The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Reg. U. S
Volume 172
Number 4972
New York, N. Y.,
EDITORIAL
Roosevelt
former
of St.
James and
Ambassador to the Court
Republican party have of late
fronted. -r Their
opinions
strikingly alike.
There can be no doubt whatever that they have
expressed what is in the minds of many thought¬
are
ful Americans at this time.
much
for any other, that what they
said has attracted so much attention both
and
things,
almost
times
at
point of accusing the speakers of
faith
It
have
here
abroad, and given rise to wild charges of
various
of
or
good
would be
sense.
reaching
the
lack of good
a
•
exceedingly unfortunate if parti¬
sanship, the natural resentment against the
gime whose soldiers
emotionalism of any
ican
killing
are
re¬
in Korea,
ours
or
concludes
evidently most carefully considered
ings of Mr.-Kennedy and Mr. Hoover.
to
will
fail
citizens
hope
of
to
It
United
States
of
America
have
be embarrassing to President
may
and
that the Administration
even
weigh what these distinguished
the
had to say.
Truman
may
Secretary Acheson to have these
things said at this time.
given the Kremlin
propagandistic
use
an
It
The
United
of these dissenting views. The
Continued
ACTIVE
MARKETS
on
page
Nations
questions about it.
what it has done.
likely
ever
has
with
been
now
may
1951
corded,
will
Income
as war
We seek,-
rather, to ask what it seems
In brief, we will try to look
to accomplish.
studying
Excluding defense orders, the total business vol¬
in
National
its
methods
and
special
pur¬
internal
machinery,
because it is upon these that reliance must be placed for
accomplishing any of its numerous and ambitious re¬
forms. Many a promising plan for world improvement
has ended as a distressing failure because it could not
be carried into practice.
Our discussion is necessarily
somewhat technical, though we regret it.
pose
for
work higher in first half of 1951, and decline later.
ume
It cannot be unfitting to ask certain
This-article does* not try to consider
the United Nations full in the face with the
of
between
us
more
government controls, with
overlooking fact that boom is already
merely postponed downturn.
tight labor situation with firm commodity
prices. Says domestic trade will be less, but stock prices
Looks
(1)
four and five years.
foresees
old and Korean War has
.
•
be
in
(3)
who
hold
my-'-
lance, they
are
China,
namely,
seats,
Roger W. Babson
United
Nations.
Three
States
being
no
loans
consists of the 60 members of
Each
member
has
will
better off in this respect than
Continued
28
PICTURES taken at the Annual Election Meeting of
New York at Produce
(5)
the
vote,
one
the
on
page
out
the
of
&
Class
A
on
Franklin Custodian Funds,
inc.
CO.
A Mutual-Fund
Common
LOWELL
STATE
AND
^
WEST POINT MFG. CO
at
As
duction
as
be
1951
a
wears
to
on,
bank
Members New York & Boston Stock Exch.
31 MILK STREET, BOSTON 9, MASS.
Tele. BS 424
CAnal6-8100
Fitchburg
the
on,
decline
more
THE NATIONAL CITY BANK
Free
from
viay be obtained
investment dealer or
your
FRANKLIN
The
64 Wall
Worcester
OF NEW YORK
DISTRIBUTORS, Inc.
Street, New York 5
Dept. Teletype: NY 1-708
Brown
(all
Bond Fund
Nete York
Municipal
or
OTIS & CO.
VANCE, SANDERS & CO.
Established
BOSTON
controls
Civilian pro¬
armament
production
on
30
page
.
Bonds
New York
Cincinnati
' Chicago
Columbus
Denver
Toledo
Agency: 20 Exchange PL
BONDS & STOCKS
NATIONAL BANK
THE
OF
CITY OF
New
NEW YORK
f
England
Public Service Co.
An interesting
workout situation
CANADIAN DEPARTMENT
&
f *
CO.
Domihioh Securities
Grporatio/i
'
40
Dallas
THE CHASE
Portland, Ore. San Francisco Los Angeles
MEMBERS NEW YORK STOCK EXCH.
Buffalo
Department
Company of California
ESTABLISHED 1891
1899
Bond
Toronto
CANADIAN
issues)
CLEVELAND
Chicago
Angeles
credit
markets in
Company
GOODBODY
(Incorporated)
Devonshire Street
Office:
Steep Rock Iron Mines
and
Corporate Securities
jProspectus from authorized dcaleri
active
Canadian Superior Oil
Underwriters and
Distributors of
BOSTON
Los
instalment
Municipal
Canada
Canadian Bank
°$@ommeJzee
Head
Bond
We maintain
New York
of
Continued
across
Prospectus
CTfie
Ill
and
requirements.
effect
than
28
qjft 600 Branches
Seattle
OF
mortgage
reserve
decline in legitimate business.
will
degree.
unnecessary
Monthly Commercial Letter-
duPont, Homsey & Co.
Springfield
an
along the line of tighter credit
restrictions
increased
and
cause
volume
first will
upon request
Tel. HAncock 6-8200
The
moved
only
19, 20, 21 and 22.
page
MUNICIPAL
BONDS'
SHOPS
Private WiretoNew York
sooner.
has
the
post¬
would
State and
& ELECTRIC CO.
N. E. GAS
SACO
&
which
place much
slide
War
out.
t--
WHITNEY
FIBRE
the
and
Security Traders Association of
Exchange Luncheon Club, appear
DWIGHT MFG. CO.
KEYES
the
are
ahead.
ALMY
H0LLINGWORTH &
its
con¬
next
broke
the
BATES MFG. CO.
DEWEY
con¬
and
firmly
are
downturn
taken
business
shrink
to
curbs, such
United
re¬
(4) Rushing to catch up on its
neglected defense program, the Administration is anxious
par¬
by the General Assembly for
The General Assembly
and
Administration
advisors
War
poned
of the six retire every year.
the
ever
■
trusters"
Korean
Efforts
term of two years.
However,
But
year.
overlooking
fact that the boom is already old
that it was creaking badly when
"brain
constitute the non-permanent members, and are elected
a
The
date
Six other countries'
"the whole thing."
1950.
highest
businessmen
,
have
England,
In American
of
break
to
m
\
authority. It is composed of the "Big Five"
permanent
the
vinced that radical inflation is about
0?
important of the two; it is the
France, Russia and the United States.
lives
economic
lightly upon the divisions of authority be¬
tween the two legislative chambers of the United Nations
—the General Assembly and the Security Council. Tne
more
be
sumers.
touch
far the
that for
will
orders take the place of peace production
and high prices prevail.
(2)
The outstanding . feature of
1951
will
be
the
ever-increasing
interference of
the government in
The Two Chambers of the United Nations
latter is by
less than
1951
the
mt
not have
may or may
opportunity to make good
Babson
"brain trusters"
world
center of real
venture
not
warn¬
We
Mr.
assembly is one of clumsiest instru¬
for preserving or making peace. Calls United
Nations oligarchy.
a
mentalities
kind should lead'the Amer¬
people not to give the most careful thought
By ROGER W. BABSON
Commerce Commission and Federal Reserve Board and
We
to the
Outlook for 1951
Contending United Nations Charter proposes world be
governed by standing committees, Mr. Robertson points
out vices and defects of this system of organization.
Cites poor record of such standing bodies as Interstate
It is for that reason,
as
Copy
a
Business and Financial
Member of the New York Bar
given voice to their views of the international
situation by which we now find ourselves con¬
as
Price 35 Cents
By WILLIAM A. ROBERTSON
ex-President and the elder
an
of the
statesman
Thursday, December 28, 1950
A Close Look at the U. N.
As We See It
A
Pat. Office
15 BROADWAY
CHICAGO
Exchange Place, New York 5, N. Y.
105 W.ADAMS ST.
NEW YORK
IRA HAUPT&CO.
Members New York Stock Exchange
and other Principal Exchanges
111 Broadway,
WOrth 4-6000
Teletype NY 1-702-3
WHitehall 4-8161
Boston
N. Y. 6
Teletype NY 1-2708
Telephone: Enterprise 1820
Chronicle... Thursday, /Decern'>er 28, 1950
The Commercial and Financial
2
(2530)
The
MARKETS IN
TRADING
New York Central
4/98
in the investment
4V4/2013
Chi. Mil. St. PI. & P.
4i/2/2019A
Specialists in
/
'
-
•
8c/mcf;
and
the
possible
ing
lion
McpONNELL&fO.
adopt¬
bear¬
the po¬
portant
ing
York Stock Exchange
Exchange
on
tentials in the
BROADWAY, NEW YORK 5
of
Panhandle
Apart
Eastern.
Carl C. Brown
being
from
Churchill-Downs Inc.
owns
substantial
The
the
Panhandle Fields in Kansas, Okla¬
which
homa and Texas.
BOND
Kentucky Home Life
LOUISVILLE
excess
Bldg.
of
gas,
in
is
the regulatory provi¬
Natural Gas Act ad¬
ministered by the Federal Power
Commission. Among other things,
to
regulation not only limits the
earnings of the pipe line to a fair
rate of return, but more important
currently results in producing a
negligible profit on the valuable
gas supplies owned and utilized in
the
day-to-day operations. This
comes about by virtue of the fact
such
Bell Tele. LS 186
Long Distance 238-9
Eastern, engaged
transmission
sions of the
KENTUCKY
2,
\,
U. S. THERMO
CONTROL
Company's large gas re¬
the
that
acquired over a span of
years at advantageous prices, pro¬
duce an unrealistically low valua¬
tion basis if subjected to the pres¬
serves,
SIMPLEX PAPER
Analyses
on
Request
regulatory concept of permis¬
earnings. It results in the
of having
three field
ent
Over
^
CA.
7-0425
:
:
Teletype BS 259
N. Y. Telephone WOrth 4-5000
^
be paid;
payments must
F. H. McGraw & Co.
Smith & Wesson
The afore¬
price
laws will
Purolator Products
State
mentioned
greatly accelerate a correction of
Panhandle's remedy
this condition.
lies
Hytron Radio & Elec.
in getting the
either
producing
gas
Federal
activities
from
to sever its trans¬
mission and production activities
regulation
As of
37 Wall Street, New
York 5
WHitehall 4-2530 Teletype NY 1-3568
has
Eastern
Panhandle
that
serves.
As
a
serve
value
trillion
cubic
feet.
cost!
Cyrus J.
New
like
Maryland
the
of
best for
Panhandle
a
move
10 EXCHANGE PL., NEW YORK 5, N. Y.
Phone DIgby 4-4950
Teletype NY 1-953
Railway
Mahaffie
the
I
long-term apprecia¬
Railway
tion is Western Maryland
stock,
common
at
selling
r
p
ap-
i
x
o
-
22
mately
on
the New York
Of
Stock
Eastern
Ex¬
shortest
a
the
route
from
the
Great
Lakes
Industrial
area
Tide¬
to
water
stockholders
liquidating dividend. This
litigated by the Federal
ultimately
is
of
part
97,000
at
the
poft of Baltim
was
Power Commission but
Alex.
B.
Johnson
o
road
r
$135,000; reserves were
with sub¬
view of the
indicated large potential dilution
stantial opposition in
pensburg,
Pa.,
the
second
common
and
equities
under
Under
the
the
Mahaffie
in
Goulds Pumps, Inc.
Reed Prentice Corp.
Howe Scale Co.
Bought—Sold—Quoted
31 Milk
BS 328
Pennsylvania Railroad
Philadelphia Electric Common
Penna. Power & Light Common
Foote Mineral
Central Electric <& Gas
Central Public Utility
SYzi
American Marietta
Henry B.Warner & Co., Inc.
Members
123
and
represent
in
each class
are
of
excess
in
25%
Re¬
known to exist.
Phila. Telephone
PEnnypacker 0-2857
New York
Direct
City Tel.:
wire
to
Bell System Teletype
PH 771
BOwling Green 9-4818
Ames
Emerich, Chicago
BUY
U.
S.
SAVINGS
committee was appointed
Western
the
Stock Exchange
claiming -to
interests
stockholder
by
Phila.-Balto.
South Broad St., Phila. 9, Pa.
approval
Maryland
man¬
BONDS
agement, representing the various
classes of stock, to amend
plan
posed
plan
all
which
upon
might
This
agree.
new
classes
toward
through
a
plan
a
would capitalize the
which
preferred ar¬
small cash
pay¬
ment and the issuance of new
stock.
preferred
whether
of
com¬
reported to have made
is
progress
rears
the pro¬
arrive at a
and
or
not
a
In
any
minent,
would
appear
im¬
highly favorable to the Western
Maryland equities.
for 37 Years
National Quotation Bureau
Incorporated
that
earnings-wise, the passage of time
is
Quotation Services
event,
izing the preferred arrears is
it
Over-the-Counter
first
plan for capital¬
also
and
Street, Boston 9
Tel. HUbbard 2-6442 Teletype
must
The
Norfolk
v.
Ralph F. Carr & Co., Inc.
to make the
Strong minority
second
preferred
operative.
a
this plan.
75% of
Act,
stock affected
vote
cently,
pre¬
e.
an
important
by the U. S. Su¬
preme Court. The property was north-south "bridge" carrier, con¬
carried on the books of Panhandle necting with the Reading at Ship-
Corp.
Worumbo Mfg. Co.
under
submitted
was
is
approved
Eastern at
Merrimac Hal
amount
arrears
Act
change,
Eastern
approximately
an
to stockholders and met
common
which
securities
but undeveloped acres of
gas reserves to Hugoton Produc¬
tion Company, the stock of which
company was distributed to the
was
dividend
ferred
plan
Members of New York Stock Exchange
Western
Canal 6-1613
be
may
October, 1950, a manage¬
capitalizing the pre¬
mittee
Panhandle
Enterprise 6800
,
each class of
City
proven
EXCHANGE
In
Railway
1948
Hartford, Conn.
ment plan for
stock
In
in
arrears
ferred
Lawrence & Sons,
York
Tele. BS 142
Enterprise 2904
Open End Phone to New York
i
Partner,
Dealers Ine.
Portland, Me.
Ohio.
of
ALEXANDER B. JOHNSON
production.
as
&
Maryland
MEMSIRS
NEW YORK CURS
re¬
be enhanced by deeper zone
reserves,
which
dividend
in
The Western
transferred
NEW YORK STOCK EXCHANGE
cur¬
gas
no
or
& Co., Inc.
Securities
Tel. HUbbard 2-5500
paying for a number of years
prescribed dividend rate, is
been
total
owned
may
Over-The-Counter
Shaskan & Co.
is
be acquired at no
can
for gas production with an
estimated
reserve
of
approxi¬
7
million
five
some
of
Assn.
75 Federal St., Boston 10, Mass.
15
some
Nat'I
at the
pipeline stock, a good
proven
are
Securities
interest,
substan¬
stock
nominal
own
One
Sept. 30, 1950 Panhandle
owned or controlled 1,-
J. B. Maguiie
Members
ing a 45% tax rate. For the yea;
1950, earnings are expected to be
in the neighborhood of $5,500,00),
reserve
or
100,000 acres in productive areas,
of
which
over
71%
is already
mately
Bought—Sold—Quoted
rently selling around 40 affording equal to an aggregate of $24,200,a
This
yield of 5% and is selling in 000, or $136.50 per share.
line with natural gas pipe lines stock is 94% owned by Baltimore
this amount about 3 trillion cu. ft.
Primary Markets in
51%
a
earnings
boost
Commission to exempt its
Power
by corporate action.
V0GELL & CO., Inc.
these
above
a
fair result is inevitable.
Manufacturing
shipped over Westerii Maryland.
In addition, large increased ton¬
Federal regu¬ case can be made out for its at¬
lated company, such as Panhandle tractiveness at today's prices with
Eastern, is limited. A constructive higher earnings and greater divi¬
change in this confusing and un¬ dend prospects. The large gas re¬
which
Bates
line will
earn $3 per share for 1950 and has
equal to approximately $7 per
on
the
present
common
paid $2 in dividends. The tax share
position of the company under the stock at tax rates prevailing in
new proposed bill is favorable. Its
the year 1950.
Western Maryland stock is 43%
expanded system should permit
higher earnings in- 1951. In 1952 cwned by the Baltimore & Ohio
the completion of the Trunkline Railroad
(all classes).
The first
Gas Supply, Inc. system, in which 7%
preferred * stock, which has
tially.
(2) the price obtained by inde¬
pendent producers; and (3) the
which
values, Panhandle's pipe
Panhandle
price, to
branch offices
Western
over
Production, million tons of ore will pass
these reserves through the port of Baltimore, of
value of $54 million.
a
and
prices in the same location: (1)
the legal minimum required by
the State Law, on which minimum
TeL
Direct wires to our
substantial new
years,
for sMoment
more.
should
royalty
NY 1-1557
Birmingham, Ala.
Mobile, Ala.
New Orleans, La. -
bargaining, indicates a value in hem Steel Corporation and mines
the neighborhood of 4c/mcf. On owned
by the Pittsburgh Consoli¬
such a basis Panhandle's reserves
dation Coal Company, served by
could have a value exceeding $120
the road.
million.
Since
Panhandle
has
Potential earning power of the
3,240,000 shares of common stock Western Maryland road has been
outstanding the potential value to estimated at as much as $13 to $14
the stockholders, ranges on such a
per share on the presently out¬
basis from $17 to $37 per share or
standing common stock, assum¬
dilemma
St., Boston 9, Mass.
St., New York 4, N. Y.
HAnover 2-0700
Hugoton-Panhandle region, nages of coal and limestone are
is presently bringing in exexpected to b$ originated at cer¬
of lOc/mcf at arm's length tain
captive mines of the Bethle¬
sible
148 State
25 Broad
tonnages are expected to be orig-
management, however, is of
opinion that gas in the ground
in the
Common
Incorporated
York Curb Exchange
Hugoton
would have
particularly, in
adjacent to the Hugoton and
subject
York Stock Exchange
Members New
Western
tne
eventually
leases,
Panhandle
lor
favorable
still lowing five
reserves
1.8c/mcf,
interstate
Co!
Members New
be rather dramati¬
to
seems
Maryland lines as iron ore from
presently well developed Venezuela and from Liberia be¬
with wells, gathering lines, etc.,
gins to come in through the p#t
and
supplying one-third of the of Baltimore for delivery to Re¬
requirements of the system, is car¬ public Steel, United States Steel,
ried on the books for $2.5 million
Bethlehem Steel, and other plants
or 0.083c/mcf of reserves. At the
west of Baltimore. It has been es¬
same
valuation that the market
timated that
namely
company
and
Steiner, Rouse &
Panhandle Eastern's acreage
older natural gas pipe
mineral
Stock
Dobbs-Houses Inc.
1st Floor,
Partner,
Johnson,
which is
to
the
mBANKERS
Bought—Sold—Quoted
Railway—Al¬
Maryland. Beginning in 1951 and
in increasing volumes for the fol¬
Panhandle Eastern.
in the country, serv¬
important growing markets,
ing
Common
trillion
3
owned by
line systems
Co.
the
of
assigns
of the
one
Capital
stock
common
2-7815
ture
cally
This background is cited to
point up the vast prospective value
im¬
an
these re¬
times the value that
poses.
like
a
have
Members
American Air Filter
B.
exander
would be used for regulatory pur¬
statute, should
Tel. REctor
(Page 2;
Maryland
Cyrus J. Lawrence & Sons, New
1.8 cents/mcf to
or
serves, many
of
action
Texas
120
ft.;
was
only
equal to
Through
of
Kansas
Since 1917
Curb
Western
<
Rights & Scrip
York
M.
City.
0.0135 cents/mcf.
York City. (Page 2)
the introduction of a
Panhandle Eastern Pipe Line Co.
modest amount of working capital
and a bank loan, and the signing
The recent decision of the U. S.
of
a
favorable long-term sales
Western at Hagerstown, Md., and
Supreme
Court, upholding the
contract, the equity of this com¬
Oklahoma minimum price law of
the Baltimore & Ohio, at Cherry
pany
has been enhanced enor¬
7c/mcf of natural gas; the similar
Run, W. Va.
Large tonnages of
mously. The stock market, in ef¬
pending
coal are originated by the road in
fect,
has presently
assigned a
minimum
the Elkins, W. Va., area.'
value of approximately $18 mil¬
price 1 a w of
For the future, the traffic pic¬
New York 5
New
Partner, Lau¬
Marks &
Co., New
York
value
carrying
the
that
so
Louisiana Securities
Co.
Pipe Line
Eastern
rence
estimated at about 1 trillion cu.
M. Marks & Co.,
Member, New York Stock Exchange
Teletype NY 1-583
New
Selections
—Carl C. Brown,
discussed.)
they to he regarded, as an offer to sell the securities
Laurence
Panhandle
particular security.
a
intended to be, nor
(The articles contained in this forum are not
are
Partner,
Established 1920
120 Broadway,
for favoring
CARL C. BROWN
Hanseatic
Corporation
New York
BArclay 7-5660
Alabama &
and
Participants
Their
week, a different group of experts
and advisory field from all sections of the country
participate and give their reasons
P. 4%/2044B
Chi. Mil. St. PI.&
Week's
This
Forum
A continuous forum in which, each
Central 5/2013
New York
New York Central
Security I Like Best
Established 1913
46 Front Street
CHICAGO
New
SAN
York4,N.Y.
FRANCISCO
Volume 172
Number 4972
.
.
The Commercial and Financial Chronicle
.
(2531)
We Must Maintain
INDEX
Strong
And Healthy Economy!
By
HON. JOHN W.
a
due largely to confidence
present prosperity is
our
need for
sound and healthy
maintaining
home front.
fiscal
a
Hon. John W. Snyder——'
economy
inspire
The Outlook for 1951—James M. Dawson
example
has
number
strive
toward
individual
of
measure
and
freedom,
higher
national
standards
i
d i
n
;o
f
i d ual
v
well-
being.
develop¬
This
ment does not
r
e
a
till
Is It Possible to Forecast the Stock Market?—A.
Wilfred
Investor's First Line of
of
one
has
long been
e
r
un-
way.
T h roughout
recorded
John W. Snyder
tory,
the
has
larger
But
been
in
fact,
struggle of
toward
of
measure
and
his¬
an
self-gov¬
personal freedom.
today
this
historic
facing
are
.
.
in¬
The
made
has
even
more
ur¬
at
justice,
portunity.
likely
ideals
our
of
and
of
of
freedom,
individual op¬
America,
take
to
upheavals
the
of the
strains
tem of
past ten years, our
institutions
competitive enterprise have
equal to all the de¬
mands made upon them.
Today,
we
can build up the defenses of
our
omy
country with a national econ¬
which is sounder, more flex¬
ible,
and
vigorous than it
five years
more
nine years ago or
ago.
.
days following Pearl Harbor.
hoped;
are
too
goals;
freedom
for
to
we
set what seemed to us
visionary production
we
our
We forget how short in
not
determined to try
them out; but we were
carry
at all
could
necessity, the events of
re¬
theless,
bringing a notice¬
in thought to the
world,.
We
have
seen
we
could.
found
accomplish
expanded
plant
heights
cient
up, one after
gineered internal dissension
en¬
in¬
or
what
out
ability to defend themselves.
only
dom
is
learning that free¬
now
something
that
only through
unremitting effort.
Twice,
within
of less than
one
Nation
the
been
has
be
can
maintained
ual
We
contin¬
cooperative
by
nation's
our
in¬
unprecedented
to
built the most effi¬
production machine in
space
our
called
the
period
Your
short
decade,
history. Between 1941 and
government alone in¬
vested some $16 billion for new
plants and equipment. And pri¬
vate industry's contribution in the
same
own
to
upon
came
greater.
even
was
of
one
seeds
most
our
Here
of many
it
productive
that
was
the
to
the
now
the
are
military might
powerful forces of ag¬
who sought—and even
still
seeking—to destroy
meaning
just
nine
that
our
attacked
of America.
years
nation
ago
was
month
infamously
was
Pearl
at
It
this
Harbor.
We
plunged into fighting the
greatest war of all time. It was a
for
war
survival,
and
we
were
to prove to ourselves and to
soon
the world that
a
uals, united in
cated
to
the
Nation of individ¬
perservation
of
in¬
dividual freedoms, not only could
outfight but could outproduce the
aggressors
who then fjiught to
force
their
autocracy
upon
world
had
production
its
doubled
immediate
manufacturing workers
tripled its industrial output.
We
won
that war, and we hoped
had made safe
we
With
the
our
energies into the paths of
is
present
due
in
we
large
prosperity
measure to two
our
*An address by Sec. Snyder at a Din¬
Meeting of the 50 Club of Cleveland
Cleveland, Ohio, Dec. 21, 1950.
11
i
13
;
11
j
Urges End of Exchange Controls—
13
\
Says Women Should Learn Investment Art
14
Recommends Avoidance of Wage-Price Controls..
15
no
these traits
16
A Contrast
16
(Boxed)
Predict Decline
in
—...
Civilian
Goods..
Exchange Offer Extended
can
be found
Continued
As We See It
(Editorial)—.
Man's
Canadian
on
Coming Events in the Investment Field
From Washington Ahead of the News—Carlisle
*
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Chicago
-
Glens Falls
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Fine
>
Spinning
,
Giant Portland
'
Cement Co.
•
6
Singer, Bean
& MACKIE, Inc.
32
Mutual Funds
12
NSTA Notes
34
News About Banks and Bankers.
14
"
*
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HA-2-0270
40
Exchange PL, N.Y. 5
Teletype NY 1-1825 & NY 1-1826
Observations—A. Wilfred May.
Our Reporter's Report
39
...
Our Reporter on Governments
17
Prospective Security Offerings—
37
Public Utility Securities
18
Itaiiroad Securities
10
MEMBERS
Securities
Salesman's
Corner.
MIDWEST STOCK EXCHANGE
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Securities Now in Registration
The Security I Like
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Best
STIX & Co
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The State of Trade and Industry
To
5
(Walter Whyte Says)..
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St. Louis LMo.
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*See article by
Mr. May on page 5.
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Weekly
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Edwards & Smith.
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Company
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news,
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state
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finer expression of
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Published
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Life Insurance Group Recommends Anti-Inflation
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ner
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Punta Alegre Sugar
Lehman Brothers Celebrate Centenary
our¬
selves and faith in our future.
mind,
-
Ameri¬
character—confidence in
us.
my
9
10
peace.
record
fundamental traits in
can
t
Jack & Heintz
Government War Damage Insurance—Lawrence L. Vance
'freedoms.
ending of hostilities
set about to direct our new-found
Our
Current Credit Picture—Carlisle R. Davis.———
.
prewar
number of
and
8
^
known.
ever
By the time our war effort was at
its height, Cleveland had nearly
and dedi¬
purpose
wartime
greatest
lines the
were
—Walter S. Tower
diversified peace¬
time industries grew into some of
resist
TRADING MARKETS
Steel's High Output Is Nation's Industrial
Strength
Indications of Business Activity
marshal its greatest
gression
7
Parkinson.!
city of Cleveland be¬
own
arsenals.
STREET, NEW YORK
8
'El Salvador Bond
we
and
war
1945,
WALL
Never¬
world
another, through
Stock Market and World War IH—J. C. Luitweiler
Next Step in Treasury Financing—Thomas I.
Bank and Insurance Stocks
dustrial
freedom-loving nations swallowed
are
morning!
Telephone: WHitehall 4-6551
7
went to work, and the
we
soon
We
are
change
sure
effort.
-
years
Western
you
drinks
in
Obsolete Securities Dept.
99
Savings Bank Deposits Continue Upward Trend
We
we were
human freedom.
cent
6
American sys¬
far proved
so
world
able
you
and
American
traditional
and our traditional
time, and how limited in extent,
has been the actual experience of
Of
Defense—Bradbury K. Thurlow.
Mortgage Lending in Defense Program—Wendell T. Burns
Our Economy Is Strong
Despite
somewhat
in
granted.
keep
to
Year's
secu¬
Those
net
5
Canada's Year of Economic Progress—B. C. Gardner
gent the need for a powerful de¬
fensive military establishment.
We had no idea what our ca¬
especially our own way of
liffe, is threatened by a communist pacities were, when we faced the
ideology that directly and brutally responsibilities we dicT in the bleak
Here
cash
New
your
down!
will
Korea,
and
strikes
obsoletes
a new pe¬
crisis.
world
of
month
Was
trend,
we
of
trend,
that,
ernment
May.
Unsound Government Policies—Our Problem
Today
which warned
the world of the real designs of
the Communist regime, has forced
us again to take strong defensive
measures for the protection of our
freedom.
The grave turn in the
Korean situation during the past
continu¬
a
ation
d
Today
riod
vasion
sent
p r e
new
but
mankind
fight against inflation.
served
increasing
an
toward
ever
enough
4
,
Says strong economy requires sound government
along with balanced budget, and urges shift
nations to
greater
a
upside
portfolio
forgotten
the
on
Then turn
rity
3
:
—R. Perry Shorts
America's
other
Glass empty?
situation
Asks all-out cooperation in
to
BOTTOMS UP!
Strong and Healthy Economy!
a
future, Secretary Snyder stresses
of Federal debt from commercial banks to non-bank holders.
of
AND COMPANY
A Close Look at the United
Nations—William A. Robertson__Cover
We Must Maintain
our
Page
Business and Financial Outlook for
1951—Roger W. Babson_Cover
SNYDER*
in ourselves and faith in
LicHTfnsTEin
B. S.
Articles and News
Secretary of the Treasury
Asserting
3
Record
i,
Monthly,
<Foreign postage extra.)
account
of
the
—
fluctuations
in
the rate of exchange, remittances for for¬
eign subscriptions and advertisements must
be
made
in
New
York
funds.
-
THEODORE YOUNG & CO.
40
Exchange Place, New York 5, N.Y.
WHitehall 4-2250
Teletype NY 1-3236
The Commercial and Financial Chronicle
4
■4.
on the job, thereby Let us estimate that the govern¬
providing another *4 million. And ment's share will be unchanged.
when the normal growth in the
Business' share will probably be
working force is also brought into larger. It is helpful to recall that
the picture, it is apparent that an
plant and equipment expenditures
increase of at least 2V2
million increased 25% per year from 1939
persons is a reasonable possibility, to 1941,
but thereafter declined.
a
gain of 4%. After allowing for Our assumption is no all-out war
1 lk
million
more
men
in
the in 1951 and therefore let us as¬
armed
forces
(and don't forget sume
25%
greater
plant
and
that the GI's services are part of
equipment expenditures in 1951.
collecting $7 billion
willing to stay
The Outlook for 1951
DAWSON*
By JAMES M.
City Bank of Cleveland
Economist, the National
Ohio
Cleveland,
stepped-up defense spending that v/ill reach $50
billion annually, Cleveland bank economist foresees adequate
sources of additional national output in longer working hours,
Assuming
a
the
employment, and slight gain in
conditions looks for not more than
ent
gross
can
productivity. Under pres¬
$5 billion annual decline
in civilian goods and services, but says this may mean 50%
cut in durable consumer goods by 1952. Holds higher taxes,
restricted consumer credit and increased savings can hold
down public buying power. Sees no need for "roll backs" or
price ceilings, unless war comes.
more
still be
national
there
product)
1*4 million increase
a
in civilian employment for a
of 2%.
ternatio
na
I
1
of addi¬
tional output is increased produc¬
tivity per man hour.
Normally
this
amounts
2J/2%
about
to
per
and an overall advance of
that magnitude may occur in 1951.
year
t\
those
the
is
Actual expen¬
other
the
and
hand,
more
are
likely
to
of
take that $50 billion
us
World
con¬
of addition¬
ing
figure
Goods
World
billion.
One
of
source
additional
Note
precedent for a rate of expansion
of this magnitude. Early in 1941, duction may be found in longer
hours and more employment. The
10 months before Pearl Harbor,
latest work week figure for manu¬
defense
spending represented
about the same proportion
total
nation's
that
output
seems
out
war
How
faster
speedup
in
possible, but
improbable unless all-
even
course
develops. The present
situation
it
make
about
An increase
could
ers
un¬
certainties in the military and in¬
ternational
this
would
two-thirds
take
pansion of $32
in¬
almost
of
care
the
of
billion
$20
estimated
ex¬
billion in defense
1948 and 45 hours
of 40 hours for
Furthermore, spending in
early 1941, when put in terms of during the war. Lacking an allout war, perhaps just two more
today's prices, was about the same
as the current rate.
A year later hours per week will be worked in
defense spending reached an an¬ manufacturing industries and let
nual rate of $50 billion in terms of us suppose that the work week
for the economy as a whole moves
today's prices, and, therefore, it
seems
reasonable to assume the up one hour per week. That would
attainment of that level by this be a gain of about 2V2% in the
length of the work week.
time next year.
An
crease
Accumulation
Inventory
that
expenditures. Is there any other
of the facturing industries is 41 V2 hours source from which
goods and ser¬
it does per week, as against an average vices for defense
may come, other
today.
spending is of
Civilian
pro¬
im¬
employment?
more
of
one
million work¬
from
come
reduction
a
in
unemployment from 21/4
lion, the current level, to 1
lion.
A
nitude
possible to know for sure whether
total war is a year away or 10 is
contraction
seems
of
that
reasonable
remembered
that
mil¬
mil¬
mag¬
when
it
unemploy¬
than
from .output
There
consumers?
going; to
now
is
at
least
in
of
happened
what
Department
figures
personal
.on
ad¬
expenditures,
through World War II so that by
1944
civilians
were
consuming
goods and services than
more
1941. If that could
during an all-out war, I
they
in
were
goods..
soft
idea
Some
traction
'
the
of
coming
con¬
production of durable
consumer
goods may be derived
from a rough breakdown of how
the
in
billion for defense will
Probably a third of it
will be needed just to feed, clothe
be
$50
spent.
and
the
pay
forces.
armed
will
other
third
such
miscellaneous
be
An¬
for
needed
away
at all.
whether
or
it
Furthermore,
will
we are
but
adjustment
seasonal
influences.
That
means
production of civilian goods cur¬
rently is proceeding more rapidly
than is civilian consumption.
In
the
last
creased
total
war
dntil
inventories
shortly
in¬
Pearl
after
Harbor and thereafter held steady."
If inventory
accumulation
by the end of 1951
were
to
munication
vilian
and
expense
payroll of the
,
ci¬
the
defense de¬
The remaining third,
roughly $17 billion, would be used
to buy new
planes, tanks, ships
partment.
and
guns.
Let
us
relat^ that slice for new-
weapons
to the consumer durable
cease
It is roughly 50%
goods industry.
larger than the wholesale value of
ment
lion
come
with
TO
THAT
ANNOUNCE
from
$7
billion
production
of
from
only
increased
$5
billion
opitz
production,
coming
out
the flow of goods and services
ment
let
us
discuss
for
ADMITTED
ON
.
AS
A
the
omy.
GENERAL
JANUARY
2,
PARTNER
1951
Roberts & Company
MEMBERS NEW YORK STOCK EXCHANGE
MEMBERS NEW
YORK CURB EXCHANGE
(ASSOCIATE)
MEMBERS CHICAGO BOARD OF TRADE
488
MADISON
AVE., NEW YORK 22, N.Y.
MURRAY
HILL
B-14 3Q
there
year
these
in
By this
will
classes
be
no
debt.
of
fact, isn't it reasonable to
that
added
together,
debt
such
as¬
will
be
the
offset fully
they
expansion in gross
incomes, leaving consumer buying
power right where it is now.
The
pure mathematics of
that situa¬
probable
tion,
the
namely
buying
same
5% cut in avail¬
goods and services, suggests
moderate price increase of only
power,
a
versus
able
a
5%
of
the absence of
in
The
of
Trend
before
But
a-
a
program
price controls.
Saving
accept such
can
we
the trend of
considered.
If
happy conclusion,
saving
must
next year,
in¬
the gap between buying
available goods would
making price controls
power and
closed,
But
unnecessary.
hand,
if
or
now,
other
the
on
to save
were
consumers
than
less
voluntarily
their savings by $10 billion
crease
be
be
,
would
consumers
even
into
dip
savings, the inflationary gap would
and exert correspondingly
widen
greater pressure on prices.
In
some
ways
cellent for
conditions
are ex¬
increase in the rate
an
are prob¬
with new
houses, new cars, electrical
appliances and good clothes than
they have ever been before. Did
you notice several weeks ago that
a representative of a leading elec¬
of
saving.
ably
Consumers
saturated
more
new
dividing up of the pro¬
pie for the civilian econ¬
*How much will civilians get,
much
plants
duction
will
and
us
return
overall
the
to
position
business
get
for
equipment,
expect much along those lines.
appliance
com¬
company
will
cur¬
production of appliances 25%
Jan.
1, but that they would
tail
on
15% in order to sell the
output? Still another cur¬
factor which would ordinarily
budget
reduced
rent
these considerations,
is not conducive
But despite
the
to
the
is
produce increased saving
'rising level of incomes.
atmosphere
saving.
greater
dential
and
in
Cuts
resi¬
construction, auto output,
production
appliance
are
and they hit the headlines.
Families are thereby enticed to
news,
buy not only what they need, but
what they
the
in
might need some time
Furthermore, ris¬
future.
prices,
ing
even
rising
slowly
prices, always encourage imme¬
diate buying.
And unfortunately,
memories of what
happened to
Continued,
con¬
in
on
page
25
late
for
him
to
buy.
buying
consumer
in employment
to
gross
longer
on
crease
personal
H. Hentz & Co,
are
Members
;
.
New
York
Stock
Exchange
another
New
York
Curb
Exchange
And if the overall in¬
New
Cotton
Exchange
hours
in
which we
would add $6 billion
consumer
$5 billion.
1856
be scram¬
bling for this slightly smaller vol¬
of goods and services? The in¬
counting
Established
Will increased
power
incomes while
might
rates
of
add
income
income
taxes
will
be
York
Chicago
New
»
Board
Orleans
And
of
Cotton
oilier
N. Y. Cotton
.
Inc.
Exchange,
Commodity
for
and
farmers, wage earners, and sal¬
how much
will
government get
aried people comes to 5%, another
for non-military purposes?
Fed-;
$9 billion would be added to gross
eral, state andi'local government
incomes.
The aggregate increase
expenditures on postponable pub¬
in incomes thus would come to
lic
works, unnecejiary' services
$20 billion dollars.' *"*
1 ;
and downright waste ougHf to be
But
actual
consumer, ^ buying
stopped forthwith. But my innate
power
will - not be
$20 billion
optimism does not go so far as higher. Probably a year from-now
to
trical
$10 billion less goods and services
mo¬
new
BE
approximately
per annum.
1951, by which time there may be
crease
a
how
WILL
let
sumers'
ume
civilian economy.
Now
Now
could
now
currently being consumed by the
fred w.
mr.
next
increase
In
be
may
have to increase their advertising
billion per year, after
for rising prices and
going
into inventories, $20 billion could
PLEASED
annual
of about $12
come
ARE
these
of
an
mented that his company
requirements,
WE
debt
$12 billion. Recent¬
costly
possibility in the productive re¬ items as the operation and upkeep
sources now beiifg used to produce
of
existing equipment, training
goods for inventory.
In recent programs and the Korean cam¬
months total business inventories paign, research and development
have
been
expanding at a rate work,
transportation
and
com¬
a
enough
dropped to as low as Vz mil¬ oroductive facilities would be re¬ the entire 1951 output of the auto¬
mobile industry. It is a little more
during the war. More women leased to
produce the remaining'
tH%n half as 'large as total con-,,
not sure where or how such a war can be drawn into the work force.
$12 billion of output needed for
sumer ^expenditures
on all
dur¬
will be fought. It seems to follow In the war 36% of all women of defense.
able consumer goods, which will
working age were employed as
that
considerable emphasis will
But let us be conservative and
come to $28 billion this year. This
be placed in 1951 on the improve¬ against 32% today. A 33% figure
assume
that inventory accumula¬
would
mean
another
V2 million
suggests that hard goods output
ment
and
development of wea¬
tion will merely slow down in late
workers.
Some retired folks can
for civilians might have to be cut
1951 to a rate of $5 billion per
*An address by Mr. Dawson before the
in
half
by the time Christmas
be persuaded to return to work
year. That would mean that of the
Cleveland Chamber of Commerce, Cleve¬
1951 rolls around.
and those about to retire may be
land, Ohio, Dec. 19, 1950.
$32 billion of additional defense
years
occur
still
time
justed for price changes by using
the cost of living index, rose right
and
economy.
II gives us a
War
on
credit
consumer
1950
$6 billion
say
Service
II.
War
consumption
and
billion, and by this time next year into the overall total of
production
the figure may approximate $50
for the civilian
of
most
rate of almost
discuss its impact on al output, i.e., longer hours, more occur
the economy. To begin with, note employment, and a possibility of am probably being overly pessi¬
business activ¬
slight g a i n in
productivity, mistic when I suggest consumer
that it is about $32 billion more a
James M. Dawson
ity and prices,
raise
the
gross
national living standards might suffer from
than the present rate of defense should
for
govern¬
Where can this extra product from the present level of a 5% cut by late 1951.
ment controls over the economy spending.
$32 billion of goods and services $285 billion to at least $305 billion,
and consumer living standards?
Now, of course, a mere 5% drop
come from?
If it must all be sub¬ at current prices, by next Christ¬ in consumer
goods and services
Any forecast of 1951 economic tracted from the volume of
mas—a gain of $20 billion or about
goods
does not mean that auto output
developments must begin with an
7%.
If an increase of 7% seems
and
services currently going to
and refrigerators need be cut only
estimate of government spending
consumers
it will mean a reduc¬ high to you, consider that from
5%.
The consumer will have to
for national defense.
Just, before
tion of about 15% in living stand¬ 1939 to 1944, the lowest year-toget along with far fewer Houses,
Korea the annual rate of expendi¬
ards.
But fortunately there ap¬ year gain in the gross national
cars
and appliances, but he will
ture was $14 billion; currently it is
pear to be ways of
providing a product was 9%, the annual aver¬ be able to increase his consump¬
about $18 billion. Perhaps by next
good part of the additional needs age was 12%, and that is after ad¬ tion of food,
services, amusements
June the rate may be about $30
of
the
military without dipping justment for price changes.
for
outlook
by
consumers
supplementing
types was expanding at
$5
will also
real estate mortgage loans. Dur¬
or
sume
consider
Commerce
14%
sources
because
their incomes
higher
to
power
services by this time
Total mortgage and
next year, and business is to take. shrinking?
consumer
debt probably ap¬
$5 billion more, that suggests con¬
sumers
may
have to be getting proaches $70 billion and if in late
1951 that is being paid off at a
along on $10 billion less goods and
services by a year from now than rate of 10% per year it will sub¬
tract $7 billion from the consumer
they are currently consuming, or
a drop of about 5%.
Some of you, buying power levels of today.
I am sure, are tninking that the
When
these
reductions
from
cut will be a good deal sharper. current buying power levels are
But
of
Buying
be reduced
if the civilian economy
so,
to
balance will not be
of goods and
On
progress.
These three
incomes.
whole is to get $5 billion less
a
as
the
run
Expenditure
Now let
And
half of that
higher tax rates
other half due
the
than at
more
about
ly the expansion has slowed down
Cut in Civilian
and
at
labor turn¬
more
of
levels.
present
with
attributable
and
but
people.
usher
the
difficulties
the
and
over
condi t ions,
calls
more
lower
verting some plants to defense
than the amounts provided in the
production are probably going to
budget.
prevent overall productivity gains
from exceeding the normal rate
Impact of $50 Billion Defense
ditures
elsewhere.
what
little
a
matters of defense.
underway
during at least
part of the
year in Korea
With
President
the
operator will handle
the telephone
give
movies will seat
leeway in
contract authorizations and to
purely
ized hostilities
or
but the larger
have
expansion
an
from
Another possible source
amounts will be there to facilitate
with
local¬
means
Billion
$5
Today let us assume that current pons, rather than concentrating on Particularly good gains may be
quantity
production and achieved in
continue during
1951 costly
distribution,
trans¬
in military and political affairs. rapid creation of a huge standing
portation, utilities and service in¬
Perhaps the official Fed¬ dustries. The sales clerk will wait
Under this assumption, 1951 would army.
eral budget will allocate consider¬
be
a
year
of
on more people, the railroad con¬
ably larger sums for defense than ductor will
continued
inpunch more tickets,
mentioned,
tension,
That
billion
present,
gain
conditions
it
Thursday, December 28, 1950
...
(2532)
Trade
Exchange
Exchanges
Exchange Bldg.
NEW YORK 4, N. Y.
CHICAGO
DETROIT
GENEVA,
PITTSBURGH
SWITZERLAND
Volume 172
Number 4972
.
.
The Commercial and Financial
.
Steel
The
Chronicle
Electric
Retail
The Stock Market?
Trade
Auto
Industry
Price
"How
Mr.
Failures
to be sustained at the high level of recent weeks.
In
of
Slight slackening of activity is indicated in the steel and
metalvvorking industries over the holidays, says "Steel," the
weekly metalworking magazine, this week.
Some letdown in
the Christmas and New York week¬
but curtailments will not be as sharp as during normal
Some metalworking shops will extend shutdowns beyond
holidays to permit usual seasonal inventory-taking, but sus¬
pensions generally will be limited with prompt resumption of
of the market
ends,
In
as
pre-holiday schedules indicated at most plants the first week in
January.
discussing stock market fore-
being
in
Record-breaking output of steel and pig iron
achieved
was
Total production of steel is estimated in
boom
96,500,000 net tons of ingots, equivalent to about 71,400,000 tons of finished steel. The previous record was established
in
1944
public's
it does
ingots, about 63,250.519 tons
of finished steel, poured from the furnaces.
Pig iron output this
year is estimated at 65,704,000 tons.
The previous record year
also
1944
was
when
both steel and
it
been
not
blizzard
62,072,683
production
curtailments
labor difficulties and
tion
produced.
were
Output
of
results
losses
attending
throughout the
the
late
due
year
ally
November
to
by
sporadic
struction
or
furnaces
are
projected
into operation.
come
scheduled
added
be
to
10,000,000 tons of ingot capacity.
in
Thirteen
addition
new
Not all will be completed next
ing
Among
projects not yet announced officially is a new
East Coast steel plant to be located in New Jersey on the Dela¬
ware River below Philadelphia.
new
Civilian
goods
manufacturers
encountering
are
increasing
difficulty covering tjieir needs. Their mill allotments for Feb¬
ruary have been cut sharply, and further reductions in quotas for
succeeding months
pected
next
to rise
in
flood tide
to
Except
year.
for
the
rated
defense requirements ex¬
first and second quarters of
the
tonnage
mills
generally are
booking few orders beyond February and continued shrinkage of
commercial tonnage throughout first quarter is indicated.
In the automotive
plant
workers,
inevitable
in
industry
in
particularly
the
first
large-scale layoff of automotive
the Detroit area, appears to be
a
quarter
1951,
of
according
"Ward's
to
Automotive Reports."
However, vehicle producing companies and
many of their suppliers are expected (o keep plant forces as nearly
intact as possible by reducing work programs to three or four
days
week, it said. J
a
Exact schedules
rial
*'
;■
1
...
It
help stem the tide of risipg inflation auto workers'
wages
frozen at
existing levels until March 1, next, by the Economic
Agency.
The order contains a provision permitting
petitions for wage changes to be filed with the agency. The first
of its stabilization regulations followed a recent directive
calling
for the rolling back of prices on 1951 automobiles to Dec. 1 levels.
is
interesting
and truck
units,
1,
that
note
as
of
July
1,
1950,
total
car
registrations in the United States amounted to 43,488,591
a new
The
July
to
high record, according to Polk & Cor* RM*
figure
1949,
with
compares
with 36,573,009
33,653,776 units registered
as
units''
39,818,351
registered
as
of
as
of
July ,1^,1948,, and
of July 1, 1947.
THE
C.
-hmo.
on
-
page
pictorialized market trend (par¬
ticularly as projected into the fu¬
ture) is tempting for its seeming
simplification as well as for pure
enjoyment. The illusion that it is
easy to "beat the game"—to fol¬
low
is taken of the
Baron
"buy
1
Rothschild's
sheep,
and
advice
deer"
sell
to
by
being
iskd'
Stock
able
to
calculate
'
market
extension
"playing,"
market
of
fort, and is usually minimized
much
In
likened
be
Another
major
stimulant
prevelant overemphasis
on
misconception of "liquidity,"
entailing the invalid identification
of market price with value, and
concentration
"trends"
in
investors'
of
attempts
on
discern
to
lieu
of
value
while
the
of
course
Timing
In
the
complete
basic
stock,
nicians
misconception
nature
of
the
market-timing tech¬
blithely overlook the fact
the
that essentially a share in a
Continued
!•
27
as
MR.
must
investment com¬
munity stresses
the forecasting
elements
far
beyond the inci¬
on
Fur¬
MR.
an important standard
defining whether one is acting
an investor, speculator or gam¬
thermore,
in
as
Partnership,
January 1, 1951, of
JOHN D. PENICK
JOHN G. WHITE
(Resident Partner, Chicago, 111.)
bler,
is
the relative
emphasis
placed on prediction. The closer
one approaches a genuine invest¬
ment attitude, the more will fore¬
FORMATION OF
lator-gambler,
on
and that
MR. A. M. KIDDER
will become associated with
dealing in risks;
forecasting.
SUCCESSORS
Let's
TO
us.
Prophets Boom
talk
the
about
re-
>
growth of the prophets
;
now
In direct contrast to the
EFFECTIVE—JANUARY
1,
1951
which
General
Associates
JOHN
KINNE
72 Wall
R. MacNEILLE
BARTUS TREW
TELEPHONE: HANOVER 2-0322,
'
lid
an
Members
in¬
recurrently
New York Stock Exchange
and
halcyon 1920s,
Vu>
"
This
market.
a
••
other
principal exchanges
Main Office: 120
continuing
has
New York Curb Exchange
•
Broadway, New York 5
Telephone: WOrth 4-6700
centered
Empire State Bldg., N. Y.
Allentown, Pa.
East Orange, N. J.
Chicago, 111.
Pottsville, Pa.
Morristown, N. J.
Syracuse, N. Y.
Lancaster, Pa.
Bridgeton, N. J.
Philadelphia, Pa.
York, Pa.
Winston-Salem, N. C.
,
through so-called internal market
>
analysis,Remarkable growth .
-in the popularity of prediction is '
Street, New York 5, N. Y.
.■
depres¬
as
largely in activities attempting to
anticipate stock price movements
★
'
the
since
ly has been enjoying
SORNESON
bull
HENDRIX
Street
its forecasting "division" assured¬
Partners
KEISTER —L."A.
Wall
vestment business has
suffered
C.
Reynolds & Co.
boom.
address by Mr. May
IfOth Annual Meeting of the
Partial'iext
before
the
of
an
American Statistical
HI., Dec. 27,
1950.
Association, Chicago,
A'?'*'
Scranton, Pa.
,
\
.
.
Pinehurst, N. C.
busi-
page
JOHN D. BAKER, Jr.
MR.
of
common
the
made,
price
deter¬
"Liquidity," Blue Chipitis, and
assumptions
some
future
effort
minants.
investing operations, contrast¬
about
to
forecasting proclivity stems from
pleasure in announcing the proposed
effective
an
"Musical
admission to General
possible.
as
ingly,
be
We take
as
forecasting,
to the game of
Chairs," in which some¬
one
is certain to lose; but each
of the players, hoping it will not
be he, meanwhile has a good time.
may
catching the swings with "tours-
situa¬
and farm¬
is engaged in as
an unavoidable necessity, as inci¬
dental to the major productive ef¬
sion
t
The mental gymnas¬
in contemplating a
involved
he
And regard¬
.
.
casting, along with other risks, be
minimized; conversely, the specu¬
Adams, Keister & Co., Incorporated
STANLEY
general
.
whom
forecasting
markabie
C.
well-
of past
economic
over
legitimate business
ing,
on
the
concerning
others
But it must be remembered that
in
The
STAFFORD
persons,
KEISTER & COMPANY
AS
H.
the
over
shortcomings
and
predictions.
tics
outlook for the weather and of the
concentrates
H.
disillusionment
some
dental and the unavoidable.
registfe^
Continued
ANNOUNCING
the
and
publicized
bile manufacturer, or perhaps in
financing arrangements.
And in
Stabilization
It
market-as-a-
without
the
present
supply-and-demand
more
given them—short of the ideal of
perfect information — they gen¬
erally act in the final analysis
on
hunch; that is, they gamble
ysis and evaluation of individual
securities; and also stems from
practically all our activities. In
conducting.a commercial business
some
risky prediction is done, as
in the anticipation of the public'sstyle acceptance by the automo¬
farming, account
or
expectation
an
quired for the business-like anal¬
in
undecided, but it appears that mate¬
shortages will force several of the large producers to reduce
were
is
two
each of whose actions is based
tion.
remain
output by about onfe-third, this agency noted.
Steel, rather than
nonferrous metals restricted by government
order, will be the
chief limiting factor, it predicted.
To
forecasting
the
ordered
such as the ability
rigorous self-discipline re¬
and
is, of course, true that
of
variety of
a
approaches,
business
amount
of
An
nega¬
sound investing ap¬
a
be
culties involved in the alternative
proach.
likely
'
action
mak¬
cept of "the market" as an entity,
or of a "trend"; and sixth, the al¬
indicated with
are
mar¬
inevitable; fifth, ine
iundamental fallacy of the con¬
ternative of
to
seems
"system,"
particularly when supported by
charting,
supplies
a
^welcome
emotional escape from the diffi¬
results
tive
ball.
mostly psychological, for
such popularity of the "prophecy
system" — particularly
of
the
"technical" methods for gauging
m o v e-
the
between
of the amount of information
the
year.
"The strategical situation in
theory lies in the interaction
less
whole.
reasons
says:
game
control.
There
ments; fourth,
May
degree
reasons,
achieved
various
ket
Wilfred
A.
newspapers
Its Motivation
.their attempts
than
on
concept, John McDonald in
"Strategy in Poker, Business and
War" (W. W. Norton, N. Y., 1950)
no
of
blast
more
to
con¬
embodiment of the crystal
actu¬
time
some
Writing
has
in
to
therewith.
of
experts
The outlook for 1951 is for still greater iron and steel produc¬
as new blast furnaces and
steelmaking units now under con¬
forecasting,
the
to harbor
actions
categories
material shortages.
raw
nev¬
that
p r o-
clivities; third,
weighing of
the
empirical
pig iron in 1950 would have been still greater had
for
and
tons
doing
seem
notations
the services,
advertising 01
our
Morganstern,
public acceptance seemingly
being directly proportioned to the
fore¬
casting
when 89,641,600 net tons of
in
wares
and
individual
of
the
in
by
voluminous
and financial journals; the
continuing
of
excess
their
for the
reasons
broadcast
the
such.
ertheless, from the attitude of the
evidenced) in the literature now
let us consider first
place of forecasting in
the investing process; second, the
castability,
the proper
measure
as
conceived
Neumann
whole.
a
game
,
of the Theory of Games
by authorities as von
concept
times.
the
a
as
"playing
the
market"
against
"the
crowd"
does
not
strictly conform to the technical
sharp
unemployment insurance.
liberal
While
(4) elusiveness of a price "trend," because of the constant
divergences between individual issues and industry
groups composing the market. Urges investors to confine their
investing approach to appraising individual issues by value
standards, as they would in buying a business property or
real estate; instead of trying to anticipate short-term swings
ended Dec. 2 of this year in both continued and initial claims for
appeal
varieties
all
a
to afford
seems
Appeal
of
Forecasting
goal," citing following reasons: (1) the
imponderables ever present in the external political and
spheres, including governmental interventionism; (2)
the market's recurrently contradictory reactions to the same
event; (3) the difficulty of gauging investor psychology; and
comparison
a
Game
The
movements
unattainable
many
with the corresponding week of last year, total production showed
a
marked rise.
A sharp increase was also noted for the week
in the year now closing.
have
to
swings!"
May terms anticipation of short-term market
"an
On the industrial front overall output for the nation continued
over
swings.
caught the
up-and-down
easy
Production
Business
economic
operations is expected
past-performance charts
irregular)
By A. WILFRED MAY*
Index
J
•'
over
that depict sharp (but completely
Commodity Price Index
Food
and
tions
Output
Carloadings
State of Trade
de-hindsight"—seems to be irre¬
sistibly fostered by one's reflec¬
Is It Possible to Forecast
Production
5
(2533)
24
6
The Commercial and Financial Chronicle
(2534)
Reynolds to Admit
Baker, Penick, White;
Investoi's First Line of Defense
From
By BRADBURY K. TIfURLOW
Thursday, December 28, 1950
...
Washington
Partner, Talmage & Co.
Kidder With Firm
Mr. Thurlow points out
Baker, Jr., John Dab-
John D.
