokaw & Co.

his

40

($7,135)
$12,000,000 to $14,938,610.

25

1949

$15,000,000 to $18,000,000.

40

20

tal

rights

to

the price of the capi¬
(126 J/2) as of Dec. 6,

on

stock

19478

1949, the aggregate value

Div.

acquire

exercised
additional

the

of

of

miums

$158,940,048 during the

ended

vear

received

dends of

period the in¬

same

total

cash

divi¬

Of

this

approximately $26,949.17.

liability
accounted
for
reinsurance
for
12.9%,

19.3%,

marine

ocean

of

ness

United

States.

10.1% and the balance

however, they

judgment

of

the

this

are

officers

company

century.

management

and

directors

of

the past half

over

One

for

due to the keen

able

and

of

the

best

The

company,

its

all

the

livelihood.

it

trary,

is

be

to

considered.

494

of

as

earned

1948,

it

writing

profits from

past two

to
a

payable

tentative

earnings

Insurance

statement

Company
of
(not consol¬

Investors

June

per

for the six months

30,

1949,

a

against

highly satis¬

earnings statement

reported for 1949.

will

as

30, 1948.

It is evident that

years?

by Moody's

share for the six months

ended June

factory

X

Company of North America
cause
for good cheer.
The
growth in total property values
the volume of insurance pre¬
will
continue
and
they

and

miums

confidently expect that the
which
has
given

may

management,
such

What of future

Income from

probably

will be

investments

increase;

under¬

admirable

an

itself

in

the

past,

RALPH A. ROTNEM

Harris, Upham & Co.,

fe®®,

New York City.//;/'/.:/V/■

Technological stocks could well
be the growth and romance group
of

the

of

tomorrow

future

the

Income Tax

Share

$0.09

$7.63

•;

2.56

will

13.27

from

vary

in

1950,

notwithstanding

well exceed that of 1949. The
item:; of
in

"income"

earnings

company

usually

computing insurance
—

increase

equity in unearned premium
not

a

cash

item

in
re¬

and

is

recognized

or
included in
income statements.
It
represents merely an attempt to
gauge the increase or decrease in

company

proportion

premium
the

reserve

basis

of

the

unearned

(here computed

of 40%)

which

reasonably be expected to
to

in

scientific
lab^

oratories

today.

of

From

them

will

come

new

products, new
e q u i pment
and

new

methods

that

will

give .us
improved
foods,

clothe

ing,

-

t

nsporta-

r a

shelter,

tion,
cines,
Ralph

A.

Rotnem

meair
amuse¬

ments,
and

Net

results

reckoned

on

shaped

being

fol¬

reduction in premium rates,

third

that

the world

because

is

research

If

power,

weapons

*

the

is

one

conservative, he will

Per

4.44

source

not

of

account

will, in the
future, continue to conduct the
business
with
energy,
diligence
and skill.
\ :v';
V?-c
-\:'C
►

a

year to year.
The present trend
is favorable and income from this

may

.»

have

prefer the stocks of

ultimate

benefit

may

accrue

established

well

leaders

are

writing

some

seen.

ance

Con¬

as

be

long-term
future,
stockholders of Insur*

has,

Equity—

Service, shows net in¬ serve—is

of $5.32

come

ended

$3.01

computed

remains to

the

exceeded

J)ave been

$7.38

6.96

$3.50 per share.
stock dividend of

declared

as

greatly

to

for war.

Premium Res.

$6.22

Dec.
31, 1949, to stock of record Dec. 1.
the

for

years

underwriting.

years

Investments

4.43

idated)

of Saint Paul, Minnesota

Over

capital funds.

lows:

Profit

—$5.88

NTorth America alone

NATIONAL BANK

vestments

than

source

tend

ably favorable results from uun¬
derwriting and income from in¬

1948,

Unearned

.

was

this

31,

more

will

than offset, prob*

more

com¬

solidated net earnings during the

Incr. in

20%

Dec.
or

period of

year,

Income From

paid during 1947-48
amounted to $3.00 per share and

A

each

in

pre*

Dividends

of

from

considerable

Underwriting

during 1949
In addition,

of

as

$278,095,614,

Income

100%

owns

The

or

premiums paid in by pol¬
The total value of

double the value of

the

of

reported

and

Year

Investment Department

offset,

-

31, 1948) but a
proportion of the un¬

investments

sets of $333,550,405 as of Dec. 31,

STATE AND MUNICIPAL BONDS

decrease

icy holders.
was

addition

Simon-

suc¬

expected

Dec.

substantial

stocks

Company and The
Company of
Philadelphia, engaged in the same
stock

record far

a

that of many

1950 and

years

invests not only its own con¬
solidated capital funds ($128,835,-

Insurance

In

trust

now

"incflme"

siderably

con¬

investment

an

the

in

source

has

and

pany

Alliance

the

On

excellence with

par

better than

tor

now

in addi¬

and

capital

its

trend

peak

is likely to be con¬
smaller.: Whether the

underwriting results

upon

investment companies. There
is also an important
leverage fac¬

large business

a

account

own

owns

as

for

pure

evi¬

dences of this capability is to be
found in the company's diversity
risk.

accounted

specifically, solely

More

Indemnity
Insurance
Company
of
North
America, doing a casualty and
surety business. These four com¬
panies reported consolidated as¬

GOVERNMENT,

This

its

ceeding

Furthermore, it does not depend

value

principal and the liberal income

of

Teletype ST P 139

for

incident to the growth of the

in

received, reflect, in part, the de¬

field.

SAINT PAUL 1, MINN.

risks

war

velopment of the insurance busi¬

enhancement

rine Insurance

FIRST NATIONAL BANK BUILDING

and

was
largely
by inland marine
and casualty and surety risks. The
company, manifestly, is not mere¬
ly "a fire insurance company."

The

of two sizable subsidiaries, name¬
ly, the Philadelphia Fire and Ma¬

THE FIRST

date.

mobile

is $52,877.

During the

tion

U. S.

that

418 shares (before 20% stock divi¬

on

Caldwell Phillips Co.

pdssed

however,

501

amount only 33.5% was accounted
for by fire and allied risks. Auto¬

constituted, does

System

418

($10,455)
Based

great

compa¬

increments in the stockhold¬

($10,455)

of

Bell

335

•

dend)

and

the

to

on

miums written.

LOUIS,

121/2

American company
standpoint of capital,

second

total

stock

298

($5,655)
$10,000,000 to $12,000,000.

the

equity in unearned premium

from this

24Q

such

the

rank

166

($4,185)

drafted

to

insurance

tial

133

($3,355)

1945

Dec.

the

reserves.

1930

surplus

num¬

& Cost

($2,095)

the

their

ers'

Holdings

20

of

To Be Friedman,
Brokaw Company

to

holders

amount

25

vestor

on

%of

-

policy

$4,000,000 to $5,000,000

The

change,

,

The following tabu¬
an
original pur¬

100

1920

the

the

ber of years.

ser,

during the
immediately thereafter,

and

shares:

assumes

chase of

15

from

cashier. Mr.

formerly

Florida Securities Co. for

ST.

1, 1949.

lation

33 '/3 %

largest
Stanley

associated
new

payable

$3,000,000 to $4,000,000

States.

will

was

20%

of

1910

of

A. Hil-

Shaver

dividend

31, 1949, to stock of record

Company

insurance company in

and

with the

Dec.

five years before, the company is
the oldest stock fire and marine

C.

Douglas B.
debrand

Insurance

United

are

Stanley

Dec.

which

in

stocks.

Partners

war

Organized Nov. 19, 1792, in the
Assembly Hall of the State House
in Philadelphia, the same room in

spe¬

nicipal- bonds
and
public
■

Co.,

itself.

mu¬

utility

Owing to the infla¬

tion in property values

Shares

engage in the
i n vestment

Florida

Thursday, December 22, 1949

,

stock, and proposes to retain the

of
North America, like Daniel Web¬
ster's
Massachusetts,
needs
no
encomium.
Its record speaks for

to

cializing

CHRONICLE

Security I Like Best

STEPHEN G. DUNCAN

The

Bank

business

j"

stock

Na¬

■Building,

FINANCIAL

/

2

Vice-President, Janney &
Philadelphia, Pa.

with offices in

First

&

stockholder.

The

ST.
PETERSBURG,
FLA.
Shaver and Cook has been formed

the

COMMERCIAL

THE

(2558)

tronics,

the

of the

some

companies
in

research

that
elec¬

chemis¬

synthetic fibres,

drugs, aircraft, frozen foods,
air conditioning, etc. A few prom¬
inent companies- in these fields

try,

are
duPont, Pfizer, Minneapolis
Honeywell, Radio Corp., United
Aircraft, General Foods, General
lectric, American Viscose, U. S.
Plywood, Johns Manville, and In¬

ternational Business Machines.

"Tf

one

"is willing to

assume

a

of risk, however,
there should be even greater spec¬
degree

greater

ulative possibilities in some of

scientific

smaller

and

new

the
re-j

search

companies such as Consol¬
idated Engineering Corp., Tracer-

lab

Inc., American Research and;

Development Corp., and National
Corp.
Stockholders in

Research

these companies are putting their
faith in the

of

in

ability of their scien¬

tists to develop new and improved-

products for the coming scientific,
and atomic age, and in the ability
of the managements to judge their

future

applications

Since
soned

SHAUGHNESSY & COMPANY, INC.

these

companies, it

are

It is impossible to

unsear

seems

wise to

discuss all of

these companies in a short

article*

but perhaps a few figures on

Underwriters and Distributors
■
•

of

and

buy them as a group in order to
spread the risk.

Harold E. Wood & Company
1

markets.

and

new

Investment Securities

Corporate and Municipal Securities

of

them

will

the

illustrate

one
pos¬

sibilities that exist.
FIRST NATIONAL BANK BUILDING
SAINT PAUL

1, MINNESOTA

Consolidated

Engineering

incorporated

only 12

was

years ago.

During the

j

war

it did research work for the Gov¬
112

First

ST.




National

PAUL

1,

Bank

Building

MINNESOTA

ernment.
war

Since

the

end

of

the

it has successfully developed t

and marketed scientific

instruments

for

analytical

science

and

♦

in-«

Volume 170

dustry.

* Number

4866

Leading products

THE

the

are

mass

spectrometer, dynamic re¬
cording equipment, and electronic
detectors.
This
equipment
has
been bought by the
leading oil
refineries, chemical, aircraft, auto,
railroad
equipment companies,
technical

and

medical

research

and

earnings have
creased each year since the
Sales

this

times

year

almost

are

eastern

The
one

>

1945,

as

large

last year of the

have

they

as

vested in

market

since

$100

Fletcher

worth around

a

good business
is

also

execu¬

profit

con¬

is

stantly replaced.
minimum

a

New
U

free

and

automatic

labor

competition.

no

it will have 60,000 customers.
1929 it had 22,580
customers,

pression-proof?

;

:

v

In

in

De¬
;

,

^

instrument,

new

the

titrolog, which will be used
initially in the natural gas and
control fields for

smog

tinuous

the

of

measurement

con¬

minute

quantities of sulphur compounds.
This titrolog will be leased. While
it will take longer to

possibilities

provide

in

steadier

a

than

come

this

if

develop its
it will

way,

in¬

of

source

original equipment

sold.

were

important in time of
would be

time of

even

The first in this field

war.

will have

petitors

an

in

peace, but it
important in

more

advantage over com¬
the establishment of

reputations,
and in the

in patent protection,
development of "know-

how."

•

:

4

in early 1945

after its divestment from Federal

dend
the

was

dollar.

one

stock

has

split
on

Since then

2-for-l

the

new

and
stock

is at the rate of $1.20 annually.
Financial policy of the manage¬

31,

1945

funded debt

to

Dec.

31,

increased

was

1948,
13.1%

$917,000 while capital and sur¬
plus was
increased
50.41%
or
or

$1,123,230.
pany

had

Even in 1945 the

reputation

a

risk

credit

sold

since

in

as

a

April,

com¬

good
1945,

$6,500,000 30-year mort¬
without a
sinking

to

a

companies
Hancock

a

position to benefit. Whether

v

on

other

factors

also

are

significant, government interven¬
in

part, for the mildness and short

duration

the

of

economic

read¬

justment of 1949," Dr. Nadler said,
"and
it will play an important
in

role

ment

maintaining business ac¬
a high level in 1950."
principal fields of govern¬
activity which will have a

vital

influence

tivity at
The

on

the

.

business

picture in the coming year were
summarized by Dr. Nadler as fol¬
lows:

(1)
will

The

truly reflecting demand and sup¬
ply conditions. While a moderate
decline

in

farm

income

may

be

from

hour and
of

40

to

75

cents

other wage rates will increase

the income of wage earners.

(5)

A

works

large volume of public
public housing will

and

maintain

building activity at a
high level despite the decline in
private construction.

interven¬

more

con¬

debt

is

a

steady erosion of the purchas¬

ing

power of the currency.
"In addition to government

tion,

the

play

an

economy

following
important

during the coming year:
standard of living is

The general

higher than eVer before and

security is being strength¬
ened; liquid savings in the hands
of the people are very large and
some
of
thesfe savings will be
spent for the purchase of homes
and durable goods; the productiv¬
ity of equipment and labor is in¬
creasing, and this will tend, at

of whether

not it is warranted

or

increases.

by economic conditions.
"Government
economic

affairs

has
so

become

in
so

groups

many

have acquired a vested interest in
it
that
it is
doubtful whether

people really want to see it
curtailed," Dr. Nadler continued.

many

"There

is

no

use

in

demanding

that the budget be balanced with¬
out

at

the

;

"Some

intervention

negative factors in the
business picture are the decline in

capital expenditures by corpora¬
and the danger of an in¬
crease
in corporate taxes, which
will further adversely affect out¬
lays for new plant and equipment,
Increased
production costs will
complicate the readjustment of

tions

those

industries

which

have

asking*.for as yet gone through this process.";.
specific cuts in Federal expendi¬
tures. Nor is there any logic for
Hannaway Corp. in N.Y.C.
one group to
suggest cuts in ex¬
THe Har.naway Corporation is
penditures which will affect other
groups
but leave it untouched. engaging in a securities business
The

fact

groups

is

do

that

not

most

hesitate

economic

make

to

from

offices

at

220

New York City.

Broadway,
.

C. S. Ashmun Company
•

Specializini In
ig

(2)

MINNESOTA, NORTH & SOUTH DAKOTA

year

NORTH CAROLINA & FLORIDA
MUNICIPAL ISSUES

heavy government spending
not only influence business
activity but also have an effect
on the psychology of businessmen
1026

consumers.

(3) Aid to Western Europe un¬
der ECA
and
the shipment
of
military equipment to members of

in, fellows, the Water

FIRST

NATIONAL-SOO

LINE

MINNEAPOLIS 2,
Bell

BUILDING

MINN.

Teletype MP 551

the North Atlantic Pact will help

one

invests in such issues will depend
the individual investor's needs,

on

but

businessmen's accounts might

well consider diversified commit¬

in

ments

them

because

growth possibilities

U. S.

their

of

Extensive

the next

over

Retail

Distribution

decade.

JOHN
Pres.

Shea

L.
&

SHEA, JR.
Co.,

Upper Midwest

■

Boston,

Inc.,

the

security

stock

common

that

pany

tion

as

will

long

as

★

like

I

?

of

best

*

FIRST NATIONAL BANK
5th Street at

mind

Allison-Williams Company

into

see

The

MINNEAPOLIS

owner¬

ship

Marquette Avenue

Minneapolis 2, Minnesota

future.

the

Department

★

opera¬

the human
can

is

com¬

a

in

be

»

Investment

Mass.
The

GOVERNMENT,

STATE AND MUNICIPAL BONDS
in the

ST. PAUL

this

of

company

may

change to the
investors' ben¬
efit

or

ment,

detri¬

but the

will

company

operate

long

as

as

there

people

are

the

area.

think

in

Piper, Jaffray & Hopwood

I

there

Established

will be people
there
for
a
L.

John

Shea,

Jr.

is

eral

resources

one

mineral

world's
natural

brine

in

the

world.

Investment Securities

I

mean

the

resources,

finest coal

fields,
deposits, glass

brick- clays.
On the
is fertile in the
on

Members

and

gas

still well wooded

COMMERCIAL PAPER

By

land

many

STOCKS—BONDS—GRAIN

the

of the richest in min¬

area

1895

Kalman & Company, Inc.

long time, too
—because

oil, large
substantial
sands

and

surface

the

valleys and

the hills with

stands of virgin timber. The




New
y

Endicott
SAINT

Building
PAUL

1

York

Stock

Exchange and

other principal Exchanges

McKnight Building
MINNEAPOLIS

not

time

same

prewar years.

and

eco--

nomic

will

over-

ac¬

factors will
role in the

(6)
The present easy credit
least in part, to counteract the in¬
policy will be maintained by the creased cost of
production brought
monetary authorities irrespective about
by the fourth round of wage

This

17%

an

the ensuing up-grading

expected, yet the income will still
compare
very
favorably
with

Inci¬

in¬

government

that the price of a
increase of the public

support policy
farm prices from

basis.

around

conse->

farm

prevent

John

2.95%

or

;/

insurance

a

begets

ex¬

(4) The raising of the minimum
wage

deep-rooted and

"While

our

on

on

the

is fine!

Come

York

of

dividends.

be in

Waldorf-

New

by

sells

but these companies should

Life

group

the-counter to yield just a shade
under 7% on the basis of current

No one yet knows what dynamic
possibilities the atomic age holds,

Insti¬

of

effects

over

dentally the company's first bond
maturity is 1975.
Stock

meeting

the

headed

on

tervention

cost

It is apparently

stant

During the present fiscal
the government will spend
$46 billion and will operate
with a deficit of over $5 billion.

bonds

gage
fund

in

Hotel

an¬

Dec. 16.

ment has been conservative. From

Dec.

11th

the
Astoria

First year's divi¬

the current rate

it

The work of such companies is

the public

an

tion has been responsible, at least

The

fered to

in

Insurance at

.

Water and Gas.

a

of
Dr. Marcus Nadler

models.

duced this year

of

York

tute

\

security I have been talk¬
ing about is the common stock Of
the West Virginia Water Service
Company. It was originally of¬

developed-and just intro¬

r,

versity,

nual

has

Developmental expenses have
been charged off each year so the
profit margins in the future can
be even larger.
The market for
this equipment can now be broad¬
ened by bringing out lower priced

It has

the

with
It

expense.

1932 it had 2-3,407 customers.

The company plans to do
this in 1950;" ~
%

e

address before

Its operation is

entirely

i

n

asserted

con¬

for its customers and in turn
per¬
mits them to build better products,
t

d 1

a

professor

In 1926 the company had 20,660
customers.. At the end of this year

It

N

banking and
finance
at

has built a reputation
quality products,
Profit
margins can be large because the
equipment saves time and money

scious.

for high

recent

cus

Enamel

product

raw

almost

who

in

as

past, Dr. Mar¬

department,

its

is not

only

this

,

scientists and at the same time it
is dominated by a President who
but

1950

the

The company also needs neither
sales nor a credit

.

tive

in

Libby-Owens-Ford (world's
largest flot glass plant)

making its bull
1946, is today
$600.

and

be.

that

tion and

maintain exports at a high level
and to a large extent counteract

will hold true

Barium Reduction

in

The success of this company is
due to the fact that it has
capable

tion

Diamond Alkali

the

Administra¬

,

Monsanto Chemical

was

high

Chlorine

national

duPont de Nemours

E. I.

quences may

75

Treasury without

overlooked

the downward

the

the

on

inquiring what the

port trade caused by the devalua¬
tion of foreign currencies.

of

Owens-Illinois

in
14

demands

cies

American Fork & Hoe

in¬

this company when

stock market

Westvaco

(2559)

Congressional action and the poli¬

Linde Air Products

in the

were

Viscose

Allied Chemical

Stockholders

war.

benefited

American

CHRONICLE

Business activity in the United
States is strongly influenced
by

Union Carbide

war.

times

major plants in the

more

FINANCIAL

Says it shortened 1949 readjustment and can keep up business
level in 1950, but warns constant public debt increase is
steady
erosion of money's purchasing
power.

area:

three

large as they were
while earnings will be

cen¬

following companies have

or

&

Nadler Cites Government impact on Business

United States around the

great chemical manufacturing
ter of Charleston, W. Va.

in¬

as

is located in the heart of the

area

laboratories, the U. S. Army,
Navy, Airforce, and Atomic
Energy Commission.
Sales

COMMERCIAL

1
ST. PAUL

MINNEAPOLIS

GREAT FALLS

76

THE

(2560)

Continued from page

13

inevitably

few shots
went wide. Other representatives
,of our industry have already told
you of a few detailed improve¬
ments

that

a

believe

we

could

be

made. But the

thing I want to em¬
phasize is that the objective was
the right one—protect the indi¬
vidual investor and give him a
run

CHRONICLE

FINANCIAL

&

attractive

and

understandable

How to Increase
target,

COMMERCIAL

Two Lines of Attack ;

for his money.

;

;

I would like to see the

Congress

was

fiances shows that

gestion puts me in the peculiar
position of asking the government
to ;spend more money.
It won't
be much, however, and may well
be a self-liquidating venture.

Despite the

that

fact

the

SEC

It

to

seems

that

me

there

are

two lines of attack open to us. One
lifting up the investor and
is through education, the other is
giving him a new dignity and a
through some positive
govern¬
new importance, the man
in the
ment action in the realm of taxes.
street apparently was little in¬
fluenced. The most recent Federal First, I'd like to talk about the
re-education of our potential in¬
Reserve study
of consumer fir

about

69%

the

people making $3,000

or

more

do

not

think

a
a

of

year
man

because

vestors

I

know

more

about that

problem. We at Merrill
Lynch have made, we think, great

need help from
industry, from
business and from the government
group believe that common stocks
itself.
I am convinced that if we
are desirable
things in which to
get this help we can change the
put one's savings. Of the 69% op¬
whole
psychological climate in
posed to common stock invest¬ which the investor
operates.
ment, 34% said they were opposed
The interest and sympathy this
because they were not familiar
committee has already shown is
with common
stocks
and
28%
in itself a tremendous step for¬
because they did not believe com¬
ward in government recognition
mon stock investment was safe.
of the ownership
problem.
But
This attitude of aversion toward we need more than sympathy. We
stock ownership is in no sense need concrete action—action taken
should invest his savings in com¬
mon stock. Only some 8% of this

confined

those

to

with

the

market

aftermath,

but
in

younger
raised
a

people

seldom

the

whole

even

the

but

rest

we

of

our

had un¬ frankly and
openly in the interest
experience of the man willing to bear risk.

crash

has

culcated

strides,

who

fortunate personal

minds

that

sos
of

in

I

in¬

with

our

have

we

generation

thinks

its

and

been

that

terms

of

equity investment.

accounting viewpoint, is about true, but it is all part and parcel
of the same picture.
. .
When you as an individual de¬

it sets forth the advantages as much help to Mr. Average In¬
of
running your own business, vestor as a copy of the national
It's much too
balanced, I think very fairly, by budget would be.
Another thing that has happen¬
v
the
disadvantages.
The
wnole technical.
ed to people who
have money, tenor of the booklet, however,
Modification of Tax Laws
who know about investments and
would certainly give anyone read¬
are not afraid to take a chance
is
I also said that the government
ing it the deep conviction that our
that our tax structure is so formed
government was sincerely inter¬ could help the flow of venture
that it is not profitable for them
ested m seeing tne small business¬ capital by some
modification of
to
invest—or at the very least,
man
succeed and was anxious to our tax laws. I do not pretend t<i
they think it is not profitable.
testify here as a tax expert.
I
help him.
prose

appropriate some money to permit
the Securities and Exchange Com¬
mission to do the same thing for
investment that the Department of
Commerce is now doing for small

;

and

Thursday, December 22, 1949

have
the

been

much

series

of

impressed

booklets

pre¬

pared and distributed by the De¬
partment of Commerce to help
small

businessmen.

One

booklet

"Establsihing and Operating Your
Own

Business" is

a

real

gem.

In

realize

business.' I

that this sug-i

t

cide to invest your $1,000 you
if

will,

prudent,

examine all
of the ways you can put it to work.
When fine companies with many
years
of regular dividend pay¬
ments are selling on the Stock Ex¬
change at three, four or five times
their annual earnings, you are not
going to be willing to put your
would like to call the committee's money in a new venture that earns
attention to the fact that our part¬ less—or nothing at all.
You will
ners, through the Merrill Founda¬ not be tempted to invest in a new
tion for Advancement of Financial business when stock prices are so
Knowledge, founded in 1945, have depressed that you can find a
given to Harvard University $225,- dozen good securities listed on the
000 for a study of the effect of Exchange that are selling for less
taxes on business. This study has than their break up value, ignor¬
been
underway for nearly two ing plant and goodwill.
You can't raise capital for new
years and is expected to be com¬
pleted next year. Secretary Sny¬ business when .investors are not
der has. already shown interest in actively
interested in buying a
are

you

information
collected
and share in existing businesses.
Less than two years ago we the
No
published a booklet "How to In¬ when the study is completed it investment banker can sell new
vest."
Already we have given will be made available to the gov¬ comm on stocks when the Stock
ernment.
r
Exchange is in the doldrums. The
away more than 250,000 copies, at
But, there is this much that I economist
a cost to us of approximately $30,considering
the
new
000, or about 12 cents each. In it do know, even prior to the report capital problem cannot ignore this
we
tried to do just about what of the Harvard study: A great fact, because the individual man
the Department of Commerce did number of our present customers with the $1,000 won't ignore it. He
in its -booklet—explain the prin¬ repeatedly
mention taxes as a is the fellow who decides whether
,

,

ciples of investment, giving full reason for fheir extreme conserv¬ there is going to be equity capital,
recognition to its :: opportunities atism. Taxes are also frequently not the economist, not the insur¬
and its dangers, but leaving the mentioned to us by prospects as ance company president, not the
reader;«sympathetically disposed the reason that they will not be¬ investment banker, not even the
come customers.
to the general idea.
corporation president.
'
<
This
committee
has
Our problem is really a problem
already
This booklet of ours has had a
most favorable reception. We have been presented with several sug¬ of people and their money.
gotten thousands of new custom¬ gested modifications of the tax
laws that should encourage invest¬
over a hundred universities
using it in the classroom and ment and several comments of the
have received bales of compli¬ chairman indicate that the com¬

ers,
are
we

mittee

ments.

believes

at

least

some

modification is desirable.

My only
plea is this: that the Congress take
some
step, however small, speci¬
government would have a more
fically and admittedly designed to
profound influence. It would dem¬
help the investor. I realize that
onstrate
by
its very existence
no great reduction in taxes is pos¬
that the government believed in
sible.
However,
some
concrete
and favored investment. Whether
proof that our government is sym¬
justified or not, there are hun¬
pathetic
toward
equity
invest¬
dreds upon hundreds of potential
ment, will certainly help in the
investors
today
who: are
con¬
A similar

booklet, however, that

bore the stamp of approval of our

Overman, Asbeck Go.
To Be Formed in Cleve.
(Special to The Financial Chronicle)

; CLEVELAND, OHIO—The firm
of
Olderman, Asbeck & Co. is

being formed with offices in the

.

ELWORTHY & CO.

vinced that the government is still

actively hostile

to

the

buying of

stocks.

■

Such

Investment Securities

the,. SEC

or

of

ment

booklet,

a

the

STREET, SAN FRANCISCO
Garfield

a

similar

by

4

commercial

a

selves that

1-4460

by

depart¬

government, would
likely, to be accepted

more

than

SUTTER

other

some

also be

111

/,■/'.•

sponsored

booklet

can

house

be

sponsored

like

criticized

as

a

.

Oakland

San

Jose

Finally, such a
booklet would put into the hands
of

the

smaller

derwriter, at

ford,

a

broker-dealer-un¬

a

cost

he

dence

could

af¬

sales promotion and edu¬

cational tool that is today beyond
individual resources.

his

educational

and

confi¬

done.

building job that must be
Our industry, I am sure,

would

seize

upon such a gesture
Congress as a landmark
rapproachment between the

from the
in the

investor and his government..

Ignorance and Apathy Are Deter¬
rents

our¬

prejudiced party.
Sacramento

overall

to

Equity Investment

To my way of

thinking, the at¬
holding savings
determines whether it is going to
titude of the

man

Ignorance and apathy
biggest deterrents to
vestment.

are our

Union

two

equity

in¬

Stocks & Bonds

plain

the

functions

of

Active Retail Outlets

individual

funds wisely.

put

President

saver

invest

his

Today the material

President

oughly competent from the legal

EN&ULT

EXbrook

2-7484

to

an

was

Field.

Asbeck

Rich¬

was

pre¬

Apparently these proposals
primarily
toward
improving attitudes toward exist¬
ing securities. In a sense this is
directed

San Francisco Bond
FRANCISCO,

CALIF.

—

The San Francisco Bond Club has
elected

4

System Teletype

Sehwabacher &

McAndrew,

Co.

Other offi¬
Taylor, ■■ Peery,
Bank of America, N. T. & S. A.,
Vice-President; and Richard W.
cers

named

are

Wild, First California Cos Sec¬
retary-Treasurer,
Members
of
the board. of directors
are
the
officers .and i Alan
K.; Browne,

HANNAFORD & TALBOT
Corporation

Alexander

McAndrew & Co., Inc., President,
to succeed Harold P. Schlemmer,

SF 272

INVESTMENT

Bank
of
America;
MacBoyle
Lewis, Harris Trust and Savings
Bank; Charles Meek, Blyth 8c, Co.,
Inc.; Harold P. Schlemmer, and
John Witter, Dean.Witter.& Co.

SECURITIES

ii

Mr.

viously Vice-President of Wm. J.

Mitchum, Tully & Co.
A

officer of

Club Elects Officers

V

ii

Treasurer,
and
Asbeck,
Vice-

Mericka & Co., Inc.

1931

Bell

Of¬

Olderman,

and

ards & Co.

§ Co*

Russ Building, San Francisco
Telephone

J.

was

SAN
ESTABLISHED

Building.

Secretary. Mr. Ol¬
formerly a partner in
McDonald & Co. and prior there¬

this:
are

and

McK.

derman

the

out by the SEC, while thor¬

F. McK. Asbeck

Russell

are

Frederick

I would like to have the

government

SEC, come to your mind in connection
to explain investment and to help with these
suggestions and that is
the

Olderman'

Commerce

ficers

help us attack them
As a matter of fact, I would like both
through the twin devices of
to see the Congress provide the education and
greater inducement
necessary funds to issue a whole to invest..
series of booklets designed to ex¬
There is one question that may

Dealers in Industrial & Public
Utility

J.

Russell

be venture money or debt money.

Investment Securities

Vilas & Hickey Forecast

*

Vilas &

519 California Street

405 Montgomery Street

650 South Spring Street

SAN FRANCISCO 4

SAN FRANCISCO 4

LOS ANGELES 14

Hickey, 49 Wall Street,
New York City, members of the
New York Stock Exchange, are

GArfiefd 1-8000




Bell

^

Bell System Teletype SF 113

System Teletype SF 231& 234
t

sending out a novel Christmas
greeting; card, with Santa Claus.
drawing from^ his pack a high ris¬
ing chartTihe for the Wall Street
business intiex for 1950. •.

Volume 170

Number 4866

■

Continued from page

THE

COMMERCIAL ,&

FINANCIAL

insurance company funds
vested iri
most

as

mend

subsidy.

It

is

only

This is largely govern¬
v

therefore

'

.

Let

,

mistake,

a

a

as

we

general rule, to say equity capital
has been lacking. For some spe¬
cial

classes

of

on

bubbles of froth and foam.
for what

work

us

can

find.

Let

neighbor in want and

industry it
has been, but generally speaking
we have been
relatively well sup¬

may

plied.

abundant otherwise

tal

It

for

is

in

the

future

be

is

scarcer—much

where

So

going to

We

scarcer.

it

the

attitude

far

of

country who

too often to

too

been

mortgages

curities—on

such

has

arisen

of class hatred

degree

fore known in

op¬

enemies of

are

There

country. Since
became more and

prevalent there has been

more

unfair

and

ing

toward

and

business

of small

unwarranted

an

business

feel¬

if

1

<

Vv

-

■

"

:

large net income
disappearing—the rich man.
often

than

who, invested

prises that
did' it

in

the

now

when

are

he

it

not

was

enter¬

new

old,

and

not

was

he

he

rich

a

if he did

it when rich,
it was because he had had experi¬
ence in venturing when poor. The
man
with large net income is, I
say, disappearing as an investor
.in.
venture
capital.: You
have
or,

.

heard

time

hearings

and

again at these
before that he is

and

faxed

being

into complete useequity buyer. Who
his place in the future?

lessness
takes

as an

it

While

is

true

that

the

over

Congress has taxed certain

years

former

equity

out of
istence, the worst is that now
money

ex¬
we

gradually but surely changing
national character and

aid¬

so

ing in limiting our future supply
of equity money.
The venture is
being taken out of American life
so we are breeding a riskless
people that demand security first
and

the

opportunity to work for

second.

;5 / ,■ ;; i'l

We have been led to believe by

too many

that financing

our

own

in

the

people.
our

right

past,

Low

of

man

policies that

If

this country

our

lies

of

BLIND

and

can

and

tax structure

.

V

•

that

speculate

are

not

our

research

kind of

V-

>

■

■

v.

■;.-,/

New York.

v

of

him

that

is

that

raises

so

of

is

of

kind

prices

for

.

.'■'-.•■j'

remarks

and

Allen C. DuBois, New York.
Runner-up—Mrs. Laurence M. Marks, New York,

-

General
may

''J;

:?

'

'

'

/■v"/

'

C. Prevost Boyce, Baltimore.
Runner-up—Mrs. Lewis G. Kaye, Louisville.

:

,

...7;//,."
First Prize—Mrs. George J. Schaust, Minneapolis.
Runner-up—Mrsv Arthur Nelson, New York.

'

Prize—Mr.

and Mrs. V. Theodore Low, Bear, Stearns &
Co., New York.
Runners-up—Mr. and Mrs. Carl H. Doerge, Wm. J. Mericka fy
v..
Co., Inc., Cleveland.
'

•

our

tennis

Groves'

appear

as

a

MEN'S DOUBLES
First Prizes—Wilbur E. Hess, Fridley & Hess,
Houston.;
Kimball Valentine, Vance, Sanders & Co., Boston.

face. We

hundreds

of

thou¬

Runners-up—Hugh Bullock, Calvin Bullock, New York.
; Malon C. Courts, Courts & Co., Atlanta.
MIXED DOUBLES

First Prizes—Mr. and Mrs. G. H. Walker, Jr., G. II. Walker & Co.
New York.

Runners-up—Malon C. Courts, Courts & Co., Atlanta.
Mrs. W. L. Lyons, Jr., Louisville.

the only incentive needed
putting equity money in cir¬

as

Schwabacher & Go.

any

On

Dec.

31,

Thomas

as

a

W.

investment securities

Phelps
600 MARKET

limited partner in

STREET

the

firm, both in his individual
capacity and as Trustee Under

AT MONTGOMERY

fiduciary companies, for example.
If a certain small proportion of Deed of Trust dated May 22, 1945.

san francisco 4

have-some¬
Since

enemy, not to be
only have we en¬
couraged our people too often to
believe such things but also we
have led them down the path of

1858

security to the extent
risk now is frightening

them.

SUTROtfCO.
Investment Dealers and

Too often we want our

personal

financial future

Distributors of

MEMBERS
SAN

Brokers

NEW

YORK

FRANCISCO

CHICAGO

Primary and Secondary Offerings
NEW YORK CURB

securely guaran¬

Underwriters

—

STOCK

STOCK

BOARD

EXCHANGE

EXCHANGE

OF

TRADE

EXCHANGE

(ASSOCIATE)

Industrial Brokers

teed by a benevolent government
and as a people we have not yet
seen

we

that

horror

the

when

awaits

us

overdo it. We are slowly

reaching that point./;

but surely

MEMBERS
New

York

Stock

Exchange

New

York

Curb

Exchange

San

/

v

Los.

Francisco Stock Exchange

Angeles

Stock

Exchange

-,/.y/ (Associate)

The more such a feeling grows

the

gentlemen,
becomes

selves

that

by

turesome

will

becoming
nation.

We

a

the

risk

ruin

greater

we

our¬

non-ven¬

will

some

day wake up with a shock, when
we suddenly realize the fact that
there is no such thing as complete
security for anyone and never has
been.

Then we will find ourselves

adrift

on

an

insecure sea with no

practice in swimming alone and
with a life preserver that floats




i

\\

mixed foursomes tournament
First

not

will retire

-

,

fort to

Nobody, I believe, favors a great
proportion of equity holdings by

!

.

.

..-Low Net....

be annihilated!

and

Low Gross

culation.

lowers

an

; '

independent

the Government
Francis I. du Pont & Co.
substantial ef¬
Francis I. du Pont & Co., 1 Wall
change this trend or been
Street, New York City, members
able to change it the prudent busi¬
of the New York Stock Exchange
ness man does for his family what
will admit Frederick B. Hufnagel
the ordinary fiduciary company
to limited partnership on Jan. 1.
does not do for him.
As long

'

women

BOGEY TOURNAMENT

native

the purchasing power of his dol¬
has not made

—

new un¬

that any

*

•>

'Not

trusted.

to

■

abilities

our

sands of letters have been written

thing wrong about them—they are
some

Co.,

&

Lewis, Bear, Stearns & Co., New York. t ,
Escher,
Distributors Group, Incorporated,

II.

dertakings is speculation and that
those

-•

First Prize—Mrs.

and

program

unhampered,

taxation

market¬

almost

goods and services and
lar.

Hutton

E.

W.

WOMEN'S 18-HOLE TOURNAMENT

The Investors League has taken
direct action and has supported

funds in

own

securities

ahead

Iglehart,

First Prize—Mrs.

-

our

increased
The business
that has acquired enough to the Crawford Bill against double

inflation

v

golf

invariably
buys stock for the purpose of owm to legislators in favor of that bill di
ing outright a part of that type of by persons who read the ''Bul¬
of
the
Investors League
business that he feels will keep on letin"
which has been sent to them, in
going, making more dollars when
each dollar buys less. Such a man many instances by some of the
has had more business experience most
important corporations in
than the man in the lower income America; but, gentlemen, I have
tried to explain that reduction of
group, so he buys equities because
the one thing he feels is likely to taxes, important a help as it is,
be

W.

Gross

V..'*

if

just the

money

shocking red glare in

cre¬

business

in

popularize

invest his

A.

New York.

Low Net

and at once, better calculated
our industrial
develop¬

grim

ownership in them.

able

"

-

Fordon, Aldinger & Co., Detroit.
Runner-up—V. Theodore Low, Bear, Stearns & Co., New York.
>•'

industrial

those

properly

:

Corporation,

Boston

First Prize—A. H. Aldinger,

place

ment

to

confidence

ate

First

MEN'S 36-IIOLE TOURNAMENT

has

and

leadership

spending

now,

industries and to increase the

extent

The

..

policies that encourage under¬ live as a free
valuing the importance of owning people — then
our

*'

■

genius can put it—to
legislate what such
companies shall purchase. It, how¬ the end that we can assure our¬
selves of our ability to lick those
ever, is the business of the Fed¬
eral Government to reverse any who defy our God-given right to

and

with

man

More

it

cannot

where,

Rich Man Disappearing
The

and

and

,

ernment

Glavin,

New York.

Runner-up—Joseph

for the Government

.

is the business of the Federal Gov¬

it

the

/ ;7
The future of

to

use

in

than

■

It is the trend of thought of the

improperly belittled

are

berated.

our

not

same.

always
gilt-edged if diversification

as

C.

Runner-up—J.

times that impels such considera¬
tion. Let it not be thought that it

that

not to

are

Prize—Charles

First Prize—Salim L.

they have

as

the i great t group
from
must come the buyers of

it

need

are

conservative as
investment today than bonds
are

First

business

in

created

incomes, they have

businesses

man

dan¬

is to be maintained?

equities. We want equity capital
yet we will never get enough of

I

more

less

seriously when inex¬

whom

is

f and

be

become

or

gilt-edged stocks

that

>

by creating greater

been

but with

an

People

INVESTMENT BANKERS ASSOCIATION OF CANADA TROPHY

confidence

con¬

after

Government

gerous

First Prize—Milton S. Trost, Stein Bros. & Boyce, Louisville.
Runner-up—Wallace M. McCurdy, Thayer, Baker & Co., Phila. ;

be encouraged

Are

an

Runner-up—Harry L. Walters, Girard Trust Co., Philadelphia.

;

ROBERT E. CHRISTIE, JR., MEMORIAL
^

in size.
If venturesome funds

Trust Company of

Bankers

•

years

moderate income took

perienced, and today,

bonds?

men

—

Fulkerson, Jr.,

New York.

dollar

or

increased their

it

the

ideas

such

and

N.

Prize—W.
„.,v.

supply the

now

stocks

out smaller than when it went in.

executives

in. general.

how

the

of mounting such funds are wanting and are
conservatively essential, then they will come
invested by conservative men for from the
government itself. Then
conservative people always comes new businesses will be run
by the
upon

prices

be¬

never

consider

to

First

population and bigger and bigger

theory that it. is

it cannot be lacking in

years

a

our

thoughts

se¬

it is not subject to criticism. How¬

servatism

sort.

the

capital,

Some will remain, becoming fewer
and fewer in number per
capita

safer? Management is correct and

ever,

corporations

interest-bearing

—

golf
ALDEN H. LITTLE TROPHY

anything, where will be the

gilt-edged

j

Investment Bankers Association Convention

::^v/0''T"'

corporations that

custom

a

success¬

believe that

risk

Why should

led

picion, that businessmen who
some

se¬

our

universal

so

venture

together with individuals of
the middle income groups do not

fiduciary com¬
invest only in bonds and

ful people must be subject to sus¬
erate

own

into

If investors of large sums such
as
the investment trusts handle,

-;

insure

our

we

Goif and Tennis Tournament Winners at the

individual

built America. '■

conservative

panies

in

many

have

to

save money.

remain

that

must have

this

contribute

lives and

begin by saying that
assistance, some of
from the Congress, in changing

it

71

recom-»

capital that builds ideas and that

cannot do

/

curity plans when

will

I

we

this very thing.

companies

the investment trusts, would soon

be

may

for

walk

that business may ex¬

and "employment

pand

Suspicion of Successful People

we

parents

our

be aided, but first let us ven¬

ture afield

Equity capi¬

ventures

new

our

and grandparents in their old age

small

the real trouble lies.

security

work that

us

in¬

were

high grade equities such
trust

estates, the
interest
in
high grade equities
would increase, because people in
general
would
begin
to
have
greater confidence in equities and
little
by little,
having once
crawled, individuals, and some of

Needed for More Equity Capital
ment

(2561)

13

More Confidence in Business
ventures.

CHRONICLE

NEW

YORK

OAKLAND

MONTEREY

FRESNO

SACRAMENTO

SANTA BARBARA

SANTA

ROSA

j
J
j

78

THE

(2562)

COMMERCIAL
Continued

CHRONICLE

FINANCIAL

&

from

page

Thursday, December 22, 1949

14
system of government. In our day
of

the spirit and energies of

An

familiar

old

dull and

news

name

its last appearance in

is about to make

past it has served us well when things were
scarce.
As things are developing, and regard¬

the

In

this column.

was

long service, it will hardly be possible henceforth to
consider Alleghany Corporation as belonging in the railroad group.
For a while it cut quite a swath (in the press) in the industry.
Over
less

its

of

people. We have taken it for

our

Alleghany Corp. Retiring from Railroad Field

granted that no internal political
force
could
gain sufficient
strength to overthrow it.
No

political system yet, in
or
modern
times, has

cient

an¬
so

In

rail stocks, the holders of

Alleghany

prior preferred and preferred have been offered an exchange into
Alleghany's holdings of North American Company common, Long
Island Lighting 6% preferred, Clinchfield Coal common, or Ameri¬
can
Power & Light new capital stock (when issued).
The offer
holds good until Jan. 20, 1950.
Alleghany Corp. holders may tender
all or any part of their prior preferred or preferred stocks in
exchange. Such a tender may be for exchange into any of the seven
individual stocks offered, or into a combination thereof.
The diver¬
sity of the stocks offered should assure success.
So far

as

the author of this column knows the terms and method

of tenders are unique.
The holder of Alleghany prior preferred or
preferred stock tenders his holdings at a specific dollar price deter¬
mined by him.
In exchange he receives the stock or combination
of stocks he has elected at the market value as of the day of the
exchange.
This would be Jan. 20, 1950 under normal acceptance
of

the

plan.

However, if the Alleghany holder should, for tax
reasons, wish to consummate the deal prior to the end of 1949 he
may do so.
In such event the value of the stock he is to receive
in exchange will be figured on the market close Dec.
28, 1949.
sufficient

Not

amount

of

the

This Republic has been not
only a system of government but
a great spiritual force in the lives
ity.

of

people.
What

has

happened to

people that such
is

tem

called

now

us

as

and threatened with fundamental

change, maybe with extinction?
Why has there come to be in this
our
age such an over emphasis
upon our shortcomings and a fail¬
ure to fully appreciate the virtues

Economic distress

has

overthrown political

systems, but

vide

pro¬

for,

Never

our material wants.
have the people been so

blessed in this respect. Our daily

necessities of life

the luxuries

seven stocks is being offered to
Alleghany prior preferred and pre¬
ferred stock holders tender their stock.
The company has, there¬
fore, reserved the right to reject any or all tenders or to accept
those most advantageous to the company.
If Alleghany stock is
offered at prices the company is willing to accept in greater amount

justified desire for
are
the
best
clothed, the best fed and the best
housed people on earth. We pro¬

than

duce

meet the

can

demand

if all

of the

be satisfied with the "Offered Stock" the company reserves

of

so

In

spite of

Over the past three years the Alleghany
management has been
bending every effort toward reduction in the amount of prior
preferred and preferred stocks outstanding.
Both have substan¬

generously,

arrears.
From Sept. 9, 1946 to Nov. 30, 1949 the
amount of prior preferred has been reduced, through cash purchase
?md exchange offers, by some 64% to 38,171 shares.
The regular

preferred has been reduced by 51.5%, to 323,735 shares.

both

have

needy

Necessary
and

than

we

shared
even

of

areas

can

our

absorb.

production

lavishly with the
the world. The

energies of our people, the un¬
paralleled scientific and techno¬
logical skill and the resulting vast
production were the overwhelm¬

severe

government
discipline do

degree condition the minds
people for an acceptance

to

a

of

our

of

dictation.
Even
does lessen the fright¬

government

though

war

ful mien of authoritarian govern¬

I think

ment,

look

must

we

further for the real answer to our

Let

question.

the

of

some

take

us

look at

a

corrosive

more

fluences at work today

in¬

upon

our

political fabric. I think it is the
or moral sphere to which
must look to discover the real

spiritual
we

answer

of

cause

or

political

our

retrogression and our apparently
waning faith in the efficacy of
self-government.
there

If

distinct

a

were

advo¬

our

of a change or revolution in
political system, the Ameri¬

can

people would

cacy

with

change
even

has

been

retired

well

below

its

par

value

and

votes.

The

real

institution lies in the

our

responsibilities

that

the

govern¬

ment is asked to assume which are

but

as

inaptly

referred

welfare measures.

is

This

of

an

old

political

trick,

a

less unless there is economic sta¬

accompanying

bility

them

point but naturally the
reduced

as

speculative

portfolio holdings

are

leverage is being
disposed of.

and

they become hollow symbols un¬
less our liberty is preserved.
Even the casual student of his¬

knows that when Rome
bought wheat at a high price and
sold it at a low, began to enter¬
tory

people for their votes, the
underpinning began to

tain her

moral

crumble.

Today we see England,
and the home of 'SO

hearthstone
much
ant
at

we

get out of government is net gain
and doesn't cost anything. A

of those who are
getting something out of govern¬
ment

vote

this

If

ment.

than, those who

something

putting

into

trend

are

govern¬

toward

big

government, the police state, the
socialism

state

high

concept,

taxes, bureaucratic regimentation
is to be stopped and human freer
dom to be preserved here on our
shores there must somehow be re¬

established in the hearts of Amer¬

the

citizens

ican

"what

I

can

do

of

philosophy

for

governr

my

ment," instead of "what can my
government do for me."
•
;
May I make some constructive1
suggestions. We are competing tor
day for the hearts and minds of
the various people of the world
with a philosophy of government
not only diametrically opposed to

.

but

ours

materialism

Godless

a

implemented

fanatic na¬
aggression. To
hand every edu¬

with

a

tionalistic spirit of

strengthen

our

institution

cational

of

our

coun¬

try should strive day in and day
out to inculcate into the minds of

youth an unshakable faith in
system of government.
been led to say this by
the testimony that I heard of one
our
our

have

I

who

had

her

betrayed

govern¬

ment, stating that she had come
through
public
and
private

schools, through college and unir
versity and had not taken a course
thoroughly convinced her

which

laudible name to a
selfish purpose. Human welfare
and social security are meaning¬
giving

something for nothing, that gov¬
ernment, their government owes
them a living; that what they can

love and live, a suppli¬

at our doors because,

in part

least, of her current socialistic

that

the

Republic of America is
earth and
be preserved.
From our

the best government on

should

schools, public and private, should
a
virile patriotism, an

come

devotion to

aroused
human

liberty,

determined

change
too

a

to

the

cause

of

love of America,
improve it, not

it. There are
teachers in our schools
colleges who do not have a
destroy

or

many

and

sincere belief that

our people can
the'mseives, much less rec¬
ognize that we have the inherent
right to do so. With an arrogance,

govern

born

versatile

of

they

tongues,
the

minds

minds

their

of

overstressing

glib

students

of

some

and

distrust in

create

by

faults

our

and

IBA
CANADIAN

GROUP
NEW

I

CHAIRMEN

of

America

her

and

accom¬

New
about

plishments. In spite of what
York

NEW YORK

ENGLAND

failures rather than the glo¬

ries

have

been retired below total claims for par value
plus accrued interest.
Success of the present plan will further materially improve the
status of the stocks that remain outstanding from an asset stand¬

a

resounding voice,

a

their

with

threat to

such

oppose

The latter

stock

librium.
controls

we

more

We

tial dividend

a

betterment,

the right to pay the Alleghany holder in cash at the tendered price.

are

people in the world.

many

recently freed

itself. Wars disturb political equi¬

at times

system has not failed to

our

state

part of the
in terms of

has,

historical spans, so

to
.

pos¬

rela¬

power

police

large

a

world

taught by demagogic
that
they
are
getting

larger portion

the

or

which

generically

of America?

a

retrogressionr-toward

our

government

a

political sys¬
into question

a

been

We must seek another cause for

western

material

has

have been

we

tively free people.

from

in

measured

this

All

war.

whether

it

addition to these three

last

sible because

overwhelmingly proved its worth,

has gradually been divesting itself of its terms or the less tangible attri¬
if the recently announced exchange offer is butes of the human spirit. No po¬
Successful, its interest in the industry will be largely liquidated. litical system, either in ancient or
It is generally believed that the new offer will meet tvith a good modern times, has given individual
response.
man, irrespective of family cir¬
As of Nov. 30, 1949 out of a total market value of $50,748,608 cumstances or social station such
of securities, including government bonds, only about $12 million an
equality of opportunity to
was
represented by railroad securities.
Of this, $5,519,497 was make the most of their natural
represented by Chesapeake & Ohio common, $68,931 by Rock Island endowments. No political system
common, and $187,200 by old Missouri Pacific common.
The Chesa¬ either in ancient or modern times
peake & Ohio holding represented only 2.57% of the outstanding has placed less restraint upon in¬
BtoCk of that company which is, to say the least, rather tenuous dividual initiative and achieve¬
control.
The balance of the rail holdings—$6,371,000 market value ment. No system of government,
on Nov. 30—was represented by Kansas City
Southern and Nickel either in ancient or modern times
Plate preferred stocks and Wheeling & Lake Erie common.
These has provided a more healthful po¬
three issues have been offered to holders of Alleghany prior pre¬ litical climate for the
growth and
ferred and preferred stocks.
development of human personal¬
the past year or so
railroad holdings and

ing factors in the winning of the

countless numbers

seen

people

leaders

Into Socialism?
gave to

have

we

{Will We Spend Our Way

Judge

had

no

a

say

teachers

Communist

in

our

sincerely that
Communist should be permit¬

schools, I

consistently

to

say

to

you

ted to be employed in our school
system to poison the minds of our

youth against

the finest govern¬
permitted man

ment that God has
to live under.

The folds
are

that

of the American

broad

not

UNDERWRITERS

and

never

intended

tear

would

who

enemy

down

flag

enough to protect
Constitution

the

as

a

it

was

bulwark for

those who would desecrate it.
Let

and

consider

us

for

moment

a

the spiritual and ethical

side
what;might be called the Amer¬
ican way of life. The roots pf
our
political system lie, as you

now

of

DISTRIBUTORS

James A. Gairdner
Gairdner &

C. E.

Charles M. Abbe

Co., Ltd.,

Blyth &

Toronto

White,

Co., Inc.,

Goldsmith

Weld

&

Co.,

New York

Boston

m

well know, in the Christian relig¬
ion
and
the
ethical
standards

which it teaches. Christianity pioT
neered in

teaching respect for the
personality and the right
of the individual to grow in spill
and spirit in service to himself

CALIFORNIA

human

DISTRIBUTORS
of

HILL
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gether

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Whither

Members bos Angeles Stock




Pasadena

Exchange

of

tance

Montgomery St.

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621

SOUTH

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TELETYPE LA 224

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the

ethics

ARizona 3-3586

*

in
holding to¬
promoting cohesion

and

among a
self-governing
The cultivation of sound

attitudes must be

an

people.
ethical'

essential part

pf the training in citizenship given
our schools. Those ethical at-J-

in

titudes

serve

individuals

Westwood: 1072 Gayley Ave.

& CO., New York

reach-:

Divine. We must

give attention to the impor¬

SECURITIES

Francisco

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his fellowman and in

ing out to

INVESTMENT
Angeles

and

CO.

tionship
serve

as

and

a

restraint upon

classes

in

rela¬

with

each other. They
likewise as a restraint upon

the power of government
prone to

which is

play fast and loose with

Volume 170

Number 4866

THE

COMMERCIAL

such standards. Those who should

ciety.

first

combined weight against industry
v/ithout regard to the detrimental

rally to the defense of such
the minority groups

;a program are

in

and

race

first

to

religion, who

suffer

when

those

are

totalitarian¬

They

effects

have

those

upon

the public

has

our

encouragement.

have to look at Hitlerism in Ger¬

trampled under the

must

be

first

outlook

that

:

..

.

ethi¬

for

accounts

the

.poisonous political alliance which
exists between greedy na¬
tional labor leaders and the pres¬

•now

ent

of

administration. It is the lack

healthy ethical attitude that

a

accounts

for

the

a

both.

to

is

It

lack

the

of

healthy ^thical attitude that has

'.weakened

sensibilities

our

to

as

"What is mine and what is thine."

It is the lack of

healthy ethical
attitude that accounts for "Today
live

we

tomorrow 'we

attitudes

and

at

ations

die"

underlying the profligate

spending
stance

a

to

of

waste

the

of

expense

is

It

come.

sub¬

our

gener¬

the

of

lack

healthy ethical attitude ihat

a

for

counts

ac¬

administration's

the

element

of

of

in

endeavor,

them

there

justifiable

a

man;'! but
the responsibility

and

is

is

big

the

political institutions today
government.
Exalt
the
of government and

you in
degree suppress human

same

liberty.

political liberties,
judiciary, by 217 of
political faith arid nine of

one

the

other.

healthy

It

is

ethical

the

lack

attitude

of

that

a

ac¬

Congress ended Federal
employees were increasing at the
rate of 300 per day. Lip service
the

to

Hoover

created

followers
tions.

to

The

had

report

jobs for

more

control
much

only
party

more

elec¬

more

80th
Congress had balanced the budget,
reduced taxes, and left a surplus.
Now

we

road

to

are

maligned

the

on

deficit

dangerous

financing

again.

this method alone this
This takes away so much

by

year.

of

honest savings.
It
work
that

our

makes

children

our

for

more

government, that much
themselves.

for

less

much

Over

proposes and does makes it more

fortybeing spent
by the Federal Government alone
this
year.
That is about $300
for every person in the United

difficult

States.

for

counts

the

hypocritical
for

cern

when

the

small

almost

of

small

and

con¬

business

everything

for

-survive

administration's

expressions

man

that

business

drives

it

it
to

into

the

Those

who

Providence
for

believe

forefathers

which
we

daily

created

the

Trust."

There must further be imple¬

mented in the minds of

our

people

understanding of elementary
economics.
A violerit depression,
an

a

terrible

world

have culti¬

war,

the soil where demagogues
have sown the seed of dissention
vated

between classes by promising ad¬
vantages to one at the expense of
another.

phy

The

that

other

fallacy

the

other

man

class carries the

taxation

is

philoso¬

or

the

or

burden of

dangerous.
The
"constant propaganda that deficit
financing is not bad but in some
instances even good has found its
followers.
People
must
under¬
very

that

stand

security

individual

is

but

economic

another

facet

of

tive suggestion to you as indus¬
.

Wealth comes from human la¬
Not only is government
taking more and more from the
man who works, depreciating his
savings day by day, but it is de¬
pleting his resources relentlessly.
In thirty-five years one hundred

resources.

and

Large scale indus¬

people haVe • weakened the foun¬
dations
of
our
political order.
Along with the great,,economic
benefits it has brought' to; our
people haye come also elements of
economic insecurity."~ While the
government
leaders have
been
promising security, their program
of deficit financing has been un¬
dermining the real security of our
people.
be

'must

done.'

lifts

There

business

feeling is the result of
well

as

of

more

United

States than have

has

That

labor

from

not

come

but from

alone,

forests,

our mines,
soil as well.

our

in.

come

our

What is the forty-three billion
cost of government? It is equal
to the combined cash

the

value of all

seventy-five million life in¬
policies our people own.

surance

is

It

one-fourth

combined

home
It

is

in

of

value

the

almost

than

more

every

United

one-third

the

urban

States.

more

than

equipment owned by all the

farmers in

the

United

is equal to the net

tal of every

States.

It

working capi¬

industry iri the United

States..*

/

,

high taxes on
That
strikes

as

profits.

hardest

the

at
taxes

small

in

are

.

brackets. .Another

The

i

investor

the

aspect

lower

of

spond

you

immediately to
such

a

a

business
those

case

in control of government today,
especially the "big debt econo¬
mists," advocate bonds and more

debts for government spending to

bring government income up
again.
But this means high and
higher income taxes, more money
from productive enterprise taken
to

Washington to be used by the
This discourages in¬

bureaucrats.
centive

in

to

produce

results

and

government planning and
government activities.
Of

more

more

personality

over

of

the

permanent

You

physical facilities for those who
work, but the social and human
relations have been neglected and

in

debt,

incentive,

assure a reward to the
individual creative genius of our

people. Only in this
pass

way

led

to

of

the

sake

The

unrest

we

to this

our

Seasonal

mark

us

today will
of a better

worthy

as

Berta

tomorrow.

Press,

Exchange
Weekly Firm Changes

Edition

following firm

that

tire

from

partnership

Beckwith
Todd

Beckwith

acquire

his

exchange

the firm.

Kenneth

Boardman, member of
Exchange, and a general and

limited

in

partner

Carlisle

Jacquelin, will retire

Hornblower & Weeks

their government.

F.

The

National

Gov¬
ernment becomes the less impor
tant

bigger the
the

are

ernments

State and

in

local

A

Henderson,

Harrison

ard

Everett, member of
Exchange, will retire from
on

Dec. 31.

the

bership of Donald B. Iseman.
will
floor

cise their

The

political functions.

own

leaders

exer¬

this

of

big govern¬
call
themselves
They would "sell the
day to serve the hour." No liberal
would impress his fellowmen
under government regimentation.
ment

program

"liberals."

Thomas

from
&

business

He

Moore

will

where

retire

Dec. 31.

on

Charles

quire

M.

York

Newman

will

Colonial

246

Fundamental

Manhattan

partnership in D. T. Moore

Co.

at

Home

Carolina, Virginia and West Vir¬
ginia as well as North Carolina,

individual

an

as

our

political

Bond

Stocks

Investors,

Fund

have

and

New

recently been

qualified for sale.

ac¬

the

Exchange membership
of Orvil E. Dryfoos. Mr. Newman
will
continue as a partner of
Newman, Baum & Hollander.
Charles F.

Geo. C. Meyer Dead
George C. Meyer, account

Zeltner, member of

utive with Merrill

exec¬

Lynch, Pierce,

We need to review intelligently
our Constitutional Federal system.

ner

the Exchange, and a general part¬
in F. S. Smithers & Co., will

Fenner & Beane, New York

Last

become

died of heart attack Dec. 19 at the

Bill

session

introduced

I

Senate

787

providing for a commis¬
thoroughly our Fed¬
eral system and make recommen¬
dations to Congress with respect
to appropriate allocations of func¬

Jan.

limited

a

partner

on

1.

political
been

system.

of 58.

age

tions

between

Federal

and

IBA GROUP CHAIRMEN
CENTRAL

STATES

MICHIGAN

MISSISSIPPI

State

Governments and appropriate

VALLEY

al¬

locations of various fields of tax¬
ation

to

ments.
state

such

support

The

process

and

powers

govern¬

of erosion of
functions and

accretion of central governmental
powers

but

functions

and

gradual
we are

constant

approaching

a

has

been

until

today
unitary sys¬

tem with the states

becoming local

vidual

and

administrative

initiative

and

deny

the

We

see

thrift.
the evidence already.

just

r

rewards

The

now

000

of

Federal

J

Reserve

'

'

be

.Board

is asking to loan up to $500,to

a

single

business

in

co¬

operation, maybe in competition,
with member banks.

subordinate

units. If the Federal system is to

changed/ it must be done in¬

telligently. Let
by

our

subterfuge.

pass

because

chart the

us

by the will of

it

course

people and not

That

bill

deals

should

with

our

H.

Washburne

M.

Wm.

Harris, Hall & Co.

Braun,

John

Adams

Smith,

Bosworth

H.

Crago

Moore

&

MAIN 6281

BELL, DN 290

Active Markets Maintained

Private

wire

A

Bonner

to

—

In Colorado &

Wyoming
Municipal Bonds

DN 369

Gregory

PETERS, WRITER & CHRISTENSEN, INC.
DENVER 2, COLO.

LoTeland, Colo.
\'lj["•?'

X

;

t

'

s

••.'

\

•

\

i '

•.',••>••

•

.

.••■■'

•*

'

•,'*

;

'<

Dealers in

COUGHLIN

Corporation Securities
and

welded

together

by

powerful leaders and through the
of numbers have upset the
delicate balance which is charac¬
teristic of -a self-governing so¬

power


I


SECURITY

COMPANY

and Municipal Bonds

BUILDING

of

DENVER 2, COLORADO
Bell Teletype DN 296

Telephone Tabor 4154

ARIZONA

COlJORADO

NEW MEXICO

MONTANA
UTAH

NEVADA

WYOMING

,

Co.,

St. Louis

& Co., Detroit

(Inc.), Chicago

order.

Too many

City,

sion to study

High taxes curb business,, limit
labor, lessen jobs, destroy. indi¬

serious repercussions on

had

our

the

Drive, Atlanta, and will cover Ala¬
bama,
Florida,
Georgia,
South

broker, it is understood.

D.

them of both

and incentive to

means

do

in

Mr. Groves will make his head¬

quarters

Iseman will acquire
York Exchange mem¬

debilitates State and local govern¬

formerly

representative for Lord, Ab-

ern

M.

New

Groves,

bett & Co.

and limited partner on Jan. 1.

Harold

M.

Atlanta office of Investors Syndi¬
cate and more recently southeast¬

Dewey Everett, general part¬
ner, will become both a general

powerful central government en¬

ments by depriving

added to its wholesale staff Rich¬

II.

feebles the whole body politic. It

the

Hugh W. Long & Co., Inc., has

&

Dec. 31.

on

Oliver

the

gov¬

Federal plan.

our

Walter L. Linton will withdraw

Struthers

world

Groves in Atlanta

Dec. 31.

on

the

are

Hugh Long Go. Adds

partnership in Hav¬

Gill & Co.

ener,

from

1949

every

&

general
partner on Dec. 31, but will con¬
tinue as a limited partner.
Henry D. Mercer will withdraw

from limited

in

country

in

as a

the planners take their po¬
litical brokerage as
the money
passes. through
their hands to
build a larger political machine to
control votes, to perpetuate them¬
selves in power and suppress fur¬
ther the power of the people over
course,

firms

manufacturers of

membership, and will hold it for

the

Listing

importers, exporters and
chemicals, drugs,
plastics and oils—Firms handling
listed
under
each
commodity;
commodities
listed
in
French,
English and Spanish—Atlas Pub¬
lishing Company, 425 West 25th
Street, New York 1, N. Y.—Fabrikoid—$10.

re¬

in Bell &
George M.

Dec. 31.

on

will

will

Chemical Directory

—

important

changes"
D.

Em¬

Greig—Columbia University
2960 Broadway, N'ew 27,

World

The New York Stock Exchange

Redfield

in

Fress, 2960 Broadway, New York
27, N. Y.—Cloth—$2.75.

New York Stock

has announced the

Fluctuations

ployment in the Women's Clothing
Industry in New York—Gertrud

sacred trust

a

of industrial workers

Las

have

can

the priceless heritage oi
we love. Faithfulness

on

the America

great need for
better industrial relations, not for
the sake of business alone but for
has

progress.

of government, re¬
good times our national
reduce taxes to encourage

duce

cost

en¬

product of their
have done much to

provide healthful and comfortable

this

so¬

attention.

as

In

is statte

dictatorship of the few
the many. Let me suggest a
a

our

go" policy of
income taxes has taken away the
"one year surplus" in case of a
recession, so that tax receipts re¬
"pay

constitutional

inevitable end

the

into

•labor.

this

up

that their creative

ters

drying up.
He said this is
due to high taxes and distrust of
our people in business
opportuni¬
ties. He might well have added

The

is nothing

people in any field
of human endeavor as the feeling
that

Cut

of capital money

sources

are

and

79

thing

another

yet

But

dollars

billion

two

goods have been shipped out of the

tries and rapid urbanization of our

'

cre¬

with'A^

bor and the utilization of natural

and

As a professional man may I
:be permitted to make.a construc¬

leaders.

wealth

ate

the total value of all the livestock

political freedom.

trial

Government does not

Divine

pray

revival of that spirit of our

a

motto "In God
i

in

ought to

three billion dollars is

builds political power over people
with it.

hands of big business.

that the

recession.

When

tion

Federal

program

economy needs

bastion
the

for power to grant long-term
cap¬
ital loans for business on

to

our

liberties

cialism,

grounds

(2563)

guarantees.

capital.
A few months
again the Chairman of RFC asked

whose

preserve our political system.
But, the most formidable threat

basic

risk

or

yours, the good will of indus¬
trial, workers must be regained

Six billion dollars of direct infla¬

our

venture

business

economic

present administration of the final
of

Taxes

of

just
the
somehow,

power

"denied

we

necessary?

the flow

the persistent political attacks on

industrial

be

that

'

is

bor, Employment should be made
agreeable to the whole man, not

to

should

this

government

Somehow

it

curbed

CHRONICLE

that

present state of

It

or

Why
have

FINANCIAL

pride in the products of their la¬

law which permits monopolies by
labor leaders and denies them to

leaders.

work

the part of workers in

on

fields

ruthless power.
?•
It is the lack of a healthy

cal

loyalty

their

Often

with

reestablish

their

•foot of
;

done

that those minorities

see

the

are

Communism in Russia

and

many

foday to

been

must

who

generally.

ism and

regimentation take over
political institutions. We only

thrown

&

Continued

from

12

page

Objective of

in new

Government

Federal

areas, but rather one of reshaping
and coordinating the policies in

field

the

government

which

in

policy now largely prevails so that
they
will more definitely con¬
tribute to
a
more
stable price
level.

level in the years

a

progressive,

credit

During each war in which
has

this

engaged, prices
Following each war

been

prosperous

extent

Amer¬

monetary,

policies

fiscal

and

greater

to

toward 'this

ob¬

these

lar

problems growing out of
changes in value of the dol¬
resulted

have

in

many

de¬

risen.

decline

the

in

prices

have
with the

that

followed the other wars,

With farming

a

margins, such price dispari¬

place agriculture in a serious
financial condition.
When prices
the

is

reverse

true

except

prices come into adjustment
more quickly. v

that

much

controls

each

on

farm

firm.

or

Monetary, credit, and fiscal poli¬

Objective—Maintenance of

Prime

Price Stability

objectives of monetary and credit
policies should be the maintenance
of a more stable price level and

reasonably high levels of business
activity and employment.

This is
important than carrying the

national

debt

desirable

that

as

lowest

the

at

may

cost,

be.

It

is

fully recognized that the monetary
and credit policies carried on by
the Federal Reserve System can¬
achieve

alone

not

stable

more

a

of

level

prices, yet they are an
important factor and they should
be geared toward that objective.

accompanying business stagnation
and
unemployment or must we
have more inflation? The inequi¬

cies which affect the

bility of prices have the advan¬
tage of being indirect and imper¬

The

ties, the dislocations in our econ¬

sonal.

pansion and contraction has been
materially decreased with the rise

omy

and

the

human

which these changes in

suffering
the price

Farmers

nerable

are

to

level.

When

price

cline,

prices

of

us.

A

more

stable

particularly

vul¬

changes in the

level have caused, are familiar to
all

general sta¬

price

prices in general de¬

of farm

and

other

effectiveness
in

Reserve

the

of

Federal

controlling credit

Federal

the

of

the loss of the

and

debt

in

ex¬

turn

opportunity of the
vary discount

Federal Reserve to
rates
a

significantly. With so large
Federal debt

of the

share

now

held

by the banking system, one
of the most feasible ways of re¬
power appears to be
the Federal Reserve

gaining their
increase

to

authority to vary member bank
reserve requirements."
The basic
problem is the restoration of the
Federal
Reserve, powers
over

E. M. Adams & Co.
AMERICAN

In

be relaxed in
times of low business activity and
turn, they

credit expansion

number

and contraction.

5, OREGON

able

to

authority

such

should, be

delegated to the Federal Reserve.
Overall bank credit expansion and

Teletype PD 148

contraction must be controlled in
the interest of the entire economy,
rather than left to the decisions of
the

than 14,000 banks in this

more

While

country.

without

sible
MUVHWVmHWWVVWVHWVHHWWmHmWWmVbHVUUV

inflation

DEALERS IN

is

increase

an

pos¬

in

the

while mone¬
not be able
to counteract a depression, it is
a most important factor in either
supply,

money

and

tary policy alone

may

situation.
If the Federal Reserve is to re¬

*
4*

gain its

WESTERN

4?

MUNICIPALS

i
::

4*

*

indefinitely
It is

%

%
%
«

507 U. S. Bank

1

4*
4*
4*
*

ATKINSON, JONES & CO.

4*
4*
4*

Building, Portland 4, Oregon

System Teletype PD 157

::

ous

Fed¬

support the

considerations

support

are

policy,

considerations

involved in

nevertheless,
should

not

supersede the fundamental objec¬
tive of a more stable economy and
more

stable prices.

Further

are

loans are

these

agencies has been set up to meet
special need, taken together

some

they become an important factor
affecting the availability and cost
credit

of

fact,

stances

this

may

have

should be

mechanism for

a

policies

their

the other Federal groups

sible
A

with

respon¬

credit policy.

overall

for

in¬
the

been

Because of this,

major objective.
coordinating

credit

certain

in

In

there

overall

the

and

supply.

policy should be
adopted which will contribute to
stable

more

a

price level and to

expanding domestic economy.

an

This

that

means

should
ment

tax

relative

rise

revenues

to

govern¬

in inflation,
and fall in depression.
The main¬
expenditures

tenance of

to

accomplish this objec¬
tive.
When employment, produc¬
tion, and prices rise, tax revenues
would
also rise; when employ¬
ment, production, and prices drop,
would

revenues

Certainly
stable

when

we

be

would

improvement

over our

increased

past policy,

the

them

decreased

times,

;V

of a
marked

a

in

rates

activity,

periods of low business
and

drop.

maintenance

the

rate

alpo

in

boom

restrict

investments

fields

Flexibility

spending and government projects.
The national

handled

Flexibility should be introduced

governmental expenditures.
During booms or periods when de¬
mand is excessive, governmental
expenditures should be reduced

be

The volume of

minimum.

Federal

limited.

construction

should

Federal

grants to
state and local governments for
non-critical public works should
be
eliminated during
such pe¬
riods.

be

communities

Local

should

dertaking
When
mand

discouraged

business

is

stability,' rather than
the debt at

dollars

of

lions

mature

un¬

activity

de¬

and

are

be created

which

may

be

is defi¬

Such demand may be stim¬

ulated

by Federal financing and
investment, and through financial
inducements

to

state

and

local

governments. Projects so far as
possible should be of the selfliquidating type and should con¬
tribute to national welfare.

Rural

The

electrification and rural roads are

by the Fed¬

examples of this type of project.
It is likewise

finance
Bil¬

Federal

of

presented

are

or

to

minimum cost.

a

debt

for

re¬

each year.
Different
refinancing have dif¬

demptions
methods of

ferent effects

the total expend¬

on

itures of the nation and
consequences

significant

economic stabil¬

on

ity. Refinancing the debt by bor¬
rowing from the public and pay¬
ing
off government
obligations
held by the banks is deflationary;
while on the other hand, a policy
of
paying off the Federal debt
held by the public by refinancing
through the banking system is in¬
flationary.
The policy followed
at any particular moment should
be synchronized with the overall
credit policies for the nation and
in accordance with employment,
business activity, and prices. The
should

debt

be

reduced

rapidly in periods of good busi¬
ness activity, while during periods
of depression it may be necessary
to
resort
to
deficit
financing.

the overall
long-run
policy should be one of reducing

However,

the national debt.

Greater Policy Coordination
Needed
We

strongly urge that studies be
made
and
that
steps
be taken
will

which

bring

about

in

coordination

greater

monetary,

our

credit, and fiscal policies.

Con¬

sideration should be given to the
activities

the

of

the

Treasury,

Federal Reserve, and all corpora¬
and

tions

which

agencies

make

guarantee domestic and foreign

or

services of
be the

It should

objective

these

of

an¬

cor¬

and agencies to main¬
general price level, pro¬
duction, and employment within
certain limits so far as possible.
porations
tain

,

the

Definite criteria should

lished
taken.

If

and

we

be estab¬

action

which

at

must

have

to

are

be

free

a

prospering economy, of which

free, prospering agriculture is
an integral part, we need desper¬

a

ately to work out and effectuate
the means to a more stable price
This

level.

and must be done.

can

excessive.

developed when demand
cient.

so

expend¬

unnecessary

when demand

also

from

low, governmental ex¬
penditures should be increased.
A shelf of essential public works
should

be

contribution to economic and price

this nation.

into

the

debt should

to make the maximum

as

nounced

new

private

government

demand for goods and

Governmental

in

Expenditures

to

in

offset

and

loans, so far as their activities af¬
fect the overall credit supply and

y*;;':

selective credit controls.
of such controls

as

partially

tax

as

possible with private en¬
terprise. Otherwise the unsettling
effects on private enterprise may

stable tax rate would

a

given

eral Reserve in the securities and

little

national

Federal tax

study should be

use

uvwww

recognized that with the na¬
levels, seri¬

these

"

*

«r

fHHVVWHWWWVWW

to

tional debt at present
the

'

Bell

control over credit,

eral bond market at present rates.