Penick, and John G. White
partnership
ney
to
Co., 120 Broadway,
New
*
A.
Kidder
M.
the
with
firm,
the
All
changes
effective
are
A.
has
associated
been
1942.
Prior
Pask
and
before
associated
and
York
He is a director of
associated
Penick has been
Kidder
1933 and has been
Co.
&
since
Mr.
nolds
partner since
first
round
what
of
will
probably be
of
war
how
anni¬
hilation
have
with
White has been
&
since
Co.
Rey¬
he
when
1949
Weeks.
&
has
He
banking
He will be
investment
the
since
1923.
in
Chicago.
the
is
grandson of
M.
pilot in the Air Force in World
War I, he became associated with
A. M. Kidder in 1921 as a partner
a
was
York
a
member
Stock
whether
the
of
Exchange
New
represent¬
ing the firm from 1929 until he
the Army Air Forces
He returned
Mr. Kidder is
1945.
Palisades
Trust
the firm
to
director
a
Co.,
Engle-
wood, N. J., and Borne Scrymser
Company.
is
made
are
If
not, the conseto ourselves will be such
we
are
to make any
as
less.
We
that
preparations hope-
shall
our
therefore
of life
way
possible to survive
condition
formation, effective Jan. 1, of II.
C. Keister &
Co., 72 Wall Street,
York 5,
N. Y.
as
successors
Adams, Keister & Co., Inc. ' H.
C. Keister and L. A. Sorneson
general
partners.
Stafford
are
Hen-
C. Stanley Kinne, John R.
MacNeille, and
Bartus
is
associated with
them.
if
even
somewhat
to
Since this
ticle and
morals
is
not ;a
speech
shall
we
in
the
but
.
It
Lenin, the father
present
our
this
was
capital over the next
that it will
find
been
du Pont,
investment,
one
as
Under
v/e
greatest
in
Specialists in
security
cash.
We
•
City
office
B
Lenin, had he been
VIRGINIA-WEST VIRGINIA
NORTH and SOUTH
the
money
of
CAROLINA
first
until
you must
the
nold
scene,
put
you
is
CRAIGIE&CO.
RICHMOND, VIRGINIA
Bell System Teletype: RH 83 & 84
Telephone 3-9137
Mr.
trouble
is
over,
idda
some
with idle money in the bank cause
for serious
concern, if only be-
iiiiiiiiiiiiiiiiiiiiiiiimiiiiiiiiiiiiinip
sum
of money is no
$200,000,000,000
in
long
Those
Dan River Mills
today
Rich., Fred. & Pot. D. 0.
who
on
would,
news
sell
H01} would do well to consider
that
it'-
if
go to war
we
we
may one
Scott, Horner &.
Mason, Inc.
Lynchburg, Va.
LY
83
LD
Germans
33
of
who wrapped
lion-mark
were
a
cheaper
Before
security
generation
because
than
unprinted
one
can
the
hope to
the
Se-
*
'
r>
\\t
l
•
d
a j
K* W* "ressprich Admits
Robert
wtn
member
LeBrecht,
become
that has price-of-living escalator
group
could
referred
be
accepted
to
a
as
that rugged
regulations and price guarantees.
of
as one
our
"freedoms" that the
govern¬
able bodied person a job, which has meant
every
62 million
long time since the;
truthfully
in the past year or so providing employment
billions
for
labor force of
a
Such economists and writers
people.
it, without
have
we
Thus,
as we
the attitude of
a
partner
in R.
W.
Wall Street
48
rieSuP ricn & uo., 48 wail btreet,
New York city> members of the
New
Jan.
York
I.
Exchange,
Stock
Mr.
LeBrecht
has
.
as
an
,
John T.
foundation for
now
It
Administration
to
WASHINGTON,
from
in my
our
floor
m
C.—Harry
secu-
as
monstrosity
morass
reason
_
T
*
.
There is little doubt
our
rearmament program and those
Then
is
he
secondly, upon the conviction that
rope
bound
he will surely hang himself.
build up, will bog down
to
is
is to heap more upon him, more
not
one
of them.
slightest.
In spite
of the alarms we
the loss of our freedoms, alarms
altogether, been borne out because of the
that
has
been
that
authority,
and confusion, they believe, and for
not try to curb him in the
Taft
will be embarked
likely to see.
controls, first on the clamor that they
enough
of bungling
money,
plenty of austerity
we
made, he
which
valiant resist¬
believes now that Congress has a
greater responsibility to the people of this country
Broad
Street,
New
at
time in history,
a
than it-has ever
responsibility to protect them from
incompetent and utterly bewildered executive
So
the
we
any
branch; indeed,
protect them against themselves.
.
securities business-from of30
further
Administration has wanted
They justify their campaign to make the
that
their strategy
have not
Leith Miles Co., Inc., is engaging
at
pretty solid
Republicans in Congress I find a certain smug¬
future.
The
to
same
fices
some
the
to
they give Truman
an
York City.
a
and complete industrial mobilization has
heard from the housewives, and
had
Leith Miles Co.
a
men
Administration go faster on
ance
It is
w
Q Stieet' N' W*
...
than the
for shooting the works and
calling
Among
a
vast amount of regi¬
impose price and wage controls, to go
the last grand spreef that you and I are
ness
if
a
Washington have been most revealing.
have had in the past about
a
to want
God-given right.
in Congress who have sought to force the
cautiously with
more
Senator
'
D.
seem
most conservative newspapers.
in
been
rities business from offices at 3415
c+r,w
We
as our
mind that the current struggle between those who want to
are
upon
\r
Kahn, Jr. is engaging in
n
to
of 15 million
move
An
failure to get rid of the rent
our
The loudest clamor for something like Governor Dewey's
go.
army
more
••
to meet another crisis, we do so with
industrial mobilization
come
The
certainly
planners and regimenters to work upon from
the Republicans
with
have
out.
on
is
world
people having undergone a vast change.
The last few months in
broker.
Harrv Kahn
,our
the
as
do this, or ever has
can
far.
so
move now
our
country
around
outstanding example has been
on
,,,
"dividual
a
out
passed
helped this undertaking
of
Exchange,
Stock
T
attain
organized housewives,
Certainly it has been
will be resolved in favor of the latter.
*i
these
one must assume the po-
now
seems
Particularly is this true with that vocifer¬
CIO
He wants his
guarantees
who
*
.
ago
paper.
farmer
York.
their bread in mil-
notes
amount of
'JJlllIIIIIIIIIIIIIiilllilllllllllllllllllllli
of
is
He
curity Traders Association of New
stocks
of total mobiliza-
day find ourselves in the position
Tele.
pfrstT vfcee%resW°enf of"
with Russia would cost.
war
It is
many
National Secur-
°Sic<~,r
?,n-
tion
Natural Gas Co.
in
'
trading
years.
1939 dollars gives us some
sugges¬
of how many 1950 dollars a
Alabama-Tennessee
&
for
+•
over
influential
and
Paine,
Harry L. Arnold
actlve
German
to have become willing to
organized labor in return,
controls of the past war.
Curtis
war
the
and
and
mentation, to expect it
their
The
us
is
Arnold
Jackson
longer impossible to imagine.
that
demanding them. Organized labor has been in the forefront of this
demand, along with the unorganized
be
g e,r,
our
But as we face the current crisis, the impression is, among a
majority of Congress, at least, that the people have become inured
to their lot.
Instead of their crying out against the return of
price controls and other restraints they have for .months been
Webber,
reflection
cost
Trading Markets
a
Ar¬
associated
Piwprich & Co
such
a
with
suggested alloting $100,000,000,000
for propaganda should
give those
recently
Plan. Disgust with the mismanagement of
plenty to do with it, of course.
well known in
going to be worth
columnist
the Brannan
trading cirles,
having
been
the New York
cause
L.
resident
safe
a
and
world affairs had
15.
will
man
w^n that finally take it out. The
you
fact
a
1
if
capital in
logically form
what.it
■F. W.-
the
on
place,
your
120.
at
Jan.
of
Harry
old
in the bank with the idea
hiding
place
MUNICIPAL BONDS
lay
that
would have chortled with delight.
In
a
roadway
as
dd,
henceforth
believe
Then only a few months ago, the politico-labor leaders were
soundly rebuked, along with the apostles of socialized medicine
*
open
two
later, the dear old people went right back to their original
The respite in the struggle against statism was brief.
perpetual state of war or crisis.
York
investors apparently felt that their
Since 1932
But
been able to do
jjew
that they have
than
thought,
was
ahead.
no
draw similar
Asia
clear
years
ment
the
us
in
men
healthy sign, it
seemed
Flynn have pointed out that
will
Because the Chi¬
reminded
A
road
they had
as
stock
Exchanges,
an
adventurers
and
some
.meaning of
Consider, for example,
the events of the past two weeks,
during which investors, in the
name of
security, jettisoned mil¬
more
1920.
the
just
war,
reformers
the
kers 0£ j^e New York and Boston
"security."
nese
be
love.
individualist.
Du Pont, Homsey & Co., mem-
"victorious"
a
against
back in
and
American
Harry Arnold
gentleman's
can
to
1946, after
Bargeron
clauses in its contracts.
Open N. Y< C. Office
Returning to the field of
conclusions
pro-
Hontsey to
examples of this technique in
are
amazing facility, and
becoming tighter all the time.
done
Carlisle
ous
"social fascist," and even "liberal"
action.
with
1
The people turned against the New Deal in
accept wage controls.
advice, in attacking opponents, to
"confuse their vocabulary." Such
phrases as "peace-loving nations,"
are
the
dollar,
of
.
good many of
If
tection it seeks in the value of the
dis¬
our
without taking
glance at the soy-
.
doubts
public
on
confine
not
,
backward
defense.
few years is going to be'driven 'tb
find
refuge, we have
extreme
ar¬
cussion of defense to the field
finance,
still the investor's first line of
battered
investment
an
earning
one's
process.
lions of shares.
Trew
is going
one's .ideas., changed
and
woes.
the
assume
continue and that by taking proper
defensive measures it will be
of. a
of
equities representing good
properties are available
as
zation.
ings of the great
Forming in Hew York
long
in the market at prices near to or
below their net quick assets, they
.
Announcement
are
we
going to remain in existence, both
as a nation and as the responsible
representative of a mature civiii-
one
H. G. Keister & Co.
not
or
curves,
New
shackles
against this pessimistic view;" you
but the collar around the neck has
say.
may
basic strategic conviction,
a
may
go
their way unmolested.
We continue to believe that as
B. K. Thurlow
to be
that
reentered
a-1942.
essen¬
of
the
the
cluding those of World War II, should
44-month cycles,
and other stock market alchemy
face
tia 11 y
quences
Kidder
Kidder, founder of A.
Kidder & Co. After serving as
nd
seems
War
off
argument
unduly brash and outspoken
opinion that those who
hope to find
security in cash
rather than equities are mistaken,
it
is
because
we
are
speaking
problem
now
we
since
shook
we
that the trend-toward the controlled economy
has been fairly resisted the past 17 years, in¬
our
volume
a
regimentation
in
pe
as
in 1933.
that
fact
seem
we
been
proven
diplo¬
matically
incom
this
after World
greatest
pronounced
more
the Second Grand Adven¬
also, there has been the continuous
of
The
his
The
partner for Reynolds
Amos
threat
position with the
exposure to risk.
If we
smallest
hundredfold
a
And
Deal appeared
principles of investment.
Those
who disagree because of moving
resident
<rix,
the
secure
can
to
overextended.
He is
business
to
he
defense
a
were
embarked upon
we
danger, how much he can lose
before he is forced to retreat, and
economically
in
Mr.
bodings
most exposed
is
he
During World War II he
in the Air Force.
joining Reynolds he was with
been
New
general
the
on
where
embracing the most fundamental
Hornblower
of
incumbent
from
with Hornblower
was
opened their Chicago office. Prior
in
to
is
adequate, and
a
director of S. B. Penick & Co.
i
they
&
he
Weeks.
-
ourselves and others
Of course, there were such dire fore¬
when we entered World War I, and
see.
ture.
tent,
militarily in¬
served
M.
longer afford
defending
a
Prior to joining A. M. Kid¬
1946.
to
for her
a concern
no
can
of
to
Flour Mills of America and Vinco.
der
early 50s is likely to
1
general
whose position is being attacked
by an enemy of great strength. It
sition
know
New
M.
' }_•
'
'
'
that in the
with Baker & Holmes Co. of Jack¬
A.
we
for
partner since
that he was with
to
sonville, Fla.
'
love
the brutal fact
Walbridge
to
coming
Mr.
country and
to hide from
honest
an
since
Co.
&
Kidder
M.
1941 and has been a
with
our
future,
Baker
Mr.
with
have
we
There is an all too .general feeling in Congress, as we
approach
the Happy New Year, that this country is inevitably headed for a
controlled economy, the end of which no one in his late 40s or
'
■
If
are
security by merely holding cash.
'
'
will be associated
it is announced.
1.
Jan.
selling at prices near
investor's first line
Warns of dangers of hoping to find financial
defense.
of
City, members of the
York Stock Exchange, and
York
New
By CARLISLE BARGERON
below their quick assets, they are the
or
of the News
when sound available equities, repre¬
senting good earnings properties,
have been admitted to
in Haynolds &
Ahead
Members of New York Stock Exchange
he
will
not be
a
part of that school
Administration plenty of rope.
are
moving with
every ounce
which wants to give
He intends to resist the way
of his strength.
lonely figure shouting in the wilderness
He seems to be a
in his fight.
Volume 172
Number 4972
...
Commercial and Financial Chronicle
The
.
7
(2535)
;r^.~0ui Problem
•
;
;
Nat'l Bank & Trust
Company
„
Saginaw, Mich:
.
ment and its trends toward
of inflation.
Says
most
actions
.
our
in
business
depositors
of
borrow
at
1
again at 4
business in the
1 d !
H
American
and
5%.
or
road
from
money
2%
or
it out
doesn't
the
went
a
its
his
i
s
can
a
daily
work
rubs
of
men
—large
"Scotch,"
cessful.
secrets
against business¬
sorts
and
and
small,
descriptions
learns
and
and
their
unsuc¬
business
all the tricks
trades, and he
and
generous
successful
He
of
their
discovers that
soon
if he loans money to a butcher he
is temporarily in the meat busi¬
Many
ness.
loaned
trusting banker has
a
to
money
a
persuasive
day and found
himself in the junk business the
dealer
scrap
next.
the
In
fact, the hardest job of
American
banker
is to keep in the
these
days
banking business
exclusively—and
not
forced
get
into every other business in town.
I speak feelingly on this subject.
But all these contacts
in
close
touch
with
bring him
the
comedies
and tragedies of business life and
peculiarly
American
equip
him
Business
to
it
as
discuss
is
today
and the Signs of the Times which
foretell its trends of tomorrow.
[
No
this
momentous
big
world
in
occurrence
of
happens
ours
suddenly and unannounced. "The
mills
of
the
Prior
to
every
sign
gods
grind
great
slowly."
event
some
always appears*
which ,if rightly read, gives
timely
notice of the approaching change.
In economics this principle is well
established.
Business
booms
and
slumps
never come unannounced,
only after due notice. Any
good student can tell about when
but
to
expect them—but
no
one
can
give the exact date they will ar¬
depression surprised
us all—although we knew it was
rive. The last
on
the way. When it
finally broke
I thought of an epitaph I once saw
in
a
New. England
churchyard
which read,
"John Williams
—
Born
1833—rlied
1877—I
knew
it
coming sometime but I didn't
expect it so soon."
was
„
Our country's most serious de¬
pressions have struck
us
with
disturbing regularity. The first
came
in
1837, during which 168
firms failed in 43 days
business
in
New
then
threw
•
York
the
City
crash
three
insolvency
50%. Next
of
large
and
came
alone;
1857
which
railroads
their
into
wages
devastating
come
are
forced
their
mileage
and
a.
Members, New York Stock Exchange
—
or'
>
cial
cemeteries
39%
was
of
all
*An address
of
in
the
our
bank¬
rail-
by Mr. Shorts at the Uni¬
Michigan Study Conference of
the
Mich'gan Bankers Association, Ann
Arbor, Mich., Dec. 7, 1950.
versity of
up
our
emotions
Businessman
taining confidence in
his
marks from
"Well,
and
younger
that
successful?
only
To
in
5
view
100
Third
World
the
with
.help
our
a
War?> there
£ *JLlet
sider
it.
Labor of Hand and Brain
we
Communists and the freedom lov-
; classed
al¬
are
is
American
t h
the
of
source
a
all
wealth. That/ World War. In
but there is
sense,
no *
fact there is
J.
a
C.
may
be
indifferent
prog¬
political consciousness sufficiently
developed to appraise the issues.
-
is true in
or
largely peoples without
ress,-are
Third
e
neutral,
as
idealistic warfare in
to the
,
in
bit
a
Today the world is pretty evenly divided into two hostile camps,
ready engaged
It is often claimed that.the earth
„
.
become
Jng countries. Those who
face
are
have
/
*
thing,"
us
that
at
"battle hardened."
.
Let
Koreans
our
perience and
*
some of the forces that make1,
h
the wheels go around in American
worth any¬
business
and
also
some
of
our
..
North
stock
market
would
have
degenerated into a major
debacle. It is perhaps fortunate
that we had this nerve testing ex¬
Third World
our
.
the
aggressor.
One
whether, if the Russians
a fleet of war planes to
the
time,
.
have
us."
Charter by aiding the Koreans in
resisting
w e.
free
ligations under the United Nations
re-
investing public:
our
the
hear such
had sent
big balloon to earth again and con-
well
greatest weapon of
as
whatwedo
men "may
ask—just what is American
Business anyway, and why is* it so
if
we
can
bring down
us
,
$300 billion national output, $50
wonders
;
let
securities
a
War
which
whistle "My Country 'Tis of Thee"
epi-, while making out his income tax
now
our
with
breaks out it won't matter much
to
who
•
.
;
billion for defense "won't pinch
How often do
great economic problems, of today.
you
Says
enterprise.
Dun and
their
'
-
the
helps
patriotism — and
patroit, you know, is
true
100 succeed.
"tough"
and
the
American
—
so,
thought
;
•»'
.
Luitweiler, holding we are already engaged in Third World
,War, stresses importance of expanding production and main¬
sisters—
working together—each in
purify
are
hospitals are
filled to overflowing with stricken
businessmen
dead and dying.
Statisticians claim that only 5 in
And
brothers and
healthy
churn"
with their
write
soon
all
■
.
Mr.
particular calling — for the
growth and prosperity of our one
big American family. This is a
study
then
conclusions
are
taphs in red ink among the fail-, return.
ures and bankrupts. The commer¬
And
Luitweiler
Business, or any other large ob-. real wealth in raw materials
alone-resemblance
ject properly, one must stand back
—labor must be added. There was to the first six months of
World"
few paces so as to get the right"
more
natural wealth
in
this
War II when it became popular
perspective. You cannot even seecountry 458 years ago when Co-" to refer to it as a phoney war, for•
a mountain if
you stand too close. • lumbus
discovered America than there was so little
shooting. The
And
so,
I invite you all for a there
is
today.
The
American1 English went calmly about their.
few moments to get with me into
Let
ourselves
ask
us
.
this
at
^
~
a
Indians
the
basket
of
this
large
imag¬
to
from
see
Maine
to
and from Florida to
Over the basket of
loon
we
can
clearly
see
is
vast
one
now
that
California
Washington.
big bal¬
our
look
down
and
great" country
business plant. Right
our
"now
work
labor
that
of
has
factories,
railroads
-and
ships,-
;
banks and buildings and wire and
nails and machinery. The joutpiit
is
valued at over $250 billion
year—nearly all of which is
now
per
consumed
by the American people
themselves.
grows
Thus
our - country
richer each year by its pro¬
duction
of
vious
new
goods
the
and
year's business—even
is with you
American
and
as
me.
should
pentiirips
centuries
torn
to
-
it
it
i t
own
was
was
respect
.
nf
ot
all
a
u
common
common
a
thought of
hanHs—hut
hands—but
appropn-
get the people to
house
—
and
of
some
our
capitalists and labor leaders can't
it'even yet. This great
see
change
in viewpoint was first emphasized
only
little
a
to
over
requirements
industries
of
depending
all
upon
it for supplies.
But do
you
tion of only
goods
now,
patents
States
varia¬
a
in the quantity
produced in any year
difference
between
prosperity and depression—(and
during the past 50 years we have
pass
every
are
depen¬
the other—so much
■■"V
.
-
.,
,
i
Capital
brains
to
to
one
nuiot
political iryanny, ireeaom to carve
out their economic fortunes, that
nought
Do
with a
mcmuuc
Nazis
employed
^emP'°yed with Denmark■A§J10^<^er?
with Denmark
been still
more
****
ruthless.
aiQ
to
Looking backward to July of
Juiy
ox
this year, it is aibit shocking to
recall the panic that seized a large
is
a
of
inventions
Damocles scimitar
One may
us?
doubt it! But they
Vprit
/
right
liyes
In fact when the head of the
was
.
and__it_was annwnced. that our
•
with
on
deny
this
attribute
and
power
all
think
that
from
not
we
New
can
York
because
because
ever
now
Continued
of
of
to
WRITER
REASONABLE SALARY
I
of
stop
tele¬
San
Labor,
Capital—but
because of trie brains of Alexander
Box
J
1213,
Chronicle,
25
COMMISSIONS
Commercial
Park
reared her
famjiy an(j did the- man's work as
MATURE JUDGMENT
PLUS
dailv
sh0t down, the woman
AVAILABLE
progress
their
shouldered the musket,
SECURITY ANALYST
as
that
..®?ore secure thapy
year,
idea
new
sunnose
ataSktrtaS
segment of our investing public
when little Korea was attacked
government would fulfill its ob-
vou
tney sougnt. uo you suppose umi.
the Puritans tilling their fields
the Puritans
with-"a
r^e slung over their
con-
CONCISE
to
not
-
United
every
itself—but did either
phone
—
^uei±a
i ar Trojan horse methods that the
It is all very well for Labor or
and
industries
,
j
lut1o
auered the little nftlin+r{oc bv cir^
countries
sinf-'
.
LOU ,r 7
property.
because
our
the
Office
recognize
Francisco
one upon
through
Patent
had 15 prosperities and 16 depres¬
sions, large and small)? Thii is
dent
,
as
property. But
75,000 applications for
aggressive thinker—and pat¬
ents prevent the stealing of ideas.
10%
the
over
They
know that
f * v*® beginning
brains
of
some
the
-
Hun-
Bulgaria
see
-
his I
and
not to mention China! They
.
an
even
It took thousands
Czechoslovakia,
p0umania
tho
the
was
that if was just as much of a crime
to steal a man's ideas as to steal
and
meet
be-
S31/; Koumania ana rsuigaria
•
pay.
of -years to
of Poland,
puscus-
the
ated; by; everybody without
exists
when every industry is working
steadily, producting just the right
amount of its particular products
y
secure
•
the
Czechoslovakia,
Poland,
Denmark, Norway and the low
the
property
as
man'?
mans
a
£
labor
p r o s p e r
relatively
drop-
even
our
or
put upon all
300 years ago
when England originated the mod¬
it ern
patent law—to recognize the
its profits on the pre¬
amount of
were
and
n
-
i
J
bombs
se-*
®
7 a
a ^SS1-?ni +?1
*7
dom that
5
y
wealth." And then the Capitalist countries before
they turned their everything behind and came praeshouts—"No, it isn't Labor, it is serious attention to their chief tically bare-handed to a new and
Capital that produces the wealth." antagonists, France and England, unknown land weeks across the
But wait a minute
let us so a
R^sia since the close of World ocean. It we« freedom from reliY'J
a minute, lei us go a
made similar conauests
gious persecution, freedom from
step.further. Historians tell us that
naf maue simuai conquesxs a
* trvannv freedom to carve
Labor
i_f
billion: This? labor of "-L'
his brain
great plant consists of farms'and.
$400
no
London;
felt
of
sense
quered
why
for
lor
over
on
French
false
a
curity, since
ping
today lies in the
been
in
.
work
work
of
' business
are
J""*'fnr the>m
doj?n„ a/i frnnt^
J
*£5 bv Tending
tee^
haUlS
arl w
jSfwSl
minted
the begfnnhig of this
article
hind their vaunted Maginot Line..
vast majority of our people
of the natural products of the soil *
The parallel could be carried a ai"e descendants of Europeans who
and the sea.
"That's the truth,"' step farther. The Nazis first con- came to this continent with a love
cries the Labor Leader, "and that's
people, and represents an-invest^
ment
we
they did not
produce anything. Our
and
great wealth
it employs about 60 million
workmen,
serves
150million
.
richer than
were
but for the one fact
inary balloon right here and we
will rise straight up into the clear
blue sky of heaven, where our
vision may not be obscured by the
smokes and fogs of men, to an
altitude high enough to enable us
marks
20%
to
and
—
than right, then
wrong
under
railroad
If
Bradstreet
of
foreclosure,
man
he will at once
se^tha^
,
laboring
the
By J. C. LUITWEILER
own
right than wrong, they be¬
successful,
but
if
more
more
other
reduced
the
and
if
vet
thinks for himself
Bendix, Luitweiler & Co.
great
We
riches.
to
conclusions
after-war panic
of
1873
which
nearly wrecked the nation—dur¬
ing which 65 railroads were sold
ruptcy
rapid road
signal
or
our
year. If you
tomorrow's markets you
the
on
carefully
one
producing machin-
mass
Stock Market and World War III
crease
wealth by not producing
of goods—law or.no law. A new ship
in. New York calls for a new
month—next
money.
him
all
evlrythmg
*
back
Perry Shorts
An(j
alone—all
career
for
Every labOT"Sa™g
**
erom?fvwhether they brains has ever Produced has
of them-for e
know it or not, these great in-.
Continued on p
•Kansas
or ■ Illinois
spreads
its
prebeneficent influence all overi
-
Businessmen
R.
during his
but
ery?
^ sCwbe' tS ^talenT
broachj%
years
than its
conditions
ter.
His
13
"unpleasantness"
interference)
guess
are
different mat¬
-
vfewin^t
wnerrkymSfteinn the uman.and
fol-;
all
bor¬
row e r s
"not
o
—next
the character
of
like it
country. Prosperity is
contagious—and so is depression/
or
about our big men and our
corporations, always fail to
tell
you
thatin, spite of their
faults
they do reduce prices to
the
public.
How
much higher
would the cost-of-living be today
$21/2
mileage
to Carnegie's brains.
.
but
—
-
Perhaps the hardest problem in
business life today is to tell what
is
going to happen next week
Demo¬
crats)
followed
the
•aecessors.
laborers,
even
1907,
by
tnent
or
laid
These
big
over
railroad
working
than for
agitators who
more
Every time these men made a ?ndust?y has not been to the detrithe other—"all boundTrounrf ^tth dolIar for themselVeg> they Pr°b- ment of the man who toils, but
a
woolen s?"ng°^ whether we"taWy made~?.100 *2* the public in rather t0 his everlasting benefit.
,
depositors
(whether
Christians
large
a
country
the
on
all
are
me,
rave
single price reduction
our
billion
pays
1920; and then the last depression,in
of the 30's, which went deeper and- warehouse
Seattle.— and
Tasted longer (because of govern-: healthly prosperity in
Ohio
his
capitalists
of
later
character of
themselves.
alldeSe^ffiuoorf
■WWeWa«
States"
was
in
This
saved
and
you
554
sion
,
the
This
that?
chemicals
head; and he
lowed
"continental"
about
default.
the
UU?ueVuf tUieS for.thue^achinery due
as
United
for
leaders
for
business, iron rails were
selling at $130 a ton, and when he
quit, he had reduced the cost to
$22 a ton—and for steel rails at
by the collapse of 1893 with" by virtually
that is
bank failures,
wheat at produced in industry. Production
54c a bushel, arid call money at means prosperity — nonproduction
74%. Then came the short depres¬ means depression," /You, can't in-"
loan
Simplest
e
care
into
in- the
states
match
*
-
dustrial
that
in
match stick; then he
transcontinental rail-
machine manufacturers
destroy incentives to
bonds
the
cause. •
Holds the "Defense of the Dollar"
money
for hauling that
pine across
continent; he pays several
-
•
southern
serious
banker is to
w o r
road
govern¬
prime
as
the
in
paysNiSome
•
have heard it said that
Carnegie wasn't entitled
to the $250 million they paid him
irst he pays Idaho for the white
r
-
spends
of course) in for his steel business—but did
you
eYery state in the unioq.;.. know* that when Carnegie started
*'
pine
problem today, and advocates return to sound
currency.- Asserts businessmen, by
maintaining and expanding
production, are the best friends of common people.
The
his pipe, he
(against his will,
.
-
disastrous Socialism
government
hard work and thrift.
Today
jf a Scotchman in Bell? You
strikes a match to Andrew
light
of Saginaw,
Michigan banker attacks spendthrift policy of
that
r
„
"
By R. PERRY SHORTS*
President, Second
in fact
so,
Unsound Government Policies
Place,
and
Financial
New
York
7
on
page
34
8
Thursday, December 28,
The Commercial and Financial Chronicle...
(2536)
1950
annually than was made in
peak year of World War II
when the United States was sendsteel
Next Step in
the
Treasury Financing
Dealer-Broker Investment
would acquire
other
ever
for
current
our
lot
a
do
to
with
it.
latest
may
Reserve
that
ple
the
nance
this
of
bank
A
and
money
end
is
of $174
the
highest
in
our
history.
If
Parkinson
I.
T.
in-
supply of money, we
it to cause increased
prices and that is exactly what it
is doing.
Now, the greater part
of our money supply is in the
form of bank deposits on which
somebody has the right to draw,
It is these bank deposits which
are
constantly
increasing
and
producing new peaks in our money supply.
that
time
deposits
go
every
up
commercial bank buys gov-
ernment bonds.
officials
35-year bond
a
needs of
If
monetary
our
the
really want to stop
yield in the
issue its short-term paper to the
commercial banks which make
their investments with entries of
new deposits. Moreover, the additional cost to the Treasury of a
now
Knows
everyone
bank
a
on
increase in the volume of money,
The commercial banks
prefer to
hold short-term paper, and it is
significant that, every maturity of
government bonds since the war
war
has been l ciiiiclin-CU with
refinanced Willi
11CW
new
a
ISis-
of short-term obligations. As
result, there are at the present
$50 billion of government
moment
obligations
will
ma ture
In addition
which
within the year 1951.
to
refinancing this huge sum of
maturing paper, the Treasury may
be called upon to issue additional
obligations to finance any deficit
it may
incur din ing the year.
follows
If
its'*practice
in the past few years,
it will issue
the
a
to
Treasury
stream of short-term paper
new
provide both tor these maturi-
tics and such
a
deficit.
It is well
known that the commercial banks
will
the
be
principal purchasers
of such short-term paper, and up
will go the bank deposits and the
money supply
Sf'm
that the
lm^eiative
meet
fering
the
to
would
which
bonds
vestment
appeal.
,
—
bonds
rnent
g
)v0ld? pu/" brakes on the persiste,nt trend tow?rd la*?er applies
0 ,,moncv and would giaduaxiy
re<^uce the number of dollars to
an
amount
nearly consistent
more
nnWIn
public
have
When
,
,
^
by non-
banking investors there is no
crease
such
other
not
m-
bank
in
deposits, because
have to use pie-
buyers
existing
in¬
govern-
,
bougnt
are
an
their
money,
people s
own
or
"...
Y%~
^
"
•
7°
° 3
fu
banks.
stocks used in the National Quo¬
tation Bureau Averages, both as
Stern,
25 Broad
Stone
Co.,
&
Street, New York 4, N. Y.
Baldwin
Abraham
Securities—Analysis—
Co., 120 Broadway,
&
New York 5, N. Y.
or
short-term
in
bonds
■—call
—7T~.
*A
for
.
government
notes, and their interest
needs—indeed, their
very
minimum
a
.
.
k,
solvency
return
d*»-
of
statement
by Mr. Parkinson distributed by the Continental Press Syndi-
cate,
Brightwaters, n. y.
,
steel in 1950 alone
the amount pro¬
biggest year of
De¬
—
In
World War II.
a war
economy,
considerations
other than steel capacity which
mav restrict the uses of steel for
Vv' 111 Br°adWay' NeW
U. S. Thermo
Steel's
By
issues
at
lower
a
;.T
The
record
in
steel
foundly significant and
is
assuring.
This
industry, which can outproduce all the rest of the world
strides
j^p
We
and
^
i
in-
pie
ie7 s%
tacts tell
point where it will
T ne
1 h
the
Treasury and
Reserve
Board;
Federal
s 10 r •
steel-
making
£or they cannot,
further,
trous, inflation,
perhaps
±urin
naces
disas-
of
steel
Treasury financing
during 1950
proposed should against the
background of inhave been undertaken during the tense demand, or, about;7Vi !milpast
here
few
lutely
u
years;
essential
•
Which
our
is
j.
u
it
in
_
j
is
the
now
abso-
or
war
tons
,Ur
more
than
financing
_«•
j.
_j.
IS JUSt a..ead Of US to meet
defense
,
lion
needs.
at
an
rate
annual
previous year.
output of 1950
The
was
derived
which
Still,
in
part
-
.
other
jsfo
country can even
appr0ach the United States in
s{eei production. In three months
our *urnaces have
been making
be made in
more
steel than
year
in any other country.
one
month,
excee(j
every
Qreat
can
a
In
furnaces can
annual production of
those
other nation except Russia,
Britain, Germany and
;m
any
recor4;*high
only, 12 days'
Thus
level of
a
the
steel
a
the
costs.
md^f^
profitable
companies
sharp
industry in the
United States is a stout bulwark
to protect human liberty
enlightenment.
reduced
taken
toll of the profit dollars
the
somewhat
1949, inflation has
in terms of their
relative purchas¬
Sharp increases have
in the cost of everything
ing power.
occurred
bought by steel companies.
Their
payroll exceeded $2.3 billion
compared with a little
over $2 billion in 1949.
Employ¬
ment rose from 602,000 at the end
of 1949 to around 650.000 in the
total
1950,
in
part of the year. - The aver¬
hourly payments to wageearners
averaged $1.72 through
latter
age
most of the year,
crease
was
to which an in¬
added in December.
Armament requirements for
steel have been;
small to the pres¬
ent time and detailed
for
France
million
tons
Walter S. Tower
demands
the
The kind of
which
the
at
the year's activity, prowas
on
Although
in
than
•.
weeks
now i
earnings were substantially h/Slmr
in the first three quarters of 1950
is from so-called "scare buying."
giant
to
crease its size.
fast ap-
are
years
making
than a longterm bond issue purchased by .the
j^e insurance anci savings mhos
for
than
few
a
on our economy
for
basis.
100 million tons,
of several
continued
be
exceeding 103 million tons.
the
country.
each
peak of
duction
for the
at ever-mounting
is important that the
It
the output of certain types of steel
was
below the abnormally high
enormously
fect
must
'
funds
of
source
progress
combined,
ago,
a
-,.;rj
output short5of
In
54,000
huge expansion programs
is
w
Treasury or
the monetary authorities could do
me muueiat
w0ll]ci have a more s'abilizing ef-
0f
pro-
stronger
that
refrigerators
major
rate.
Nothing
Strength
TOWER
spokesman for industry points
to expansion of productive capacity, which permitted record
output of 97 million tons, a yearly gain of
tons. Cites $2.4
billion invested in plant and equipment since end of World
War II, obtained mostly from companiesearnings. Holds
military steel demands can be'met.
u '•
previous loSUes ai a lOWer COU
pon
S.
25,000,00
trucks, 19,000,uuu
and
4,500.090 new
miles of piphnes
and
countless
other items
record-making volume.
The net earnings of the steel
companies continue to serve as a
In review of 1950 steel year,
to support the
prices
It ought to be
mar/>eJab e' bu^ it ought not to be
Drevious
WALTER
companies
autos
homes,
President, American Iron & Steel Institute
Federal agency
T°&
have made
steel
steel to build over
new
■
officially supported, and it ought
n0^ t0,
cbS^le for the comrnercual banks. Moreover, sucn a
bond would not seriously inier*ere wlth the market prices of
1950
used
new
Nation's Industrial
,
v.
ever
production of steel has been
principally to increase the
ownership ot homes, automobi
.
Simplex Paper.
household appliances and other
Western Department Stores —
items to the highest point ever
Analysis—J. Barth & Co., 482 Cali¬ attained and to nelp support an
fornia
Street, San Francisco 4, unprecedentedly high level ol na¬
Calif.
tional employment.
Since 1946
High Ontput Is
n^", £m
.
is better equipped now than
before.
Most of the record
omy
the
about
ested
the
in
the
97
inter-
Marshall-Wells Company
—■
Paired
the most
not
above
far
was
however, there are
30
without
are
—
■
&
panics
They
Manufacturing Co.
Control—Analysii
Raymond
&
Co.,
148 Stat€
Broad Street, New York 4, N. Y.
Street, Boston 9, Mass.
Atlantic Refining Co. — Memo¬
Also available is an analysis of
randum—Herzfeld
investors, the life insurance coni-
important.
rt
,-nwj
States
many ways
a
New York."
Botts?™0
United
in
b
over
as Mr. McCabe
said recently at Chicago, continue
to
increase
our
money
supply
^
Of ail the non-commercial bank
are
o
duced
to
government paid tne
^
Y u'
V?
5
n{
would be held indefinitely, and
70Uld not be pessary ror any
!?J/ncl
pay
commercial
n7."
.current business needs. The
h% insurance companies alone
JY
have something like $10 billl0I\ cf ,n^ .monc7 a".d tnre Pro"
9eeds,
tJieJ,r maturities for reinvestments <dunnig1951, and at
least one-third of this could and
savings.^ They do proacfiing the
for their purcnases witn
newly-creatcc nank Deposits as do
the
vast output of
H
JYJ
ye ninent ferecj wjth continued holdings of
mvAerina
investing
th*>
fn
of the
facilities
limited amount randum—Hayden,
a
sew T. at higher returns have inter-
borrowing needs oy of-
its
ferine
phia 7, Pa.
describing the
jp
^-Plosive and danfh
Through
Invest
Brochure
pMetlThomaVHaPab
but the sale of
ernments.
iiao
to
Easy
—
yield and market performance tailed
analysis—J.
M.
Dain & civilian goods, such as diversions
an
eleven-year period—Na¬
Company, 110 South Sixth Street, of manpower from manufacturing
tional Quotation Bureau, Inc., 46
Minneapolis 2, Minn.
long-term 3% bond would not be Front Street, New York 4, N. Y.
plants, scarcities of other metals
and nonmetals, controls ot credit,
any more and, indeed might be
p
rirtii«
"nvr.ioMniAyTr
Nickel Plate
■
Rcvibw
Ira
priorities on transportation facili¬
less, than the cost of recent in&
«
ties, or even overwhelming war
creases in the interest
rate on
Broadway, New York 4, N. Y.
York b, jn. y.
requirements for certain items
short-termei government paper at
Riverside
Cement
Company- not heavily produced m peace¬
the insistence of the commercial
Retail Store Stocks—Analysis—
Thus, despite increasing
bonks. That increase in the short- Bruns, Nordeman & Co., 321 Card memorandum — Lerner & time.
Co., 10 Post Office Square, Bos¬ steel capacity, government pollterm rate increases the earnings Broadway, New York 7, N. Y.
ton 9, Mass.
cies may closely restrict the outof the banks and, indeed, encourAlso available is a memorandum
put of civilian products m spite
a&es them to buy more and more on Sinclair OiLCorp. and a study
Seaboard Air Line Railroad—
of the desires of millions of con¬
government paper; but it doesn't of the Retail IgjEore Industry.
Bulletin—Cohu
&
Co.,
1 Wall sumers.
make any dent on. the inflated
Street, New York 5, N. Y.
money supply.
t
Fortunately, the civilian econ¬
; '/
."v
'
American Woolen Co.—Memo¬
they should devise some means of
decreasing the government bonds
held by our commercial banks,
They are not doing anything of
^ must be admitted that there
the kind; in fact, they are en- is a limit to the amount of longcouraging our commercial banks ferm bonds which the Treasury
to increase their holdings of gov- could sell in the immediate future,
sues
It's
Bache
lower rate. The only alternative Jones Averages and the thirtyis for the Treasury to continue to five over-the-counter industrial Co., 30 Pine Street, New York 5,
must expect
Surely
rate
Memorandum—Goldman, Sachs &
our
crease
3%
tors to be enthusiastic
about a
parison between the thirty listed
long-term government bond at a industrial stocks used in the Dow-
con-
we
tinue to
Steel companies
—
•
but it would be a fair
billion. That
figure
cannot be foreseen.
world war at some early or later
date decides the future late of
Flying Tiger Line, Inc.—Memo¬
company—Bache
present securities markets
randum—Leason & Co., 39 South mankind, the United States can
& Co., 36 Wall Street, New York 5,make all the steel needed for its
So long as there is the current
La Salle Street, Chicago 3, 111. »
New York.
military requirements and have a *
demand of non-government bor¬
Also available" is a memoran¬
rowers
for
essential expansion,
on
Texas
Engineering
& very generous amount left ov^r
Over-the-Counter Index—Book¬ dum
for essential civilian uses.
The
the Treasury cannot expect inves¬
let showing an up-to-date com¬ Manufacturing Co.
in
excess
interested
already are
than ever be^re.
They have invested nearly $2.4
Corning Glass Works — Memo¬ billion on plants and equipment
Bank Stock Holders—Develop¬
ments of interest: a list of cash randum—Sutro Bros. & Co., 120 since the end of World War II,
dividends and capital changes in Broadway, New York 5, N. Y.
or slightly more than their aggre¬
recent
years — Laird,
Bissell &
gate net income for the period.
Consolidated Rock Products Co.
Thev have a combined annual ca¬
Meeds, 120 Broadway, New York
—Memorandum—Gross, Rogers &
pacity of more than 100 million
5, N. Y.
Co., 458 South Spring Street, Los tons as of
July 1,1950. They plan
Consumers Goods Industries — Angeles 13, Calif.
to add about 10 million tons of
Analysis with data on 14 selected
within the next
Eastern Air Lines, Inc.—Anal¬ capacity
companies—Goodbody & Co., 115
months.
That will mean at least
ysis—John H. Lewis & Co., 63 Wall
Broadway, New York 6, N. Y.
110 million tons' capacity by the
Street, New York 5, N. Y.
end of 1952.
And, possibly, even
Economic
Aspects of
Private
Erie Railroad Company—Bulle¬ a larger capacity may be avail¬
Debt
Study — Calvin Bullock,
1 Wall Street, New York 5, N. Y. tin—Gerstley, Sunstein & Co., 121 able at that time.
South
Broad. Street,
Philadel¬
The fact is that whether another
life insurance and other investors,
of
September
deficits
would not only meet the
deposits
the
at
some
ties. ;
country held
either to
or refi¬
of those 1951 maturi¬
be used
current
finance
peo¬
and
The proceeds of
could
issue
an
shows
savings
other
such
funds
pension
banks,
trust funds.
Bul¬
letin
what the Treasury
companies,
insurance
Federal
The
send
better equipped
do and do promptly is
bring out a long-term, say 35supply has year, bond at a 3% rate. Such a
bond would be sought by the life
11 •-
increasing money
our
to
should
be
inflationary trend,
there
causes
mentioned will be pleased
parties the following literature:
It is understood that the firms
such issue.
that what- 3%. Therefore,
being planned m steel
their possibilities
are
moves
that the end of
imperative that recent increased
money supply be drained off, recommends a new long-term
Treasury issue at a 3% rate, which will appeal to investors.
Says insurance companies and other investment institutions
Mr. Parkinson, holding it is
It is generally agreed
In fact, so many new
Recommendations and Literature
Society of U. S.
President, The Equitable Life Assurance
the world.
expansion
ing steel all over
PARKINSON*
By THOMAS I.
the
future
information
is Tacking.
But,
regardless of what happens, steel
companies can be relied upon to
do
more
than their share toward
and increasing the
strength is being increased stead- industrial strength of the United
Uy>
At the
of 1952. steel
States.
The record in steel is
companies' present plans will enclear and assuring.
able them to produce 22%, more
e®d
maintaining
Volume 172
Number 4972
.
.
The Commercial and Financial Chronicle
.
(2537)
or
less
rationing
credit,
banks, for the first time in 15
more
Current Credit Picture
many
18 years,
or
able
By CARLISLE R. DAVIS*
had shown loans
the
in
fall
of
1949
pay¬
TO HOLDERS OF...
early
or
in 1950. Numerous commercial and
Vice-President, State-Planters Bank & Trust Co., Richmond, Va.
industrial
customers
having
difficulty
in
caring
for
their
working capital requirements be¬
Southern banker reviews recent developments in commercial
banking and analyzes effects of Korean crisis on banking
policies. Expresses concern over rise in bank loans and sug¬
gests that, while taking care of legitimate credit needs of
worthy customers, -banks must, at same time, help nation
rearm and assist in combating inflation.
Calls for cooperation
with Federal Reserve and discouragement of speculative loans.
Missouri Pacific Railroad Company
of the depreciated purchas¬
cause
ing
were
of the dollar
power
increased
business
the
and
activity.
By
First and
late May and early June, we knew
without
question
that inflation
taking hold with
was
theme
chosen
is
for
holding
of
concern
been
has
deliberations here
our,
certainly
and
which
all
interest
the
who
those
of
in the past few years.
have
but
time
will
brush.
for
detailed
a
paint with
Let's
We do not
a
picture
wide
very
consider
three
pe¬
lending
policies with¬
riods:
in
the end of 1939 to the end of 1945.
shape
Inflation is
threat.
with
in
It
Ifyour bonds are held in the
obtain
will
which
tide
eficial.
ness
We
R.
and the
banking busi¬
pride in our past
We
have
did
obligation which
banks
arming and to
nancing of the
and
part,
a
take
have
we
assist in
to
assist
in
if
war,
worldwide
more
a
re¬
fi¬
the
greater
should
war
place, is but another indica¬
tion of
desire to
our
task, whatever it
which
will
be, in
may
a way
benefit
of
be
perform our
all
to
concerned.
The
to
setting for this conference,
great extent, is much different
a
from
and
the
setting of those in
1949.
deal
of
There has been
change
climate.
For
in
a
1948
great
economic
our
example,
there
are
higher,
are
personal
people
nual
disposable
and
income
is
greater, but
saving at a lower an¬
are
Wholesale
rate.
of
our
$68,242,000,000,
greater than they
major problem
prices
as
banks
we
recog¬
are
two
Agricultural
years.
large.
its, after taxes,
at
year
Total
and,
at
more
more
are
larger
important, are turning
rapid rate than was
1949.
We
are
all
conscious of the material in¬
which
crease
loan
our
prof¬
running this
deposits
true in 1948 and
very
are
rate never before known.
a
demand
a
income
Corporate
has
taken
portfolios
in
in
place
the
past
two-year period, more particular¬
relation
to
capital
cushion for
deposits
The
small,
was
investments*
the
but
these
funds.
deposits
our
credit
rose
offsetting
low
were
risks
ordered
effort
their
in
future
loans
ness
instances
some
be prepared
to
to
in
degree
attained to such
a
before.
(2) The much lower purchasing
of
power
great
the dollar, caused to
a
degree by almost 20 years
financing.
of deficit
(3)
nese
The Korean
clouds,
war
and
Russian
further
of
aggression
represented
primarily by loans,
relatively low in relation to
capital funds, on an overall basis
loans being less than three times
were
In the
period from Dec. 31, 1945,
to June 3, 1950, however, other
changes took place. We saw con¬
credit, in and out of our
banks, rise to figures never before
considered possible.
At Dec. 31,
1945,
total
credit
consumer
was
estimated at $5,627,000,000; but at
June 30, 1950, this was $17,651,-
000,000.
A
great
portion
credit
consumer
had
of this
fi¬
been
at work had
ity
been
the high
resulted
in
crease
in
a
loans
estate directly or
based
real
on
indirectly, which
a
half years,r Many consider
this,
Federal deficit financing,
the most inflationary force which
has been at work in
A
third
factor
our
economy.
the
sizable
was
rise in other business loans which
reflected
our
banking picture
the cheaper
real
the
as
in
months
♦Address
by
Mr.
Davis
Credit Conference
ican
Bankers
Dec.
16, 1950.
Association,
at the Third
of the Amer¬
Chicago,
III.,
plan.
your claim per bond ($1,179) the
plan offers you First Mortgage bonds. But the
ICC
plan offers you only $722 of First Mortgage bonds—
giving you the rest in junior obligations, "General Mortgage"
Mahaffie Act
bonds.
[3. Interest payments on these "General Mortgage" bonds are
not fixed but are
contingent upon earnings. Moreover, they
had
declined
in
These
high
additional
the
deposit
loans
totals
placed
greater
capital
funds of
same
the
and
necessarily
on
the
banks.
The
loans and risks assets
the
relative
quality
of
those assets in which bank funds
were
invested. It
was
not
unusual,
early in this year, to learn of this
or
actually
,
that
bank
carrying
which
loans
4. In addition to the
supplementary debt retirement fund (25% of available income
charges, fixed and contingent, and all sinking
fund
requirements), of which not less than 50% must be used
to retire more of
your bonds. The ICC-approved plan has
no such
supplementary provision.
bank
after all interest
been
upon
the
large
already 1 outstanding
and
normally obtained to care for the
superimposed
loans
These
fall
of
movement
seasonal
of
loans,
crops.
5. The
higher, partly due to
the
depreciated dollar and,- in
some instances, to a larger volume
of agricultural crops.
So now, in
nearly all the banks, we have
reached
new
totals
loan
would
this fall.
Concern Over Rise in Bank
Lending
What
the future loan
are
pros¬
VOTE
pects, and what has been done by
the Federal Reserve System and
the
banks in the interest
of
con¬
all
the
banks,
has been
and has
and
have
letters
come
cau¬
from
the
was
beyond
the accustomed safety level. Some
of our banks for months had been
inflationary
the
ing
The
Federal
have
also
derstanding
rate
on
tendencies.
Treasury
the
and
had
their little misun¬
about
the
interest
government bonds.
Federal
Reserve
System
are
beginning to have real effect. We
have
the effect of the restric¬
seen
interests
as
Mr. W. P.
creasing
Federal
rediscount
and
the
The
loans.
rate
of
Bartel, Secretary
am
the
Pacific
owner
of
$
Railroad First and Refunding
page
principal amount of Missouri
Mortgage Bonds and have been such
continuously since December 1, 1950.
a ballot in favor of the proposed plan of reorgani¬
owner
Some time ago I cast
zation.
Upon further consideration I have decided that the plan should be
rejected and I therefore request that
for the
acceptance
you
cancel the ballot heretofore cast
of the proposed plan and send
me
another ballot
so
within the time fixed, which I understand to be January 15, 1951,
my vote
for the rejection of the plan.
the
NAME.
1
ADDRESS.
on
DATE.
in¬
announcements
Continued
of other security holders.
Dear Sir:—
I
cast
estate
those
Washington, D. C.
also noted the effect of Regulation
real
as
Interstate Commerce Commission
that I may,
on
well
■
tions on consumer credit and have
X
hands of the ICC
A
an
Many feel that these controls of
the
ICC-APPROVED PLAN
by January 15, 1951. If
have already voted to accept
you can change your vote by filling
out, signing, and mailing the coupon below immediately to
Mr. W. P. Bartel, Secretary, Interstate Commerce Com¬
mission, Washington, D. C. Act at once and serve your own
velopments. The System has made
moves
THE
because of misinformation you
the
ICC-approved plan,
greatly concerned with these de¬
number of
REJECT
unless it is in
The Federal Reserve System, as
as
TO
Remember that the time is short. Your ballot will not count
trol?
well
Mahaffie
Act
plan calls for a capital structure which
give the company substantial tax savings as compared
with the
ICC-approved plan. Because bond interest comes
ahead of income taxes, it
may seem as though tax savings for
the
company are a matter of indifference to you. They are not.
Money saved on taxes is available for other corporate pur¬
poses, including improvement of the property. A strong
property makes a strong bond.
course,
also
were
regular sinking fund for retirement of your
bonds, the Mahaffie Act plan in final form will provide for a
were
Board, all in the interest of curb¬
pressure
our
cumulative
up to only W/f/c- This means that if three
years' interest should be in arrears, there could be no addi¬
tional accrual and that
any further unpaid interest would be
irrevocably lost to the bondholder^.
*
*♦
v
are
have
rapidly rising
this
rise has
and
seasonal
your present bonds the Mahaffie Act plan offers
cash and equivalent (including 1.06 shares of Texas
5% preferred at par) than does the ICC-approved
1. For the entire balance of
dollar
period by about $19,000,000,000.
bank
National
& Pacific
by.
reflected
a
both
you more
requirements. Busi¬
rapidly and were
Nearly all of these factors
in¬
next to
increase in
Let's sketch briefly some of the
high spots in
v
of
loans,
WHY
IS
1. For each of
was
gone
your
rose
This
substantial
had about doubled in the four and
reduced
High Spots in Banking Situation
HERE
being written. The pro¬
rearming, coupled with
this fear activity, brought about
some real,
but in many instances
imaginary, shortages; and these
shortages have become more and
activ¬
in the real estate field.
had
this
more
the capital funds of all banks.
high deposit figure caused the
capital cushion of our banks to
be relatively thin. The substantial
in
Europe and elsewhere.
Company.
advantage as a
holder of the First and
Refunding Mortgage bonds. Sup¬
port of the Mahaffie Act plan is to your advantage. - '
an
spect
the Chi¬
the threat
war,
urge you to vote REJECT. We also urge you to support the
Mahaffie Act plan, an outline of which was sent
you a short
time ago by the Missouri Pacific Railroad
for
care
assets, for the most part govern¬
ments, which to a great extent
Risk assets,
or
Approval of the ICC plan is not to
con¬
had short maturities.
ments
never
-
received
now
you accept
very, very rap¬
tioned banks and business to go
the past six months.
and the high postwar business ac¬
These things inform us that we
slowly. The rediscount rate has
tivity. These substantially greater
been raised. In an effort to control
are
facing
somewhat
different
loans had
caused
a
great shift
consumer
credit, Regulation W
problems than we were in 1948 from
investments to
loans.
On
and 1949.
has been reimposed and its terms
June 30, 1950, total loans of all
These changes have been caused
tightened from the original re¬
banks were about $52,000,000,000,
quirements.
To curb new resi¬
by many factors, but they are the
or
approximately a 70% increase dential
reflection
building,
Regulation
X
principally
of
three
over the
loan figure of $30,362,has been put into effect.
things:
Many
000,000 at Dec. 31, 1945. Invest¬
(1) The high postwar business
announcements, pronouncements,
activity,
-
still rising in late November when
within
ly
-
by consumers for con¬
purchases —automobiles,
the like—with the result that
accept the ICC-approvedplan he is
ballots
calling for your vote on
reject the present ICC-approved
reorganization plan for the Missouri Pacific System. We
'
washing machines, appliances, and
sumer
have
You
very real fact that our idly. From the end of June to the
liabilities, in relation to end of September, consumer cred¬
it jumped about $1,600,000,000, or
our capital funds, were becoming
10%,
to
$19,293,000,000.
very, very high.
Although loans nearljhad increased sizably in that six- Labor's request for wage increases
became
somewhat
more
pro¬
year period ending Dec. 31, 19£5
Business
houses
im¬
(by about $8,000,000,000, or rough¬ nounced.
ly 37% to $30,362,000,000), loans mediately tried to anticipate re¬
relatively were still very small in quirements and ordered and re¬
nanced by bank loans—direct con¬
substantially higher thanu
sumer loans or loans
to retailers,
they were 12 months ago. Indus¬
to finance companies, and others.
trial production is much higher
Another most inflationary factor
than it was in either of the
past
sumer
to
acting in your best interests. Instruct him to
whether
properties. There
veritable scramble in many
company,
'
greater degree, both in residences
a
of a hank, broker,
insurance
vote REJECT now.
the
ago and
continues
not
deposit
two years
were
far
so
our
sumer
approximately two million more
people employed today than were
gainfully employed in 1948. Wage
rates
to
capital cushion of
concerned, though
nized
the
in
our
rise
a
to
no
Davis
through V and VT loans, ration¬
ing, bond sales, and the like, in
contributing to the winning of the
last war. The fact that we today
are
considering the opportunity
within
the
been
markets
was
take
patriotism.
he has voted
of
had
difficulties
was
had
Carlisle
will
can
in
has
$165,612,000,000.