4f

!

proper

it is doubtful if it should continue
+

*

loans

guaranteed.
While
corporations
or

or

of

itures

<s

*

direct

made and in others the

each

In

borrowers.

private

instances

some

requirements of the non-member
banks,

%

corporations

agencies independent respon¬
sibilities for making credit avail¬

eral Reserve to control the reserve

PORTLAND

Federal

of

large

a

and

If, in order to accomplish this ob¬
jective, it is necessary for the Fed¬

BANK BUILDING

given

has

Congress

ects be selected which interfere

may

declining
prices to
serve
as
strengthening factors in the econ¬
omy and in the demand.

insured

Thus, we take the position that
one
of the major guideposts and

more

areas.

possibilities for avoiding the
over-expansion of credit in cer¬
tain areas in times of rising prices.

ties

mands upon

the Federal Govern¬
period they have fallen. Each suc¬ ment by various groups for specific
ceeding war has resulted in a programs to protect them against
With these spe¬
higher peak. Many in this genera¬ these injustices.
tion have experienced two great cific
programs
have
come,
of
wars
and one great depression necessity, many direct controls on
Nearly
during which time the price level agriculture and business.
has
fluctuated
violently.
From every group, including farmers,
and
laborers, ob¬
19X4
to
1920 the general price businessmen,
level more than doubled.
By 1932 jects to these controls but wants
it had fallen to less than the 1914 economic security against the great
level.
By 1948 it had risen two swings in prices and their asso¬
and one-half times.
At the pres¬ ciated problems. Greater stability
ent time it is down some
11% of the price level offers the only
from
the
1948
monthly
peak. opportunity for greater economic
without
the programs
Nearly every American citizen is security
asking the question, must we have which require specific and direct
have

for agriculture.

business of slow turnover and nar¬

rise

postwar

offer

justment again.
row

a

were

in avoiding over-activity in
They are tools which

these

If

fields

loan

the immediate

in

years

level, prices for farm products and
items used by tahe farmer in pro¬
duction are slow to come into ad¬

a

jective.
The

nation

ahead is one of
enterprise,

We must gear our

ica.

production fall

in farm

prices in general continue at a low

the essentials of a free

instalment
factor

slowly, resulting in a price

used

ties

disadvantage

Monetary and Fiscal Policies
the

most rapidly.

more

Thursday, December 22, 1949

CHRONICLE

products decline farthest and
Prices of commodi¬

raw

Stable Prices—Main

FINANCIAL

&

COMMERCIAL

THE

(2564)

m

important that proj¬

Two Elected V.-Ps. of

Stone & Webster Sees.
The elections of Gerald B. West

K.

Orland

and

Zeugner
Stone

of

Presidents

Securities

have

Corp.

Vice-

as

Webster

&

been

an¬

nounced.
Mr.

syndicate

West,

manager,
has been associated with the com¬
pany

since 1928 and was appointed

Assistant

an

in

Vice-President

1944.

.

who joined the
1929, was also ap¬
pointed an Assistant Vice-Presi¬
dent in 1944, and will continue in
Mr.

Zeugner,

company

in

charge of sales.

John L. Hopkins

Pacific Northivest Securities

Frank Butchart & Co.

ties

business from offices at Van

Buren

Road.

Mr.

associated
Barney & Co.
formerly

blankenship, gould & blakely

Ira

BUILDING

with

was

Smith,

fiaupi & Co. to

Admit

PORTLAND 4, OREGON
AMERICAN BANK BUILDING
PORTLAND 5, OREGON

Bell System Teletype PD 280




Hopkins

Investment Securities

INCORPORATED

WILCOX

Opens

MORRISTOWN, N. J.—John L.
Hopkins is engaging in a securi¬

Ira

New

York

New

York

admit
-<k

Anthony Reinach

Haupt & Co., 11 Broadway,

City, members of the
Stock Exchange, will

M. Reinach
Jan. 1.'

Anthony

partnership

on

to

Volume 170
Continued

Number 4866

front

THE

COMMERCIAL

the

Policyholder's Stake in
We

concern.

labels, the
the

not

even

what inventions and

or

sities

will exist then that

undreamed

in

of

Who

men.

1900

that

written

then

for

in

the

could

minds

have

sets

trailers?

Or rides

trains

five-mile-a-minute

or

airliners?

ury

other

of

things

And

accept

we

indeed

as

are

wrested,

with

us

with

even

policies?

Yet,

mythical

very

definitely, the policyholders of

a

purchase

things
,

those

of

now.

Similarly since

what

benefits

do not know

we

today's

life

insur¬

houses,

butter,

or

The

that

fact

define

must

we

those obligations in terms of dol¬
lar gs, however,

raises questions to¬
not asked when
policies were sold.
!
,

day which
the

"benefits"

wasteful

are

and

at

least, for any major
that figure.
Per¬

of

many

it

that most

us assume

is the cost of the

interest

the

on

debts

Yet,

war.

contracted

for past wars,

plus pensions to the

veterans

all

amount

total

of
to

of

our

than

less

wars,

14%

the

of

Federal budget. Much more
this is allotted to prepara-

than

1 ions for future wars—how

of

none

us

can

tremendous

wisely

tell.

now

But

a

fixed

not

housing
least it

in

or

was

of

terms

a rea¬
were

butter

time

When you spent

demand.

on

in fact merely
trading the equivalent of that
amount of gold for something else.
dollar,

were

you

There
sound

a

saying

that

or

with

more.

The

often

as

assurance

"as
You

any

"Changing value of the dollar does
not directly

affect, to the same de¬

in the steel, or cot¬
The prices of
what he buys and sells are more
or
less
self-adjusting with the
the

gree,

man

ton, or oil business.

changes in the dollar.
But
dollar

does

affect
life
insurance, as it affects all
forms of savings and the attitude
directly

very

The confidence

toward thrift.

our

policyholders have in us must de¬
pend, in turn, on a confidence that
when we repay our obligations in
dollars

those

dollars

will

have

a

commensurate exchange value for

something else.

It is

a

part of our

total

na¬

third of

a

the

to

millions

pendent

of

of

task

people

de¬

government for all

on

or

part of their incomes.
That one-third includes the cost

of old

It

and survivor benefits.

age

includes

for

the

social

of

includes

It

cost

farmers, their

form

security.

the

Marshall

to

grants

of

own

It

Plan

foreign

or

govern¬

form of social

are a

security not only for

good part

a

to

veterans, which constitute

a

of

of

bonus

payment

public treasury.
Every
tion

of
-rr

those
the

one

becomes, then, a part of our
to

certain

understand

of those is

benefit

them,

still

them.

didn't

redistributing

them
whims

who

others

or

did

not

according

is,

"need"

instead

fellow

of

to presumed
according to a
his

and

man

services to

If

we

include

lion

v-

the

foreign

aid

one-half of

our

40-odd

bil¬

dollar budget

presumably

is being spent
fight off foreign
our security,

to

collectivist threats to

economic trends and forces which

our

And yet a vast

those future
dates, and it is part of

cur¬

low. Person¬

not

whim. We must find

or

have

Once

had

we

the

franc.

in

pound

The

the

and

British

pound

exchangeable for

was

a

sterling silver,
and later it was exchangeable for
gold. It was when that ceased to
be the

that the pound

case

in

decline

public

began

confidence.

The dollar is headed in the

direction; fortunately for
slowly.

nation, not even one as
strong as this one, can survive,
much less maintain the soundness
of its currency,

and services.

it

liberty and

is

our

way

and

selves to pay out on

home

leading

us

pursued and promoted to

unthinking,

whether those

or

espousing them

are

actually sin¬

is unimportant. The impor¬

cere,

thing is that the belief that
policies are good, or neces¬

widely held

is

sary,

and

of life.

inexorably toward ex¬

salvation
business?-

What hope

taken

tional

long

too firm

so effectively
time that it has

a

root in

a

our

of

It

activity.
The

;

the fallacies they
actively, disproving?
When some of our most prominent
economists and business analysts
see guarantees of "good business"
in
an
ever-increasing spiral of
government spending and deficit
financing?
programs accept

should

be

of

government
spending say boldly that the real
menace
to prosperity is saving;
that the way to achieve prosperity
for

all

is

the

for

government

and the

and

into debt the better, since
always control the Federal

can

spend,

to

spend
it

more

Reserve Banks and borrow money
from

itself.

increasing
debt, they say, is the price we pay
for prosperity and is a calculated
risk.

But it

planners

Rapidly

to

seems

the

do

let the taxpayers

•,

If the theories of the planners
then

correct

thrift

aging

me

the

it be maintained-

could

We have believed that

that

to

prosperity

the threats

were

and I have

been

monstrous

a

in

encour¬

saving.

It

has

mistake

to

en¬

individuals to provide
their own security through life
insurance, instead of squandering

courage

their

incomes, going into debt,
depending on future tax¬

and

payers

to provide for them.

tinue under

But you

theories

have

and

over

over

results

for

all

and

ruthless

dictatorships

oppression.

and has existed on faith

founded
in the

was

validity of certain economic

principles. One of them has been
that only through investment in

productive enterprise could read
earning power and true prosperity
be
achieved,
and
that
only
through thrift and conservation of

press,

obstacles

very

to

progrenf#

forefathers#
when they set
up our constitution and form o#
government. We have believer!
that only a sound currency with
against

which

our

tried to protect us

definite value could

kind

provide any

of

protection against mone¬
tary manipulations.
If these principles in which wf*
have believed are right, and the*
spend-yourself-rich theories are*
wrong, then I warn you in all
seriousness

the

that

we

have

gravest

in

ask

aware¬

an

primary principled

What
can

most

America

of these

What

and

Caq Be Done

ourselves,

might well
this#

do,

we

to

we

influence

nation to seek the sound and for¬

3

sake the false?
It

to

seems

hope

for

must

lie

sion of

me

economic

our

In

an

that

the only
salvation

determined expan¬

a

informational program.

that starts#
of otu?
enterprises, and fans out its in¬
fluence down through all ranks.
Let me suggest these steps as a
at

the

starter:

top

a

program

of

everyone

-

First: We should prove to our¬
selves

the

soundness

of

STATE

and

as widely as we pos¬
anything which threat¬

uously and

sibly

can

that honesty or integrity.

ens

The dangers to

rooted deep in
human nature. All of us yield at
times to the temptation to try to
any

currency

are

something

achieve

MUNICIPAL BONDS

{

the soundness of

CAMPBELL
-.1 :

&

BOBBINS

INCORPORATED

r

*

>

nothing;

for

which is only another way

of

say¬

J'JC
t

ing to achieve somthing at some¬

body's else expense, y As long as
we

have

forms
us

a

the

functions of protecting

our

without

dency

belongings
check.

money

or

compensation,

to

Bond Department

government which per¬

against those who would

to take

t

Investment Securities

take
of

this

advantage

others

But when

a

seek

possessions
ten¬

of the

is. held

in

government it¬




FIRST

NATIONAL

BANK

The United States National Bank Bldg.
.

•

Portland 4, Oregon

Bell

System Teletype PD 328

OF

.

4

our

reasoning, the facts about our ec«(Continued on page 82)

seemingly

also

before*

urgent
of responsibilities. It is to do all
that is within our power to help»
us

that the

and

fam¬

currency

duty, also, to protest as stren¬

our

had

special-privilege
debasement

legislation,
—the

It must be

,

The life insurance business

natural

or

production,

or

concerned—infla¬

tion, loss of confidence in money
and in government, bankruptcy,

,

ines, high taxes, restraints of trade*

and I know that these
unsound, that they
tried

artificial

fraud,

are

been

con¬

that it could not be in¬
creased 4oy wars, trade barrieru

ness

again in the human history, menvitably with the same tragic

another

what

reaped

man

long

not

system, whereby one*

a

sown;

reawaken

Unsound Theories

could

prosperity

calculating and
take the risk.

With such theories in

in

you

and

perpetual ascendancy in govern¬
ment, and having a degree of ac¬
ceptance

Atlanta

t

resources

a

;

are

revolution,

,

defenders

even

our

na¬

receives cre¬
dence and support in our educa¬
tional
institutions; even in our
churches. If forms the pattern for
much labor union thinking and
thinking.

is there when

business leaders, our
chambers of commerce, those who
should see the danger signals and
read them correctly, seem blind
to what they mean? When even
some of our "save free enterprise"
many

fever¬

promoted

so

Courts & Co.

Co.,

Legg &

acts or
policies which restricted produc¬
savings, for the tive output, or hindered the equi¬
of our currency and the table exchange of one thing fpr
of the
life; insurance another on a mutually profitable.» V 1"
basis. We have believed that such

soundness

ishly promoted. What is more, it
has been

C.

.Baltimore

.

the safety of our

committed grave errors

poli¬

attract the votes of the unlearned

part of the rest of

being spent right here at
to promote steps which are

maturity

J

Whether these destructive
are

•

seemingly endorsed by the voters
time after time at the polls, what
hope then can there really be for
the preservation of our nation, for

same

us, more

No

cies

John

Philadelphia

dollar.

our

weight of

pound

Schmidt, Poole & Co.,

way

implicit confidence

British

French

a

permanent guaran¬

some

confidence

of

tee

its

Walter A. Schmidt

subject to political manipula¬

tion

it goes

commu¬

:y4-v/:-V

nity.

earn

Redistributing the wealth,

man's productivity or
his

varia¬
prin¬

who

others

of

according to the ideas

that

a

security

taking the incomes from
earned them, and, for

affect the

validity and honesty of
the dollars we have pledged our¬

so

ally, I believe that the confidence
of
most
persons
in the dollar
would be still higher- if it were

and for

who

earn

of

the

>{■* ./>

;

social

the

out

form

most

It

high—partly ; be¬

confidence in all other

rencies has fallen

these

so-

refunds"

"insurance

called

the

theless

obligation

relatively

tant

includes

It

grants with the costs of prepararation for future wars, then al¬

moral, obligation to do all
to repay value with value.

still
cause

dustrialists.

power to see that they will have,
for it is our unwritten, but never¬

can

fidence in the American dollar is

of the outside world, but also for
seme of our own farmers and in¬

responsibility to do all within our

we

for us, con¬

izing production of useful things

making
a

i ciple

f

change in the value of the

a

along

destroyed

goods and resources, and of penal¬

dedicated

ments, which

Yankee dollar."

a

hear

much

Sound?

be

to

used

as

don't

Dollar

the

is

Fortunately

in¬
cludes the cost of RFC, which is
the business man's social security.

budget—at least
is

—

ECA
Is

Hugh D. Carter, Jr.

money

subsidies

it

A dollar meant,

for practical pur¬
poses, around a twentieth of an
ounce of gold. You could exchange
it for gold at the Treasury any

Joseph W. Sener

realize

particular

part of the

or

other merchandise, at
fixed in terms of gold.

us

our

in

while continuing
to pursue policies of deficit fi¬
nancing, of ever-broadening sub¬
sidies, of buying up an$ destroy¬
ing foodstuffs just to keep the
price high, of artificially support¬
ing prices of government bonds,
of encouraging consumption and
even
criminal
wasting
of
our

tional

days a dollar had
fixed value. 'If it

it.

note once

were

In those

business

with

to

.

sonably

a

provide

to

and

in Money

all of

that

ance

in

of

or

clothing, or- educational opportunities, or personal, services.
We
can only define them in money.

but

us

all

we

harmful.

haps

will someday buy, we cannot
define ' our
responsibilities
in
of

provide

which

reduction from

ance

terms

to

services

of which

provide
enemies

to

from

even

From

our earn¬

on

destroyed, then the life insur¬

istration

tangible

SOUTHERN

PENNSYLVANIA

only

Dependent

confidence

Our national budget now con¬
siderably exceeds $40 billion a
year.
There, is very slight chance
indeed, under the present Admin¬

generation ago provided then for
the

not

benefit,

many

the

not

services from

might

com¬

part of

a

protection

abroad;

the

is

predatory.

of us

took

,

become

if

that

government has

own

one

monplace now, which were com¬
pletely unknown to those who
out

Become

frankly face the

now

our

ings

lux¬

of

many

must

each

streamlined

on

We

fact that

automobile

or

CHAIRMEN

SOUTHEASTERN

l

•

Confidence

believe

I

Predatory

policies being
would, in 1950, pay

same

have

can

Insurance

predatory, a good
protection vanishes.

our

Government Has

predicted

IBA GROUP
FA STERN

fallacies, the

same

result.

same

becomes

yet

are

collec¬

.

self

neces¬

some

television

81

•

know what kinds of houses, auto¬ part of
mobiles, television sets there may

be,

of

ideas, the same

same

delusions—which

Life

do

kind

same

tivism—the

Sound Economics
our

(2565)

CHRONICLE

page
actly

The

FINANCIAL

&

PORTLAND,

OREGON

the

(2566)

82

so

at what the entire stock mar¬

Markets

Walter

Whyte

Says—
=By WALTER WHYTE he

*

♦

you

IBA GROUP CHAIRMEN

got approx¬
seven point gross
you

*

*

MINNESOTA

well.

so

was

that it

*

31 and 32.

The

be

At

suggestion

sold

between

time

no

during

week did it get past 30.
As this is written it is selling
the

>5!

est

fraction. The

a

bought stock in recent weeks old stop of 26% still applies.
Continues to advise caution. on this column's suggestions,
haven't fared too badly. They
So far as new buying is
Three weeks or so ago, in
bought American Smelters at concerned, I'm standing clear.
looking forward to the end of 46 and
Denver, Rio Grande
More next Thursday.
the year, I had day dreams of

bullishness

increases

year,

TEXAS

SOUTHWESTERN

^

Denver, Rio Grande didn't
fare

But if I missed on the gen¬
Market step-up plus heavi
turnover in more than a eral
trend, readers who around 29 and

v

Thursday, December 22, 1949

profit.

ket

fraternity is now hailing
with glee. Still, there it is
The stronger they are the less
I like them, and I'm not short
of a single share.

If

54.

across

out
wrong as anybody can be, sold
who am I to look askance imately a

as

chronicle

financial

&

I also know I've been week-end

more.

Tomorrow's

Commercial

*•

Bernard

of

•*

*

The advice

—Walter

-f

Smelters

on

was

self-praise. It would have
to stop it at 47 and take profits
be
modest, but nobody

to

mistake

possibly

tone that I

the

the best sooth¬

was

sayer in the business.
Just
one word from me and mar¬

backs to do

So what

bidding.

my

*

;"

*

*

happened? If

don't know the

answer

you
then

look at last week's col¬

a

where

I

pontificated
about how dangerous the mar¬
umn

was

and how stocks had

already seen their best prices.
For hardly was this classic
column in the mail, when
stocks took a firm grip on
themselves, looked a round
and wham! Up they went,
leaving me with a handful of
choice words
and a large
empty bag, not to mention a
silly grin on my face.
>,

,

*

■■■

So that's where I

The

market's

^

*

*

tj/'Wv
now.

am

and

up

I'm

down. This would be the time

in

it got as high as 55 and high
fraction, finally closing at the

those of the author only. 1

Chronicle.

those

with

They

are

Kansas

Ruse &

from

presented as

81

page

Continued

from

page

3

;

.

structure and

tiomic

threaten

the

to

answers

it.

the

dangers
the

Learn

collectivist

falla¬

cies which constantly recur—learn
them thoroughly so that we are

that

if

tide

could

How

turned.

■■

then

the

could

be
'•

■ ■■1

millions

of

condition

prece¬

v

J

it be said with any truth that the Commission,
of the Frear Bill, is not taking sides?
^

attempted "deal" to limit "unlisted trading privi¬

leges"

done

■

the

If

be

The

^

can

the sponsor

collectivism

of

;

-

,

Good Intentions
dent to its approval?

The Policyholder's Stake in
Sound Economics
which

Muir

the

of

tain reorganizations, does it make "listing" a
Continued

D.

Company,

San Antonio

City

this

article do not necessarily at any

coincide

Edward

Victor H. Zabner
Soden-Zahner & Co.,

Whyte.

expressed

time

kets would roll over on their

ket

views

between 53 and 54. Last week

could

take

[The

Knopp

of St. Paul, St. Paul

at 23.

coming out with a pre-Xmas
column that would be a classic

B.

The First Nat'l Bank

holders

as a sop to those opposing the Frear Bill is disgusting.
Here there can be no compromise.
It's ghoulish to see some

dealers

brokers

and

pall bearers.

of

Mr.

.

■:

ignorantly preparing to be their owii

V.

.-V- \'ri;,

McDonald, despite

your limitations as shown in
speech, we like you.
We believe in your sincerity.
when a question of economic in¬ have
That you have an opportunity to put the investment, indus¬
paid in have not been insformation arises.
vested in constructive enterprises, try, and all dealers and securities brokers
permanently in
at

never

a

Second:

loss

for

Begin

an

answer

an

educational

campaign within our own organi¬
zations, to prove to our associates
and employees the eternal veri¬
ties that have been so widely and
effectively assailed. See to it that
others in our organizations know
the answers too.

Third: Speak out at every op¬
portunity. Become a salesman for
sanity, an ambassador for Amer¬
ica, a fighter for a future worth
having. Don't wait for the battle
to come to you; take it to the
other side.
^

social security cards could be made
to realize that the $23 billion they

your

as the private life insurance coin*,
your debt there can be no doubt. The present composition
panies invest them, but have beena
spent as fast as they were rethe
makes that opportunity one of being dn
ceived,
and
that
future taxes+adamant dissenter and converting a majority to your view.

&

would
them

have

to

levied

be

to

I say

ism

Do you

pay

benefits they might
ever get back in return, I believe
they would rise up very quickly
and
bring about some drastic
changes.
any

Commission
ask

us

what

are some

statute

controlling.

all matters affecting the
always go first to the
After all, that is the law. The law is

the basis of the Commission's

that the tide of collectiv¬

can

be turned, if we will set

ourselves

to

the

task

of

turning

it. I say that if each of us realizes
the seriousness of the threat to

of the changes we suggest?

In your remarks you said, "In
Commission's activities, we must

^

Fine! And while you are

powers."

going along in the performance

of your functions, please, please go also to the Constitution
of the United States and advise your co-Commissioners that

search through some old
it is the basic, primary and fundamental law of the land
Fourth: We should use all pos¬ our nation and our industry then
columns, drag a sentence out
under which the exclusive power to legislate is vested in
sible media to influence all seg¬ each of us will so do it—and if
of context, and come up with'
ments of our public. If you are each of us begins it -now and the Congress, a power which it may not delegate to the
"See, I told you so!"
If I not using sound economic infor¬ works at it to the best of his SEC. Tell
you confreres that Congress did not intend that
don't do it, thereby barring mation in your direct mailings, ability, the job will be done.
the SEC legislate under its rule making powers, and that
The Life Insurance companies
your annual reports and your ad¬
myself from the ranks of fore¬
even if there had been such an intention, it would still be
America
have
78
million
vertising, then you are not making of
casters, it is because I'm a
unlawful because unconstitutional, u
the
to

maximum

use

of them.

naturally lazy guy and poring
through old columns is my
idea of heavy work. Besides

really understand what free enter¬
prise means, or how important it

there'll

is

be

readers

nasty

enough to spot the. inconsis¬
tencies, who'll write me an¬
noying letters, and where will
I be?

to them

personally, or how far
departed from it. Few
employees understand the opera¬
we

have

tion

of

they

are a

the

businesses

of

which

part. You cannot

com¬

rv bat
*

*

*

Yet

despite the sharp ad¬

vance

I continue to gaze at the

market

know
Will

Few people in the United States

with

misgivings. I
they've gone up, and
probably go up some

collectivism, in their minds,
simply by denouncing it. We must
use facts in our
program, but we
must

make

those

facts

under¬

standable and believable and

con¬

vincing.
These

encroachments

on

our

policyholders. What efforts have
we
made, let us ask ourselves,
to convey to them any idea of the
damage the something-for-nothing
policies have done to their sav¬
ings and to their futures?
It

has

haps,

our

We

to

per¬

disciplinary

of

has

permitted

these

liberties and

have

and

even

encroachments
our

destinies.

not

fought them hard
enough and widely enough and
often enough and soon enough.
This is a good time to start. And

safeguards enforced by

our

Of course, we can go on

editorial columns have

our sound money,

and
all
of

The Administrative Pro¬
Return to the system

^

courts.

on.
We will through these
of these man-to-man "talks;"

and

more

Mr. Chairman, which will it be: man or mouse, per¬
formance, achievement, or just those good intentions with

which the road to hell is paved?

we must start it, for there is no
one else to do our own particular
security,
part of the job. We also have the
which are inseparably linked to¬
most at stake, and the widest
gether, did not come overnight.
knowledge of the problem and its
We will not regain overnight what
Victor Lea, well-known econ¬
solution. It must be a long range
we have lost. But if the
people of
omist and commodity market an¬
program. We must all of us turn
this nation were informed, and
salesmen for this, the most im¬ alyst, has formed the firm of Vic¬
convinced,
of
their
impending
tor Lea and Co., Economic Con¬
portant sales campaign we have
catastrophe unless the tide turns
ever
conducted.
We
must
be sultants, with offices at 61 Broad¬
—if they could be made to under¬
Mr. Lea
fighters in the most important way, New York City.
stand that the inevitable result of
war
we
have ever fought — a has had long experience in the

freedom,'on

•

change! Abolish somehow the procedure in
wherein the Commission acts as investi¬

cedure Act has tried but fallen short.

the

j

cases

gator, prosecutor, judge and jury.

of the collectivist threats

guaranteed
on

timidity,

our

indifference

or

menace

which

been

^

Another

our

Pacific Coast

Securities
Orders Executed

on

Pacific Coast Exchanges

individual

these loose and reckless financial

Members

New

*'"

'

New York Stock Exchange
Curb .Exchange., (Associate)

York

San

Francisco Stock Exchange
Chicago Board of Trade
,

14 Wall Street
COrtlandt 7-4150

Private Wires

.New York 5, N. Y.
Teletype NY 1-928
to Principal Offices

San Francisco—Santa Barbara

Monterey—Oakland—-Sacramento
Fresno—Santa- Rosa




San Francisco Exch.
Renominates Atkinson

economic and

raw

material

mar¬

war once again for American in¬
the utter
ket field, and until recently was
dependence.
prosperity and
Assistant to the Director of Pur¬
It will take courage, but I be¬
the complete negation of the very
chasers and Manager of the Com¬
lieve that the men and women of
security they have been promised
modity Economic Research De¬
the life insurance business have
—if they could be made aware of
partment of Standard Brands, Inc.
that courage.
just
the
barest
rudiments
of
Let me close with a word from For several years he was Manager
sound economics and how
they
are affected in their
daily lives Emerson, the great philosopher of the Commodity Department of
and futures by economic laws -— who himself, at an early age, had Fenner &
Beane, and for the past
if they could be made to realize experimented with social security
20 years has been a member of
the vital importance to them of or the communal life. He was both
the faculty of the New York Inolder and wiser wheh he observed:
insisting that their union

policies

can

only

destruction of

Schwabacher & Co.

Victor Lea Forms
Consultant Firm

,

mean

Earl

T.

has

had

leaders

political representatives take "Of what avail the plough or sail
heed of basic principles and act
Or land, or Life — if Freedom
genuinely in the interests of all—
fail!"

S t

,

i t

u

t

e

of

Finance,

teaching

that

announced

Atkinson

of

Of

been

Dean

Douglas

G.
& Co.

Witter

nominated

for

a

third

term as as Chairman of the Board
of

Governors.

members

of

our

and

Chairman

Parrish,

the Nominating Committee of the
San
Francisco
Stock
Exchange

ernors

for

Mark C.

Board

two

year

of

for

Gov¬

terms

are:

Elworthy of Mark C. El-

worthy
Smith

Nominations

the

&

•

Co.;

Ferdinand

Merrill

of

C.

Lynch, Pierce,

Fenner & Beane and

Ralph E. Van

der Naillen of Douglass, Van der
Naillen &

Co!, Inc.

The Annual
tion

Meeting and elec¬

of officers

of the

Exchange

-

Economics and Coriihiodity Market Analysis.
V. t -

jrourses in

will be held

11, 1950.

'

on

Wednesday, Jan.
-

-

>

1 Volume 170

Number 4866

THE

COMMERCIAL

FINANCIAL

&

CHRONICLE

(2567)

83

Continued from first
page

Continue Inv. Business
Gordon Macklin & Co.
CLEVELAND, OHIO —«The in-

I) vestment
i

Macklin

business
&

Co.

not

were

be continued

rescue

However, it

now

clear

appears

—and, moreover, it would

that the

enough

that the Chinese

seem

com¬

munists expect and welcome it.

Non-Communist Areas

areas,

uncertain of their desires

as

some

of

between Russia and

the

Leonard O. Ross

.West, and some of which probably prefer to have noth¬
ing to do with the Kremlin.- Needless to say, the Soviets,
once
they feel well "consolidated" in China, will not hesi¬
tate to push on if
they can. Some of the land lying outside

Robert E. Borton

the

by Leonard

O.

Ross,

President

as

communist

dynasty

world's

Treasurer, and Robert E. Bor¬

Elected V-P.

We
backward peoples
long for what we
think of as modern conveniences, and that they count their
wealth and welfare in terms of the things that mean most
to us. We often make the mistake of supposing that they
want to be civilized in our sense of the t?rm, and are quite
ready and willing not only to enter that kind of a life, but

a

fective Jan.

1.

1950, has been

an¬

or

York

office.

Two

years

Commissioned

that

later he

the« Kremlin

constitutes

much

a

real

Ensign in
United States Naval Reserve.
After his release from active
duty

and his followers

in

1946

as

a

Lieut.

Commander,

York

rejoined the Doremus
organization as Assistant Manager
in Philadelphia,
becoming Man¬
ager a year later.

other

|

and Western culture.

I

They, for the most part, have been

less interested in business and economics than in other

aspects of life, but there

be

can

no

It is doubtless true that

intelligence is concerned,

ideas and

are

many

the

as

tion in life has been made much
our

standards

is

not

; Newburger, Loeb & Co.,
bers of the New York

I change

and

j changes,

other

have

of the rank and

But

tional branch office
son

y

mem¬

Stock

such

as

to

agreeable according

suggest that anything
in heading

off communism.

j

Ex-

at 931 Madi¬
of 74th Street,

facilities, reflects the

able

of

empire,

Park

as

a

Avenue-East

business

Side

well

as

as

a

A

•

novel

ture of this

Of

and
new

a

fea¬
group

portraying

the walls many remarkable

on

scenes

| actually

photographed
on
the
floor of the Stock Exchange itself
during trading hours.
'\

With Sutro & Co.
(Special to The Financial

BEVERLY

PACIFIC

NORTHWEST

COMPANY
UNDERWRITERS

•

DISTRIBUTORS

DEALERS

•

Markets Maintained in

Serving the
Pacific

"'X'

Pacific

Northwest
Since 1913

}

■

Northwest

1
•'*

•

Securities

more

sort of

a

religion.

as

of tyrants greedy for

its leaders
more

a

power,

small,

.

•

influence—and quite possibly half insane with

"ideology", which has

some

ATT

SEAT

on

guard,

For that
may

reason

of the appearances of

mankind, if not

be obliged to pay

very

187-188

more
SEATTLE

PORTLAND

SPOKANE
im

interesting
office is

photo-murals,

group

a

residential district.

come

even

EXCHANGE BUILDING, SEATTLE

grow¬

very

this

never

Leaders of Communism
But at present communism has

ing recognition of the importance
zone

respectable

more

though

which has

hitherto been without stock brok¬
erage

eyes) much
certain that it can

:

presently become evident to the wayfaring
a fool, and when it does all this nonsense
about communism, socialism and the welfare state serv¬
ing the poor and the unfortunate will be easily enough
recognized as such.

Avenue, corner
New York City. The
opening of a
fully equipped branch office in

| this neighborhood,

Western

are

suspect that

we

truth must

man

addi¬

an

Time may,

and well

heavily for learning

■SB

TACOMA

111

ABERDEEN

Bh]|

YAKIMA

wary

EUGENE
BELLINGHAM

these

elementary truths. One is accordingly inclined to ap¬
proach with sympathy the notion of some sort of activity

SEATTLE

PORTLAND

Brokers

•

SPOKANE

EUGENE

Chronicle)

HILLS, CALIF.—Al¬

bert E. Peacock has become affili¬
ated with Sutro

Canon Drive.

&

He

Co., 275 North
previously

Underwriters

•

Dealers

was

State and

Municipal Bonds

*

with C. E. Abbett & Co. and Dean
Witter & Co.

TRADING

Dempsey-Tegeler Co. Adds

PACIFIC

MARKETS

MAINTAINED

NORTHWEST

L. S* Government Bonds

SECURITIES

LOS ANGELES, CALIF.—Rob¬
ert D.

Evans, Jr., has been added

to the staff of

Dempsey-Tegeler &
Co., 210 West Seventh Street.

With Gross, Rodgers & Co.
.

„

'

(Special- to The

LOS

.

Financial

Chronicle)

•

Seattle

ANGELES, CALIF.—John

W. MacKusick has joined the staff
of Gross, Rogers & Co., 458 South

.

V

(Special

to The

Kempner is
E.

F.

Financial

now

Hutton

Spring Street.

&

New

York

623

with

South

.




Stock

Exchange and New

York

Curb

(Associate)

Chicago Board of Trade

J-Ralph

connected

Co.,

\

MEMBERS

Chronicle)

ANGELES, CALIF

First

Municipal and Corporation Bonds

E. F. Hutton Co. Adds
'LOS

-

National Bank

FOSTER & MARSHALL

Spring Street, members of the Los

Angeles Stock Exchange.

••

_

<

'

820

SECOND AVENUE, SEATTLE 4

Teletype SE 482-483

BOND

*

1

Telephone SEneca 0680

MAIn 3131

[
\

many

peoples whose situa¬

more

miraculous will be achieved under Point Four

providing mankind with the good things of life
in the degree that the free
enterprise system has done
through the decades and even centuries. That simple

Stock Ex-

opened

(in

We

did.

j

as

benighted of the world!

At any rate, our experience with

to

far

so

|

more

quite capable of absorbing West-

learning Western techniques.
us

\

doubt that they have

acquired intellectual attainments equal to those in

near

*

Opens New Branch

and

quarter.

ever

1

1

a

time will, run against the communist
craze* whether it
emanates from Moscow or in thin
disguise from some

Mr.

;

.

wealthy families who have sought out Western learning

of them think of

and

the

....

...

few

ern

serious threat to the remainder of the world than Hitler

that

attain

to

Most of these so-called backward countries have

native

or

more

ourselves

exert

nothing could be further from the truth.

file of these lands

but whether

an

we

as

.

Of course,

that form of social

organization shall be adopted

good to deceive ourselves.

are

advanced countries.

accepted,
or not these
peoples become vassals qf So¬
viet Russia. There can, in our
judgment, be no doubt

nounced

by William H. Long, Jr.,
President. Mr. York, in charge of
the agency's
Philadelphia office,joined the firm in 1940 in its New
was

economic

or

We

,

produces the larger part of the
of the most important "strategic"

The question is not whether this

no

constantly talking as if it would be a simple
thing to teach these peoples chemistry and physics, engi¬
neering and agriculture, manufacturing and all the rest
and that they forthwith would be eternally grateful, repay¬
ing us not only in the coin of the realm, but in allegiance
to our notions of government and social organization ib
general.
'
'

the Near, Middle and Far
East, or as much of it as can
be salvaged. It is clear at once that viewed in this
way,
the matter becomes a political not an economic issue.

of E. Howard York,
Vice-President of Doremus
& Co., 120
Broadway, New
York City,
advertising agency, ef¬
as

themselves

exert

end.

apparently regarded as "lost" at least for
the time being, but "Point Four"
operations are now be¬
ing trotted out as a means of saving the remainder of

Flection

,

3rd,

us

too much inclined to suppose that the
of the earth are gadget-hungry, that they
are

China is

Of Coremus & Co.

the world.

Let's Not Deceive Ourselves

supply of some
ton, Vice-President and Secretary. substances, tin, rubber and mica among them. Unfortunately,
Offices will be located at 1010 some of these peoples have suffered from the
exploitation
Euclid Avenue.
Mr. Ross was for- of western nations, and all of them doubtless
aspire to be
j merly associated with the firm,
wholly free from rule by non-Asiatic peoples. Such a situa¬
h Mr. Borton was with Wm. J. Metion, of course, is made to order for propaganda about Asia
| ricka & Co. ' V ■
for the Asiatics, and for much of the communist "line."
and

across

But it would do

to

South and east of this broad band of
communistically
controlled territory, there lie a number of
>

are

Middle and Far East, designed to stem the

It used to be said that Chinese communists

communists at

Kremlin expects to dominate the situation
throughout
the area now under the control of Chinese communists

which

Near,

march of communism

all, but merely a group trying to
their country from the bandits within and without.

Gordon

of

will

Soviet dictator.

the

in

As We See It

DEPARTMENT

Seattle 4. Washlnaton
Member Federal Deposit

Teletype SE. 48#

Insurance Corporation

.

rjBr

.

84

COMMERCIAL

THE

(2568)

FINANCIAL CHRONICLE

&

price

By

first-hand

Blond, British Government's trade adviser here, reveals
UK's exports to U. S. since devaluation, and

Neville

increases in

increased sales.

techniques for promoting further

they

facilitate

To

Spahr Denies Return to Gold

these

British
Government is making available
to
them
dollar-exchange suffi¬
cient to pay their expenses over
here. Such surveys for promoting
trade have been quite 'successful,
specifically in hosiery, and spare

Staff Correspondent

a

meet.

which

requirements

must

Stepping-Up Britain's Export Drive

Thursday; December 22, 1949

the

surveys

,

Standard Will Drain Our Sold
Executive Vice-President of Economists' National Committee

Monetary Policy says desire to get gold arises when cur¬
is irredeemable and ceases with end o| distrust in irre¬
deemable currency. Holds present U. S. gold stock is ample.

on

rency

the United months of this year, rose to 4.1
parts for automobiles and motor¬
markedly millions in September, 5.6 mil¬
cycles, Mr. Bland revealed. Auto
"Fears of an inordinate demand gate to, and invites, that particular
since Devaluation time, according lions in October, and 7.3 millions
exports, although showing nice in- for
in November. These latter-month
gold, which naturally and consequence.
to Neville Blond, Trade Adviser
"Our gold stock is more than
to the British increases should hold the decline | creases over previous yeqrs, still
properly characterize life under
leave great room for improvement,
an irredeemable currency, are un¬
Government. for the entire year 1949 down to
ample to permit the immediate
which can be appreciated by the
The
consciously carried over into tne institution of a redeemable and
present 10%, Mr. Blond asserted.
British

exports

to

States have been rising

position

The effects of devaluation have

of

stimulated

trade

cluding ping-pong

and

shoes, et ai.

with] 1949 figures, which goal Mr. Blond
sales promotion
which have been devised.. /

techniques

revealed

by Mr. Blond

cities

41

during his stay in this country.
Although his individual mission
City on Dec. is finished, he has laid the ground¬
work for a permanent sales drive.
16, before his

New

Blond *

o

for

Blond has visited

Mr.

press con-

f ere nee

Neville

!
triple the

in

York

He has established

departure

'

.

home." Mr/ Blond

"Trade

this

to

came

network of

a

with 31 of¬
four regions

Consulates,"

country in May 1948 to examine fices distributed over
the possibilities for British goods .into which the country has
in the American market.
divided for the purpose.
\
r

Exports from tne

,

United

States

U. K.

which

monthly, average of
pounds
during the

to

the

at

ran

To

back

been
,.

the continuing ef¬

up

a

forts of the British officials, man¬

million

3.4

ufacturers will be streaming over
to learn at first hand the style and

first

eight

U. K. EXPORTS TO THE UNITED STATES
'

(Monthly

£ thousand)

average,

1st half "

V"

/

ores

Raw & waste

and

wool_*

;;

.

r

.