At the
of 1945, we see now that we
the
ben¬
most
factor
amounted
end
inflation¬
ary
who
with
shortages before
recognized the prospect of similar
risen
slowing to
any
degree
be
Those
wrestled
while at the end of 1945 these had
us
in
this
al¬
volume
1939
financing
deposits. For example, de¬
posits of ail banks at the end of
can
assist
country.
the
in
business
and in industrial
major
Any
we
acceleration
an
active
name
adviser,
check immediately to see how he has voted. If
etc.,
rearming
bank
June 30, 1950, to date.
Deficit
thoughts
which
of
investment
trustee,
at
developing and, as a
in many instances
immediately
began
to
protect
themselves
against
anticipated
shortages or controls.
We sawbuild ing activity accelerated to a
(3)
real
very
form.
from
period
prospects
Almost
consequence,
is
today
us
six-year
1950.
longer merely
a
The
(2) The end of 1945 to June 30,
no
caused
ready
Korea.
came
the
once,
our
(1)
banks.
our
Then
Refunding Mortgage Bonds
a vengeance.
Effect of Korean Crisis
The
9
23
9
.1
JheCommercial and.Financial Chronicle
(2538)
<10
J'
i
,t'4
.
A
_
should
Government War
have
thing
done?
been
needed
was
Damage Insurance
The
by
should
The
recent
de¬
of
resurgence
suggestion that the War Damage
Corporation of World War II be
revived
to
far
insurance
of
this
the
far
property
involved,
ness
was
on
false
a
Vance
L.
Lawrence
resulted
property owners and in a substan¬
tial waste of resources.
Had war
properties within the
territory of the United States oc¬
to
damage
public funds.
is* another
There
insurance operations.
in
inequities
to
private
This
If everyone is to
alone.
from the
to
analogy
a war
doubt of general
no
no
non-busi¬
as
as
participate in carrying the burden
premiums should be collected
from individual property owners;
the cost should be paid, as in the
case
of
Pearl
Harbor
damage,
based, at
so
be
the
aspect of
it was set up which
merits the most serious attention
program
as
the
present time.
In a future
it is conceded, extensive
property damage in the Conti¬
at
war,
nental
Unitqd States is virtually a
curred on a scale comparable to
certainty.
If it is proposed, as
that experienced in many other
before, that insurance policies be
countries the program oi tne cor¬
issued as the only basis for com¬
poration would, in the opinion of pensation for damage, the impli¬
this writer, have been rejected by
cation is that policy holders will
the people and their Congress and
be
reimbursed
and
non-policy
would have been
superseded b,y a
quite different one.
The
was
War Damage Corporation
organized as an RFC subsid¬
Where, for ex¬
of houses is'leveled
raid
the
surviving
holders will not.
ample,
in
a row
air
an
an
insured house would
its
value and his. unneighbor would
of
owner
iary by Act of Congress to pro¬
vide
"reasonable protection
insured next door
against loss of
not.
damage to prop¬
or
which
may
result from enemy attack
(including any action taken by
the militarly, naval or air forces
erty,
the
of
United
.
personal,
and
real
States
attack) "i
enemy
was
offered
cies
of
in
form
the
insurance
miums
resisting
in
This protection
for
of
poli¬
which
pre¬
be
paid
The lengths
this
which
of absurdity to
mistaken
application
of
private practices could go is to
be found in the possibility that a
technical error in the policy might
void
it.
J.
Abe
Mr.
War Damage
description
Goldin, in¬
wrote
attorney,
surance
of
,
the
policy in 1943:2 "The
locationclauses
and
charged.
As
in
private insurance operations, car¬
rying of the insurance was purely
should be construed in the light of
voluntary with the citizens.
present decisions on those clauses.
were
policy form
based
was
The
the
upon
fire form of New York State.
This
program
represents
in this
in
It
policy are similar to those
the New York fire policy, and
is of
utmost importance to the
insured
di¬
a
rect
that the
be insured."
mental'
eral
activity.;. As in private
insurance,
premiums
collected
from persons who peed protection
were
age
expected to
for the
losses.
ignores
gram
provide
Such
the
cover¬
a
pro¬
fundamental
applicant in his
application correctly describe and
transplantation from private
insurance practice to a govern¬
locate
properly
of
the
property
to
In view of the gen¬
responsibility for prosecution
the
war
this
is
not
only
an
indefensible result, it is politically
unworkable.
The reasonable ex¬
pectation
in such
Congress would
a
is
case
that
extend-relief
to
difference between peacetime risk
the
and risk of war damage.
This
difference is responsibility for the
reimbursement to the insured and
risk.
No
individual
individuals
is
or
group
responsible
for
of
a
casualty
uninsured.
same,
used
everyone responsible for the wel¬
Corporation
fare
June
must
his
be
else
such
risks
met
own
by each person on
responsibility.
Coven-
tional insurance is
a
very
appro¬
the
as
has been finally the
the effort and materials
in
soliciting, writing and
recording
everyone
far
so
uninsured
such as windstorm, for
example.
Unless we are going to
adopt very extreme ideas of so¬
cial organization and make
of
In
insurance
policies
would prove to be a waste of
This
sources.
waste
World War II.
occurred
in
The War Damage
collected,
through
premiums totaling
approximately
$132,000,000.
It
cies.3
excess
of
5,000,000 poli¬
If there had been extensive
priate way of doing this.
Mili¬ damage the discrimination be¬
insured
and
tary action in time of war is, on tween
uninsured
the
other
hand,
generally would surely have been erased by
acknowledged to be the responsi¬ political action. The collection of
bility of all the citizens of a premiums was an improper de¬
nation.
flicted
Even
by
undeclared
loss to
a
as
a
the
enemy
damage
attack
in¬
in
is looked upon as
borne by the nation
war
be
whole.
This
i
1 Regulation f'A," War
Damage Cor¬
poration, July 1, 1942, and Public Law
506,
77th
Congress, Approved March
r
on
issue
of
property owners and the
policies was a waste of
resources.
The
question
theq,
is:
What
point of view
taken
in this
country with
reference to the damage at Pearl
was
mand
27, 1942.
2 War
the.. Am.
Damage
Assn.
Insurance,
of
Univ.
Journal
of
Teachers
of
Insurance, March, 1943, p. 71.
3 The
damage did not develop,
the
tion
Shipping was covered
Shipping Administration.
was
What
-
needed
was
by
the
of
was
experience of the industry in
adjusting claims, not in selling
policies.
and
The
of
use
skills
the
•
experience developed in this
work
the
the
by
industry
facilities
offices
of
would
service
in
.
as well as
widespread
its
be
invaluable
of
event
extensive
of
damage.
To
this
the
of
this
conclusions
here
the
major
limits the
paper
such
where
secure
is
involved,
but
other
is
potential
raihoad
the
by
have
the
released
been
trouble
picture
this ment takes steps to freeze
time
of
one
the
in
spots
will
settled.
nounced last
It
Thursday that
an¬
repre¬
va¬
wages
generally, that the non-operating
unions may get no further wage
finally boosts
was
sentatives of the railroads and
for
the
it
efiect
in
assume
duration
Even
emergency.
if
final
the
is
reasonable
seems
that
of
freeze
no
settlement
to
will
rious
operating brotherhoods had be substantially below the figure
an
agreement on wage, mentioned in the unions' demands.
and working rule disputes.
Some It is hardly likely that the in¬
300,000 employees are involved. creased wage burden if, and when,
There appears to be little question it
comes
will
be
of
sufficient
reached
but
ly,
that
the railroads
the
and
rank
brotherhoods,
agreements.
end
individual¬
file
and
magnitude to materially influence
very favorable railroad earn¬
the ings outlook for the coming year.
of
the
will
ratify
The settlement
for nearly two years and which
1950. has resulted in sporadic,
on
in
the
will Moreover, it seems probable that
dispute that has been going at least some relief will be forth¬
a.
serious,
work
coming in the
of rate relief.
way
Other sections of the country may
stoppages on
join the eastern roads in
key railroads and in key terminal their request for such an increase
areas.
soon
in freight rates.
-
The
provides for a
three-year moratorium on strikes.
;
limitation was used Yard
proposition
made ceive
seems
property
that
fact
to non-business prop¬
This
because
reference
the
to
made
title
erty.
little
point
been
has
Presumably
column
but
agreement
Troster, Singer & Go.
service employees are to re¬
a
increase of 23 cents
wage
To be New Firm
hour, retroactive to Oct. 1, 1950,
an
with
additional
an
two
cents
Name;
an
Troster, Currie & Summers, 74
starting Jan. 1, 1951. How¬
Place, New York City,
business or productive property. ever, the changeover from a 48- Trinity
will change their firm -name to
Business property is used to pro¬ hour to a 40-hour week, one of
Troster, Singer & Co., as of Jan. 2.
vide goods and services which are the
major stumbling
blocks
to
distributed by means of a price earlier agreement, will be post¬
system.
If a particular form of poned at least to Jan. 1, 1952. • At
issues
arise
with
reference
to
hour
Roberts &
business
property
is relatively that time the situation will be re¬
costly to create or maintain, that viewed. If the present emergency,
will
fact
be
reflected
in
-
rela¬
with
its attendant threat
shortages,
tively high prices for its products.
power
The
48-hour
high prices will "ration" the
consumption
of
t h e
products.
Many economists believe that the
price
system
should
be
relied
time
distribute
to
upon
of
war
products in
well as in more
as
times.
settled
particular
Accordingly,
business
.if
productive
or
until
week
Road service
cents
will
of
the
continued
be
a
,
wage
1950, and
Roberts
&
488
Co.,
Madison
Avenue, New York City, members
of the New York Stock
employees will re¬
increase of five
hour retroactive to Oct. 1,
an
Admits Fred W. Opitz
man¬
exists
later date.
a
ceive
still
Company
announce
W.
to
on
Opitz
Jan.
Exchange,
admission
the
of
Fred
partnership
general
2, 1951.
additional five cents
an
hour after Jan. 1,
an
dition, all
wages
vice
1951. In ad¬
(both yard ser¬
Chas. Chambers Joins
road
and
service) will be
cost-of-living adjust¬
for this risk could be considered ments every three months starting
a
1951.
The adjustments
Roberts
&
part of the legitimate price of April 1,
Co.,
488
Madison
the product.
This would tend to will be made, either upward or Avenue, New York City, members
discourage creation
of
business downward, on the basis of the Bu¬ of the New York Stock Exchange,
property in risky areas and move¬ reau of Labor Statistics' index, announce that Charles W. Cham¬
ment of people into high risk and with present wages pegged to an- bers has become associated with
index of 176. Each change of one the firm as financial consultant.
therefore high cost areas.
The argument based upon the point in the index from that level Mr. Chambers, who has been an
will be the signal for an adjust¬
analyst and 'Consultant for over
price system is valid, but it is not
property is subject to war dam¬
age the cost of regular insurance
subject
to
ment of
rRoberte &, Co.-i:t;.cs^ft:
cent an hour in wage 20
years, formerly served in that
adopted, the proposed capacity with Wertheimer & Co.
agreement will mark the first long From 1941 to 1945, he was a mem¬
effectively as possible, and minor
term
labor
contract
in
railroad ber of the
Planning Commission
variations in price are likely to
■ '■/-.■l;,.
j; of the War Production Board.
- - *
be ignored. Furthermore, modern history.
It has been estimated by rail¬
combat puts all susbtantial con¬
controlling.
In modern war the
problem is to use all property as
one
If
rates.
.
-
centrations of property in the risk
although
area,
extent
tinguished.
more
Where
regular
a
damage
to
the
dis¬
risk
insurance
consumers
sumers
rather
payers,
who
if
the
be
is to distribute the
gram
of
could
in
is
less uniform the effect of
or
using
variations
risk
of
than.
pro¬
burden
as
road
that
management
the
wage
George Liddle Joins
increases will cost the roads about
million
$130
the
most
recent
Income
Federal
the
net
cost
annual
Based
proposal
tax
would
of
rate
be
First California
for a
47%,
reduced
(Special to The Financial Chronicle)
to
1%
at
the
gross
revenues
*'.V:
on
This is less than
$68,900,000.
of
annually.
PASADENA,
R.
Calif.—George
Liddle has become associated with
con¬
California
estimated
1950 level.*:., With
Company,
112
the First
increased £|ficien?yn£xpected to South Los Robles Avenue. Mr.
it stem
frorn the cqptjjnuipg property Liddle was formerly Vice-Presi¬
tax-,
to
,
would
carry1
government1 funds
~
the
were
improvements an$ ngyv equipment dent of Jones, Cosgrove & Co. and.
The"
being installed, t^ne^rrters should prior thereto was with First Cali¬
practically the have little ,.difficulty,, in absorb¬
fornia Company.
In the past he
same, but the distribution of the
ing this newest rise in wage rates
conducted
his
own
investment
burden among citizens is differ¬
at least so long as traffic remains
ent in the two cases.
business in Cedar Rapids, Iowa. J
This dif¬ at these
high levels. These high
ference may not he significant in traffic
levels are expected to con¬
basis
two
a
reimbursement.
for
groups
are
situation
are
very
part
of
where
the
devoted
income
high, where
to
consumer
war
goods
uses
are
taxes
large
product is
a very
national
and
where
rationed,
as
they certainly would be. ! Fur¬
thermore, in a program of ration¬
ing and price control any increase
in
war
price
risk
insurance rates after
tinue
for
the
unless
next
there
two
is
With Merrill Lynch Co.
five
to
major
change for the better in the for¬
years
a
eign situation.
(Special to The Financial Chronicle)
•
Neb;
OMAHA,
Malcolm
—
-
.
operating employees Yarbrough is with Merrill Lynch/
satisfied and the Pierce, Fenner & Beane, Patter¬
picture cleared for some time to son Building.
While
have
the
now
been
.
come,
cope
the
railroads
have
still
with the demands of the
.
.
.
to
non-
were imposed en¬ operating brotherhoods. The nonceilings.
The operating unions have demanded
increases are likely to be neces¬ a straight increase of 25 cents an
sary
since
predictions
of
war
hour, to be effective as of Nov. 25,
the
damage on which rates are set
obviously subject' to wide
are
1950.
such
The
an
railroads
increase
claim
would
cost
that
the
industry approximately $525 mil¬
annually compared with $400
claimed
by the unions.
World War II, with the result that million
error.
This situation
actually de¬
veloped
in
the War
Shipping Administration
subsidized
preserve
the
ample.
tioning
United
the
the
risk
in
ceilings
States
order
on
in
/
to
such
coffed;
"ex¬
Specialists in
RAILROAD
SECURITIES
lion
Selected
Situations at
all
Times
These demands have not been out¬
standing long and settlement is
not in early prospects Itlis hoped,
that recent action by
operating employees will at least
set
a
pattern for the f'non-ops"
and price 'contrbl thereand prevent a crisis.
Continued on page 33
It is possible, if the govern¬
as
Widespread^!qse- of Ra¬
/
W.
ceilings
dangers
commodities
since
sphere of the War Damage Corpora¬
was
primarily Continental United
States.
War
is
property
industry
the
re¬
30, 1943,
issued in
the
na¬
actively prosecuting
can
the loss
Corp oration
was
Where the
responsibility of the citizens for
resulting. It is there¬
fore
not appropriate
to expect
those suffering damage to stand
.Damage
least in
provided
was
above.
the damage
pro¬
of
gram
War
there
paper
the
damaged private property in those
without
policies or pre¬
miums.
The rest of its "protec¬
tion is
property.
that
Damage
indicated
It is the thesis
of
service.
tion," however,
erage
v
o
The
called upon for the wrong kind
in
and
the
of
industry.
non-business
as
concerned,
areas
provide
c
War
an agency
industry is proud of its record of
cooperation with the War Damage
Corporation, j. Unfortunately,
as
Alaska, and the
Corporation
pro¬
vided compensation to owners of
Harbor
Such
advantage
insurance
vate
_
requirement, logically follows.
fense activities has resulted in the
take
up
skills and organization of the pri¬
premium
without
government,
,
should set
fort is necessary.
Limiting his discussion primarily to the narrow problem of
financial protection of non-productive property from war
damage risks, Prof. Vance criticizes method of covering such
risks through a government-owned corporation as was done
in World War II. Holds war risk damage is responsibility of
assumption
Thursday* December 2&;'1950*"
i * ►«
the neces¬
sary procedures and rules, but if
no damage
occurs no further ef¬
University of California
Associate Professor of Accounting,
its
1
agency to receive proof of damage
of
ownership.
S u c h
an
agency
By LAWRENCE L. VANCE
and
M»
skeleton
ak
and
all
...
■
<'
however,
)
M
C
O
25 Broad Street
»Tf O
New York 4, N. Y.
Telephone BOwling Green 9-6400
Members Nat'l Assn. Securities Dealers, Inc.
Volume 172
Number 4972
.
.
.
The Commercial and Financial
Chronicle
11
(2339)
Lehman Brothers Celebrate
Lehman Brothers, one of Amer¬
ica's leading investment banking
firms, Dec. <.6 celebrated its 100th
anniversary.
The
centennial
is
tions
has
Centenary
his
been
being marked
acumen.
last
by
leacing experts in the merchan¬
dising and retail fields, became a
^-3-page
a
book
pub¬
lished
by the
tracing
firm,
its
develop¬
ment
since
its
founding in
Montgomery,
Ala., in 1850.
The book
firm, ai:d his
rising through
the
come
partnership
the
father
the
firm
man,
has
played
in
had
1947.
of
by
cotton
Robert Lehman
rapidly grow¬
the ownership of their se¬
curities.
The
firm, under its century-old
"Lehman Brothers," was
affairs,
brothers, Henry,
Mayer Lehman, who
migrated from the village of Rimpar in Bavaria during tne middle
the
of
19th
At the out¬
Century.
set,
goods were
but shortly
grocery and dry
their stock in trade,
the
became
firm
house,
commodity
a
predominantly
in cotton.
becoming the
center of the cotton crop financ¬
ing, the firm in 1858 established
With
York
New
New York office at
a
in
before
1908.
Two
119 Liberty
Street and Emanuel Lehman came
live.
to Manhattan to
later
Governor
and
at
energies to public
serving
four
terms
York
New
of
State,
being
present
United
a
States Senator.
founded by three
Emanuel and
firm
all his time and
as
of
name
in the
decade
business
decades later he retired to devote
of the United States and in broad¬
ening
the
their lives for their country
gave
in
World
Hitchcock,
world's
War
II,
Thomas
-perhaps
the
Jr.,
leading
polo
player,
and
Peter G. Lehman, a member of tne
fourth
generation
The
first
tion
to
firm
the
of
his
also
are
Isles,
other
Two
associated
now
Lehman
the
with
John
and
ton business to
Lehman.
Governor
virtual halt, the
a
Alabama
of
Mayer Lehman
charged
the task of
with
persuading the Union
to
authorities
grant permission for some 1,500
bales to pass through the lines to
be sold in the Nortn for the bene¬
fit
Alabama
of
Union
prisons,
prisoners
the
in
scheme
a
that
proved futile.
After
at
War
Lehman
was
resumed
Fulton
176
thence
in
Civil
business
the
Brothers'
Street,
106
Water
to
1867
Pearl
133-135
to
and moved
Street, and
Street,
again to 40 Exchange Placjs,
booming center of the cotton
and
the
trade.
Lehman Brothers
of the
was one
100 firms which founded
the New
York
in
Cotton
Lehman was
Directors,
Mayer
and
first
Board
tion he
Exchange
of
1870,
on
the
posi¬
a
occupied-until 1884. Three
later, a member of the firm
acquired a seat on the New York
Stock
Exchange, on which the
firm has since been continuously
years
Continuing to adapt itself to the
of the Nation,
changing
economy
the
interested
itself
in
the
of merchandising and
manufacturing businesses. Among
financing
these
1897, the Electric
Vehicle Co.; in 1899, the Rubber
Tire Wheel Co., which eventually
was
absorbed
Tire
the
Goodyear
Co., and the
by
Rubber
and
Havana
Tobacco
became
a
part
which later
Co.,
the
of
American
Tobacco Co.
Brothers
and
offered
to
the
public.
Most of these issues
were
joint ventures with Gold¬
man,
Sachs & Co., with whom
Lehman Brothers enjoyed a mu¬
tually
productive
nership for
With
firm's
working
part¬
many years.
the
wider
interest,
the
Lehman
Hancock,
was
later
&
for
stock
of
Co.,
Sears,
large busi¬
many
which theretofore had been
nesses
family-owned,
capital
needs
their
necessitated
public
re¬
securities'
In the intensive compe¬
markets.
tition
that
found
the
to
course
for
Brothers
the
business, Lehman
forged ahead and from
time to time succeeded in making
their services available to many
companies of national importance
whose
names
aged
co-managed
or
F. W.
familiar
are
in
American
household.
those for whom it man¬
every
Among
issues
were
Woolworth &
Co., May De¬
partment Stores, Cluett, Peabody
&
Inc.,
Co.,
H.
S.
Kress
Johnson
Endicott
Corp.,
Co.,
&
it
Jewel
The
Goodrich Co., Campbell
F.
B.
Soup Co.,
Philip Morris & Co., P. Lorillard
Co., Radio Corp. of America, Gen¬
Foods
Corp.
National
and
Dairy
Products
are
Corp.
in the
included
occasional,
Many
list
of
steady clients, in¬
or
cluding leading enterprises in the
fields of merchandising, oil, avia¬
tion, mining and manufacturing.
Lehman
Brothers also has been
leader
a
in
businesses
through the
oped
helping
to
o
enabled
rectly
b t a.i
expanding
n
capital
recently devel¬
more
channel
ments,
of
private
was
not
family
admitted
to become
a
large
are
di¬
institutional
John
seventeen
which
century with
the
same
faith
an
in
has
now
partners, begins its
ond
sec¬
expression of
the
future
of
America that marked the partner¬
ship
at
mined
its
its
inception
and
development
deter¬
in
the
service of American
industry and
investors from generation to gen¬
Winters to Be
Partner In Abraham
M.
n
e
w
is
enslavement
ing
resolution
easy
Ex¬
apace.
of
the
of
face
shipments
the
challenge to
well
B.
United
States
than
C.
trade
balance
States and our export
surplus in trade with the sterling
have been reduced
strikingly.
There has been a substantial in¬
area
ings
in
of
Canadian
gold
reflecting
not
official
U.
and
only
hold¬
S.
dollars,
improve¬
an
ment in patterns of trade but also
marked
Against
and
inflow of U.
this
step
courageous
taken in
wise
a
has
the trammels
exchange
be
rate.
said
ments have
views
abroad,
In
the
been
of
fixed
a
summary,
it
year's
develop¬
again confirmed
once
of
those, at home and
who
reasoned
dian
capital.
freeing the Canadian dol¬
lar from
may
S.
background,
have
maintained
a
confidence in the Cana¬
business outlook and
in
this
country's impressive long-run
po¬
in
brief, is the brighter
the picture. But there are
seemed
forces
ing.
also.
that,
of
A
we
revival
wholesale
prices
course,
Canada
and
all-time
is but
witnessing a
inflationary
of
in
subsid¬
were
are
and
it
ago
broad front, the
on a
pressures
at
year
inflation
Today
marked
both
living costs
peaks.
This,
of
of the manifold
one
problems
about
and anxieties brought
by international tension and
The
unrest.
been
only
condition
can
of
Korean
conflict
manifestation
one
of
the
defenses.
of
world
affairs
has
of
expendi¬
reflected not
the
in¬
military
be
must
whose
What
a
wider range
but
also
only the desire
of governmental
perhaps the as¬
obtained
rather
at
of
debt
reduction, declining direct
taxes and increased governmental
outlays for civilian purposes was
of course greatly facilitated by the
sharp drop in defence expendi¬
essentials
easily
can
done
be
more
ap¬
such
on
contribution to
an
cost.
But
the
after
1945.
In
position
that
other
of
the
implications of the
"business
contribution
could,
we
to
to
to
postwar recovery
it were, settle down
as
enjoy the fruits of progress in
orderly world.
We now find
an
we
situation
live in
is
It
an
quite
pacity
equipment
and "know how" is
larger than it was at the
much
rection
of
a
and
is
that
true
War
progress
further
that
World
in
of
II and
this di¬
is also
possible. It
an annual outlay
today
dollars
billion
defense
for
emergency purposes
war
will
about 6% of
production,
our
require
only
current
national
al¬
impact of our own
may
be intensified by
arising from purchases
the
though
program
demands
other countries of war mate¬
rial produced here.
But in any
by
event
the total claim
ductive
on
our
involved
capacity
Economic
The
expanding
that our productive ca¬
in
terms
of
resources,
On
Background
economic
the
side
we
creased defense program
of
manpower
at
a
in terms
and materials come
civilian
when
time
for consumer and
demand
capital goods is
already pressing heavily upon the
ceiling of available supply. What¬
our
longer-term potentials
ever
ities may be, we do not have
the surpluses
capacity
which eased
productive
power
We live today in an eerie twi¬
light, not between peace and war
and
man¬
inflationary
in the earlier phases of
in World War II. In
consequence,
the additional re¬
pressures
our
effort
,
quirements
of
partial
mobiliza-
pro¬
in
Continued
de¬
on
page
announcement
any
is
neither
of these shares.
an
offer
sell,
to
nor
a
solicitation of offers
The offering is made only by the Prospectus.
in
mined.
12,000 Shares
the
that
But
ultimate
its
dshape cannot
an
Issue
long
we
exigencies of the
present moment and, as best we
may, prepare for what the future
may bring. The situation is no less
serious
New
all-
an
and work for peace we
meet
must
and
Even while
the
most
Courtland Manufacturing
'
4
1
6% Cumulative Preferred
size
Company
Stock
$25 Par Value
be deter¬
now
disquieting
aspect of unfolding events is the
absence
ground
of
on
a
common
ideological
which to base
a
Price $25 Per
meet¬
Share
ing of minds. There seems to be
no
"gold standard" of ideals or
.
conduct to which
herence.
can
Behind
becomes
dissemination
ends
ideas
of
which
dictatorships and
give
the
distorted
Copies of the Prospectus
to
serve
The
shape
Heimerdinger & Straus
interchange of
the
be obtained from the undersigned.
curtain
propaganda.
and
may
ad¬
common
iron
minds
50 Broad
of
Street, New York 4, N.. Y.
Tel.: DIgby
*An
address
by Mr. Gardner at the
Meeting of Shareholders of the
Bank
cf Montreal, Montreal, Que., Can¬
ada, December 4, 1950./
Annual
toda/
of quickly available-
which
buy
December
20,
1950
face
the fact that the claims of the in¬
a
This
struggle.
other
clear
a
economy,
to
peace
sup¬
with
Canada,
nations, could look to a peaceful
future, and that after making our
economic
new
usual."
as
'true that
plications.
war
words,
the
on
that, in a world which is anything
but
orderly, the additional re¬
quirements of defense must be
facing us all.
superimposed on a heavy burden
In this regard, I think we must of governmental expenditures for
For the time
accept the fact that the defense civilian purposes.
program of the immediate future being, therefore, the period of de¬
is not something that can readily clining taxes would appear to be
be brought within the compass of at an end.
understanding
has much broader and graver im¬
but between cold
and
program
proceeding
were
we
respon¬
this is to endeavor
as
some
exemptions
and
security
tures
those
the
which
those
propriately
make
Social
greatly increased.
postwar budgets have there¬
be
"defenses"
all
to
matter
to
sibility it is.
occasion
Since
war-swollen
our
little
our
a
Background
sumption that such benefits could
And
are
respect
entrusted
1945
substantially
services
may
word
sense
which
is
it
Our
continuing
a
preparations a banker
make no very useful comment.
That
if
extended
an
tures have been
Preparedness
their
to
beginning
tentialities.
That,
side
of
raised.
firm
very
Canadians
peace
use
With
with
the United
are
basic
of national strength.
offsetting inevitable declines
crease
I
fluences
in sales to countries overseas; Both
the
cut
early
thinking of the term in the
am
broadest
Gardner
more
adverse
look
when
I
to
for
fore
a
in
a
any
the
of
find
cannot
Challenge
In
pres¬
of the matter.
aspects
end
for
port trade has,
the
Federal funded debt, direct and
guaranteed, has been reduced by
over
$1,500
million.
The
ex¬
tremely high wartime rates of
personal income tax have been
foundation.
The
in
look first at the budget¬
the
when
and
camps
all-out
this,
particularly
Budgetary
us
ary
called
proceed¬
partner in Abraham &
department.
when
issues dividing the world into two
re¬
the
search
or
have
sources
been
truth
Co., 120
the
Baruch - Hancock
Atomic,,, Broadway, New York City, mem¬
bers of the New York Stock Ex¬
Energy Report.
Monroe C. Gutman, an expert in the securities' change, on Jan. 1. Mr. Winters is
field, became a partner in 1927. Manager of the public utility re¬
Among his outstanding contribu¬
of
Sidney R. Winters will become
a
brought under subjection.
perialism, one's hope for
and
democracies
He
co-author of
ex¬
pansion
out
firm,
the
1924.
dustrial
inherent
continue
The
Let
tlement of disputes are decried as
the machinations of capitalist im¬
In¬
than
say
period.
attempts to apply
the concepts of justice to the set¬
continued
for
The
member of
was
in
of
progress.
with
faced
are
less
To
situation,
should
sion
for Ca¬
nada, a period
we
of
pur¬
Today,
war.
combating hoarding
are
And
econ¬
intents and
place¬
whereby enterprises
to
place securities
with
those
ent
Canadian
tne
how¬
is not to underestimate the
difficulties
buying.
men
military
fully geared to
ever,
flexible
to
effort in the
our
all
to
contrast,
problem
the
been,
shadows
eral
from
return
a
time
was
mobilization.
liberty, when defense against at¬
tack is promptly labeled aggres¬
side of
Corp.,
by
of economic
year
In many important
respects the past 12 months have
year ago.
Studebaker
the
into
took
a
Co., Inc., Gimbel Brothers,
Inc., R. H. Macy & Co., Inc.,
eration.
of
range
of
Tea
partnership young men of special
business
experience.
The first
partner who
issue
pub¬
a
investors.
During the two decades begin¬
ning with 1906, almost 100 secur¬
ity issues were underwritten by
Lehman
Lehman
when
first underwrote
Roebuck
in
were,
1906,
others
represented.
firm
Since
Brothers
lic
significantly different
our
While the blockade of the Con¬
federacy's ports brought the cot¬
today under conditions
increased
nephew
a
Lehman.
Orin
We meet
of the
family.
members of the fourth generation
firm,
and panic
total, been
running at a
high level with
partner
a
Philip
Robert
of
rates;
genera¬
of
member
become
was
for government; for
and for cooperation in
development
the firm's younger men
Two of
a
for continuation, promi¬
because of tense international
program
interest
meanwhile
a
goods
the
you-go"
Leh¬
H.
the family tradition
working for
joining
ing businesses
be¬
of
Canadian banker warns,
nent
was
to
head
Herbert
Mayer,
followed
gathering
ranks
that
omy
situation and the defense
program, "business as usual" is out
of question.
Says needs of times call for a strict "pay-as-
the death of his
upon
in
son
capital for the
the
present
em¬
phasizes
part
Robert,
s~n,
At
and financial
progress, with prospects
During this period, Philip Leh¬
man, a son of one of the original
founders, was the head of the
compared
as
requirements
poses
partner in 1927.
when
envisaged
now
peak of
war
lated
President, Bank of Montreal, Canada
Though stating Canada has experienced
as
indeed
and re¬
represented
about 40% of national production.
Progress
By B. C. GARDNER*
Mazur, one of the
outlays
'
be small
with the
Economic
highly successful Lehman
whose policies have
largely reflected his investment
Corporation,
Paul
will
stewardship
the
of
fence
Canada's Yeai of
8-0460
31
I
12
The Commercial and Financial Chronicle
(2540)
uncertain, and to arrive at
a
tional
these
conclusion
facts
Mutual Funds
lowance
based
estimates,
and
the
for
on
with
ra¬
al¬
an
that
factors
American Business Shares
Reports for Fiscal Year
American
are
in
unknowable.
Thursday, December 28, 1950
...
its
"Thus
-
Group Securities Foresees
Favorable Market
Prospectus
your
request
upon
investment dealer, or
national
research
position
from
from
&
securities
corporation
120 BROADWAY, NEW YORK 5, N. Y.
dividends reflects
tion of
Stocks Statistically Low
ings and dividends.
Investment
The
Management
of
Group Securities, Inc., in the Heport to Shareholders for the 1950
fiscal year
that
ending Nov. 30. points
stocks, despite
common
their
price advance since June of
1949, still offer outstanding in¬
vestment
values since "earnings
further
risen
have
dividends
and
than prices."
management,
declaring that present inflation¬
ary
controls were insufficient,
stated that
Stock and Bond Group
Shares
Investment
(Mutual
Funds)
Institutional
Distributed
HARE'S
RECTOR
NEW
YORK
LTD.
6,
N.
buying of houses, automobiles and
household
equipment.- Also, the
government has inaugurated va¬
rious
stockpiling and allocation
to increase
been
This
taxes.
the most effective meth¬
controlling inflation be¬
one of
of
increased
reduce civilian
Prospectus may be obtained from
the above or local dealer.
'
also
only
not
taxes
ability to buy, but
provide income for the gov¬
ernment's
military
requirements.
Even so,
the increased taxes to.be
paid by the public on 1950 in¬
comes have been more than offset
ii
the continuing new round of
wage increases.
As a result, the
by
aggregate
after
already
reached
has
for
ahead,
income
continue
will
highs
personal
of
.
taxes
and
a
new
to
on
new
considerable
time
taxes to be passed
Essentially this
notwithstanding.
is true because most of the meth¬
ods of
increasing production—the
solution
basic
inflation—also
to
increase income.
"While
".'^"prospectus from
your investment
dealer
PHILADELPHIA 2, PA
the
steps
so
far
taken
control infla¬
tion
have
been
relatively
in¬
effective, they may be more ef¬
by
or
government to
fective
the.next few months
over
the
as
government takes in
more
than it spends during the
heavy tax collection period ahead,
money
while
and
*
is
there
temporary
a
lag in actual defense production.
Over the longer term, however,
additional
control
steps to
infla¬
tion will b£ necessary because the
combined inflationary forces are
Keystone
great.
so
possible
and
inevitably
price
controls
undesirable
fore
will
selected
economy,
investing their capital
t
to
be
the
if
BONDS
inflation
scribes
(Series B1-B2-B3-B4)
price
they
share
or
much,
expect
decline
if any,
in
the current dividend rate of about
$15 on the Average stock.
"Yield—the
return
,
of
the current yield on the
Average stock is 6.88%.& This is a
Today,
very
high return on the price of
such
good-grade
used
it
relative
those
as
high
especially
is
the
to
return
high-
on
'
bonds.
ade
stocks
the Dow-Jones' Industrial
in
Average;
GSenes S1-S2-S3-S4)
be obtained from
the
a
Dow-Jones
for
by the
Average,
example, Ts historically high,
but in relation to the
of
those
earnings and
stocks—which
the primary determinant
value—their prices are low.
are
of
Stocks Still Attractive
a
at
or
years are cer¬
tain to be strengthened further.
"(3) In the long run, in spite of
controls or high water, the gen¬
eral
price level is certain sooner
paid
"(4)
rates
In
this, money
to continue at a
spite
likely
are
of
long as central
bank manipulation can hold them
fairly low level,
as
that is
there
and
some
little time.
"(5)
On
out
Nov.
on
basis
likely
before-tax
fairly
be
to
high in the industries favored by
no
is
conditions—which
present
means
by
all industries.
Pell, de Vegh Reports
Total
000,
ex
Fund
equally.
As in the early 1940s
companies will almost cer¬
Dec. 21 were $454,-
on
dividend, as compared to
April 5, 1950, when the
on
nine
69
was
net asset value was
the
as
compared to $25.13.
of
dend
posi¬
tion
by
the
Fund,
high
business activity, will
than
ever
depend
Inc.
its
months of
nine
first
rent fiscal
favored
Securities
industries
these consider¬
INVESTORS MUTUAL
Dividend Notice No. 41
The
dend
per
selection
of
Board
Mutual
has
of
share
31,
a
and
payable
to shareholders
ber
Directors
declared
thirteen
Investors
half
January
on
on
of
quarterly
one
record
as
of
divi¬
cents
22,
H. K.
Bradford, President
Principal Underwriter and
Investment
Manager
INVESTORS DIVERSIFIED SERVICES
Established 1894
as
Investors
Syndicate.
Minneapolis, Minnesota
factors
we
have mentioned.
•
the
for
K
American Business
to
ended
year
Shares, Inc.
Nov. 30.
E. W. Axe
Analyses
Prospectus
upon request
Investment Situation
Certain Established Factors
Helpful to Investors Today
Emerson
W.
Axe, President of
Fund, Inc., in a
Axe-Houghton
o fit
V
Ijoud, Abbett & Co.
New
York
Chicago
—
—-
Atlanta
Los Angeles
—
hazards into the outlook for
In such
a
situation the
investor might well conclude that
at
--
his
fi¬
poWers
of
last surrender
soul
give
the
to
the struggle to
future trends and Tenden¬
and
up
■
-
"Actually, however, nothing
farther
be
the
present
differs
investor
from
character
eral
always faces.
tial
facts
the
problem
little
in
from
INVESTORS
the
gen¬
he
that
Some of the
required
truth
of
its
essen¬
estimate
to
longer-range investment problemsare
well
can
be
established
of probability.
that is
and
estimated with
a
others
fair
A
Diversified Investnient Company
a
of the investment terrain
hidden by the fog of poli¬
war.
The business of the
today is just what it
always is, to study the tacts that
are
definitely
ascertainable, to
prices.
parts
of
the
situation
that
>
,,
de¬
It is only
Prospectus
be obtained from your local
investment dealer or The Parker Corporation,
200 Berkeley St., Boston 16, Mass,
are
T'T
>
may
f I fi T H
1951
Decem¬
1950.
indi¬
and
increased
assets
$72,135,000
evil
cur¬
to a total of $1.
year
tainly find it difficult to increase
while many others will
The report disclosed that Group
must
21,
Dec.
on
vidual securities."
he
was
Vegh
more
reasonable estimates of the
his¬
de
selection
upon
make
this
share
still be left a.wide range for earn¬
on
.
This brings distributions for
1950.
on
of June, 1949, still exists in
these stocks because earnings and
dividends have risen further than
Undoubtedly,
per
Pell,
cents
70
declared
investor
value
$30.42, ex
long-term capital gains divi¬
A
the
and
date;
their net
six
tics and
attractive
compared
as
earlier
the
at
'
The number of
originated.
stockholders
to
Pell, de
of the
assets
net
Vegh Fund
some
based
all
the
After this
28.
During
Mutual
An excess profits tax will
cut down these earnings very un¬
"(6)
study in relation to the
nancial
30,
Nov.
share.
per
dividend,
this
are
likely to be for
careful
points in the Average stock price,
of
since
cents
payment net asset value was $3.89
$120,000
to "rise substantially.
later
or
and
fraction
rise of nearly 70
34
the year the Company
$1,898,594 from the sale
least with a fair
of securities.
In addition unreal¬
degree of probability:
ized
appreciation increased $1,"(1) General business activity
is likely to remain at a very hign 070,028, so that for the year there
level for some little time, prob¬ was an over-all gain, realized and
unrealized, of $2,968,622. On Nov.
ably for two or three years at any
rate.
This is more than we can 30. 1950, total unrealized appre¬
ciation in the portfolio was $3,usually be confident of.
"(2) Inflationary forces which 390,232.
have developed to such magnitude
tainty
such
gree
"Today, after
of
Of this amount 20 cents was
1949.
realized
"Successful investing, however,
even
in
this assured .period of
.
of
shows
1950,
four
cies.
represented
Industrial
share
cer¬
today.
judge
price
be
can
reasonable
with
indicate that dividends
being
over-paid
or
just likely to be obtained.
It is ob¬
barely covered. Actually, at none vious, however, that this approach
of the eight significant points in
requires careful study not only oi
history mentioned earlier—either
highs
or
lows—have dividends general conditions, but of indus¬
been so well covered as they are tries and of individual securities
the
The average
stocks
a
were
could
the
which
factors
of
po¬
are
tion might
de¬
is historic
number
and
there
ations a-satisfactory result is
which
in
conditions,
policy is based
which
term
of
simultaneously sold at such high
prices and yields.
Such a situa¬
and
of
Keystone Company
Congress Street
is
commodity
a
dividends
Boston 9, .Massachusetts
appear
international
course
ings growth.
periods of high
"It seems probable that these
prices in 1929-1937-1946-1950, and
factors will govern the course of
the four periods of low prices in
1932-1938-1942-1949, the present security values over the next few
is the first time in history that years and it is the belief of the
stocks of such high quality have
management that if investment
g! "In
cally high in relation to its his¬
'
COMMON STOCKS
ef Boston
stocks
inflateds: major
This certainly is true
condition
a
inflated
our
present situation,
can foretell the
one
litical
earnings
invested
on
money—is the most fundamental
basis
for
appraising
securities.
torical value.
PREFERRED STOCKS
50
likely
per "
Thus, there is no reason to
more.
securities.
least
commodity.
IN
Xke
run
next
$25
average
not
share
very
that
and
year,
will
per
$23
as
"In,the midst of
INVESTMENT FUNDS
may
sales,
taxes leads us to believe
earnings on the Dow-
porate
new
Prospectus
analysis
of the outlook for corporate
wage and
report on the investment situation
be needed—.
stated that "the deterioration of
Stock Market Outlook
Certificates of Participation in
I
careful
Our
taxes.
they may be from the international situation over
an
American-way-of-life
view-.
the past month introduces serious
point.
' ' ' •
Funds
(Series K1-K2)
the
On
direct
will
no
30,
increase in net asset value per
an
inflationary
forces which need controlling also
mean
a
continuing high level of
corporate sales and. earnings be¬ during the past 20
The reduction of all
nonmilitary government
spending certainly is essential, as
is the encouragement of saving;
Custodian
inflation.
Industrials
cause
Y.
in¬
for
need
hand, the very
than
ods
STREET
controlling
of
other
are
both
of
and as a method
revenues
lower
has
by
government's
Jones
is
19
the
creased
taxes
because
borrowing, and
tightened mortgage credit and
consumer credit to discourage the
business
military use "and away
from civilian goods.
"To reduce ability to spend, the
government's most positive step
Ltd.
increase
to
that the net
toward
Shares,
Corporate
pectation.
controls to redirect raw materials
Of
earn¬
ings, after taxes, is a logical ex¬
sure
the
in
although
established
corporate
government
has increased
interest rates somewhat to dis¬
the
courage
Group Shares
in
decline
"A
earn¬
profit margins, and increased cor¬
willingness to spend,
"To reduce
Insurance
sizable decline in
a
,
investment
The
Bank Group Shares
wide expecta¬
a
Inflation Controls Insufficient;
out
Aviation Group Shares
favorable
stock
price
relative to earnings and
torically
Shares, Inc.
report for the fiscal
Nov.
ended
year
Established Factors Present
By ROBERT R. RICH
Business
annual
A-N N t VIS R S A ft Y
>
V £
Volume 172
Number 4972
.
.
.
The Commercial and Financial Chronicle
(2541)
Canadian Banker Urges End of
Exch. Controls
Mortgage Lending in
Gordon R. Ball, General Manager of
Bank of Montreal, at
Canada's gold and
holdings are ample, and " existing exchange controls
impede international investments.
133rd Annual Meeting
dollar
In
of institution,
133d
Bank
at
Meeting of the
Annual
of
Montreal
Gordon R.
Dec,.,
on
4,
Ball, the General Man¬
ager,
called
for
end
an
all
of
exchange
controls
the
by
Cana¬
Govern¬
dian
strong
con-
in
n s
Mr.
Cana¬
dian
Ban
business,
1950
has
a
been
the
of
year
unexpected.
prices.
based
significant eco¬
nomic developments of the past
year
was,
of
course,
Canada's
abandonment of
rate
and
its
left to find
to
of
the
on
market
mort¬
be
knowledge that for
exchange
free rate
a
of
months and maybe years to come,
the housing
field
will
under
be
forces.
tion
events
com¬
from
The
govern¬
appeared to be threatened by dis¬
leading up to this
major reversal of policy are now
history and there is no point.in
ment
has
quieting increases in the number
reviewing
cided
of unemployed,
by accumulating
difficulties in maintaining over¬
dian
In its early months, the economy
seas
export trade and by
a gener¬
Suffice
it
amply
prices.
But
of
series
a
developments which could hardly
have
been
'combined
'of
a
•is
to
flush
produce
is
It
feverish
the
Today,
business
glow
heightened
symptoms
good
of
the
of
the
by
infla-
'tionary virus.
-
'.gether With "delayed-action" ef¬
fects of the exchange revaluations
'of
the
previous September,
remarkable
*a
-exports
the
stimulus
expansion
direction
-tinued
"ment
of/ trade
in
Canadian
of
It
goods to other
overseas has
to mitigate the short¬
Canadian dollars abroad,
much
of
age
move-
is
'flow of imports from
-done
con-
a
the
encouraging to ob¬
moreover, that an enlarged
serve,
'holding out
promise, of im-
some
export
provea
in
prospects
these
"traditionally important markets/
Within
tures
expendi¬
capital nature, which
originally expected at best
-were
to
itself,
Canada
of
a
hold
steady, have risen sig¬
nificantly. The increase has been
largely traceable to heavier out¬
lays by governments, utilities and
-public institutions and to enlarged
"capital
investment in the petrol¬
industry.
eum
"J .At
the
interest
spotlight
and
of
concern
switched abruptly to the interna¬
tional
of
sphere
with
the
aggression
armed
outbreak
in
Korea.
That situation has emphasized the
urgent need to
eventualities.
in
Canada,
free
for future
prepare
In
consequence,
nations,
with
other
committed
to
company-
is
greatly
expanded
defense
penditures, which will create
demands
major
our
on
source
"and military
economy
on
new
difficulties of 1947.
however, that
gest,
far
ripe
for
a
control from the
conditions
new
During the past
close
range
list.
And there
that
danger
adopted
tions
automobiles
durable
items
and
of
in
may
they
need for
may
originally
were
ceived.
cer¬
on
equipment, with a growing pro¬
portion of these transactions being
gone
far in many important respects in
sincere efforts to break down the
barriers
i international
to
But
merce.
complex
com¬
have
still
we
expensive mechan¬
ism of exchange control.
Admit¬
these
necessary
gencies
have
with
dealing
in
the
of
always
controls
past,
emer¬
it
is
possib^. that difficulties
may
again artsb m future. But with
our
holdings of gold and
dollars
States
at
United.
high levels and
with
a
the necessity of maintaining
fixed rate of exchange now re¬
moved, it would
that
Canada
appropriate
vigorous lead
seem
give
a
elimination
conditions
the
of
permit.
as
devices
controls, with
he
has
delegated
to
the
mortgage lending, and
Housing and Home Finance
control
over
FHA-
loans,
gage
that
the
and
with
Federal
Housing
and
Administrator
their
the
provisions
Home
should
regulations.
Federal
the
Reserve
Board
Finance
coordinate
Regulation X of
Reserve
Board
and
reductions of loaning ratios by the
FHA and VA are the designs set
for limiting credit in the hous¬
up
ing field.
Regulation
on
X,
be
can
construction
new
commenced
both
old
both
cases,
payments by the borrower
are
ity, under Section 101 of the De¬
1950, has
regulations forbidding new
fense Production Act of
issued
inventories, which
subject to
duction
in
some
overall
had
re¬
1949, have been rising
noticeably
in
aggregate
value
"during recent months.
For
suggest
to
fear
that
with
Canada
has
the
respect to
possibility of flight of capital in
an
unrestricted
market.
A
/
fluc¬
tuating exchange rate should act
as
important
an
been
rather
be
against
and
poses,
may
more
Board
Home
and
mixed/
The
practically
the ob¬
a
cessation of
large development building
larger firms.
for
new
proj-^
ects by the
Housing credit controls
We all dislike regulations or
hurt
most
in
J
seem
direct
have declined
good suburban lots.
palatable
than continued inflation or rigid
price, material; and wage controls.
The„
are
more
controls
new
serve
Already
cessive.
the
By reducing in that
amount
of
available
obtainable.
ened.
dustry make
materials
at
less
erase
place, reduced
the building in¬
in
for
and
economy
to
read-*
lower?
at
factors
of
many
readily!
more
it
possible!
is
will
next
these
and
the
brake
any
on
is temporarily
•
in the
Many
building industry
have said that the controls
are
severe
that
assets
in
are
housing units
cannot be built next year. Others
expect that the backlog of liquid
facilitate
foreign
a
'
the
possession
of
regulations
may
satisfied
come
other
either not being reached
controls, 1951 should be an¬
big year for the construction
industry. To the proposed 850,000
units
must
be
Continued
on
added
other normal building and defense
1 In
or
is be-
page
the
Holders
indicate
included.
other controls
are
referred
■
not an
Offer
of
Republic of El Salvador
Customs First Lien
8r/o Sinking Fund Gold Bonds, Series A,
Dated July
1, 1923, Due July 1, 1948;
lc/o Sinking Fund Gold Bonds, Series C,
Dated
July 1, 1923, Due July 1, 1957; and
Housing
Certificates of Deferred Interest
(Scrip Certificates)
Bonds of Series C,
issued with respect to
and
Convertible Certificates for
3% External Sinking
January 1,1976.
Fund Dollar Bonds, Due
is any
freedom
capital
powerful
excessive
to
would
in
safeguard
Finally,
I
of
use
doubt
if
this
there
country in the world which
constitutes
a
more
attractive field
foreign investment of
manent
nature
than
a
per¬
does Canada
today.
NOTICE OF EXTENSION
The time within which the Offers
ing—played a dominant role in
keeping business at a high level
the
during the postwar years. Made
possible in large part by the lib¬
dated April 26, 1946, to exchange
coupons for Republic of
El Salvador 4%, 31/2%
due January 1, 1976,
agencies,
numerous
residential
1950 VA and FHA terms
liberalized; and by
early in
were
further
June
and
the
the Korean War, resi¬
housing starts were (for
six months) at the un¬
first
precedented annual rate of 1,300,000 units.
.♦Address
Third
and
the
appurtenant
and 3% External Sinking Fund Dollar Bonds,
and to pay Certificates of Deferred Interest
(Scrip Certificates) in cash at 15% of their face amount, may be
accepted, is hereby extended from January 1, 1951 to January 1, 1952.
The period for exchange of Convertible Certificates for 3% Ex¬
ternal Sinking Fund Dollar Bonds of the Republic, due January 1,
1976, in multiples of $100 principal amount, has also been extended
from July 1, 1952 to July 1, 1953.
Copies of the Offer may he obtained upon application to The
National City Bank of New York, Corporate Agency DeparUnent,
20 Exchange Place, New York 15, New York, the New York Agent
of the Fiscal Agent, Banco Central de Reserva de El Salvador, San
Salvador, El Salvador, C.A.
.
.
„
REPUBLIC OF EL SALVADOR
By Enrique A. Porras
by
Mr.
Credit
Bankers
14,
Bonds
While credit expansion,
National
111., Dec.
above
1950.
Burns
.
before
Conference
Association,
of
the
the
Chicago,
December 28,1950
33
this
manuscript, when the terms
"regulations," "controls," and the libe,
are
used, reference is made to the type
of Regulation X, unless the context would
tions, residentia l construction
This is
if
Washington be¬
that the
goal is
vere
residential
come
the authorities in
se¬
more
the
in
Unless the Korean War and the
defense program induce
Few would deny that expanding
construction—particularly of hous¬
financing terms of
our
coupled with rising in¬
Effects of Controls in the Building
comes,
will support more than
Field
850,000 new homes in 1951. Change
Why the Regulations
government
so
850,000
people,
devising amendments to Regu¬
lation X to include multiple-unit
housing.
eral
year^
favorable
encouraging.
wages
aggressor.
are
While
building materials
defense
rising
steeply
con-^
trends, the current situation with*
and
more manpower
available
often
and
materials
other
that
In the second
requirements
and
the upward pres¬
and prices is less¬
so
wages
the
are
other
on
in
nails, plumbing and heating sup-!
plies, plasterboard, and millworkl
disappearing.' Cement
and'!
way
materials; and
sure
i
materials
prices. Lumber prices, especially,!
have dropped.
Gray markets iiij
construction,
new
Building lots,
value, especially*
in
struetion industry are more
•ily
dual
a
purpose.
In the first place, they
fight inflation by checking credit
expansion where it has been ex¬
controls
Finance Administrator
te^
cities.
housing field
are
American
more
and
preparing
controls of any kind, but controls
of the type now employed in the
be in the offing.1 The Federal
Reserve
dential
right.
for
agriculture, the picture has
tion.
for recreational pur¬
construction
a
facturers'
of
^
itself
been
necessity
the worst required immediate ac¬
The National Production Author¬
1949, inclusive, at a pace almost
unparalleled in our history. Then
Manu¬
The Korean attack
vious
To
principal credit control.
one's
year.
which .financing may be affected
les^
than the larger contractors. There!
has
been, temporarily at least/
the
withdraw
rapid rate than last
expansion
new
buildings. In
requirements of down
has
more
goods
-
would
in¬
Be¬
and
building expanded during 1946 to
a
other
construction.
new
3, 1950. FHA and
regulations apply to loans on
VA
complete
at
with
already having their
are
after Aug.
or
Further,
rise
combined
on
of the great volume of house
ing starts arranged for or pushed
through in the summer and early
under
heavy outward capital movement.
to
/,
building
on
cause
Construction, both by the military
existing ^services and by business.
Even without the new regula¬
made to apply only
"*
financed by consumer credit. The
number
of
commercial
failures
continued
wave
market.
there is less demand for labor and
insured and VA-guaranteed mort¬
rapidly as
In particular, I
credit
Administrator
been
and
durable
fed
sound
the
and
brought,
new
by liberal
government
lending policies, was not the sole fall, the full effects will not be
of the building boom, it was ielt for several months.
primarily
responsible;
and
the
The smaller builders with mod¬
building boom was the core of the erate means-to assist in their own
preparation for resisting
law,
have
we
credit,
intended to assist in preserving a
to
country
A
restrictions
effect
and prices." The new controls
con¬
/
.
this
little
household
them
be used for
than
those
for
and
other
purposes
Gin
control
of
condi¬
countries be
many
after the
passed
which
patterns
real
a
under emergency
retained
has
to be
seems
War
cause
to the
Among
problems involved, ex¬
change control stands high on the
The
fluences,
induced
ventional
at
many
Korean
pressures.
flated the
Reserve System control over con¬
-
of private
processes
international investment.
the
order,
of the obstacles1
some
impeding the
the
new
•
Board of Governors of the Federal
the
studying
of
tor
the power to regulate them lodged
with the President. By executive
I have had
year
opportunity
an
exchange control
of strategic materials
be
prevailing.
now
of
equipment.
construction
exam¬
under
device
fense Production Act of 1950 pro¬
vided
for
the
establishment 'of
standpoint of its
usefulness
the
as
Sections 602 and 605 of the De¬
gone
well
may
thoroughgoing
850,-
units, and
credit controls
Burns
primary
restructing volume.
ination of the matter of exchange
new
a
having
time
the
practical
1
have been im¬
posed
I would sug¬
the
•V During the year, consumer buy¬
ing has been heavily concentrated
tain
also that - the
shortly be
in
as
000
T.
will
move
ex¬
,
imately
Wendell
import restrictions, which
legacy of • our exchange
a
are
a
ited tcrapprox-
•
..
gratifying
gency
t i
e n
construction
followed by removal of the emer¬
tedly,
mid-year
.Canadian
is
1951
resid
well-intentioned at¬
price-fixing against a
of
at
exchange
our
Indeed,
in this
than offset
more
contraction
areas.
to>
the border.
across
gave
during
should be lim¬
the
lying values.
"It
de¬
that
basic
this
A strong revival of business
activity in the United States, to-
Gana-'
background of fluctuating under¬
since
condition
a
the face of
on
than
more
health.
have
different nature.
very
-the
foreseen
that the
say
here:
demonstrated
accepted prospect of; some fallacy
recession in demand^ production
tempts
-
to
in' detail
Washington.
experience with fixed rates
ally
l^and
them
labor
shortages,
forcing costs up and
building more difficult;
the inflationary., fires in this
plete domina¬ country during most of this period.
level through
own
influence
the
The
fixed
a
return
a
discussion
lending at this time must
gage
One of the most
•
Says, how¬
program.
are long continued,
they will lower individual
bring black markets into being. Sees goal of
850,000 additional housing units adequate.
realistic
In
build
to
building starts by those wishing'
to get going
before restrictions^
might hold them back further ill-*
incentives and
A
1951.
of
cludes, if controls
good
at
in
trying
and
Then
controls must be supplemented by sound government
fiscal policies and curtailment of
unnecessary spending. Con¬
products have
demand
were
were
forth
ever,
Other
were
generally,
Dairy products have con¬
to
face marketing
diffi¬
light.
banks cooperate to assist defense
urges
western
harvests
fruit
which
.
good,' but
been
Livestock
Canada,
K.
have
crops
enjoyed
of
Ball stated:
Gordon
field
tinued
business
For
the
reduced
growers' return per bushel.
scarcities
Minneapolis, Minn.