Aug.

'

1949^

1949

1949

1

29

23

27

5

2

70

.

7

____

Oil seeds & fats_-i_w.__;___^_-___i

?

JPottery, glass, etc.____________.-_

152

160

;

3

-

83

2

0

^

16 :

"73

•

;

.

•

J

35

206

tem

here.

The

119

42-

China

63

88

50

74"

Earthenware

78

95

52

90

20

17

9

38

'
*■

l^on-ferrous metals mftrs. ^
,■

363

_

'

v

129

67 ;

"

209

i

80

Cutlery, instruments, etc._

56

77

61

Electrical

19

17

16

236

238

145

173

86

366

422

284

264

21

20

330

317

136

144r

Machinery

__________

______________________

Cotton goods_
Woolen & worsted
&

Other
J.

art.

silk__.^___^________i_

textiles-.

Incl.:

'

;"t

.

28

..."

.

V-

336

<

•.

290

88

-

^

191

linen___

-

Apparel'

148

39

___;

42'

1

56
;

100

Footwear

15

234

300

r

324

_________________

•

Lindn
Danlask table

170

39

180

30

32
60

134

74

54

162

159

145

162

516

_______________

of

irredeemable

Automobiles

197

136

211

141

62

14

i

44

.

—

-.

29

45

6

20

776

mftrs.

723

299

________________

64
-

—

244

_______

'

—

Company

Gilbert

Mr.
the

Ross Curtis.

John

Aviation

was

member

a

Corp

of

the

our

tuted

U.

of

S.

Army during the World War and
subsequently entered Northwest¬

ana

3,815

paper

turned

was

sued

for paper money than was
turned in for gold.
And

If the paper money is
gold, intelligent people

why not?
as

good as
do not wish to incur the expense
involved in holding gold.
:
"But

psychologically and
thoughtlessly we have developed
confusion

remarkable

a

in

our

thinking and agitation in respect to

in

deemability. As

a consequence

University where he majored
Finance. He will represent the

firm

in

Milwaukee.

Mr. Curtis

was

in the U. S. Navy

during the War, prior to which he
with the Milwaukee office of

was

Mason, Moran & Co. He will repre¬
sent
the
Marshall
Company - in
Southeastern Wisconsin and will
his

make

Wis.

van,

headquarters
,Y.

in

/

10.9%.

The

average

was

■

system

of

despite the fact that none
them is valid. The institution
redeemable

of a

provide

currency

should

potent force in the di¬

a

Cf.:'

V':-

nation

a

new

life.

It

and confident lease

should

be something
installing new and strong
rails in a dilapidated and danger¬
on

ous

Congressman Lynch

railroad structure.

r

770

899

Club

333

ing

of
to

the
be

Bond
held

"We need, badly, to understand

A.

Club
at

the

of

New

Bankers

Jan. 11,

Charles L. Morse,
Jr., President of the Bond Club,
announced. Representative Lynch
will talk on "Employment and the
on

safe

ratio

of

deemability
sible.

gold

our

stock

'Tax Incentive Act of 1950'."

tinue

with

rency,

an

irredeemable

under which the fears

cur¬

as

to

its future value should be expected
to

become

rather than
probably shall end
in the pit of Socialism since

less, and
up

such

a

greater

we

currency

is

a

wide-open

to

risky if not impost

Then

could be

v).'-

short.
"It
is

toward

course

our

collapse and social chaos
expected to be relatively

currency

therefore

behooves

to

us

redeemability.
That,
best
protection agaipst

into

our

,

deficit

financing;, and Socialism.
Redeemability and .Social1'sm are
natural enemies. Those who coun¬
sel delay in
redeemable

making our currency
wittingly or un¬

are

<

in

Proposes New Rent Law
.

According

to

real

W.

estate

in

the

Dec.

10,

item

an

"Sun"

York

New

Charles

v

state
of
confused
Lynch our present
of New York, a member of the. thinking and attitude in respect
House Ways and Means Commit¬
to a redeemable money.
Other¬
tee, will address the next meet¬ wise, we seem destined to con¬
York

a

as

non-gold money and deposits can
soon be reduced to a point which
will make the institution of re¬

like

Bond Glub fo Hear

Walter

a

of hurry

fered

upon us again; and
policy' should be pur-,
part of the profligate

thrust

such

spending - which an irredeemable
currency invites, the present very

re¬

this confusion, all sorts of argu¬
ments in behalf of delay are of¬
of

if

inviting Socialism
rection of an expansion in pro¬ wittingly
duction; it should tend to open this country." •
f/;/:'.„V'* /*■''
Deia- up .foreign trade, and to give this

s..'•

I■

3

4,100

to

in 1879,
in in that

a

27

3,343

8.1

8.6% for the years 1915-1932. Our,
ratio has fallen from 24.6%
in

been

we

hoarding under

305

•

,

example
insti¬

one

history: When
gold redemption

gold

year

MILWAUKEE, WIS.—The Mar¬
shall Company of Milwaukee, 762
North Water Street, announces the
addition to their staff of Eugene
Gilbert and

in

more

Adds Two to Staff

10

238

4,291

____

currency

abroad.- To cite but

24

;

Total (incl. items not specified
above)

•

period

a

•

Congressman

Commercial

|,■

"People, while living in

re¬
sensing quite correctly the desires 1941—the highest in our history
ceiving dollar exchange, concur¬ to get gold because of distrust oi since 1915—to the present 14.8%.
rently with the existence of the an irredeemable currency, seem
"A
noteworthy aspect of the
large sterling balances in the ster¬ to find it difficult to realize that common
assertion that this ratio
ling area countries, Mr. Blond and redeemability is a
repellent of of 14.8% is inadequate is tfce fact
Minister of Trade Harold Wilson
hoarding.
;
7"' that in practice all our domestic
are trying to overcome by prod¬
"They cannot seem to bring money and deposits are convert¬
ding the Dollar Export Board to
themselves to pause and to con¬ ible into silver at a ratio of only
make available payments partially
sider the fact that redeemability 1.3%. Even at this very low ratio,
in dollars to their exporters,
invites and results in dishoardihg our people do not rush to get
The volume of UK-US exports, of
gold, and that it is irredeem- silver despite the fact that it. is
and their trend, during the first
ability, or fear of it, that causes much more valuable than paper
9 months of this year, are demon¬
hoarding. That has always been in so far as material is concerned,
strated in the accompanying table.
"Deficit Federal financing has
true, both in this country ana i

95

Inch:

Miscellaneous

the

42

90

75

JLeather goods

Tractors
Motorcycles
Cycles
Spirits

statement issued Dec. 19.

getting

of

218

163

Chemicals, drugs, etc.___

,

-

■■

26

J?aper,, etc.
Vehicles

'

.

'

__________________

Bilk

\

problem

ern
'

goods

year's sales of

dollar-market without himself

180

:

/

*

Iron & steel & mftrs

best

British manufacturer to sell to the

Incl.:
■

the

■

Sept.

-

21

scrap.......

Raw & waste silk (A art.)

t

July

1949
__________________

Non-ferrous

that

period of redeemability in which honest currency. The ratio is ap¬
23,000 cars equal merely one-haif the causes for such fears Would
proximately 14.8% against all nonday of America's home produc¬ no
longer exist," said Walter E, gold money and bank deposits.
tion. One of Mr. Blond's difficul¬
Spahr, Executive Vice-President We fought World War I without
ties has existed in the difficulty
ot tne Economists' National Com¬ domestic suspension of
gold pay¬
of overcoming the franchise sys¬
mittee on Monetary Policy, in a ments on a ratio ranging from

The Marshall

4

China clay

fact

country; feels is attainable in view of the

were

a

balls, toupees,

'

For 1950 the aim is to

furthering her;
business

at

a

miscellany of British products, in¬

fu¬

ture plcihs for

this

for

demand

the

Britain's in¬
ternational

on

Lange, a New York
consultant, proposes

that the current rent control law
in

New

State

York

be

patterned

after the present commercial
business

rent

a

return

of

6%

and

under which

laws,

be entitled to

the landlord would

the

on

value of

for ; both
amortization of mortgages and de¬
preciation of the
building.
Ih
order to allow sufficient time to
the

plus

property,

make

a

2%

change of residence for
economic circum¬

whose

tenants

stances would not

permit them to

much higher rent, Lange
suggested limiting the amount of
pay

a

rental
to

increase

in

any

10%.

one

year

;y
;.
"This
procedure," Mr. Lange
points otit, "would enable owners
.

,

.

.

Canadian Securities

to

to

M

t

""

'

'V

'

'v

'N

&

•Vj

'

get the increase so necessary
help them pay deferred main¬

charges and other ex¬
without causing any great
hardship on the part of the ten¬
ants. > Under two or three years
of the above- plan, the law of
tenance

Government,

Municipal

Public Utility, Industrial

<-v.

Grcenshields & Co

supply and demand would auto¬
matically eliminate the necessity,

Underwriters and Distributors

Members Montreal Stock Exchange

for rent control.".

of Canadian Security Issues

Montreal Curb Market

Greenshields & Co Inc
Dominion^wide service,

,

penses-

,

'

,

,

Vr

r

/

a

.

Wire connect ions : Montreal —Toronto" New York

Another advantage claimed for
the proposal is that it would -elim¬
inate thq "double jeopardy" which
landlords and tenants face

both

Royal Securities Corporation
Limited
244 St.

James Street West

M

Toronto

Winnipeg,

*

Halifax

Calgary




Saint John

Vancouver

Montreal 1,

Quebec
.

control v

•

by- -FederalD and

authorities.

*

Telephone HArbour 8151

-

because of diverse ratings on rent

507 Place d'Amies, Montreal

Canada

HL B N. S.

_

Ottawa

Charlottetown

St.

Hamilton

John's, NOd.

OTTAWA

QUEBEC

SHERBROOKE

TORONTO

city

-

Corp. in N. Y. C.

The H. B>Ni S. Corporation is

securities business
Wall-Street? New
.York City/^; <v- Uot
engaging^ ih

a

from offices at 1

Volume 170

Number 4866

■-

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(2569)

85

Continued from page 16
time

News About Banks and Bankers
stockholders with
amount

of

the

check for the

a

distribution

in

In

li¬

of

in

liquidation at which time they

will be called in for surrender."

T

As noted in

~

2088,

| page

Bank

National

taken

was

ufacturers

over,

Trust

bank's offices

-

issue of Nov. 24,

our

the

Co.

operated

has

share

for

from

County,

the

fourth

of

of 40c

quarter

$532.47

surplus

000;

Two

At

-

■[

i'f

i!:

of

■' '

'

the

meeting of

a

trustees

'

tfi

The

and

elected

pany, was

board, filling

a

of

of

Nov;

10.- Mr.

National

book

Deposits

two

*

:v.

new

*

>'■

,

■

I,
the

Promoted

of

the

that

he returned to the com¬

war

office in

from

are

Taze¬

Mr.' Maynard's

tary.
■

noted

in

1990.

!

Nov.

our

death

17

issue, page

f;v"'{X

lotte

Was

Announcement in also made that
Brooklyn Trust Company has re¬
ceived authorization from the New
j

and

open

branch at 253-11 Union

a

Turnpike,
Glen / Oaks - Village,
Queens.
The new office will be

| the

26th

banking

office

the

of

company; In October .the company
authorized

was

branch
116-22 Queens Boulevard,

office at
Kew

to

open

a

j'be opened as soon as quarters can
I ■'*'!
;

"

.'

The

'

■■

6

v

'i;

floor

to

Manufacturers

&

Traders

Y„

received approval on Nov. 30 from
-the State Banking Department to
»increase its capital from $5,720,000

$6,020,000.
The stock is in
of $10 each. ' As indicated

to

shares

in

our

the

issue of Dec. 8, page 2304,

trust

over

of

Dec.

to

14

Wil¬

In

a

of

ficiaries,

to

Harold

second

Building, over
banking • floor.

main

trust activities will, be

our

in

this

new

made in

was

space

' '

:

our

issue

Dec,

politan Trust Co.

,

*

The

•

&■ ;

..

>

capital of the Liberty Na¬
Bank
of Oklahoma
City,
was

sented

increased

as

of Dec.

1

stock

dividend, while the
amount
of $500,000
re¬

a

further

sulted from the sale of
if

on

Louis

Armour,

named

A.

if

Hager,
as

stock.

new

*

has

Jr.,
the

succeed

to

phiis Busch III
Trust

&

G.

Co.

St.

of

Louis,

Mo.,

President

company

recently took

that the

simple
to

seasoned

trust

to

their trusts to

department.

become

President

for the benefici¬

means

transfer

The

The

St.

pointed

out

is

without

cost

The

staff

Trust

will

the

be

effected

re¬

a

director

"Globe

with the

career

elected As¬

was

Cashier

and

advanced

three

year#

to Assistant

Mr.

Vicer?

Tomberlin, former

old St. Louis Union Bank in
1914,
and served with the Army Tank

Assistant Vice-President and

Corps during

Credit

later
the

served

St.

Becker

World

War I.
He
years as head of

14

Louis

Co.,

After two

office of

made

retary

brokers.
with the Recon¬

Bank

and

v

'•

j £<

•;

/ *

U.! S.

of

'

1937

President
later

,

as

H.

enlisted

as an

officer

an

sec¬

Lane
in

Bank

St.

in

ant Cashier in 1946 and Assistant
Vice-President in 1947. Mr. Clonta

formerly Cashier, joined the bank

•

in

On Dec. 6 James M.

1925.
He became Auditor of
the three Atlanta offices in 1944;
Vice-President in^ 194'"/

Kemper, Jr.,

Assistant Cashier of the Commerce
Trust

Company

of

;

Kansas

Assistant

City,, and Cashier in the

Mo., for the past three years,.was
elected a Vice-President and di¬

rector,-according
City."Times."
,

the

to

Kansas

.

.

*;

National

Bank

of

At¬

At

-

nieeting

a

directors

of

same

if

■

year,

if

on

The

...

Nov.

First

28,

"Globe

stockholders

to

the

which

-

will

Company's office and

He

the

S.

Ga.,

Starks

were

and

elected

Wilson

Dec.

on

15

promoted

George Tomberlin
Vice-Presidents; C.

Clonts

became

General

Auditor; Herbert L. Megar, Cash¬
ier.; and Russell E. Bobbitt, Assist¬
ant Cashier.
Mr. Starks, formerly

in New York state,

banking

career

he started his
in 1936 in Buffalo,

N., Y.,

with the Marine Midland
Bank, moved to the Florida Na¬
tional Bank & Trust Co. in Miami
in

1940

and

in

1942

joined

the

crease

bank

of

man

the

Board,

will

provide

stockholders with the
to

opportunity
20,000 additional!

subscribe for

shares of $10 par

price

$23.50

of

will result in

value stock at %

per

share.

.

time

it

made

was

Liles and H. P.

known

by Mr.

Fleming, President

of the bank, that it is

(Continued

Citizens & Southern in Atlanta. In

on

planned to

page

86)

Democrat"

Savard, Hodgson &Co., inc.
Members of The Investment Dealers

Manufacturing Co.
will retain this position, but

Association

of Canada

INVESTMENT DEALERS

r
v

-

'■

On Dec. 15 Theron L. Marsh and
John N.

Page

were,

216

elected Vice-

St. James Street W., Montreal

Plateau 9501

—-

Presidents of the National Newark
&

Banking Co. of Newark,
had been Assistant

Essex

N.

Both

J.

Vice-Presidents;

Marsh,

Mr.

of

the bank in 1934, is the son

S. Marsh,

Spencer

of the
who was

Mr. Page,

Chairman of the Board.

with the bank since 1932, is a
rector

of

Building
election

the

Newark

Corp.
of

the

Along
two

&

ST. JOHNS, P. Q.

McLeod,Youhg,Weir & Company
LIMITED

Members of The Investment Dealers' Association of Canada

di¬

with

Savard & Hart

DEALERS IN ALL

Essex

the

CANADIAN SECURITIES

Vice-

new

Members

Presidents of the bank, three new
Assistant

Cashiers, with status

as

officers in the bank, were named,
viz: Anson M. Fischer of Verona,
Bradford Cochran of New York
and Seth H. Thelin of

Upper Mont-

"Evening News," Robert G. Cowan,

-announced

that

the

board voted to transfer $1,000,000
from undivided

profits to surplus,

increasing the bank's surplus from

$3,000,000 to $4,000,000.

J;




;

of

The Montreal Stock

Direct

private wire

The First Boston

to

Head

50

The Montreal Curb

Montreal and

on

Montreal

Market

STOCK BROKERS

all Exchanges

216 St. James Street

Office

King Street West, Toronto, Canada

Branch Offices:

Exchange

Corporation, New York

Stock orders executed

ciair, all three representing pro¬
motions.
At same time,-said the
President,

TROIS-RIVIERES

SHERBROOKE

ac¬

to the Newark "Evening
Dec. 16, who came to

cording
News"

late

QUEBEC

Ottawa

Hamilton

London

Correspondents In London, England

New York

QUEBEC

Thia

capital increase oi
$200,000 with $270,000 to be placed
to the bank's surplus.
Total capi¬
tal
funds,
including
undivided
profits, will then be $1,970,000 aa
compared with $1,500,000 as re¬
ported Nov. 1, 1949. At the same
a

the Lockport Exchange Trust

Co. of Lockport, N. Y.

in¬

capital

funds of tht>
$470,000.
The
plan, an¬
four Atlanta officers and elected
nounced by Marion H. Liles, Chair-r
a new Assistant Cashier.
Howard

lanta,

Sons Hinge

be

>,t

the

National

the

and

-

Bank and Trust Co. in Macon,
authorized a plan to be submitted

Louis.

Vice-President

the

Army he returned to the
in 1945; was elected Assist¬

bank

Trust

_*

;

and

man

Company in 1934."
.

to

Young; after serving

Corp., Mr, Thias

Vice-President

a

Manufacturers

Department, joined the Cit¬

izens & Southern in

G.

investment

years

struction Finance
was

A.

man¬

of the Small Business Term

ager

Viceof

reported that Mr. Hager

Executive

&

for

The

director of sales for the C. Hager

beneficiaries.

continued

to

Executive

an

and

Louis

of Dec. 6

would

intention

his

First National

a

transfer to La Salle National it is

to

affairs.

linquish the Presidency on Jan. 2

made with La

Salle National in order to provide
a

sistant

bank's

Assistant Vice-President and loan

made known

aries

1944, Mr. Starks

the

officer, has been transferred to the
New Business Department.
Born

liquidate its business and dissolve.
were

also will be active in direction of

been

while P. A. Thais has been named

Wainwright Vcigt

htmphill, Noyes, Gra¬
ham, Parsons & Co.,
Pittsburgh

& Co., Columbus

Adol-

late

Chairman of the

Board of the Manufacturers Bank

bene¬

Trust

indicates

Cartwright

Sweney, CartWiignt

Co., Cleveland

Southern

succeeding James P.
Hickok, who, as indicated in our
issue of Oct. 20, page 1587, recently

letter also

Murch

The directors of the Citizens &

; •.

$1,500,000
to
$2,500,000;
$500,000 of the new capital repre¬

Chicago,

trust

&

r

tional

Townsend,
Company
of Chicago, states that the com¬
pany has decided to voluntarily
President of The

the

on

the Field

of

present

feet of

square

Okla.,

Laurance

letter

addi¬

Maynard H.

of the trust business of the Metro¬

Chairman of the Board, and John
C. Wright, President' of La Salle
bank.

National
the

from

announcement

by

to

8,. page 2304, to the ac¬
quisition by the La Salle National

it

Company

space

Reference

Jias completed arrangements
acquire the trust business of
Trust

companies

Salle

4,000

on

concentrated

cago

The

trust

early in January."

Salle National Bank of Chi¬

La

the

incident

that

All of

Streets office in
ff

of

option

our

/..V
^

arrangements

..

Trust Company of Buffalo, N.

;

through

with its subsidiary, Metro¬
Investment
Company.

additional

Richmond.
are

Todd

President.

business

The

Gardens, Queens, which will

be completed.

in

L.
Frank B. Reid

began his banking

investment

"an

Richmond.

Cashiers

Boush

~

j York State Banking Department according
! to

office

Norfolk.
.

'■'*

V'r"

The

department the bank has exercised

McCarthy, William L. Til¬
ler, Hampden F. Collier and Mar¬
vin B/Cranshaw, all of Richmond,
and Carl P. Brickey, of the Char¬

1940, he

busi¬

tional space necessary for the trust

liam H.

Secretary in 1929.. In
was elected Secre¬
tary of the company, and in July,
'1941, Vice-President and- Secre¬
| April,

trust

later

stated

Assistant Cashier

Assistant

New

Assistant

an

the

Wright of the La

Hatch, officer in charge of

Streets

Main

pany; in .1919, and following sue-,
cessive promotions was appointed

of

Trust

Democrat" further said "Mr. Thias

Neither

don, John B. Orgain, Jr., and John
S. McClure, all of the 8th and

After

The

banking powers and neither
has accepted deposit accounts.

bank.

the bank's 21st and Granby Streets
office in Norfolk; William T. Gor¬

having
Signal

Corps in the 77th Division.

:

■

has

Vice-President

Norris

War

charge of its trust

result for La Salle

politan

to Assistant Vice-President are R.

with

in

the

$55,185,000."
*

Vice-Presidents, four

Main Streets

Sloat has spent

World

Joseph

National,
differ in that the action by The
Trust Company of Chicago will
lead to ultimate liquidation of the
company, whereas the Metropoli¬
tan Trust, while retiring from the
trust business, will
continue in

Norfolk, Va., and
Edgar C. Gatewood, at the 8th and

created by

career with the
having been first em¬
ployed by it in 1912.,. He is a vet¬
overseas

staff.

plans, although effecting the

same

Streets office in

company,

of

VALLEY

and

Metropolitan Trust Company.

on

j his entire business

served

-:My OHIO

Company of
Chicago follows a similar step in
acquiring the trust business of the

$60,920,$220,000 and

;

eran

bank's

Bank

of

ness

at

Thompson, manager of the
bank's.,Charlotte and Boush

com¬

5-the death of Edwin P. Maynard
on

'

acquisition by the La Salle

merger

tive

member of the

a vacancy

The

in

5

ing to W. W. McEachern, Execu¬

■

the

the

bank

Assistant Cashiers have been

new

Brooklyn Trust Com¬

Secretary

capacities,

department.

of

resources

of Brooklyn, N. Y.,^on Dec. The new Vice-Presidents
Wallace H. Sloat, Vice-Presi¬ well F.

15

Salle

"Bulletin"

pany

dent

official

to

promoted within The Bank of Vir¬
ginia. of Richmond, Va., accord¬

board

PENNSYLVANIA

G, Porter is Vice-President of La

Assistant Vice-Presidents and five

...
■

the

$3,000,000.

■„

dividend is payable on Jan. 16, to
stockholders
of ? record
,as,v of

21.

Dec.

date aggregated

14,

I County Trust's 152nd consecutive

Dec.

of

reserves. were

that

the bank's directors at

by

!

,

Trust

and

in

added

of Nov. 1, 1949, the bank

as

showed total

board.

their regular meeting on Dec.

WESTERN

Belshe, Vice-

'

OHIO

that other officers and employees
of the trust companyJ would be

"In its latest statement of condi¬

of

r

Voted

tional

10,000

that

share.;

a

Chairman

bank's

'I

NORTHERN

trust

also stated:

a

tion,

the

present

this" stated

1949,
compared
with
previous
quarterly dividends of ZIV2C, ac¬
cording to Andrew Wilson, Jr.,
of

the

.

IBAvGROUP: CHAIRMEN

Mr.

Officer, will
shortly become identified with the
department of La Salle Na¬

one

value of the stock is estimated

York,

New

dividend

a

for

"Evening Bulletin"
noting

declared

10

a

Albert T.

President

shares (par $100) to 100,000 shares
$10
par.
The
Philadelphia

*

Westchester

National Bank

and

of

as

County Trust Company

send

meeting on Jan. 10
proposal to increase the capital

a

branches of the trust company.

The

on

stock

the

all

and

plans of

at their annual

Bronx

by the Man¬

are now

Street

the

basis, the
stockholders have been advised by
President R. Livingston Sullivan
that they will be asked to approve

tain them until the final payment

:

of

Philadelphia to split its capital

stock

being at its present location

104 South La Salle Street.

Wright indicated that Mr. Town-

furtherance

the Market

quidation.
Upon return of the
certificate, stockholders should re-

at

W., Montreal

SHERBROOKE
ST. JOHNS, P. Q.

—

Plateau 9501

TROIS-RIVIERES

THE

(2570)

86

Continued

85 jrom
■

page

News About Banks

increase

bank's

the

three to five
bank building,

building from

stories.

old

The

demolished

now

being

room

for the new, was a

office structure,

to make
five-story

with the bank oc¬

cupying the first floor.
Accord¬
ing to Mr. Fleming, the new build¬
ing
(originally
proposed
as
a
three-story structure) when com¬

have more banking
and rental space than the old one.
will

pleted,

(it

of

Vice-President
Trust

of

Co.

*

*

Retirement

A.

of

L.

Lathrop,
Bank

Union

Los

&

Cal.,

Angeles,

under that institution's retirement

announced by President
Meyer, effective Dec. 31,

is

plan

R.

Ben

following 31 years of service with
the institution.
Mr. Lathrop will
continue

director of the bank

a

as

Before

the announcement states.

coming

Los

to

FINANCIAL

5

Angeles in 1915,
native of Minne¬

Under-Consumption of the Data

ing on the
says." [!!]

spective Exchange's offices in New York, and at the SEC's offices
Washington and Chicago. The data regarding securities registered
on
other Exchanges are obtainable in the Washington and New
York offices of the SEC.
For the unlisted companies, affected by
in

Acts, the dafa are available in

the other

the SEC's New York and

Washington offices.

public's limited use of the New York Stock

The

Exchange's Re¬

ports Division, which furnishes these data to practically anyone
asking for them, is indicative of the generally prevailing inhibited at¬
titude toward financial facts which are relevant to quantitative value

judgments in lieu of the easier-to-take

affairs.

company

(Mjap-

"glamorous" descriptions of

While the Stock Exchange and Curb facilities for

.J

.

stockholders'

of

success

The
Bound

meetings

than

what

.

,

he

Post-Meeting Report

,

with the annual meeting is the post-meeting report,
inform the absentees of what transpired there.
It has the ad¬

to

up

adding

of

vantages

information

stockholders

for the

if

there

are

enough intelligent ones attending the meeting to correct such omis¬
sions in the annual statement; of showing the anti-management
of controversial

side

in inspecting them at their re¬

interested

their book "Public Relations for Retailers"

"Manners of a presiding officer have as much or more bear*

;

gold-mine of information is available for anyone wishing to
scrutinize it—particularly if they reside in New York City, Chicago,
or Washington.
The data relating to registered securities listed on
the New York Stock Exchange and the New York Curb Exchange
call for anyone

in

millan 1949):—

This

on

Hession

and

unregistered companies at present merely report
directly to shareholders according to what may be prescribed in their
own
respective by-laws and/or by State Blue-Sky laws.
How¬
ever, all such presently-unregistered corporations with assets of over
$3 million and with at least 300 shareholders will be brought under
the SEC's above-cited reporting provisions if and when the pending
Frear Bill is enacted by the Congress.

are

Thursday, December 22, 1949

CHRONICLE

the SEC's aegis. The

of

size

the

&

Observations

And Bankers
new

Continued jrom page

COMMERCIAL

thereto.

questions; and of getting stockholder reaction1
Although the number of companies sending out such postr

meeting

reports

has increased

to

about

100, the degree of stock¬

holder opposition or indifference to them is quite remarkable.

This

is evidenced by the small number writing in for them when their dis¬

tribution is

request basis—a result in line with the indifference
persistently shown to the opportunity to secure the long form of
reports from companies sending out prior abbreviated ones.
on

a

annual

The practice of reporting on the meeting should itself raise the
caliber of the proceedings, for it offers the attraction to able potential
participants of avoiding their conferences with management occurring
in

But

the

post-meeting report can obviously be on no
constructive than the proceedings at the
meeting which it has described. So our conclusion is that the com¬
vacuum.

a

higher

a

plane

nor any more

bination of both the post-meeting report and earnest and intelligent
stockholder participation, is necessary for an effective result.
If

they will not exert themselves sufficiently once-a-year to attend a
meeting of the businesses which

they own, stockholders would surely
inquirers comprise seem to deserve their
Lathrop, a
confusion, disorganization, and expropriations.
sota, was engaged in the railroad but a tiny fraction of the 5 or 10 million stockholders in the listed
It is not to be inferred from the above observations that even
and lumber business in the middle
companiesr—with much of the daily "clientele" even including re¬
west, the east, and in northern peaters. Investigation reveals that the users consist mostly of pro¬ the full exercise of zeal and intelligence in digesting his company's
Mexico.
Continuously connected fessionals,, as security analysts, statistical service researchers, and factual information would afford the stockholder complete compre¬
with the banking and trust busi¬ credit departments of banks. An estimated 80% peak load comes in hension of its current or future status. There would still remain many
the spring months of annual report issuance, substantiating the air-pockets, as confusion resulting from the reporting t>f dividends
ness in Los Angeles since 1915, he
conclusion that the investing public does not deem it worthwhile and the resulting general misconception regarding the actual divi¬
became associated with the Union
Mr.

Bank & Trust Co. in

1918, organiz¬
ing its trust department.
He has
since continued in charge of that
department and also

of the

tee.

to

Indifference

member

as a

past President of the
Bankers
Association

California

currently

Chairman

its

of

information in connection with making its new

the detailed

use

accessible

manuals; and

some

t

j

rr

4.:

served

He has

other

numerous

on

u„_

tt~

Legislation and Taxation.
mittees of this association

com¬

well

g0ing_business basis, and with its preference for occupying
itself with the imponderable qualitative factors of company activities

on

a

sociation, for the Vice-Presidency
of which

tical manuals

of the

American

he

was

15 states in its

as

Bankers

the

As¬

nominee of

1939 election. For

three successive one-year terms he
was

President

Owners
of Los
man

&

of

the

Building

Association

Managers

Angeles; is a past Chair¬
Independent Bankers

of the

Association

the

of

12th

Federal

Reserve District, etc.
*

The

*

*

■

Peoples National

■

:<V,-;

Bank

of

Washington, at Seattle, Wash., has

purchased the assets of the Brem¬
erton

Trust

Savings

&

Bremerton, Wash.,
of the

Bank,

and

a

at

branch

Peoples National has been

established in the quarters hereto¬
fore occupied by the trust com¬
pany
as

in Bremerton, to be known

Bremerton Branch of the Peo¬

ples

National.

ment

In

this

of

by

an

announce¬

A.

Roy

Noyes,

President of the Bremerton Trust
&

Savings

Bank, Joshua

Green,

As will be vouched for by the

is pitifully neglected.

statistical services, even their relatively

technically-minded clientele

requires sweetening of their supposedly dull factual reading
the inclusion of "outlook" and other forecasting tid-bits.

through

logical valueappraisal approach to security investment rather than corporate
officials or the public-relations promoters that is really responsible
for the gross overemphasis on "public relations" angles and for the
perversion of the entire management-stockholder relationship. Rec¬
ognition of the misdirection of stockholder interest is manifested in
current trends in the annual pamphlet report going directly to stock¬
holders—viz. the title of a recent magazine article "Stockholder Re¬
ports Are Public Relations Literature"; in the appraising of annual
reports (both in and out of prize-winning contests) overweighted
according to typography and physical makeup; in overemphasis on
the pink-pillishness of their over-simplified language; their over¬
stuffing with pretty photographs and neat diagrams, and portrayal of
products until they resemble sales catalogues.
Even an ardent reformer of stockholder management practice
like Lewis Gilbert is preoccupied with the importance of the nonfiscal elements of the annual report.
In his recently published
Annual, Report of Stockholder Activities reflecting widespread cur¬
rent feeling he gives the palm for "the best" report to a company
It

the

is

for the

phobia

public's

against

following reasons:

the

thorough

,

,

,

,

Jackson, until
now
Assistant Manager of the
Everett branch of the Peoples Na¬
tional Bank, is to become Assistant
Manager.1 The entire staff it is
added, will remain. The Bremerton
Trust & Savings Bank was organ¬
ized

holders.

ples National, and P.

A.

Strack,

Chairman of the Executive
mittee

of

Bank, it
will

the

was

become

branch

and

in

came

zation

Com¬

National
stated that Mr. Noyes

Manager

R.

1914

Peoples

of

the

W.

and

Mr.

Noyes be¬
associated with the organi¬
in

1919.

An

item

bearing
on the increase in the outstanding
capital of the Peoples National,
from
$1,500,000
to
$3,000,000
through the declaration of a stock
dividend of $1,000,000 and the is¬
suance to the stockholders of the
rights to buy another $500,000 of
stock, appeared in our issue of
Oct. 27, page 1666.
*

*

*

"(T) Pages were numbered;

in

p

President

"Page 26 concluded with President C. N. Haskell's message
words: 'We will welcome questions from stockholders

Warehouses

Raymond

Ltd.,

Corp

Terminal

President

pect to send all

>

stockholders
This is

ings at the meeting.
ago.'"
«

And

then, almost

as

an

a

a

We exwritten report of the proceed¬
practice we initiated two years

afterthought, Mr. Gilbert says:

then concludes with comparative figures for
balance sheet and profit and loss tables [sic], although we hope
that similar treatment for the Consolidated Statement of Surplus
"The

"

of

.

President of Direct Winters Trans¬

put Ltd., all of Toronto




kind

page

5

•

thinking on steel pricing: Make each product stand on its
from a profit standpoint.

own

The revolution in "extra"

pricing is most apparent to sheet users,
Actually it is only a delayed recog¬
nition of the technological revolution that had completely swept the
steel industry long before the war—the changeover to wide high
this

trade

authority observes.

speed continuous mills which roll out tremendous tonnages of flat
rolled steel at

high speeds. Before this happened it was more difficult
costly to make the wider sheets. The old hand mills were better
narrow short sheets.
So the steel companies charged more

and

suited to
for

the wider

Campaign and

the Annual

The consequences of stockholder sloth are

phenomenon

of

and

likewise manifested in

the

cheese sandwiches "on the house."

exemplified
by this Widely if mistakenly praised principle laid down by Mahoney
The

Today the produc¬

)

Smart steel buyers are therefore going over the new extra

lists

carefully.

Next the designers and production engineers will be
Buying practices of many firms will be changed, and per¬
haps in time so will design. If it is possible to redesign for wider
sheets without much increase in manufacturing and assembly costs
very

called in.

it will
some

be done, with the net effect being a saving in steel cost to
fabricators despite the base price increase.
;

The second factor disclosed by a between-the-lines scanning of
the U. S. Steel price increases is this, according to "The Iron Age":
U. S. Steel has apparently decided to price its products in such a way

that there will be

(Semi-finished

margin.)

an

equal percentage of profit on almost all of them.

may still
This explains why there

products

carry
was

somewhat lower profit
flat across-the-board

a

not a

boost in base prices.
Tinplate and pipe skelp base prices were cut.!
A number of base prices were unchanged. Advances averaging $2 a
ton on a weighted basis ranged all the way from $1 to $29.50 a ton,
the latter

If,

on

electrical sheets.

•V

i

;

expected, other steel companies meet U. S. Steel's prices,
"The Iron Age" finished steel composite price will advance 3.5%
to 3.835c per lb.
This is still tentative because there may be slight
variations. This increase is higher than the weighted average 2%
base

as

price

increase

include certain items

because

"The

Iron

Age"

(notably tinplate) which

not advanced.

or

r/'

^

»

the

composite
were

does

either

not

reduced,!

•,

The American Iron and Steel Institute announced this week that

operating rate of steel companies having 94% of the steel-making

capacity for the entire industry will be 94.5%
week

beginning Dec. 19, 1949,

ceding week's rate of 94.1%.

an

of capacity for the

increase of 0.4 point from the pre¬

;;

This is the highest rate since May 16 when the industry was

-v""

operating at 95.6% of capacity.
This week's operating rate is equivalent to

£

//"''V

1,742,100 net tons of

steel ingots and castings compared to 1,734,700 net tons one week ago.
A month ago the rate was 78.2% and

tons;

a

year

average week in

ELECTRIC

production amounted to 1,441,600

it stood at 88.6% and 1,597,000 tons, and for the

ago

1940, highest

OUTPUT

SET

prewar year,

at 1,281,210 tons.

NEW ALL-TIME

HIGH

'

RECORD

'

'•

,

PAST WEEK

Meeting

annual meeting—the interest in which it
has been deemed necessary to drum up through such high-jinks as
the appearance of Mrs. Wilma
Soss in a fin de siecle bathing
the

sheets, less for the narrower ones.
practically reversed.

tion and cost picture is

THE

Anti-Sloth

Industry

of

report

anT"alert costume (at this year's U. S. Steel meeting), kleig lighting, televising,

T tH

jrom

The State of Trade and

particularly any questions they

will be given in the next report."

of

V

these

might wish to have answered at the Annual Meeting.

director of the Dominion Bank,

gmifh is

'

who cannot be in attendance and

W. Dent Smith has been elected

head office, Toronto, Canada. Mr.

Continued

and

(2) there was a table of con¬
tents; (3) on page 3 the stockholders were reminded of the
coming Annual Meeting; (4) the charts were informative and
excellent; (5) a page was devoted to reproducing typical adver- r
tising of the corporation; (6) pages 16-17 were devoted to
photographs of the regional meeting held in Pitsburgh on March
3, 1949 with proper identification of shareholders in the group
pictures; (7) on pages 22-23 the same treatment was repeated in
regard to the Annual Meeting of June 1948; (8) page 25 is
replete with information about the number of shareholders the
corporation has and similar data about the attendance at the re¬
gional meetings, together with the management plans for more
of such direct personal contact between management and share¬

Chairman of the Board of the Peo¬

performance.

brokerage fraternity as well as individual investors do manage to
But in line with the invest¬

prediction of market movements in a supposed sea of liquidity;
epitomized in ever-growing Blue Chip-itis; both use of the wealth
of the SEC-induced information as well as the boiled down statis¬

as

imponderables would still exist, including quali¬

stomach them in that abbreviated form.

on California State Bar
ing community's general diffidence toward all stock market elements
member of its Committee om? that center on quantitative value appraisal of individual securities

a

many

the

of the non-technically minded

Committee

and

And

tative evaluation of various phases of management

Consistent With Anti-Analysis Phobia

Summarization of the detailed data is of course contained in
more

dend-basis of companies in which the investor does or does not own,
stock.

throughout the year.

market commitments

bank's Executive Commit¬

He is

and

disseminating the SEC data are indeed used, the

growing distortion of the annual meeting is well

The amount of electrical energy

and

power

distributed by the electric light

industry for the week ended Dec.

17

was

estimated at

5,996,606,000 kwh.j according to the Edison Electric Institute.
This figure

surpassed last week's

new

all-time high record /

by 115,246,000 kwh. and the all-time high mark set
of this year by

186,572,000 kwh.

,-V

on

Jan.

29

,

£,>: It was .206,415,000 kwh. higher than the figure reported for the

Volume 170

Number 4866

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(2571)

,

jweek ended Dec. 18, 1948, and 628,982,000 kwh. in excess
[put reported for the corresponding period two years ago;

of the out^

somewhat slower last week, attributed largely to seasonal in¬

was

fluences. f

I

■

i

14

•

'

.

[CARLOADINGS RECORD A 3.6% DROP

FROM PREVIOUS WEEK

Loadings of revenue freight for the week ended Dec:, 10, 1949,
totaled 668,825 cars, according to the Association of
American Rail¬
roads.
This was a decrease of 25,098
cars, or 3.6% below the pre¬
ceding week.

|

„:,7-

•,

-7

•/,

.

».

a decrease of 114,088 cars, or 14.6%, below the
corresponding week in 1948, and a decrease of 185,334 cars, or 21.7%
under the similar period in 1947.
AUTO

OUTPUT

- c According
.motor vehicle

was slightly below the level for the
corresponding
1948, while unit volume approached last year's level in many
sections, Dun & Bradstreet, Inc., currently reports in its summary of

week in

trade.

COURSE

BY

SHARP

'

UPTREND

j.

■

-l

v

•

.

.

dtamberlin Mgr. of
Brown Bros. Harriman
Brown

Co.,

Brothers

59

Harriman

&

Wall

Street, New York
City, private bankers, announce
the
appointment of Robert H.

CuamiMsrira
a

as

of

manager

.

.

Retailers of apparel increased their sales volume
moderately the
past week.
Price awareness figured in much of
the buying. The
demand for men's furnishings and children's
clothing rose somewhat.
Lingerie was popular with women, as were sportswear and blouses.

to "Ward's Automotive Reports" for the

|

BRISK

Brisk week-end activity marked a noticeable rise in consumer
purchasing in the period ended on Wednesday of last week. Aggre¬

v

REVERSES

WHOLESALE TRADE MARKED BY
ACTIVITY

gate dollar volume

■-

It represented

.

RETAIL AND

87

the

firm

in

-

past week,
production in the. United States and Canada. rose
'sharply to an estimated 86,624 units from the previous week's three- Medium and high-priced dresses and suits continued to be purchased
year low of 52,514 (revised) units. ~'-7 .'J7"7:.77"7
meagerly.
•• •
<7
:
;
c
' /./

the New York

office.

Mr.

Chamber1 i n,

formerly

,

I

The total output for the current week

made up of 61,536
cars and 18,538 trucks built in the United
States and 3,978 cars and
2,§72 trucks built in Canada.
.
;

was

—

A

progressive

increase in

the

industry's production is

dicted by Ward's for the next several weeks.
continued
in

1

to

effect to

rise

last

and Canada

new

schedules were

model output,

with 123,315

compares

cars

it said.

built in the U. ;S;

year ago and 65,875 units in the like week of 1941.

a

were bought last week, as contrasted to the high

sales leVel sustained

over

recent weeks.

:

The level of the past two weeks was
maintained in the consumer
Interest in meats increased
slightly, as pork and
more plentiful.
Eggs and dairy products were in
moderately large demand. -The supply of fish was sharply

curtailed,
following seasonal changes in weather.
Housewives purchased the
same amount of vegetables as in the
previous week with the volume
Of fresh fruit
showing a noticeable drop.
-

BUSINESS

FAILURES

V ' CONSECUTIVE

LOWER

WEEK

v

FOR

SECOND

%

S

'

"-

Volume

Commercial and industrial failures declined to 161 in the week
Dec. 15 from 191 in the preceding
week, Dun &

ended

on

markedly

alties

and

j

Failures involving liabilities under $5,000 fell to 124 from 134

«

but remained

jago.
but

well above the 77 of this size which

a

year

Casualties having liabilities under $5,000 dipped to 37 from 57
nearly twice

were

All

,

weekly
lines

industry
decline.

of

as numerous as a year ago.

trade

and
More

business

with

concerns

the

except

groups

rise

failed

?.

*

,

wholesaling

than

a

year

ago

had

only

increase

marked

occurred

in

the

South

States.

All

regions except New England, the South Central and Mountain States

ireported

;

i

/

PRICE INDEX SHOWS

,

FURTHER

MILD DOWNTREND

The wholesale food price index, compiled by Dun &

Bradstreet,

.Inc., again trended

slightly downward the past week.
A drop of
2 cents brought'the Dec. 13 index to
$5.74, as compared with $5.76 a
week earlier, and $6.21 on the
corresponding date a year ago. The

|decline from the comparative 1948 figure has been

j

ipke index represents the
foods in general use.

1 WHOLESALE
.

j-

was a

IN

narrowed to 7.b%.

total of the price

LATEST

per

INDEX

Grain markets were unsettled with prices
moving

.

was

slower with cash markets

influenced by a large volume of shipments from the
country. -Milling
demand for wheat was slow, export sales were
only moderate and
Government purchases were very small.
Corn prices showed some
resistance

to

the

overseas

downward

and

the

trend,

a

market

irregular and net price changes were small
[with strength jn late dealings prompted by absence of pressure from
producing areas.

j

;
The
I ; under

j

was

pressure

of

an

easier undertone at the close

offerings attributed to

lagging demand for

The

domestic flour market remained inactive with

slightly for the week/

Cattle receipts

were

last week but choice fed steers continued

in fairly

scarce

prices down
good

volume

with prices stronger.

IJog values dropped to new low ground for over three years.
Sea¬
sonally slow demand for fresh pork was a factor.
Lard was weak
with prices sagging to new low ground for the
season, reflecting

[weakness in fats and oils and continued heavy receipts

j

the Government's proposed acreage allotments for next

j

of hogs,

<
Spot cotton prices finished slightly lower last week largely in¬
fluenced by the larger than expected increase in the Government's
Dec. 1 crop estimate and reports of widespread dissatisfaction over
cut

plantings

season

more

Reported sales in the ten spot markets increased rather sharply
the latest week, from 331,100 the week before,
and 280,600 in the same week a year ago.
;

Entries of cotton into the Government loan stock for the week
1, totaling 275,766 bales, were the largest for any week

ended Dec.

this

j

'

season.

Total entries for the year to date aggregated 1,501,200 bales,

or




the

mit
of

New

York

Richard H. Moeller
the

New

partnership

York

on

member

Exchange,

Jan. 1.

formerly

was

and

Exchanges, will ad¬
to

Mr. Moel¬

partner

a

in

Sutro & Co. Adds

Board's

(Special

SAN

to

The

Financial

Chronicle)

FRANCISCO,

Benjamin D. Knapp
affiliated

with

CALIF.

-,

has become

Sutro

&

the New York and

Co., 407

San Francisco

Stock Exchanges.
He was
merly with Blair & Co., Inc.

for¬

Ridgeway, Newsome
To Admit
Ridgeway, Newsome & Co., 120
bers of the New

mem¬
Stock Ex¬

York

change, will admit Arthur S. Har¬
per to partnership on Jan. 1.

...

index, department

77 7777'

Harris, Upham to Admit
Charles Handasyde Whitney and
Geoffrey G. Whitney will be ad¬
mitted to limited partnership in
Harris, Upham & Co., 14 Wall
Street, members of the New York
Stock

Exchange,

Jan. 3.

on

Weingarten to Admit
Robert L. Weingarten will be¬
come a partner in Weingarten &

Philips & Co. Forming
New

(

York

be formed
(Special to The Financial Chronicle)

s

in

CLEVELAND, OHIO—James
has

become

with McDonald &
merce

New

T.

associated

Co., Union Com¬

Building, members of

York

the

Stock

Exchange.
Mr.
formerly Cleveland

was

Stock

Exchange,

Jan. 1.

on

Philips & Co., members of the

McDonald & Go.

manager for Central Republic Co.

Stock
as

Wm. Blair

Exchange, will

of Jan. 1 with offices

the

Admit

to

CHICAGO, ILL.—K. F. Deitrick
will be admitted to partnership in
William Blair & Co., 135 South

Savoy Plaza Hotel, New
City. Partners will be James
J. Philips, member of the Ex¬ La Salle
Street, members of the
change, and Lee J. Spiegelberg Nev; York and Midwest Stock

York

general

partners, and Beatrice
Philips,
limited
partner.
Mr.
Spiegelberg and Beatrice Philips
were

former

partners

in

J.

Exchanges

on

Jan.

Now Sole

C.

Eileen

F.

proprietor

E. F. Hutton & Co. Adds
Harold Kennedy to Staff

1.

Proprietor

Arthur

of

is

Ransom

now

W.

sole

Morse

&

Coggeshall-Hicks Changes

Co., 115 Broadway, New York
City../ /•"-,■

E.

F. Hutton &
Company, 61 ; John Coggeshall will become a
Broadway, New York City, mem¬ partner in Coggeshall & Hicks
York Stock Ex¬ 111 Broadway, New York City,

bers of the New

change, announces that Harold J.
Kennedy is now associated with
them in their institutional
depart¬
He
was

ment.

formerly

with

Graham, Parsons & Co.

members of the New York Stock

Exchange
Brooks

firm

on

Jan.

on

will

1.

withdraw

Dec.

31.

Eugene
from

S.
the

Theodore J. Smutny
Theodore P.

Smutny is engag¬
ing in the securities business from
offices

Cole With

Hammill
•

(Special

to

The

Financial

Chronicle)

105

Madison

Avenue,

j

7

Welch Now in Utica

C-

Shearson,

at

New York City.

'

Two With Bosworth

UTICA,
N.
Y. — Bernard
J.
Welch, proprietor of B. J. Welch
Company, has opened offices at

Sullivan
(Special

to The

Financial Chronicle)

CALIF.—

DENVER, COLO. —Edward H.

Cornelius Cole II has become as¬
sociated with Shearson, Hammill

110 Genesee Street.

The firm

was

formerly active from Oneida, N. Y.

Hilliard, Jr., and Martin E. Titus

BEVERLY

&

HILLS,

Co., 443 North Camden Drive.

Mr. Cole was

slightly less than one-half the amount entered through the same date
season.
The volume of trading in the carded gray goods market

last

of

Boston Stock

which

than 20% below the 1949 figure.
Inquiries for
cotton for domestic and foreign account were more numerous.

,

Schirmer, Atherton & Co., 50
Congress Street, Boston, Mass,,

City, members of the New York

James T. Conners With

to 373,800 bales during

I

Schirmer, Atherton Partner

Louis & Co.

green coffee and lower Brazilian prices.

investment

Co., 551 Fifth Avenue, New York

Conners

coffee market developed

Reserve

or a

year ago.

trust

and

Broadway, New York City,
•

"NOTE—On another page of this issue the
reader will find the
most comprehensive
coverage of business and industrial statistics
showing the latest week, previous week, latest
month, previous year,
etc., comparisons for determining the week-to-week
trends of conditiohs, by referring to "Indications of Current Business
Activity."

Conners

cocoa

Federal

Robert H.Chamberlin

Montgomery Street, members of

store sales in New York
City for the weekly period to Dec. 10, 1949,
decreased by 4% from the same
period last year.
In the preceding
week a decrease of
7%;was registered below the similar week of
1948.
For the four weeks ended
Dec. 10, 1949, a decrease of 5%
was reported under that
of last year.
For the year to date volume
decreased by 7%. ■

!

The

previous

one week away the tempo of gift buying
perceptible increase, bringing the level of
department
store sales totals in New York
the past week close to those of
the similar week in 1948.
7 7,... 7.' />,/•'.. -

in the like week

I

as many

prospect of ship¬
reduced movement from the

Total sales for the week amounted to 232,643,000 bushels,

con¬

with

;

a

the

cor-

dent

banks in

slightly during
moderately below the level for the similar
ago, although last-minute re-orders were
keeping many

to

to

p o n

nation increased

With Christmas

v

r e s

but remained

showed

daily; average of 38,800,000 bushels.
This compared with a daily
average of 41,500,000 bushels the week before, and 32,500,000 bushels
a

-

Department store sales on a country-wide
basis, as taken from
the Federal Reserve Board's index
for the week ended Dec.
10, 1949,
decreased by 4% from the like
period of last year. In the preceding
week a decrease of
8% (revised) was registered below the like week
of 1948.
For the four weeks ended
Dec. 10, 1949, sales registered a
decrease of 6% from the
corresponding period a year ago and for the
year to date a decline of 6%.
<

vices

of
ser¬

Blanchard & Co.

aided by the

likelihood of

country due to wintry weather reported over a large part of the main
producing areas.
Trading in grain futures on the Chicago Board of
Trade declined slightly last week.

| 1*

to —5; East and
+6; and Southwest

—1

to

77/J;".VQ;;■v7_;"7,'i;-7'777v.^ ' ;'7/

generally

j

ments

+2

.

"! lower for the weeflk.
corn

Coast

England

period a year
plants busier than last pre-Christmas.
Approximately half
buyers were in attendance ait wholesale markets as in
the

f

charge

ler

Pacific

..

According

further slight easing in the general wholesale price

Demand for both wheat and

and

New

in

the firm's

members

.7

Wednesday of last

on

was

the week

MOVED

Dec. 6, and with 268.20 on the corresponding date a year
ago.

'/

period ended

Co.

&

1936. He is

matters.

Interest in toys
-

in the

in

year.

//

-

retail volume

Wholesale dollar volume for the

WEEK

The daily wholesale commodity price index,
compiled by Dun & Bradstreet, Inc., moved irregularly during the
period and closed at 246.75 on Dec. 13.
This compared with 247.47
i

seasonally.

South, Midwest,
Northwest 0 to —4;

,.*./

pound of 31

level in the past week;

on

period last

same

riman

portfolio

with over-all unit volume above
week a year ago, putting dollar

estimated to be from 0 to 4% below that of a
year ago.
Regional estimates varied from the levels of a
year ago by the fol¬
lowing percentages:

'

COMMODITY PRICE

IRREGULARLY

There

♦

:

sum

of

.

I

WHOLESALE FOOD

buying

week.

casualties than in 1948.

more

retail

kitchenware, small appliances and furniture rose
promotions for these items continued;
cosmetics, jewelry,

y,—4 to—8.
r

/:;77 77y7y77\7/TT:
Atlantic

as

Total

;

in all

the

leather goods evoked less favorable
response.

week

.

Weekly declines prevailed in six of the nine major regions. The

.

rose

a

particularly noticeable in trade

and service but negligible in manufacturing,
f

occurred

level with the

a

in

The demand for

Inc., reveals.

Despite this second consecutive weekly decrease, casu¬
the 96 and 87 which occurred in the
comparable
weeks of 1948 and 1947.
However, the number of concerns failing
continued below the pre-war level of 270 in the similar 1939 week,

increase

'

Bradstreet,

exceeded

substantial

house-furnishings in the week
level for the comparable

|

;/

a

join-

Brown

nection

'

was

d

Brothers Har¬

i

There

manager,
e

buying of food.
'poultry became

pre¬

Employment totals

overtime

some

bottlenecks in

overcome

The week's total

and

week

Less shoes

j

assistant

a n

formerly local man¬
ager for Merrill
Lynch, Pierce,
Fenner & Beane, and prior thereto
for Schwabacher & Co.

A1 Johnson

have become associated with Bos¬

worth, Sullivan & Co., 17th at Cal¬
ifornia Streets.

Mr. Hilliard

was

Opens

/Special to The Financial

Chronicle)

"

COLORADO

SPRING^'COLO.

—A1 J. Johnson

is

engaging in

a

formerly with J. J. B. Hilliard &

securities business from offices at

Son, Louisville, Kjr.

727 North Foote Avenue.

Thursday, -December 22, 1949

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(2572)

88

Indications of Current Business Activity
statistical tabulations cover production and other figures for the latest week or month available, (dates
are either for the week or month ended on that date, or, in cases of quotations, are as of that date):

The following

column

shown in first

Latest

STEEL INSTITUTE:
operations (percent of capacity)

Previous

Month

Week

Ago

Ago

ALBICAN IRON AND
Indicated steel

Equivalent to—
and castings

94.5

1,742,100

1,734,700

Dec. 25
<•

Dec. 25

(net tons)—

gteei ingots

94.1

,11

88.6

78.2

,

oil

Crude

COMMERCE) —Month

gallons each)
to

runs

Gasoline output

output

MLerosene

.

5,127,000

18,128,000

17,686,000

18,395,000

2,209,000
6,766,000

2,092,000
6,849,000

7,585,000

7,853,000

8,342,000

7,814,000

9,387,000

105,264,000

106,146.000

Dec. 10
Dec. 10

Volume

DEBITS —BOARD

BANK

2,506,000

OF

97,110,000

BY

25,151,000
89,448,000

27,622,000
92,117,000

77,647,000

66,271,000

68,527,000

64,078,000

U.

PARTMENT

October

GOVERNORS

£668,825

(number of cars)

§693,923

§635,828

782,913

SERVE

§592,621

Dec. 10
Dec. 10

§599,183

5516,168

675,808

credit
Total

CONSTRUCTION

ENGINEERING

ENGINEERING NEWS-

—

C

RECORD:

Total

.

Public construction
State and municipal

.

Dec.
Dec.
—————-Dec.
——•
Dec.

construction

S.

U.

Private construction

_

>—-—

223,625,000

$217,758,000
117 449,000
100,309,000

38,860,000

52,942,000

170,683,000

12,652.000

$302,115,000

$119,434,000

15
15
15
15

78,490,000

*

75,379,000
44,055,000

(U. S. BUREAU OF MINES):
Bituminous coal and lignite (tens).

102,149,000

coke

Beehive

..Dec. 10

9,200,000

—Dec. 10

626,000

12,800

*12,100

(tons)

947.000

5,644,435

credit

PRICES:

iron

Pig

;V

5,790,191

of

month

Number

96

refinery

Export

3.705C

3,720c

<

$45.88

$46.91

sales

$27.25

$27.92

$29.58

$43.00

Piece

York)

at

Dead

(New

Dead

(St., Louis) at—
(East St. Louis) at

Zinc

23.425c

Piece

103.008c

12.000c

12.750c

21.500c

11.800c

Dec. 14

11.800c

18.200c

12.550c

t

17.500c

U.

DAILY AVERAGES:
—

Dec. 20

Aa

119.61

;

J.

—

'

121.04

119.61

119.41

>

Dec. 20

115.43 *

115.24

114.46

117.80

107.27

106.92

103.64

Dec. 20

110.88

110.34

117.20
120.02

109.42

117.00

117.00

Group-—

-

——

Dec. 20
Dec. 20

Group

>

119.82

115.82

corporate

Average

:•

•. •

■.

130.1

130.7

150.2

W116.3
139.7

140.9

144.1

161.2

182.5

i

130.8

.

V:-.
166.0

165.9

142.3

142.1

141.4

102.9

—

comfortables

102.9

108.5

apparel—

:

—

.

147.1

——

brassieres

and

142.1

141 8

housedresses

and

132.5

130.9

130.8

:—

137.0

157.2

138.5

.

■

139.4

133.2

133.5

140.3

!

140.3

141.4

139.5

140.2

apparel—
139.5

Hosiery
;

and

2.87

2.89

3.09

2.60

2.79

Infants'

128.1

131.4

132.4

168.0

168.0

169.6

131.1

131.5

*

—.

—

T

children's

and

127.4

131.4

;—1_

;__

overalls—

Shoes

2.87

132.9

127.4

129.5

caps

including

129.5

130.4

Clothing,

2.59

155.8

152.2

152.3

•—4

—

neckwear

and

Hats

2.86

Dec. 20

136.8

130.7

144.9

139.7

:

2.58

Dec. 20

—

—

Aaa

/.,.

■

and

2.44

2.17

2.18

2.17

—Dec. 20

142.3
140.8

115.7

goods—
..

.

UiiwvfWtrti".

AVERAGES:

DAILY

YIELD

BOND

O. S. Government Bends

128.7
138.8

144.6

u

wash

Shirts

MOODY'S

141.9

137.0

-

145.1

______

______

silks

Sheets

Men's

40,167,801

130.4

Underwear

112.00

119.82

'

Utilities

Public

Industrials

42,132,506

129.8

wear

Shoes

106.74

20,539,207
$366,155,300

-

.

children's

Furs

110.15

Dec. 20

RETAIL
PRICE
(COPYRIGHTED

JOO

=

30—

at Sept.

customers

Woolens

Corsets

115.63

20,768,783

$382,161,300

*

137.0

furnishings

Aprons

117.20

20.872,186

$387,528,700
42,3^2.413

138.8

goods—
and

Hosiery

111.44

115.24

121.25

121.46

Dec. 20

—

Aaa

115.63

115.82

Dec. 20

Average corporate

consumers—

omitted)——

(000's

customers—month of

apparel

Women's

100.91

104.51

104.32

104.54

Dec. 20

Bonds

Government

S.

12,744,152

13,975,926

1)

'/•-

128.6

Blankets

MOODY'S BOND PRICES

7,285

.___

Domestics—
^

Dec.

to

ultimate

to

1935-89

and

Cotton

21.300c

9.750c

9.750c

14,877,000

index

Rayons
•

9.750c

Dec. 14

22,821,000

15,524,000

apparel

Home

18.425c

95.000c

12.000c

Dec. 14
Dec. 14

at—*

(New York)

tin

Straits

23.200c

18.425c
81.000c

18.200c

25,907,000

16,034,000

—

goods

18.425c

18.200c

959

•

DEC. 1:

OF

AS

78.750c

Dec. 14

2,869

*968

1,889

COMMERCE):

linters

of

ultimate

ultimate

Composite

Dec. 14

3,457

•2,808

———,__—_—

—

3.705c

$45.88

;

V,.;-.

■

at

*3,130

2,854
970

OF

PUBLICATION

$45.88

Infants'

at

refinery

Domestic

.

3,192

—

—

INSTITUTE:

September

of

*3.705c

Men's

J'-.v

Electrolytic copper—

*6,906

—

(DEPT.

(excl.

from

Revenue

QUOTATIONS):

(E. A M. J.

7,016

bales—

gross

ELECTRIC

Women's

(KETAL PRICES

3,994

—t—.—

500-Ib.

bales

Running

Dec. 13

gross ton)
(per gross ton)

*4,455

—:

GINNING

Dec. 13

(per

Scrap steel

2,350

4,493

PRODUCTION—U. S.
AGRICULTURE—As of Dec. 1:

OF

Dec. 13

lb.)

(per

steel

*2,562

loans.,

credit

INDEX

Finished

♦2,876

—

accounts

FAIRCHILD

E'JON AGE COMPOSITE

4,239

3,002

564

183

191

161

Dec. 15

INC.

STREET,

/ 5,881,360

8,233

*5,438

———_—

September

BRAD-

&

INDUSTRIAL)—DUN

AND

(COMMERCIAL

FAILURES

/ 5,996,600

Dec. 17

-

*9,893

5,678

iw

__j.

Kilowatt-hour

d!ric *cmtp utM irf" 000Tkwh.)

$15,518

10,171

Acreage

EDISON

Rte

*$16,799

———

:

payment

DEPT.

156,900

•318

*449

542

Dec. 10

$17,187

credit

COTTON ACREAGE AND

COTTON

RESERVE SYS-

SALES INDEX—FEDERAL
AVERAGE—KH)
—

Tfc.VI—1935-39

,

—_—

—___—

credit

Production

STORE

IIEPARTMENT

12,249,000

1,263,000
3,200

1,017,000

Dec. 10

(tons).

anthracite

Pennsylvania

7,100,000

shoit-term

31:

2,676

Charge

31,894,000

$474,600,000

RE¬

FEDERAL

Oct.

credit

Noninstalment

70,255,000

$725,700,000

„

26,898,000

Loan

Single

9,250,000

$463,500,000

i

credit

Service
COAL OUTPUT

of

as

.

,

Other

44,038,000

•

$102,887,000

S.

Automobile

$146,187,000

87,657,000

5,195,000

,e

—

Estimated

—

millions

consumer

Sale

r

$101,848,000

p

1 "

DEMonth of

U.

—

__r__

THE

OF

SYSTEM
in

Instalment

fICVTL

■

CREDIT OUTSTANDING—BOARD

CONSUMER
OF

freight loaded (number of cars)
Revenue freight received from connections
Revenue

omitted)

,

REPORTED

COMMERCE

OF

(000's

$99,491,000
'

■

.

CORPORATIONS

S.

336

3,564,999

SYSTEM—

■>

PUBLICLY

—

*336

*3,785,237

GOVERNORS

OF

thousands)—

(in

»■••*•

1

•

DIVIDENDS

CASH

25,397,000

23,397,000

85,926,000

64,374,000

November

of

336

(tons)______

RESERVE

FEDERAL

THE

Month
,

103,577,000

freight transported

of

3,864,112

reporting-—,

carriers

motor

5,721,000

AMERICAN RAILROADS:

OF

ASSOCIATION

5,185,150

5,329.000

18,219,000
2,068,000
7,037,000

Dec. 10
—Dec. 10

distillate fuel oil (bbls.) at
fuel oil (bbls.), at_

Gas, oil, and
Residual

5,105,950

115,234,000

Dec- 10

—■—

and in pipe lines—

at

(bbls.)

Kerosene

4,979,300

5,671,150

September:

of

of

Number

'

£ec- \°n
Dec. 10
Dec, 10
P*®' J®
Dec. 10

—

stills—daily average (bbls.)
(bbls.)_.
(bbls.)
Oas, oil, and distillate fuel oil output (bbls.)
llesidual fuel oil output (bbls.)—
-(Stocks at refineries, at bulk terminals, in transit
Finished and unfinished gasoline (bbls.) at
Crude

* ?

131,003

80,201

95,803

ASSOCIATION— ;

TRUCKING

Month

(bbis, 0*

September:

of

shipments (thousands of pounds;_____

Total

1,597,000

'

•

average

Ago

< DEPT.

PRODUCTS

WROUGHT

ALUMINUM
OF

1,441,600

Year

Month

•Month

AMERICAN

PETROLEUM INSTITUTE:
and condensate output—daily

AMERICAN

Previous

Latest

Year

Week

wear—

2.67

Railroad

Group
Public Utilities Group
Industrials

—

Group

2.89 >

2.93

3.29

3.32

3.34

3.5a

3.35

Shoes

144.9

3.15

3.20

144.5

3.12

Furniture

146.5 4

146.5

2.79

2.80

3.06

150.7

2.80

Floor

154.1

153.2

158.2

117.7

117.7

124.0

128.3

128.6

131.1

138.8

138.8

144.6

134.0

134.0 v;

135.3

3.16

2.65

2.66

2.66

345.6

343.4

!

Socks

392.3

144.5

:

—

coverings

Radios

Luggage

___________

household

Electrical

appliances,.,

China

Orders

ASSOCIATION:

PAPERBOARD

NATIONAL

received

Production

Percentage
Unfilled

.Dec. 10

activity

of

orders

(tons)

259,736

182,831

201,641

210,286

201,766

207,837

198,237

.Dec. 10

—

203,493

.Dec. 10

(tons).

(tons)

96

94

96

444,302

363,813

■

93

•\ '

429,785

421,332

.Dec. 10

at

:

METAL

of September:

PAINT

REPORTER

DRUG

AND

AV£RAGE=100

PRICE

Unitd

Gold

1926-36

INDEX

States:

(in short tons)

TRANSACTIONS

SPECIALISTS

AND

ODDSTOCK

Number

of
of

MONEY

Odd -lot

Dec.

purchases by

dealers

(customers' sales).

„

* '

744,891

579.308

784,627

$29,448,934

$23,143,575

$31,314,619

$27,591,518

j orders—Customers' total sales
Customers' short salesl__

Customers'

short
other

sales

"

247

29,061

>>>,:■..

166

22,237

>

>

809,959

605.902

781,526

586,259

$27,623,674

$21,968,358

$27,614,340

$27,412,379

$28,175,868

.

.

Dec.

'

^373,210

;

143400

Dec.
S.

DEPT.

OF

LABOR—

7.42

8.35

4.87

3.10

3.30

6.62.

6.11

6.72

£15,799,000

*£3,537,000

£14,372,000

*

(10)

(200)

—

6.08

4.41

3.00

IN GREAT BRITAIN-

LTD.—Month of November

BANK,

5.99

4.61

—_—

yield

'6.98

6.19
•

5.92

;

>

EARNINGS

CLASS

(ASSOC.

ROADS

I

OF AMERICAN RRS.)—Month of

October:

$878,120,864
651,909,449-

revenues

$648,924,128

operating

expenses

520,919,600

$694,969,465
540,987,731

80.27

77.84

74.24

$65,375,827

$75,401,078

$100,778,745

46,785,556

63,537,627

110,876,857

24.000,000

38,500,000

85,000,000

$63,537,629
15,197,309

$65,727,319
15,685,638

$108,467,186

78,734.938

81,412,957

124,538,151

2,705,224
76,029,714

2,950,428
78,462,529

119,020,937

41,430,849

42,413,274

84,383,123

Operating

>;

180,340;

268,420

3

operating

Total

323,280

273,020

Taxes

Net

SERIES—U.

8.11

Total

287~700

'

:

*

6.86*
—

(25)

MIDLAND

,,

of

STOCKS—Month

(125) *"

NEW CAPITAL ISSUES

143,400

273,210

3
3

'244,110

244"l 10

287,700

3

Dec.

OF
Nov.:

YIELD

(25)

Insurance

$18,127,655

3

Dec.

NEW

52,581

$27,406,811

omitted)

AVERAGE

(15)

Average

RR.

sales

Round-lot purchases by dealers—
Number of shares—

Banks

592,421
6,162

6,206

7.829

"

Dec.

PRICES

26,910

3,169,147

42,193

(000's

31

COMMON

Utilities

106

19,950

787,732

9,101

<

Dec. .3

.___

Round-lot sales by dealers—
Number of shares—Total ,sales__
Short sales

WHOLESALE

206,428

•44,483

short tons)

"Industrials

20,116

V

■.V,"

28,895

613,731

Dec.

sales

e

203

28.720

•„

-Dec.

•

22,436

819,060

Dec.
total

value

Other

■'

Dec.

:

sales

Customers'

Dollar

*184,255

•33,905
*2,927,898

ounces)

WEIGHTED

Railroads

28,973

Dec.

other sales—.

shares—Customers'

of

200
'•

-

Number of

Customers'

69,639

*55,850

188,563
30,281
2,224,805

tons)___.

fine

October

MOODY'S

757,032

-Dec.

value

Number

26,177

26,648

19,299

24,869

.Dec.

shares

Dollar

;

IN CIRCULATION—TREASURY DEPT.

of

As
'

orders

Number

ON

(customers' purchases)—

Odd-lot sales by dealers

(in

;

THE ODD-LOT ACCOUNT OF

FOR

THE N. Y.
EXCHANGE—SECURITIES EXCHANGE COMMISSION:
DEALERS

LOT

(in

58,379

:

ounces)

short

(in

Silver

Zinc

IJTOCK

fine

(In

Lead

143.5

125.6

124.9

124.9

Dec. 16
,

•••..<

production of recoverable metals in the

Mine

Copper

'ML,

.

(BUREAU OF MINES)—

OUTPUT

Month

120.8

119.8

119.8

Underwear

2.86

346.4

Dec. 20

INDEX

COMMODITY

MOODY'S

2.88

Dec. 20
Dec. 20
Dec. 20

Baa

2.68

Dec. 20
Dec. 20

A

2.67

Net

,

ratio—per

cent

•

railway operating
after

income

income before chargos
(est.)—

charges

192G=10O:

All commodities
Farm
..

JDe#. 13

;

!

products

.£)ec. 13

All

commodities

other

Textile products
Fuel and lighting

than

farm

and

foods

,

.Dec. 13

_______

151.4

r

162.6

1

175.7

151.1

[

r

.Dec. 13

.

154.0

156.5

y

151.0

154.2

-r ■"

v

.Dec. 13

Foods

156.6

159.6

169.1

145.1

144.8

153.9

137.5

136.8

146.9

145.3

?
,

,

137.4

...«

•'

>156.5

•

All

130.3

130.3

137.3

168.7

168.9

169.4

173.6

.Dec. 13

189.8

189.6

189.5

202.3

.Dec. 13

:

other

130.4

.Dec. 13

Building materials

.Dec. 13

materials

115.8

115.8

115.9 s

131.8

■■■'■

r-; ,;

SELECTED INCOME ITEMS OF U. S. CLASS
Commerce

RYS. (Interstate

of

Month

Net

Commission)—

September:

railway

Other

I

operating

income

income

Total

income

deductions

Miscellaneous

from

income

,
-

Income
Income

Other
Net

available

after

fixed

for

fixed

charges—:

charges

3,300.195

deductions
income

5,517,214

2,987,975

3,351,983

,1

38,130,654
34,037,349

34,668,869

1,375,359
28,031,722

1,321,223
26,058,705

10,900,016

22,789,882

1,181.961

4,644,588

2.20

2.18

81,395,153

39,061,291

structures & equip.)
defense
projects—.

^

.

16,070,965

#

BpeclaJ indexes—

;

.<

'■

*

•

Depreciation (way &

.

Grains

.Dec. 13

170.1

Amortization

Livestock

.Dec. 13

185.3

186.5

187.8

219.8

Federal

Meats

.Dec. 13

207.9

209.1

213.2

230.9

Dividend

.Dec. 13

198.6

203.3

205.8

199.8

Hides and skins

<):■/:

154.1

161.3

161.9

'

of

income

taxes

I

to

J

i

date.

rrnl

i

%

.The weights

«H6 to 1948 inclusive,

+AI1C WClglHCU
based oh the average, Oroduct shipments for the
ui awio,i*xx tiuuc

x UilD.

used are
SReflects effect pf five-day week effective Sept. 1, 1949,




-

'

.

SlCCl VUiKipUMM? Wttfi ICVi&CU IV* DliU
7 years 1937 to 1940 inclusive ana

49,343,614

appropriations:
1:

stock-—

On

'common

On
mil

—

31,073,519
i;331,726

preferred stock

Ratio of income

to

.•Revised figure.

-

fixed charges

v

;

17,769,139
.

.

2,935,405
3.44

Volume 170
Continued

Number 4866

-

jrom

THE

COMMERCIAL

&

FINANCIAL

might perhaps allow for
cents

in

Inflation, Bocmlet

crease

Recession?

01

went

As

lars, but in physical output. (See
Table 1.)
In dollars, we now sell

result, the infla¬
tion has been practically stopped,

almost three times as much

and I think that

in

as

Belatedly, the stock market

up.

launch

to

a

Nor
1

will

such

■

a

we

it

Current

^

boom again.

Year

56 *

61
92

-f-

0.9

159.2

58.0

224.9

+

8.4

171.2

59.4

169.6

58.1

169.4

58.6

149

people;

259.8

FORECASTS

-=■

FOR

in

of production for
14 million

less in prices,

of

increased

6

million

for

population; 5 to

higher standards of

9

months..

224.8

1950

—

(estimated). 220

—

...

223

-

'Annual

as

corporations

our

able to turn

out the

with less labor

have
same

been

and

salaries

risen

substantially during the first

have

in

fact

not

*

^Purchasing

of 1939.
f "Mid-year
of the President," July,
{"Survey of Current Busi
ness," November, 1949, p. 5.
Economic

„

1949,

power

Report

87,

p.

•

But —the
splendid trend up¬
wards, the boom of 1946-48, came

r"

to

halt. Qt

a

depression,

cession,
at
-

did

it

but

lead

not

to

nor even

just

to

real

a

a

re¬

halted—and

rather unexpected moment in
October
1948. jAlmost
suddenly
a

the

price inflation stopped, at the
when

moment

very

Truman

was

another

OPA

President

saying that without
and

rationing and
stand-by controls, prices must go
j'"up and up and up."

living
We

Therefore, the first question in
minds will undoubtedly be:

your

What is

going to happen now? As
on large-scale
deficit financing—$5% to $6 bil¬

we

have embarked

lion

so—will

or

.inflation?
factors
with

another

Or will there be other

threatening

nation

our

as

telling the world?

are

aided

by

another

nine months of

full

almost

em¬

We have not available

3^-million

increase

in

an

will not need it.

machine-hour

and

sible

to

labor

Our

con¬

manhour

per

it

make

pos¬

in fewer
Our worry will not

produce

hours.

more

be

production, but rather selling
what we have produced and can
produce in addition.
We have
bound

we

are

huge deficit in

a

Federal budget, some

$5% to
$6 billion or so. Isn't that enough
to bring about another sharp in¬
flation?
And if that is not enough
will not another upward turn of
the

price spiral be rather probable

when
next

some labor bosses will start,
Fall, the 5th round of wage

"a

'• "

•

-

•*a

■

' «;

■

,

■''

■

-,

I

the

have

next

year,

another

we

like that of

1946-48, the greatest boom in
history.
On the other hand
will

large-scale

no

*

;

\

our

mass

happened to bring about
this boom of unparalleled dimen¬
sions?

'

remember the

no

—

we

high
unemployment
figures immediately after the war.
They evidently were based on the

"i assumption
that we would fall
back to our peacetime level of

consumption, but two elements
have completely changed all this:
After

plenishment

a

of

;

period of re¬
consumer's

the

closet, we did not fall back to pre¬
consumption; our workers

war

and

farmers, the great masses of
our
people had, in the interim,
improved their purchasing habits,
purchasing power and their claims
(to a higher standard of living.
Even food consumption, if we add
volume and quality, has risen by
14 to 17% per capita.1 We mainl tained
a
civilian
consumption
greater than ever before — and
-

.

this

was

made easier

in part

and

T f

possible at all by the

'

side and the
on

lower

the

minor
tiles.

,

us

In

the

mobilization,

we

mobilization

and

climax
which
But
can

the

in
we

.

-

not

me

1 U.

figures.

de¬

enormous

effort

war.

during this period, Ameri¬

S.
,

of

man

fervent

adherent

even

This

the

on

left

by some of
stuck my neck
on

published

forecast

President's

has made
of sound

me

of

my

Eco¬

me as

different.

are

INFLATIONARY

.