Asserting home mortgage lending will be dominated from
Washington for probably years ahead, Mr. Burns explains
provisions of Regulation X of Federal Reserve Board and
,
has
year,
Nat'l Bank,
making
excep¬
was
quantity, but
drastic
downgrading caused by
frost damage, together' with the
lower basic price set for the crop
culties.
review
Vice-President, Northwestern
we
3$% more houses than the
builders of the country could com¬
fortably handle. By midyear, this
had already resulted in material
By WENDELL T. JBURNS*
in
con¬
In
nection
d i tio
crop
large
with
ment.
a
wheat
tionally
1950,
25% to
Defense Program
says
prairie
his report to shareholders
the
should have declined
13
Minister tf Ft
lance
and Public Credit
to
or
14
The Commercial and Financial Chronicle
(2542)
Says Women Should
Can Britain Do
News About Banks
Without Marshal Aid?
CONSOLIDATIONS
NEW BRANCHES
REVISED
By PAUL EINZIG
Bankers
and
NEW OFFICERS, ETC.
Dr.
CAPITALIZATIONS
the
At
regular meeting of the
directors
Bank
of
City
National
The
Dec.
New York, held on
of
19, H. Harold Whitman was ap¬
pointed Vice-President. Mr. Whit¬
man is one of National City's vet¬
in South American banking,
erans
having served nearly 30 years in
that territory. He is now stationed
office.
head
at
Roberts
W.
John
and
Christopher R. P. Rodgers
were appointed Assistant Cashiers
at the same meeting.
if
At their
if
Dec. 26 the
City
on
Vice
Mr.
a
M.
Both
West and
Vice-Presidents.
Potter,
Vice-Presidents
35
for
have
and
with the National
tion
Assistant
previously
were
been
City Organiza¬
32
and
respec¬
years
tively.
if
of
board
if
if
Following
the
Lawrence C.
meeting
a
directors,
of
Marshall, President of the Bank of
Manhattan Company of New
announced
that
21
Dec.
on
J. Kelly, Jr., and William
Bischofberger were advanced to
rank
the
Mr.
Vice-President.
of
Kelly is attached to the foreign
department and Mr. Bischofberger
to the Queens division of the bank.
Marshall also announced
Mr.
the
promotion of Richard H. Garlock
the
to
rank
Assistant
of
President and the
Vice-
appointment of
the following as Assistant Treas¬
Arthur
Beck, Austin W.
Beetle, Morris Engelsberg, Ernest
C. Hoechner, William A. Kelly,
Harold M. Lindstedt, John E. Mar¬
shall, Richard W. McCready, John
urers:
Louis
S. Robinson,
Trust
&
B.
special
partner
&
Hutzler,
has been elected to the Advisory
Board of the 29th Street office of
Chemical Bank & Trust Company
of New York
Chairman
the
fills
according to an an¬
by N. Baxter Jackson,
death
of
the
bank.
of
of
Tim
by the
Rosenthal,
Benjamin
Chairman
Mr.
created
vacancy
the
United
States
Playing Card Company.
*
if
New York has resigned ef¬
1. He will
Consultant to the
Force
16
be Special
Director
of
with
years
division
ment
the
both
of
bank,
the
Dr. Paul
he
has
of record Jan.
ers
of
banking
was an
D.
official
an
of
Aero
Engineering ,& Advisory Service,
Inc., subsidiary of Aero Under¬
writers Corporation.
elected
E.
5,
eight shares held. Directors also
declared
the
regular
quarterly
dividend of 25 cents per share,
*
Federation
Bank
of
Trust
and
office
in
the
Central
Grand
Jan. 3.
zone
was
its
Street
formed
last
main
25
at
McKee
Assistant
has
the
the bank.
some
Mr.
serve
in that
*
of
John
T.
Madden,
President
of
the
Bank of New York, has announced
that the Board of Trustees has
assigned
the
to
metropolitan
division at the Wall Street Office.
McKee has been associated
Mr.
with
the
Bank's
credit
depart¬
ment since his discharge from the
in
Army
1946.
He
began
his
with the bank in 1934.
career
*
%
.
Vice-President
turers
Trust
if
of
York, has been elected
of
Manufac¬
of
a
New
director
the
company, Henry C. Von
President, has announced.
Mr. Clough joined the staff of the
company in 1921, and was appoint¬
Elm,
ed
an
Assistant
appointed John E. McAniff
Secretary in 1924.,
an
Vice-President, Joseph C.
Wolf, Secretary, and George F.
Wingertzahn an Assistant Auditor
member
of the bank's
law
de¬
partment for over 10 years.
Mr.
Wolf has been a member of the
department for over 14 years.
Mr. Wingertzahn has been em¬
ployed in the auditing department
same
for the past five years, and prior
to his association with tne bank
he was Chief Accountant in the
Continued
on
This
once
does
Britain
page
34
may
not
necessarily mean,
more dependent on Marshall
For there
aid
Marshall
of
under which
headings
1951.
in
be
can
doubt that
no
Britain's producing
1948,
no
grant financial
In
this
Meanwhile,
respect
there
George
Dec. 14,
deBebian,
Secretary-Treasurer of the Feder¬
ation
Shareholders
of Women
American
Business,
that
audience
much
ment
learn
must
women
about
more
in
her
warned
invest¬
sound
practice if they are to pro¬
own capital.
tect their
Mrs. deBebian
in her talk said:
statistics
"Today
women
tell
70% of
own
that
us
country's
our
wealth—but they
it. Why?
Simply
they have been so imbued
privately-held
control
not
do
because
with
is
that there
idea
the
some
mystery attached to eco¬
nomics and that women 'could
great
not understand'." She also
pointed
out that in many
women
tell
of
instances
that
they know nothing
investing—"my husband takes
her
of
care
everything." Mrs. deBe¬
was always appalled
bian said she
at
because
statements
such
that
felt
she
all
too
were
women
ignorance instead
of having an open mind and try¬
ing to learn the basic principles
underlying our financial structure.
of their
proud
In
elaborating upon this sub¬
Mrs. deBebian added: "In
this country we are all capitalists
and we must consider that we
ject,
responsibilities
have
must
to
learn
Mrs.
We
our
own
dividends—and
capital—our
American
such.
as
preserve
our
of life."
way
deBebian,
noting
in
that
out of every
four women over
60 in the country is a widow—
and also that the average inheri¬
one
used
is
tance
in
up
years,
seven
"This is
commented:
most dan¬
a
state of affairs and in this
gerous
modern
when women have
tremendous strides in
day
fdf^dttVe
months.
decision is expected
indications
no
intends to await the outcome of
United
States
•
whether
the
government
military aid discussions with the
whether it intends to proceed with rearmament
or
to the full extent
envisaged in the £3,600 million three-year
pro-
The view is held in official circles that while Britain
gram.
may
be able to afford to do without Marshall aid she could not afford
to
embark
on
ing the management of their own
While it is possible to
advice from many reliable
sources it is vitally important that
women
learn the basic principles
capital.
rearmament
on
a
underlying
sound
practice.
"But,"
she
ture
women
large scale without substantial
was
possible to suspend Marshall
aid long before it was supposed to come to
an
end is
evidence of progress toward reconstruction.
most
people
when
Marshall aid
worried
were
was
to
as
due to
what
come
to
an
rightly quoted
Until quite recently
would
end.
Both
in
1952
opponents
supporters of the government envisaged major difficulties unless
Marshall aid
assistance.
were
undue
fears, at
cerned.
made
It
to be followed by some other
is
was
any
true,
it possible to
due to end, can now be
rsite
the
This
the prices of
sterling
as
far
as
of American
envisaged without
the immediate future is con¬
improvement
in
the
situation
afebut
ar.ea, raw
that
There
seems
to be little
however, for supposing that this factor would not continue
to operate.
Provided that the unity of the sterling
tained, Britain is likely to be able to
carry on
mat¬
Women
Hall
Busi¬
just
have
short course in finance.
a
course
was
said to have had
enrollment of any
finance yet presented.
in
course
Our audience at each lecture was
mainly composed
success
was
so
of women.
W o
Brooklyn
m a
n's
Its
that
tremendous
Brooklyn Federation and
our
the
will
Club
jointly present a series of five
lectures, starting Jan. 18. Other
local chapters of the Federation
are also planning similar courses
after the first of the year."
closing
Bebian said:
talk,
her
make
proper
—we
use
attend
must
Mrs.
de¬
"We must also learn
the value of our proxy
votes and
of our
power.
annual meetings
must learn how to
evaluate
management—we must learn how
management and labor.
between
In short,
the
fact that
act
to
peacemakers
as
we
must
awake
to
we
have
duties
and
how to be
must
learn
good corporate citizens."
has
almost entirely through the rise in
materials.
of
American
in
Town
and
finished
financial
in
Federation
Shareholders
J. L.
risk the consequences of the termination of
Marshall aid has come
reason,
'form
It is gratifying that the termination of Marshall aid 18
months before it
interest
ness
We
happen
are
The
ters.
In
event, the fact that it
more
and more
commencing to show
today
—
some
investment
continued,
dark side of the pic¬
is- the
"that
American assistance.
as
such
the largest paid
rearma¬
no
are
pre¬
assistance for the purposes of
As¬
sistant
a
Company
Savings
of the bank. Mr. McAniff has been
Charles C. Clough, Administra¬
tive
Industrial
in
everybody would like to know is whether the United
In any
be
a suspen¬
continuation
to
ment.
if
Bankers Trust Company and will
Emigrant
the
pared
capacity.
if
apply for
.States, having terminated Marshall aid to Britain, would be
Williams, who for
of NeW York, joined the staff of
the Union Dime Jan. 1, 1950, as
Treasurer.
He will continue to
initiation
the
What
Living¬
ings Banks Association of the State
considerable additional
difficulty in producing enough for rearmament
of the export drive.
What is essential is
that home consumption should be curtailed.
and
takes
time has been with the Sav¬
on
Mortimer
Arthur
secure
other
many
dollars
there should be
ston, Vice-President, who retired
Nov. 1 after 30 years' service with
been
Treasurer
P.
a
that Britain will not
are
capacity has increased very considerably.
Provided that there
will be enough raw materials, to keep British industries occupied
that at the
place of Edmund
are
lose
to
since
34th
*
He
this will involve
The chances
however, that she will become
aid for her economic stability.
William L. DeBost, Chairman of
the Union Dime Savings Bank of
announces
case,
trade balance)
There
$10,000,000 to more than
$46,000,000.
New York,
Brooklyn,
St.
law, medicine and industry, they
are still most uninformed regard¬
have
been from
*
sterling indebtedness to other
Some of these countries are not likely to
sion of interest payments.
ago
years
is
Committee
the
made
burden.
Eighth Avenue. In the
years its resources have
if
Britain's
of
area
any
dollar
at
10
increase
which interest payment can be suspended if Britain has an adverse
Federation
office
in
meeting of
a
Affairs
at
to avail itself of the "waiver clause" of the loan agreement (under
o n
formerly occupied
by Title Guarantee and Trust
Company, and more recently by
Bankers Trust Company.
P. L.
Roraback, Executive Vice-Presi¬
dent, will be in charge of the new
office.
should
interest and capital payment on the American
loan of 1945 is due to begin in 1951.
Unless Britain should decide
Street,
It is at 6 East 45th
Street
of
more
In
in the quarters
45th
stocks
Other Dominions too may feel that they are entitled to
of the dollars they earn.
Thus, even in the absence
of a deterioration of the dollar position of the sterling area as a
whole, Britain's dollar position might easily deteriorate.
spend
New York that an
is being opened
Company
additional
the
has been achieved at the cost of a
commodities imported from the dollar
Ceylon.
made Dec. 26
was
economic
continue
if
if
British
of
countries.
indefnitely to swap their gold for sterling.
In fact,
Britain had to agree in December to release £4,000,000 of gold to
sterling
21.
Dec.
in
sponding
payable Jan. 2 to stockholders of
record
interest
the
in
been
Moreover, as far as Britain is concerned, there is still a
very considerable dollar gap, offset by the export surplus of the
rest of the sterling area in relation to the dollar area.
This means
that the counterpart of the increased gold reserve was a corre¬
each
for
assistance
has
area.
the basis
on
share
Vice-President.
Barney &
(now Smith, Barney & Co.);
Floyd
additional
one
people in Britain who feel that the termina¬
many
American
of
decline
Feb. 1 to stockhold¬
on
Marshall aid to Britain has come to
the increase of the gold reserve
Jan. 17 the stock dividend will be
distributed
practical
all
premature.
For one thing, the improve¬
ment of the dollar position has not been nearly as pronounced as
the British Government would like it to appear.
A large part of
an
aggregate par value
of
$100,000. If approved by stock¬
holders at the annual meeting on
Walter
economist for Chas.
as
tion
are
reconstruction
of
elected
department. Previously, he
also
profits,
So for
it.
to
agree
end.
There
meeting of the trustees
R.
Williams,
Jr.
was
four years in the general
and
an
consisting of 5,000 shares of stock
annual
served as an officer in the special
aviation division and for the last
Co.
undivided
of
out
difficult for the United States Gov¬
to
purposes
of New York, at a meeting
Dec. 20 declared a stock divi¬
transportation
Post-War
ernment
Einzig
Directors of Clinton Trust Com¬
pany
dend
more
if
if
Analysis Depart¬
Division,
the
and
even
if
Fi¬
Headquarters, U. S. Air
in Washington, D. C. During
headed
psychologically and politically for the British
Government to apply for its resumption, and
Dec. 22.
on
Bank
President, of Bankers Trust Com¬
nance,
freely envisaged. Nevertheless, onde Marshall
aid is suspended it will
be very difficult
Vice-Presidents, effective Jan. 1,
Walter G. Kimball, Chairman of
the board of the bank, announced
and
fective Jan.
to Assistant
if
Ormand Milton, Assistant Vicepany,
impact of higher raw material prices and
prospective shortages."
The possibility of a
deterioration
of Britain's dollar position is
by Thomas J. Shanahan, President
Brothers
nouncement
the
New York,
of
advanced
Announcement
if
Tim,
Assistant Cashiers
Company
been
have
reconsidered if neces¬
economy and balance of payments in 1951 as
a result of the increased defense program and
of the Commercial National Bank
of
Salomon
in
if
Safe
Campbell and Gardi¬
James K.
ner
Hadassah
Hotel
governments
recognize," the
declares, "that part of the improve¬
ment in the position of the sterling area is due
to external factors which may well be tem¬
porary.
Furthermore, new difficulties and
burdens are certain to fall upon the British
if
if
area
speaking before
American
of
Mrs.
be
70% of
own
therefore
statement
director of Hotel New Yorker
if
In
the
"Both
sary.
Vice-President
Corporation, etc.
A. Nirmaier and Frank Stadtler.
*
President.
-
of sterling
unity
situation would
the
Deposit Company; Treasurer and
on
John
is
and director of Manufacturers
the
York
Clough
and
women
and
know how to control it.
only suspended, not terminated, and that
size that Marshall aid is
appointed
was
Administrative
Bank, appointed Percy
John
he
wealth
LONDON, Eng.—On Dec. 31, 1950, Marshall aid comes to an
end as far as Britain is concerned.
It is true, the joint AmericanBritish statement issued on Dec. 13 goes out of its way to empha¬
of
Administrative Board
company,
National
the
of
the
obtained
be
can
Arthur Mortimer deBebian
Mrs.
on
continues.
1943, and in
1947, with the formation of the
General
materials
raw
Comptroller in
and
a
if
meeting
directors
later he was placed in
charge of personnel at the com¬
pany's main office and shortly
thereafter was appointed Comp¬
troller. He became Vice-President
Five years
Learn Investment Art
points out
ending of Marshall Plan Aid to
Britain on Dec. 31, holds, despite doubts action is premature,
nation should find no difficulty in producing enough for
rearmament and for continuation of export drive, provided
Einzig commenting
Thursday, December 28, 1950
...
area'is main¬
without Marshall aid.
Quinn Elected
WILMINGTON, Del. —Auchincloss, Parker & Redpath, Inc. an¬
nounce
been
the
that James L£ Quinn
elected
a
corporation.
has
Vice-President of
Volume 172
Number 4972
.
The Commercial and Financial Chronicle
.
.
(2543)
Recommends Avoidance of Wage-Price Controls
and
Richard Rapport, Connecticut State Banking
Commissioner, in
report to Gov. Bowles, favors tighter credit controls and more
encouragement of savings.
amounted
a
Banking Commissioner
Richard
Rapport
warns
of
inflationary
dangers which
mercial
arise
on
from
deficit
the
June
peak; all types of
struction
one-third
were
than
a
tial
financing
through com¬
mercial
boom.
"By Sept. 30th, physical indus¬
output had risen 7% since
r
construction
year
before, while residen¬
alone
was
up
Unemployment was at its
lowest level in two years, and this
and
decries
scarcity
use
of
rising prices and business profits,
wage-
of
price controls,
led
urging,
demands.
stead,
in¬
strictions
of
credit
sav¬
ings
by
pub¬
Rap¬
port
will
sign
Richard
Rapport
re¬
Banking Commissioner
as
on
Jan. 15, 1951, to become Executive
Manager of the Connecticut Bank¬
Association.
ers
"Powerful
-
inflationary
have been dominant in
omy
II,"
forces
our
econ
heavy
was
of
cause
buying
of
goods
from
be¬
deferred
demands, ac¬
shortages and popula¬
tion growth, the most important
basis of the inflationary pressures
the unprecedented growth in
liquid
the
war
incomes
and
assets
In
years.
during
that
period,
bank deposits and currency in cir¬
culation
increased
almost
three
times
from $60
—
billion.
billion to $170
In
addition, individuals
and businesses bought 100 billion
Government
of
securities,
and
substantial
proportions of both
these types of liquid assets were,
for the first time, held by < rela¬
tively low-income groups.
'
"Private credit expansion added
to
this
huge
loans
new
with
home
consumers,
and businesses.
owners
incomes
sonal
supply
money
to
Total per¬
increased substan¬
tially, following rounds of wage
increases, and were maintained at
high levels in part by Govern¬
ment
in
expenditures
and
programs
the
housing field, foreign aid,
defense spending, veterans' bene¬
fits, and farm price supports. In
the face of all this, while the gross
national product rose in terms of
meet
ate
new
$195 billion.
as
Such
the
was
War
case
be
borrowings
businesses and
individuals,
to
thus
further
mand for
stimulating
the
de¬
goods and services.
"It is obvious that the
superimposition of government defense
demands
an
and
expenditures
already
economy
with
upon
burdened
inflation will create
unpre¬
cedented pressures upon our
price
structure. It is
unlikely, under the
circumstances, that inflation
be
held
back
duction.
The
in
spending
can
increased
must
be
came
curtailed
by
courageous
These national trends
banks,
and
in
Connecticut
our
shown
are
and
dis¬
cussed in their local
relationships
in the more detailed
pages
which
follow.
interesting and extremely
important to note that the infla¬
since
mid-1949, at
but
by
among
spreading its obligations
institutions and individuals
lize
quarter,
occurred
without
stantial
increase
in
find
and
their
Not
Government
might otherwise
into the spending
way
secured
the
avoid
direct
controls
prices, materials and wages.
only do they lead to the crea¬
tion
have
that
"We must
on
sub¬
a
expenditures. Individuals and bus¬
inesses have been spending these
sums
dollars
rising stream.
a
on
Sept. 30th of this year
spilling over into this present
vast
must, after tax¬
maintaining the incentive to pro¬
duce, finance its deficit, not
through the commercial banks,
peak
and
government
where the purchases will immobi¬
"It is
tion
eral
of
vast
and
reaucracies, but
the
bitter
War II,
expensive
we
bu¬
know now, by
experience
of
World
that such controls do not
adjustment
in
1949,
production and some lowering of
prices, was only temporary, even
though it had been welcomed by
some
as
a
healthy correction of
the economic situation.
"By
June
this
of
at the
the Korean outbreak, in¬
time of
dustrial production
at
was
a
new
high, unemployment was at a
minimum, individual incomes had
greatiy increased,
as
had con¬
expenditures.
sumer
were
ment
were
Businesses
expanding plant and equip¬
and
starts
of
increasing
numbers.
We
riod when
by
tremendous
in
were
war
housing
new
boom pe¬
a
started in Korea.
"Immediately following the out¬
war in June, scare buy¬
break of
ing and stockpiling
both
and
the
on
part
individuals
businesses, and gave such
impetus to our
out
heavy,
were
of
the
economy
months
of
an
through¬
July,
August
and September that by the end of
the
third
quarter
we
had
what
Although results will
for each individual bank, in most instances net operating
earnings should show some improvement over those reported last
.vary
year.
•
.
The expansion in loan volume since the
outbreak of hostili¬
ties in Korea has been one of the
outstanding developments affect¬
ing commercial bank operations during 1950. For the 21 weekly
reporting Federal Reserve member banks in New York City, loan
volume has advanced in 28 of the
past 29
For the week ended
weeks.
Dec.
20, the total for the banks in this
reached a new record of $-3,329 million and was
$1,516 million
approximately 30% above the total of the same period a year
area
or
ago.
Another factor which has been favorable to loan
operations
year has been the less-than-normal seasonal influences on
loans. During the
early months of the year, the decline in loans
was
considerably less than usual. The high and rising level of
business for the first half helped to
prevent the contraction in loan
volume which is normal at that time of
year.
this
Also, the upturn in loans occurred earlier than usual. The
latter part of July or August is the normal time for
loans to begin
to increase. This
year,
early
however, the volume began to increase as
June and has since shown steady gains with the totals
as
reaching record levels in
recent
which reports have been
which time business
made
sonal
declines
weeks.
Even
in
far
so
in
the
weeks
for
December, and during
borrowing normally shrinks because of sea¬
business and inventories, loans have continued
in
increase.
to
Along with this expansion in loan volume there has, within
months, been a firming of interest rates. In order to
discourage excessive borrowing and as part of an anti-inflation
program, the Federal Reserve increased short-term
money rates.
Commercial banks in the area increased their
prime rate from 2%
to 21/4% and there was an
upward movement in rates all along the
the past few
line.
These
developments
in
the
commercial bank operations for
place, loans produce
a
loaning field
a
number of
are
significant
to
In the first
reasons.
considerably larger return than
most other
types of investments.
In the second place the loan volume this
has averaged materially higher than in 1949. Whereas a year
ago there were deflationary tendencies
present in the economy
with a resulting pressure on
rates, this year the reverse has been
funds added fuel to the inflation¬
true.
spiral by
personal and
further
ary
business
thus
providing
more
incomes,
spending.
the
breaks
out
with
the
disastrous
effect the moment the controls are
increasing lifted.
Even
far, such controls
have
as
been considered
necessary are in¬
direct and selective. In the impor¬
"Although the figures contained
tant task of restricting credit, we
this report are, by law, a re¬
have two moves
which, despite
flection of the condition on Sept.
the criticism leveled against
them,
30th of the institutions under the
are proving to be of considerable
supervision of the Banking De¬
value.
Federal
Reserve
Board
partment, the time necessary to
Regulation W, pertaining to con¬
their compilation brings us well
sumer
the
final
quarter of
the cal¬
have
present
endar
year.
in
economy a
our
We
at
tight labor sup¬
ply, a physical output at full ca¬
pacity in some areas and close
credit,
affecting
gether
and
real
with
mortgage
Regulation
estate
the
loans,
VA
lending
FHA
and
regulations,
cover
a
large part of the credit
field, but by themselves are not
estimate
shortly be
a
that
deficit
manpower
people who must
ranks
of
those
production for
Civilian
there
will
military and defense
of
million
one
from
come
now
the
engaged
civilian
in
purposes.
goods will, therefore, be
supply and the demand
for fewer
goods will cause prices
Even'if increased produc¬
to rise.
tion
could
keep civilian goods to
output,
the in¬
creased expenditures of billions of
nearly
present
dollars would greatly increase in¬
comes
and
thus
create
upward
pressure
on
prices
supply of civilian
prices
mean
business
Higher
to
wage
larger
on
for
to
lead
stable
to
individuals.
individuals
increases
incomes
prices.
ness
the
Higher
higher costs, both to
and
costs
of
goods.
to
Higher
and
upward
costs
to
a
considerable gain.
finished
goods.
And
so
the
up¬
ward.
"It
spite
may
institutions
higher
inevitable
taxes,
the
that,
de¬
which
garner
the
savings of people must, as
never before, encourage
savings,
have
been
some
of
.'
been
moderately higher.
the
.
heavier this
year
These
and
two
operating
items
been
a
absorbed
part of the
a
The result
modest improvement in earnings.
These factors
bank
expenses
have
gains in gross income but in general
improvement has been carried through to net income.
has
were
statements.
in evidence at the time of the
third quarter
which had indicated
Institutions
earnings
for
the nine months above those of the
previous year included Bank
of Manhattan, Bank of New York &
Fifth Ave., Chase
Chemical Bank &
tional,
Irving
National,
Trust, Corn Exchange, Empire Trust, First Na¬
Trust,
Manufacturers
Trust, National City Bank,
New York Trust, and Public National.
These
same
factors continued to operate
throughout the fourth
quarter and reports for the final period should make
favorable
showing.
There
could,
of
course,
be
an
equally
year-end
some
adjustments among individual banks which might alter their final
results.
For
example, with loan volume showing
a
sharp advance
this year, some institutions
may find it necessary to make further
additions to valuation or bad debt reserves.
There is also uncertainties in the tax
outlook with respect to
As
a
only because in these times,
more than
usually, it is pru¬
dent to be thrifty, but because
every
dollar saved is a dollar
taken
that
out
of
the.
pushes
spending force
upward
great violence
with
such
prices. For the
reason, people must be en¬
couraged to buy Series 'E' Savings
on
same
Bonds.
Such
purchases
not
only
keep money from being spent
consumer
goods,
the
need
for
on
but also reduce
deficit
financing
through the commercial banks.
"These
or
are
and pursued,
age and
to
the
not easy measures to
follow. That they be used
however, with
cour¬
understanding and unself¬
is
of
very
grave
importance
existence
Govern¬ country's freedom."
of
our
result
serves
excess
profits tax legislation.
banks may find it
necessary to increase tax
beyond what was previously believed sufficient.
some
Regardless
not
even
ishness,
seems
have
rates and treatment of banks under
be avoided.
"All
busi¬
ever
Taxes
and handicaps to necessary
expansion of military production
directly to higher prices adopt
wagc-price spiral whirls
secu¬
sures
lead
resulting
press
necessitated
from borrowings has more than offset
this loss with the result that
gross income has in most cases shown
X,
to¬
has
investments, primarily U. S. Government
rities, the income derived
in
into
though the expansion in loan volume
reduction in
some
"So
for
means
in shorter
year,
Operating statements of the principal New York City banks to
be published within the next several
weeks are expected to make
from their own growing
stop inflation but only postpone
incomes, by drawing down,.pav¬ it:
The
pressure
remains
and
ings, and by borrowing. These
money
ities
"The
JOHNSON
year
to it in others, tremendous
per¬
sufficient
prevailing higher prices, the actual sonal
to
provide
all
the
incomes, a large public and
physical volume of production—
tightening that is likely to be
private debt, and huge supplies of
that is,
needed in this area of inflation
the output in units of cash
and liquid assets. Under such
goods and services—was, at its
barriers. These regulations should
conditions and with Government
maximum in the postwar period,
be vigorously supported and
defense
expenditures just about
less than twice as high as in the
rigidly observed by all lenders.
beginning, it is certain that in¬
best
In
prewar
year.
There
was,
addition, nil type of credit
flationary
pressures
will
both
thus, a huge supply of money
extension by all types of lenders
continue and increase.
pressing against a relatively low
should be carefully screened and
"Federal Reserve Board author¬
supply of things to buy.
limited so that inflationary pres¬
marked by a decline in industrial
E.
favorable comparisons with those of 1949.
pro¬
alternative, if infla¬
curbed, is a great re¬
spending.
Civilian
tion is to be
duction
by
H.
THs Week—Bank Stocks
cre¬
deposits which could be loaned
out
By
ac¬
from
savings ing individuals and business to the
limit
redemptions of sav¬ delicate
compatible
with
reflected
are
housing
spending
Bank and Insurance Stocks
the infla¬
II,
would
withdrawals
ings bonds.
cumulated
was
for
accounts and
Bowles, adding: "Although
early postwar period there
in the
of
ex¬
a
credit,
funds
¬
since the end of World War
Mr. Rapport stated to Gov¬
ernor
rate of
to
basis
to
taxation, by strongly
credit and business loans also ex¬ tightened credit, and
by greatly
panded sharply during the third increased savings. Government it¬
quarter and added substantially self, on local, state and national
to the money supply.
Currency levels, must set an example by
and bank deposits reached a new cutting back all
unnecessary and
high of $172 billion, while addi¬ nondefense expenditures. The fed¬
tional
.
rate
personal
expanded
"Consumer
in¬
personal
annual
an
with
increase
wage
total
while
high annual
Mr.
lic.
to
billion,
penditures
and
greater
Our
rose
$224
re-
coupled
widespread
come
more
drastic
to
labor,
pay for
borrow
pressures
con¬
higher
60%.
banks,
World
celerated.
boom
a
to
current
a
to
banks,
during
trial
may
will have
tionary
virtually to
on
obligations. If this deficit fi¬
nancing is done through the com¬
Says deficit financing should not
In his annual report to Governor
needs
its
be done through commercial banks.
Chester Bowles, Connecticut State
will not be able
ment
defense
15
of
these" considerations,
however,
the
operating
and condition statements soon to be
released should make
able
comparison with those of
a
year ago..
re¬
a
favor-*
The Commercial and Financial Chronicle
16
Stocks
after the turn of the year.
holiday market. Gold stocks ex¬
ceptionally attracted the greatest
buying interest on news that a
delegation
would
shortly visit
Ottawa to make recommendations
Canadian Securities
WILLIAM J. McKAY
By
little doubt that Brit¬
is
economic de¬
Commonwealth
ish
cisions
are
the
of
in the course of develop¬
now
the
Already
ment.
inet
magnitude
highest
Cab¬
British
Policy
Economic
the
and
steady deterioration of the terms
but has balked at
of British trade,
the
steps for their cor¬
necessary
rection.
In
recent speech before
a
Institute
British
the
arrangements and the problems to
be dealt with at the conference
Britain
Ministers
The conference
to broad matters
be confined
will
of
Jan. 4.
general policy but there is no
question that the most important
item on the agenda will be the
measures
to be employed for the
allocation of raw
opportunity was
meeting held
and
obtaining
The
materials.
gold-mining
industry.
Base-metals
and
Western
oils
made moderate progress but the
industrials were dull and inactive.
enough for
the prices
Life Insurance
rising
were
shortages
Scarcity
were
higher costs of material and labor
must increase export prices but he
deprecated most strongly the sug¬
exporters
beyond
sary steps to
meet the changed that, as he did not believe in a
conditions of world markets. Can¬ policy of victimizing his foreign
Both the problems of
ada alone took advantage of the customers.
missed at the similar
to take the neces¬
last September
of
trend
obvious
prices to
world
exchange, whereas in
set free her
this unilateral action it
expected that all the
Commonwealth
members, would
place
of
been
had
and Au¬
Kingdom
United
The
stralia in particular are now
fering
suf¬
result of the procrasti¬
by
domestic
as a
induced
nation
politics and blind adherence to ex¬
treme economic autarchy.
India
and Pakistan likewise have stub¬
prices
increase
Gaitskell and the British ex¬
Mr.
would be largely solved
however by the simple expedient
porters
placing the level of sterling in
conditions,
of
line with current world
free sterling and
better still, to
or
have acted in unison.
British
that
gestion
should
permit it to rise to a more
level in accordance with
thus
natural
method
the
by
adopted
already
Britain's senior Dominion.
issued
of
discouraging
price spiral.
the
of
Witter
"The
Exchange
Governors of each
non-
atory work which will be neces¬
sary, requiring possibly many
the
ing
wage
It is
the
action
This
in
listings pooled.
It
can
consideration
board of directors of
West
St.
result
the
if
two
the
countries
to
serves
the
only
which
aggravate
two
political differences. The Canadian
authorities
who
have
always
thoroughly realistic at¬
toward the relationship of
adopted
titude
a
of U. S. and
the trend
hesitate to reverse the step
when
taken
that the
trend had drasti¬
predevaluation
cally changed.
When
The increasing volume of
that must be exported to
same amount of prede¬
(2)
goods
obtain the
valuation imports, thereby
market.
home
the
devaluation
sterling
became obvious
it
terms of trade.
result¬
world prices did not ing in the diversion of goods from
the Canadian dollar and
following
(1) Constant deterioration of the
existing
(3)
An
rise in the do¬
living which more¬
undue
mestic cost of
has not yet
over
reflected the re¬
cent
the United
Kingdom re¬
wholesale
sharp advance of
prices.
(4) Sale of British goods abroad
cut the value of the
pound, the extent of the slash was at artificially low levels induced
motivated
by panicky fears of by the grossly undervalued level
a
continuing fall in the level of of sterling despite the existence of
world prices.
From the moment a strong sellers' market.
that the, trend commenced to re¬
It is to be hoped therefore that
luctantly
verse
itself it became evident that
Britain
on
was
the
Despite
the
fact
wrong
that
at
the
forthcoming
conference
track. economic realism will prevail over
former
Chancellor Sir Stafford Cripps
of
time
the
door
open
at
devaluation left the
petty politics. Also much of the
responsibility for revaluation or
freedom
Commonwealth
the
of
for reconsideration in currencies would be removed from
light of subsequent events, his
successor
has acknowledged the
the
individual
the
monetary author¬
ities of the countries concerned by
concerted action of the
It
members.
wealth
Common¬
be
can
pre¬
its
dollar
volume
$502,629,264, a 154%
increase over the combined busi¬
in the
with
since
San
Francisco
volume
has
risen
from
$84,000,000 to about
$250,000,000, and the Los Angeles
Exchange's
from
$44,000,000 to
CANADIAN BONDS
of
Government
Provincial
Municipal
the
it
is
any
difficult
vanced
against
wealth
action
alleviate the
United
the
India
united
the
do
ship
with
was
During
section
Two Wall Street
New York 5.
*
*
,
N. Y.
-
NY 1-1045
WORTH 4-2400
Australia,
As
far
as
general ster¬
her
fellow
dislocated
independent
incorporated
to
ling revaluation would also serve
to restore the exchange relation¬
that
A. E. Ames & Co.
much
economic malaise of
Kingdom,
Canada is concerned
CANADIAN STOCKS
exchange
so
Pakistan.
and
be ad¬
Common¬
can now
in
would
that
what
conceive
to
logical arguments
field
Corporation
event in the light
present world emergency
In
currency move.
the
of
Dominions
Canada's
by
the
the
week
bond
external
market
also little
change in the Do¬
Corporate bonds
minion internals.
on
the other hand
were
fairly active trading.
higher in
The Cana¬
to
Fifty Congress
-
Boston 9*
Street
Mass.
use
to
powers
money
est rates rise as a result.
the
"Neither
the American
of
government
people
easy
rates
ments.
Persistent
disburse¬
strength
of
Canadian dollar futures indicated
a
reversal
of
the
present
low
of
inflation," the Association
strong
declared.
New
issues should
attractive
outside
(5)
the
be
made
enough to be placed
banking system as a
part of this program.
A strong wage-price policy,
with the
government and business
pursuing a vigorous program
discouraging further rounds
the
Inflation
are
Federal
trend
ful
Los
Both
265.
also
traded
Stock
Angeles
lists
on
Exchange
include
the
listed
Exchange,
New
issues
York
other
or
changes.
can
be
taken
in
time
by
and
the
time, however, that no anti-
be
success¬
co¬
operation by business, labor and
the general public.
"Real sacri¬
fice by all of us is needed to wage
a
successful fight
against infla¬
tion," the Association stated.
week.
that there
than 40 hours
more
a
week. If
a
longer work week is necessary,
it can be put into effect under
existing law.
law
is flexible
additional
payments
"The Federal
the
and
required for overtime act as an
incentive for drawing workers
into essential production jobs
and in
Maurice
J.
Tobin
reducing absenteeism. There is no justifica¬
change or relaxation in this law.
former Secretary of War Patterson stated on
tion for any
a
previous occasion, any suspension of the over¬
provisions might cause such a 'violent change
time
the
in
basis
on
which
labor
relations have been
conducted,' and consequently such 'deterioration of
labor
relations,'
as
actually to 'result in decrease of
production.'
"I
am
convinced that the
proposals presently be¬
made for the relaxation of labor standards
might demoralize our working force to such an ex¬
tent that it would adversely affect the production
ing
goods and materials which our nation so urgently
of
Government, the Associa¬
It warned at the
the fullest
say
needs."—Maurice J. Tobin, Secretary of Labor.
declared.
unless there is
❖
no prohibition in the Federal
wage-hour law against working
In
stopped
❖
in
held in check if steps along these
tion
the
Exchange
issues
of
wage-price spiral.
lines
and
securities
351
is
"As
anti-inflationary pro¬
gram of public debt management
aimed
at getting
a
substantial
part of the debt out of the bank¬
ing system
into the hands of
savers, thus reducing the money
supply held by the general pub¬
vital
Francisco
San
has
production.
40-hour
should like to
I
An
inflation program can
dividend
afford a
can
same
and
nor
money and
in
a
period
fluence of the customary end-year
affiliates
Credit
general
their
curtail the
supply even thougn inter¬
control
dian dollar remained under the in¬
$ejling due mainly to U. S. re¬
patriation of profits of Canadian
~
and
allowed free¬
Reserve authorities
lic.
$215,000,000.
The
proposed to change
so-called
the
is
controls, with the Federal
(4)
annual
.
con¬
tinued dull and inactive and there
was
effort made at
monetary
Tightened
interest
ex¬
every
it has been
waste.
as
ample.
about
mar¬
❖
tary expenditures are made effi¬
ciently and with a minimum of
currency
experiment
the
1940,
Exchange's
''One of the standards which
time to insure that mili¬
same
will
*
full and efficient
Cutting
all
non-military
expenditures
by Federal, State
and
local
governments
to the
Canadian
constructive!
year.
"My attention has been called to proposals put
allegedly to aid the defense effort, which
would relax labor standards of vital importance to
(2)
dom
preceding
According to the N. Y. "Times,"
business.
basis.
ditures on a pay-as-you-go
(3)
the component exchanges
of
ness
forward
military preparedness program, at
least in its
present dimensions,
and all other government expen¬
credit
Ex¬
In the first year of its
A Contrast!
Increased Federal taxation,
with the objective of putting the
(1)
bone,
Paul,
Cincinnati
and
operation
ex¬
securities
a
of the dollar and
The pro¬
follows:
posals are as
the
mean
Chicago,
power
policy
a
would
securities
the
people's savings.
of the
sumed also that the success of the
serve
It
five-point program to fight infla¬
tion
and
thus to
preserve
the
buying
for
move
Association proposed a
The
following:
and
1949,
former
amounted to
the symptoms
recognized
sup¬
was
Minneapolis, St.
Louis,
changes.
changes could be united into one
At the same time, Carroll M.
of
large Exchange.
Britain's present economic mal¬ Shanks, President of the Associa¬
"Advantages
of
the
merger
tion, announced that the life
bornly refused to acknowledge the ady but is reluctant to prescribe
insurance business stands ready to would be broader markets for the
the obvious cure. Among the more
logic of events and by the adop¬
give the government any possible public and for the securities of
tion of divergent exchange policies evident economic ills that have
aid it can provide in the light young and growing industries in
have erected an almost impene¬ rapidly developed since the overthe West.
It would be a healthy
against inflation.
trable economic barrier between devaluation of the pound are the
has
1,
Dec.
the
of
Cleveland
public
would
the Life In¬
on
consisted
far, however, Mr. Gaitskell
So
consolidation
organized
by
the
and
'
plied by the success of the Mid¬
west Stock Exchange which was
service from the
broader markets which inevitably
Association of America.
surance
the
in
investors
and
by wire
probable that the impetus
is
to effect a
population and industry in the
in the past few years, the
progressive increase in number of
better
Stock
quick exchange of quotations
transactions, and with the
two institutions' memberships and
West
a
Coast
northern
with
for
in
Dec. 6 by the
Pacific
of
name
consoli¬
take
a
it might
effected,
southern branches linked
"In
taken
was
is
Exchange,
authorizing the initial dis¬
cussions, the governing.boards of
Speaking on behalf of its 83 the
two
Exchanges
were
in¬
million
policyholders,
the life fluenced by several basic factors,
insurance business called on the such as the tremendous increase
statement adopted
reported that if
dation
the members of each Exchange.
government for a stiff program to
light the new threat of inflation
arising out of the events in Korea.
statement
Witter
and
said.
be
markets
for
Atkinson
plan for unit¬
any
two
formulated
the
equipped to serve
expansion and growth which the
future holds for the West," the
rec¬
ognize the vast amount of explor¬
months, before
better
ket
and
said in their joint statement,
in¬
along with
policy of
a
Chairman
Witter,
Angeles Exchange.
Messrs.
Atkinson
and
to
into bands of savers,
joint statement
Dec. 20 by Douglas G.
Los
bone;
tightening monetary and credit
controls; and getting public debt
expenditures
military
se¬
the West, are
the
to
on
Phelps
creased taxation; cutting
principal
two
markets in
Atkinson, Chairman of the Board
of the San Francisco market, and
Program
Five point program proposes
Chicago.
Ex¬
exploring the possibility of con¬
solidating
their operations,
ac¬
Group
Inflation
the
Exchange,
curities
Recommends Anti-
fast.
be¬
ginning to appear and the ex¬
pressive word "bottleneck" was
coming into use again. The Presi¬
dent of the Institute stated that
Stock
Francisco
San
cording
things that the coun¬
needed
and
try
abroad
sell
to
of the many
similar to Midwest Stock Exchange
—at
change and the Los Angeles Stock
Export,
of
Committee have met to discuss the
be held
The
the
in
Angeles and San Francisco Stock Exchanges report plan¬
•
Chancellor Gaitskell admitted that
while it was now easy
of Commonwealth Prime
Los
Thursday, December 28, 1950
Exchanges Considering Merger
ning joint organization
improvement of conditions
for the
There
West Coast
mostly firmer in a quiet pre-
were
to
...
(2544)
very
actual
practice, these things might work out
much
as
Mr. Tobin asserts.
they would.
Indeed,
we
are
inclined to believe
They would do so, however, only because of the
"indoctrination" to which wage earners have been
subjected of late years, which has led them to refuse
to do anything at all unless they "get theirs."
We suggest a comparison (or rather contrast) with
the attitude expected of management and investors
be forthcoming quite generally,
generally
—
an
attitude which, without doubt, will
Ex¬
Volume 172
Number 4972
.
.
The Commercial and Financial Chronicle
.
(2545)
Predict Civilian Goods Decline
New York
NAPA Business Survey
ton,
say
Our
Committee, headed by Robt. C. Swanhowever, civilian restrictions on use of strategic mate¬
Reporter
rials will not be felt until March. See inventories at low for
year
A
composite
opinion
of
inventories are
at
the low for the
year, and generally
out of balance. From the amount
of
Agents' Business Survey Commit-
tee, whose
Robert
C.
Swanton,
Director
\h-'[
below
of
practicable
a
mobilization
Wine hester
defense
inventory
From
Agents
of Olin Indus-
New
Conn.,
e s
a
and
t i-
civilian
in
February
tories
kinds
"August
March, according to the NAPA
which
also
"Even
with
acceleration
of
reported
the
all
second quarter.
of
more
of
young men out of
industry. Replacements
from housewives, older
may come
men, and
longer working days and weeks.
Buying Policy
"The
of
putting
a
few
bit
a
in
government
far
as
ments
contracts
ahead
delivery, but
commitments
Others
3-month
a
non-controlled
materials, *to
purchased
balance
the quantity that can be used with
the allowable controlled materials.
vises and, in many
cases, reverses
trend of industrial
planning
nant), are taking a very cautious
view of the future until they know
and
what, how much, and when they
will be required to produce for
temporarily adds to the
created
limitation
"In
by
orders
the
con¬
materials
already issued.
mobilization."
orders,
to
correction
a
be
somewhat
con¬
"Prices pushed tip again follow¬
the* steel cost increase. In¬
dustrial
purchased
ventories
about
the
same
three
material
continue
in¬
months.
to
rate
drop
the
as
at
past
Employment re¬
high. Purchasing policy is
extending slightly into the four
mains
to
six
with
months'
as
buyers,
contracts, are
range
government
out to
cover
delivery
as
Hemphill, Noyes to
far ahead
commitments
as
firm
be
can
"
Hemphill, Noyes, Graham, Par¬
& Co., 15 Broad
Street, New
York
City, members of the New
York Stock Exchange, will admit
William
G.
Maloney and Law¬
sons
M.
rence
Jan.
on
office,
Mr.
the
of
ager
Stevens
4.
1421
Willard
firm's
partnership
Man¬
is
Philadelphia
Chestnut Street.
I.
draw from
on
to
Stevens
Emerson
will
with¬
partnership in the firm
Dec. 31.
made.
"Purchasing Agents
comment
present priority ratings are
working well. The most fre¬
that
quent
complaint
mands
of
is
the
on
failure
to
provide
for
maintenance, repair and operating
supplies. With the step-up in mili¬
tary production, a controlled ma¬
terials plan may be necessary.
advance, assisted by
the threat
of
controls, inspired
another wave of price increases in
mobile
tainly
The
rollback
of
What other
rolled
back
at
cer¬
prices
Stock
Van
the
to
ad¬
request
of
set
the current
ceiling are
$64 question of buyers.
Escalators
that
are
a
work
both
City.
The
NPA
order eliminating
firm
and
effect
on
is
having
a
,
Van
the
Raalte,
New
York
Partners in the
too
Loan Trend
reserve
of
normal
other words
of
the
Midwest
requirements
Main
reason
ship:
A.
Clarence
A.
Riley,
Chicago,
Kamrath,
111.;
Chicago,
111.; and Robert B. Newman, Presi¬
of
Newman
and
Company,
Springs, Colorado.
Messrs. Riley and Kamrath will
depressing
come
as
to the
brokers.
as
a
general partner.
will
be
change
considered
by
the
Ex¬
Jan. 4.
on
Agner Lichtman will retire from
partnership in Ungerleider & Co.
an
Dec.
31.
Factor
for the
it will take
and
uncertainty
little
a
over higher
time to see if
more
quite
few of the smaller nonbank investors
a
are now
funds into the
putting
some
higher yielding government obligations. These in¬
stitutions have up until quite
recently been on the sell side of the
market. There is also a not
unimportant amount of buying in the
intermediate-term eligibles.
This is being done by commercial
banks
which
Lehman
Loans
are
Practical
quite a number of deposit banks in the
outlying
showing signs of slowing down, principally those that
Edition
and
Roy
Credit
A.
V.
Foulke
—
2nd
Prochnow
—
Prentice-
York
11,
N.
Y.—cloth—$10.
that
on
Primer
ceived
price weakness.
S.
Savings Banks Now Buying
psychology."
The
savings
banks
.
.
Life insurance companies
have
with
■
>
associate,
on
request.
directed
•
on
to
Orders
should
be
Mr. Larmon.
u./s.
,
TREASURY
STATE and
temporarily holding for them the issues
to take
Lapham—
on the
volume being
this type of market pressure and it should not
be too
long before the large companies are again in there paying
■they liquidated in order
W.
taking
on
Federal several 32nds for
Thomas
Single copies 25c, quantity prices
haye pptrbeen as vigorous in their
liquidation of Treasury obligations, bujt: this does not
yet indicate
they are through selling these securities,
Nevertheless, time is
running out
Ave¬
New York 17, N. Y., and his
'
t•
*
Sigurd
upon
been
;
oft)
,
AmericahsCon¬
developed by
"wild inflation¬
a
lesser
a
and
Larmon, President of Young &
nue,
there will be a slowing down in these in the
not distant future.
Deposits of these banks have been affected in some measure
by
the booming stock
market, but it is not believed there will be
enough of these withdrawals to have an important influence
2Vzs of 1959/62 in sizable amounts
evident in the other tap bonds.
'
for
Rubicam, Inc., 285 Madison
Savings banks have been coming into the market
again, after
quite a spell in which they were sellers of various
governments.
Whether this buying will continue in
volume is not clear yet.
There are mortgage commitments still
to be taken care of, but
also
Bank
Herbert
—
Hall, Inc., 70 Fifth Avenue, New
ordinarily would be going into loans are now
being put into the 1%% notes or the longer
taxables, the latter
obligations
1
—paper.
of
monies
Brothers,
William Street, New York
5, N. Y.
are
consumers goods.
Also it is not ex¬
pected by most of these institutions that there will be
any reversal
this recently established
trend, unless there is a complete
change in the nation's economy and the international situation.
The
Brothers—1850-1950, A
Centennial—Lehman
heavy in savings deposits, and must have the
These funds had been
going largely into mortgages.
income.
MUNICIPAL
nongovernment commitments.
Pension funds,
with large sums to invest, are becoming in¬
creasingly important in the government market. They have been
taking and beyond doubt will continue
of the market.
They
are
right
now
SECURITIES
to take
large amounts out
mainly working on the Vies.
Exchange Floor to act
more than just token
buy¬
enlargement in these acquisi¬
tions.
:
.
Gamwell Co. Admits
Stock
Exchange has elected to member¬
Robert
Fisher,
limited partner
1.
Exchange mem¬
bership
of
the
late
Harry
A.
Augenblick to William A. Klubnik
to be upped to the
In
a
general
&
recently held conferences between private
loaning agencies
and the monetary authorities can
bring about voluntary limita¬
tions of these borrowings.
Nonetheless, there are other signs ap¬
pearing in the market which give a more favorable
light to the
picture.
Mortgages, according to reports, are slowing down in
many localities due to government regulations and as a
result,
CHICAGO, 111.—The Executive
Committee
become
come
violent.
Fisher,
Hammond
Fire and casualty companies have been
ers and there are indications of an
Midwest Exch. Members
copper
much
the outside copper mar¬
ket prices.
with
loney & Co.
Colorado
channels,
formed
partners in Block, Ma¬
were
dent
into
of
Exchange.
turning
back
be
Arthur
members
the recent conversion activity and
scrap
will
Partners will be J. Horace
Block
ways
protect the buyer with long-term
commitments.
Exchange firm of Block &
Raalte
offices at 1 Wall Street, New York
products will
the government and whether Dec.
scrap
be
.
Transfer of the
requirements and lower prices would be looked
by many money market followers as a
buying opportunity
T
auto¬
prices to Dec. 1 will
retrain further price
vances.
Form in New York
Stock
steel
December.
to
Effective Jan. 1, the New Yoik
both
Commodity Prices
"The
1
not
in
Jan.
as
that the
reserve
The loan trend is the
ary
Block & Van Raalte
on
the critical materials
on
and
give defi¬
with higher re¬
banks, it is believed, would not be of
long duration and would
de¬
suppliers for ratings
items not
be
were
investment policies unless there should
develop
not
list,
requirements
G.
F. Dewey Everett will retire as
limited partner in Hornblower &
Weeks on Jan. 1, but will remain
in
Admit Partners
overdue.
ing
reserve
The unsettlement which could
the commercial
increase in
areas
December, for the first time
sidered
if
come
1.
H.
a
have been made for durable
in four months,
the decline in
production matched the decline in
new
been
2
Boudinot
partner
coming to an end. This
does not rule out another shock to the market,
legal limits.
for
Jan.
on
E.
will
now
Jan.
and
the
are
range
cutting back
are
of
will
commit¬
as
available.
are
has
of
as
Cowen
coverage
6-month bracket. Industries hold¬
ing
market
C.
Co., will become limited part¬
ners
of
clues, the opinion appears to be more prevalent
"bear market" in Treasury securities is
serves
partner
A.
&
Ending
better market action here and
there is still too meager to
December,
industry to defense
production," the survey states, "re¬
fusion
government
Gerald
Cov/en, general partners in Cowen
'59/'62s, the 2%% tax shel¬
Treasury bills are still
buying, although there appears
to length maturities somewhat.
now
late
Dec. 6.
specialized
tendency
the
of
Bosvvorth, Sullivan & Co.
limited
a
securities
nite
into the 4- to
more
Industries not yet in defense pro¬
duction
(and they are predomi¬
the
a
partner¬
in the government market.
of future
range
extended
was
individual
as
from
James F.
Pierce, member of the
Exchange, and a general partner
in Chauncey & Co., will become
irregular. This is due in
part to Federal's flexible support, and
year-end adjustments which
have the tendency to distort the
picture temporarily. While the
upon
for
zation, the forecast of price, wage
and
material controls,
the pro¬
gram for greatly increased mili¬
tary requirements and speedier
of
more
scraped.
will take
keeping within
emergency,, the creation
Office of Defense Mobili¬
to be
idea, however,
of
conversion
bottom
being
New draft requirements
national
the
the
ceased
recently offered 13/4S.
which might
cover
declaration
concerned have been the restricted
tered issues, and the
the barrel of employables is
orders,
is expressed that
they can
be put into production in time to
take up the
anticipated slack in
March and the early
part of the
President's
roll
pay
far
as
are
The
then
indicate
areas
highlights of the market
and
in
Edwin
Bear Market
the peak month for
Interest
Wood
buying in the highest yielding
getting selective
retire
Dec. 31.
restricted obligations. The
partially-exempts continue to be in
demand but herein again the
supply is still a problem. The lim¬
ited amounts that are available
are
being snapped up by both
large and small commercial banks.
The
Hagen and Pierre Al-
will
ship in Beudix, Luinveiler & Co.
commitments by institutions that until
recently have been
on the sidelines. The shorter
tap bonds seem to have caught
the fancy of certain
nondeposit bank investors although there has
been quite a bit of
going away
use.
Since
brecht
mainly
suit¬
as
doubt
"The
not
are
in
growth has been small compared
previous months. Reports from
proposed
defense
used
to
of
in
materials
was
hiring.
new
will permit
survey,
follows:
equip¬
to mili¬
Employment
first
products for a limited period.
The real pinch of restrictions on
the use of materials will be felt
of
military
of
in-process inven¬
a high roll-out
as
while
production
goods
the
that
able for
quarter of 1951. The current fairly
high output of finished goods, it is
held, will continue during January
and
poses
civilian
gen¬
production
Swanton
of
another
problem
know
eral decline in
C.
letting
may be adaptable
tary production, many sizes, types
Inc.,
Haven
mates
Robert
of
the
ment
tries,
w
in-
for industry.
experience, Purchasing
pany, Division
f
and
contracts
Repeating
ArmsCom-
V*
working
speed-up
Promised
venory.
Purchases,
Herman
money
expediting being done to keep
production moving, it seems safe
to say that raw material stores are
Chairman is
changes:
Despite year-end adjustments, somewhat firmer
money-term
Federal's lowering of the
pegs, the government market
continues to make a not unfavorable
showing. Volume has been
increased by switches and
swops, but there have also been new
rates and
"Industrial
National Association of Purchasing
The New York Stock
Exchange
has announced the
following film
By JOHN T. CHIPPENDALE, JR.
Inventories
pur¬
chasing agents who comprise the
Stock Exch.
Weekly Firm Changes
Governments
on
17
'•
•
Joins Dean Witter
Gamwell &
Co., 40 Wall Street,
New York
City, members of the
New York Stock Exchange, will
G. Kenson is
admit Herman Hagen to partner¬
Dean
ship
Spring Street.
on
Jan. 1.
&
to
Admit
New
York
Co., 40 Wall Street,
City, members of the
New
York
Stock
admit William P.
nership
on
LOS
ANGELES,
now
Witter
&
Calif.—Bruce
affiliated with
Co.,
632
Aubrey G. Lanston
South
& Co.
1 INCORPORATED
Riter & Co.
Riter
(Special to The Financial Chronicle)
Exchange, will
Shirley to part¬
Jan. 1.
Mi',
<
Pearson Winslow
Pearson
Winslow
age of 57 after
a
15
died
at
long illness. For
number of years he was a vice-
President
New
of
York.