Additional

More

experience can be relied
then we can be confident that

cit in the

Federal budget in

$6 billion.

living

rose

tional

billion,
billion

2%.

Now, with

of

about

not

residential

and

for

public construction..
VV.
V- "Tv'-h'

government

action

output

and

per

machine,

of

further

risk

-

v<




•

Lower

were,

applied evenly to all

salaries

and. pensions,

it

1

-

2

in somewhat

even

One of the
the

centers

has

greatest dangers are
communication, ft

of

of

idea

the

been

sorpe

arm-chair

strategists to paralyse
in case of war
by im¬

Russia

mediately destroying the

centers

of communication. We are in some

important
nerable

as

places almost as vul¬
they are. Therefore,

around the most concentrated cen¬

for

mobilization and

for

needed

ters

work, some more or less

war

protected circumvention roads and"
railroads must be provided for.
Private industries have also be¬

to think in such terms. Dis¬

gun

agreeable
the

and

as

this is, it is inevitable*
must be spent.

costs

struction—It

in

1950

a

general

constructipm
about $19 billiqn

total
at

it

as

to be

seems

that

remain

in

was

1949.

How¬

residential and public con¬

ever,

increase

will

and

construction

farm

and

ness

"

1
.!

-

busu
will

Insurance

life

erans

1V2

\

matter

dividends i&

insurance

between $2.7 and $2.8

with

billion. Ex¬

former

bonuses shows that not

%

a

first-half of the
The total amount of the vet¬
the

of

perience

:

Life

Veterans'

year.

1

excise

(perhaps

veterans
more

for immediate

spent

are

used

tax

th&a
con¬

to

repay

farm

ness

debts and for sav¬

ings.

•

,

.

"

/

..

"•••*'.:

'

y /
-

;

2

expenditures

2
-

(including decreased busi¬
profit and business construction)

Higher productivity
2»/2%-3%

per

hour

of

man

and

2V2

Exports

3

1314-15

Imports

—

1948

billion

July

$1.05

to

September

an

average

not

614- IV2

and

Monthly average exports in

lion.

machine,

...

(1)
was

Lower business investment

The

and

1949

from

was

down

to

of less than $900 mil¬

average

of imports has,

reached the average of
but is bound to in¬
crease.
Therefore, the estimate of
$2 billion will probably hold goock
yet

1948

as

yet,

(2) Lower Farm Expenditurest—
'Veterans'

life

(1) Wage Increases—Total wage
increased from 1946 to
$9.5 billion; from 1947 to

than
fects

at

somewhat

less. We have taken

a

median esti¬

mate.

INFLATIONARY

estimated

See previous note.

insurance dividends.

Explanation of Table 3

be

wages,

probably

bomb-proof localities.

Dividends—This will be

2V2

(Contracting)—

1948 by $12.4
1949 by $1.1

Agriculture

try,

certainly

dispersed over the coups-

mostly

2

Deductions from Purchasing Power:
Lower normal exports and higher imports.

1947 by

the

be

Deflationary

billion; Sept. 1948 to
pre¬
billion. In 1950 we
diction that no serious inflation
will experience the full impact of
will
be
brought about through
higher
wages
and
especially higher minimum wages, estimated
at three-quarters of a billion dol¬
through pensions, barring some
quite unforeseeable changes.
We lars. The inflationary power of the
have
almost
a
3%
increase fourth round of wage increases,
insofar as it affects costs, might
in productivity per year.
If this
would

will

reduction)

be

Pensions

nerable type should and

(5)

V/z~ 4

—

DEFLATIONARY

luctance to invest, low level of
foreign trade—were very strong.
Nevertheless, a Federal deficit of
2% of our gross national product,
alone, would hardly be ; strong
enough to bring about inflation—
especially not if our average na¬
tional productivity should rise.

I

Billion

8V2-II

deflationary elementsr—a large
number of unemployed, great re¬

of

a huge super-Pearl Harbor. Some
auxiliary plants of the most vul¬

struction

;

,

"Foreign

1

Additional

the

Impact

•

sumption. The remainder has been

to $6

that great. (See table 2.) We must,
of course, consider that in 1936-38

the

■

this has been
taker*
care of by including deductions oz*
the right side of the table.

State

a na¬

even

expenditures

'"Federal

$220-odd

effect of a $5

the

deficit would

Annual Kate

1950

(Expanding)—

Veterans' "bonus":

1935

In 1936, the cost of

income

an

Finance," in¬
cluding Western Union armaments and other gifts
Adaptation of the U. S. to the Russian A-bomb

deficit in the Federal

of

At

Wage increases, including higher minimum wages and
pensions paid out
i,.'

budget, if
no
greater than $5 to $6 billion,
or
may
not
be
sufficient
to
bring about any serious increase
in the price level. We had a defi¬
a

Power in

Additions to Purchasing Power:

If past
on,

—

Kv:,^ •',

Purchasing

inte¬

are

greater the danger
that, some good hits might par¬
alyze the whole war production m
grated,

decrease;

also

lip service of politicians to a
balanced budget is loud, but the

realities

Nation's

industries

our

more

opinion

follows:

a

public

however, has

the

the first to advocate
the Washington act-

was

least

(4) Residential and Public Con¬

1950, the prospect

National Income in Prices of December 1949 about $220-odd

that in election years,

me

in

must rely

we

for

was

Council

For the year

TABLE 3^',-;,f
Changes

inte¬

that the

said

a

at

will

balanced budget.

a

Experience,

figure
Department

rather

balancing the in¬

a year ago,

appears to

In Billions of Dollars

misunderstood.

be

finance and of

The
of

had to begin rethis reached its

cpll the cold

hour

>

is

but
atomic

to

ministration be decentralized. Tbe

nomic Advisers.

own forecast,
what other bold people

•

midst

productivity, the

labor

and,

the

risking my

see

but

proved astonishingly accurate ac¬
cording to the mid-year report of

1950

adapted

defending them.

that

$2-$4 billion less than in 1948 and

For

Before

mean

deflationary elements

clients, I

forecast.

•

.

_

a

not

balance sheet of the

right. Egged

out

degree the low-grade tex¬

price of food and to

the

5% loss

v r

elements

my

expected to

a

economy,

crops

bumper
here and good crops almost

profits,

more.

making

S.

to apply

were

past three years I have

flation: The fact that the

;£

,

Bitter experience

*

Second:

in

flationary

amounts

Cold War

The

loss

For the

U.

1%

quantity and 4% less in
us hope at no sacrifice

considerably

deci¬

let

saying,

5%

a

increase, there is one
working against in¬

are

1949:

the whole economy, a

ductivity

^ Not Through Deficit Financing

expec¬

of

Firs?.:

ton, or

It

mission,

(let

great factor

the world

in

in sales volume would

seems

over

than

sales

quality). If this

been

all

Of

Fred' Lazarus,

to

heard

it will be

Mr.

owner

department,

of

have ventured to predict for 1950.

1950.

showed

;

What

tations

a

in

less

in¬

risk

the

You will

just

we

increase of $4

an

Estimated

un¬

see

higher

dollar

sive because besides general pro¬

you

employment.

year

a

Depression in 1950?

or

would

Let

will

nor

boom,

in

chain,

price

4%, and this will cer¬
tainly influence the price picture,

.

serious inflation from this dur-

;ing

it

as

Will We Have Another Inflation?

in

■

y>

is: You will not'see

answer

about

|

'

*

'largest'

predicts that the department store
business in 1950 will sell 5% less
in

increases in steel last

this

crease;

"

1950 will be somewhat

won't have another inflation—not

Extremes

No

-

My

cost

resulted

>

Boom

store

The Balance Sheet of Prediction

increases?

'

'.:J'.

The
year

but I don't think

all heard that

have

to

inflation in 1950.

in

lower than in 1949. The

not sufficient to create

are

national purchasing

our

America'

re¬

in 1948.

especially the pension agreei

now,

and

we

same as

The wage increases obtained
up to

ments,

stantly rising output

1949; they have

mained almost the

the civilian labor force per year

unemployment and de¬
the experts in Moscow

mass

flation,
are

have

we

these

have

now

ployment.

our

What's Immediately Ahead?

(but

higher productivity).

scheduled,

been

is, however, no defense
falling bomb. Therefore,
David Lilienthal, former Chair¬
man of the Atomic Energy Coi»-

that

power

de¬

There

■,,The U. S. Department of Agri¬

and

wages

evident

about

•

impossible and that

will receive 10 to 15% less income

output

hours, total

year..

gration of most of our important
industries makes decentralization

culture is not optimistic. Secretary
Brannan forecasts that agriculture

but

a

was

think

to

think,

I

warfare.

-5-—6

hourly

October on,

it

news,

already

not,

rate.

from last

wages

least

at

-

against

We have had increases in

The fact

—

Some industrial decentralization

on

I

2 to 3 million for the needs

the

months..

l!ilst

peace

indirectly for the cold

6

for

had

we

has

2.0

—

*lst

people,

or

volume.

in

1949

In

would estimate that
6V2 million working di¬

rectly
war;

less

1%

before.

45^ million
1949, 59M» million; in

are

there

1950

Department stores expect 4 c/o
j

1948

employed

these,

1

1949.

had

never

v

1947

labor force

our

3V2 million for every postwar year.

153

Department of Agriculture—Less than

in

we

we

have added

we

Of

U. S.

as

four years

t2nd 9 months..

44.2

202.5

increase in

an

—

known

fense.

55.3

255.9

150

46.3

100.8

139.3

1939

,

102.7

1.4

—21.4

such

253.9

2.8

—

;

A-Bomb

After the Russians themselves ex-

44.4

179.3

144

•

99.1

1946

150

fist 6 months._

5.0

—

Adaptation of the U. S. to

Russian

that

42.3

■

67.4

210

1949 (annual rate)

debt with U. S. help.)

ploded this

(Millions)

98.1

73.6

230

1948

Employed

1935-39=100

6.0

1933

progress

by the help of two import
factors:
Rising productivity

and

*

Living

Deficit

—

1937

tant

92

1

or

Civilian Persons

in civil¬

enormous

about

1939

Europe
than now?
scheduled, and the shipments are

was

Cost of

(Fiscal Year)

$56.8

armaments to

to

that the Russians had the A-bomb,

production has been brought

ian

1933

1947

Income

of

amount

sent-

(3)

64.7

82

101

1946

Civilian Production

be

the

1936

The

Dollars

(Billions)

do the

as

2

Budget Surplus

(Billions)
...

higher

Moreover, the just beginning. (See also the prob¬
does not lem
of
liquidating
England's*,

Number of
National

°1939

Dollars

1929

8*

labor

of

much increase

as

Will the Budget Deficit Bring Inflation in 1950?

1935

(Billions)

Year

file

and

in

strong unions.

TABLE

Gross National Product
Rise in

rank

achieve

costs,

increase

an

were

produce

to

easy

in¬

an

of it in the form of pension con¬

one, it would
get it going again.

be

in

resulted

of

spending.

current

of 10 to 12 cents—but most

have

another

not be easy to

followed.

if

even

year's "fourth round"

to

production

in

less

much

but

non-agricultural indus¬

This

increase

an

seems

These will bring about

tributions.

5 to 6

a

hour across-the-board in¬

an

crease

tries.

TABLE

(2573)

8

page

What's Ahead For 1950

1939.

CHRONICLE

more

$3 billion; insofar as it af¬
purchasing power, somewhat

Western

Union

armaments

and

other gifts—It has been suggested
that

ECA

1951

would

expenditures
be

$1 billion

in
or

fiscal
per¬

haps even $1^ billion below fis¬
cal 1950. However for the calendar

1950 this reduction does not

amount to too much and I expect,
moreover, new

fortifying
Far

Commerce
quarter of
1950 is 14% below that in 1949. Ife
Department

forecast

;(2) Additional expenditures for
"Foreign Finance," including

year

Lower Business Investment,

(3)
—The

our

East—an

claims to come for
new frontier in the
East

Moreover, I expect

Asiatic
a

ECA.

considerably

is

a

for

of

first

the

general opinion that the re¬

duction

will

greater,

rather

be

somewhat,

especially if we include

business construction.
A

14% reduction applied to the?

whole

lion.

year

Less

would mean $2.5 bil¬
business profits wilt

account for the rest.

The distribution of inflationary

throughout
such that thewill be helpful

and deflationary forces
the

year

veterans

will
bonus

be

(Continued on page 90)

90

(2574)

FINANCIAL

&

COMMERCIAL

THE

Thursday, December 22, 1949

CHRONICLE

Continued froni page 89
especially, European recon¬

more

mat's Ahead For 1950—

Our
os

Matron, Boomlet

Recession?

or

especially for .the first half of the not falling volume, with a de¬
year, while most other elements cided preference for higher qual¬
will
be
distributed
relatively ity goods.
'

equally over the year. Therefore,
(9) Corisuriiers' hard goods Will
the deflationary gap to be filled do better than soft goods because
will be mostly in the second half most trades connected with resi¬
of the year, and this will be in
the middle of the election cam¬

dential construction will do better

paign.

of

the

On

dicate

whole, this would in¬

almost

equilib¬
rium; this table is very close to
that

complete

published by

us

in 1949.

If this forecast would come ap¬

than last year,

With the exception
appliances, d business line in

which overproduction is already
enforcing a rather sharp competi¬
tion.

The

holds

same

good

for

radios, while television is bound
to expand further.

The automotive industry may
proximately true, the volume of
our
production would be some¬ maintain volume, but a price
what higher than in 1949, the struggle looms.
number of employed would be
(10) The heavy industries have
somewhat higher
(more so just shown confidence in their
in

first half and less in the
second half of the year), and the
the

number of unemployed

would be

slowly growing perhaps up to lk
million

or

somewhat

more

in the

second half of the year.
The nation's food bill would be
lower by 4 to 5%

and if we can
follow the Department Store fore¬
cast, soft goods would also be
lower by about the same per¬
centage;
v
Some public carriers will still
claim higher fares and some seg¬
of hard goods will also

ments

show

rising tendency. I cannot
visualize this to be a decisive ele¬

price increases
just announced. They will profit
by the better government pur¬
chases and the expansion in con¬
struction, but may lose by the
decline in investment in private
plant and equipment.
strength

by

the

choice

labor

today

become more difficult.

may

European continent.
We
nevertheless,
out-compete
them, but just now we are doing
all in our power to make them
more efficient and the result will

by

unparalleled
produc¬
tion power.
Our superiority rests
on our rising productivity and this
again must mainly be based on
our widening domestic consump¬
tion.
In
one
labor
hour,
the

greatly expanding customers. We
need expanding production for use
of our own mass-market, rather

American

than

of

times

worker

much

as

the

help

produced

machine

the

almost certainly be that they will
be our competitors rather than

2Vz

with

piles;

British

the

as

Continued

farms

partly producing,
all, but for
government storage.
our

found.

What Changes

Can Be

Expected

in the Markets?

The cold

cannot

war

be

inten¬

sified

If

physical production, as I an¬
ticipate, will rise slightly and pri¬
vate investment and farm income

will decline somewhat, then I ex¬

indefinitely.
Our producductivity is growing.
If we are
to

avoid

sion

rather

a

after

the

cold-war

serious

cold

slump—then

we

pect a somewhat lower farm but
slightly higher urban consump¬

much higher degree than

tion, because:

to.

(1) The population is increas¬
ing by about Wz%.
(2) Our urban population in¬

gear

whole

our

not

to

production

government

postmust
to

a

hither¬

work

or

government gift or storage, but
to
real
domestic
consumption

faster.

population

Since 1940

has

grown

our

fund as of Jan.

for

three-year terms to re¬
members whose terms ex¬

place

'.:<■/

pired:

•

curities

Co., Limited, Toronto.
Central States

to

Andrew M. Baird, A. G. Becker

Co.,
Incorporated,
Chicago;
George F. Noyes, The
Illinois
Company, Chicago.

Mills,
Cook & Co., St. Louis.

the

net

'<

surplus.

that

reported

Committee

steps have now been taken which
it is believed
will correct the
operating deficits which have oc¬
curred in the past two years. As

Valley

S.

Also,

The

&

Andrew

the

to

added

been

has

credit re¬
sulting from
"Fundamentals of
Investment Banking," which was
previously carried as a deferred
credit, has now been transferred

Fullerton, A. E. Ames &

Mississippi

securities

the fund, and

for

the accrued interest on these ! se«*

Ralph E. Phillips, Dean Witter
& Co., Lps Angeles.

G.

aside

set

were

specific

certain

dition,
California

year's conven¬
by-laws
have; been

authorized by this

Newhard,

the

tion,

amended

calendar

the

make

to

the Association's fiscal year
New England
m
beginning Jan. 1, 1950; and budg¬
James W. Moss, Preston, Moss ets have been approved by the
& Company, Boston.
.4 .Board of Governors for the period
year

New

Duncan
Boston

Sept. 1-Dec. 31, 1949, and for the
new
fiscal
year 1950,
both of
which show a small surplus, ex¬
clusive of anti-trust suit expenses.

York

R.

Linsley, The First
Corporation, New York;

Raymond

Stitzer, Equitable
Securities Corporation, New York:
Pacific
Harold

Northwest

M.

Martin,
Favre, Inc., Spokane.

Committee Reviews Invest¬
Company Growth

New

of

Murphey

during

made

interesting reports

the

the

proceedings of

the Convention was the report of
the

Investment Compa-

Committee

new

*

/

Earl M. Scanlan, Earl M. Scan& Co., Denver.

on

i

n

Ian

the
;

Western Pennsylvania

A

s.

e

Chairman

-

t

M. M. Grubbs, Grubbs, Scott &

e

f

Hugh

e,

Bullock,

Company, Inc., Pittsburgh.

President

.

,

o

f

Bul¬

Calvin

Membership

s

o

Commit-

lock,

invest¬

ment

dealers

by

According to the report of the
Membership Committee the mem¬
bership of the Association at the

in

end

of

importance of

ident's "Point 4" program.

was

as

I have

20%

and the rural population by only

(3) Metropolitan areas grow at
even greater
speed and the
population
in
the
"spending

no

faith in expanding our

markets by unpaid-for exports as
a

lasting prop! for our production,
even in the shape of the Pres¬

years" is growing. The more pen¬
sion plans will gain momentum in

"Reverse Reparations"

in

As of Aug. 31,

1949

1948

Class I___

already paying what I
"reverse reparations."
For¬
are

Prepared and pre¬
packaged fobds, branded goods
which guarantee quality, will con¬
tinue to widen their field.

(5) The governments may still
expand
their
buying activities

lars

year or more to

a

Austria

and

Japan.

Germany,
I call that

reparations in reverse. And if the
Russians tell the world that we

creating

capitalistic empire,
say is that is a
somewhat, owing to our changed strange kind of empire and an
even stranger kind of capitalism.
strategic position.
(6) The farm population will Since ancient times, empires have
buy somewhat less; the rather in¬ subjugated foreign nations in or¬
fluential agricultural services are der to get slaves* gold, grain arid
urging the farmers to realize that other food and raw materials
their income is

decreasing and cut
family expenditures.
(7) The wide field of soft goods
has. had something like a Second
restocking boom; this will come
to a stop, prices are expected to
show a falling tendency, but the
industry must and will improve
quality.
(8) The food trade will experi¬
.

ence

slightly receding prices, but




are

well,

all

I

a

can

from them. We

are

sending to all

the other continents and to Latin

America unpaid-for shipments in

larger and larger quantities. If We
an
empire, we are ari empire
in reverse. And if that is capital¬
ism, it is Santa Claus capitalism.

are

And

we

this. We

markets,

are

cannot

go on doing
bound to lose foreign

we are

already doing

so

because of the devaluations and,

this

Class II__

41

56

branch

Offices

Class I

of

recent

40

Class II—

94

Hugh Bullock

companies

55

Class A__
Class

B—

Class

C__ 237

276

growth

open-end

invest ment

,

as

medium

a

through

which

groups

participate; in the
of American indus¬

can

ownership

tries. """More

lower

people

income

have

Registered
Offices

of

the

Committee, reviewed amend¬
by various state legis¬
latures to their Blue Sky Laws
during 1949, and also presented
of

draft

a

Securities

"Uniform

proposed

a

Act," which was sub¬
September to the Na¬

in

Conference

of

Commis¬

febUritt^S history," the report
stated.

853

sajpe

'

"But

they

are

not

-

Aviation

William

the

people who had it before.

orrity certainties in life, name¬
During the fiscal year ending
Aug. 31, 1949, the Membership ly death and taxes, have severely
Committee recommended and thfeJxedi^eephe ranks of the large
investors of yesterday;
Board of Governors approved 22 private
applications for membership. The meanwhile a veritable legion of
Smaller ^investors, actual or po¬
loss of 38 members resulted in "a
tential,
have 3 come
upon
the
net loss of 16 members.
;Scene."
This
development,
the
Since the beginning of the new
fiscal year on Sept. 1, member¬ Committee pointed out, has caused
"a- fundamental change in the atti¬
ship losses have totaled four. Ap¬
tude of investment firms regard¬
proval of the 21 new applicants

Securities

Com¬

the

under

Chairmanship
M.
Burden,
of

A.

Smith, Barney & Co., New York,
in its second annual report to the
Convention, reviewed in consider¬
able detail
the recent develop¬
ments in air t r a n s p o r t a t i o n,
covering both
the traffic
and
earnings of the aviation companies
in

1949 and the conditions under

which they operated. The conclu¬
sion of the Committee is that the

capital structure of

airlines

many

that
is in
qt

appears unsatisfactory, and
the industry, as
a whole,
need

substantial- amounts

of

equity capital.

;

r

:

,,

'

Another

recently
constituted
Committee, the Canadian Securi¬
ties Committee, headed by Stanley
E. Nixon of the Underwriting De¬
partment of the Dominion Securi¬
ties

Corporation Ltd., of Montreal,

made

its first report to the

con¬

vention. In this report, the whole

histoiy and scope of

Canadian

securities in the United States

was

reviewed, as well as the problems
growing out of exchange control
and capital movements between
Canada

the

to

United

the

and

Attached

report

memorandum;

which

States.
was

methods

on

States

United

'purchase

a

by

residents

and sell Canadian

securities in Canada.
Public Education Forum
Two days

of the

ing

y

just prior to the open¬
Convention, a Public

Education Forum

was

held under

the

sponsorship
of the Public
Education Committee, whose
Chairman

is

Joseph

Johnson,

T.

President of the Milwaukee Com¬

Milwaukee, Wis. The forum
was
designed primarily to pro¬
vide suggestions and assistance to
those responsible for Group pub¬
pany,

lic relations activities and also to

furnish

ences.

opportunity

an

exchange

of

ideas

the
experi¬

for

and

A number of speakers, rep¬

resenting

all

of

segments

the

financial community, participated
in the forum, and model adver¬

tisements and other literature were

display. Many of these were
printed in the November issue of
on

the IBA

Public

Education Bulle¬

tin, published by the Public Edu¬
cation Committee.

.

A Round Table on Cooperation

more

70,2 m.P«ey .than in any decade in our
branch

857

issue

ments made

the

the

follows:

^Our economy, the more, I think, call
Class A__
95
'the "spending years" will expand merly, the defeated nation had to
Class B__ 264
to include higher age brackets.
pay War indebtedness to the vic- Class C__ 230
This was called "repara¬
(4) There is now a decided tqrs.
Now we, the victorious
trend toward better quality, since tions"
686
we all
regret the shoddy war nation, are paying one billion dol¬ Registered
merchandise.

York,

stressed

past two fiscal years

As of Aug. 31,

an

"Empire in Reverse"
We

the

New

rapid

an

in

Legislation, in his Annual Report

ment

One

Rocky Mountain

ChiJ-

to the

may

D.

needs.

city

elsewhere

of

from

Governors of the Associa¬

serve as

tion

D.

"Chronicle." Mr. Noyes, as Chair¬
man of the Committee on' State

The

not

creases

Arthur

livered at the forum is contained

mittee,

the Board. $100,000, taken
surplus, was placed in this
1, 1949, and $12,500 was appropriated from
this
year's income and added to the
fund as of March 1, 1949. In ad¬

following have been elected
their
respective
groups
to

reces¬

war—a

of

attorney
with Gardner,
Carton and Douglas, on the de¬
fects of the Blue Sky Law, de¬

Some Other Committee Reports

by

The

by

not for consumption at

are

address

gren,

sioners on Uniform State Laws.

.

good economic weather. I expect 12% to 14% of our total produc¬
that the government will discover tion.
Most armament production is a
means of preventing the national
Income froni falling sensibly be¬ rather
perishable commodity,
low 1949, especially in the sec¬ much of it is scrap after a very
ond half of 1950. Reduction of few years.
Our ECA gifts are more transi¬
excise taxes seems to be in the
cards.
I am confident that, if tory than most of us think and

The

tional

jrom first page

Holds 38th Annual Convention

There

see a slightly rising
purchasing, power of the Urban
population for food and clothing.
We produce a vgreater output
However, there is one important
element which may tend to change than ever, but not all of it is for
use.
Before the war, all our na¬
the picture.
V
1950 will be an election year for tional defense cost $1 billion or
] y2% of our national income. To¬
Congress.
In such a situation,
every government tries to ensure day the cold war is taking away

,,

Investment Bankets Association

C.

is, however, a rather im¬
portant development looming in
the background which will re¬
quire a great decision.

government stock¬
\y!;, t. ••.' ',V

- wr

by George F. Noyes, Vice-

over

President of the Illinois Company,
was held on the morning of Dec: 7.

mitted

Things to Come

needed, another expedient will be

production for give-away ex¬

ports and for

fund.

Urgently Needed—Production for
Ultimate Consumption

Measured in

can,

Canadian

About

a

as

the

on

America's

As

profits may shrink somewnat, the easy way of plowing
back and financing high profits

created

was

much

as

times as much as

gold, our wages are three to four
times as high as most workers'

or

America's political power in the
world

11

worker in India.

a

either reducing

of

time

expanding our
domestic
markets, and thereby
improving our standard of living.

a

ment while I

Russian and

growing productivity gives

the

our

times

8

worker,

struction.

:

A
on

Securities Industry

panel

discussion

in

•

took plaice
Conven¬

Dec. 6, at the second

tion

session, covering efforts to
greater cooperation within

secure

and often competing
that operate within the in¬
vestment industry. The partici¬
pants in the discussion included
Hal H. Dewar, President Invest¬

the

various

groups

ment

Bankers

A

Clement A. Evans,

sso c

i

a

t i on.;

Chairman, Na¬
tional Association ,of > Securities
Dealers, Inc.; Benjamin H. Griswbld, 3rd, President, Association1
of Stock Exchange Firms; Dorsey
which were considered by theing mutual ownership or openend investment companies, where- Richardson, Chairman of the Ad*
Board of Governors during the
bfethe small investor can have the ministrative Committee of the Na¬
convention
would
increase
the
advantages of diversification as tional Association of Investment
membership of the Association to
well, as supervision in placing his Companies; and Francis Adams7°3.
ftftids..
Truslow, President of the New
The Committee called attention
York Curb Exchange. Mr. Evans
Revisions of Blue Sky Laws
to the fact that the balance sheet
suggested
that
a
committee,
of the
Association
reflects the
A special forum on "NCw Hori¬ headed
by
Hal.
H,
Dewar,
pension plan previously adopted zons in BlUb'Sky. Work," presided President
of
the
Investment
-

Volume 170

Number 4866

THE

Bankers Association, represent the
investment bankers in
securing
cooperation in joint efforts with
other segments of the
securities

business.

Mr.

Truslow

criticised

politicians and others who regard
the investing business as
already
so

integrated that it is

run

by

a

handful of insiders. The fact that
divergent views were expressed
at the forum
was, in

itself, he said,
proof that the industry is not
dominated by any one class or
any

few individuals.

Committee

Chairmen

Industrial Securities: Robert W.

sion

MacArthur, Paine, Webber, Jack¬
son
& Curtis, Boston.

S.

Securities: Roger Cor-

Outlook

Public

Montreal.

V*

&

Securities:

6:00

Education: Norman Smith, Mer¬

rill
Lynch,
Pierce,
Beane, New York.

Fenner

K ^.

Taxation:

Railroad

Securities:

•

&

>

James H.

Hutton, Jr., W. E. Hutton & Co.,
Cincinnati. ' 77 77 ,•/.7.. 7'\7
; Finance:
Francis
M.
Knight,
Continental Illinois National Bank

Company,-Chicago.

^

Legislation:

cago.

;

^

reports

tion

are

issue

the

New

York

Dec.

30.

City
The

"The

from

The American Economic As¬

are:

The Econometric

leading

—

modore

and

Biltmore,
(incompletely):

beiow

American

Tuesday, December 27

7•

10:30
of

Economic, Policy

in

Occupied

Germany

;

| Chairman
Duke

—

Calvin

B.

Hoover,
2:00

"The Effect of Trade and In¬
dustrial Efficiency Upon Ger*

man

Agriculture"—Theodore W.
Schultz, University of Chicago.
"The Role of

■

Fiscal-Monetary

Policy in German Economic

.

Re¬

covery"—Walter W. Heller, Unii versity of Minnesota.

7:

•

*

European and World Trade"

—Horst
i

Mendershausen, Federal
Reserve Bank of New York. • :v

"Discussion:
Council

of

Gerhard

Colm,

Advisers;
Lloyd A. 'Metzier," University - of
Chicago; Philip M. Raup, Univer¬

sity

of

Wisconsin.-.77 >

8:00 P.M.—What

How

H:
,

Much

With

c

a

Recent

!■>-,

Planning
Is

and

Compatible

Market

Fluctuations"

—

Experi-

ence.

i-a

'

Chairman—S

e n a

10

r

Paul

H.v

jAddresses: Sir Henry Clay, Ox¬
ford

University;' Ebik
University of Uppsala.

!

Discussion:

Lindahl,

W. G.

informal discussion

vestment

oped
*

Chairman

December
U.

S.

in

28

Foreign InUnderdevel-

Areas
—

Own

James

r-

V.

Cox,

Angell,

Columbia University.




The

Financial

Chronicle)

Angeles Stock Exchange Officials

Paul

Phelps Witter

Warren H. Crowell

.

Treasurer: George E.
Zimmerman, Revel Miller & Co.
Governors: Carl L. Barnes, Morgan &
Co.; Warren H. Crowell,
Crowell, Weedon & Co.; Charles T. Jawetz, Daniel Reeves &
Co.; B. P. Lester, Lester & Co.; Paul J.
Marache, Marache
Sims & Co.; Carl M.
Purcell, Barbour, Smith & Co.; Stephen C.
Turner, Wagenseller & Durst, Inc.; Phelps Witter, Dean Witter
&

"Distribution of Turning
Tlihes Series"—C. Ashley Wright,'Standard Oil Com-

—

7;" Pany-

•

Co.; George E. Zimmerman, Revel Miller & Co.

:k^-/

"Cyclical Price Flexibility in
Kaysen, Harvard

Steel"—Carl

University^,
"Recent Patterns of Employ¬
ment

Nathan
State

Tax

NSTA Notes

and_7Unemployment" —
Morrison, New York

De$gtment of Labor.

Discussant#?.

4:00-6:00

Gordon

of

P.M.—Contributed

pers

Pennsyl-

Chairman

Tax Policy"—
Rolph, University of
California, Berkeley.
Earl

O.

"The
•

H.

Brownlee,
University
of _Chicago;
Louis
Shere, ; University
of 'Indiana;
Richard E. Slitor, U. S. Treasury.
,

Where Are We Going?
Frank

H.

Knight,

University of Chicago.
Papers:

,

S.

Trends"—Sumner

Discussion:

prepared

Economic

••

•

lege.

-

but

George

—

7

B.

of the Air

-

Dorfman, Department of the Air
r

"The

tion

Slichter,

be

no

discus¬

•

'

Producer's

>

Cost

Func¬

in

Comparative
Statics:
Application to Some Basic In¬
dustries"—Michael J. Verhulst,
Bank

for

Recon¬

struction and Development.

"Welfare Losses"—Roger Dehem, University of Montreal.

"Ancient

Norman Barwise

President:
& Beane.

•

International
H.

There ..will

comments,

Problem"

Dantzig, Department

Force.

announced—Joseph
A.
Schumpeter, Harvard Uni¬
versity.
Basic

Linear

"Production
Scheduling for
Monopolized Products"—Robert

'

be announced—B.

Kierstead, McGill University.

"Some

of

"Differential Effects of Tax¬
ation in the Trucking Industry"
—RichardTEindholm and Victor
E. Smith, Michigan State Col-

A.M.—American Capitalism:

—

Application

Force.

Friday, December 30
10:00

Friedman,

Programming Methods to the
Hitchcock-Koopmans Transpor¬
tation

r,

Milton

of^hicago.

Paper8:

~

R.

/ Discussion:

Pa-

■

.Stt-

v;

in' Federal

Harvard Uhiversity.
W.

•

to

.7 Points of

Econ¬

Title to be

Wednesday,

(Special

CHICAGO, ILL. —Emil Presburg is now with W. C. Gibson &
Co., 231 South La Salle Street. He
was formerly with Bache & Co.

President: W. G. Paul.
Chairman: Phelps Witter, Dean Witter & Co.
Vice-Chairman: Warren H. Crowell,
Crowell, Weedon & Co.
Vice-President and Secretary: Thomas P. Phelan.

Papers:

."Efficiency Versus Equity Is- University
sues

Title to

from the floor.

10:00 A.M.—1.

Our

Taxed?"—E.

Chairman

Douglas, Washington, D. C.

75

Leonid

''
"Methods?, of Measuring Abso-

—

Guaranty and

University

;,7 vania.
;

Economy?

European

Be

Keith,

,

Economic

Co.,

--

Chairman-— Garfield

Structure and
Private Enterprise

fers

"Fitting Germany Into West-

-

1 ern

&

Elmer C. Bratt,
Lehigh University; Robert W. Bur¬
BOND CLUB OF DENVER
Chairman—Carl Shoup, Colum¬ gess, Wester# Electric Company;
At the annual
Thor Hultgren, National Bureau
meeting of the Denver Bond Club held on Dec.
bia University.
6,
1949, the following officers, directors and National
of
Economic
Research;
Zenon
Committeemen
Papers:
<
for the year 1950 were:
Szatrowski, University of Buffalo;
"Capital Gains and Losses"— Clark
Warburton, Federal Deposit
Lawrence
H.
Seltzer,*: Wayne Insurance Corporation.
University. :
Friday, December 30
;
"How Should Wealth Trans¬

Papers:

,

A.M.—1.

Brainard-Judd

of

University of Chicago.

Thursday, December 29

University.

with

Pearl Street.

of Games

A. M.-i&SO P.M.—Business
Cycle Patterns

Gains

Discussion:
Leroy
D.
Stine-:;
7
bower, Department of State; B. K.
Madan,
International
Monetary
Fund; Bruno Foa, New York.

*

Chronicle)

28

Extensions

Thursday, December 29

"M

—

,,

Los

sity.

of Economic Advisers.

Ass'n

Financial

in the Theory of Games"—Oskar
Morgenstern, Princeton Univer¬

_

omy"—Walter S. Salant, Council

Economic

The

"A Theory of Stabilizing Bus¬

;

iness

Meeting

Treaty,

on

Brainard, Judd

' •"

Papers:
_

Investing and Borrow¬

vestments

to

HARTFORD, CONN.—Kenneth
E. Turn, Jr. has become associated

—

'W-

"Impact of U. S. Foreign In¬

listed

are

With
(Special

Chairman
Henry H. Villard,
City College of New York.

conven¬

Brown, Jr.,
Brookings Institution.

Some of the important
meetings,
be held at the Hotels Com¬

Co., 1621

Society

—

to

associ¬

now

With W. C. Gibson & Co.

Proprietor

MO. —George E.
sole proprietor of
& Son, 408 Olive
-

.....

Sandberg is

Chronicle)

NEB. —Or-

an¬

-^.lute and Relative Variations in
Other Methods of
Encouraging
the DuratiMtof Business
Private U. S. Foreign?* Invest¬
Cycles"
—Nilan Nbrfis, Hunter
ment"—William A.
College,

Association.

Gessler

Financial

Hurwicz. University of Illinois.
"The Problem of Substitution

Distribution

"Tax,

A.M.

the Theory

fairs, United Nations.

sociation, the American Statistical
Association, the Econometric So¬
ciety and the American Finance

be

Wednesday, December

ing Countries"—H. W. Singer,
Department of Economic Af¬

groups

to

7 7-77

;

"Chronicle."

,

Between

A.

L.

G.

speaker

7.7.7

9:00-10:30
of

the

Papers:

economic and statistical fields are
holding their meetings concur¬
to

nounced.

given in full elsewhere in
of

Don

Third

pany.

Stock Exchange Relations: Wil¬
bur G. Hoye, Chas. W. Scranton
&

this

leading associations in the

in

S.

Vrtis, Glore, Forgan & Co., -Chi¬

Joint Allied Social Science
Groups
In New York Dec, 27-30

27

Charles

Standing Committees covering the

7...

rently

Speakers: ^

E.

now

Street.

;:-y- .V-;

T.

last year, and made at the

Chairmen's:

bus.

Sweeney, E, H.
Inc., New York.
State

Randolph Bur¬
City Bank of New

LOUIS,

Gessler is

Mitchell,
Tyler President,
Sylvania Electric Prod¬
Rollins & Sons
ucts, Inc.; Kenning W. Prentis, Jr.,
* ■V.ov-.'
President, Armstrong Cork Com¬

Business:

Kenneth Boulding,

Now Sole

to The

SCOTTSBLUFF,
ville

Broadway.

29

Miller.

ST.

W.

—

gess, National
York. ^

v/'Vy.-;

Small

The

Ewing T.
Boles, The Ohio Company, Colum¬

Dec.

Chairman

Research and Statistics: W. Yost

Cleveland.

Management
Statistics
and

of

(Special

Monetary-

Ernest Hagen

Discussants:

Joins Boettcher Staff

Hon.

as
Instru¬
ments of Economic Stability
Robert Turner

R. J.

at the age of 91.

ated with Boettcher and

Thursday, December
10:00 A.M.—Direct vs.
Fiscal
Controls

Statisticians

Fulton, Maynard H. Murch & Co.,

—

What

Expects

New York.

Budget"

lis, Neil H. Jacoby.

30

Meeting—
Business Statistics

Dinner:

L.

Co., New Haven.

Governmental Securities:
George
B. Kneass, The
Philadelphia Na¬
tional Bank, Philadelphia.

Four

Charles

Federal

Paul H. Douglas.
Joint Chairmen—Howard S. El¬

P.M.—D inner

Title:

•

..