Bonbright & Co.;of
''
Broad
Street
the
NEW
a
'
,
YORK 5
WHitehall
3-1200
45 Milk Street
BOSTON
9
HAncock 6-6463
The Commercial and Financial Chronicle
18
Thursday, December 28, 1950
...
(2546)
citizens
our
Savings Gain Continues
This
A.
Utility Securities
Power &
Iowa
(Ipalco)
Light
There
Light Company
former subsidiary of United
a
Light & Piailways, has annual revenues of about $21 million, re¬
flecting a gain of 92% in the postwar period despite the broadly
rural nature of the area served. The company supplies electricity
nation's
banks,
cording
gas
differ somewhat
The
by
i
largely agricultural—corn and other grains,
territory is
dairying and other farm products—and there is
coal mining. Des Moines is a jobbing and publishing center,
diversified food processing, farm implement manufacturing
livestock,
Mutual
natural gas
P
industrial; 82% of gas revenues are
residential. The company's electric load has grown at the rate of
over 3% annually during the period 1920-49, and an annual growth
of 9% in the years 1950-53 is anticipated.
produced (principally from steam and
internal combustion units) about enough electricity to service its
the company
1949
substantial amounts were purchased, inter¬
retail customers, but
changed, and sold to other utilities. The former susbidiaries of
United Light & Railways continue to maintain an important power
though some
(Interchange Power Service, Inc.)
power allocation are being made.
pool
in
changes
Ipalco's central division has just installed a 50,000 kw. unit
brings reserve capacity to 18% (34,000 kw. plus approxi¬
mately 40,000 kw. available from the pool); the western division
has about 11% reserve (5,000 kw. plus about 15,000 kw. from the
which
Clubs,
Sav¬
Christmas
reached a record
of
payment
high total of $178,000,000 in 1950.
the savings
November,
During
increase their
banks continued to
ovidence
Kelley
;
;
-
Company at about 17c per million btu. which is only 63% of the
cost of coal. However, Northern Natural is seeking an increase to
which
19.3c
cost Ipalco
would
some
$438,000
a
year.
This is on
top of a $296,000 increase effective Sept. 27.
if the
However, even
it seems
because
increase is approved by the FPC,
new
unlikely to have much adverse effect on net earnings
of the anticipated increase in gas sales, the passing on to
of the cost through fuel or "gate" clauses, and
of 47% of the balance through taxes. The new
customers of part
die absorption
generating unit is expected to save the company about
$300,000 per annum of which about 158,000 or 10c a share will
steam
remain after income taxes.
It is unlikely that
Regarding
prospects for Missouri Valley federal power
the
coming into the service area, this is difficult to estimate, but much
of any available firm power might be allocated to heavy industries
located near the source. However, the Bureau of Reclamation has
115-kv. service line which would cross the company's
in western Iowa, and two 220-kv. lines from the southeast
projected
area
one
The company's relations with the
REA's, principally in Council Bluffs and the northern area, are
to the
vicinity of Sioux City.
j
quite satisfactory.
There is
state
no
■
,
.1
regulation of rates in Iowa, and the franchise
situation is reported
'to>be-good. A recent candidate for governor,
state commission, was defeated, but it
4s said that a bill for this purpose may be introduced at .the
next session of the legislature!
The company has completed an
original cost study, but this is not yet approved by the FPC and
SEC.
/ ■ 1 •' V '
I ••
•
'
who proposed creation of a
-
The
1951
construction
and after the first
approximate $7 million,
the company expects to project a
budget
of the year
may
five-year budget. The character of 1951 financing has not yet been
Net income declined
during the wartime period, but recovered
$1.85
taxes
to
much
might reduce earnings by about 16c,
rate
"if
we
can
maintain
The
substantially
earnings
30.
The
$7,847,000,00
gain
Nov.
on
$1,368,000,000
of
period
same
funds
last
year.
The
obtained by
$142,000,000
were
further reductions
of
monthly showing bettered that for in holdings of U. S. Governments,
the same month last year.
The of $33,000,000 in corporate and
gain in regular deposits in No¬ municipal securities, and of $13,vember reflects a lessening in the 000,000 in cash.
stock
has
been
selling recently
7.4%.
•
,
on
'
1
■■
"
;
record
.
M.
arden
405 South
Avenue. He was formerly
Kidder
&
Co.,
of
ith Smith, Barney &
Co.
120
Northeast
was
dollar
a
lion in
by
us
tighten
in
up
taken
ing
to
adequate financ¬
assure
where
facilitate
It has now
needed
to
lion
a
which
than
that
we are
better
before for
ever
productive
equipped
the
They have put into ef¬
fect the most recent developments
production techniques and
annual rate
an
above
War
the
II,
11
million tons
highest rate
and
a
further
World
of
large
ex¬
pansion in steel capacity is under
way.
We are producing electric
power at a rate 50%
above the
highest weekly rate of World War
II.
Our proved oil reserves are
than one-fourth higher than
the
of
end
the
and
are
steadily increasing.
A record ex¬
pansion program has been carried
out
by the petroleum industry, the
chemical
industiy, and
many
oth¬
/
ers..
Unfortunately, however,
a
-
voted
materials, is
of
make
we
-
on
are
the
maintaining
a
by
fiscal
the
for
well
run
But
a
in
the
our
objectives,
so
one
work
along with the other.
It is. necessary,'., of
course, that
we
restrict certain
those
of
a
the
as
defense
fully
more
become
activities.
We
the
today.
which the
take
may
in
that lies ahead is
with
full
a
one
of
our
benefits
raw
of
its
job
face
we
j urgency
To have to con¬
vert the fruits of
ucts
that
of
sense
its meaning.
and
nation.
our
mobilization
defense
our
labor, the prod¬
materials, the
intelligence of
management, of our technical
knowledge, into destructive in¬
struments rather than productive
machinery is not only a costly
it is an unhappy process.
It is, nevertheless, a job we must
process,
well—if
do—and
do
maintain
our
to
are
we
of life.
way
Today the survival of freedom
in
our
country,
own
in
the free
ership,,, and
those
the
funds.
situation
Congress
small
part
recorded
tures
billion
on
funds
one
the
policy
out a
greatest
have
already been provided, or
being considered by the Con¬
gress.
~
■
v
•
debt
of
program,
highest
order
the investment of
to
protect
the world.
111.—Harlan B.
Tooker has become associated with
Island
Bank
Joins
,
Co., Rock
Building.
Goodbody & Co.
(Special to The Financial Chronicle)
BOSTON, Mass.—Albert N. Salters
has
become
associated
with
Goodbody & Co., 50 State Street.
He
was
formerly with Investment
Research
Corp.
With Waddell & Reed
;
.
obligation /
the millions of
doubt of the ulti¬
Standard Bond & Share
are
essential.
With a
the present size,
the government has an
the
they
no
(Special to The Financial Chronicle)
possible
•are
determina¬
our
ROCK ISLAND,
larger
will be required than those which
public
be
of
by taxation,
increases
in taxes
much
our
can
our
American be¬
American principles,
protect
With Stand. Bond & Sh.
out
amount of these costs
remain
throughout
hand,
much higher level." If
carry
we
we
dom
Treasury on the other. In
and
in
subsequent years,
however,
defense expenditures
a
and
which
If
triumph of the cause of free¬
the
to
still
mate
expendi¬
the
in
steadfast
there
will
expenditures
at home.
to
liefs and
Only
more.
here
tion
1952
are
all
of
is
we pursue
actions
individual
and
the
year, be¬
of the time lag between the
actual
hearts
freedom
strong in faith, clear of purpose,
developed,
during the current
the
the
policies which
take
after
soon
budget
as
in
whom
hope, depends in large part on
the
the
new
provided
of these
placing of orders
and
a
The first of this month he
asked for $18
for
way
billion of
appropriations
Korean
and
-
emer¬
us
measures
no
citizen
The
The Presi¬
serious.
more
defense
of
the
to hold
inflationary pressures can
fully effective without the
wholehearted support and coop¬
eration of every group and every
program
under
dent asked for $17
we
in
confronts
be.
year
home
While, adequate
tax
revenues
sound "are the first essential of a sound
that
less
that
Certainly
the
problem of budgetary balance will
of
true
no
nations which look to us for lead¬
gets
be
per¬
is
gency
'ago.
a
effort
and. self-sacrifice
of all of us, and
this
thus far have
year
below
economy.
We must •Federal fiscal
economic objectives and not the
only
defense
a
reflects, in part, the fact that
expenditures other than defense
healthy
blend
will
itself
success
Equally important
efforts
First
in
efforts toward peace and sta¬
front toward
our
not
eventual
case
also
strong ,financing
industrial plant, capable of rapid
conversion to the production of
war
the
was
the increased taxes
the 81st Congress.
It
will be at
Our Economic Objectives
balancing
ago.
cause
war,
to
activity and
op¬
erating methods, and are continu¬
ing to seek new methods that will
yield greater productivity.
We are producing steel today
at
closer
"
most efficient machines obtainable
in
the
of
This reflects, in part,
current high rates of business
year
have installed the most modern and
anywhere.
finances
relatively strong
a
expenditures than
factories
Our
effort.
much
come
tremendous
a
the
position. Revenues currently have
v
this
emergency,
war
restraint
active
with
gram
materially to the continued growth
of this community's industrial em¬
pire.
..
This record industrial expansion
means
to
force which seeks
any
government in
contributed
have
enough
quires in the first instance a sound
government fiscal position.
We
are starting this rearmament pro¬
manufacturing
individuals,
to
demanded
are
A continued strong economy re¬
dollars in Greater Cleveland
alone for expanded
pres¬
down
strong
system of free enterprise, our way
bil¬
full
a
defenses
of life.
other comparable period in
our history.
In just the first three
years following the war, private
As
contribute
government
by military might to destroy our
any
controls.
can
In
time,
same
under the
mobilization for
government to invoke more
emergency
sonal
fields.
some
the
at
has
it
to restrict the ex¬
pansion of credit for certain ci¬
vilian uses, while steps have been
great nation, while building
a
withstand
.
investment than in
industry spent a quarter of
must,
we
our
.
plant and equipment
new
far greater
—a
at
formerly with
Blair F. Claybaugh & Co.
following
the government,
private business went ahead in the
postwar period and, by its own
financing, invested over $100 bil¬
•-MIAMI, Fla.—Mrs. Peggy Moore
joined the staff of Daniel F.
She
must
program
Without the investment
the War.
the Stock Exchange
Co.,
soundness of the
structure,
through self-restraint and by in¬
creasing our savings. ,J;.-
keep alitfe that incentive, that
drive, and that force that has made
has
Avenue.
credit
other
at this time.
necessary
been necessary
we
carried out in the years
and
&
expansion
a
But
(Sppcial to The Financial Chronicle)
Rice
are
nation's
ent
which business and industry have
Joins Daniel F. Rice
Stewart is now associated with
there
direct
,
CLEARWATER, Fla.— Edward
3
page
Strong
And Healthy Economy!
our
(Special to The Financial Chronicle)
-.
from
We Must Maintain
bility.
f
important
objectives,
fiscal
the
■
With A. M. Kidder & Co.
these
become necessary
Continued
guarantee
.
Necessary
to
addition
military production.
rough
as
of the important ob¬
one
In
For the first time since May the
'
1
present."
around 19 to yield
a
has been
jectives of Treasury debt manage¬
ment.
Credit Restrictions
Regu¬
bil¬
This inflation control action
To maintain the
President Gussett hopes to continue the $1.40
arithmetic estimate.
dividend
according to
will total nearly $11
duction
lion.
the
but increased income
the present bill)
(under
postwar low.
new
necessary
months ended Sept. 30, share earnings were
1,588,000 shares. It seems unlikely that EPT in 1951 will
on
amount
a
year ago.
For the 12
years.
to
three-year period, the re¬
a
month, in contrast to $82,000,000 a
at
sharply in 1944-5 and has shown a slowly rising trend in later
Over
safeguards
more
I
determined.
billion
$5
since Jan. 1 is 74% above that for
facilities
much additional gas will become available
gradually increasing supplies made available
by Northern Natural Gas, since the increase will be largely
absorbed by house-heating customers in Des Moines—of which
there are now 17,000 against an estimated potential of 45,000.
-
for boiler fuel despite
time peak, while government se¬
curity holdings of the commercial
banking system will be reduced
reach
I.
deposits reached $19,706,000,000, rising $88,000,000 during the
the
.
favored by the availability of natural gas
for boiler fuel during about half the year, and burns Iowa coal
in the winter. It has been buying gas from Northern Natural Gas
is
accomplish this, we
—to
vidence,
ro
of
have pursued the policy of shift¬
ing the Federal debt out of com¬
—by $149,000,000, in contrast to
$177,000,000 the preceding month
P
lar
(tentative orders have been given for these units, but the exact
sizes have not been specified). Ipalco in future will not have to
take so much power from the pool for its central division, but the
western properties will continue to draw from the pool and from
the Omaha Public Power District until the Council Bluffs plant is
company
well-being
holdings of real estate mortgages
R.
pool). With these reserves, no early additions to capacity are
scheduled, but in three years some 100,000 more kw. may be added
The
and
economy.
Savings,
A. Livingston
which
completed in 1953.
nation's
In order to
Institution for
23% commercial, and only 21%
In
r
reflecting
Banks
President
and
there are also small amounts from ice and
Of the electric revenues about 42% is residential and rural,
decline—of
seasonal
$141,000,000—occurred in club and
other accounts during November,
of
Association
usual
The
the
of
ings
of revenues are from electricity while
withdrawals up 23%.
s
g
National
contributes 24%, and
heat.
n
dent
also
with
and
light consumer goods.
About 75%
Liv-
A.
t o n
Kelley, Presi¬
operations, reserve capacity, etc.
to
as
a
just
released
report
to some 350,000 in Des Moines and other Iowa
communities, in two areas—one in the central part and the other
in the western. While the two divisions are interconnected, they
natural
and
to
as
way
deposited, excluding
exceeded withdrawals. mercial banks and into the hands
of private nonbank investors. Dur¬
Amounts
deposited
during
the
month
were
10%
greater
and ing 1950, holdings of government
withdrawals 9% greater in 1950 securities by private nonbank in¬
than in 1949, whereas in October vestors will be increased by $5
deposits had been up 17% and billion, raising them to an all-
ac¬
to
a
dividends,
mutual
529
the
amounts
deposits in
savings
in the trend of savings
the
for
in such
out
stability
the
of withdrawals,, so that
first
time
since
June
pressure
more
a
the
total of around $20 billion.
a
evidence during No¬
definite upturn
was
vember of
carried
management
planned and
is
contribute in maximum degree to
Banks, reports November deposits increased
$88 million, reaching
By OWEN ELY
Iowa Power &
Kelley, President of National Association of
Livingston
Mutual Savings
debt
a
which
program
Public
in Federal securities.
means
(Special to The Financial Chronicle^
CANON
Peterson
is
CITY,
Colo.—D.
connected
dell & Reed,
with
Lee
Wad¬
Inc., of Kansas City.
Volume 172
Number 4972
.
.
.
The Commercial and Financial Chronicle
(2547)
19
Secuiity Traders Association of New York
Ernie
Robb, Paine, Webber, Jackson & Curtis; Chas. Goodeve, F. B. Ashplant & Co.; Joe Cabbie,
& Co.; Fremont W. Robson, A. E. Ames & Co., Inc.; John Macdonald, Dominion Securities
Corporation; Irving Grace, W. C. Pitfield & Co., Inc.
Abraham
John
Sullivan,
Alfred
L.
Julius
Merrill Lynch, Pierce, Fenner & Beane; A1 Powell,
Company; John Reilly, J. F. Reilly & Co., Inc.;
Hirsch & Co.; Hank Serlen, Josephthal & Co.
Powell
John
A1 Tisch, Fitzgerald &
P.
Warren
F.
Fox
,
Mayer, Merrill Lynch, Pierce, Fenner & Beane; Leslie Barbier,
G. A. Saxton & Co., Inc.
&
Company, Inc.; S. E. Dawson-Smith, Bonner & Gregory; Paul C. Fredericks,
W. York & Co., Inc.; Charles M. Kaiser, Grady, Berwald & Co., Inc.; Barney Conlon,
Co.; Charles O'Brien Murphy, Merrill Lynch, Pierce, Fenner & Beane; William Lally,
J. Arthur Warner & Co., Inc.
Arthur
Ed
Vare,
Hourwich & Co.; Ernest Lienhard, Troster, Currie
Reed, Carl M. Loeb, Rhoades & Co.; Ed Whiting,
Loeb, Rhoades & Co.; Bill Filan, Carl M. Loeb Rhoades & Co.
& Summers; Harry
Carl M.
Brown,
Nat Krumholtz, Siegel & Co.; Hoy Meyer, Gruntal & Co.; Edwin L. Tatro, Edwin L. Tatro Company;
Ed Corley, Blyth & Co., Inc.; Bert Pike, Troster, Currie & Summers; Giles Montanye,
H. M. Byllesby & Co., Inc.
Jr.,
Joseph V. Farrell, McGinnis & Company; Frank Kane, Ernst & Co.; Fred Barton, Eastman, Dillon
& Co.;
Carl Lachman, Jr., Eastman, Dillon <£ Co.; Dick Abbe, Shields
& Company;
Vinnie Lytle, Shields & Company
Gutberlet, Paine, Webber, Jackson & Curtis; Bill Eiger, Goodbody & Co.; Ree Bolognini, Lasser
Nelson A. Strothmann, A. M. Kidder & Co.; Richard M. Barnes, A. M. Kidder & Co.;
King Ghegan, Edwin L. Tatro Company
Bros.;
(front)
Blue
Jack
Gertler, Barr Bros. & Co.; Ed Ganser, First of Michigan Corporation; Roald Morton,
Publishing Co.; Taber J. Chadwick, Taber J. Chadwick Co.; Charles Horton, Broun,
Co., Incorporated; Harry Peiser, Ira Haupt & Co.; Mel Moore, Fintfh, Wilson & Co.;
Jim Musson, B. J. Van Ingen & Co., Inc.; Ken
Ebbitt, Shelby Cullom Davis & Co.
List
Bosworth
&
20
The Commercial and
(2548)
Financial Chronicle
...
Thursday, December 28, 1950
Annual Election Meeting
Ely Batkin, Batkin & Co.; Herb Lax, Stanley Pelz & Co.; Soren D. Nielsen, New York
Corporation; Otto Steindecker, New York Hanseatic Corporation; Hans E. Ben, New York
Corporation; Frank Welch, R. S. Dickson & Co., Inc.; Arthur Schwartz, Bache &
Sam
Gold, J.
Posner
&
Arthur Warner & Co., Inc.; Jack Sammon, Andrews,
Tom Brown, W. E. Hutton & Co.; William
Rothschild;
Tetmeyer, Dominick & Dominick; Dan
Dave
Wittman,
Jr.
&
William
H.
Boggs, Hill,
Don Sloan, Donald
Jim
Thompson & Co., Inc.; Harry Arnold, Paine,
C. Sloan & Co., Portland, Oregon; Walter Saunders,
FitzGerald,
W.
L.
Canady
Sam
&
Co.,
Magid, Hill,
Inc.;
Mike
Thompson
Korn, Dominion Securities Corp.; D. Raymond Kenney, D. Raymond
Saunders, Dominion Securities Corp.; Hugh Kilmer, Hardy & Co.; Charles
Marks & Co.; Jim Torpie, Torpie & Saltzman
William
Oscar D. Griffin, Griffin, Kuipers & Co.; Rudolph Petke, Garvin,
Bantel & Co.; Henry G. Kuipers, Griffin, Kuipers & Co.; Chas. Jann,
Mullin, Tucker, Anthony & Co.
Estabrooh & Co.; Jim Brinkerhoff, J. C. Bradford &
Stanley Heller & Co.; Ted Young, Theodore Young <£ Co.; Harry Casper, John J.
Co.; Tom Davis, A. C. Allyn and Company, Inc.; John French, A. C. Allyn and
Company, Inc.; Nat Greene, Townsend, Graff & Co.
O'Kane,
tion;
Hanseatic
Hanseatic
Co.
Heaney,
& Co., Inc.
Webber, Jackson & Curtis;
Dominion Securities Corpora¬
Michael
J.
Heaney
&
Co.;
Sid
Co., Inc.
John fuzgeratd, W. C. Pitfield & Co., Inc.; Joe Kirk, Delafield &
Delafield; Tom Worthington, C. Herbert Onderdonk Company;
Ed Gutberlet, Paine, Webber, Jackson & Curtis
Siegel, SiegeI & Co.; Tom Greenberg, C. E. Unterberg & Co.; Stan Pelz,
Preller, McGinnis & Company; William Swords, Zuckerman, Smith &
John
Homer
O'Connell
&
Stanley Pelz & Co.
Co.; A1 Kadell,
Co.
Maddox, W. E. Hutton & Co.; Sam Colwell, W. E. Hutton & Co.; William Frankel, J. F.
Co., Incorporated; Tom Brown, W. E. Hutton & Co.; Sam King, King & King Securities
Sam Gold, J. Arthur
Warner & Co., Inc.
Bill
&
Kenney & Co.; Walter
Zingraf, Laurence M.
Reilly
Corp.;
Volume 172
Number 4972
.
.
.
The Commercial and Financial Chronicle
(2549)
At the Produce
Exchange Luncheon Club
Sam
Weinberg, S. Weinberg & Co.; Irving Feltman, Mitchell & Company; Harry Michels, Allen &
Company; Bill Weiffenbach, Theodore Young & Co.; Charles Ogden, Ogden, Wechsler & Co.;
Sid Jacobs, Sidney Jacobs Co.
Jim
T.
Torpie, Torpie & Saltzman; Dan Mullin, Tucker, Anthony & Co.;
Mackessy, Abbott, Proctor & Paine; John Kassebaum,
Alstyne, Noel <& Co.; In the background, John J. Meyers, Jr.,
Gordon
Stan
G.
A.
Graves
&
Edward
Fischer,
Ogden,
Wechsler
Robert S. Byfield; Irving
& Co.; John Stein, Frank
"Duke"
Phil Kullman, John J. O'Kane, Jr. & Co.; Henry Gersten, Gersten
& Frankel; Rudy Petke, Garvin, Bantel & Co.;
Stanley Eaton,
Bendix, Luitweiler & Co.; William H. Boggs,
u:"
"
Hill, "ru
Thompson & Co., Inc.
Frank
Van
Co.
21
Roggenburg, Roggenburg & Co.; Herb Seijas, Blair, Rollins & Co., Incorporated; Les Barbier,
Saxton & Co., Inc.; Henry Bruns. H. G. Bruns & Co.; John J. O'Kane, Jr., John J. O'Kane,
Jr. & Co.; Frank McKenna, Grimm <£ Co.
Ittleman,
Frank Ginberg
Ginberg & Co.; Elbridge
Hunter & Co.
&
Co.; Arnold Wechsler,
Smith, Stryker & Brown;
Hunter,
Alfred
Tatro
&
Tisch, Fitzgerald & Company, Inc.; King Ghegan, Edwin L.
Company; Bill Kumm, Dunne & Co.; Les Frenkel, Gersten
Frenkel; Ernest Robb, Paine, Webber, Jackson & Curtis;
"*—*—
"
°
*
Micky Pinkus, Troster, Currie & Summers
—
Larry Wren, Allen & Company; Harry Pollack, Leone & Pollack; Abe Strauss, Morris Cohon & Co.;
Charles Seaver, Seaver & Company; Carl Swenson, G. H. Walker &
Co.; John Fitzgerald,
W. C. Pitfield & Co., Inc.
J
•
.
Everett
Walter Johnson, G. A. Saxton & Co., Inc.; "Pete" ^teven, A. C.
Allyn and Company, Inc.; John Doherty, A. C. Allyn and Company,
Inc.; Harold Burke, Auchincloss, Parker & Redpath; Frank Warner,
G. A. Saxton & Co., Inc.
F. Wendler, Mitchell & Company; Lamar Tuzo, Union
Securities Corporation; Robert A. Torpie, Merrill Lynch, Pierce,
Fenner & Beane; Bill Salisbury, Union Securities Corporation; Gustave J- Schlosser, Union Securities Corporation; William Mulholland,
i
McLaughlin, Reuss
&
Co.
William
G.
T.
H.
Maddox,
Walker
&
Jr.,
Co.;
W. E. Hutton & Co.; Carl Swenson,
Sam Colwell, W. E Hutton & Co.
,
The
22
Commercial and Financial Chronicle
...
Thursday, December 28, 1950
(2550)
Pronounced Huge Success
Charles Stonebridge,
Gene
Stark,
William
York
Joseph Mitchell, William Fleckner, Thomas J. Trager, John M. Mayer,
Chas. O'Brien Murphy, all of Merrill Lynch, Pierce, Fenner &
and
D. O'Connor,
Affiliates, Inc.;
Germain,
J.
Arthur
&
Co.,
Inc.;
Allen
Broomhall,
& Frenkel
Kennedy, Coffin & Burr, Incorporated;
Schoellkopf, Hutton & Pomeroy, Inc.
Frank,
Masterson
&
Reinholdt & Gardner; Wilbur Krisam, Geyer & Co., Inc.;
Co.; Jim Brennan, J. G. White & Co., Inc.; John Witkowski,
John
Gahan,
■
:
'
Joe Egan, Frank C.
John Witkowski & Co.
& Co.; Tom Reilly, J. Arthur Warner & Co., Incorporated; Harry Stillman,
Co., Incorporated; Hank Serlen, Josephthal & Co.; Ted Plumridge, J. Arthur
Incorporated; Mort Weiss, J. Arthur Warner & Co., Incorporated
Samuel Englander, Marx
J.
Arthur
Warner
Warner
&
&
Co.,
Henry R. Schmitt, Pulis, Dowling & Co.; William H. Boggs,
Thompson & Co., Inc.; David R. Mitchell, Blair F. Claybaugh &
Edward R. O'Kane, John J. O'Kane, Jr. & Co.
V
V.
Bob
«"»
V..:**..**-;.- .»l.
mn. .t.
Warner
New York Hanseatic Corporation; Lester Frenkel, Gersten
Walter C. Kruge, James D. Cleland Company
Walter
& Co., Inc.; Vic Reid,
Bolognini, Lasser Bros.;
Fitzgerald <£ Company, Inc.; John Butler, Geyer
Barney Nieman, Carl Marks & Co., Inc.; Ree
Connie Sheridan, Mitchell & Company
————————————————
Jack
Jay Duga,
Beane
Hill,
Co.;
S. R. Melven; Jim Currie, Troster, Currie & Summers;
O'Kane, Jr., John J. O Kane, Jr. & Co.; John Sullivan,
Lynch, Pierce, Fenner & Beane
'
John J.
Merrill
•:
Harry
Arnold,
Paine,
Webber, Jackson
& Curtis; Don Sloan,
C. Sloan & Co., Portland, Oregon; John McLaughlin,
McLaughlin, Reuss & Co.
Donald
Sidney
Jacobs, Sidney Jacobs Co.; Joseph C. Eagan, Frank C.
Lester Frenkel,
Gersten & Frenkel; Charles Bodie,
Stein Bros. & Boyce, Baltimore, Md.
Masterson;
Volume
172
Number 4972
.
.
The Commercial and Financial
.
Chronicle
(2551)
Continued
from
9
page
tion, and undoubtedly this is
one
means.
Third,
Current Credit Picture
and
pronouncements of the Sys¬
tem, in the opinion of many,; are
having a dampening effect upon
the high loan activhy.
There are
who believe that these
some
trols,
coupled
seasonal
with
reduction
the
con¬
normal
in ciop
is needed in the
fense
or
find
some
borrower.
Regulation
of
finance
to
tion
pro¬
duction
production of de¬
we
should
way
for
There
V
will
instances in which
are
should increase
a
out
reactiva¬
The
World War II, and that pro¬
can and will lick inflation.
won
goods,
war
worthy
move¬
are
obtainable, if the loan
or
in
—
tomers
assist
tion.
our
increase
their
times, this
ment
we
loans—go all
worthy cus¬
assisting
to
At
produc¬
call for
may
loans, will bring about a us in the case of many larger new
machinery, as well as addi¬
satisfactory decrease in loan to-, loans and very thin credits.
I tional
working capital funds.
tals by the year end.
Be that as know, however, that those of us
Wherever possible, if safe loans
it
may,
still
we
have
before
here this morning are hopeful that
us
'
the
r2al
problem
of
high
loans;
controls of the
regardless of the
Federal,
present
and
plated, we still have a
contem¬
business.
Some
of
trols
Reserve.
also
and
con¬
the
of
higher
a
loans with
new
attempt to weed out many
loans which perhaps
dled.
Few
looking
1 It
might have
ago
is
also
today
outside
are
investments.
that
true
five
been han¬
banks
for
an
mar¬
ginal
years
banks
some
•
have
rates
been
increased
to
a
.modest
extent, principally in the
raising of the prime rates.
More
.
'rapid repayment schedules in
;
tain
cases
All
these
of
being
are
have
cer-
demanded.
having effect.
Each of us, however, is consider-
ing
what
be
.
in
our
the
which lie
fthe
policy- should
own
and
weeks
ahead.
None
but
answer;
suggestions
months
of
may
has
us
perhaps
stimulate
some
our
tion.
Some
loan policy
our
First,
should
let
like
would
to
continue
all
suggestions under three captions.
I would prefer to think of them
probable
as
help
practical
to
answers
meet certain opportunities
us
Reserve
System
inflationary
discharge
customers
our
I
will
obligations
our
to
and
our
nation.
not
these
present
to
in
the
; order of
their importance.
Each
important, and there necessarily
is
is
overlap
an
of
with
one
the
other.
cult
we have an obligation and
opportunity to serve our cus¬
tomers.
They, have worked with
-and for us through the years, and
consider
must
.we
ments.
their
We should take
legitimate
credit
of all
care
needs
.worthy customers.
.qualifications—all 1
.credit needs of
require¬
of
our
Observe the
i t i mate
worthy customers.
•to
these
for
care
customers
is
a
"very real obligation.
Many of our
customers, borrowing for proper
.purposes
and entitled
to credit,
using
.are now
discount facili¬
our
ties
for
the
The
low
purchasing
first
this.
years.
power of
the
higher business
dollar and the
tivity
in
time
ac¬
responsible in part for
are
We must take
care
of these
responsible customers when their
,borrowing requests
are
for proper
purposes.
,
Second,
obligation,
have
we
and
nity, to help
forbid that
a
have
awful
and
in
Korea
well
the
be
mishes
hope
of
a
opportu¬
China
a
God
rearm.
Third World
conditions
may
skir¬
conflict.
know
averted,
our
that
or
nation
strong.
To
won
if
if
must
be
war
it
is
does
be
strained- relations
regardless of how tactfully they
handled.
We hate to see cer¬
tain of our good friends affected
adversely by any regulation; and
have observed with regret the
of Regulation W, for ex¬
effect
automobile dealers;
on our
Regulation
X
estate
frustration
been
we
come,
must
rearm.
We
must
endeavor
financing defense and
to
assist
war
to
in
orders
accomplish this purpose. If the
integrity and know-how are pres¬
on
of
of
some
as
our
who
obtain
to
our
well
as
customers
unable
of
some
customers;
have
loans
to
out some of thdir plans.
Despite this, I feel that we in the
banks
should
to
the
cooperate
carry
fullest
degree, adopting the spirit
well as the letter of the present
regulations
it
^impose.
to
but
should
We
look for loopholes
tions,
which
others
any
he^necessary for the
may
eral
or
Fed¬
not
in the regula¬
should
we
try
so
far
possible to bring about sincere
as
from
customers
our
with the anti-inflation program of
the Federal.
The future welfare
of
nation, and perhaps of the
our
world, depends in
great
a
measure
May
Most
of
speculative
loan which
Now,
differentiate
loans
I
at
easy thing
times between
an
judgment
and
begins
is oftimes
mine.
When
of
pass
which
Where
stops
tion
those
good
speculation
hard
to
deter¬
a
accumula¬
reasonable
from
does the
inventory
of good
the
bounds
business
few
a
on
at
times
insist, that the bor¬
rower
increase his curtailments
these
slow
several
are
those
cour¬
which
loans
for pure speculation.
Also,
some
properly;
loans
and
can
these
types
of
handle.
were
loans
think
I
to
handle
should
we
time
when
looking for loans,
delighted
we
carefully the
which
the
should
we
discourage.
In
be deferred
we
all
we
aged.
must
will
for
It
to curb inflation.
direct
doing what
our
we
efforts
can
in
toward
to curb infla¬
and-
choice
We should
that
will
en¬
increase
production,
needed both for re¬
arming and for our civilian needs.
We
must
some
slow.
Richard
rapid liquidation of
which
should
have
be
Morey
ST. LOUIS, Mo.—Richard Morey
will be admitted to partnership in
.
but
We
re¬
new
present loans which
our
good,
are
our
on
time encourag¬
same
more
of
intelligent
arrange
programs
been
intelligent
A. G. Edwards & Sons, 409
North
of the
in the pricing of our money, rec¬
ognizing this as a means to assist
Eighth
in
Exchanges, on Jan. 4. Mr. Morey
is Manager of the firm's munici¬
pal department.
curbing inflation to
some
ex¬
These
the
of
some
are
facets
loan policy which will
opportunities of
ing and of
help
our
Street,
York
members
Midwest
and
With Inv. Service
Stock
Corp.
serv¬
discharging
obligations to
New
custodiers,
DENVER,
our
Smith is
our
Colo.
now
—
Bernard
Corporation, 650
Seventeenth Street.
nation, and the world.
will
Securities Salesman's Corner
■
Also,
think
I
that
should
we
carefully consider this question of
repayment requirements on new
loans.
The more rapid repayment
schedule
we
can
with
arrange
propriety, the better job we
doing for the country and for
are
our
banks.
Again, we should consider the
question of rates on loans.
The
rate
on
short-term money, in the
opinion of many, does not have an
outstanding
short-term
deterring effect on
borrowing; but it does
have its effect.
For years we have
By
On Nov. 28, a large
eighth of
an
Funds
that
a
size advertisement which took
fre¬
quently
almost
so
than
used to
duction of many famous well-known trade marks such as Zenith,
Remington
R.C.A.,
Rand,
to Put Trade Marks Like
Then copy such as
invested in 50
These
Railway,
Northern
Great
Pequot Sheets, Bell Telephone, etc.
money
until
different
are
we
those whose trade marks
down,
up
the ordinary financial
seeing in our daily papers.
This ad was signed by a group of dealers.
Sixteen West Coast
dealers
got together and placed
an
advertisement that had
some selling copy in it for a change.
Here is a resume of the way they put their story across. At
the top of the ad (taking almost a half of the space) was a repro¬
entirely
was
advertisement that
down,
down,
JOHN DUTTON
full newspaper page, carried a story about Mutual
been bidding for loans; and com¬
petition has been driving our rates
to
or
Ethyl
Gas,
Here was the heading "How
Work
for You."
this followed: How would
you
like to have
60 nationally-known business firms like
pictured'above? Well, you can do it
Mutual investment funds give you the advan¬
are
we have been poorly paid,
actually underpaid, for our
money. Many of us who are han¬
for
dling
and bonds. The value of your
if not
loans
finding it
are
what difficult to
and
change
properly price
much
so
from
our
the
some¬
our pace
loans.
rowings,
we
increase
our
in
should
loan
continue
rates
of
keeping
with
to
new
on
borrowings to
point
realistic
a
This will also
serve
degree in combating in¬
some
flation.
Of course,
sider
credit
our
we
should also
techniques
them down to date
assist
tion
and
that
so
bring
we
can
well
as
the
in
rearming
for defense of this country of ours.
This requires intelligent appraisal
the facts and
of
edge
when
of
a
proper
and
how
are
map
and
our
ahead
unless
changed.
a
are
course
We in the banks have
banks' in
business
is
of
on
these
our
a
days of high
time when
nation.
The
we
must
prospect
handling the loans for defense
top of our very high present
volume
is
one
which
to realize how thin
our
single security that is backed up by many individual stocks
investment company share is a direct
reflection of the stocks and bonds back of it.
Regarding dividends the ad said: You
can
have ownership in
widely diversified list of securities. You share in their earnings.
When dividends are paid you get them.
a
And it went
is
spread
on:
The risk present in every
out among many issues.
form of investment for the
form of investment
This is the most satisfactory
or woman
man
of limited
means.
Over
750,000 people own them.
No Mystery About It. There is nothing mysterious about buy¬
ing investment fund shares. The price is plainly marked. There
is a sales charge to the investor included in the offering price of
investment company shares offered by dealers. For details thereof,
and appropriate material information, see the prospectus. And the
advertisement concluded by suggesting that the reader call one of
the 16 dealers who were named at the bottom of the page, and it
also
their individual
gave
I don't know if this ad
addresses and telephone numbers.
any inquiries, but I believe it
Group advertising of this type is
brought
is pointed in the right direction.
something new, but I don't-see any reason why security dealers in
each community cannot get together and share the costs of this
causes
capital
of educational
advertising.
The
people
more
about
know
be for your
salesmen to go out and do business.
opinion this is the sort of advertising that people will
read. It is definite and clear. It promises nothing that isn't entirely
correct in every way. Isn't it much more effective than some of
In
the
my
that
ads
we
see
so
often
such
Funds," followed by the dealer's
bering
as:
name
"We
Handle
All
Mutual
and address?
of the
Some
a
activity, depreciated dol¬
lars, and at
rearm
a
investing in securities, in Mutual Funds, and what you are offer¬
ing in the way of investment service and advice, the easier it will
very difficult problem in trying
to handle the loan portfolios of
our
in
type
use
study of the
clearly point
our
$25.
to
feeling inflation with
of history will
as
knowl¬
other than the customary plan of
loan procedure.
We
little
tage of investing your savings, regardless of how small or large,
this battle against infla¬
in
as
con¬
analytical methods and
our
as
Not
standpoint
income, but more from the stand¬
point of placing a brake on bor¬
to
C.
associated with In¬
vestment Service
}
us
we
loans
courage
the
have less money
spending.
tend to reduce the deposit money
created by his' loan. It will help
loan
We should have firmly
on
loans, it will help in
in the inflationary
battle.He
were
mind at all times the fact that
in
ways
available
loans
which could be made safely. Some
of these today should be discour¬
are
our
encourage,
vengeance,
refuse
selective
more
meet the
we can
out the rocks and shoals which
to
be
us
time
are
culty, however, I think without a
doubt that we should try to make
age
discourage speculative loans
of our loan risks.
secured, perfectly safe obligations.
it these
be
can
assist in rearming.
We must
cooperate with the Federal in its
anti-inflation efforts.
We should
a
If
We must
which
tent.
loans
These
will
we
to
good, but which
judgment to that of
speculation?
Despite this diffi¬
the distinction and have the
loans
of
any
propriety be
am
frank to
and
speculative.
are
as
all
resulting from "good busi¬
judgment"
ness
well
as
admit that it is not
to
possible,
as
with
can
deferred.
should dis¬
we
far
loans
so
are
figures today.
Second, I think
courage,
all
well-
—the
infla¬
suggest
have been slow.
and present
dangerous,
I
have
us
more
strong,
tionary tide.
com¬
job,
properly arranged and which
might reconsider.
we
upon our ability to hold, if pos¬
sible—in any event to slow down
likewise
be
be¬
are
should consider very
But
to
create
times
at
us
diffi¬
are
They
the
militarily
strong,
They
We
and
reverently
ask
Almighty that this be not so.
we
in
very
preliminary
such
real
very
great
nation
our
we
The
War.
a
anti-
of
tween the bank and its customers,
e g
These are very important qualifi¬
cations.
To make these loans and
its
None
administer.
to
cooperation
First,
an
cooperate
in
efforts.
likes regulations.
as
and
to
we
to help to
inflation, it, seems to
should reconsider and
we
Richard Morey io Be
A. G. Edwards Partner
loan policies
our
worthy customers.
handle
loans, at the
we are
books which
and
that
our
can
we
policies.
which
wholeheartedly with the Federal
individual
these
present
the
the
suggest
me
change
our
in many cases. We must take care
of all legitimate credit needs of
payment
present-day emergency
conditions spme other of our loan
at
few?
a
that
to
May
important way
help to curb in¬
have to
very
adjust to
it
loan policy, assist in
our
one
curb
or
me
while
outwardly
a
condition exists.
There
in which we can,
through
This may call for
.To accomplish
ing the
away
several ways
the
;
to
this battle against inflation.
we
bat
great na¬
liken
is
Lastly, if
be
our
eating
real
Suggestions for Bankers
can
made.
pro¬
that those
see
flation.
suf¬
Russia
additional
should
bit of ingenuity at times,
in which
vitals
very
healthy
are
of
I
about
for
within
terminates
ample,
greater degree
for the months ahead.
horse
defeat from
to
.and
a
bring
that^ inflation
feel
thinking, point up our problems,
possibly help us to formalize
,
and
Trojan
I mention
reviewing more carefully their
present outstanding loans.
Loan
,
.
the
are
f
This
undermine
Some
Federal
There has been
selectivity of
"
have
curbs
own
those
to
flation.
but it
combating in¬
insidious thing can
about
we
are
good
a
nation
our
in
world
fering, distrust, weakness, defeat.
banks
our
their
must assist
we
the
and
bring
can
duction,
loans
in the form of guaranties.
Third,
ing needs resulting from the re¬
arming activity and from normal
added
by the banks without outside pro¬
tection
r&il
very
problem in caring for the borrow¬
civilian
good part of this job can be done
a
deposits
with relatively thinner
capital
funds.
"
loans
encourage
we
ductive purposes.
It has been said
that production to a great extent
ent, if needed plant facilities
available
to
can
should do all that
we
all forecast additional
23
and
phraseology in this ad might be worth remem¬
putting into your sales talk on Mutual Funds. For
example, why not say, "Instead of a few securities here you have
ownership in a widely diversified list of securities. The risk is
divided among many
issues. You share in their earnings. When
get them." It seems to me that this is both
^
dividends
are
paid
you
good advertising and good salesmanship.
When 16 dealers get together and place
the joint benefit of each
an
idea
country.
in
one
an
advertisement for
of the participants, possibly there is
it for many other groups
of this kind throughout the
The ads could deal with educational material that would
cushion is in relation to the pros¬
pective loans which must be han¬
dled.
The insidious and increas¬
setting the public straight on the securities business,
they could build goodwill for your own business, and they could
help you and your salesmen sell more and do a better job in every
ing inflation, the probability of
larger bank loans, and the pros¬
pect of further deficit financing,
way.
be helpful in
Once again I'll
bring all of
say/"Happy New Year, and may it
and the health to enjoy it."
you success
24
(2552)
The Commercial and Financial Chronicle
Continued from paae 5
war" boosts to 50
■
time
turn
out
60% will this the constructive usefulness of the
or
the
be
to
long-
feared confiscator of net corporate
Is It Possible to Forecast
gm
ml
"Tlffl
11V
m
m
earnings and
eral
mm
«
IvIAThM
tllVVA
prospective
m
_
tbis
■
as
■
ITlCKAAvl
of
dividend
culable
the
present
yields.
And
Internal Market Analysis
Time
to its
effects
listed
ness
on
different from
not
ness
Exchange is not
an
share in
a
and
listed;
demic.
the
of
achievable goal, our obwould be merely aca-
an
jections
busi-
a
cause
elements
business-value
were
the
sharply divergent
throughout the market as
mental
well
its overall impact.
current
as
as
The
currently popularized
"in-
flation" threat confronts the short-
Fortunately, there are available
#
forecaster
term
with
another
dwarfed
in findings along this line, which are dilemma.
Is
whole-hog dollartheir
rapidly disinterested and reliable.
The depreciation to result from enorchanging
attitudes
toward
the Cowles Commission for Research mous
armament
needs,
deficit
market
as
a
whole.
In
their in Economics in two major studies spending, and wage spiraling; or,
"liquidity" concept the forecast- found that the forecasting efforts on the other hand, will these iners make of a security a king of of financial publications, services,
flationary elements be counterlisted
share
in
counter
be
to
importance
by
the
ebb
flow
and
of
jnd of Dow Theory practitioners, balanced
have
Without real-
market movements.
been
generally
abortive,
izing it, no doubt, they are deal- Simil:ar negative results in preing in prices in lieu of value, attempting to anticipate the extent menis or tne marKei as a wnoie
^ctmgof "the'mlXef-'^a-wh^e
which
to
their
fellow-public will
subsequently
level
to
outwit
ami
the
cause
diverge
issuesT
price
from
value, to
buyers yey
to out-foiecast their
sellers,
fellow-forecasters.
In
vein
this
emphasis
is
ing" urge
on
cism
his
or
liquidity
from
potential cntiif his
conscience
own
should become lost in other
money
than "good company."
matic
suited
in
This prag-
lumbia
JJ™verslty bch001 ot Busl
j»> u*#.
ne*>
Furither lldications of the e*
_
Perts.
trend-forecasting
market's
centration on "good" — that is,
popular—issues irrespective of the
price-value
relationship,
with
attention
centered
at-
on
tempts
to
predict their future
price behavior as a kind of elite
group.
rlcord
markPt
.
'
through
wprp
uniriino
.
nf
iL
thp
those in the Dow-Jones
avera„e
.
Furt°h'
evidence 0f the market-
fnrppnc.t4n{y
Street»s
0ffered
a
cwincr.ratrhin*
,,
„nnt:nnpH
hv
chLt
UnHv
J
,
movcments
chnrtrnmintrc
professional
hv
thp
element
bv tbp varvine size
is
the
of
to
of
some
fallacies
to
the
anticipate
means
internal market anal-
ysis.
The
basic
fallacy
the plethora
ods
used
to
common
of "technical" meth-
in
stock
market
is
the
implied
major
premise that the future course of
a
price can be determined from
its past behavior; disregarding the
line " between
past and the future.
This
the
error
of
explosions
points;
"island
rever-
tonometers,
and
sals»; but
as
well to the more
spectable
sun
cycle
spot
re-
theory,
(Market
make a correct double forecast.
spots and
And the market effect
fully
is
from
conclusions
steUar
tied
to
radiation
sun
result
other fallacies.)
as°
nity has become engaged
kind
in a
of strategic game akin to Machia?
vellis
practicing of the Second
Degree
Lie—in contrast
analysis.
This
indoor
engaged
as
the
value
sport
of the
Atlantic, has been aptly deecribed
by
Lord
Keynes
as
»!SWSi
Professional
•
investment
may
llk®£ed ?°,t?fie^rwspap?r
\° those newspaper
competitions m which the compet-
Sfa«iVfXka0hUuXrDSo:
York
Stock
enlargement
govern the mar-
events' Identical events
4ha^f successively opposite
market effects*1
,
olte"
Dow Theory's Basic Fallacies
Let us now
jpa^e market swings.
Likewise
jng
abortive
general
the
are
in
market
efforts
forecast-
movements
of
the economists,
statisticians and analysts, who are
so
able in
forming conclusions
about individual securities
In fact,
WaR street sophisticates,'includWall Street
jng these experts themselves
are.
occurred after a11 previous
nevertheless "wrong"
was
wars,
on
the
dieted event. Throughout the first
are common to most of the other
penetrations,
mary
and
confirmations, prisecondary
advances,
attempt to
is
market
tbe
netitors
as
whole
a
competitor
has to
that
so
Dick
earh
those
not
faces which he himself finds pretbut
those
likeliest to
which
catch
The
he
uiarket's
as
future
guide
a
an
immediate market
_
_
.#
,
the
Impact
""
ih
1J rupe!lable Cause^, of the
^atlVe Forecast,nff Results
thinks
_
„
,
1901
market
Dow
Stocks
(64
and
1936
while
measured
as
by
the
Average of Industrial
Jones
almost
tripled
in
price
to
184)
concurrently the 20
popular dividend-paying is(as measured by their trad-
most
sues
at the beginning) suf-
overall
decline
of
39%
Although 13 of the most popular
issues
railroads, the industrial
were
well
as
the
as
rail .components
contributed to the record that
half of the issues
shrank
one-
by 50%
more.t
or
In the interval from 1929's peak
time to the present in con-
0f all
trast
the
to
2i%
40%
decline
Industrial
in
the
in
Composite
the
Average,
Standard
Price
and
Index
of all list-
has
been
and
300
issues
their
are
1929
now
highs.
selling above
(Among these
such standard issues
are
Alum-
as
inum, Chrysler, Continental Casualty,
Deere,
DuPont,
General
Mills, General Motors, International Business Machines, Penney,
Procter & Gamble, Sears Roebuck,
Socony Vacuum, Texas Co., Union
Carbide, etc.)
Likewise while the 50 stocks in
Standard and Poor's Daily Index
have during this 1929-1950 period
fallen from 200 to 157, ten of the
component issues have risen.
As this is being^ written ths
Dow-Jones Industrial Average
exceeds its 1946 top by 11%;
give nevertheless a majority of the
is
blowing;
down the hill. Ac-
continue to blow that way — not
even whether it will continue to
component issues (17 of the total
of
30)
are
selling
substantially
lower,
factor also
of
market
prediction
mani-
making
assumptions
—
particularly
out of line from
are
,
.
t
difficulty
short-term
when stocks
f
.
.
_
tin^'
r
con-
tent termed "the market."
Between
the
_
nomic
Tnsunprahi
was
as
rise averaging 20%. On the other blow for another day (that is for
hand, the Korean outbreak of last another up-tick).
The weather
Intm-*uuu»uy ^iveisence
June was greeted by a market vane does not insure continuation
Even greater divergence has ocdrop of 15%.
of the wind; similarly recording curred among the railroad issues
of a past price trend does not during the same period. Although
s
Inflations Uncertain ^Market
Uncertain ^Market
guarantee its continuation. Strip- the Dow-Jones Railroad Average
confider>ce is there in the bucketTh#>
of the event
occurrence
followed by
to fests
the
and
—
wind
eight months of 1939, those ex- whether up or
pecting the outbreak of world-,'tually, it does not thereby
wide war sold stocks.
But the any clue as to how long it will
actual
least
at
or
marize the fallacies contained in ed stocks in number, and 90% in
the popular Dow Theory, which market value); nevertheless over
market, for it dropped 22% in etc., the Dow theorists
1946) and continued its bearish define whether the
ition
nnariv
overall
Poor>s
For example, in the period fol- internal market analysis techlowing World War II the minority niques.
Charting
the
market's
forecaster who turned out to be course according to its concepts of
correct in his expectations of tops and bottoms, secondary areas,
g?od business instead of a demo- major and minor reversals, breakbilization depression such as had through points, valid and invalid
Pronetouse "bucketting"o£(i.e,
To "the 'competitor "whose ThXe majority forecast
entity,
briefly sum- (comprising one-third
very
Ex-
bottoms
at
an
and
usuany show-
sb0w how the highest echelon of
market professionals fails to antic-
as-
both sides
on
in
to
^beir
New
Xhese data
as
taining a "trend," overlook the
obstacle thereto resulting from the
constant divergences within that
Dow-Jones
difficult to anticipate, since psy-
as
behavior until late 1949.
bull or bear. As a definition of the
Outbreak of war furnishes an- present this is useful, but as preother example of the difficulty of diction it signifies nothing.
It
process of style-forecasting a 'diminution 'of the bears' drawing the correct market con- functions merely as a weather
the
vestment commucommitments at market peaks and elusion from the
correctly-pre- vane that shows which way the
& by
Contest analogy
Goniesi <\naloirv
"Trend"
\n h«rse racing of and formula-timing practitioners.
winning a parlayed bet, he must
blame
Those trying to time movements
of
the
stock market considered
an
T£e forecaster's di?ficuItie^ a^e ratio systems, of action reaction
father enormously increased by signaIs ("according to Newton's
Law^
to
"The Market" and the Elusive
Jhe technicians applies Theory, to fered
not only
ing volume
the cbarters of Dow
of
Third
quick
faulty interpretation
exculpate the sacrosanct systern (a masochistic mental somersauIt)
fore-
casting
hard-and-fast
is
for
us
in
stock price movements by
of so-called
practioner
and
funda-
embodied
effort
mass
the
its
himself
brief
a
t
£et PartlclPants pactions to ex-
substantiated
,
change
In this
tie«t
Forecast
rorecasi
reference
prevent
than
more
short interest) as published month-
Beautv
neauiy
pect,
ditficul-
Si®,?1
if®;^thV
growing
foible of what I call Blue Chipitis; that is, the cumulative con-
major
Double
vouoie
a^p1SnfU1J^^d by the perform- chological forces
as
the
"Parlayed"
rariayea
ine
«nH
psychological Pa
motive, governing individuals in
the handling of their own as well
?prrk
as oIher people's
money, has re1
well
as
The
J^a^iversftt School of'Busi" di.ffic.ult feat
over-
"window-dress-
the investor.to pro-
himself
tect
of
the
by the nation's enormous
productive capacity, credit restriction> and general controls?
a^ved attroman extensive sur- the fact that he mus be correct
oJf
broj^gTTll!?prwnnH
In fo.rete111^
?nlyJs^ch.„exT
"jade Nelkin F Underwood and ternal events but also their effect
by E
C*
the direction
stock market.
Like
the
markets, other
the
were
limitations
being written, is incal- from making
*s
re-
results in their forecasting phases,
libthe
profits taxation,
excess
factual data and the abortive
Thursday, December 28, 1950
...
ped of its surrounding copious as a unit stands about 4% above
jargon, the Dow principle is a log- Jhe 1946 high, no less than 16 of
ical absurdity.
In effect, I
the component issues
,
convinced that
am
Similarly in this
are lower.
years
market,
assumptions about trend behavior the present, while the Dow-Jones
commit the
error
involved in the
Industrial
Average
advanced
by
in- mathematical principle of "the 15%, of the 1249 round-lot comfalls maturity of the chances" which mon stocks traded in on the New
value criteria. There
are many
stances
market
of
severe
York Stock Exchange 918 rose,
305 declined and 26 remain unlooking at the problem from the
changed.
The advances h a v e
fame
point of view. It is not a sons
ranged up to 140%, and the decase of
picking those who, to the m<>vements must fail.
aiso a halving of stock market Dow thinking is a variation: that cline to 3o%.
best of one's judgment, are
really
,let us consider such pre- prices midst the 1937-'38 period when there has been a repeated
Single day performances likeChe prettiest, or those which aver.V?n based on external factors
0f monetary expansion. Similarly run in a series, the mere reoccur- wise
portray the elusiveness of
age opinion genuinely thinks the P0lJtlcal> economic, and financial. in the post-OPA
decontrolling pe- rence of that repetition alters the trend. As this paper is being writIirettiest.
We have reached the
? these sPhere.s the forecaster is riGd of 1946-'48 when inflation mathematically correct odds con- ten, the preceding day's market
other competitors
Steinmetz called "the most mischievous of gambling superstition of 1917 stocks broke 50% in tions." This principle embraces
y attempts to time market a seven-month period. There was the psychological fiction of which
fancy of the
all of whom
are
Wltbin ou*" tlme limitations we
can only ouAtline a few of the rea-
midst
an
ment.
During the wartime infla-
inflationary
environ-
,.
.
third degree where
we
devote
our
intelligences to anticipating what
opinion expects the
average
aJ,ways faced with,a great number
imponderables.
really took hold
and
.
In "their forefront is the steadily
aver-
40%
and.
the
the
on
commodity
prices
cost
of
cerning the probable outcome of session left 504 issues up, 360
the next event.
down, one leading index registerby
This is the foible leading boys inS a rise> another a decline; all
economy
rose
living
ftge
by
€ome,
fourth,
„
w_
..
7
Thus,
the investor relying
forecasting price movements
Ueu of
analysis, must be
style merchandiser
a
as
crowd
psychologist.
tion whether
most
me
to
urgently ad-
realize that
cuisite
for
his
fcavior
is
for
him
Results
111
stocks'
a
prere-
good
to
„
be-
behave
f^imself!
_
The
the
results
weigh empirihave
been
ochieved in actual practice in the
•narket place by various
categories
cf
forecasters.
ever-all
*
if
This
the
market
"General
is
most
im-
desideratum
of
prognostication
Theory of Employment, In-
^rf^a,SdvMr*y/' J- Maynard Keynes,
'
"
"
-
*
meas-
as
a
means
of
building
up
Overall
corporate profits con- ematical facts of dice or of blackexample where correct and-red turns on a roulette wheel,
of short-term changes The roulette player often becomes
quantitative element— thus bankrupted by an extraorenough achievement in dinary run
of the same color
itself—does not necessarily sup- against him.
ply the key to the future action
Essentially Dow's theory and
a pent-up backlog of demand such
as
helped to avoid a traditional
Practice
that
governmental
ures
serve
'
It is important to
--£*>irtant;
7
restricting civilian goods stitute an
Production actually are wholly prediction
bad for business; or, on the other in even a
band, whether they perhaps will a difficult
him
cally
____
Jhe necessity_of foretelling and in- the 82% rise in commodity prices than 50% probable to be followed
„D0WN» BUT LIST IS
IerPretiug highly relevant Wash- since 1929 has been accompanied by a tail; and the same misconcep- HIGHER.
inSton moves.
by a net decline of 40% in the tion exists in most systems for
Great divergence has likewise
It may even be an open ques- Price of stocks.
outwitting the inexorable math- occurred in the price behavior of
let
as
Here
vise
in
value
successful
well
on
bi
.
"
of
postwar depression after 1945.
1946 to
The current
politically-governed
typically typifies animportant
imponderable
tax outlook
other
as
far
its
as
concerned.
gradual
investor
While
rises
in
in
the
effects
the
are
past,
corporate
*nC°r?e, .*aX Ja^e
have
not
resulted in profit destruction,: it
could happen that further "heated
the
market
1947
as
the
a
whole.
per
share
From
earn-
other systems likewise follow the
principle
that
the
chances
of
a
individual industries.
industry group
Of
the
s^ recorded
50
by
Standard and Poor's, in the face
of
a
57% rise above the 1935-39
price that has occurred in
average
their Composite Index comprising
a11 the industries, seven groups
Pow show absolute declines (rangin.g .to 42^by 9an^d^an
in&s on the issues comprising the
Dow-Jones
Industrial
Average
r°se
by 40% (from $13.63 to
other than even; thereby assuming
either extension or reversal of a
vanced loss than the composite,
$18.80),
"trend,"
November,
yet
the
mean
of
their
market price range concurrently
by 7% (from 188 to 175).
succession of identical results
whose
course
over
are
the
mininS
^ssues) and 38 have ad-
During
the
past
1949-50,
12
months,
while
the
month, is
direction.
Composite group was rising by
fcT "Condensed Summary Tables of
Small WOnder then that in the
Incidentally—when a system for
output of the statistical services beating the stock market or a
Certain Active Securities for the Years
there
is
sharp
contrast
between
next tick, day, week or
evidenced from its past
game of chance comes
a
cropper,
Harriman'&
Co., New York, 1937.
Volume 172
Number 4972
The Commercial and Financial Chronicle
...
(2553)
11%,
15
declined
groups
others
have
In the
midst of the
remained
15
and
averages' rise
the highest levels in 20 years
during the first 11 months of 1950,
the food product, building trades,
and tobacco groups have actually
declined.
non-existence
of
market
a
appraisable
as
an
entity and
difficulty of defining a "trend"
the
that
inclusive
is
create
insu-
an
perable obstacle to forecasting of
the stock market.
vestors
And those in-
basing their prediction
market-as-a-whole
a
or
on
con-
a
ceived-of representative frena also
must
this
win
ponent
paralayed
a
first
case
and second
on
bet
in
the overall trend
the divergent com-
on
issues.
dividend
ed
The Constructive Alternative of
ye°a"7(a
a
wnl
5%
added
be
to
the
Amortization As
vestment
process
we
herent
The
ine
with
audience without
our
structive
alternative
sound
a
and
in
a
the
proach
is
based
the
on
of
the
genuine
sense
buying cheap and selling dear),
We
further
assume
that
vestor must estimate in
the likely return from
way
property,
a
interest
an
as
real
estate
holder of
share
a
pany
stant
liquid
listed
con-
in
a
tation
his
S
of
capital
reasonable
investment
an
sufficient
to
+hfMhpr/i ilin
that there
logic in
the
according
other
be
investor
find
to
informed
ish
will
news
it
the
on
other
off
someone
at
pro-
accelerated.
or
to
(my
or
perhaps
case
for
prosperity
chiefly depend
in
more
on
interest
value
to
of
serve
the
as
rental
principal,
plus, an
increment
for
annual
amortization
to
compensate
for
the risk involved.
The
ponents and rental of
should
be
taken
Prlce'
boiled
care
risk
our
of
to §lve the
investor
com-
capital
m
hard-
reasonable
a
the
ex-
pectation of recouping his principal-\vlith-interest plus a chance
for
profit.
Through
this quanti-
tative concept, capital can be em-
ployed realistically with
account
takTr ^Vrtfmb^Sto
composition
of
the
earnings
dividend
yield; and rationality to
the multiplier m arriving at the
market price;:m lieu
of leavmg it
thTdfctates
the dictates of historical nrecedent
ot histoiicai precedent,
the highest living standards in tbo
world,
a way
in
this
it
and
what
is
has
made
this country capable of defeating
an enemy in time of war.
I hate
to see anything get started that
may harm that system unless it is
room can do something wordi
while, starting right now. If you
cut clown on your spending for absolutely necessary. And I don't
consumer goods and services, you happen to think controls are nec-
helping to
are
the value
preserve
of our money, you are helping
preserve
tern,
free
our
and
you
unless all-out
essary
economic
Forecast Summary
sys-
helping
your
are
war comes,
to
I understand that tradition
re¬
country prepare to defend itself,
quires that the Chamber of Com-
merce forecasting session end with
Granting the possibility
that a dollar saved today may be
casts of what lies ahead
worth somewhat less ten
is what 1951 looks like to
same.
years
from now the person who saved
will still be vastly better otf than
the fellow who has squandered all
,.
Tf
n
infiitinn
think
about,
a
1951.
dozen very specific fore-
As
of
Dec.
19,
of
in
us
1950,
here
me;
a) Industrial Production—The
Fedeial Reserve Index averaged
200 for 1950
1
U
*
It should
,1
•
at
average
axcicigeat
Jv™"fjleast 220 in 1951.
cavinff
Business
^
loss
not
morp
*
_
»
,
ready decided they would prefer
H
ex-
trast to the recurrent post-1929
depressions in its other activities.
(3)
The
motivations
for
this
proclivity to forecasting overemphasis include: the psychological
desire
to
escape from the rigors
and evidenced difficulties involved
jn
appraisal methods; the ordered
appeal; the temptation to
pictorialize the future from the
First
..
R
.
by
various
.
.
categories
+1
.
<b>
tradictory
have been made
Value Appraisal and Portfolio
Management
pr»cticedas,)arV ofconllstent
long-term
They should
Primarily,
in
j
'individual
t
rnrf1jnL
niaue
would continual-
we
fn
those
which
and do not alreadv
times
ab
at
issues
evaluation
our
both
buv
own
ac.
terhwe
do
We would
undervalued
fueflu„deerS th^sole
proviso
thei;
is
limited
total
should
predetermined
tion
our
on
be
maximum
thlt
by a
limita-
entire portfolio's pro-
pGrtion
of
dealing,
with
SI
we
equity share holdings
^y from 50-70%). Similarly, in
aoprai^ed
would
sell
over-val-
such
otf
iSSUes, but under the proviso that
^be
total
of
our
.
'
Sr
with
fla
mv com
,
1
.
\ess
:
,
.
Quarter
Activity
of
in
tho
1951—Raw
ma-
f
eauall
aronirv
aDDiiCable
a£e increased'
the
will have to endure black
we
markets
quality
rationing
rioration,
unbalanced
aete-
which
OPA
to
so
portfolio's
share
people
many
have forgotten.
The
of
experts
,
with
Let
make
me
ments
to work.
a
For
com-
likely
are
thing, they will
infinitely better if there is
work
one
between
diateiv
.
,
..
.
.
More
anparent
and
power
^oods
are
bought
are
auicklv
^^ are^quicwj
a rollback
eroate
furthermore
will
JTSSStlK
11;iniSA ._ijon
m.obiemc
and
over-
tinuing
nQt
in
proioer
bHnd
is to insure
diversification
subservience
mula"timing schedules.
to
ol
-
In other
agreo
them.
pfU1<slin,pr
whnkcib
195i
but
vear'
levels
(B)
aver™
not"
mav
by
^
d
th''
Heures for
exceed
current
than 5%
more
!„d "laries
Thev
bit 7Jt af
nacl nftheLll sfv
in
rai
higher ill
move
1951
months
mont"s*
Federal Finances — The
Treasury will have a cash deficit
in ca]endar 1951> but x win bo
surprised if it exceeds $5 billion.
(8)
Department Store Sales--'
The dollar volume of sales in 1951
c^troUers
vviU
be should
elceed 1950 f
bv
controllers will oe should ^exceed 1950 liguies by
the
,
thousands of
applications
wres
for
up-
tnousanas ot applications 101 up
(9)
AntnmnhiiA
PrnHnniinn
Automobile
wa[d price.adjustments. Ihe con- The industry
Production
—
may turn out about
rollers will have enough trouble 5 million cars and trucks in 1951
1 ryirig to adjust ceilings to cbang- compared with about 8 million
-in£ to be correct on both the mg future circumstances, witriout this year.
external eventualities and the
annate jrtotpwo; (10) Banking - Interest rates
market s reactions thereto;
by_romng DacK piitcs 10 i . and total loans wil, hold close tQ
(d) increasing government no Aonter.pidcutduie
ui ute current levels, and the growth in
interventionism and its unpre- Past, ui r';
:
demand deposits will be moderate
disability;
Assuming there is no rollback, and perhaps less than that of 1950.
(e) in theories of internal the ceilings should appear to work
(11) Corporate Earnings—Earn^
market analysis and trend-pro- fairly
ject'0»» basi« fallacies as as"
sumption of the future from the
well
for
awhile.
In
the
d-1945 the: BLS Cost of Liv-
market, in 1951, with the supply of goods
~nd bayl"g, power °.nly a .bttle
out °-f baianee, puce ceilings
should be able to keep pi ice inwould-be
genuine
investor
ihe dcxes fairly stable. Furthermore,
constructive alternative of confin- the mere existence ol ceilings will
ing himself to appraising individ- cncouiage
saving because there
laf ."sues accorfilg to valid busi- will be less advantage in buying
ness-value standards, as he would ui anticipation of future price rises,
in estimating the worth of a going Finally, the price ceilings will at
Sroup3 composing the
(6) As the alternative to the
unattainable goal of anticipating
market movements, we offer the
■
■
■■
AUerDaCh, POliaK
ma.l°r
causes
_
words
the
formula
is
distinctly
Robert Rosenberg will be adsecondary to tbe value criteria.
mitted to partnership in Auerbach,
f
„
Tn v.„ne.
,
H
It; is not 1951 that
worries
T.
Jr]}
f
e aila t ,n
p
in 19a0r
.
,
o
Fa M^stock &
Branch
in
Co^ Opens
Jacksonville
JACKSONVILLE, Fla.—-rahnestock & Co., members of the New
York
Stock Exchange
have
opened a biancii office in the Barnett National Bank Building, un-
of this Lia>ion.
whole inflatio" Problem.
■
fo Adlllit R0S6nb6rg
®
r
ri^v J ^
d- the
one
■
jngs before taxes will be as high
in 1950' but profits after taxes,
win> of courge> be lower
as
c m
past' and
ing lndex moved up only 10 /0,
^ the constant sharp diver- and the BLS Wholesale Price Ingence between the price action dex advanced only 7%. Those
of tbe individual issues and were years of total war; certainly
but
for-
to
except
say
Prices—Thev will
the
develops'
shortage
controllers
market's habit of con- a 1"'
reactions to the same a'ght
.
buying
to expect them.
seem
I
can
/,-x
other
few
how controls
on
Price and Wage Contiols—
them
pose
No Rollbacks Needed
supply of goods is created imme,
.
^') its changing and illogical
selective emphasis among conflicting elements, resulting in
the insuperable obstacle of hav-
a
overall'aim
(4)
Those who have the power to im-
What
bUSi"eSS —ty °r real eStatC"
(say 20-40%)
—The current rate is about $233
billion, and the total for 1951
should exceed $300 billion.
production,
and the other unattractive features
0f
(3) The Gross National Product
without Drice ceilinss Tile
savings
seem
' m'lLTa'rnWwiP
(4) The emmrical results actu- no rollback. To the extent prices
ally achieved" in market timing are lowered by a rollback, a gap
€Vfnt'.
{he amortization provisions
the
and
up
person
Tba
to.
hi lllrd n**
cut too shaiply will be eased. De-t
fense production will take up somo
slack' and industry will peiforrm
miracles with substitute materials.
which
that
invested
our
every
what price controls lead
competitive free enterprise system
is what has brought this country
terial restrictions are not going to
cause more tban a
dl°P in
overail. business activity. The
stock-pilhig program will certain ly curtail production schedules" of
outcome of the inherent risks for
Value-appraisal activities should
rate
a
an
.
the actual
portfolio management.
be used against the
way
background of liberal diversifimine the present worth of a stock cation of one's entire
portfolio beby capitalizing its carefully-esti- tween equities and fixed-interest
mated
long-term future average securities in the following way:
at
In short,
induce
,
major
windfall
will
be
yield of nskless
to put
system
an
operations to timing in one
or another, we should deter-
dividend
which
savings
AOwl
dental, while in securities operatow ird
areata
ravin*
to
tlons
15 .usually engaged in to
imposition of general
exert a major influence. Minimi- p
ceiling t have Hie imzation of the forecasting element p.
? ii.nqe'whn have the
determines classifications of beto
coriTrcUs
^'Pa7fn1hrexte?na71uoof-S
weu as m tne external ouuook,
it
to
easy
iQkI
101
the rate of saving.
Note that this points
*n
ma-
?0mp/Ay- What the wilf finally get
he rental return
in
addition to
Valuation
reflects the going
kept
is
the
philosophy).
annuai
Wrastinff
0f
Instead of trying to gear invest-
ment
nf
well-
mistakenly
Realistic
two fields it
hand,
must estimate the
we
haps less,
unwarrantedly low price (a sort of
Ponzi
amnnnt
.
spec-
take
to
cause
him
to
cnmp
it will not be
m. m^wmm
TAV
seems
spending.
on
increase in
of
power
the past decade
premium
a
mm
VIlIlfJvK
the purchasing
(5) As the causes making such
abortive results inevitable, we
have cited:
.
^a^ the many impondeiables
a higher price;
conversely, that coming bear-
sell
offer the following
market forecastability:
n\
A IIV
financial periencing a continuing and growing boom in forecasting, in con-
emphasis being on
actual return) ranging somewhere
around the remaining
4%—per-
that
less
some
"sucker"
me
■
IllllMllIf
the
money plus an mdeterminable re- have been decisively negative.
or
one's hand later at
or,
sheets,
turn
equity
an
cyclical
to
factors;
really resting on the
able
on
inr
short-term
process
now
^ y
jfc
over
4
vaae
J
Many of you, advise others are do
furthermore, to in
a position to
,
v
*
Summary and Conclusions
amortiza-
"g ?trong asset P°sition ,and °th,f
annraisM
faY°rable fair rental value wtll his
conditions, be for be
getting a
an
of
value
share
*
a
prospective buyer can look
at this method of appraisal from past; misconceptions about market
another angle. Alternatively,
he "liquidity";
confusion
of
value
can
consider that with a
6V2% with price; and enjoyment of predividend yield, together with
a diction as a game.
compen-
an
is no
gauging
the
The
expec-
return
ouailtttfltive value
Our
and
USe 8"d
Tnnei
hi
amortization
amortization
general
or
increased
market
secure
the
me
amortization for risk must be
our
cashability
without loss; but that he can legit-
imately
g00(j fjme to buy
summary and conclusions to my
Offset to Risk remarks on this question of stock
an
portion of the anticipated earnings
com-
guaranteed
be
cannot
a
g#0d v*,ue!
rental
to be capitalized as dividends to
business, the turn out less than the average, oi
a
or
Continued from
J1®*® and agriculture; but in the
the risk
either
vestigating
a
privately
owned
business, that similar to the buyer
of
fime js
Ul borne amount ot forecasting
« necessary in investment, busi-
ance
he would in in-
as
to
mQre
of stock considered
in
share
a
ally
to
strength, the amortization can be
longer-running or even incomplete.
In cases of "unclean" bal-
realistic
a
guide
a
will be how soon the inrisks
become
effective;
figure
in-
the
as
£™or fs Ambling"
parts from value, in this way ereoccasions for purchases
(in
alternatives
the amount of annual amortization that is needed to "win the
race" against risk, the balance
sheet of the respective company
is a vital determinant.
In cases speculating or gamming.
of a high net-quick liquidating
(2) "Wall Street" has been
ap-
premise
ating valid
sales
re-
tion process. In connection with
estimating the degree of risk, and
that market price recurrently de-
and
of
01
crux
crux
tween
logical investing
investment value
own
what"
that is, there is a kind of race be-
con-
form
method.
Our
his
reserve
2/2%
e)'
principles, nevertheless
fortunately do not need to
of
him
give
annual
sumUs3ein°rantWnaa«nvyS1maJkpt
movements is unattainable as' well
^ Inconsistent with toenume ineenuhfe inleave
furnish
amoTtization
20-vear
a
quiring
Having reached the conclusion
inconsistent
to
years ta zu year amortization re
invpctinv Annrnanh
Sjouna investing Approach
as
also
good clue to the short-term spec- action then present a continuing
ulative prospect. In the case of problem to most market followers.
the market as of individual issues, How shall they weigh their timing
good investment turns out to be efforts against evaluating individgood speculation as well.)
ual issues on a business-appraisal
Under our method, a cost price basis?
Which choice shall they
which gives an annual dividend make when
discerning opportunireturn of 6V2% on the price paid
ties to buy good values at a time
would roughly in 25 years afford when the market averages are at
complete amortization of the in- historically high level?
vested capital.
That is, after de]viy own answer, made on the
ducting the rental value of his basjs 0f
experience as well as
money of 2V2 ,0, it leaves him 4%
logic, is that, rigorous though it
for annual amortization, which,
may be> a black-and-white choice
times the 25-year deduction, will
between timing and valuing must
then give the investor his share
be made; that compromise means
in the property and working capifalling - between - two - stools into
ta.written down to nothing.
constant confusion of investment
Similarly, a 7/2% instead of with speculation; and
finally that
6V2% capitalization of the expect- the
decisive
principle must be:
a
to
The
ancillarilly
pens
unchanged,
25-
t of Harold
i\ir.
uia>ton
was
J.
tor-
merly with Merrill Lynch, Pierce,
me
insofar as a general control program is concerned. What bothers
Fenner & Beane.
Robert McManamy, Jr.
is
that the program, once
started, may be with us for years^Robert McManamy, Jr., Presiing or some otnei non-quantitative
Even investors who accept the Pollack & Richardson, 30 Broad
and .years and years. You do not dent of McManamy & Co., Inc.',
standard..
principle of value-analysis of one Street, New York City, members have a competitive free enterprise
N
y
k cit
di d on Dec
2i
(Incidentally, praclical expeii- kind or another, still want to use of the New York Stock Exchange, system when the government sets
'
ence shows that this approach
of market-timing simultaneously as on Jan. 1.
Mr. Rosenberg was prices for every item that is pro- shortly alter sullerii.g a neari
appraising individual issues hap- a so-called "tool." The "when vs. -formerly with W. E. Hutton & Co. duced, and ultimately that is just attack.
convention,
style,
window-dress-
me
Chronicle
The Commercial and Financial
26
Thursday, December 28, 1950
...
(2554)
amounted to
Continued jrom page
7
give
-
free
lunch
-
are
and
adders
They
increase the wealth of the country
goods,
more
statement is that
jobs,
more
more prosperity for all the people.
the Unsound politicians are subtrac¬
United States, anyway —with its
ters and dividers. They produce no
n e w
estimated wealth of over $400 bil¬
new
wealth and are constantly
more
lion?
Cameron's statistics show
promoting schemes for dividing
automobiles, telephones, radios
that 22% is invested in 25 million
the
wealth
w6
already
have.
and a host of other products in
homes;
12%
is in six million "Share the other - man's - wealth"
America alone, than in all the
the country's wealth,
creased
new
Who
true.
not
is
it
wealth in turn has built
industries and employed
labor. Today we have more
this
owns
-
-
other countries of
the world com¬
personal prop¬
over
45 million
farms; lV/2% is in
including
erty
has
horse on the road.
years.
(just 11 years later), they've spent
brains
the highest priced com¬
are
modity in the world.
And
today,
so
$10 billion more. As
fact,
recognizes
ness
three of these elements of produc¬
Henry Ford had a good idea
no
money.
He finally in¬
duced a few men who had money
tion.
you
out
that
anyone
business is but
the history of the growth of high
ideals, of men's confidence in one
to risk $28,000 of it to make more
another, until today over 90% of
money
by developing his idea. all our country's billions of dol¬
Thus, one man with an idea, other lars of business per year is done,
tory of American
—but
men
with "risk capital," and a few
good workmen, went into partner¬
by
ship, and they all prospered—and
of
in
the
process many
other stock¬
to
which honest
on
paper
matter of
busi¬
will
new
jobs
shortest
wages,
hours,
lowest
prices, greatest abundance of the
good things of life, and every man
free to work when, where, and if
Away back in ancient
he chooses.
times, Horace, the wise old philos¬
opher, said: "If a better system is
thine, impart it; if not, make use
of
mine."
nomic
This is America's eco¬
challenge to the world to¬
much
So
nor
all,
know
Labor
develop
every young man
that
nor
neither
Brains
Capital
will
for
then
can
In
American
fell through
you
its
tion
men.
is
—
cashed
his
The human race has
carefully
future may
laid
plans
for the
to naught if his
come
The government is unsound. A govern¬
ment is only as sound as its di¬
baseball team in the world
rectors—and they are politicians.
from 50 to 60 games a season.
time in any line of endeavor.
loses
Frank Woolworth worked hard to
A sound
first $50 and then saw
three of his first five chain stores
for
absolutely fail. Cyrus H. K. Cur¬
tis lost over $800,000 on the "Sat¬
politician is
a
fine asset
more,
save
his
country (and we have a
number in both parties—
our
good
in fact, than we had before
the recent election), but we still
Evening
could make it pay a
Lincoln
suf¬ receiving
Abraham
failure after another— directly
one
badly defeated in five differ¬
ent elections—and finally became
was
country's greatest man.
Unfortunately, we hear many
loose statements these days to the
effect that about 80% of all the
our
wealth of our country is owned by
or
in
us
his
it
run
for
shocking
life
insurance
months.
7
statements
half
is
hidden
tax^ which must be paid by the
poor, as
well
loaf
bread,
of
and
on
a
year,
as
—
These
and
Take
taxes
—
is
shocking that they are
116
are
finally lifted, prices
higher than ever. From 1939 to
our
deposits and money in
1950
dollar
your
single suit of^lothes.
hidden
taxes
value
prices went
as
dropped
up over
the $100 you
to 590
and
75%. On that
get today for
"E" bond isn't worth
the $75 you
ago
that thrift and hard work.,
surance
will
today
security
bring
old
in
comfort
is
age.
To
my
and
mind,
greatest economic problem of
day is the Defense of the
our
the
Dollar.
Monkey with a nation's
and you jeopardize all
Our
government started
currency
values.
this inflation when it took us off
its
started
1933
and
priming"
in
and
Standard
Gold
the
"pump
spending sprees, and it will never
until it puts us back on
quits spending more '
it takes in. But, of course,
it
stop
again
and
than
politicians don't like sound money
spending.
because it restrains their
The
is
welfare of the
true
people
by more production,
wealth—not by more money
advanced
more
thing that will in¬
—and the only
wealth is hard work. Let us
crease
politi¬
discard the old destructive
slogan "Tax — Spend — and
Elect"—and adopt the constructive
cal
on the
"Social
industry so heavily
expansion—and then
retard
it
to wreck
giving competing
"Co-ops"
by
tax
uses
of this tax money
some
exemption.
in
1916,
1%, tax-
Back
when income taxes were
free
"Co-ops"
with
began
small
of farmers who sold their
groups
economic
slogan "Produce—Pro¬
Produce." And then,
duce—and
good of our economy, let
the
translate this increased produc¬
us
tivity
but
inflation.
much
-not
taxed so much to pay for all these
unsound policies. Any employer
would rather pay money to his
True
business per year
$3
and escape about
billions of taxes. Why should
not building and loan
associations,
elevators, labor, educa¬
tional and religious business "Co¬
farmer
taxed
be
ops"
business
the
as
same
the
compete
they
concerns
could
"Boss"
wages
if
higher
the
than
employees
that
have
by such leaps and bounds
that today they compete with our
taxpaying Businessmen at the rate
of scores of billions of dollars of
—
into
betraying the welfare of its own
people—and remember that only
the government can start or stop
since
"Tax-exempts"
grown
wages
inflation
of
flames
rather,
own
and
to
higher
into
not
the
feed
products together for a little bet¬
ter
price.
Nobody
complained
about
that.
But these
"Co-ops"
be
were
to
an
ex¬
travagant government. Some day,
some smart Labor Leader will see
to
best
the
way
to
get an
in¬
is
in the employee's wages
crease
get
a
decrease in the employer's
more danger in big
There's
taxes.
government than in big business.
1948, our government collected
in taxes an amount equal to all
In
paid to all the persons
all the factories and
the wages
working in
mines throughout the en¬
all the
tire
if
wonder
I
country.
Labor Unions know that.
the
This can
ad¬
mean
only one thing—the govern¬
ment
gets richer and stronger
Why
against?
this
45%
tax
25%
of the total productive wealth of
Who pays for all this spending
the nation. Here is injustice that
anyway? We, the people, must pay
concerns
every taxpayer—and it
for every dollar of it either by
is about time we all got mad. And
increasing our own taxes or by while we are at it, why not get
borrowing on bonds—and bonds the
goverment out of business too?
are but deferred taxes to be paid
If democracy means anything, it
by our children. When the govern¬ means the less
government, the
80 on a quart of
different hidden
these
us (even the
orphans), encourages
extravagance, and destroys all as¬
helpless among
widows and
government
as to
The
Co-ops.
an
first?
Spendrift Policies
basis
on
most
wasting our seed corn.
are
it
is
The handwriting
feeling of security which
hits the hardest and the
a
false,
only way to change it is to vote
spendthrifts out. They are
true.
a
the rich—50
all
the
vantage? Why not tax the untaxed
more
even
in¬ when they
they conceal the
about
con¬
them
is
these
circulation nearly tripled—but the
that
it
of
the
lower prices to
help quench them. Any govern¬
ment that promotes inflation
is
that if every in¬
out of taxes—but
i
itself.
going to
worst
—
keep
to
people happy while it ruins them.
Inflation makes people think they
are
richer than they are, gives
inflation
a
Inflation
is
cocktail
for
last 20 years, our
go
fact
politician's
Security" money be worth by the
time you get it? A chief reason
for the high cost-of-living is the
high cost-of-government—and the
borrowed
from
the
government.
The terrific cost of all this is paid
milk,
only 2% of the people—and that
taxes
a
share-the-wealth program
is
therefore in order.
The main Last
directly
money
the
therefore
and
wall. How much will your
—
million."
of employees. This
the
the
lower.
—
fered
Cocktail
there
And
cruelly
Post" before he haven't enough of
them.
Our
single dollar form of government is the best in
of profit. DuPont worked 11 years the world
it's the spendthrift ment
borrows,
billions of new
and spent $27 million before the politicians we criticize. They have money pour into circulation and
first
pound of nylon was sold. a program which is steeped in every extra dollar buys less goods
Frank Munsey's remarkably suc¬ politics. They figure that every
and prices rise. We have too
cessful career, after repeated fail¬ time they increase
pensions or much money for the supply of
ures, might be tersely described subsidies
or
wages,
they
gain goods. Price controls and rationing
as: "40 failures, 40 successes, $40
votes. Today, 1 man in every 7 is only postone the evil day — and
urday
Inflation—The Politician's
that these
(total $44 billion)—it would only
run this Administration for about
and obstacles
things to test the stuff we are
made of.
You can't win all the
"help the poor" and votes
"price supports" is talking east
and voting west—a hypocrite in
every man's language.
only permanent remedy
stop
to
And
ever
are
—
price
maturity
on
Otherwise, how are you
sell bonds in the face of
climbed on protest." No matter 1 year. If every farmer sold his
substitute for personal
how successful a man may be in farm machinery and live stock—
Obstacles appear at every
his business or profession* all of (total $25 billion)—that wouldn't
turn in the road
worse
and
one
in the United States
sured person
should protest, makes cowards
of
wages
support
guaranteed
anything? The politician who
buy
the
desire
honest
an
talks
plan, however, might make infla¬
a
courage.
best
18 out of the
Downie tells
and speak their views
subject. A famous writer
said: "To sin by silence when
up
this
out
for
a
paid
do
down the deficit path toward in¬
mind, its biggest problem is un¬
sound government policies—and it flation. And, Socialistic ideas grow
as a nation's.debt grows.
is about time for businessmen to
we
with
know
look prosperous on
square
you
to stop inflation and help the poor
cost-of-living like some employers
government has spent more than
it took in—and staggered further
biggest problem of today? To my
stand
can
as much as the money
when he bought it; i.e.,
tie bond and coupon dollars to the
he
money—until his note comes due.
Business—and now, what about
once
But after
must
Today—Unsound
Government Policies
on
day.
of
Problem
receives
he
money
since benefited and
(as Bruce Barton says)
is the
have been created for magnificent edifice of American
150,000 employees.
Here, and Business—a 'Temple of Trust'."
right in front of our eyes, is the And the wonderful thing about the whole 152 years from George
Washington's time to the ^begin¬
American free enterprise system
it all is that you and I and every
at its best—a combination of Capi¬
ning of World War IF (including
businessman, large or small, in
the cost of the Civil War,, the
tal and Labor and Brains — and
every town in every state in the
Spanish American War and World
through its country-wide opera¬
union, has a chance to make this
War I). And when you hear these
tion prosperity has been passed
"Temple of Trust" a little stronger
around
among
millions of our
politicians brag about how pros¬
and nobler by his living—or, if
people and we have become the he chooses, a little weaker and perous we all are today under
their planned economy (and they
richest and strongest nation on
more insecure. These young men
the earth. The ownership of the
plan everything but economy), I
of today as they become our busi¬
can
see
American Tel. and Tel. alone is
you
bankers wondering
ness leaders of tomorrow will find
with
spread over 975,000 stockholders.
puzzled
brains
just how
it a little
easier to trust each
Critics attack our capitalistic sys¬
much of this prosperity has been
other—or a little harder—by your
manufactured out of the $258 bil¬
tem, but no one attacks the stand¬
conduct and mine.
ard of living it provides—highest
lion of borrowed money. Anyone
have
holders
wholly tax-free—or else guar¬
the bond
buyer that the
antee
Agricultural Department to hoard
over $4 billion worth of food. How
billion per year — over 4 times
that during the what it was 10 years ago—and
4%
years
since World War II every
time
Congress
increases
ended, up to January 1, 1950 — costs by voting another bonus,
all in peacetime—this Administra¬ another
pension, another price
tion spent $179 billion, which is support,
another wage raise or
about $12 billion more than was another
bureaucrat,
your
hard
dollar
goes
lower
and
spent by our government during earned
"This
sign their names.
nessmen
to encourage the
exist.
Do
by the exchange of money, but
the exchange of little pieces
not
policies have built up a per¬
people to buy stocks, but no back¬
ground at all to buy bonds—for
advancing prices appreciate stocks
and depreciate bonds. Sometimes
I think the government will either
have to make its bonds partially
or
another
law
to
penalize
hoarding — and then finance the
spendthrift policies are
hurting the very poor
people they claim they are trying
(Socialism by taxation — Greece to help. Nothing the poor man
fell the same way—and England,
buys today has risen so high as the
though only 18% s o c i a 1 i z e d, is cost-of-government. Since 1940 the
already
gasping for breath. cost-of-living has increased about
Throughout all history, every time 75% but the cost of government
a
government attempted to pro¬ has increased 274%. Politicians try
vide
greater benefits for more to tell you that this outrageous
people than
it could currently increase is due to defense spending
support, it first took away their (of which we all approve), but
freedom, then lowered their stand¬ the truth is that non - defense
ards of living, and finally ceased
spending is now running about $25
tell you
business is dishonest. The his¬
let
Administration's inflation¬
This
ary
prices up. They
supports to hold
pass
stantly depreciating dollar?
To
make bonds good investments you
can't get it even there with¬
must keep purchasing power level.
giving up your freedom.
The Roman Empire
and
don't
a
only place to get "se¬
is in a penitentiary, and
Security and freedom cannot live
together.
just
And
"se¬
the
on
the
curity"
women;
isn't enough to go
provide everybody
with the abundant life.
there
around
American busi¬
and rewards all
are
with
way
curity" for everybody they'll want
in
is
his
has
Truman
9%
200,000 factories; and the
Commodity
small balance is in money and
In any event, this evolution of
other
miscellaneous
property.
the centuries has finally brought
These
figures show that about
us to the point where today you
70% of our wealth is owned by
can
hire labor for so-much an
average, not wealthy people—and
hour, money for 3% or 4%—but no matter how you dviide it up,
of whom
—45%
Price
President
$42 billion—and if
over
about 12 million people
owned by
Brains Are Highest
3,000
for
slogan
In the fiscal year 1939, they
spent $9V2 billion, and now in 1950
have an
automobiles
which
swarm
our
automobile for every horse in the
highways; 2% is.in retail stores,
country—(and sometimes it seems
nine-tenths of which are owned
for every jackass too — the way
by small merchants; 5% is in local
some
people drive). The only
buildings; about 51/2% is in public
time a horse gets frightened now¬
property; 14% is in transportation
adays is when it meets another and
public
utility
companies
bined. They say we now
their
been
income taxes
pay
interest.
fect background
occupation.
by
must
you
money—a
own
away,
Businessmen
multipliers
—make
trouble with this
$790 per aver¬
counter program.
—Om Problem Today
and
their
with
votes
giant
Unsound Government Policies
over
family. They buy the people's
age
as
much
paid for it 10
years
with all the 10 years' interest
added—and to add insult to injury
They
now
own
over
And take Price
old
days
no
Supports. In the
farmer
was
crazy
enough to even dream of bumper
crops
and bumper prices the same
to
wants
free.
stay
In
the
last
analysis, all this leads to Socialism
—and
the only allurement that
Socialism has ever had to offer
is
a
promise of greater abundance
liberty, and even
in exchange for
promise has never yet been
that
better.
and
people get poorer and weaker
and that is bad news for every
man who works for a living—aqd
the
fulfilled.
American
The
not
particular
for
businessman
is
not
against
any
political
party.
He
and
for
is
sound economy which
But now, the politicians try
to "by-pass" the old law of supply
stands
will
insure
and demand and manufacture per¬
and
development of America. He
petual prosperity for the -farmer.
Price supports help one class and
wants
year.
hurt
others.
all
So
far
our
gov¬
$500 mil¬
help one small class of
and keep 150 millions of
of the people from buying
ernment has spent over
lion
to
farmers
the rest
potatoes cheaper. They pass a law
to force business to hold prices
down
and then continue price
—
ability,
tegrity
lieve
in
in
continued
the
growth
efficiency and in¬
office. He doesn't be¬
laws
which
benefit
one
penalize another, nor in
practices
that
line
one
class
against another. He knows that
the true welfare of our country
rests on economic grounds; that
class and
when
business
prospers,
every¬
body prospers; and that any
law
.Volume 172
Number 4972
.
The Commercial and Financial Chronicle
.
.
L .(2555)
that
hurts
business
hurts
every¬
Continued
from
body. And above all, he knows
that the best friend of the common
is
people
the
the
not
politician,
but rather
government,
businessmen of
failure casts
influence
upon
every
the
totaled 160,431
units, compared with the previous* week's
172,307 (revised) units and
116,567 units a
The State of Trade and
job,
every
every
community
and
home in the whole United
and
7,566,650 trucks.
Reflecting the increase in national production the current
shipments of machine tools in November, the National
States. Bankrupt business and you
Machine
monthly rate since August, 1945, and
highest for any month this year.
the
including
—
government.
The
of
Thomas
Jefferson
words:
"I
that
place
the first and
boasts
its
as
Let Jef¬
in
his
economy
most
in¬
his phi¬
was
losophy of government?
answer
own
between
liberty
or
profusion
and
servi¬
8336 units
year
8,336
compared with 7,989 units
one year
index
is
based
the
on
annual shipments of
average
100.
The
November
October and 84.3 in November
a
292.7
was
year ago.
against
Living
Abraham
Lincoln
tion. And what
its
as
his
was
government?
Let
that in his
own
inspira¬
philosophy
Lincoln
an¬
words: "You
than
a
It
The previous high this
spurt of
139
cannot establish sound
security
on
borrowed money. You cannot keep
out of trouble by spending more
than you earn."
And
so
that
see
we
these
soenders, these creeping, flirting,
or actual Socialists (whatever
they
be),
may
certainly
are
not
Jef-
fersonian Democrats and certainly
not Lincoln Republicans—and yet
they
demoralizing both parties
threatening the stability of
are
and
America.
Jefferson
the
and
grandest
in
history — differed
faiths, but there was
which
on
of
American
in
and
the
they
before
it
is
best efforts
throw
these
out
ticians
and
sanity
too
late—exert
have in
we
to
us
spendthrift poli¬
restore
to
America,
solvency in govern¬
our outstanding ob¬
ligations of today.
And now, just one more thought
and I am through. You and I are
under great obligations to Amer¬
ica for being able just to
live
and to work in this great country.
America has been good to us, and
we, as
intelligent
men,
must know
indebted in very large
we are
part for all we
and
happiness
possess
and
of freedom"
intelligence
There will be
price
heroism
of
before
us.
gone
to
us
enjoy this fruit
from
others
those
And
the
who
so,
as
it falls
as
orchards
which
have
planted, let
destroy the trees that feed
us
not
us,
but
rather, in true thankfulness, plant
for
trees
new
still
others
to
en¬
This is the scheme of life—
joy.
and
this
is
the
constructive
patriotic philosphy to guide
At
every
whole
system
being
of
power,
let
meeting
us
this
a
without
allegiance
our
large
re¬
and
way
"To
we
for
the
to
lives
noblest
us.
and
the
,,
man
there
openeth
ways, and
High
Soul
there
week
low,
moving ahead at
placed
and
some
on
indications that the
faster
a
pace.
Several large
orders
have
are
flats,
rest
to
and
fro;
Yet to every man there
openeth
A
High Way and
a
Low
Which way his life shall
go."
&
Bradstreet
high since
new
Compared
with
the
pre-
advance
an
the
on
of
corre¬
near
wholesale commodity
result
a
of
the
mar¬
President's
264.77
increase of 19.1% from the pre24, and is 28.1% above the 246.26
upward
and
the
on
with
all
seasonal
new
lack
of
market
a
year ago.
Chicago Board of Trade trended consist¬
deliveries
of wheat, oats and
Mill demand for wheat
peaks.
substantial
continued
June
on
amounts
moisture
did
as
were
in
reported
the
heavy
Winter
from
in
snows
receipts of cash wheat.
demand
sold
exporters
wheat
some
quite
export.
states
domestic
lent
which
areas
Strength in
and
soybeans
was
for
corn
was
processors
cash
prices for the yellow cereal to the highest
since October, 1948.
Trading in oats was more active.
Supplies continued tight and limited receipts were readily ab¬
sorbed at firm prices.
Sales of grain futures on the Chicago
Board of Trade averaged 40,700,000 bushels
per day for the week
ended last Friday.
This was little changed from the previous
week and compared with a
the
the
daily average of 32,000,000 bushels in
week last year.
same
i"'r
ex¬
pected nearly next year.
Some steel companies are booking DO
orders far beyond the limits
they are required to accept.
In order to meet DO and allocation demands a
gradual change
in product mix is
early weakness and closed only slightly below
Raw sugar rose to a new high for the current move¬
ment, aided by a bejter demand for the refined product. An im¬
proved tone in thef'green coffee market resulted from sustained
already felt and the additional
ones
that
are
taking place.
some
This is working hardships on
profit standpoint.
Companies who for¬
profitable specialty items now find themselves
companies from
more
making capacity for the entire industry will be 100.1% of
capacity
week beginning Dec,
26, 1950, compared to an average of
100.8% a week agq, pp a decline of 0.7 of a
point.
Electric
amount
light and
at
It
a
the week.
Trade Volume Reaches All-Time High in Latest Week
.
of
electrical
energy
distributed
b,y the electric
industry for the week ended Dec. 23 was esti¬
7,032,740,000 kwh., according to the Edison Electric
Inc., reports in its current summary of trade.
Total retail dollar volume in the period ended
of last
week
was
estimated
to
be
from
1%
to
Regional estimates varied from the levels of
these
percentages:
Wednesday
on
5%
ago.
above
a
year
a
year
ago
by
„
power
New
England, East, and Pacific Coast 0 to 4-4; South
4-5; Midwest
4-3
to
4-7;
,
output
week's all-time
for the
new
for much of the record dollar volume, there was also a
very slight
increase in unit sales from last year's level, Dun & Bradstreet,
for
Output Continues to Break All-Time High Record
The
wholesalers and retailers continued
as
their inventories.
Heavy buying sent lard prices to
high ground for the season, with strength in vegetable oiln
supporting factor. All livestock closed with small net gains for
up
operations, the rate was 81.7% and production
1,575,800 tons, a year ago, it stood at 93.1% and 1,-
op$ra(jng rate, is equivalent to 1,930,600 tons of
ingots and castings
1,944.200 tons a week ago.
to
build
the entire industry, compared to
A month ago when storms in the Mid¬
This week's
steel
mated
to
Christmas shoppers throughout the nation, with the holidays
imminent, brought retail dollar volume to an all-time high during
the period ended on Wednesday of last week.
Total sales were
slightly above the nigh level for the corresponding week in 1949.
While rising prices for many items were considered responsible
for the
affected
from
week ago.
demand for roasted coffees
a
bread-and-butter products for the defense and
allocation programs, "The Iron
Age" points out.
The American Iron and Steel Institute
announced this week
that the operating rate of steel
companies having 94% of the steel-
west
recovered
a
more of the
in
the
above
—1 to
week
high level to attain
a
broke
new
through
historical
previous
high record
as
industry.
47,319,000 kwh. higher than the figure reported for the
previous week, 1,038,797,000 kwh., or 17.3% above the total output
for the week ended Dec.
24, 1949, and 1,524,500,000 kwh. in excess
of the output reported for the
corresponding period two years ago.
was
Carloadings Advance in Latest Week
freight for the week ended Dec. 16, 1950,
to the Association of American
Railroads, representing an increase of 6,159 cars, or 0.8% above
the preceding week.
,
revenue
772,902
cars,
according
week's total represented an increase
o| 133,174 cars, or
above the corresponding week in 1949, arid an increase of
18,350 cars, or 2.4% above the comparable period of 1948.
20.8%
...
And every man decideth
a
levels
is
The
drift
A
been
.
The
Dun
Flour prices advanced 20 cents per hundredweight as domestic
bookings expanded sharply toward the latter part of the week
with both large and small
baking interests participating in the
buying movement.
Reflecting good manufacturer buying, cocoa
totaled
the misty
prewar
increased to
an
the corresponding date
active
to fall
defense program
large construction projects
very
the
$6.80,
index represents
the $5.73 recorded
of
on
reaching
manu¬
contract stage, the magazine asserts.
r.
Some steel people are now convinced that a controlled
mate¬
rials plan will be placed in effect as
early as March or April.
Their conviction is based on the
impact of DO orders and alloca¬
tion programs
Loadings of
way
between,
finally force production schedules
are
the
of 249
or more
national
latest figure marks
Grain futures
down.
This
$6.82.
recorded
carried
to which will
at
in many
week as
of
Northwest
>
.
•,!!-
4-2
to
4-6;
and
4-1 to
Southwest
4~^«
Country-wide wholesale buying increased slightly last week,
p're-holiday reorders for immediate delivery continued to mount.
The aggregate volume
of orders
the similar 1949 period.
was slightly above the level for
The number of buyers attending various
wholesale markets declined seasonally
parable to last year's number.
Department store sales
And the Low Soul gropes the
in
The
weekly
Most
last
by good
as
below
current
state
a
which
the
And
trade
of
aided
metals
well
1939 total
of $5,000
Korea level
lot of conferences
this
below normal.
are
from the
emergency.
A rise of 8.17
points during the week lifted the Dun & Bradstreet
daily whole¬
sale commodity price index to a
new all-time
high of 315.36 on
Dec. 19, from 307.19 a week
earlier.
a way,
climbs
high
a
form,
our
This is the high¬
know.
every
A ,way,
Ancl
fortunes
our
cause
our
Inventories
Continuing
and compared with 154
a year ago.
Small
under $5,000 rose to 35
from 31 in the
42 in 1949.
movement
accelerated
Steel quotas of regular customers are
being slashed to the
bone—more than 50% on some products.
With some manufac¬
turers it is nip and tuck between
depleted steel and nonferrous
Electric
country and rededicating
final
upward
was
proclamation
by "Iron Age" editors in widely separated
is practically no hoarding of steel by
Institute.
to
The
kets
restricted
716,300 tons.
is
foreign
a
not adjourn
like
affirming
by
big
our
government
challenged
a
strength to the market
,»
this crucial time, when
their
the
Commodity Price Index Reflects Rise of
19.1% From Pre-Korea Level
requirements would dictate.
amounted
American today.
true
lot of headaches and
a
reach
1948.
$5.96, the
facturers, large and small, have less steel than their production
fice
and
check
regular customers.
making
now
Agency can collect
ently
and wealth to the labor and sacri¬
we
liabilities
Wholesale
indicates that there
merly sold
have
controls
careful
A
and
ment. Here lie
that
before
in
index represents the sum total
of the price
per pound
in general use, and its chief
function is to show the
general trend of food prices at the wholesale
level.
adds.
areas
and
Stabilization
174
of 31 foods
companies will comply with the government request.
But many
firms are facing a pricing dilemma.
Contracts based on cost
plus, escalator clauses and average prices will probably have to
be reviewed individually.
Many hardship cases will have to be
doctrine
both agreed —
solvency in govern¬
ment. Let us, as patriotic business¬
men
who are deeply concerned
about the future of our country—
sanity
Economic
to
The
Holiday
enough staff to enforce them, states "The Iron Age," national
metalworking authority this week.
Meanwhile, manufacturers are pondering over the new pricing
standards, trying to decide what course they should follow. Most
political
one
the
of
down 31%
14.1%, and it is 18.7% above
sponding date a year ago.
"fair pricing standards" is as futile as
trying to stop an avalanche
by frowning at it. Mandatory price controls are sure to be installed
studied.
Lincoln—two
men
with
Korea level of
Voluntary price controls are doomed to failure even before
they begin.
Trying to hold prices in check by publication of
as
week
were
Sept. 21, 1948, when it stood
Steel Production Scheduled to Fall Due to
soon
increased
preceding week, Dun & BradThey compared with 196 a
year ago, and 116
A rise of 3 cents the
past week put
wholesale food price index for
Dec. 19 at
jumped 0.2%.
as
industrial failures
Wholesale Food Price Index Reaches
New Post-Korea
High
up
Christmas
units
s
'
-
preceding week and compared with
cannot
strengthen the weak by
weakening the strong. You can¬
not help the wage earner by pull¬
ing down the wage payer. You
similar
failures
in the latest period, led by a
in house furnishings.
Average retail food prices
1.3%
I
.
faSUa"^ ^vo^vinS liabilities
from 119 last week
ion
was
of commodities moved
groups
the
in
level, failures
in
This compares with 175.1% a
3.2% above the mid-June level, 4.2% higher
year ago and 31.7% above June, 1946.
Prices of all major
month earlier.
and
street, Inc., reports.
costs climbed to a further new high and consumer
to 175.6% of the 1935-39 average on November
15, the
rose
'
wee^ totaled
and 5,973
ago
Business Failures Climb
are
289.6
"
■
week ended Dec. 21 from
150 in the
305.1, reached in August.
year was
prices
index
order
new
week
a
&
Commercial
1945-47
Average annual shipments for that three-year period
estimated at $354,000,000.
as
0lltPut in the
ago.
'
Bureau of Labor Statistics reports.
The Republican Party boasts of
swer
nnit?St
reports, reached the highest
new orders were the second
shipments in November was 110.9,
compared with 100.9 in October and 67.6 in November last year.
The
and
economy
tude."
of
Association
The association's index for
among
important vir¬
tues, and public debt as the great¬
est of dangers. We must make our
choice
Builders'
.
Party
And what
ferson
Tool
■
Democratic
spiration.
Industry
year
bankrupt everybody
or
ago
The drop was
attributed by Ward's to
the closing of Chrvslei s passenger care
divisions for model
changeovers.
Total output for the
current week was
made ud of 118RQQ
cars and 33,196 trucks
built in the United
States and a total of
5,992 cars and 2,344 trucks built in
Canada.
For the United
States
alone, total output was 152 095 units
against last week's revised total of
164,318 units, and in the like
The total for this year is made up of 35,921,941
passenger cars
profound
a
every
total
ylar
country whose
our
success or
school,
nor
5
page
Z%
the
Federal
Reserve
on
Board's
a
and
was
somewhat
countrywide basis,
index
for
the
week
as
com¬
taken from
Dec. 16,
ended
1950, advanced 9% from the like period of last year. This com¬
an increase of 2% for the previous week. For the four
pared with
ended Dec. 16, 1950, sales showed a rise of 3% from the
corresponding period a year ago and for the year to date regis¬
weeks
tered
an
advance of 5%.
According to the Federal Reserve Board's index, department
store
sales in New York City, for the weekly period to Dec. 16,
1950, advanced 9% from the like period of last year. In the pre¬
Auto Output Lower for Week But
Higher Than Year Ago
ceding week an increase of 2% was registered above the similar
week of 1949. For the four weeks ended Dec. 16, 1950, an increase
Combined motor vehicle production in the United States and
Canada the past
week, according to "Ward's Automotive Reports,"
date, volume advanced 1% from the like period of last year.
,
.
of 2%
was
recorded
over
that of
a
year ago,
and for the year to
*
Financial Chronicle.
The Commercial and
Thursday, December 28, 1950
..
(2556)
28
We See It
As
fact
the
be the
But how and where is this
of Presi¬
dent Truman to prevent World War III, while Mr. Hoover
and Mr. Kennedy appear to be chiefly interested in mak¬
ing certain that we win World War III. Calling people
names, however,
rarely accomplishes any constructive
purpose, and a good many of the comments such as that
have asserted that it is the aim
just cited seem to us a trifle silly. Mr. Hoover might well
reply that if we make certain of winning World War III
there would be n6 such war. Indeed, he would then be
preaching almost precisely the doctrine
ing from the Administration for a long
But such
if
discussions
all of
Of course,
us
as
this
are
that has been issu¬
while past.
not very enlightening.
want to prevent another World War
it if it comes. Few, we
None of us want to lose
we can.
much risk of losing it in
preventing it. The problem is how to
proceed. That problem will not be solved by glossing over
facts or ignoring unpleasant situations.
We have blun¬
dered our way into a very difficult state of affairs, and
we can afford very few major blunders henceforth if we
are to escape with a whole hide.
We now need to take,
indeed we must now take, a long, broad view of it all
and arrive at conclusions which are in accord with all
the facts and which take full cognizance of the blundering
history which has led to the present impasse.
believe, would care to assume
order to
gamble
on
begin with it is necessary, at the risk of becoming
To
tiresome, again to recite the general nature of the major
blunders which have given birth to our plight at this
of Woodrow Wilson, a substantial
people in this country have cherished the
that war could be banished from the world by some
Since the days
moment.
of
number
notion
organization which would be guided,
not by selfish interests of its members, but by some high
moral or humanitarian principle.
Wilson and his sup¬
League of Nations, which very promptly revealed
impotence. It was relatively easy when World War II
of the
its
broke put to make headway with the claim that
not been "isolationist" in those intervening years,
on
taken an active part in world affairs, the
might have been spared the horrors of the
the contrary
human
race
the time Japan had capit¬
years 1939-1945. At any rate by
ulated in 1945, the Government
so
had we
but had
far
States,
as
of the United States, and
be determined the people of the United
can
were
the world's leading exponents of another,
bigger and better League of Nations—which finally took
shape in the United Nations, an organization which was
to put an end to "aggression" throughout the world.
'
Meanwhile
we
had taken
three of the four powers
ambitions of importance.
ing thus placed in
made
soon
a
a
in the world with imperialistic
The fourth was relatively speak¬
position of unparalleled
it clear that
it had lost
not
one
power, and
whit of its
appetite for conquest and expansion. The United Nations
soon became hardly
more than a debating society with
the Kremlin and its satellites
side of
virtually all
questions %nd the remainder of the world on the other.
Outside the halls of the grandiose world organization, the
Kremlin, far from disarming as the remainder of the
world proceeded to do, steadily built up the strength of
its
armed
Thus
at
forces
this
and
those
on
of
one
its
moment
allies
and
associates.
nothing resembling any sort
"balance of power" exists anywhere in the world.
of
Not
only is there nothing resembling equality of mili¬
tary might in being between the Kremlin and those who
would hold it in check, but the theoretical opponents of
the Soviets have all too often until
quite lately been held
together—if they have been held together at all—only by
some vague hope of
maintaining peace without any real
display of force. It has now become fairly clear, we be¬
lieve, to all that the only way to restore any "balance"
in the older sense of the term (and very probably of main¬
taining peace in the world) is by building up the strength
of the anti-Kremlin world.
It is evident that harsh words
when
Congress,
Continued from
The
line
first
Its
Burma.
*
actual
au¬
alterations
the
be
the
the field
and
League of Nations failed.
Is the
United Nations better equipped
as
The World to Be Governed by
as
as
and
physical and mental capacity
development?
The mere sug¬
scrutiny of the charter of The
United
Nations
shows
that its
is to be-conducted >
principally through a series of
standing or permanent commit¬
tees, or councils, of which the
Security Council is the chief. The
goal which the organization has in
sight is internationalism brought
to pass through the instrumental¬
ity of small groups of persons'
constituting committees or com¬
missions supposed to be possessed ,
of talents, foresight, self-control
have
never
embodied
in
beings.
realization of this truth is
step
great importance in
estimate of The
of
certain
in
who
office¬
"too much con¬
are
that
rarely minds
remarkable enlargement."
attentive
too
forms, and added:
them
These
forms
then it is that
edge
of
little
adapted
are
a
boards
with
or
governmental
which
these
of individuals- who
supervise the system
furnished by the law with
group
to
mankind, and a far
comprehension
are
appointed; (3) only too
often members are obsessed with
overpowering
an
to
use
their
determination
official
positions
as
springboards for reaching some¬
thing higher, more attractive, and
more remunerative.
(4) A single
pig-headed crank "reformer" or
"do-gooder" upon a commission is
able
to negative
completely its
usefulness.
boards
The
and
As
world
governors,
commissions
are
sim¬
mense
There
is
an,
between
a,
distinc¬
"standing"
or
"permanent" committee of a body
like The United Nations, which is
subject
to
but
few
and
gradual
lavish
and
of
the
at
the
though in not so
degree as in the 'twen¬
a
Quandary of the Federal '
1929
fur¬
forcible illustration of the
a
truth of the statement of Edmund
not
quoted?
already
Does
it
suggest that 1929 was a time
of stress,
when "the file afforded
precedent," and the members
no
of
Federal.
the
Reserve
Board
accordingly unable to meet
the situation?
The Board failed
were
the
heed
dressed
to
remonstrances
it by the Federal
adr;
Ad-,
visory Council (made months in
advance); it hesitated between a
wish to tighten money in order
curb
speculation in stocks, ori *
hhnd; while on the other
wished to refrain from tightem-
the
it
extension
1920s,
one
ing
money
abroad, by raising the
here.
This acted
rate of discount
like
a
palsy; and it illustrates the
and
evil that would
weakness
paralyze any council or commission
of
world government that
might be set up.
The
im¬
Federal
Reserve
Board's
Condition Today
of
v
„
jurisdiction, and a dangerous en-,
The Board today, Instead of
largement of power (given to it being a great independent power
because
of
a
deep-seated
and for steadiness and correction, is
j,
ignorant popular prejudice against
railroads) saved it from a condi¬
tion of "innocuous desuetude."
It
has now swelled into an author¬
ity
so great as
unto itself—a
every
to be almost a law
condition to which
government
bureau
as7
pires.
It
important
and
especially
time,
Burke
created
an
shall
bitterness
Does not the whole episode
nish
to
Only
cipher.
we
Reserve Board in
history has been checkered
polite
for¬
ties.
colorful, at one time sinking
low as to be hardly more than
a
ply impossible.
tion
severe
and
so
soon
the
recall
the
the
in
present
unjust discrimination.