Conference: Julian H. Collins,
Julien Collins &
Co., Chicago.

Group

Frank D. Newbury,
Electric Corp.;

Seymour, former Pres¬
ident of Edmund Seymour &
Co.,
York investment
firm, died

New

Luncheon Meeting

—

Edmund Seymour Dead

(joint)

"The

W.

Donald B.
Woodward, Mutual Life
Insurance Company of New
York;
Alan H.
Temple, National City
Bank of New York.

Bergmann, R. W. Pressprich & Co.,

r

1950

Noon
~

91

Edmund

Wednesday, December 28
12:00

Business

Friday, December

Service

! Canadian Securities: F.
Douglas
Chapman, A. E. Ames & Co., Ltd.,

Trust

for

Discussion:

path, New York.

and

Interpretation"—Harold T. Da¬

28

P.M.—Luncheon
Title:

Westinghouse

Education:

(2575)

American Finance Association

Burgess,
Western Electric
Company.

Securities:

Red-

Auchincloss, Parker

Federal

3
—

•

Edgar J. Loftus, R. S. Dickson &
Company, New York.

-

in¬

be

waukee.

the ensuing year:

tesi,

to

Chairman^-Robert

mond.

Natural Gas

will

Meeting

Municipal Securities: Walter W.
Craigie, F. W. Craigie & Co., Rich¬

Public

Aviation

Noon

Wilt-

berger, Blyth & Co., Inc., Chicago.

Oil and

floor

CHRONICLE

vis, Northwestern University.

12:00

Alfred

the

Tuesday, December

corporated, Boston.

Joseph JT.
following are Chairmen of
Johnson, the Milwaukee Co., Mil¬
IBA
Standing Committees for

the

from

FINANCIAL

American Statistical Ass'n

Investment Companies: Charles
F. Eaton, Jr., Eaton &
Howard, In¬

Membership:

&

vited.

Winfield H. Perdun, Laurence M.
Marks & Co., New York.

1949-50

The

-

COMMERCIAL

Prices

and

Their

Inc.

Norman

R. L. Robinson

C.

Barwise,

'

Phillip J.

Merrill Lynch,
*

Clark

Pierce, Fenner

«

Vice-President: George S. Writer, Peters, Writer &
Christensen,

Secretary: Raymond L. Robinson, Sidlo, Simons, Roberts & Co.
Treasurer: Phillip J. Clark, Amos Sudler & Co.
Directors: Robert L. Mitton, Robert L. Mitton
Investments; Glen
B. Clark, Colorado State
Bank; Gerald D. Bachar, J. A. Hogle & Co.;
Donald L. Patterson, Boettcher & Co.
National Committeemen: Phillip

J. Clark, Amos Sudler & Co.;
Stone, Stone, Moore & Co.; Norman C. Barwise, Merrill
Lynch, Pierce, Fenner & Beane; Robert L. Mitton, Robert L. Mitton
Investments.
Ernest

E.

Alternates:

Donald L.
Patterson, Boettcher & Co.; Gerald B.
Ryan, Peters, Writer & Christensen, Inc.; Orville C.
Neeley, Merrill
Lynch, Pierce, Fenner & Beane; Bernard
.

van

& Co.

Kennedy, Bosworth, Sulli¬

;

92

COMMERCIAL

THE

(2576)

Chicago

Co.,

American-Marietta

(letter of notification) 10,Out) shares ($2 par)
stock.
Price, market (about 10%), Underwriter

21

Nov.

common

& Co., Chicago. To reimburse cor¬
porate treasury for expenses in connection with pur¬
chase of additional property.
M.

—H.

Byllesby

•

Benefit

Arizona

Insurance Co.,

stock of

scriptions to 200,000 shares of $1 par common

Legal Reserve Life Insurance Co.
No underwriter. The
proceeds are for investment in new firm.
Office—Ari¬
zona Bldg., Box 430, Bisbee, Ariz.
Ashland

•

Ashland, Ky.

(letter of notification) 15,000 shares of
convertible preferred stock (no par)

15

Dec.

& Refining Co.,

Oil

cumulative

sold to company

Proceeds—T<5

be

\

par) common stock, of which 2,400 are offered by
Strauss. 2,100 by Stanley Strauss and 1,800 by
Leslie J. Weil. Underwriter—G. H. Walker & Co., St.
($1

Allan J.

sell¬
Dempsey & Co., Chicago, the underwriter, at

Louis, is buying this stock at $2.333334 a share and

ing it to

$2.50. Latter, will resell it at $2,875 each
•

Baltimore

Trotting Races, Inc.

$1,330 per unit, each unit to consist of $1,000
bonds and 110 shares of stock. No underwriter. Proceeds
offered at

will be used to build

stock,

common

racetrack. Three officers also filed

voting trust certificates for 290,000 shares

with respect to
of

a

par

$1.

Building & Equipment Corp. of America
(letter of notification) 6,500 shares of captial stock

Bank
Dec. 9

(following
about

$7

a

two-for-one stock spilt, effective Dec. 20) at
Underwriter—Scherck, Richter Co., St.

each.

Louis.

^7.,'

L

Barclay Oil Co., Inc., Mt. Carmel, III.
r
r
•Oct. 13 (letter of notification) 2,000 shares of non-con¬
vertible
Mthares

($100
($1

value preferred stock and 6,000
stock (of which 2,000 shares

par)

par)

common

will be
,

purchased by underwriter at par). To be offered
Jtn units of one share of preferred and two of common
stock at $102 a unit.
Underwriter—Sterling, Grace &

To acquire oil leases and drill wells.

Co., New York.
•

Beverly Gas & Electric Co.

Dec.
to

20

filed

offered

be

(par $25)
shares

$33,000 shares of capital stock
stockholders at the rate of

to

for each two shares

1%

held, at $30 per share. No under¬
The proceeds will be used to pay off $575,000 of

writer.

notes held

of

ment
Jan.

by maturity.

issue

entire

the

etc.

ratable retire¬
Bids expected

10, 1950.
Consolidated Caribou Silver Mines, Inc.
(by amendment) 800,000 shares (no par) com¬
Price—$1.25 per share. Underwriter—Wil¬

Nov.

17

mon

stock

L.

liam

Burton

New

Co.,

&

York.

Proceeds—To de¬

Pasadena, Cal.
200 shares of common
stock (par $1) to be sold at $22 each to Paul W. Heasley
for resale to the public. Underwriter—Hopkins, Harbach
& Co., Los Angeles, Calif.
Proceeds—For working capConsolidated Engineering Corp.,

•

(letter of notification)

12

Dec.

..'•// :

ital.

Cooperative

Consumers

Kansas

Association,

City, Mo.
filed $2,000,000 3%% five-year certificates of
indebtedness and $3,000,000 of 4%% 10-year certificates

of indebtedness, to

now

by the New England Electric System.

Broadway Angels, Inc., New York City
Nov. 14 filed 2,000,000 snares (lc par) common stock and
500,000 management shares of, 0.1 of a cent par value,
to be sold at 50 cents and 12.5 cents respectively. Under¬
writer— Hugh J. Devlin, New York.
Proceeds — For
working capital. Business—To back theatrical produc¬
tions, distribute tickets and act as an agent for talent.

inventories and paying
Farmers Purchasing Cooperative.

nancing
Business:

Radiant Glass

Continental

•

Underwriter-—
including fi¬
operating expenses.

be sold to members.

Proceeds—For corporate purposes,

None.

Heating Corp., N. Y.

(letter of notification) 20,624 shares
stock (no par) at the market for account
Hicks. No underwriting.
16

of common
of Mercer

$15).
Offering
Offered to stockholders of record Dec. 20
at $44.50 per share on ratio of one new share for each
50 shares held. Rights expire Feb. 1, 1950. Employees of
company, its subsidiary and associated companies will
also be given an opportunity to subscribe.
Proceeds—To
Nov. 4 filed T75,000 shares

of common stock (par

—

be added to treasury

funds and used for corporate pur¬

Statement effective Dec. 9.

Underwriter—None.

poses.

Houston, Tex.
Dec. 21 filed 375,000 shares of capital stock (no par) tobe offered to stockholders at $13.50 per share at the rate
of %ths of a new share for each share held.
Under¬
writer—None.
Proceeds—To be used, along with a
Duval

•

$2,500,000

Texas

Harness

Eastern
Oct.

filed

27

Sulphur Co.,

loan, to provide mining and
potash in Eddy County, N. M.

bank

facilities to mind

Racing

milling

Underwriter—Tellier & Co., New York.
Proceeds—To purchase, improve and operate the Fort
Steuben Raceway. Expected second week in January.
•

Eastern

Steel

Stainless

Corp.,

Pasadena,

Cal.

(letter of notification) 5,000 shares of common
to be sold by John M. Curley to the Eastern

16

stock

Ultraviolet Corp. at $9

each.

Ltd., Los Angeles, Cal.
30,000 shares of class A
common stock, of which 22,778 are to be issued in ex¬
change for 3,254 shares of Roberts Public Markets, Inc.
at the rate of seven shares of Fitzsimmons for each
Fitzsimmons

•

Stores,

(letter of notification)

16

Dec.

exchange will be sold at $10 each.
Proceeds—For working capital.
the

No underwriter.

St. Petersburg, Fla.
shares ($7.50 par) common stock,
Offering—Offered stockholders of record Dec. 1 at the
rate of one new share for each five held at $16.85 per
Florida

Power Corp.,

filed

2

.

Handmacher-Vogel, Inc., New York
Nov. 28 filed 150,000 shares ($1 par) common stock, of
which 50,000 are to be offered by company and 100,000
by
three stockholders.
Underwriter — None= named.
Price by amendment. Proceeds—Company plans to use
$315,000 to redeem 3,000 shares 5% cumulative preferred
stock ($100 par) at 105, and the remainder to improve
lease-hold property and furnish new offices. Business—
Manufacture of women's suits.
Price—$10 per share.

'

Statement effective Dec. 15.

•

Cincinnati

Fund,

Inc.

242,000

Underwriter—Issue not
will enter
with Kidder, Peabody & Co. and Merrill
Lynch, Pierce, Fenner & Beane, under which the firms

l-for-3 rate and

at

will be offered to common

common

stockholders at l-for-9 rate.

Underwriters—Dillon, Read

& Co. Inc. and Dean Witter & Co. will

cinnati, O.,

as

distributor. Business: Investment

to the underwriters. Proceeds—To pay
promissory notes and to carry merchan¬
or to replenish treasury
The balance would be used for other corporate

public auction

or

off short-term

dise inventories and receivables
funds.

purposes or

21

(letter of notification)

of

Commonwealth
Dec.

Edison Co., Chicago
(1/10/50)
$49,000,000 sinking fund debentures, td be
1, 1949,.and mature April 1, 1999. Under¬

Florida

Oct.

writers—Names

to

be

determined

by competitive bid-

shares not subscribed for.

Heliogen Corp., N. Y.
Dec. 16 (letter of notification)

Office—17 West 60th

Telephone Corp.

pany's officers, directors, employees or agents. Price to
present stockholders will be $10 per share until Dec. 2,
1949, at which time the balance of shares unsubscribed
will be offered to general public at $10 per share. Pro¬
ceeds—To be used for further expansion of telephone
facilities.
Food

•

Fair

Dec. 6 filed

Jan.

due

1,

•.

Stores,

'

'" S'

Inc.

v

Street, New York, N.

Industrial Center, Inc.
vr
25,000 shares of class A
($10 par) common stock. Price, par. Underwriter—Per¬
kins & Co., Boston.
For operating a plant to be leased

Dec.

2

from
•

(letter of notification)

the Navy

Department.

(1/10)

additional
other

Underwriter—Eastman Dillon & Co.
will be used to redeem $2,645,000

supermarkets, warehouses, parking lots

facilities,

and

to

equip

and

these facilities. Expected,

about Jan. 10.
Gibbonsville
Dec.

6

Mining & Exploration Co.

(letter of notification) 250,000 shares (10c par)
stock. Price, par. Underwriter — William L.

common

mill-,
Office—Hutton Bldg., Spokane, Wash.

Henderson, Spokane. To buy and install additional

-inf machinery.
•

Gulf

Atlantic Transportation

Co., Jacksonville,

Florida

Philadelphia

Pittsburgh

San Francisco

Chicago

Cleveland

'

Private Wires to all offices




_

,

..

.

.

•

May 31 filed 620,000 shares of class A participating ($1
par) stock and 270,000 shares (25c par) common stock.
Offering—135,000 shares of common will be offered for
subscription by. holders on the basis of one-for-two at
share. Underwriters—Naipes by amendment,

25 cents per

Kf

\

*

.

:'} %

'A

:

>

Maryland Mines Corp., San Francisco, Cal.
Dec. 12 (letter of notification) 14,000 shares of common
stock
at $1.90 per share,
to be sold by Gwendolyn
MacBoyle, executrix for the Estate of Errol MacBoyle,
deceased.
Underwriters—E. F. Hutton & Co. and Davies
&

Mejia, San Francisco.
Illinois

r"'

Bell Telephone

Nov. 30 filed 389,982

Co.
shares of capital stock (par $100).

share.

American Telephone &

'At ♦*.

$100

Telegraph Co. will be

given the right to buy 387,295 of these shares and the
remainder will be offered public stockholders. Under¬
writer—None. Proceeds—To pay advances

Income

Foundation

9

filed

200,000

Fund,

Inc.,

from A. T. & T.

Md.
(par 100).
7

Baltimore,

shares of capital stock

Industria Electrica de Mexico, S. A.,

Mexico City

250,000 shares of 6% cumulative

convertible

preferred stock, 100 pesos par value ($11.5607). Offer¬
ing—This stock is to be offered at par to holders of
common and special stock at rate of five shares for each
12

shares

bination

held, either of common or special, or a com¬
both.
Underwriter—Banco Nacional de

of

Mexico, S. A.

Proceeds—To reduce outstanding short-

term indebtedness.

7 Investment Co. of America, Los Angeles
12 filed 500,000 shares of common stock. Under¬

writer—ICA Distributors,

15-year 3%% debentures due Feb. 1, 1959, and $2,000,000
of notes.
Balance will be used to acquire or construct

Boston

;

Idaho

Dec.

$8,000,000 15-year sinking fund debentures,
1965.

of capital

1,400 shares

(Mass.)

Hingham

Nov. 29 filed

Proceeds—Proceeds

New York

77';;7

($5 per share) to be offered exclusively to
stockholders. Proceeds—For general corporate purposes.

Pro¬

/■

(letter of notification) 28,500 shares (par $10)
stock.
Underwriters—None, other than com¬

31

common

13 filed

dated

to sell

ceeds—For construction.:

Oct.

4%% pre¬
ferred stock.
Price $100 each.
To be offered initially
to common stockholders.
No underwriter.
For plant
and property additions to convert to automatic
dial
Operation. Office: 240 W. Monroe Street, Decatur, Ind.
$250,000

7 ''7V;

construction. Indefinite.

•

Dec.

company.

Citizens Telephone Co., Decatur, Ind.
Oct.

buy unsubscribed

preferred; unsubscribed common will be sold either at

Business—Investment company.

undertake

,

Ltd., Honolulu
E cumulative ($20
par) preferred and 50,000 shares of ($20 par) common.
Offering—Preferred will be offered to preferred holders

underwritten but at expiration date company

will

V

•

June 21 filed 150,000 shares of series

into agreement

Dec. 14 filed 15,000 shares of capital stock, par $1. To be
offered at market through Cartwright & Co., Inc., Cin¬

W:.:\

Hastings Manufacturing Co., Hastings, Mich.
Dec. 6 (letter of notification) 2,000 shares ($2 par) com¬
mon stock, to be sold by Aben E. Johnson, President of
the company, at $7 each. Underwriter—First of Michigan
Corp., Battle Creek, Mich.
7-1 77-'7

Rights expired Dec. 21.

share.

Of¬

real estate and buildings owned by corporation
operating expenses.
/
«

prove

and for

a

Nov.

No underwriting.

(no par) at $100 per share.

Offering—To be offered to stockholders pro rata at

Canam

Mining Corp., Ltd., Vancouver, B. C.
Aug. 29 filed 1,000,000 shares of no par value common
utock. Price—800,000 shares to be offered publicly at 80
(cents per share; the remainder are registered as "bonus
idiares." Underwriter—Israel and Co., New York. N. Y.
Proceeds—To develop mineral resources.
Statement ef¬
fective Dec. 9. Offering expected in January.

stock

needed for

Any additional shares not

share of Roberts.

Hagans Improvement Corp., Mamaroneck, N. Y.
13 (letter of notification) 399 shares of common

Dec.

common stoc*.

Price, $1 each.

Dec.

•

stock at par

(1/9-13)

Inc.

Club,

shares1 (5c par)

1,000,000

& Co. and A. M. Kidder
the remaining 135,000
plus unsubscribed shares of the new common.
Offering price of class A $5. Proceeds—To complete
an ocean ferry, to finance dock and terminal facilities,
to
oay
current
obligations, and to provide working
capital.

snares

Hawaiian Electric Co.,

Chemical Co.

Dow

and may include John J. Bergen
& Co.
Underwriters will buy

fering limited to stockholders of company and to mem¬
bers of the Lee Haven Beach Club.
Proceeds—To im¬

properties. Expected late this month.

velop mining

Dec.

,

Dec. 15 filed $1,000,000 5% debenture bonds, due 1970,
and 110,000 shares of common stock ($1 par).
To be

v

debentures will provide for

new

Nov.'29

6,300 shares of class B

(letter of notification)

9

' V,,

V"

V

Firing Corp., St. Louis, Mo.

Automatic
Dec.

$1.20
to be

employees at $20 each. No underwriter.
added to working capital for general

corporate purposes.

additions,

fund

on

The sinking

property.

to

construction,

Bisbee, Ariz.

(letter of notification) $300,000 certificates of
evidence of dividend refunds, as pre-organization sub¬
14

Dec.

ding. Probable bidders: Halsey, Stuart & Co. Inc.; The
First Boston Corp.; Glore, Forgan & Co. Proceeds—For

M

.

SINCE PREVIOUS ISSUE

ADDITIONS

INDICATES

•

Registration

in

Now

Securities

Thursday, December 22, 1949

FINANCIAL CHRONICLE

&

lii v..t>4

Inc. Price—At market. Busi¬
Statement effective Dec. 14.

ness—Investment company.

Volume 170 : Number 4866

THE

r

COMMERCIAL

''

NEW ISSUE CALENDAR
1950
(EST)__Eqp. Tr. Ctfs.

January 5,
Northern Indiana

Pennsylvania RR.,

Proceeds—To

Preferred

Finance

•

January 10,

1950

Food Fair

Pacific

Stores, Inc.-

V

January 20,
Sharp & Dohme, Inc
United Gas

June

Corp., 11:30

-Bonds

Common

-.-Preferred

•

tion—Will

Under¬

writer—Greenfield, Lax & Co., Inc., New York. Price—
$1 per share. Proceeds — To purchase additional plant
facilities, tools, dies, jigs, etc.; the balance for working
capital. Statement effective Oct. 3-and amendment to
Kentucky

Water

1

...

•

,

Service Co., Inc., Louisville

WT21 (letter of notification) 1,000 shares ($25 par) 6%
cumulative preferred stock. Price, $27.50. Underwriters
—Bankers

Bond Co. and Smart & Wagner,
Louisville,
Ky. To extend water system at Middlesboro, Ky.

Lawrence
(Mass.)
Gas
Electric Co.
(1/4)
Dec. 1 filed $2,750,000 of series A first
mortgage bonds,
due Dec. 1, 1979. Underwriter — To be determined
by

competitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; The First Boston Corp.; Carl M. Loeb, Rhoades
& Co.; Otis & Co.; Coffin & Burr. Proceeds—To redeem

$1,500,000 31/g% series A first mortgage bonds, due 1968.
at 102 *4%, to repay $1,000,000 notes held
by banks and
the balance for construction.

Expected Jan. 4.

v

-

Limpia Royalties, Inc.,

Midland, Texas
i
25 filed 516,228 shares
($1 par) capital stock.
Offering—To be offered share-for-share in exchange for
•outstanding shares in Limpia Royalties, a trust estate.
A value of $3.80 per share is
placed on the new stock,
and any shares not needed for
the:exchange will be
Nov.

to

sold

Trush

amount-

shareholders

on

Underwriter—None.

Business—Mineral

and

ratable

a

To

royalty

basis

effect

rights

an

in

at

this

•

"'V

Office: 203 Ninth Street, Lorain,
'

v'r/ V.

if'1;; V7£ :7 7"7

McDevitt Finance Co., Ventnor
City, N. J.
12 (letter of notification)
$100,000 6% debentures.

Dec.

Price—$50
to

operate

per

unit.

small

No underwriting.

loan

business.;

To

secure

Office—5205

Avenue, Ventnor City, N. J.
Magna vox Co.,

;

Fort Wayne,

funds

Atlantic

V-v.'■

by amendment.

working

777.

?

'.

cap¬

•

Mid-Continent Airlines, Inc., Kansas
City, Mo.
Dec. 6 (letter of notification) 4,000 shares
($1 par) com¬
mon stock.
Price—At market price (between $8 and
$9).

Underwriter—White & Co., St. Louis, Mo. Proceeds—For
working capital.
>"
'
.7777
•

:

Middle

Utilities, Inc. (1/17)
640,000 shares of common stock

(no par).
Underwriters—Names to be determined by competitive'
bidding. Probable bidders: Dillon, Read & Co. Inc.;
-Merrill Lynch, Pierce, Fenner &
Beane; The First Bos¬
ton Corp.; Lehman Brothers.
Proceeds—To make com¬
mon

stock investments

totaling $13,000,000 in three sub¬
sidiaries, viz: Arkansas Power & Light Co., Louisiana
Power & Light Co. and Mississippi Power &
Light Co.,
that these subsidiaries

so

grams.

can

continue construction pro¬

Tentative date of- offering is Jan. 17.

Moller-Dee Textile

Corp.,-Wilmington, Del., and

•Dec. 7 filed 500,000 shares ($5 par) capital stock.

writer—Coffin,

Betz

Proceeds—To build

Cotton textiles.,

a

&

Co.,

the

subsidiary. ; Proceeds—To

Dec.

7

ferred

Indiana

Public

Service

Co.

(1/5/50)

Merrill

Lynch,

the

Pierce,

exchange.

$1-06.61,* the

redemption

price

plus

a

61-cent

accrued

Power Petroleum Ltd., Toronto Canada
April 25 filed 1.150,000 shares ($1 par) common of whict
1,000,000 on behalf of company and 150,000 by New Yorl

Co..

Ltd.

Price—50

cents

per

share:

Underwriters—

Philadelphia.

textile plant in Israel.

Under¬

Price,

on

Corp., Worcester, Mass.
notification) 10,000 shares ($2.50 par)
Price, $7.50 each. To be sold by Charles

stock.

common

S.

Payson, New York.

Boston.

'77/

-

Underwriter—J. P. Marto & Co.,

7777'"', 77''77'7.7".

~7''7..'7

Royal Crown Beverage Co. of Poughkeepsie, Inc.
notification) 8,000 shares of 5% cumula¬
tive preferred stock (par $20) and 40,000 shares of com¬
Dec. 8 (letter of
stock

(par 10 cents) and 18,000 common stock pur¬
chase warrants to purchase a like number of common

mon

shares.
N. Y.

Underwriter—Raymond V. Edwards, New York,
Price—$30.66 per unit, each unit consisting of one
loans

for

common

stock. To

equipment and additional
working capital. Office—170 Washington Street.
new

-Sayre & Fisher Brick Co.,

Sayreviile, N. J.

•:

,

!

'

.

Oklahoma, Inc., Tulsa, Okla.
(letter of notification) 30,000 shares (100 par)
stock, to be sold at 121^ cents each by Greenfield, Lax
& Co., Inc.; New York
City, who will serve as its own
2

underwriter.

/;'./, \'.•
*
Sudore Gold Mines Ltd.,
Toronto, Canada
June 7 filed 375,000 shares of

share (U. S. funds).

per

common

stock.

•

■

Price—$1.

Underwriting—None.

—Funds will be applied to the purchase of
road construction, exploration and

Proceeds

equipments

development.

Teco, Inc., Chicago

.

Nov.

21 filed 100,000 shares
($10 par) common stock.
Offering—These shares are to be offered to holders ot
common

stock in Zenith Radio

for each

five held.

Corp. at rate of one share
Underwriter—None. Proceeds—For

working capital and the promotion of Zenith's "Phonevision" device, whereby television users could
pay a
special fee for costly television programs by calling the
telephone company and asking to be plugged in.
•

Thermoid Co., Trenton, N. J.
20 filed sufficient shares of convertible

Dec.
and

-common

trust

of

stocks
the

for

issue

Employees'
at

more

than 100,000 common
tributions from employees

maximum

to

preferred
employees under the

Thrift Bonus

Plan.

Thfo

than

14,000 preferred and
shares, with maximum con¬
estimated at $400,000 and

contributions by the company at $80,000.
Proceeds—For working capital.

No

underwriter.
•

"Tickets

Dec.

77

,

Cement Co.

Sterling Oil of

<

Dec.

more

Reed Prentice

No underwriting.

Portland

Co., Seattle.
To replace working capital
plant improvements.

number is estimated

Please"

13

(letter of notification) 100 units representing
Vi% each of the profits.
Price—500 per unit.
Proceeds
—For production of The Hartman Show "Tickets
Please."
Underwriter—None.
/

Ultrasonic Corp., Cambridge, Mass.
Dec. 7 (letter of notification) $300,000 of
5%

v

debenture

bonds, due 1960 (which will have attached 3,000 shares
of class A stock). The bonds are convertible into
40,000
shares ($5 par) capital stock. Price —
$100 each. No

underwriter. For general working
Rogers St., Cambridge, Mass.

capital.

Office—61

.

Union Oil Co.

■

¬

(Calif.)
600,000 shares

Nov. 18 (letter of notification) 106,584 shares of common
stock (par $1).
Price, $2 per share. Offered for sub¬

for all of the

>

Proceeds—The shares

scription by stockholders of
for-three basis.
New
not

York

for

has

record

Nov.

23

any unsubscribed shares.
enlarge, modernize and equip dryers* etc.

.

one-

Rehabilitate
v

/

Finance

Dec. 7 filed 120,000

(no

a

Rights expire Dec. 28. Breswick & Co.,
agreed to purchase for investment and

resale

cumulative

on

Co., Los Angeles (1/9-13)
shares of convertible preferred stock,

par).

Underwriter—The First Boston

SERVICE
SINCE

Oct.

17

filed

($25

par)

common

stock.

are to be issued in
partial payment
35,000 outstanding shares of capital stock
Co., an oil producing company*
a

of the Los Neitos

Upper Peninsula Power Co.
Sept. 28, 1948 filed 154,000 shares of common stock (paf
$9). Underwriters—SEC has granted exemption from com¬
petitive bidding. An investment banking group man¬
aged by Kidder, Peabody & Co.; Merrill Lynch, Pierce^
Fenner & Beane, and
Paine, Webber, Jackson & Curtbfc
may be underwriters. Proceeds—Will go to selling stock¬
holders.
Consolidated Electric & Gas Co. and Middle
West Corp. will sell 120,000 shares and
34,000 shares, re¬
spectively. r. :
*

CONFIDENTIAL

(

f

SORG
PRINTING CO., Inc.
SO SOUTH ST., NIW TURK 7, N.V.

Business—

Westerly (R. I.) Automatic Telephone Co.
V
Dec. 2 (letter of notification) 6,000 shares of common1
stock (par $25). To be offered pro rata to stockholder^
of record Dec. 10 at par.
Of the total, 3,800 shares will
be

sold

New England Telephone &
Telegraph Co.,
9r500 of the outstanding 15,000 shares.
No
underwriter. To repay advances from the parent com¬

holder

to

of

pany-

i ■'

"...

:

•

Younker Brothers, Inc., Des Moines, la..
/i.
Nov. 4 (letter of notification) 1,000 shares (no par)
stock,
to be sold at $27.50 each. Underwriter—T. C. Henderson

..

.

.




H. Huston &

istration

par.

;
' *
* :
"I
V
Montana-Wyoming Gas Pipe Line Co.
Nov. 30 filed 150,000 shares ($5 par) common stock,
writer—Coffin, Betz & Co., Philadelphia. Price—At par.

working capital.

1950

June 27.

Columbia,

redeem

S. G. Cranwell &

Co., New York* Proceeds—For admin¬
and
expenses
drilling.
Statement
effectiv#

Co.,

(letter of notification) 47,880 shares ($2 par)
stock.
Price—$4.75 each.. Underwriter—Harold

expended

Fenner

dividend.

and

common

5%

accompanied by a cash payment to make
up the differ¬
ence between the
offering price of the new stock and

Gas

•

•Nov. 30

a

& Beane, New York.
preferred not surrendered in
Each share of stock exchanged will be

retire

&

1979.

Spokane /( Wash.)

like number of shares of
outstanding 5% preferred stock. Underwriters: Central
Republic Co. (Inc.), Chicago; Blyth & Co., Inc. and
Proceeds—To

Due

ments
'"

($100 par) cumulative pre¬
Offering—To be offered on a share-for-

share basis in exchange for

Electric

Carolina

Soya Corp. of America, N. Y. City
Dec. 15 (letter of notification) 400,000 shares of common
stock (par lc). at 50c per share.
Proceeds—For improve¬

;

filed 211,380 shares

stock.

Co.,

a
like
amount
of outstanding
Underwriter—Names by amendment
(probably Halsey, Stuart & Co. Inc.; Kidder, Peabody &
Co.; The First Boston Corp.; Union Securities Corp.).

struction program.

Northern

cumu¬

and

filed

Proceeds—To

$38,-

This program is expected to require
$43,000,000 in 1950 in addition to the $70,000,000
of expenditures since 1947.
^
7.7''77/7
!

($25 par)

$22,200,000 first and refunding mortgageDue 1979. Underwriter—Names
by amendment.

bonds.

Corpora¬

repay

22

bonds.

of Buffalo

merger

Carolina

South

'

1920

Tel-Aviv, Israel

South

Nov.

about

Seaboard

South

.Dec. 21 filed

to

stock

Fergus Falls, Minn. To retire bank loans.

500.000 of bank loans obtained in 1948 and
1949 in connection-with the construction program of the
constituent
companies and to finance in part the company's con¬

retire.bank

Proceeds—To retire bank loans and furnish

Expected early in January.

succeed

share of preferred and fine shares of

Ind.

Dec. 2 filed 100,000 shares of class A $1 cumulative con¬
vertible preference stock ($15 par).
Underwriter—Maynard H. Murch &, Co., Cleveland. Price

ital.

5

preferred

15,500 shares ($$
par) common stock.
Price—Preferred to be sold at
$25 and common at $7.75.
Underwriter—W. R. Olson

\ ./ ;;.

(1/12)

Nov. 18 (letter of

Telephone Co.
Nov. 29 ;(letter of notification) 3,489 shares
(no par)
common stock.
Price, $20 each. No underwriter. To par¬
tially reimburse the company's treasury for additions to
Ohio.

^

-

Inc., Fargo, N. D.
(letter of notification) 2,000 shares of 6%

Oct. 12
lative

Corp. Bids expected Jan. 12.

Jan.

on

will be its direct

New

(Ohio)

property made in 1948.

diversified

' •'

■

for

Smith,

-

exchange.

Texas,

Mexico, Oklahoma and Arkansas.
Lorain

-

Niagara Electric Corp., Central New York Power Corp.
-and New York Power & Light
Corp. Central New York
is to be the surviving
company, and is to change its
name to Niagara Mohawk.
The Niagara Falls Power Co.

Debentures

y :y

.<

shares

new

ones.

exchange.

-

Keller Motors

registration statement effective Oct. 31.;

v.

of

Business—Pharmaceuticals.

15 filed $40,000,000 of gen.
mtge.

The First Boston

American

Corp., Huntsville, Ala.
May 10 filed 5,000,000 shares (3(5 par) common.

"

week

To redeem at $75 each plus accrued
dividends any $3.$0
preference stock not surrendered under the

bonds, due Jan. 1,
Underwriters—Names to be determined by com¬
petitive bidding.
Probable bidders—Halsey, Stuart &
Co. Inc.; Morgan
Stanley & Co.; Kuhn,*Loeb & Co.;

'■'iJanuary

-

,

capital, reduce

Expected

Underwriters—Alex. Brown & Sons,
Baltimore, and Drexel & Co., Philadelphia. Proceeds—

1980.

January 28, 1950
—Equip. Trust Ctfs.

—

: /■

■'

working

subsidiaries.

ference stock, series A, at rate of three
„each four old

or

Niagara Mohawk Power Co.

Dec.

Bonds

31, 1950
Telephone & Telegraph Co.
a.m. (EST)——

Fund, Inc., New York

shares ($100 par) cumulative pre¬
Underwriters—Names to be determined

•

increase

in

Sharp & Dohme, Inc., Philadelphia, Pa.
(1/2Q)
9 filed 171,815 shares of cumulative
preference
Offering—To be offered in exchange for
229,085 2/5 shares of S3.50 cumulative convertible pre¬

20,000

■;

invest

stock (no par).

Business—Open-end

of,

Proceeds—To

loan,

Dec.

transmission line from

Jersey Power & Light Co.

filed
stock.

year.'-

(EST)_._•

Corp.
bank

(par $1) to
Underwriter—John G. Nesbett &

City.

93

Jan. 97' "* '

in reimbursement of payments
made for, construction of additions and
betterments sub¬
sequent to April 30, 1949.
Sale deferred until later thii

Indiana Harbor Belt RR

11:30

Y.

payment of the cost

1950

a.m.

gas

(2577)

V

lor

through competitive bidding. Probable bidders:
Kidder,
Peabody & Co.; Smith, Barney & Co.; W. C. Langley &
Co.; Lehman Brothers. Proceeds—Will be applied to the

1950

January 24,

9

ferred

1—Equip. Trust Ctfs.

<

N.

New

Preferred

January 17,. 1950
Utilities, Inc.--*-——

4

Inc.,

Debentures

Western Maryland Ry.-_

a

management investment company.

Equip. Trust Ctfs.

January 12, 1950
Niagara Mohawk Power Co.___

-»

share

one

Fund, Inc. (The)
filed 50,000 shares of capital stock

20

Co.,

y

Lighting Co

Middle South

Dec.

Debentures

Missouri-Kansas-Texas RR

V

.

Montana-Dakota
oi

Nesbett

be offered at market.

Co.____.-_.———-Preferred

Commonwealth Edison Co

of

Co., Inc., New York. Price—At market.

January 9, 1950
Eastern Harness Racing Club, Inc.___„_..Common
Seaboard

build

Natural Resources

(EST)__Equip. Trust Ctfs.

noon

V".

•

:

rate

Dec. lz iiled 1,970,000 shares of
capital stock. Business—
Investment comnany. Underwriter—Frank L.
Valenta &

1950

Public Service Co

at

Worland, Wyo., to Baker, Mont.

Bonds

—

zu

.uee:

held.

seven

ment.

Baltimore & Ohio RR., noon

H-toiU

CHRONICLE

Rights expire Jan. 4, 1950, Price—
$13 *4 a share. Underwriters—Blyth & Co., Inc. and Mer¬
rill Lynch, Pierce, Fenner & Beane.^ Price
by amend¬

1949
Peoria & Pekin Union Ry., 11 a.m. (EST)____Bonds

Lawrence Gas & Electric Co.-.

"V

stockholders

common

uOx

each

December 28,

January 4,

FINANCIAL

•

Offering—To
='•

&

& Co., Des Moines.

If* ISAGRAVt press, Ud.

Proceeds—To selling stockholder.

(Continued

on

page

94)

'

'

"

•

'•*'

,i

J

1

94

>

(2578)

Continued

jrom

•

American

Telephone

&

Telegraph

Dec. 21 directors voted to make

Jan. 28.

bank

issue of like

to

twelve

Telephone

&

Telegraph

Co.

(1/31)

000 debentures to

be offered at competitive bidding.

in

its

$100,000,000

It

amount that

will mature serially in three

is

for general corporate purposes.

sell early in 1950 $5,000,000 of

The fourth group

•

Central Louisiana

•

shares

preferred stock, the net

common

stock: First

Dec. 20 company asked ICC for authority to issue $55,-

000,000 first mortgage bonds, due Jan. 1, 1980, the net
proceeds to be used toward paying off $25,760,000 of
notes and to redeem on April 1, next, approximately
$33,644,400 of general mortgage 4V2% convertible income
bonds, series A, due Jan. 1, 2019. Probable bidders:
Halsey, Stuart & Co. Inc.; Kuhn, Loeb & Co.; Lehman
Brothers and Bear, Stearns & Co. (jointly). The bank
loan was made to redeem on Jan. 1, 1950, $25,760,000
first mortgage series A 4s, due Jan. 1, 1994,

;

num¬

expenditures.

Merrill

are

4

Missouri-Kansas-Texas

Traditional underwriters for

Salomon Bros.

stock: First Boston

Corp.; Dean, Witter & Co.

and

4

Columbia Gas System, Inc.

directors

authorized

the

sale

of

competitive bidding. Probable bidders: The First Boston
Corp.; Merrill Lynch, Pierce, Fenner & Beane; Halsey,
Stuart & Co. Inc.; Kidder, Peabody & Co.; Union Secu¬
rities Corp. Bids expected toward the end of Janary,

13

it

was

Montana

New

■•■/%

indicated

Stuart

&

Co.

Inc.;

Harris,

Hall

&

Co.

(Inc.);

&

Power Co.

ler; Lehman Brothers; Kidder, Peabody & Co.; Harriman
Ripley & Co. Inc.; Otis & Co. Proceeds—To redeem
$2,500,000 first mortgage 5J/2% bonds, due Aug. 1, 1974.

Seaboard Air-Line RR.

that $90,000,000

additional fi¬
nancing will be necessary for the period 1950-1953 to
cover in part a construction budget of
$290,000,000. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; The First Boston
Corp.; Glore, Forgan & Co.

Jersey Bell Telephone Co.

bonds

to

meet

plant and installation costs.
Probable
Halsey, Stuart & Co. Inc.; Morgan
Stanley & Co.; Kuhn, Loeb & Co.; Shields & Co.; First
Boston Corp.; White, Weld & Co.
bidders

for

bonds:

El Paso Natural Gas Co.
was

4

.

1

"

In addition to the new financ¬
also is said to be considering plans to re¬
of its privately-held indebtedness. Traditional

company

fund

some

underwriter, Dillon, Read & Co. Inc.
•

Texas

Dec.