Its
1913,
.failure
Commerce
was
will not be
we
the Federal Reserve Sys¬
in
tem
-
body
ICC
If
tion of
Commission
The
from
ardent
hopes that accompanied the crea¬
gotten/
governmental
Interstate
opportunity,
money," with results in
which
1929
is illustrated
of this
outstanding
The
its
1929, to follow the policy
to
of "cheap
to
truth
The
litical and
they
looseness
Board
1927
251.
commissions
personal; (2) members
free from vague no¬
tions of a duty to represent the
section or the country from which
This
commerce."
things is requisite than of¬
fice ever gave, than office can
ever
give.—Burke's speech on
"American
Taxation,"
Good¬
rich's
"British
Eloquence," p.
administration
seldom
that it is e%sy to
The
ways
generality of language gavp
of
experi¬
honeycombed with prejudices, po¬
;
step* forward
and
in
that there are certain vices
infect them all.
Briefly, 1887, to regulate railroad freight
and passenger rates, and prevent
are:
(1)
Often they are
knows
are
to
greater knowl¬
commissions.' •'
had
'
System
only vague and uncertain objec¬
tives.
They were to establish an
elastic currency, and to fix a rate
of discount (or rediscount) "with
a
view to accommodating trade
by our own experience here in
America/) Let' us speak of two of
has
Reserve
overlook one important fact.
understand
extensive
more
sions—"Open Secrets" About Them
in
to
high-roads are broken up, and
the file
affords no precedent,
our
ence
He
ordinary occasions; and there¬
fore, persons who are nurtured
in office do admirably well, as
long as things go on in their
common
order; but when the
Standing Committees or Commis¬
who
Nations
Office-Holders
Commons
of
thought
any
Anyone
:*
•
•
govern¬
Reserve Board
Federal
Federal
such a distinct
was
Edmund Burke once said to the
House
government
The
.-**•*■.*
and
United
The
of
Burke's Opinion of
of
A
as
.
another
to
pass
The
hardly approach.
versant in office are
Standing Committees
been
in
another
one
every
the
could
holders
such
nations,
religion, temperament, experience
in life, methods of business and
character of commodities, as well
outside
popular elec¬
contrast with
missions
The
task?
question is of the first importance.
a
60
of
em¬
activities
of
imaginable degree,
respects race, language, color,
almost
Legislatures
ously undertaken by any one save
the old League of Nations.
The
human
jurisdiction to
from
differing
were
time
the
multitude
a
composed of individuals and races
committees of our State
or of Congress.
Wide Domination
These latter
constantly vary in
The United Nations aspires to membership with every election
nothing short of ruling the whole that occurs, and reflect popular
world—a task never before seri¬ thought in a way that the com¬
a
nu¬
more
operation to become,
transactions
and
nary
World-
Aims and Purposes—A
wisdom
and
tragic mistakes, were
of
were
brace
were
tremendous
single
a
^nation-wide, but world-wide,
not
the ordi¬
any
of
difficulty,
merous
direct
to
or
such
influence
tions; in
at
limits
the
,
debating society.""
and
regulate one
(transportation)
to
business
mental agency.
page
thority is about that of a glorified
so
pressure
country has proved a dismal fail¬
ure.
How
much greater would
A Close Look at the U. N.
for
local
no
attempt
of
within
The
or
and
are
even
interference by
no
from outside Congress.
We
Haiti
is
there
gestion is startling.
United Nations.
decisive part in destroying
transporting
merchandise
complex and burdensome,
shrugged off.
forming
Only Some Thieves Destroyed
Questions involving charges for
of force to be
up
otherwise prepared at the
earliest possible moment. But where among these peoples
is there real will to fight and can they be re-armed and
trained (even if they are ready to do all they can to help
themselves, which often appears doubtful) without pre¬
cipitating a war with the Kremlin which at this moment
almost certainly could not be contained.^* Essentially the
same questions are to be raised as respects Japan, where
a
large potential military might exists. And, of course,
we should
have to face the possibility that an aroused
nationalism in Japan and in Germany would, when arms
are again available, recreate imperialistic ambitions.
These are some of the problems which are weighing
heavily upon the minds of Mr. Hoover and Mr. Kennedy—
and a good many others of us — and they can not be
kind of international
porters were never able to convince the majority of the
voters of this idea, and we, accordingly, were not members
building
Spain, should be armed and
is, of course, easy enough to label these critics "iso¬
lationists" and thus unworthy of attention. It is simple
It
Interstate
the
port such a notion.
Questions
that has concerned Mr.
Hoover, Mr. Kennedy and thousands of others throughout
this country during the past year, and particularly during
the past two or three months. It is most frequently said
that all of Western Europe, including West Germany and
Name-Calling Doesn't Help
to assert as some
the
That is the question
undertaken?
for this nation.
enthusiasm for
an intense
methods
of
Only
Commerce Commission could sup¬
Here Are the Real
these gentlemen have
of vital importance to us all. Sound judgment as
facts and opinions expressed by them could well
difference between catastrophe and relative safety
ternational
not.
was
remains, however, that what
said is
to
it
commission, to control in¬
trade
and
business.
world
the Kremlin any more than Britain's pledge
to Poland prevented the outbreak of World War II.
It
should have been foreseen — all of this — but apparently
will not stop
Continued jrom first page
unlikely that anyone
with history would
seems
at all familiar
have
the
hardihood
inference from
Interstate
in
favor
the
to
draw
career
an
of the
Commerce Commission
of
the
creation
of
any
closely linked up with the Treas¬
ury Department, and is subordi¬
nated to the fiscal policies of the *
Administration.
Thereby
it
is
of that authority
in 1913; and it is very
nearly "harmless" for some of the
purposes
expected of "it by its
creators; e.g., its control over the
rate
of "discount.:
Yet this
robbed of much
given
it
something that
of
was
then deemed,
especial importance.
A world
governmental committee in con¬
trol of banking and finance would
Volume 172
Number 4972
*-.
The Commercial and Financial Chronicle
.
(2557)
have
even
tain
itself
harder time to main¬
a
blance of
or
preserve
a
till
currencies,
tions
the
the
and
60
the
most
1945
drawn at Bretton
to
as
just
the
what
advocates
employment"
It
to
seems
plete
and
ket"
for
the
important
in
Has
whole
lines
such
have
a
suggest
fairer
what nations would constitute the
achieve it than
but
"World Reserve
Would
the
United
States
or
Great Britain
or
Canada
have
the Board
be managed by
from Pakistan,
sentatives
have
would
or
duction
gardless
of
in
the
other nation,
come
even
pointedly differed as. to
only the fool¬
so
repre¬
ticle
own
perience with governmental
missions, it is
at
two
which
of
objects
ex¬
Very
com¬
below
foremost in the list of
results which The United Nations
was
to
accomplish:
chinery for the promotion of
plain English,
last
includes
"full
employ¬
greatest step to such
ment" as the
its
end.
ideal
other
conduct,
rigid or
the
are
careful
the
goal,
must
one
reader
of
that such
Nations
noble
Views
be
this
careless
a
history if he supposes
machinery as the United
offer
can
respect
is
as
can
inspire
or
command
confidence
to
effectuate the desired result. This
weakness cannot be bettei; stated
than
by Mr. Nicolson
lowing
Lord
in
the
fol¬
William Walter
ing
too
conferences,
of
stiil
that
the
dramatic
such
need
consequent
,,
concrete
they
were
and
often
sions."
'"long,
the
escape
grows
the
public
mind,
of
in Business
says:
But
they
inflated
or
speak
the
contrast,
their
than
letters of fire, Korea has pointed
to the weakness of government
by
so
boards and
in
ing
in
war.
disappointing as
they are doubly
armies.
negotiators,
peace
so
directors of
as
Within
the
last
few
months, the Commander-in-Chief
of
our
have
were
armies
in
Asia
the United Nations, especially
as
the army neared the 38th parallel.
Certainly,
in
we
American
our
homes have wondered.
Speaking
of
the
which falls upon a
to
responsibility
military leader
keep his troops supplied with
foqd, Napoleon
once
observed, "if
he
allows himself to be guided
by the commissaries, he will never
stir."
Today, he might add with
increased
must
emphasis,
await
commission
sentatives
the
and
races,
and
religion,
well
of
up
many
divided
as
if
decisions
made
of
that
he
of
a
repre¬
nationalities
in
as
language
in opinions
necessities pf life, ahd
consume almost us mUch
do
we
Employment" and Enforced
Maintenance
of
Trade and
International
Commerce
,
Observations like the foregoing
must be met; they cannot be
{ig¬
nored, ; however embarrassing; to
those who would compel business
activity, and would galvanize into
existence
an
international
trade,
whether profitable or not.
cates
of
tended
well
uninterrupted
international
pause
to
Advo¬
and
ex¬
trade
reflect
international
trade"
ceive
equal treatment
consideration
at
the
legislators.
situation
a
the
few
very
ments.
If
is
and
ljiay
and
equal
hands! of
The two horses do
jnot
shdft^.
evenly in the same
insist upon "full employ¬
ment," as having first
you
consider¬
ation,.
you
must
be
willing- to
place.
trade
take
A nation which
S.
It
Policy
was
United
by
of
suggestions
what
of
series
a
impossible,
ture
a
is
to
live
in
government
has
hands
of
compose
United
the
world
a
pointed
the
ex¬
other
is
the
a
advice
of
century—all
warn
us
When the
far
a
wars
a
of
to
is
is
an
of
character
some
at least supposed
over the full mem¬
or
of
United
realize
the
by
derisive
valuable
is
as
world
of
as
government
for
of
universal
a
"esperanto"
Would
the
and
a
of
about
many
of
the
millions of this world
"volapuk"?
fathers
a
charter
is
How
surrender
from
have
govern
only to raise
The
plan
language.
who
to
Nations
for
the
a
govern¬
which is ad¬
those
fit
laugh.
The* United
the
You
that
failed
is
in
Nations.
world
conspicuously
of
of
any
speech
forefathers,
or
them
their
derived
period "when the memory
runneth
man
in
not
to
the
con¬
favor
of
a
substitute
which might be the most scientifi¬
cally framed language that schol*
ars
and savants
The
is
ever constructed?
is full of life and
power,
nation's own
one
a
in
plaster
ening
complished
for
united
ac¬
action
the great powers.
But in the fifth
conference, that at Verona in 1822,
she broke
of
of
a
proposal
interfere
to
in
paris,
now
that
to
is
fall
threat¬
to
pieces
using. To quote the words
Gentz, the Austrian statesman
prominent at the
so
Congress of
Vienna, "Upon the shifting sands
modern
politics
it is to build
on
Enthusiasm,
own
of
how
difficult
solid foundations."
patriotic
love
land itself,
very
willingness
to
die
great thoughts
such a
are
and
it—these
for
impossible for
nondescript thing of
as
for
people and country and
the
paper
The United Nations.
abruptly because
away
chievously
the
of
even
in the
love
mis¬
Spain.
life
Paul H. Gaither Is
it
in
recognized the in¬
of
Spain's
colonial
be
American
any
the
dependence
subjects in South America;
or
also
tradi¬
our
President
own
did
as
Monroe,
laying the foundation for
Has
tablished
fortunes,
let
they may?
Is
what
any nation that would en¬
its future to any series of
world committees
formed?
own
that
our
es¬
"Monroe Doctrine."
"This
self
maxim
so
people
worthy
above
be
sacred
been willing
true,"
that
of
all,
no
set
freedom
example of
a
blind and
almost thoughtless
drift toward what is called
"unity,"
but what is
only too often hardly
a
mere
"getting to¬
This movement is show¬
ing itself in both church and state.
The feeling seems to arise from a
notion that, if only people can be
a
Our
sition
in
moved
the
Western
from
Europe
portant) from the
selfish
and
She
World,
not
was
in
im¬
Conditions of
good.1- But
are
where
absent,
or
these
where
their influence is feeble and inef¬
Exchange.
Mr.
Gaither
Axe Securities
was
for¬
formed
Fifth
Avenue, New York City, to
continue
of
our
our
any
desire
advice
to
in
be
respected
moments
of
with
offices
investment
at
730
business
Corporation.
Patton, Lanktree With
Central Republic Co.
(Special to The Financial Chronicle)
wealth
for
territory
was
concerned,
have caused our counsels
more
and
as
the
Leffler
intrigues of European
far
Securities Corporation has
been
disinterest¬
so
Corp.
Formed in NYC
jealousies
and
unsual
OMAHA, Neb.—John H. Patton
and
Hugh
come
J.
Lanktree
have
be¬
associated with Central Re¬
public Co., Farnam Building.
Patton
was
Mr.
formerly co-manager
danger
of
be
Webber, Jackson & Curtis and in
or difficulty.
We used to
generally
respected
and
trusted,
liked.
even
Just
though
we
were
intervened
not
velt
life.
Burge & Kraus, Union
re¬
only
more
mean
strength, and
when
of
H.
associated
associated
with
Gottron,
Russell & Co. for
many years.
Axe
politics, coupled with
and
habits
Ohio —Paul
become
merly
was
and
edness
similarity in
fundamental attributes, such as
race, language, religion, coupled
with those of character,
training,
that sort make it possible for in¬
dividuals to join together for,some
has
Commerce Building, members of
the New York and Midwest
Stock
the Channel.
across
mileage, but (what
might
to
of weight.
was
own
heeded
akin
CLEVELAND,
Gaither
with Ball,
intervene, her
country once stood in
a position to
play very much such
a
part in European affairs, even
perhaps in Asiatic affairs. Our po¬
.
ily be
something
she did
looker-on
got together in large numbers or
masses, the result must necessar¬
increase in strength and
im¬
In this way, she found
when
influence
of
Fallacy of One World
than
that
has
The existence of the United Na¬
tions is itself but one
of
to be called the "Concert of
Europe."
a
to forget it.
occasions
portance, to join in that somewhat
came
to
is
special
on
Burge Go.:
(Special to The Financial
Chronicle)
vague but useful combination that
could
ever
With Ball,
at the rest, and
be
was,
conditions
The
themselves
one's
through the conference system of
Suppose
Would
reared
be
an
Read
ment
re¬
partner in that
Thereafter,
all
that
England
sought to do in continental affairs
gether."
It
bership of the 60 countries
of
mistakes
more
be.
of
every nation or people de¬
manded the right to be the archi¬
tect
of
its
own
ever
to
dreamy and impossible Holy Alli¬
For a short period she was
be
Would
living?
thine
tions possessed
ance.
not
be
even
democratic
or
government.
and. authority,
willing to try what might be
pic¬
reins
the
for
fused to become
never¬
to
customs;
Napoleop ended, she resolutely
been
the
and
statesmen
Presently,
great
the kinds of men who
Foreign
Minister,
the commissions of The .George Canning, flung defiance
tolerable
trust
Oligarchy
an
her
Englishman
there
a
oligarchy where, of necessity, the
strings are pulled by a few na¬
and
sign-posts of
step.
whole
really
were
Nations?
worth
for
error
enter
England herself had set
success¬
not
this:
if
All
wiser example.
the United Nations could succeed:
What sort
of
world
would
we
have
differ¬
these should have served to
us from
so michievous a
committees
there
It
to
been
geographical
our
com¬
the
of
ought
overlooked.
capital
a
perience
Our
very
or
other side to
one
which
Hadley's
a
Tragedy of Errors
a
States
federation.
than
more
said, it is clear that the
common
second
U.
for the Future
surface
government
popular
of
trary"
We close with oniy
from
Doctor
has
way.
production;
location; our the other is mechanical and dead.
replete with commercial interests; our habits of So also is the frame of The United
thought and our political tradi¬ Nations; a thing of cardboard and
perplexity.
hardly
large subject.
once
application: "Plans for making
tions
have
Yale,
every one safe may produce little
else than skulkers and cowards."
under
that both solidity.
This,
however,
occurs
"complete' only where there is a real com¬
cannot -re¬ munity
of interest, along with
trot
If
ent
rule, but without
international trade, would be the
drama of "Hamlet" without the
Prince of Denmark.
"full employment" and
alysis of veto)
as
A Clash Bound to Result Between
international
stir
world
really
a
form
fo^making every one swarming
end by making every ever heard
r."
poo
of
thought holds good with
United Nations
The
"Full
one
and
Leonard P. Ayres.
make
never
non¬
or
and aims, (and subject to the
par¬
he will
happy
needed.
truths has
.
prosperity.—"Turning Points
Business Cycles," Preface, oy
puzzled to know what
the true and ultimate aims of
These
of them in hord times
well
may
.
are
we
.
been
A
Geneva
at
tions of individual freedom?
.
are
up,
them
In
commissions for wag¬
If they are feeble and
goods
constantly
using
wearing them out,
replacing them. , Most 'of
we
and
body
a
enforce.
non-durable
production.
of
them
to
from year to year.
they manufacture
durable goods have to be pro¬
duced in fairly regular amounts,
for
power
result
in comparatively steady volume
Guns, tanks and airplanes
terribly serious—more so than
lacks
cycles
fact that
words.
5.0 "cease-fire" orders from
Havana.
theless
"Turning Points
Cycles," Colonel Ayres
to month and
By
con¬
louder
notably
defense
Hadley,
rich usually
taxpayers) have been devoted to
the subject at international
gath¬
erings,
T.
said: "Plans
holds
politics
ministered
the
the
conduct of affairs
United Nations
then
all
has
of
errors.
will
Arthur
liberation and ponderous sums in
dollars
(mostly
of
American
is
tions
are
that
one
world
from
all industrial na¬
produce
their
durable
goods in waves or surges of
output, instead of manufactur¬
ing them in steady flow, vary¬
ing little in volume from month
the
to
discus¬
international
actions
the
.
Business
tract.—"Curzon, the last Phase,"
by Harold Nicolson, p. 42.
.
as
Quotation from the Late
on
trade
are
unpleasant
States
The United Nations is not
been
realized thus far by
only a few of
us Americans.
The late Professor
place that months of de¬
a
skimmed
credit cannot
Colonel Leonard P. Ayres
compromises or pan¬
either misled the
currency
high
so
ful
In his work
yjhich
aceas
International
world
best,
worst
fetish.
tragedy of
of
This
United
am¬
foreign
confidence
our
fold
furnish
any
of
reconciling
the
two
things?
Each one is viewed by
internationalists as an "essential,"
We
shall
we
older."
wider
Discord?
Nations
selfish
world; for
foreign
in
Pact
Doctrine,
making people content with the
thought that "rich" America will
United
means
1874: "Even
them; and this basis is
which
complicated,
vexatious
At
achieved
At
This
United
embarrassment
A world which
on
The
The
extension of the Monroe
Representa-.
currency,
panics.
grows
of subordinat-
achievements
results.
apparent
honest
have
does its business
know¬
meetings in¬
volves public anticipation and a
ing.
of
this language in
used
with
A
well
House
our
For
The
The
Phelps
from his "Life of
passage
.staging
^
In
Curzon":
ternational
the
esteemd economist of Our
of
Has
Countries
of
the
impression
("The
36.)
p.
countries.
forfeited
itself,
influence to the
plans
has gained ground that the
Atlan¬
tic Pact is to work like a
European
two
difficult."
Remedy
Nations
the
Atlantic
high ground has been
our
bitious
of
sure
reluctant to
make efforts to
guard against Rus¬
sian aggression.
The
pro¬
policy,"
of
Munich," at
fives, Hon. William Walter Phelps Disturbing Shadows
Curzon had little faith in in¬
.
of
latter
century;
•
and
views
thinkers
in
one
time, only recently deceased.
own
Desirable
bus¬
accommodate
any
19th
nature
that
human
Here
land,
the
an
to
to
very
of
lies 'far
human
way
follow
plan.
own
part
of
the
forced
than
of <two
our
Universal Peace
in
methods
rather
the
economic and social advancement
of all peoples."
In
and
iness., is
prevention of war; (2) The
employment of "international ma¬
What
tive.
it for
however,
any
sound
world
economy.
that, perhaps, "Full
employment" has become a
surface, and is in the
character
very
itself,
(1)
The
an
the
are
created
this
cautiously,
may be suggested
the heart of the problem
aims
or
extremely
Has
Avoid Panics and "Hard Times"
in order to look
now
the
is
the
employment
combination
Economic
\
Underlying Reasons for Failing to
away from this not very
our
"the
yet
"while
wage
the
a distrust of self
has
possessed many of the nations or
countries
in
Europe since
the
making
of
the
Atlantic
Pact.
There is a
distressing absence of
old-time self-reliance and initia¬
same
this
perilous
The
The
apostle of full
sound
a
all
in
Just such
Lordship made
that
full
a
is
gram
'
'
of
of
crux
the
an
admission
card
no
All
29
abandoned by stepping down from
our
position of advantage, and
stability than lending
where
together
pro¬
his
as
stand
every one relying on the next.
The displacement of a
single card
brings the entire structure down
in ruin.
statement from
a
more
cards,
and
Keynes, shows that
ardent
so
the
this.
as
'
inspiring picture
even
hardy would attempt' any com¬
plete explanation in such an ar¬
China,
The Aims of The United Nations
Turning
the late Lord
employment
opportunity to
never
And
author, quoting
ever
to
no
of
uncertainty,
"In
exchange, and re¬
political and social
consequences."
the precise answer,
Egypt and Iraq?
j
all
parts
employ¬
itself, and jobs
contribute
and
United States
any
they
com¬
mar¬
on
house
a
full
end in
an
36,
p.
real danger.
In
everybody tends to
everybody else; and the
case,
whole has
to be made available wnether
not
or
at
language,
ment is
are
term.
"within hailing distance."- Wha.t is
the reason?
When learned men
France
or
seat,
a
have
we
Munich,"
a
business.
own
membership of
a
the
development
History
shows
the
Board"?
fective, there is
has
"bull
world
of
"full
a
occurred?
had
by
mean
Our
one
at -work
been forcibly ob¬
Mr.
Philip
Cortney
his valuable
work, "The Eco¬
socialist
of
contemplate
continuous
opposite.
any
farms
own
mines
by
in
It would be of interest to learn
great things the
World Bank and the International
Fund were to do.
The less said
Dare
It
served
nomic
what
better..
others.
"Full Employment"
them
Woods
and
the full,
great aims of the United Nations.
the
bankrupt, their currencies depre¬
ciated if not
worthless, and their
credit gone?
Think of the pic¬
tures
assembly is about the
opera¬
of
keeping its
lean
world
able for making peace or waging
war.
We pass to another of the
affairs of
that compose The
Nations,
on
mills
such
business
nations
United
banking
and
will not hesitate to sac¬
clumsiest instrumentality imagin-- rifice the
business and welfare of
Reserve Board"
today attempting
and
intent
to
A
rule over the finances
has
moment
supreme
passed.
sem¬
independence.
;
Can even the most ardent dis¬
ciples of World Government con¬
template the picture of a "World
to
the
1823,
with
sults,
so we
to
as
we
most
did
beneficent
once more in
President
Theodore
in
War.
These
the
Russo
-
office
of
Paine,
past was an officer of Burns,
Potter &
Co.
1905,
Roose¬
Japanese
striking illustra¬
tions of our influence, but per¬
haps not entirely the only ones.
are
Omaha
re¬
persuaded Russia and Japan
meet at Portsmouth, N. H., and
terminate
the
the
Joins Dickson Staff
(Special to The Financial Chronicled
CHARLOTTE, N. C.—Elbert C.
Blackwell is with R. S. Dickson &
Co., Wilder Building, members of
the Midwest Stock Exchange.
Chronicle
Commercial and Financial
The
30
Thursday, December 28, 1950
...
(2558)
relations.
majority of Continued from first page
stocks is that they've acted in
Tomorrow's
hesitant fashion.
a
Of
Whyte
course
decisions
Major
Says—
a
an¬
issued
are
during the Christmas - New
Year period. They wait until
At this time I should take the holidays are over. I'm not
long look ahead and write referring to emergencies.
WHYTE =
By WALTER
=
»
be
to
seldom
nounced
slump;
its hopes, They're something else. All
fears and what to expect. Be¬ of this means that we are, and
fore you are frightened off let will probably continue to be,
in a news market. Putting it
me hasten to assure you that
have
I
intention of doing
no
news
such thing.
any
First of all I
have
what 1951 will bring.
idea
no
any other reasons they're
insignificant.
the
e
look to
be
saying that the
if
if
if
first blush of inflation is over
Having sounded off about (hence the hesitation) and the
what I won't write about, I new selling recently coming
strikes
year
trials should not go
eign policy.
if
if
if
How,
these
may
tors
wink
by warning that a reac¬ of
around the corner
umn
tion
and
the col¬
was
I
75.
advising holders to clear
of their
holdings in
.some
So
preparation for the blow.
how
matter
minor
a
that no
coming
hold, you've taken
far
the
market hasn't de¬
some profits and still have a
clined, or for that matter has
partial position. If they break
it gone up. The best that can
and your original position is
If
they
sound
a
Pacific Coast
Executed
at any
of the
on
those
with
coincide
Schweickhardt Go.
Schwabacher & Co.
Members
Stock
Exchange
New York Curb Exchange <Associate)
San Francisco Stock Exchange
«
Chicago Board of
Private
Trade
Teletype NY 1-928
Barbara
to
act
distributors
Monterey—Oakland—Sacramento
Fresno—Santa
in
dealers
Partners
Schweickhardt,
Rosa
Orleans
New
underwriters,
as
and municipal
madket
rities.
Hibernia
the
and
eral
La.—Schweick-
has been formed
in
offices
with
Wires to Principal Offices
Francisco—Santa
San
NEW ORLEANS,
hardt & Company
Building
New York 5, N. Y.
14 Wall Street
are
secu¬
Erwin
of
member
Stock
gen¬
R.
the
D'Antoni.
SPECIAL CALL OFFERINGS
Per 100 Shares Plus Tax
DuPont
....
Atlantic Rfng.
@ 12% Feb. 19
Climax Moly. @
•
Apr. 30 $587.50
@ '2
425.00
'TVz Mar. 12
312.50
Richfield Oil. @18% Mar. 27
450.00
312.50
Gen'l Motors. @ 17
Mar. 27
Y'gst'n Sheet @ >0% Mar. 2
Canad. Pacif. @ '.1% Mar. 24
Cities
Service @ '2%
Mo. Pac.
United
Feb. 28
~v
pfd. @ >0% Feb. 28 387.50
33% Feb. 19 412.50
THOMAS, HAAB & BOTTS
Put &
Dealers
formerly
nosti
&
a
partner in
was
Schweick¬
Vice-President of Weil
feel
war
curbs
average
no
Since
1950.
for
first
half
in
trend
the
Calls Brokers <fc
Equities, Inc.
UNO Equities, Inc., 30
New
W.
York
S.
ciated
City,
Salomon,
with
banking
Broadway, N. Y. 4, Tel. BO 9-8470
of their
1950
of
the
Pine St.,
announces
formerly
various
that
asso¬
itnernational
institutions,
has
Vice-President
in
been
charge
foreign department.
—
(40) New home
suffer
(27) Business and financial fore¬
next year are not based
nothing
almost
small easy payments for
hence.
years
again in the land.
she
believe
construction will
greater decline than
a
other
Nonessential
lines.
have her satellites
it in
wants
now
be satisfied
will
She
ban lots.
to
1950,
1951 than fdr
government will
part of its
the
since
available
food
should be larger in
raise planting quotas as
attack
is
on
inflation. If the weather
favorable, the gov¬
will be blamed for farm-
extremely
ernment
But
syrup.
goes
plans
rising supply of feed grains, meat
plentiful next year
for
time
are
have much effect on
held
tary needs.
Federal Reserve support
(30) Government bonds will be
up
*
tightly between the floor
and the
Taxes Will Be Higher
.(16)
Federal
of
burden
The
municipal
and
taxes
will
will
There
be
an
excess
1951. These excess
profits taxes will be milder than
those in force during World War
II;
but
will be
they
retard
inflationary
efficiency,
in
over
Board
powerful controls
loaning poli¬
member bank
likely to pass
however,
unless
cies. Congress is not
such
controls,
commodity prices go a lot higher,
or
World
War
III
comes.
the year progresses.
(32)
I
see
that
nothing
we
are
period of improved
back
swing
will act as a
incentive
no
to
toward
further
building. There is
build homes for
rental income.
(46) As building volume slack¬
in 1951, the quality of avail¬
materials and workmanship
ens
able
those who have
and
This will help
saved their money
improve.
should
can
for at least
pay
now
and Politic*
Will
Increase
do so should
orders as a
means
of holding up production
volumes and reducing overhead.
(47) Those who can
attempt to get defense
Not too much
profit from such war
expected, how¬
these contracts will be
subject to tight-fisted renegotia¬
to in¬
entering
half the
home.
Orders
Defense
ever,
Uncertain
dicate
certain nonessential
as
business should be
purchasing
discourage
en
cost of a new
(31) A great deal will be heard
1951 about giving the Federal
(18) There will be heavy pres¬
for increased Federal "sales
of luxury and
should
negligible.
Stock Market and Bond Outlook
sure
to
changes
price
conditions,
be
economy
and incentive.
taxes"
ceiling of Federal Reserve
sales.
Under such
Reserve
profits tax in
of
purchases
anti-inflation
remain high.
and
huge
(45) Tighter credit controls will
make it more difficult to purchase
not likely to older residential properties, and
prices.
1* e prices for these should weaken,
by continued
high National Income and by mili¬
will be held
demand
damper on new
a
such
sustenance farms
well in price »s
will be spurred by those
year.
such
draft
up
(44)
The
rent control
at
the
Small
hold
should
rearmament, a federal deficit will
arise during the last half of the
(29) As a result of the preceding
should be more
and
also curtail
seeking refuge outside the big
if cities. Demand for large commer¬
the cial farms, however, should weak¬
With prospects good for a
(15)
will
Later,
with
along
Administration's
of arv
demand.
prediction, money supplies should
not begin to rise until after busi¬
ness
has turned down. Increases
part of 1951.
year
(43)
Congress
volumes
business
next
during the latter
price weakness
ever,
for
The.first half of 1951 may
actually see a budget surplus as a
result
of
high National Income
taxation.
by the
other section*
adversely aftect the demand
big city real estate. Lower
will
we may see
increased
caused
outbreak in
early
June 30, 1951
and
scare
Korean-China War and fears
(28)
failures, the
crop
ing
The
(42)
continue taking
unexpected jabs at us, while the
Polituro boys hand out the sooth¬
during
1951.
of
supply
down, this
was
position
income
Barring
total
(17)
UNO
credit
easy
down and
foreign merchandise. The cry for
increased tariff protection will be
Europe.
income for 1951
less than that
Farmers'
should
State
W. S. Salomon Willi
boom was the result
of the recent
of
credit. Much
mortgage
on
outlook for
strongly affected by
be
will
1951
increasing
heard
Activity Will Decline
(39) The real estate
domestic manufacturers will
competition from
many
funds
Estate
Real
As was the case this year,
U6)
bond
year.
supplies.
not
Good
Farm Outlook
taxes, both corporate and personal,
will be increased again in 1951.
Assn., Inc.
their
some
part Of
maturing earii
with
diversified,
it that
carefully
to
see
casts for
Mr. Anag¬
Co.
Company.
elected
50
Mr. Schweickhardt was
Landry &
hardt,
225.00
475.00
Aircr. @
Members
on
for
except
& sudden
municipal*,
commercial
diction recognizes that living costs
building will also be hit.
on the thought that World War III
next year may be above the lower1
(41) The coming decline in new
levels that existed during the first will start in 1951. Russia is cer¬ building will throw a wet blanket
tainly heading for war, but we do over speculation in vacant subur¬
half of the year now closing.
main
275.00
Explanatory pamphlet on request
■
depressant
a
Exchange, than in 1950. Prices for meat, how¬
Evangel N. Anagnosti and Vincent
•
then
will re¬
high during 1951. This pre¬
(14)
COrtlandt 7-4150
as
the latter part of
Formed in New Orleans
York
peace
a
(12) The cost of living
farmers'
Pacific Coast Exchanges
New
of
abroad
cause
should
Investors
additional heavy credits should be
granted
might
their bond maturities are
another
Chronicle. They are presented as forecast is not so optimistic as it episode like "Korea" in 1951.
might otherwise seem, for there is
those of the author only.]
More Deficit Financing After
likely toibe a weakening of the
time
Securities
Orders
not necessarily
do
article
strongly
(13)
expressed in this
event
stockpiles could
prices.
figure.
views
[The
Such
scare.
act
the
in
threat
it at
average
can
you
lower
the rise will not
pay in 1951. Futhermore, our ex¬
panding
stockpiles of strategic
materials
present
a
real
price
for the worst.
storm, I prepare
outlook
turnabout in prices for
changed, but the ex¬
and
however,
these,
downward change in the Vak
any
„
for
in
ulation
further. Total foreign trade should
not be much
has been some spec¬
mand. There
prices for 1951, I do not now fore¬ porters will be on the short end
cast.
I of this business with the importers
(11) The year 1951 should prove gaining.
(25) It will become more diffi¬
an excellent time to
keep a tight
cult
to
convince
Congress that
grip on inventories. Commodity
know if
attitude
chains.
(24) Barring new war develop¬
levels of late 1950, Retail
the high
convertible*.
are
With income taxes slated
to
increase
in
1951, tax-exempt
bonds should continue in good de¬
Foreign Trade Outlook Fair
quite steep from
the drop may be
me
The
whhll
(38)
shrink¬
mild decline in 1951 when com¬
pared with the price level for age in our exports during 1951.
December 31, 1950. In some lines Imports, however, should rise
hold, but I do see signs
down in the market action,
the
interest
and
my
govern¬
bonds
corporation
only
volume, but I predict a rise
the sales of variety chains
of drug
long-term
for
bonds, see No. 30 above.
ment
ments, I look for continued
J'11
take
22
For
them.
buying
forecast
for individual
reason
no
see
investors
decline in department
a
mean
store
Remain
Wholesale prices of many
be marked by a
(10)
speculation
don't
I
Because
Last week I ended
(23) The trend forecast in No.
will
commodities will
if
if
if
but-1
Firm
if
if
if
stabilization
taxable cor¬
in a
1931,
bonds should hold
price range during
narrow
public's spending for food
and lower-priced soft goods.
its clauses.
of
some
(37) Highest-grade
porate
the
of
in
anybody can
problems I'll glad¬ another
period of strength.
him.
at
will also act
sales.
Falling demand for hard
damper on furniture
goods should mean a
and industry,
Over-voneen1951.
quality.
but also by
tration will not pay in
dwellings
fewer
a
(22)
repealed
Commodity Prices Will
they fall back, but hold
an¬ these
levels, you can look for
ly turn over this space to
as
during 1951 but
be amended. The Administra¬
of the law will continue to
be
not
If
swer
of
as
highly-skilled workers.
(9) The Taft-Hartley Law will
below the
figure; the rails below
225
*
the
Such a program
diversification —
emphasize
not only by company
household equipment. Completions
the
particularly of
on,
wears
year
Credit curbs will cut into
demand for automobiles and
(21)
a
program.
will
more
be continued
year
ment
Less
successful investor
will be the one who
carefully planned invest¬
The
(36)
next
follows
Will Be
Trade
Domestic
first part of 1951,
the whole
the
will
supply
indus¬
the
decline
be
may
compared with 1950.
Tightness
in
the
labor
as
(8)
On any sub¬
market.
un¬
there will be fewer for
might point out some of the in presages unsettling or even
obstacles the market will be bad news. This is particularly
faced with in the immediate
evident in the action of the
and near future.
Practically industrial averages.
all of them are interrelated to
if
if
#
•the Korean war and its pos¬
To
change the picture
sible effect on our relations
somewhat there is this to say
with the European countries,
for the
there
in
sixth
a
panies will provide an exceil« nt
backlog of demand for squint In¬
come
Stocks where good valu«*
can
be demonstrated.
25%
remain
increases in 1951.
wage
months,
chain store stocks.
Investment
Trust funds*
like good
(35)
capital
term
will
figure,
rates
changed.
will not
Most labor groups
successful in getting
of
-
best
the
pension funds, and insurance com¬
states
gains tax above tne present
(7)
be
long
the
increase
Tight
and/or
cities
additional
Will Continue
Outlook
Labor
Although
The market is
plus the taxes that will be
levied to implement our for¬ sequent
taxes
for next year with
be looked
adopting sales taxes.
(20) Despfte renewed efforts to
I have to
the market for clues.
are
such
in
increases
I
tent.
round
will
news
Further
in
now
flation hedges in the past
of revenue.
can
don't know what
Because I
If there
find adequate sources
planners at Washington may
rush their patient into an oxygen
❖
if
will
but some¬
they will sell
quotations.
that have not been
the
simpler language, the
will determine the im¬
if ■
declining too fast
result of government curbs,
business is
a
as
mediate trend.
#
#
#
evident
(6) If in 1951 it becomes
that
Stocks
(34)
and
States
1951
current
position for 1951 should be those
popular as in¬
municipalities
again be under pressure to
(19)
during
lower than
a
trols!"
Stock Averages may
higher during the
The
(33)
first half of next year,
public may then goods. Congress will see the value
government-made of some such sales taxes as an
inflation road block.
let's get rid of the con¬
is
"This
out of large
cities and avoid
move
work somewhat
will increase. The
cry
wise
having investments in such area*.
time
about the new year,
into
will
re¬
war
Disappears
bomb-vu nerable
Outlook for 1951
the holidays have
danger of
it
Unnl
people
something to do with it.
had
The
mains.
Business and Financial
if
if
if
Markets
Walter
the
for
said
be
a
international
as
tions.
(48)
The
1951 will be
political outlook for
dominated
completely
24
The Commercial and Financial Chronicle
(2552)
Continued
from
war" boosts to 50 or 60% will this
5
page
time
turn
long-
the
be
to
out
feared eoni'iscator of net corporate
Is It Possible to roiecast
The Stock Maiket?
earnings and of the present lib¬
eral
dividend
yields.
And the
prospective excess profits taxation,
as this
is being written, is incal¬
culable as to its sharply divergent
effects
listed
ness
on
not
ness
share in
a
listed;
share
and
be
to
busi¬
a
achievable goal, our
an
were
be
would
jections
ob¬
merely
security
"in¬
currently popularized
flation" threat confronts the short-
the
of
dwarfed
Fortunately, there are available
findings along this line, which are
dilemma.
in
king of of financial publications, services,
flow of and of Dow Theory practitioners,
Is
another
with
forecaster
term
dollar-
whole-hog
depreciation to result from enor¬
mous
armament
needs,
deficit
spending, and wage spiraling; or,
on the other hand, will these in¬
elements be counter¬
counter in the ebb and
balanced by the nation's enormous
been
generally
abortive. productive capacity, credit restric¬
market movements. .Without real¬ have
izing it, no doubt, they are deal¬ Similar negative results in pre¬ tion, and general controls?
ers
a
a
interpreting
ing in prices in lieu of value, at¬
tempting to anticipate the extent
dicting
to which
flationary
(in contrast to their fine work in
their fellow-public will
subsequently
level
to
the
cause
diverge
from
price
value,
and
ments
of
move¬
market-as-a-whole
the
analyzing individual issues) were
arrived at from
extensive
an
sur¬
to
outwit the market's other buyers
and sellers, to out-forecast their
vey
made
by
fellow-forecasters.
M.
Nelkin under the direction
In
this
vein
of
liquidity
over¬
emphasis
is
the
ing"
on
the investor to pro¬
urge
tect
himself
cism
his
or
money
"window-dress¬
from
C.
of
house opinion
Underwood and
brokerage
E.
F.
Co¬
University School of Busi¬
Benjamin Graham at the
lumbia
in 1948.
ness
of
the
trend-forecasting
perts'
should become lost in other ties is furnished by the perform¬
investment
those
of
ance
than "good company."
com¬
This prag¬
matic
as
well
as
psychological panies which center their efforts
on timing the market movements
motive, governing individuals in
of the standard issues.
The longthe handling of their own as well
term
record, substantiated by a
as other people's
money, has re¬
recent
exhaustive
study, shows
sulted
in the market's
growing
swing-catching,
foible of what I call Blue Chip- that, in lieu of
better results were gained through
itis; that is, the cumulative con¬
continued holding of the same is¬
centration on "good" — that
is, sues
or of those in the Dow-Jones
popular—issues irrespective of the
Average.
price-value
relationship,
with
Further evidence of the marketmajor attention centered on at¬
forecasting shortcomings by the
tempts to predict their
future
Street's
professional element
is
price behavior as a kind of elite
offered by the varying size of the
group.
short interest, as published month¬
ly by the New York Stock Ex¬
Beauty Contest Analogy
In this process of style-forecast¬ change. These data, usually show¬
ing a diminution of the bears'
ing also the -investment commu¬
commitments at market peaks and
nity has become engaged in a kind
their
enlargement
at
bottoms,
of strategic game akin to Machiashow how the highest echelon of
velli's practicing of the Second
market professionals fails to antic¬
Degree Lie—in contrast to value
ipate market swings.
analysis. This "indoor sport" as¬
pect, as engaged in
of the
on
both sides
Atlantic, has been aptly de¬
scribed
by
Lord
Keynes
as
follows:
likened
investment
to
those
may
newspaper
competitions in which the compet¬
itors haye to pick out the six
pret¬
tiest faces from
graphs,
a
hundred photo¬
the
prize being awarded
k)
the
competitor whose choice
most nearly
corresponds to the
average preferences of the com¬
petitors as a whole, so that each
competitor has to pick not those
faees which he himself finds pret¬
tiest, but those which he thinks
likeliest to catch the fancy of the
other competitors, all of whom are
looking at the problem from the
point
game
of
view.
It
is
not
abortive
general
the
are
in
market
efforts
of
forecast¬
movements
the
economists,
statisticians and analysts, who
able
Wall
in
are
forming
conclusions
individual securities. In fact,
about
Street
sophisticates, includ¬
ing these experts themselves, are
"bucketting" of (i. e.,
acting contrary to) the experts'
prone to use
majority
the
forecast
market's
greater
the
as
guide
a
future
majority,
to
the
and
—
the
more
confidence is there in the bucket-
ting.
Insuperable Causes of the
Negative Forecasting Results
Within
can
sons
further
the
in
our
time limitations
we
only outline a few of the rea¬
why attempts to time market
movements must fail.
are
enormously increased
that
fact
he
be
must
by
correct
stock
the
on
difficult
winning
a
the
effect
market
is
have
often
intelligences to anticipating what
opinion expects the aver¬
opinion to be. And there are
of
imponderables.
market
rising
government
steadily
interventism
I believe, who practice the which continually confronts the
fourth, fifth and higher degree."* short-term market forecaster with
gome;
Thus, the investor relying
forecasting price movements
on
in
I4eti*nf value analysis, must be
successful style merchandiser
well
as
Here
crowd
let
quisite
tefeVior
It
as
may
even
be
an
open
ques¬
tion whether governmental
most
realize
urgently ad¬
that
restricting
production
civilian
actually
goods
him
a
prere¬
good
to
be-
correct
behave
himself!
Results
in
Practice
as
a
means
of
building
up
pent-up backlog of demand such
helped to avoid a traditional
as
It is important to
weigh empiri¬
cally the results that have been
postwar depression
achieved in actual practice in the
tax outlook
market place
other
cf
by various categories
forecasters.
This
portant;
if
ever-all
market
»
■
the
most
im¬
of
prognostication
.
*
is
desideratum
as
far
Theory of Employment, In¬
Money," J. Maynard Keynes,
*.156, N. Y., 1936.
and
1945.
politically-governed
typically typifies an¬
important
imponderable
its
as
concerned.
gradual
investor
While
rises
in
in
the
i
"General
terest
The current
after
income
resulted
tax
in
rate
profit
effects
the
are
past,
corporate
have
not
destruction,
it
could happen that further "heated
means
fallacy common to
the plethora of "technical" meth¬
ods
in
used
casting
stock
is
market
fore¬
implied
the
major
turned
events
out
to
bilization
depression such
occurred
after
be
had
as
all
previous wars,
nevertheless "wrong" on the
market, for it dropped 22% in
1946, and continued its bearish
was
behavior until late 1949.
Outbreak
of
war
past and the future.
the
charters
ratio
error
of
applies not only to
Dow Theory, of
of action reaction
of
systems,
signals
This
("according to Newton's
Law") explosions points;
Third
an¬
other example of
the difficulty of
drawing the correct market con¬
clusion
stellar radiation
result
from other fallacies.)
Let
now
us
marize
briefly
very
the fallacies
the
popular
common
Dow
Fallacies
sold
stocks.
the
But
of the event
occurrence
was
followed by an immediate market
rise averaging 20%. On the other
the
Theory,
other
analysis
Charting
the
in
which
of the
to most
market
sum¬
contained
(64 to
according to its concepts of
course
define
whether
bear. As
or
the
market
present this is useful, but as
diction
it
signifies
functions
is
definition of the
a
merely
pre¬
nothing.
as
a
It
weather
clue
any
how
to
as
long
it will
continue to blow that way — not
even whether it wHl continue
to
vane
market
a
1936, WhijG
as
measured
Average
almost
of
by
in
nrioe
184), concurrently the
20
dividend-paying
ing/volume at the beginning)
fered
overall
an
is„
issues
were
well
as
suf¬
decline of 39%
Although 13 of the
as
the
Industrial
tripled
most
popular
railroads, the industrial
the
rail
components
contributed to the record
that onehalf of the. issues shrank
by 50%
or
more.f
In the interval from
1929's peak
of all time to the
present, in
trast
drop of 15%.k
to
the
40%
21%
decline
Industrial
in
the
in
the
Average,
Standard
and
Composite
Price
Index
(comprising one-third of all list¬
ed
stocks in number, and 90% in
market value); nevertheless over
300 issues are now
selling above
1929
such
are
highs.
(Among
standard issues
as
i
I:
these
Alum¬
inum,
ualty,
Mills,
Chrysler, Continental Cas¬
Deere,
DuPont, General
General Motors, Interna¬
through points, valid and invalid tional Business Machines, Penney,
penetrations, confirmations, pri¬ Procter & Gamble, Sears Roebuck,
mary
and
secondary
advances, Socony Vacuum, Texas Co., Union
etc., the Dow theorists attempt to Carbide, etc.)
tops and bottoms, secondary areas,
major and minor reversals, break¬
June
by
that
market'
(as measured by their
trad¬
sues
tech¬ their
market's
hand, the Korean outbreak of last
greeted
market
Stocks
does not insure continuation
J
i
Likewise while the 50 stocks in
Standard
have
Poor's
and
Daily Index
during this 1929-1950 period
fallen from
200 t<5 157, ten of the
component issues have risen.
As this is being written the
Industrial
Dow-Jones
its
exceeds
1946
nevertheless
of
30)
are
Average
by
top
majority
a
component issues
of
11%;
the
(17 of the total
substantially
selling
lower.
blow for another day (that is for
another up-tick).
The weather
was
thp
resulting from
divergences within
Poor's
from
war
considers
overall tent termed "the
Between 1901 and
and
Dow Theory's Basic
the
correctly-pre¬ vane that shows which way the
Throughout the first wind has been and is blowing;
eight months of 1939, those ex¬ whether up or down the hill. Ac¬
pecting the outbreak of world¬ tually, it does not thereby give
actual
constant
Dow-Jones
dicted event.
wide
movements
entity, or at least as m
taining a "trend," overlook
an
as
most popular
the
e
"Trend"
Those trying to time
of
the stock market
hard-and-fast
bull
furnishes
.
Dow Jones
between
tn
interpretatk!6
"The Market" and the
Elusive
premise that the future course of
a
price can be determined from
its past behavior; disregarding the
line
iq-q
sacrosanct
(a masochistic mental
somer-
obstacle thereto
basic
The
mar¬
expectations
of
good business instead of a demo¬
Divergence
Intra-Industry
Even greater
divergence has oc¬
similarly recording curred among the railroad issues
price trend does not during the same period. Although
Inflation's Uncertain Market
guarantee its continuation. Strip¬ the Dow-Jones Railroad Average
Impact
'
\V(j.. ■■ ped of its surrounding copious as a unit stands about 4% above
The inflation factor also mani¬ jargon, the Dow principle is a log¬ the 1946 high, no less than 16 of
the component issues are lower.
fests
the
difficulty
of
making ical absurdity.
In effect, I am convinced that
short-term
market
assumptions
Similarly in this year's market,
the
of
of
wind;
past
a
.
from
correct
a
nomic
stances
of
midst
of line from
There
falls
market
severe
inflationary environ¬
During the wartime infla¬
of
1917
stocks broke
seven-month period.
also
many in¬
are
an
ment.
a
eco¬
particularly
—
out
are
value criteria.
tion
long-term
prediction
a'
halving
prices
midst
of
the
50%
There
in
stock
was
market
1937-'38
period
Similarly
decontrolling pe¬
of
1946-M8
really took hold
commodity
when
■„
inflation
the economy
on
prices
essentially the market technicians'
we
see that from Jan. 3, 1950 to
assumptions about trend behavior the present, while the Dow-Jones
commit the
maturity
chievous
tions."
principle
the
of
Steinmetz
involved in the
error
mathematical
chances"
called
of
of
"the
"the
which
most
gambling
mis¬
supersti¬
Industrial
advanced by
I
15%, of the
J
mon
1249 round-lot comstocks traded in on the New
j
York
Average
Exchange 918 rose,
declined and 26 remain un¬
305
Stock
This
The
advances have
principle embraces changed.
the psychological fiction of which ranged up to 140%, and the de¬
Dow thinking is a variation: that cline to 35%.
when
there
in
>run
has
been
series, the
a
-rence of that
a
repeated
mere reoccur-
repetition alters the
-mathematically correct odds
cerning
the probable
performances like¬
the elusiveness ot
this paper is being writ¬
Single day
portray
wise
trend. As
ten, the preceding day's niarket
of session
left
504
issues up, ow
con¬
outcome
the next event.
down, one leading index register¬
leading boys ing a rise, another a decline; ail
30%;
the
stock
price averages gambling on coin-tossing to vary of which led to this descriptive
nevertheless
fell
by
10%
net. their bets on the belief that a caption on a newspaper's niornLikewise, over the longer term, series of successive heads is more ing-after * account: "STOCK IN¬
the 82% rise in commodity prices than
50% probable to be followed DEX IS DOWN, BUT LIST lb
40%
and
the
cost
since
1929
has
been
by a net decline
price of stocks.
Overall
stitute
in
an
a
even
of
rose
living
by
by
accompanied
of
40%
in
the
a
short-term
changes
quantitative element—
difficult enough achievement in
not
necessarily sup¬
ply the key to the future action
of the
market
1946
to
ings
as
a
whole.
the
per
'
'
N
!
-' 1
or
of
the
same
color
individual
industries.
statistical
services
contrast
between
their
Essentially
Dow's
theory
and
that
thereby assuming
reversal
or
all
Composite Index comprising
industries, seven group
show absolute declines (rang¬
the
of
a
42%
by
issues)
During,
the
Canadian gow
38 have a
and
past
composite.
12
months,
1949-50,
while
"trend," whose course over the November,
next tick, day, week or
month, is Composite group was rising
evidenced from its past direction.
Incidentally—when a system for
beating the stock market or a
game
of chance
comes
a
'
.
the o
groups
vanced less than the
in the
Of
recorded m
Standard and Poor's, in the lac
of a 57% rise above the 1935-tf
average price that has occurred
industry
other than even;
either extension
the
.
of black-
roulette wheel.
ing to
mining
sharp
is
,if
■r>,
on a
The roulette player often becomes
thus bankrupted by an extraor¬
dinary run
against him.
HIGHER."
Great divergence has likewise
systems for
inexorable "math¬ occurred in the price behavior o
ematical facts of dice
and-red turns
misconcep¬
same
most
now
range concurrently
(from 188 to 175).
Small wonder then that
there
in
the chances of a
succession of identical results are
price
of
exists
principle
by 40%
(from $13.63
tc
$18.80), yet the mean of their
output
tail; and the
tion
other systems likewise follow the
rose
fell by 7%
a
the foible
earn¬
share
the issues comprising the
Dow-Jones
Industrial
Average
market
by
is
From
on
1947
This
outwitting the
corporate profits cpnexample vwhere correct
itself—does
a
on
anticipate
ysis.
to ex¬
his
in
prediction of
are
business; or,
to
of so-called internet market anal¬
are
who
wholly
the other
hand, whether they perhaps will
bad for
effort
mass
the
quick
exculpate the
sauit)
in
is
faulty
.funda¬
the
embodied
price movements by
example, in the period fol¬ internal
lowing World War II the minority* niques.
serve
stocks'
of
some
for
28
con¬
effects.
forecaster
meas¬
ures
for his
is' for
The
foretelling and in¬
psychologist.
me
vise him to
a
the necessity of
terpreting highly relevant Wash¬
ington moves.
stock
to
fallacies
For
and
In their forefront is the
average
age
great number
reference
mental
spots and
opposite
successively
and
prevent
us
than n brief
more
of
fully
chological forces govern the
ket participants' reactions
ternal
events.
Identical
riod
a
making
difficult to anticipate, since psy¬
prettiest.
always faced with
limitations
Time
from
Market Analysis
the
racing
practioner
tern
Internal
spectable sun spot cycle theory,
and formula-timing practitioners.
parlayed bet, he must (Market conclusions tied to sun
horse
correct double forecast.
a
And
as
Like
market.
in
feat
of monetary expansion:<
in the post-OP A
In these spheres the forecaster is
forecasting phases.
foretelling not only such ex¬ tonometers, and "island rever¬
events, but also their effect sals"; but as well to the more re¬
picking those who, to the
First let us consider such
best-of one's judgment, are really
pre¬
diction based on external factorsthe prettiest, or those which aver¬
age opinion genuinely thinks the political, economic, and financial.
We have reached the
third degree where we devote our
results in their
re-
ternal
when stocks
The
a
of
case
ing6
so
"Professional
be
Likewise
difficulties
The forecaster's
ex¬
difficul¬
its
himself
the technicians
Forecast
Double
"Parlayed"
The
make
indications
Further
potential criti¬
conscience if his
own
of
the constructive usefulness of the
factual data and the abortive;
current
its overall impact.
as
The
demic.
The
importance
by
their
rapidly disinterested and reliable.
changing
attitudes
toward
the Cowles Commission for Research
market
as
a
whole.
In
their in Economics in two major studies
"liquidity" concept the forecast¬ found that the forecasting efforts
make of
well
aca¬
the
cause
elements
business-value
listed
Exchange is not
an
different from
throughout the market as
Thursday, December
...
,t
<>(
',-1,:
>.
■,
■•••
*
-
„
«
cropper,
-
,
-
t Cf
"Condensed Summary
Active Securities for
t
Tablest
of
the
.
and -Y926 comp,a
with 1936," published by Brown Brother ,
Harriman & Co., New York,-'1937.
Certain
1901,
1910,
1919,
Number 4972
Volume 172
v.
The Commercial and Fiurtncial Chronicle
.
I
'
1
.
15 groups declined and 15
unchanged,
In the midst of the averages'risq
to the highest levels in 20 years
during the first 11 months of 1950,
the food product, building trades,
anciliarilly
11 %>
pens
others have remained
a good
also i;o furnish
clue to the short-term spec-
what" alternatives as a guide to Contimiprl 4mm
action then present a continuing
jrom
of problem tomost market followers.
^
.ulative prospect; in the case
the market as of individual issues, How shall they weigh their timing
good investment turns out to be efforts against evaluating individ-
and tobacco groups have actually
good speculation as well.)
Under our method, a cost price
dThe
rto
non-existence of
ot
•
rir
u
market
a
the difficulty of defining a "trend"
that is inclusive create an in«;ii-
"the stock market"
basTngtheir
win
"paralayed"
a
first
case
•
vain!
ht
nf
l<y
hi™
whlrh
wHl
a
,a
vea™
Sit
2n
in
vMr
amnrtWmn
ro
a
of
thal
.Su™mary
Now let
Conclusions
Offset to Risk remarks on this question of stock
an
tween the risk and the amortiza-
latter two fields it
rvf
inYmefinrr
linn
uCntell.
is
based
the
on
parts from value, in this way ereating valid occasions for purchases
and Sales (in the genuine sense of a high
of buying cheap and selling dear), figure
or
further
assume
that
vestor must estimate in
a
the
xxrl^Vx
onnnnntiaw
net-quick
liquidating
realistic
longer-running
plete.
ance
n c
can
even
or
WuilG
111
kept
is
SGCUTltlGS
i
havl°r as investing, in lieu of P
speculating or gambling.
ex-
buyer
estate
real
holder of
a
or
depressions m its other activities.