19

Service

Electric

reported

Co.

offer 100,000 shares of

may

pre¬

new

ferred

stock, possibly in April. Probable bidders may
include W. C. Langley & Co.; Lehman Brothers; Kidder,

Electric Service Co.

Texas

Nov.

28

company plans sale of $8,000,000 of
1950, the proceeds to be used to finance
the company's construction program. Additional financ¬
ing also is anticipated in the first half of 1950 by other

reported

bonds early in

of

Utilities

Texas

Co.

Probable

bidders:

Halsey, Stuart & Co. Inc.; The First Boston Corp.; Blyth
& Co., Inc.; Kidder, Peabody & Co. and Smith, Barney
& Co. (jointly); W. C. Langley & Co. and Glore, Forgan
& Co. (jointly); Carl M. Loeb, Rhoades & Co. and E. H.
Rollins & Sons (jointly); Union Securities Corp.; Drexel
& Co. and Hemphill, Noyes & Co. (jointly); Lehman
Brothers; Salomon Bros. & Hutzler. 7
United Gas Corp.
Nov.

30

reported

bidding

$25,000,000

bonds, due 1970.
tration

(1/24/50)
plans to sell at competitive
first mortgage collateral trust

company

of

The company expects to file

statement

with

the

SEC

expected, will be opened to 11:30
at 2 Rector

Street, New York.

Co.

Dec.
a.m.

1.

a

Bids,

(EST)

on

regis¬
is

it

Jan. 24

Probable bidders: Halsey,

Corp.; Harriman Ripley & Co.; Equitable Securi¬

ties Corp.

...

Dec.

5 expected company will do some new financing
early in 1950 in connection with its expansion program.
Initial financing may consist of $10,000,000 bonds. Prob¬

•'

Florida Power & Light Co.

able

bidders:

Merrill

Lynch, Pierce, Fenner & Beane;
Corp.; Halsey, Stuart & Co. Inc.; Leh¬
man
Brothers; Equitable Securities Corp.; Harriman Rip-rley & Co.

Dec, 15 reported company expects to raise $12,000,000
in new money in 1950-1951 to finance in part its con¬
struction program. McGregor Smith, President, disclosed
that

Offering will represent part
company's program to raise approximately $18,000,000 in the 1950 fiscal year ending Aug. 31 to finance
its $20,000,000 expansion program for the year. Company
has arranged for the private sale of $10,000,000 of 30-year
mortgage bonds with a life insurance company to provide
the major portion of funds needed in the 1950 fiscal year.
The balance will be obtained through the sale of about
of the

Boston

Oklahoma Gas & Electric Co.

additional construction cost of $7,283,740 by the*
sale of bonds and debentures.
'

reported company will offer additional shares of
stock on a one-for-eight basis to its present

common

shareholders early in 1950.

&

announced that company proposes to fi¬

nance

,1.

Southwestern Public Service Co.
Dec. 10

Inc.;

Dillon, Read & Co.

Inc.; The First

.

new

pipeline project.

Dec. 12 it

Halsey, Stuart & Co. Inc.; Kuhn, Loeb & Co.; Leh¬
Brothers; First Boston Corp.; Harriman Ripley &
Co., jointly.

man
*

$30,000|*000 and $35,000,000 new debentures early in the
year. Probable bidders: Halsey, Stuart & Co. Inc.;
Blyth & Co., Inc.; The First Boston Corp.; Kidder,
Peabody & Co.
vyvv.;

Eastern Natural Gas Corp.
9 reported planning issuance of bonds, preferred
and common stock to finance proposed $28,000,000 nat¬
Dec.

4

reported that company has under consideration
the refunding of its long-term first mortgage 4% bond's
involving not less than $30,000,000. Probable bidders in¬

Nov. 28 reported company contemplates sale of between

4

gas

j

- ~

9

Stuart

Northern Natural Gas Co.

ural

Dec.

subsidiaries

Company filed Dec. 8 with the New Jersey State Board
of Public Utility Commissioners a plan for
financing
$65,000,000 of construction.
Company proposes to sell
$50,000,000 in common stock and $15,000,000 in long-term

Commonwealth Edison Co., Chicago
Dec.

competitive bidding. Probable bidders in*Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutz¬

elude

Peabody & Co.; Smith, Barney & Co.

(1/10)

approximately $22,000,000 in new securities, which may
include bonds and debentures and possibly some addi¬
tional common stock. The proceeds are to be used for
expansion and extension of its gas and electric lines.

common stock
(which represents the unsub¬
scribed portion of 1,345,300 shares offered stockholders
last June). Underwriters—Names to be determined by

:

RR.

Dec. 20 reported the company may issue in a few months

304,998

shares of

1950.

$2,500,000 first mortgage bonds, series A, to
1, 1975. Underwriters—Names to be der

Jan.

also

Hutzler; Harriman Ripley & Co. Inc.
Lehman Brothers (jointly). Expected about Jan. 10.

4

the

of

termined by

Dec. 15 reported planning the issuance of about $1,650,000 of equipment trust certificates.
Probable bidders:

Halsey,

19,

Company

Lynch, Pierce, Fenner & Beane and Carter H.

Dec. 19 company reported planning equity financing for
mid-1950, the stockholders to have pre-emptive rights.

Dec.

has issued invitations for bids to be re¬

by 11

mature

ing,

♦

Power Co.

common

•'

-

■

1

$2,500,000 of debentures.

Harrison & Co.

to finance, in part, an $85,000,000 expansion program.

Colorado Central

'-"i. '.

-

(12/28)

a.m". (EST) Dec. 28 at The United States
Trust Co., 45 Wall Street, New York, N. Y. for the pur¬

Rupe &

propdses to sell
additional
common
later
to
provide
approximately
$700,000.
Last issue of common stock underwritten by

2,493,334 shares outstanding. Plans
call for the issuance of 560,000 shares in the next year

4

Underwriter—Dallas

company proposes to sell about $1,800,000 addi¬
tional first mortgage bonds, the proceeds to be used for

shares from 2,500,000 to 6,000,000 shares.

Presently there

stock.

5

capital

increase in the

an

;

Pekin Union Ry.

&

company

chase

Proceeds—To retire present indebtedness,
the construction of a cast iron pressure pipe

Mississippi Valley Public Service Co.
Dec.

Cincinnati Gas & Electric Co.

common

Peoria

clude

Chicago, Rock Island & Pacific RR.

Dec. 21 stockholders authorized*

common

Metropolitan Edison Co.
Nov. 30 reported company plans to sell additional bonds
and preferred stock, probably in February, to help fi¬
nance
its
1950 construction program.
The company
expects to offer $7,000,000 in bonds and $3,000,000 in
preferred stock. The bond and preferred stock offerings
are to be sold at competitive bidding.
Probable bidders:
Drexel & Co.; Harriman Ripley & Co. and Union Securi¬
ties Corp. (jointly); Carl M. Loeb, Rhoacles & Co.;
Halsey, Stuart & Co. Inc. (bonds); Kidder, Peabody &
Co. (bonds); White, Weld & Co. (bonds); Smith, Barney
& Co. and Goldman, Sachs & Co.
(jointly on pfd.);
Glore, Forgan & Co. and W. C. Langley & Co. (jointly
on pfd.). 7
7.7.7/v 7;:. '-77 77;v7

Boston Corp; for preferred, Kidder, Peabody & Co. and
McDonald & Co.

ber of

of

finance

Dec. 19 company reported contemplating equity financing
before mid-1950, the stockholders to have pre-emptive

•

Jan. 5 at its office at

on

Brothers (jointly); Harris, Hall &

4

ceived

plant, and for other corporate purposes.

Central Ohio Light & Power Co.

•

(EST)

'
or

(Inc.); First Boston Corp.

The

Son, Dallas.

rights. Traditional
underwriter: Woodcock, Hess & Co., Philadelphia.

Traditional underwriter for

12 o'clock noon

.

Lone Star Steel Co.,

Dec. 19 reported planning equity financing by mid-1950,

rights.

..7/7/77".

(1/5)

'

-

Dallas, Texas
Dec. 13 announced company plans to issue and sell
$5,000,000 10-year first mortgage bonds and to raise an
additional $2,000,000 through the issuance to present
stockholders of rights to subscribe for 592,185 additional

Electric Co.

for

American

the company will receive bids at

15 announced

Co. Inc. and Lehman

plans to issue and

announced that corporation

the stockholders to have pre-emptive

4

Pennsylvania RR.

Dec.

before

is Halsey, Stuart & Co. Inc.

proceeds to pay for construction costs, etc. Probable bid¬
A. C. Allyn & Co.; Harriman Ripley & Co. and
Merrill Lynch, Pierce, Fenner & Beane (jointly); Kidder,
Peabody & Co. and Blyth & Co. (jointly); Equitable Se¬
curities Corp.

equipment trust certificates, series BB, to be dated Jan.
1, 1950 and to mature $791,000 annually on Jan. 1, 19511965. Probable bidders: Halsey, Stuart & Co. Inc.; Har¬
riman Ripley & Co. Inc.; and Lehman Brothers (jointly);
Salomon Bros. & Hutzler; Harris, Hall & Co. (Inc.).

share

one

J

ders:

(EST) Jan. 4 at its

noon

:

Iowa Public Service Co.
Oct. 26

its proposed offering of $11,865,000

of

expansion, additions and improvements.

Co.

(1/4/50)

rate

Hutzler 7 Room 1811, Broad Street Station Bldg., Phila. 4, Pa.* fot
will be
$10,620,000 equipment trust certificates, series Y, to be
Co. and
dated Jan. 1, 1950 and to mature $708,000 annually oh
will be
Jan. 1, 1951-1965.
Probable bidders: Halsey, Stuart &
Co. Inc.; Salomon Bros. & Hutzler; Harriman Ripley &
by Bankers Trust Co. and Morgan, Stanley & Co.

and C.

headed

on

additional

for

at the rate of $10,000,000 annually. The
to be sold at competitive bidding.
Four 7•.

be opened at 11:30 a.m., Jan. 31.
Probable bidders—
Morgan, Stanley & Co.; Mellon Securities Corp.; Halsey,
Stuart & Co. Inc.; First Boston Corp. Proceeds will be
used to provide funds for extensions, additions and im¬
provements to plant of the Bell System companies and

Company will receive bids by

2*4%

Bank, The First Boston Corp., Salomon Bros. &
J. Devine & Co., Inc.
A second group
headed by National City Bank, Kuhn, Loeb &
J. P. Morgan & Co. Incorporated.
The third

that they will be dated Feb. 1, 1950 and
mature Feb. 1, 1971, that a registration statement will be
filed with the SEC early in January and that bids will

New York office

of

the

at

s

& Telegraph Co. owns 3,003,584 shares, or
90.34%, of the 3,324,604 common shares outstanding, -and
640.957, or 78.17%, of the 620,000 6% preferred shares
Proceeds will be used to retire bank loans and to provide

of serials.

expected

Baltimore & Ohio RR.

issue

stock

common

--

its stockfadditional

Telephone

banking syndicates are expected to bid for the new issue
One group is to be headed by Chase National

Dec. 21 the directors authorized a new issue of $200,000,is

call

--

years

issue

new

American

will

of

shares

early in January and will replace them with an

bonds

& Telegraph Co.

each six shares of common or preferred held.

Development
The

Pacific Telephone

Dec. 15 company announced a plan to offer ti
holders the right to subscribe for 814,694-

International Bank for Reconstruction &

Co.

third offering to em¬

a

ployees of the company and its subsidiaries of up to
2,800,000 shares at a price of $20 per share less than
the market price when payment is completed, but not
more than $150 nor less than $100 per share.
•

•

Co. Inc.; Salomon Bros; & Hutzler;
Co., Inc. and Lehman Brothers
Harris, Hall & Co. (Inc.). Expected about
v:
;.

(jointly);

Prospective Offerings

Thursday, December 22, 1949

CHRONICLE

ders: Halsey, Stuart &
Harriman
Ripley &

93

page

FINANCIAL

&

COMMERCIAL

THE

The First Boston

plans haye been completed to date on what form
new financing will take,
although the company
expects to improve its current equity position, which is
38.6% of capital. Probable bidders for common stock:
The First Boston Corp.; Dillon, Read & Co. Inc.; Smith,
Barney & Co. and Blyth & Co., Inc.; Lehman Brothers;
Union Securities Corp.; Merrill Lynch, Pierce, Fenner
no

the

4

Pacific Lighting Corp.

(1/10)

Dec. 21 directors authorized the filing of a registration
statement with the SEC covering 100,000 shares of $4.40

dividend preferred stock. Underwriter—Subject to the
registration statement becoming effective, it is proposed
to sell such shares to a nationwide

& Beane.
.

syndicate of under-

writers to be headed by Blyth & Co., Inc., which will

Webster-Chicago Corp.
Dec.

9, R. F. Blash, President, announced

Mrs. Blash have entered into
stadt

& Co.

part of their shares of
new

tration

that he and

agreement with F. Eber-

Inc., New York, and Shillinglaw, Bolger &

Co., Chicago, covering
No

an

a

proposed public distribution of

common

stock of the corporation.

financing by the company is involved.
statement

relating to the

A regis¬

proposed offering

is

expected to be filed with the Securities and Exchange
Commission in the
4

near

future.

Western Maryland Ry.

7

(1/12)

■•.77

•'7 V

■

A

Dec.

14 company was reported to be planning the issu¬

ance

of about

or

Co.

about

Jan.

$2,450,000 equipment trust certificates
12.

Probable

bidders:

Inc.; Harris, Hall & Co.

on

Halsey, Stuart ,&

(Inc.); Salomon Bros. &

Indiana Harbor Belt RR. (1/28)
Dec. 15 company reported to be planning the issuance of

make

public offering of such shares on or about Jan.
10,1950. Proceeds—To be applied against its outstanding

Hutzler; Harriman Ripley & Co. and Lehman Brothers

$1,800,000 equipment trust certificates.

bank loans.

(jointly); Lee Higginson Corp.

4




Probable bid¬

a

a

$54,000,000 Port Authority Bonds Marketed
Harriman

Ripley & Co. Inc. and

Blyth & Co., Inc. jointly head an
underwriting
group
that: was
awarded on Tuesday, $54,000,000
The Port of New York Authority
4%
and 1%% general and re¬

on

interest

any

of

y4

period
the

fraction thereof from
redemption to ma¬

or

date

stock,
at mid-

uncompleted

remaining

of

of

only

current

subscription
rights
to
holders being involved.

Burlington Mills

required

Paine, Webber Adds

seven

CHICAGO,
Church

ILL. —William
Robert

and

W.

bonds, series 14 and 15,
In the opinion of counsel, the
due $3,600,000 annually Dec. 15, bonds are
exempt from Federal
1950-1964, inclusive. Re-offering income taxes, except estate, in¬
was made at prices to yield from
heritance and gift taxes, and from
0.60%
to a
dollar price of 97, any and all taxation, except estate,

funding

haye been added to the staff of
Paine, Webber, Jackson & Curtis,
209 South La

Salle Street.
1

est, aside from the uncompleted

With Paul H. Davis & Co.

operation previously mentioned,
Involved 25,000 shares of

S.

Thomas

minutes to complete. The slow¬

V

turity.

shares

95

(Special to The Financial Chronicle)

competitive bidding on a straight
cash basis and without any prior

The fastest deal involved 38,-

which

the

The stock will be sold through

month.

712

by

utility's board.

Co.'s

par

1%

of

date

payment

Salt

International

(2579)

Commission,

Exchange

single such offering, 1,300 shares

of

plus a premium
for each 12 month

thereafter, at

FINANCIAL CHRONICLE

&

COMMERCIAL

THE

Number 4866

Volume 170

(Special

Philco

Kidder, Peabody Adds

to The Financial Chronicle)

I]LL.—Richard

(Special

to The

Financial

Chronicle)

H.
BOSTON,
MASS. —Royal
C.
Roop has become associated with
minutes.
Beineck has become associated
Paul H. Davis & Co., 10 South La
witn Kidder, Peabody & Co., 115
The largest deal, in point of
according to maturity. The group's inheritance and gift taxes, now or
Salle Street, members of the New
Devonshire
Street.
For
many
winning bid represented a net hereafter imposed by the States number of shares, was 50,000 U. S. York Stock Exchange.
interest cost of 1.532%.

will

Proceeds

Steel

of New York and New Jersey.

used

be

the

by

The Port of New York Author¬

taking

Corp.,

15

common

CHICAGO,

41

six hours and

ity, created in 1921 by New York
Big Stock Deal Set
and New Jersey, is authorized to
One of the major equity offer¬
purchase,
construct,
lease
and
operate terminal and transporta¬ ings already started through the
on
Dec.
15, 1950. The "balance tion facilities within the Port of works and designed to reach mar¬
needed
to
redeem
all
of
the
late
in
January,
involves
New York District and to make ket
fourth series bonds will be pror
charges for their use and for such 304,998 shares of Columbia Gas
v'ided from other sources.
purposes to borrow money upon System common.
;
The new
bonds i include $14,its bonds or other obligations. The
Comprising the unsubscribed
400,000 of series 14, which are not Port District comprises an exten¬
portion of 1,345,300 shares of¬
redeemable prior to maturity, and
fered to holders last June, it
sive area in both states, centering
$39,600,000 of series 15, which are
has been authorized for regis¬
about New York Harbor.
redeemable on Dec.
1960,
or

Bankers

ment
was

the

convention

Assn.,

matter

of

private

with

Securities and

the

DIVIDEND NOTICES

service

public

group's

calculated that such

as

sales in the first 11 months ag¬

$515,990,000

gregated

107

volved

issues,

in¬
of

and
rise

a

CHICAGO,

New

vious year.

rather

indicate

usual, counting on
better in the months

but

them,

as

The

something
ahead.
A

■

'

'

MIDDLE STATES PETROLEUM

matter of inventories, that is

the year runs
put and, quite the reverse of
the usual pattern, they would be
as

the

up

stock

of good

way

at the

moment.

the

as

seasoned market

is concerned traders who
or

the-street

clients,

like
savings
insurance companies,

and

banks

bulk

the

find

operate

perhaps for is better, off-

of

current

interest

in the railroad liens.
Better

feeling

rail-

toward

bonds has developed noticeably

in the last fortnight and,

as

been

real buying interest. J

some

I In fact until that time the ten¬
out

getting

ROBERT B.

PACIFIC GAS AND ELECTRIC CO.

But

bonds.

as

I

about

136,154

scribed

on

when

the

"If

query

we

do

money.

'"v;

'

'

»

the

Among

discussion

at

:

"

net

of

the

month

this

these

involving
24

were

the

puts

453,100

completed

within reasonable time with only

the

recent

for

Invest-

Dec.

on

30,

1949.

closed.

Treasurer

Beckett,

J.

will

be

issued

First
at

National

Winsted,

Bank

in

the

of

Edward

H.

27,

Unlisted Trader Available

Preferred

tive

the

of

of California

,

DIVIDEND NOTICE

Board

DIVIDEND NOTICE

clared

stock dividend
of two and

rate

shares
each

of

& Financial Chron¬

Hurlbut

at

1949.

Bearer

in

firm

F.

McARDLE,

Liquidating Agent.
December 9,

1949.




private

that

can

regular

per

share

on

and the 5%

Sinking Fund

Series Preferred Stocks

able

February 1, 1950 to

December 30,

dividend

1949 in

value), each

pay¬

stockholders of record

SOUTHERN CALIFORNIA

respect of the 10% stock dividend
recently declared.

January 16, 1950.

common dividend no. 160

preference stock
4.48%

convertible series

dividend no.

convertible

Secretary

The Board

New York 8.

of the

following quarterly dividends:
cents

NOTICE

28

per

share

on

the

share

on

the

Stock;

cents

per

Preference Stock, 4.48%

Con¬

vertible Series;

n

New York has declared

40c per
the

a

City of

dividend of

share on the 7,400,000 shares of

capital stock of the Bank, payable

February 1, 1950 to holders of record
at

S

Place,

,of Directors has

authorized the payment

December 16, 1949

the close of business

January 3,1950.

The transfer books will not be closed

THE

CHASE

i

Park

series

dividend no. 7

Treasurer

'

25

if

Preference stock

B. C. REYNOLDS

Philip Kapinas

handle

Box

COMPANY

EDISON

4.56%

N. Y.

i

payments

the 5% Series

par

on

consecutive

on

($100

1222, Commercial & Financial
Chronicle,

1949

21,

41 year of

quarterlydividendsof$1.25

payable
the Common Stock distribu¬

opportunity

placements.

3,

MORRIS H. WRIGHT

1949. The Board of Direc¬
tors also declared

scrip will be

& Unlisted Securities,

for

the

January

of record December 19,

Stock for
(100) shares

Common

National Bank

Winsted,

EDWARD

Dated

experienced

looking

on

ber 30,1949 to stockholders

The Chase National Bank of the

with
of Winsted,
the State of Con¬
necticut, is closing its affairs. All creditors
of
the
association
are
therefore hereby
notified to present claims for payment to
the undersigned at said bank.
The

located

business

;*

value), payable Decem¬

par

2/2%, at the
one-half (2J/2%)

held, payable in Common Stock
..on December 30, 1949 to Common
Stockholders of record December
21,

share

the Common Stock ($10

additional

of

hundred

one

an

special dividend

of 20 cents per

Corpora¬

Loan

declared

has

tion

of Directors de¬
a

TRADER-SALESMAN

is

Com¬
at

On December 7,1949, the

DIVIDEND

Listed

the

stock

such

of

St

Corporation

and

trading

icle, 25 Park Place, New York 8,

Thoroughly

of

Stock

payable January 16, 1950 to

holders

FINANCE CORPORATION

Beneficial

Address replies to Box

1221, Commercial

of

Company, held November 21, 1949,
a
Dividend of $1.25 per share was
declared upon the $5.00 Cumula¬

PACIFIC

\

table

general

Board

Weatherhead

Cleveland, Ohio

on

in

Company

the

The

of

November

BUNNELL,

1949.

r'

Treasurer

Winsted.
Con¬

Liquidating Agent.
Dated December 9,

shares,

BACH, Treasurer.

J. Costello,.

to

CLARENCE

fractional

Vice President

of

State of

present claims for payment to
the undersigned at said bank.
notified

of

of

meeting

a

Common

necticut, is closing its affairs. All creditors
of
the
association
are
therefore hereby

lieu

■■w

The dividend will not be

situations wanted

wires.

At

Directors

50

The

tn

outstanding, has been de¬
30, 1950 to stockholders
9,
1950;
scrip certificates

The Weatiierhead

1950. ~

liquidation notices

located

of

and

January

close

California

San Francisco,

issued in lieu of fractional shares.

servicing

up

share

one

issued

record

1949.

ficial industrial

J

year's
special offerings made on the New
York Stock Exchange through the

W

of

pany,

found

which

Special Offerings

25

business

E.

The Board of Directors of Bene¬

compilation

at

as

of

The Transfer Books will not be

Industrial Loan

quick placement.

total

close

shares

shares

Experienced

spots

sore

stockholders of record

the close of busin'ess December

allowing for the usual "short¬
age," wound up with less than

/.f

Placements

Private

to

1,-

totaled

"rights."

of

per

it

was invariably observed that
the "picture has changed," and

usually

1950

ter

69,000

regular meeting of

subscrip¬

it

sell, what will we do with the

of

.business on December
dividend on its Common
Common Stock
at the
such stock for each four

of

a

its

in

14,*

share upon the Company's Com'
mon Capital
Stock. This dividend will
be paid by check on Jan. 16, 1950, to
common stockholders of record at the

a

December

sponsoring bankers, af¬

But the

Dec.

on

At

leaving
only
unsub¬

shares,

000,383

Quite the other way around,

that

cleared

was

had

received

of Directors

1949, declared a cash dividend for the
fourth quarter of the year of 50 cents

Corporation held on
15, 1949, a dividend of
$2.00 per share on the outstanding
Capital Stock and a dividend like¬
wise of $2.00 per share on the out¬
standing: Class A Capital Stock
were declared payable January 10,

an

Board

The

of

on

that

announced

tions

,Of

and

payable

dividend notice

Boston, Mass., Dec. 15,1949

re¬

shares.

approaches
there
was
visible
change of heart and resistance to
efforts to get put sell orders.

1949

close

E. H.

BROWN, Treasurer

the

early this week

away

those prices were

of

the

at

been
declared
payable
on
to holders of record of such

has
1950,

Corporation
January 14,
shares

/•'

open.

was

subscription

ago

transaction

The

middle

a

TABLET & STATIONERY
CORPORATION

is

of

clared payable January

sold
by Cities Service Co., to
shareholders, of the issuing utility.

price for
certain
carrier

dency had been to fix

Treasurer.

KEMP,

hereby given that a dividend at the
$.50 per share on the issued and out¬
standing shares without par value of the Com¬
mon
Stock of
Western
Tablet
&
Stationery
rate

shares

avoid

offer¬
ing of 1,136,537 shares of Ohio
Edison Co. common stock, being

A

M.

WALLACE

WESTERN

Notice

rate

The

of The First Boston

Big One

a

opened

were

the

market has reflected, there has

Secretary
'

B. LEIGHTON,

1949

-

28,

the Board of Directors

and work involved with

fortnight

books

was

As far
with,

A

:

CLASS B DIVIDEND
A dividend of 75 dents per share has been
declared on the Class B stock of Middle States
Petroleum Corporation.
That dividend is pay¬
able on January 14, 1950, to holders of voting
trust certificates and stock certificates of rec¬
ord at the close of
business on December 30,
1949.
Transfer books will not be closed.

Stock

to

seem

majority
to

order

Finishing

little in

a

the

in

in

to

expense

'

as

corporate 'hew issues are
concerned* Dealers' shelves are

satisfied io build

that

would

public sale."

.

this Corporation have de¬
of 37y2c per share on the
stock.
They have also de¬
pf 62 '/ac per share on the
Common capital stock.
The dividends on both
Freferred and Common stock are payable Janu¬
ary 5,' 1950, to
stockholders of record at the
close of business December 20, 1949/
'■

"

York

Board
of
Directors
of
the American
has declared the reg
quarterly dividend of 25c per share on the
Common
Stock, payable December 31, 1949 to
Stockholders of Record at the close of business
December 20, 1949. Transfer books will remain

of

capital

dividend

a

CORPORATION
.

Machinery

dividend

a

clared

ular

involved small

private placement

sorted

when one

really "hare''

"this

that

belief

cheerful
note
is
mentions the

really

struck

"

,

Directors

clared

Preferred

DIVIDEND NOTICES

Shoe

Corporation

Manufacturing Company

committee declared its

issues the

cases

United

with King Merritt & Co., Inc.

Observing that the bulk of such

with

DIVIDEND NOTICES

B.

Common Stock Dividend No. 136

direct. placements

mood,
satisfied
what the year has brought

William

become connected

Westbrook has

•

finds the in¬
vestment banking fraternity, un¬
derwriters and dealers alike, in a
jubilant

—

Co.

Chronicle)

$211,000,000 from the pre¬

some

The holiday season

ILL.

G.

Brooklyn 22,

The

(Special to The Financial

December 19,

AMERICAN MANUFACTURING COMPANY
Noble and West Streets

ers.

commit

With King Merritt &

sales

direct to institutional buy¬

made

with A. C. Allyn &

was

£0. and Bond & Goodwin, Inc.

720,000 principal amount of its
general and refunding bonds of
the fourth series, 3%, due 1976,

tration

he

years

which required only

minutes.

Authority toward refunding $68,-

15,

t

NATIOHAL
OF THE

BANK

CITY OF NEW YORK

in connection with the payment

of this

28V2

cents per

share

on

the

Preference Stock, 4.56% Con¬
vertible Series.
All three dividends are pay¬

able January

31,1950, to

stock¬

holders of record January 5,
1950.
t. J. GAMBLE, Secretary

dividend.
A. J. EGGER

Vice President and Cashier

December 16, 1949

>V

* *

*

THE

(2580)

S6

COMMERCIAL

CHRONICLE

FINANCIAL

&

Thursday, December 22, 1949

Hence should the government

■

BUSINESS BUZZ

actually win the $2 billion suit
before

Washington...
A
/lflU

Behind-th«-Seen® Interpretations
from tbe Nation's

Capital

the ICC, many railroads

would

be forced either to

heavily

row

bility,

or

a

A UUb

ings

WASHINGTON, D. C.—If there is any Christmas present which

paid

of

it is that he decide on a limited program
within the achievable range of a six months session.
Failing that,
Santa Truman,

and

of priorities.

his

with

after communing

course

4»is advisers

in

Florida, the pros-

£>ec*s ahead indicate that the same
"huh

situation

of

disorganization,
witnessed in 1949, will prevail in
the
forthcoming session, which
*»r«»cticaily must be limited to not
•rnuch

that

members

-snd campaign for

months

six

than

more

the

will

♦iot

that

be inspiring,

It

$5

fore

that

will

be

that "

sealed

is

issue

terrific

a

-

president
Che

same

tries to prevent it,

negative

from

•came

♦douse

the

effort

Anothe big

addi¬

<

>

fight is civil rights,

their

political

importance, but this is doubtful.
An
attempt
to get a
Federal
STFPC act will fail, but can come
close to raising the new roofs put
the House and Senate cham¬

bers at great expense.

Then there is the farm support

fight

Again

Secretary

Brannan

v/ill try to get the income subsidy

plan

through, and again he will
fail, but there will be a terrific
fight over whether supports on the
basic crops should again be extend¬
ed

at

mandatory 90%

level in
1951. The fight will be all the more
a

bitter

because

is

it

election

an

vear, and will be enhanced if 1950
looks like another bumper crop
year.

It-is
Miitil

difficult

Congress

influence

of

to

appraise,
back, the

comes

the

industry

pen¬

sion agreements upon the exten¬
sion of the scope of soclil secur¬

ity and the increasing of old age
pensions. The labor-won pen¬
sion

schemes might make

gress

cautious.

On

Con¬

the

other

hand, the effect might be in the
opposite
ory

that

direction,
the

on

the

■■■

{{JiHiliilii!

•'

H

"lr' y.

ment's

the

land-grant

*-

ally

On

What

to

IV"

on

which

meets

idea of

an

an

transportation

ideas,

Responsible Administration
legislative leaders would like to

to

it

use

the President
as

issue

but

of

colored

will

they

far in '50

vance

hard

oleo.

to

swallow

it

is

own

agreements

contended

Gen¬

by

the

government

the

got

freight charges than
was

on

not

the

I during the

legisla¬

yCy;

war

something

was

.7

4% and less than 5%

•v ■ ■::

:v. -v,

The

before

Speculation as to the motives
of the Department of Justice in

the

ably will

this question.

for

the return of $2 billion which the

Department of Justice alleges

was

hate

opened the recent phase of hear¬

from

$1,981 million

ings

ous.

the

While

are

In any case

ICC

no

finally
..

.

disposes wo£~

,

predict

the
the feel¬
technical grounds

one

can

outcome of the ICC case,

Net income of the railroads

try,

because

legislative project.

it

has

The

antics

Mr. John Lewis have made it
more so.

been

impossible

an

of

even

On the other

the wartime freight charge recap¬
ture case was heightened by the

government's position
Commerce

this

on

the

was

government's

hand, most
Republicans consider the TaftHartley law and some curbs on

of

Justice

unions

it

the In¬

Commission

That

case.

railroads'

as

answer

phase
the

to

charges, heard last

overcharged
during
the
war.
Quick assets of the railroads, by

ing

is

the

Commission

comparison,

disallow

on

Aug.

during

$1,612

were

of

31

the first

this

million

year,

a

nine

year

down
previ¬

months

and

will

tion into

These
There

growing political
needle

the

trying.
are

are

»;

Administra¬
;

;

v:

major

issues.

the

would

vast extension of government

guarantees,

direct money, and
subsidies in the housing finance
field. The tax on oleomargar¬

the

to

the

effect

will

of

the

be

able'to

reparations

tice.

(This column is intended to

of

In other words the

flect the "behind the scene" inter-

estimated

pretation from the nation's Capital

pared

at

with

$278

$505

million, com¬
million for the

and may or may not coincide with
the "Chronicle's" own views.)

first three quarters of '48.

IIAnover 2-0050

Teletype—NY 1-971
Firm Trading.Markets

of

rations"

able

severest kind of

FOREIGN SECURITIES

Department

of Justice very bluntly

All Issues

is unin¬

terested in the possibility that if

interstate

won

f!ABL MARKS & CIO. INC.

its freight charge "repa¬

it

case

could
a

strain

put
on

the

•

FOREIGN SECURITIES

rail..

the¬

50 Broad Street,

Reason's (Greetings

SPECIALISTS

i

.

New York 4, N. Y.

AFFILIATE: CARL MARKS & CO. Inc. CHICAGO

En AU

be

—

■a

payrolls

more

YOU

careful

We

WONDERFUL

PEOPLE
>

Spokane Portland Cement
Oregon Portland Cement
Coplay Cement Mfg.

as

|

fttmnj ©livistmas—

LERNER & CO.
Investment

10 Post Office

.25 Broad St.

Square, Boston 9,1Vfass.

Telephone HUbbard 2-1990

Teletype BS 69




announce

that

is

now

manager

of

associated with
our

us

Trading Department

p

Hill, Thompson & Co., Inc
W)l.

GOIJLET

>

Securities

New York 4

pleased to

t>

Jtappy hew IJcav

Glens Falls Portland Cement

are

MR. WILLIAM H. BOGGS

Cement Stocks:
Riverside Cement

Investment Securities

Executive

and

Underwriting

70 Wan Street, New York

^ g816

"

re¬

'49, after fixed charges, has been

as

charges would have on the
railroads, adequacy of war-time
freight rates generally, and so on.

ly that the dairy lobby will be
the

recapture

it

most

these

it

prohibit

that

It
announced
that
object to any evidence

ine is scheduled for repeal early
in the session, and it is unlike¬

to

position

position.

issues,

lesser
by
comparison.
Thus, the Senate must consider
a

took

entirely unconcerned in
any way with any of the broad
aspects of the railroads' financial

of other

the

scores

asset,

'

■

At the opening the Department

on

claims of the Department of Jus¬

was

a

May.

that

the Senate Finance

will

now

it

prob¬
be several months be¬

is

plea

cases

Hence

ICC.

their

on

fore

government's

covering virtually every
and
whose
aggregate

and sales.

Committee

in¬

moved

moved fast.

Only five of those

over

terstate

to

,

claim for reparations is $2 billion.

investment.
i ;*,•

A 0i.... *

cases

railroad,

overall the railroads only earned

ad¬

against Republican Congressional
candidates, to try to get the TaftHartley law repealed, and the
Wagner
Act
reinstated.
They
demonstrated to be

4

repudiating the

them?"

$ road finances, and it is equally
1 uninterested in the fact that

tive calendar.
■■

upon

means

election

an

rather

The Administration will agitate
the
CVA
and
MV
superstate

which the President is

since

it

17

idea

resistance, but it is

forget that it is incumbent

now

Altogether the D. of J. has filed

fond, and which he will push.

them,

Isn't

specific

a

only
*

and it
n

of

that the Department

dustry. The freight

an unknown quan¬
It is still only an idea and

It is

so

V railroads,

will

since

classes

classes of freight

new

erally,

have, remains

fundamentally
legislative program.

got the

rates,

new

government's

lower

place "Point

govern¬

agreed to by the gov-

were

of Justice is

hot

the

freights, the charges actu¬

war

"lib¬

the

war

freight actually

repealed.

.

no

the-

of

advantage of the long-standing

greater the bene¬

industrial

During

TP'

'fag

propa¬

with

interest in

present

in the office

or

■

the counter fast, but
the position of Mr. Truman, who
never forgets what lie for stands

lory plan, the less the sole bur¬
upon

r,'-f-K.rtiK.jy.'-

niiiiiiiiiT

move, off

fits under the Federal contribu-

den

1950,

enactment.. Even

tity.

it is not beyond the realm of pos-

ever

for

to

out¬

an

Comptroller General, who usually
may
be counted upon to bark
loudly at any one actually over¬
charging the government.

lower

insurance

the

of J.

after

either in the Defense De-;.

ernment,

j

White

inverse ratio to

ill i mil

iimiiiiiii
imViiniiii

their

the D.

case

if any,

case

partment

for, is not known.

and

■sibility that the President will get
an * anti-lynching
or '
anti-poll
tax bill of substantive importance
in

stage

at

not

tional taxes.

the

>

the

collect

little,

[iiiiiiiiniii
in

this

War

compul¬

erals" realize this is too

of

alleged

to

un¬

asked

ago
into

live

will

result

stop

order from the D. of J. *

on

important possibility of legisla- :

Abreast-beating and arguing and -j
Wenting of the air while Con- j
fcress tries to economize and

long

all

though

as

again

ganda

there

amount

looks

will

$6 billions but be¬

or

exhausted

lack

Department of

accounting firm hired by the
Department claimed over¬
charges.
There is believed to be

mm

The

sory^ pre-paid health

the deficit for fiscal '51 will be
around

have

*

side

benefits, despite top employment.

the outcome

to

prove

resisted.

look

TitJJlit/.*

in Hi HI
niin hi
!i 111 Mill

year.

officials

notable

a

the

■

from the Defense De¬

case

less

years
i

tion to the number of UC clients

pretty
will

a

be

who

One of these fights is over the

Budget and taxes. It is

election

an

been

in

<

earn-

Technically, the War Department

resistance,
however, will weaken in propor¬

fights are dropped, postponed, or
unless there is political chaos.

f&te bet

in

has

interest

or

compensation, now
administered by the states.
They
will agitate moves in the direc¬
tion of Federalization, but these

of these

some

was

a

employment

reelection.

unless

the House

earnings

if such

partment, although certain Army
witnesses did testify last May for
the government, presumably more-

loosely-written
social
security extension
with,
however, only a handful of "nay"
votes.
On general principles, an
extension of social security bene¬
fits and coverage looks unavoid¬
passed

Administration

Congress has got so many ma¬
jor fights abrewing, it is imposto imagine how the session
manage

it

have coveted the direction of

so

get home

can

when

able

tfable
•can

precise than

.

*For unless Mr. Truman changes

their

on

recaptured.

were

Justice

schedule^

thev would like at least a

lia¬

receivership.

years,

war

There

Democratic and Republican alike, would

of Congress,

into

go

bor¬

the

the Treasury through refund of

taxes

Jjke from

meet

Of course they could eventually
win a substantial return from

during

the members

to

Offices

5, N. Y.

Telephone WHitehall 4-4540

Trading
120

Department

Broadway, New York 5, N. Y.

Telephone REctor 2-2020