The
(3)
motivations
this
for
overem-
share
cannot be
pany
stant
liquid
o
be^capitalized^ as d
^ desire to escape from the rigors
^"^^s dhanfor risk must be m evidenced difficulties involved
d;he average or and
our amortization
the
^a business,
listed
com-
guaranteed
con-
in a
appraisal methods; the ordered
increased or accelerated.
cashability
market
at
imately secure
tation of .an mvestment return on
his capital sufficient to compen-
can
sate, him for
the
use
with
6V2%
a
value
with price; and enjoyment of pre-
dividend
and risking
of his money.
^
; . ..
Our quantitative value-apprais
that
strong
f,
ohnut
„avl-no,
tippH
p
yield, together with a diction as a game.
asset position and ..other
(4) The empirical results actu-
? J*
a?e
many companies, but curbs , that
ut too sjiarpjy
be eased. De-
.
mvrnml fense production will take up some
fm-
slack» and industry will peiform
mi^acles with substitute materials,
eronipr
annlicabl^
The
increased'
(3) The Gross-National Product
the
widiout Price reilin*s
savirlgs
—Tha current rate is about $235
billion, and the total for 1951
should exceed $300 billion,
will have to endure black
we
rationing
markets
tha
ma-
program will certainly curtail production schedules of
y w
pouaiiv
arp
or
g.
iess
tho
in
/-»4Iamp
'havp-thV si°ch-piling
nntp that
n
^
^
Activity
First Quarter of 1951—Haw
i
d. UldlKtU
nmw\vhn
d t
V
with
Business
L
LUU lalG IOl
* PJ
.
..
dete-
aualitv
(4) Price and Wage Controls—
and lhe other unattractive features Those who have the power to im~
of 0PA which so many people pose them seem to expect them,
rioration, unbalanced production,
seem
What
have forgotten.
to
:
with
No Rollbacks Needed
pictorialize the future from the
past; misconceptions about market
reasonable^expec- another angle. Alternatively, he "liquidity";, confusion of
consider
least.-220, in. .1951.-
system appeal; the temptation to
The prospective buyer can look
this method of appraisal from
without loss; but that he can legit-
OG
>
m
be
vestigating^ a privately^ owned portion of theanticip^ted earnings phasis include: the psychological
businessb that similar to the
of
XI IJlciy
a
In cases of "unclean" balsheets, on the other hand,
Reserve Index averaged
average at
i
*a'f'* ^
J
s
OllGrPI-
(2). "Wall Street" has been
us in
w{};Jj*af fSSX?°° f°r 1950, It should
^aJ10n .of the forecasting element % e.
L ?
determines classifications of be- P -JX v
he would in in- either we must estimate the pro- proclivity to forecasting
a^ property, as
aU"°Ut W3r C°meS"
Forecast Summary
to
fys-
economy
'
X® ~Jl°
inci-
1 periencing a continuing and growing boom in forecasting, in conincom- trast to the recurrent post-1929
general fin a
strength, the amortization
in-
way the likely return from a share
of stock considered as an interest
in
Tn
nrnnacc
tion that is needed to "win the
race" against risk, the balance
sheet of the respective company
is a vital determinant. In cases
premise
that market price recurrently de-
We
ou^'free
that a dollar saved today may be 1951, As of Dec. 19, 1950, hero
worth somewhat less ten years is what 1951 looks like to me:
*be R617!01} wboL>(1) Industrial Production—The
summary and conclusions to my
Amortization As
the form
proach
™fareVehlping
money
the same. Granling the possibility easts of what lies ahead of
me offer the following
.
lncfir*a1
wond, and it is what has made
be: tern, and you are helping your
I understand that tradition reany t,meis a ffoodtime fo buy a country prepare to defend itself, quires that the Chamber of Com«°od value!
Many of. you, furthermore, are in merce forecasting session end with
*'
■
a position to advise others to do about a dozen very specific fore-
%renta°
2%
market
well
"our
preserve
with
nnH
th£
in
^ !♦ ?<? f*r w£ff
world
„
the
to
principles,
cminrl
roiintri/
living^tandards
Note that this points
.
coXston* of inve^ment
structive alternative in
Vk
this
the highest
an
m which
genuine inThe crux of the amortization m
e orecastability:
nevertheless process will be how soon the in-(J) Some amount of forecasting
we
fortunately do not need to herent
risks
become
effective; ls necessary in investment, busileave our audience without a con- that is, there is a kind of race be- ness, and agriculture; but in the
inconsistent
as
vestment
In
to induce
easy
Th^
to
constant
Having reached the conclusion be added
from the foregoing analysis that value)
as
on spending.
it will not be
xnciea&e 111 ine .rate 01 saving.
(laStead ? w«h speculation; and finaliy
ed^ivfdend^ wm" vfve
the decisive Principle must
Sound Investing Approach
anticipating
what price controls lead
pSt compel iree^te%^
short, is what has brought
tal written down to nothing.
mnncvWk
in
of savings
power
decade seems to
up a way this country capable of defeating
every person in this an enemy in time of war. I hate
room can do something word, to see anything get started that
while, starting right now. If you may harm that system unless it Is
cut down on your spending for absolutely necessary. And I don't
consumer goods and services, you happen to think controls are nec-
rpntal
war
*
movements is unattainable
1931
time^ the 25
Hpdin^'iniT
th™n giro the ?nvestt h °s share
to theoroo^^i^WrichfffSSu
bet—in
The Constructive Alternative of
lOCf
My own answer. made on the
basis of exPerience as well as
logicVis »at, rigorous though it
may be' a black-and-white choice
between timing and valuing must
be made; that compromise means
the
ic
it
d'Vergent C°m*
«■
<
...
increase in the rate of savin*
ductin*
the overall trend
on
nonentTsu^
success
choice
averages are at
v
d
Pa9e *
flniliiAl*
VUIlUOK IOl
business-appraisal
shall they the purchasing
a
Which
nnno
25
historically high level?
1CVC1*
ranitni
monev^of^Vo?
Imvp^
Z ZnJl ^1'orUXn
And those in-
prediction on
market-as-a-whole or a conceived-of representative trend also
this
on
Tit A
1116
^ T" good values^ a premium
diTTg ac a time over V
ties to buy
oTIv %
of 072
vpctod
a
must
basis?
complete amortization of the in-
nerable obstacle to forecasting of
vestors
ual issues
i retu™
on the price paid
an e n 11 t y and would roughly m 25 years afford when the market
#
(2oo3)
Let
me
make
a
I say except to agreo
can
them,
m
few other com-
nnri
Prices—Thev will
whAi«coi/»
move
higher hi
ments on how controls are likely im hut avei^e Sgures
to work. For one thing, they will year'
mav
n0t& exceed
work Infinitely better if there is levels by more than 5%
no rollback. To the extent prices
m ;
aild
th£
for
current
Thev
\3ease
ally achieved in market timing are lowered by a rollback, a gap ^11
?n 1QM bift
%
1 getting a fair rental value for his
by various categories of experts between buying power and the ^ raD|d Dace 0f ti.e oasf
approach conlorms to the principle raoney plus an indeterminable re- havc becn
decisiVely negative.
supply of goods is created imme- ninnllK,
that
there, is no logic in an investor turn (my major emphasis being on
....
.
,h
causes makina such
diately. More goods are bought,
gauging the value, of an equity actual return) ranging somewhere
w
en apparent shortage develops,W Fedwal
Finances•The
share
according to .cyclical
uor around the: remaining-4%-per- ?ave oited—
inevitable, we ^ ^ controllers are quickly Treasury will have a cash deficit
other
short-term
factors;
that haps lesSj or perhaps more in case ftave,c tea
'
stuck with the problem of ration- in calendar 19ol, but i will bo
process really Testing on the spec- of
windfall prosperity
for the
™a"y.
a rollback, furthermore, will surprised if it exceeds $o biUion.
favorable ^conditions, he aviii be
.
Sts^neSk
„
ulatiye assumption that one will
company.
informed "sucker"
be
able
to
fmd
to
well-
in
it off
will chiefly depend on
one's hand later at a higher price;
it
to
addition
him SkeSnf
bini mistakenly at
an
^
v
.
Realistic Valuation
.
r
A
.
PApffftlin
Value AwusUof Portfoho
practiced
.
,ra^5. y e
?"rits chaneinv
■
and
create vast enforcement and ad(8) Department Store Salesand over- The dollar volume of sales in 1951
».Wtt the
controllers will be should exceed 1950 figures by
swamped with
thousands and about 10%.
nlinistl.a(ion probiemS)
fflodoal' :tliouSaiias of applications for
flirting
trying to adjust ceilings to cbang-
roariion^
rmrkpt's
and
thpreto*
,,.mwketsr^.i^tt^eto,
Reflect
fhni
o
yield of riskless ,
-•
.
interest
value,
Plus
.
of
_
to
serve
our
invested
an. increment
rental
the
as
principal,
for
annual
iy
^
.
..
..
.
f
pFlmarl y'.lUUlvlUUdi
^°uid
,inspeci
'!*' in!? u.
cording' to
nijue
both
our
laatica
at.
1® AC"
evaluation
"hose
which
and do hot aiready own.
tech-
we
do
We would
re°rifkZolved C ThfScom at a11 ^
me
risK
involved,
xne nsic com
sues, under the sole proviso tnat
ponents and rental of our capital their total should be limited by a
should be taken care of m the
predetermined maximum limitabuying price, to give the
hard- tion on our entire portfolio's proboiled", investor a reasonable exportion of equity share holdings
pectation
recouping his prinfrom 50-70%). Similarly, in
cipgl-with-interest plus a chance deahng wtth appraised over-valfor profit.
Through this quanti- uations, we Would sell off such
tative concept, capital can be em- issues, but under the proviso that
Ployed1 realistically with account the total of our portfolio's share,
of
taken of the calculable risks.
holdings should never decline beThis gives real meaning to the }ow a predetermined minimum
composition of the earnings and (gay 20-40%).
dividend
yield; and rationality to
The overall-aim is to insure conthe multiplier in arriving at
tinuing proper diversification but
not in blind subservience to fort
biind.
haphazardly fixed according to rauia.timing ^^5. In other
the dictates of historical precedent,
words the formula is. distinctly
market price; in lieu of leaving it
oi
u
there
as^
as-
sumption of the future
no
rollback
should anoeai to wo*
compared
with
about
8
fairwfn
for
fa^
av^iile
In
the
L V
+
1+
ings-bofop.taxes. will after taxes
be as high
ag m i90o, but profits
WSJU
on/i
i
/hA
\
composing1 ^"market
As the alternative tp
(6)
in d buving power only of goods
1951, with the supply a little
^
balance
price
ceilings
should be able to keep price in-
market movements, we offer tae dexes fairly stable. Furthermore,
would-be genuine - investor the.
mere existence of ceilings will
constructive alternative of confm- encourage saving because there
ing himself to appraising jndivici- wm be tess advantage in buying
ual issues according to valid busianticipation of future price rises,
ness-value standards, as he would F{liaijy +he price ceilings will at
in estimating the worth of a going
business property or real estate.
0f wages and will thereby restrict
one of
the major causes of this
Pnlhif
whole inflation problem.
MllCIIIiiWIf ■ IlllClli
it is not 1951 that worries me
^
■
DAAAMltAro'
•
{0 JtUIIIII K0S6IID6lg
U ACltlll ilUOCIIMCife
„
■
.
Robert Rosenberg wi
co'urg
■■■
'
'be
1
lower.
rr,.
HIT
T~>
For Good Measure—-Thp
_
C;eveland Indjans will wfa lhe
— and draw more fans than
+theQf
unattainable goal of anticipatitig
o£
/-,n\
(12)
rt ci
-Ke^dSl Kes"^anS
groups
°
?^nu
e
•
general control pro;7™is concerned What bothers
insofar
as
_
^
Fa.*:nestock & Co Opens
Rranrh
in
Jacksonville
JACKSONVILLE, Fla.—Fahnestock & Co., members of the New
York
Stock Exchange,
have
opened a branch office in the BarnPtt
National"
Bank'Building
un-
nett Natio.ial bank au imng uii
management of Harold I.
Clayton. Mr. Clayton was formerly with Merrill Lynch, Pierce,
Fenner & Beane.
a
glfmj's fh "t
" started
» 19o0.
may
thc
oroeram
once
be with us for years
McManamv
Exchan^e, ^^^eve^item
? ed and ultimately
Co. ducea, ana mum
,
that is pro-
Jr
KOD.rt lVIClVianamy, Jr.
Robert MeManamy, Jr., PresI-
shortly after .suffering a heart
that is just attack.
.
^
fn^nerhans^Vss than thatof^1930
an?PfrbaPs lesa tban ^at «r19a0"
s
or
'
million
tmee-year penoa rrom mia
*L Jn« Mex moved up, only 10%,
wholp«?ale Price In(». the constant sharp diy»- and the 3LS Wholesale Pnc| m
snH
r\ocf'
past; and
another, still want to use of the New York Stock
ence shows that this approach of market-timing
simultaneously as on Jan. t- ®; R1°=?
8
appraising individual issues hap- a so-called "tool." The "when vs. formerly with W. R. Hutton &
—
to mid-1945 mOVed UPs only 1U/(7„,
the BLS Cost of Liylllg
Index
fallacies
basi«
jection,
is
Si?——
(Incidentally, prac'.ical experi- kind
Automobile Production
cuircnt ieveis,.ana tne g;owt
'
,
of
(9)
.^rg circumstances, without this year.
the -gating an immediate set offprob(10) Banking - Interest rates
Je^Tis by rolling back prices to tn^ gvirj total loans will hold close t^o
. . no longer practicable levels of the current levels and the erowth in
invest- long-term portfolio management.
ment operations to timing in one They should be used against the
'") intreasin0 government
way or another, we should deter- background of liberal diversifi-- .rfinteryentionism and its unpiemine the present worth of a stock catiomof one's entire portfolio bS- no, shctability;
by capitalizing its carefully-esti- tween equities and fixed-intei'gst
m ^eRnes
f
mated long-term future average securities in the following way:'
^et analysisi and trend-piqnnnnai
up-
beerimrte.price]fdjustmenls Thccon, The.industry may turn out about
elements' resulting in 1 rollers will have enough tiouble 5 million cars and trucks m 1951
Sirnal eventoiite
.
/
,
Instead of trying to gear
weu as m melexiernai ouuook,
.taem
the insupelabieoftsttcie^nav^
-Manage:
^
i
return
the actual
outcome of the inherent risks for
unwarrantedly low price (a sort of
Ponzi philosophy).
t
rental
to the
coming bear- which the amortization provisions
or, conversely, that
sen
What he will finally get
less
take
some
-
,
'
The Commercial and Financial Chronicle
26
Continued
amounted to
from page 7
age
their
with
give
giant
Unsound Government Policies
over
—Our Problem Today
• 11
...
own
free
away,
-
multipliers
This Administration's
have an
automobile for every horse in the
country—(and sometimes it seems
sleeVneyontCkdrive)0^hee
people drive).
1 he
only
some
time
horse gets frightened now-
a
adays
horse
another
it meets
when
is
the road.
on
xi_ ■
I -???.
the centuries
hire
can
has
finally brought
point where today you
to the
us
nf
so-much
for
labor
is in nublic
aboilt 5i/>%
nror)ertv.'i4%
in
is
otrnlllt:nn
stores
by"me^tanU-5%"S inTcal
owned
Commodity
T„
retail
h ghv.ays 2% is in retail stores,
;s jn transportation
tumf clmpanTes
by about 12 million people
of whom are women; 9%
—45%
Brains Are Highest Price
our
swarm
factories;
200,000
and
the
is in money and
miscellaneous
property.
small, balance
at her
These
figures show that about
of our wealth is owned by
70%
an
th
,ye
t
billion-and if President
over $42
Truman has his way with "security" for everybody they'll want
A?
Security and freedom cannot live
together.
The Roman Empire fell
through
SnStotoT^ texati°" ~ Gr,eecHe
there just isn t
around
and
And
world
wonu.
busi-
American
today,
so
thrp
hvfif Hplrv FnlThTJ
h^;t
He
Hnred
duced
few
few
a
a
to risk
htea
In
fin all v
w^o S monev"
who had money
men
men
ent
isnl
his
develnnin?
hv
by
developing
idea
his
idea.
h
enough
provide
with the abundant life.
to
tc
so
5" ^ ^mfway-and England,
go though only 18%
everybody
airpaf|v
2 a s n
Throughout
s o c 1 a
i
n 2
11
z e
the hist°ry °f the gr0Wth °f high
of men's confidence in
ideajs
one
for
breath
all history, every time
Support,
it first took away their
freedom
then lowered their stand-
plan, however, might make infla¬
worse
is
to
the
therefore
and
only permanent remedy
and
one
—
the
stop
itself.
inflation
Otherwise, how
going to
are you
is the
eyes,
system
at its best-a combination of
tal
Labor
and
through
Capiand
country-wide
its
Brains
opera-
and
!?15r0Sf2 ha-Siiinntn of our
JpaSp?ir
around
among
millions
people and
richest
ana
and
ricnesi
the
earth.
strongest
strongest
The
American
spread
have become the
we
nation
nation
on
ownership
Tel.
of the
alone is
Tel.
and
975,000 stockholders.
over
tem'bufn^on^ttacks1th?'standlivfa^it
ard'of
Drovides—highest
fJLL.WW1iBlll
prices
e^ery man
life and
free to work when, where
he chooses.
times
Horace
opher
the wise old ohilos—
if
said*
thine,' impart
mine."
and if
Away back in ancient
letter sySem
a
it- if not
This
is
make
America's
nomic challenge to
is
use
eco-
the world to-
day.
But after all, every young man
know
must
Labor
nor
develop
that
neither
Brains
nor
Capital
will
ever
substitute for personal
a
courage. Obstacles appear at every
turn in the road — and obstacles
things to test the stuff
are
made
time
best
loses
we are
wonderfu1
th
,
£ndj
th^t
busjnessman,
vou
thing
about
and I and every
large
in
state in the
small,
or
town in every
union, has a chance to make this
every
spendthrift policies
are
cruelly hurting the very poor
people they claim they are trying
to
help. Nothing the poor man
can't
You
win
his
first
$50
and
then
saw
urday
other-
other—or a little harder—by
your
conduct and mine.
Evening
Post"
before
Prob'em of Today—Unsound
firirSt ,P^nd °
cessful
ures
as
nyion was sold.
faree^afterTepeated faT
m^eht be tersefv
40^failures 40
described
$40
successes
million.
fered
was
one
Abraham
Lincoln
after
failure
suf-
another—
badlv defeated in five differ-
ent
elections^
our
country's weatest
and
Unfortunately,
ftoljy
we
became
man
hear
many
loose statements these days to the
75 %
the cost of
but
government
has increased 274%. Politicians try
tell
to
that
you
this
outrageous
increase is due to defense spending
which
(of
all
we
is
approve),
that
non
but
defense
-
now
The
handwriting is
the
on
wall. How much will your
"Social
much of this prosperity has been
manufactured out of the $258 bilmoney. Anyone
can look prosperous on borrowed
money until his note comes due
So much then for American In 18 out of the last 20 years, our
Business—and now, what about its government has spent more than
biggest pioblem of today? To
my
it took in
and staggered further
mind> its biSSest problem is un- down the deficit path toward insound government policies—and it flation. And, Socialistic ideas grow
is about time for businessmen to as a nation's debt grows,
stand up and speak their views
Downie tells us that if every in°n this subject. A famous writer sured person in the United States
oncesaid. To sin by silence when cashed in his life insurance —
we should protest, makes cowards (total $44 billion)-it would only
but ®f men. The human race has run this Administration for about
piimbed on protest. No matter i year. If every farmer sold his
b9w successful a man may be in farm machinery and live stock—
b!s busmess or profession, all of (total $25 billion)—that wouldn't
is carefully laid plans for the run it for 7 months. These are
,
A sound
for
our
politician is
country
(and
a
fine asset
we
have
a
enough
of
them.
Our
form of government is the best in
the world-it's
the
spendthrift
politicians
a
we
program
criticize. They have
which is steeped in
Who
pays
for all this spending
anyway? We, the people, must pay
for every dollar of it either by
increasing
borrowing
are
by
our
on
own
taxes
or
bonds—and
by
bonds
but deferred taxes to be paid
our children. When the govern-
ment
money
borrows,
pour
billions
money
to wreck
by giving competing
tax
exemption.
Back
"Co-ops"
it
when income taxes
free
new
into circulation and
every extra dollar buys less goods
eVery ~and prices rise'
hav* to°
7 mcrease Pensions or much money for the supply of
subsldlas or wages, they gain goods. Price controls and rationing
,
retivine rmoney d^rect^6^ in- when T*™ r" avi!lifted, prices
minev" directly or in" "h'j they are finally day"and
^ceiY1lnS
dl,re9 y ./rom the government, go higher than ever. From 1939 to
Th.e terrlflc eost of a11 this is Paid 1950 our deposits and money in
out of taxes-but they conceal the circulation nearly tripled-but the
tavL which mnit h"" A
doUar valu,e dropped to 59(5 and
iaxas0wblcb m^t be paici by the prices went up over 75%. On that
in
were
1916,
1%, tax-
"Co-ops"
began with small
groups of farmers who sold their
products together for
ter
price.
about
and
that.
But
grown
little bet¬
a
Nobody
complained
these
"Tax-exempts"
"Co-ops"
since
by such leaps and bounds
have
that
share-the-wealth
therefore
in
order.
program
The
is
main
false, hits the hardest
helpless
the
and
most
in old age. To my
mind,
greatest economic problem of
our
the
is
day
Dollar.
the
Defense
with
Monkey
and
currency
Our
of
jeopardize all
you
government
started
this inflation when it took
Gold
started
Standard
it
quits
takes
spending more
But, of "course,
in.
politicians don't like sound
because it restrains their
The
is
and"
sprees,
and
than
off ■"
us
1933
"pump priming" and
and it will never
until it puts us back on
it
again
in
its
spending
stop
the
nation's
a
true welfare
advanced
by
money
spending.
of the
people
production,
more
wealth—not by more money
more
—and the
only thing that will in¬
wealth is hard work. Let
crease
us
discard the old destructive politi¬
cal slogan "Tax — Spend — and
Elect"—and adopt the constructive
economic
slogan
duce—and
for the
us
"Produce—Pro¬
Produce."
good of
And
then,
let
economy,
our
translate this increased
produc¬
taxes
on
Last
year,
a
single suit.of clothes,
these
hidden
taxes
ago with all the 10 years'
interest
added—and to add insult to injury
inflation.
'True
much
not
taxed so much to pay for all these
unsound policies. Any employer
would rather pay money to his
wages"
higher
if
the
were
to
than
employees
own
be
could
"Boss"
ex¬
an
travagant government. Some day,
some smart Labor Leader will see
that
the
best
get an in¬
to
way
employee's wages is
in the
crease
employer's
today they compete with our
taxpaying Businessmen at the rate
to
of
government than in big business.
of
scores
billions of dollars of
get
decrease in the
a
taxes. There's
business per year and escape about
In
1948,
$3
in
taxes
billions of taxes. Why should
not building and loan associations,
farmer
elevators,
labor, educareligious business "Co¬
tiohal and
ops"
be
taxed
business
the
same
they
Why this 45%
concerns
against?
the
as
compete
more
big
danger in
government collected
amount equal to all
the wages paid to all the persons
working in all the factories and
all the mines throughout the en¬
tire
our
an
the
if
wonder
I
country.
This can
Labor Unions know that.
thing—the govern¬
tax ad¬
vantage? Why not tax the untaxed
mean
only
ment
gets richer and stronger
first?
the
of
They
the
the
now
total
nation.
own
25%
over
productive wealth of
Here
is
injustice that
concerns every
taxpayer—and it
is about time we all got mad. And
one
people get poorer
that
man
who works for a
wants
is
bad
and
to
for every
living—ana
In the las
free.
stay
ana
and weaker
news
the goverment out of business too?
analysis, all this leads to Socialism
—and the only allurement that
Socialism has ever had to oil
If
is
while
we
are
democracy
the
means
of
They figUre that
Tv,
of this tax
some
at
it, why not
anything, it
the
means
less
get
government,
better.
old
a
promise of greater abundanc
for liberty, and eve
in exchange
that
And take Price
days
no
enough to
Supports. In the
farmer
even
was
crazy
dream of bumper
crops and
promise has never
yet bee
fulfilled.
The
not
against any
political
party. «■
sound economy whica
and
particular
and demand and manufacture per¬
not
is
and
stands
for
continued
will insure the
petual prosperity for the farmer.
Price supports help one class and
development of America.
wants ability, efficiency and
tegrity in office. He doesnt
hurt
lieve
all
others.
So
far
ernment has spent over
lion
to
help
one
small
our
gov¬
$500 mil¬
class
of
in
practices
line
that
against
down
body prospers; and
—
and then continue
price
rests
when
He
another.
true
on
'
which
keep 150 millions of
the rest of the people from buying
potatoes cheaper. They pass a law
to forc^ business to hold prices
the
^
i
benefit o
penalize another, nor
laws
class and
is
businessman
American
for
bumper prices the same
But now, the politicians try
to "by-pass" the old law of supply
year.
farmers and
a
is
the
Security" money be worth by the
time you get it? A chief reason
Government Pohc.es
„
he-haven't
of profit. DuPont worked 11 years
and spent $27 million before the
the
—
keep the
it ruins them
Inflation makes people think
they
are
richer than they
are, gives
them a feeling of
security which
cost-of-living has increased about
ning of World War II (including
the cost of the Civil War, the
lion of borrowed
good number in both parties—
Cyrus H. K. Cur- nfere, in fact, than we had before
$800,000 on the "Sat- the recent election), but we still
could make it pay a single dollar
to
—
absolutely fail.
over
'
inflation
a
three of his first five chain stores
tis lost
is
.
Frank Woolworth worked hard to
save
there
values.
lower.
the
all
And
buys today has risen so high as the
1940 the
the whole 152 years from George
Washington's time to the begin-
future may come to naught if his shocking statements — and it is
in any line of endeavor. The government is unsound. A govern- even more shocking that they are
baseball team in the world ment is only as sound as its di- true,
from 50 to 60 games a season, rectors
and they are politicians.
Spendrift Policies
of.
east-
Spanish American War and World for the high cost-of-living is the tivity not into higher wages to
little stronger War I). And when you hear these high cost-of-government—and the feed the flames of inflation
but rather, into lower prices to
and nobler by his living—or, if politicians brag about how pros- only way to change it is to vote
he chooses, a little weaker and Perous we all are today
under these spendthrifts out. They are help quench them. Any govern¬
insecure These young men their planned economy (and they wasting our seed corn;
ment that promotes inflation' is
r
1
A" -e yuuug.111.
n1an
rvprvthina hut innnt
Take Co-ops. The
of today as they become our busi- Plan everything but economy), I
government betraying the welfare of its own
ness leaders of tomorrow will find
can see you bankers wondering taxes an
industry so heavily as to people—and remember that only
it
a
little easier to trust each with
puzzled brains just how retard expansion—and then uses the government can start or stop
"Temple of Trust"
greatest abundance of the
thfngs of
good
A
talking
comfort
that these
nessPmen.
our
supports" ,is
Cocktail
it; i.e.,
dollars to the
running about $25
billion per year — over 4 times
what it was 10 years ago—and
every
time
Congress
increases
„
„
enterprise
"price
and'
paid when he bought
over
...
free
price
Inflation—The Politician's
he
with an idea, other lars of business
per year is done,
n
'
...
,
.
...
men with
risk capital,
and a few not
by the exchange of money, but
y
know that during the
good workmen, went into partner- b
^ exchange of little pieces 4% years since World War II
ship, and they all prospered—and
f
: h honest busi- ended» up to January 1, 1950 — costs
by voting another bonus,(
in the process many other stockanother price
sign their names. "This all in peacetime-this Administra- another pension,
holders have since benefited and
,ag
Bruce
Barton
says)
is the tl0n sPent $179 billion, which is support, another wage raise or
??/wm/?bS ^3iVe been Here, and magnificent edifice of American about $12 billion more than was another bureaucrat, your hard
created
150,000
employees.
Business
a
dollar
'Temple
of
Trust' " spent by our government during earned
goes
lower
and
American
support
money he receives on maturity
will buy as much as the money
the
truth
„ntil
tnfjaV
on% of
"ien luweicu u eu j»wiiu
aPotnei> untll t?a?y, °ver y9/o, 91 ards of living, and finally ceased spending is
all QUr country's billions of dol- to exist
;
one man
right in front of
guaranteed
a
anything? The politician who
talks "help the poor" and
votes
voting west—a hypocrite in
every man's language.
d, is cost-of-government. Since
And don t let any°ne tel1 y°u a government attempted to* prothat business is dishonest. The his- vide greater benefits for more
tory of American busine^ is hut people than it could currently
$28,000 of it to make more annfh'
mnnev
money
Thus,
Lnd
a
rnnnev
no
[1° ™
partially
with
among us (even the
$10 billion more.
a matter of sell bonds in the face of a con¬
widows and orphans),
encourages
fact, the only place to get "sestantly depreciating dollar?
To extravagance, and destroys all as¬
curity" is in a penitentiary, and make
bonds good investments you surance that thrift and hard
work
you can't get it even there withmust keep purchasing power level. today
will
bring
security and
out giving up your freedom.
And
the
worst
of
it
all
is
hour, money for 3% or 4%-but
brains are the highest priced comthe
me
bonds
you square an honest
desire
stop inflation and help the
poor
wholly tax-free—or else guar¬
antee the
bond
buyer that the
or
tion
moditv
moaixy
in
in
government will either
make its
to
have
How
can
has been their slogan for 3,000 cost-of-living like some employers
politician's cocktail
yea". In the fiscal year 1939, they do the
wages of employees; This people happy while
spent $9% billion, and now in 1950
j
penalize
for
—make more goods, more jobs,
mQre pr0Sperjty for ap the people.
s
Thcv
up
to
advancing prices appreciate "stocks
and depreciate bonds.-Sometimes
They
tie bond and coupon
bined. They say we now
prices
law
to
other countries of the world com-
OVer45mUUon
hold
people to buy stocks, but no back¬
ground at all to buy. bonds—for
wealth in turn has built
new
inflation¬
to
another
and
trouble with this statement is that
it is not' true.
Who owns th Unsound politicians are subtracnew
industries and employed United. States, anyway
with
tors and dividers. They produce no
more labor. Today we have more
estimated wealth of over $400 b
new
wealth and are constantly
automobiles, telephones, radios
ion? Cameron's statistics show ^mXgtnschemes for dividiny
and a host of other products in that 22% is invested in 25 m
on ^ wealth we aiready have.
America alone, than in all the homes,
12% is in six: mill o ,.share.the-other-man's-wealth"
country's wealth, and
creased the
supports
pass
I think the
this
the
on
ary policies have built up a per¬
fect background, to encourage the
increase the wealth of the country
+u0+
:
income taxes
1950
lunch
-
occupation.
by
pay
interest.
28
hoarding — and then finance the
Agricultural Department to
hoard
over $4 billion worth of
food
adders
are
must
you
money—a
counter program.
Businessmen
ii
$790 per aver¬
family. They buy the people's
votes
of
Thursday, December
...
(2554)
welfare
business
ciasj
c°ua
grounds;
of
economic
one
knows t
our
prospers,
\
eve.ry^
that any i
Number 4972
[Volume 172
.
.
The Commercial and Financial Chronicle
.
L .(2555)
business hurts everyAnd above all, he knows
that hurts
body.
that the best friend of the
government,
the
but
nor
rather
the
businessmen of our country whose
success or
failure casts
influence
upon
job, every
school,
every
community
and
every home in the whole United
States. Bankrupt business and you
including
—
government.
the
Democratic
The
Party boasts
Jefferson as its in¬
Thomas
of
spiration. And what was his phi¬
losophy of government? Let Jef¬
ferson
words:
"I
that
answer
place
in
his
economy
the first and most
own
between
liberty
or
and
economy
profusion
and
servi¬
tude."
t
The Republican Party boasts of
Lincoln
Abraham
tion. And what
of
government?
swer that in his
its
as
his
was
Let
inspira¬
philosophy
Lincoln
an¬
words: "You
own
aryea°rUaSgoeek'S t0tal °f
shipments
year
Machine
Tool
in
machine
of
Builders'
national
tools
in
Association
production
current
new
the National
reached the highest
orders
November
order
new
October and 84.3 in November
a
index
year ago.
Living costs climbed
to
a
further
new
highland
consumer
prices rose to 175.6% of the 1935-39 average on November
15, the
Bureau of Labor Statistics
reports. This compare§|with 175.1% a
month earlier.
It was 3.2% above the mid-June
level, 4.2% higher
than
a
31.7% above June, 1946.
Prices of all major
of commodities moved up in the latest
period, led by a
spurt of 1.3% in house furnishings.
Average retail food
year ago and
groups
prices
jumped 0.2%. "
strengthen the weak by
weakening the strong. You can¬
not help the wage earner by pull¬
:
.
.
the
down
ing
wage
You
payer.
of
out
trouble
by spending
more
than you earn."
And
so
we
that
see
these
be), are certainly not Jeffersonian Democrats and certainly
not Lincoln Republicans—and yet
may
they
demoralizing bo,th parties
threatening the stability of
are
and
America.
Jefferson
the
and
grandest
in
of
American
in
doctrine
they both agreed —
and solvency in govern¬
ment. Let us, as patriotic business¬
who
men
and
before- it
is
the best efforts
throw
sanity
and
and
late—exert
too
have in
to
us
spendthrift poli¬
to
govern-
outstanding ob¬
our
ligations of today.
And now, just one
thought
and I am through. You and I are
under great obligations to Amer¬
ica for being able just to
live
to
Stabilization
Agency can collect
a
before
There will be
lot of headaches and
a
this
trade
check
by "Iron Age" editors in widely separated
is practically no hoarding of steel by
indicates that there
regular customers.
Inventories
below normal.
are
Most
manu¬
Steel
quotas
turers
of regular
than
50%
is nip and
it
on
part for all
and
have
possess
others
of freedom
intelligence
who
those
of
before
us.
And
as
so,
as
it falls
orchards
which
enjoy this fruit
from
us
and
heroism
gone
we now
to
we
happiness
the
have
planted, let us not
destroy the trees that feed us, but
tuck
to which will
as
some
this
this
is
thP
the
true American today.
At
"whole
system
being
of
finally force production schedules to fall
there
moving ahead at
placed
are
indications that the
faster
a
pace.
defense program is
Several large orders have been
and
some very large
construction projects
stage, the magazine asserts.
contract
,
Some steel people are now convinced that
rials
plan will
be
placed in effect
Their conviction is based
tion
programs
early
as
a
as
near
are
the
by
or
April.
already felt and the additional
of the bread-and-butter products for the defense and
more
allocation programs,
The
American
"The Iron Age" points out.
Iron
Steel
and
Institute
announced
this
week
100.8%
week ago, or a decline of 0.7 of
a
a
point.
like
without
this
our
re¬
to
our
allegiance
country and rededicating
and
fortunes
our
cause
we
way for
"To
A
lives
our
noblest
the
to
affected
amounted to
'operations, the rate was 81.7% and production
1,575,800 tons, a year ago, it stood at 93.1% and 1,-
amount
The
light and
mated
at
power
Continues to Break Ail-Time High Record
of
electrical
distributed b,y the electric
industry for the week ended Dec. 23 was esti¬
7,032,740,000
kwh.,
energy
according
to
the
Edison
Electric
the
high
week's all-time
for the
It
High
the
climbs
Soul
way
between,
on
the misty
was
drift
to
man
High Way and
And every
Which
above
broke through previous
new historical high record
week
high level to attain
a
47,319,000 kwh. higher than the figure reported for the
man
and
fro;
1
there openeth
a
Low
-
' '
decideth 1
way his life shall
go."
reported for the corresponding period two years ago.
Carloadings Advance in Latest Week
1950,
totaled 772,902 cars, according to the Association of American
Railroads, representing an increase of 6,159 cars, or 0.8% above
Loadings of revenue freight for the week ended Dec. 16,
the
preceding week.
The
rest
the
represented ah increase of 133,174 cars, or
20.8% above the corresponding week in 1949, and an increase of
18,350 cars, or 2.4% above the comparable period of 1948.
flats,
Yet to
every
in
industry.
of the output
there openeth
And the Low Soul
gropes the low,
And in
The
output
previous week, 1.038,797,000 kwh., or 17.3% above the total output
for the week ended Dec. 24, 1949, and 1,524,500,000 kwh. in excess
man
'
state
a
Auto
Dun
Bradstreet
a new high since
Compared with the pre-
represents
$5.73 recorded
the
&
at $6.80,
$6.82.
in many
week as
of
advance of
an
the
on
corre¬
wholesale commodity
result
a
of
the
\
mar¬
President's
national
upward
reaching
active
A
the
on
with
lack
market
of
moisture
Supplies
at
were
in
reported
the
Winter
sold
from
prices
wheat.
exporters
domestic
quite
export.
states
areas
Strength in
and
soybeans
was
for
wheat
did heavy snows in some
as
receipts of cash
October,
ago.
of wheat, oats and
Mill demand for wheat
amounts
demand
cash
year
deliveries
peaks.
substantial
continued
a
Chicago Board of Trade trended consist¬
all
seasonal
new
and
increase of 19.1% from the pre24, and is 28.1% above the 246.26
an
June
on
the corresponding date
on
Grain futures
lent
which
corn
was
processors
for
the yellow cereal to the highest
Trading in oats was more active.
1948.
continued tight and limited receipts were readily ab¬
firm prices.
Sales of grain futures on the Chicago
Board of Trade averaged
ended last Friday.
This
40,700,000 bushels
week and
a
compared with
per day for the week
changed from the previous
daily average of 32,000,000 bushels in
was
little
week last year.
"
Flour prices advanced 20 cents per hundredweight as domestic
same
bookings expanded sharply toward the latter part of the week
both large and small baking interests participating in the
buying movement.
Reflecting good manufacturer buying, cocoa
with
recovered
a
from
week ago.
early weakness and closed only slightly below
Raw sugar rose to a new high for the current move¬
ment, aided by a better demand for the refined product.
proved tone
An im¬
in the green coffee market resulted from sustained
demand for roasted coffees
build
as
wholesalers and retailers continued
their inventories.
Heavy buying sent lard prices to
new high ground for the season, with
strength in vegetable oils
a supporting factor.
All livestock closed with small net gains for
to
up
the week.
»
Trade Volume Reaches Ail-Time
Christmas shoppers throughout the
High in Latest Week
nation, with the holidays
imminent, brought retail dollar volume to an all-time high during
period ended
on
Total sales were
Wednesday of last week.
slightly above the high level for the corresponding week in 1949.
While rising prices for many items were considered responsible
for much of the record dollar volume, there was also a very slight
increase in unit sales from last year's level, Dun & Bradstreet,
Inc., reports in its current summary of trade.
week's
total
Output Lower for Week But Higher Than Year
Combined motor vehicle
Canada the past
Ago
production in the United States and
week, according to "Ward's Automotive
Reports,
last
ago.
these
,
"
•
period ended on Wednesday
estimated to be from 1% to 5% above a year
week
was
Regional estimates varied from the levels of a year ago
percentages:
New
4-5;
—1
Electric
way, and ways, and a way,
And
A
-
put the
Total retail dollar volume in the
Electric Output
know. This is the high¬
us.
every
of
last
latest figure marks
recorded
the
Institute.
affirming
The
-
of
is
power, let us not adjourn a large
meeting
wegt
week
the
movement
accelerated
Korea level of 264.77
that the
operating rate of steel companies having 94% of the steelmaking capacity for the entire industry will be 100.1% of capacity
for the week beginning Dec. 26, 1950, compared to an average of
prewar
1939 total of 249
emergency.
A rise of 8.17
points during the week lifted the Dun & Bradstreet
daily whole¬
sale commodity price index to a
new
all-time high of 315.36 on
Dec. 19, from 307.19 a week
earlier.
controlled mate¬
the impact of DO orders and alloca¬
on
and 116
year ago,
Commodity Price Index Reflects Rise of
19.1% From Pre-Korea Level
upward
was
proclamation
the
pected nearly next year.
foreign
a
The
kets
.
March
above
represents
Wholesale
sorbed
This week
a
sum total of the
price per pound
of 31 foods in
general use, and its chief function is
to show the
general trend of food prices at the wholesale
level.
since
down.
the
year ago.
our
government
challenged
index
levels
some
716,300 tons.
this crucial time, when
a
manufac¬
With
This week's operating rate is equivalent to 1,930,600 tons of
lifei-^D^ sfcee! ingots and castings for the entire industry, compared to
A month ago when storms in the Midpnnstructive' *nil,944.200 tons a week ago.
construct v
patriotic philosphy to guide every
sponding date
depleted steel and nonferrous
products.
between
This is the scheme of
and
18.7%
is
carried
slashed to the
new6trees1 for stfll ^othersSStcf981 L'°'1
3oy.
it
by good
being
in
well below the
,96, thc current index
2
,
and
aided
are
making
indebted in very large
we- are
and
must know
the past
at
^°ir?,a
which
customers
fice
that
men,
cents
requirements would dictate.
and wealth to the labor and sacri¬
intelligent
of 3
strength to the market
ones that are ex¬
Some steel companies are booking DO
orders far beyond the limits they are required to accept.
In order to meet DO and allocation demands a gradual
change
in product mix is taking place.
This is working hardships on
some companies from
a profit standpoint.
Companies who for¬
merly sold more profitable specialty items now find themselves
we, as
rise
restricted
more
and to work in this great country.
America has been good to us, and
A
facturers, large and small, have less steel than their production
bone—more
174
Y18 liabilities of $5<000
■SIS. S3 iSX* prulce lnde^ for Dec" 19
Sept. 21, 1948, when it stood
ently
careful
A
areas
were
to
we^k, DunBrad-
in 1949.
weekly
adds.
increased
Wholesale Food Price Index
Reaches New Post-Korea
High
big
lot of conferences
a
price controls reach their final form,
industrial failures
Preceding
They 15°
compared with 196
£nmanaei .T
enforce
companies will comply with the government request.
But many
firms are facing a pricing dilemma.
Contracts based on cosf
plus, escalator clauses and average prices will probably have to
be reviewed individually.
Many hardship cases will have to be
America,
in
solvency
staff
Economic
them, states "The Iron Age," national
metalworking authority this week.
Meanwhile, manufacturers are pondering over the new pricing
standards, trying to decide what course they should follow. Most
metals
restore
ment.-Here lie
country—
our
we
these
out
ticians
concerned
deeply
are
about the future of
the
as
enough
political
one
which
sanity
soon
studied.
Lincoln—two
men
history — differed
faiths, but there was
on
Christmas Holiday
,ik®
totaled
ioq from
or more increased to
139
119 last week and
compared with 154 a year
ago.
Small
with liabilities under
$5,000 rose to 35 from 31 in the
preceding week and compared with 42
The
Voluntary price controls are doomed to failure even before
they begin.
Trying to hold prices in check by publication of
"fair pricing standards" is as futile as
trying to Stop an avalanche
by frowning at it. Mandatory price controls are sure to be installed
as
spenders, these creeping, flirting,
or actual Socialists (whatever
they
<
nnit<?
failures
.14.1%,
Steel Production Scheduled to Fall Due to
152 095
of
3 Week ag0 and 5>973 units
MaiS1,? week down 31%Continuing
of 1948. from
the
Jv
level, failures
against 289.6 in
The previous high this
305.1, reached in August.
year was
aSgo°mPared ^ ?'989 Units
^et^no'reoorfs1
street, Inc., reports
292.7
was
total
a
Business Failures Climb
estimated at $354,000,000.
The
year
Commercial and
are
cannot
cannot establish sound security on
borrowed money. You cannot keep
one
The association's index for
shipments in November was 110.9,
compared with 100.9 in October and 67.6 in November last
year.
The index is based on the average annual
shipments of 1945-47
as 100.
Average annual shipments for that three-year
period
of 118,899
up
the week
the second
were
made
n
r'Arisa1 rtaiff 164,318 units'andthe
oooi or./asl year 110,594. Canadian output in
November,
reports,
monthly rate since August, 1945, and
highest for any month this year.
the
33U]9fiU fn^ir
Snen',ueek was
and%
J* ^
the United
and
cars
5 992 cars and
^
States
5,992 cars
2,344 trucks built in
Canada.
or the United
States alone total
output was
7,566,650 trucks.'
Reflecting the increase
Chrys-:
°f
Industry
The total for this
year is made up of 35,921,941 passenger cars
and
among
important vir¬
tues, and public debt as the great¬
est of dangers. We must make our
choice
y
The State of Trade and
profound
a
every
bankrupt everybody
r
common
people is not the politician,
Z?s
Continued from paqe 5
by
+4; South +1 to
+7; Northwest -j-2 to +6; and Southwest.
England, East, and Pacific Coast 0 to
Midwest +3 to
to +3.
1
slightly last week,
as pre-holiday reorders for immediate delivery continued to mount.
The aggregate volume of orders was slightly above the level foi
the similar 1949 period.
The number of buyers attending various
wholesale markets declined seasonally and was somewhat com¬
Country-wide wholesale buying increased
parable to last year's number.
frnm
Department store sales on a countrywide basis, as taken from
the Federal Reserve Board's index for the week ended Dec. 16,
1950 advanced 9% from the like period of last year. This com,
.
,,
(
.
,
o£ 2% for the previous week For the tour .
of 3% from the
corresponding period a year ago and for the year to date regis-
pared with an increase
weeks
ended
Dec.
16,
1950, sales showed a rise
j
tereAcco?dingnTo°the
Federal Reserve Board's index
store sales in New York City, for the weekly period
1950
advanced 9% from the like period of last year.
rpdhi2 week an increase of 2% was registered above
week of 1949
For the four weeks ended Dec. 16, 1950,
of W
was recorded over that of a year ago, and for
datef°vMume
department
to Dec. 16,
In the prethe similar
an increase
the year to
advsmced 1% from the like period of last year. .
^
-
Financial Chronicle.
The Commercial and
Continued from first page
See It
We
As
it
But how and where is this
be
this
dent Truman to prevent
and Mr.
Kennedy
World War III, while Mr. Hoover
to be chiefly interested in mak¬
and
good many of the comments such as that
a
just cited seem to us a trifle silly. Mr. Hoover might well
reply that if we make certain of winning World War III
there would be no such war. Indeed, he would then be
preaching almost precisely the doctrine that has been issu¬
ing from the Administration for a long while past.
But such discussions as this are not very enlightening.
Of course, all of us want to prevent another World War
None of
can.
we
want to lose it if it comes.
us
Few,
we
such
when
enthusiasm
for
notion.
a
there
Congress,
is
no
and
interference by
local
pressure
from outside Congress.
•
The
attempt to regulate
no
one
Europe, including West Germany and
line
of
business
within
the
(transportation)
limits
of
country has proved
How
ure.
the
be
much
a
single
dismal fail*,
a
greater
would
difficulty, and more nu¬
the tragic
mistakes, wer6
merous
the field
of operation to
become
nation-wide, but world-wide'
not
cipitating a war with the Kremlin which at this moment
almost certainly could not be contained.
Essentially the
same questions are to be raised as respects Japan, where
a
large potential military might exists. And, of course,
we should
have to face the possibility that an aroused
nationalism in Japan and in Germany would, when arms
are
again available, recreate imperialistic ambitions.^
These are some of the problems which are weighing
heavily upon the minds of Mr. Hoover and Mr. Kennedy—
and a good many others of us — and thpy can not be
shrugged off.
ing certain that we win World War III. Calling people
names, however, rarely accomplishes
any constructive
purpose,
question that has concerned Mr.
earliest
appear
in
business"
Questions involving
charges for
transporting
merchandise
a r l
complex and burdensome, even
Spain, should be armed and otherwise prepared at the
possible moment. But where among these peoples
is there real will to fight and can they be re-armed and
trained (even if they are ready to do all they can to help
themselves, which often appears doubtful) without pre¬
enough to label these critics "iso¬
It is simple
have asserted that it is the aim of Presi¬
course, easy
and
intense
an
port
of force to be
up
trade
methods
of
the
Interstate
Commerce Commission
could sud
Questions
building
1959
the
particularly during
three months. It is most frequently said
that all of Western
lationists" and thus unworthy of attention.
to assert as some
Only
but apparently
country during the past year, and
the past two or
Name-Calling Doesn't Help
is, of
—
Hoover, Mr. Kennedy and thousands of others throughout
for this nation.
It
That is the
undertaken?
expressed by them could well
the difference between catastrophe and relative safety
the facts and opinions
to
the Real
Here Are
however, that what these gentlemen have
said is of vital importance to us all. Sound judgment as r
all of this
28
commission, to control'
ternational
not.
was
fact remains,
—
world
than Britain's pledge
of World War II. It
will not stop the Kremlin any more
to Poland prevented the outbreak
v
should have been foreseen
if
Thursday-December
,.
(2556)
28
and
the
were
brace
and
jurisdiction to
multitude
a
transactions
of
of
em¬
activities
60
nations
composed of individuals and races'
differing
almost
from
another
one
in
imaginable
every
degree,
language, color'
respects race,
as
religion, temperament, experience
in
life, methods of business and
character of commodities, as well
physical
as
and
and
mental
development?
The
capacity
mere sug¬
gestion is startling.*
*
believe, would
order to
gamble on preventing it. The problem is how to
proceed. That problem will not be solved by glossing over
facts or ignoring unpleasant situations.
We have blun¬
dered our way into a very difficult state of affairs, and
we can afford very few major blunders henceforth if we
are to escape with a whole hide.
We now need to take,
indeed we must now take, a long, broad view of it all
conclusions which
arrive at
and
We
to assume much risk of losing it in
care
in
are
accord
with
Continued
blunders
moment.
number
which
have
given birth to our plight at this
Since the days of Woodrow Wilson, a substantial
of people in this country have cherished the
notion that
war
could be banished from the world
by some
kind of international organization which would be guided,
not by selfish interests of its members, but
by some high
moral
or
voters of this
of the
principle. Wilson and his sup¬
able to convince the majority of thei
never
idea, and
we,
accordingly,
League of Nations, which
were
not members
promptly revealed
imp.otence. It was relatively easy when World War II
broke *>ut to make headway with the claim that had we
very
its
not been "isolationist" in those
intervening
but had
on the
contrary taken an active part in world affairs, the
human race might have been
spared the horrors of the
years 1939-1945. At any rate by the time Japan had capit¬
ulated in 1945, the Government of the United States, and
so
far as can be determined the
people of the United
States, were the world's leading exponents of another,
bigger and better League of Nations—which finally took
shape ih the United Nations, an organization which was
to put an end to
"aggression" throughout the world.
years,
Only Some Thieves Destroyed
Meanwhile
we
had taken
a
decisive part
three of the four powers in the world with
ambitions of importance. The fourth was
ing thus placed in
made
soon
it
clear
a
in destroying
imperialistic
relatively speak¬
power, and
it
had
lost
not
one
whit
of
its
appetite for conquest and expansion. The United Nations
soon
became hardly more than a
debating society with
the Kremlin and its satellites
on
or^
side of virtually all
questions and the remainder of the world
on the other.
Outside the halls of the
grandiose world organization, the
Kremlin, far from disarming as the remainder of the
world proceeded to do,
steadily built up
its armed forces and those of its allies
Thus
at
this
"balance of
moment
the strength of
and
associates.
nothing resembling any sort
power" exists anywhere in the world.
of
Not
only is there nothing resembling equality of mili¬
tary might in being between the Kremlin and those who
would hold it
in
check, but the theoretical opponents of
the Soviets have all too often until
quite lately been held
together—if they have been held together at all—only by
some
vague hope of maintaining peace without any real
display of force. It has now become fairly clear, we be¬
lieve, to all that the only way to restore any "balance"
in the older sense of the term (and
very probably of main¬
taining peace in the world) is by building up the strength
of the anti-Kremlin world.
actual
thority is about that of
au¬
glorified
a
It is evident that harsh words
alterations
nary
Aims and Purposes—A WorldWide
»
The
Domination
United
Nations
These
aspires
to
latter
membership
that
world—a
thought in
ously undertaken by
the
old
before
never
League
any one save
of Nations.
League of Nations failed.
United
for
Nations
better
tremendous
so
seri¬
The
equipped
who
Nations
is
government
principally
standing
tees,
shows
to
that
series
a
permanent
or
of
commit¬
con¬
He
attentive
too
These
forms
in
constituting committees
edge
talents,
and
at
foresight,
wisdom
time
any
human
The
such
self-control
have
as
been
never
embodied
ever
beings.
give.—Burke's
of
this
truth is
a
step of great importance in
forming any estimate of The
rich's
speech
Taxation,"
'
ardent
the
in
especially
bitterness
of the
1920s, *and
at the
time,- though' in not so
degree as in the 'twen¬
•*■•••■
v-
■
;
'
Quandary of the Federal
Reserve Board in 1929 .<
,
.'v., Does not the whole episode fur¬
nish
forcible illustration of the
a
¬
truth of the statement of
<
Good¬
p.
251.
the
shall
we
the
>■.
The
on
"British- Eloquence,"
recall
we
1913,
present
of
"American
realization
in
ties;-.
mankind, and a far
more
extensive comprehension
of things is requisite than of¬
fice ever gave, than office can
in
If
severe a>
office do admirably well, as
as things go on
in their
common
order; but when the
high-roads are broken up, and
the file affords no precedent,
then it is that a greater knowl
of
1929, to follow the policy
failure
to
sight is internationalism brought
to pass through the instrumental¬
ity of small groups of persons
missions supposed to be possessed
to
"cheap money," with results in
.1929 which will not be soon for¬
long
goal which the organization has in
com¬
generality of language gave
its opportunity, from
Board
tem
ordinary occasions; and there-fore, persons who are nurtured
councils, of which the
Security Council is the chief. The
trade
looseness
This
..
tion of the Federal Reserve Sys¬
to
adapted
(or rediscount) "with
accommodating
commerce."
1927
of
to
understand
are
who
system
hopes that accompanied the crea¬
forms, and added:
or
or
view
gotten.
rarely minds
are
them
thought
conducted
be
through
its
office¬
much
the
They were to establish an
elastic currency, and to fix a rate
and
that
"too
are
to
The
.
tives.
a
Nations
remarkable enlargement."
of
scrutiny of the charter of The
supervise
.and'
Commons
of
to
of discount
Edmund Burke once said to the
versant in office
Standing Committees
United
in
election
vary
the
House
easy
important fact.
of individuals
furnished by the law with
only vague and uncertain objecr
hardly approach.
holders
The World to Be Governed by
one
United
The
that it is
ways
reflect popular
that the com¬
way
'
System
were
Burke's Opinion of Office-Holders
The
question is of the first importance.
A
State
our
Reserve
distinct step forward
a
group
were
Is the
task?
a
could
of
elec¬ little
Congress.
every
and
a
overlook
ordi¬
the
constantly
with
occurs,
missions
of
of
or
outside
popular
as
^committees
Legislatures
nothing short of ruling the whole
task
direct
to
or
such
influence
tions; in contrast with
debating society.
;
Edmund
quoted?
Does it
suggest that 1929 was a time
Burke
not
already
of stress, when "the
file afforded
precedent," and the members
no
of
the
Federal
Reserve
Board
accordingly unable to meet
the situation?
The Board failed
were
adr
Federal Ad¬
visory Council (made'months ifl;
America.
Let us speak of twO,J6f
Standing Committees or Commis¬
.advance); it hesitated between a,our
outstanding
governmental
Wish to tighten money in order
sions—"Open Secrets" About Them
commissions.
vi
to curb speculation in stocks, op
t
i'"Anyone who has had experi¬
the one hand; while on the other
The Interstate Commerce
ence with
boards or commissions
it wished to refrain from tighten*
Commission
in
United Nations.
position of unparalleled
that
Its
Burma.
or
humanitarian
porters were
such
was
V
Federal
in certain
Haiti
another-govern¬
Federal Reserve Board
..The
A CloseLook at the V. N.
all
To begin with it is necessary, at the risk of becoming
tiresome, again to recite the general nature of the major
pass'to
mental agency.
page
The
the facts and which take full
cognizance of the blundering
history which has led to the present impasse.
from first
The
by
truth
own
our
of
this
is
illustrated
experience
here
the
heed
to
dressed
to
in
remonstrances
it by the
-
governmental
knows that there
which
infect
administration
are
them
certain vices
all.
Briefly,
these
are:
(1)
Often they are
honeycombed with prejudices, po¬
litical and
tions
of
section
they
an
to
or
are
often
a
free
from
appointed;
passenger rates, and prevent
unjust discrimination.
no¬
overpowering
their
Its
and
history has been checkered
colorful, at one time sinking
so
low
a
polite
as
to be hardly more than
cipher.
Only an im¬
(3) only too
obsessed with
jurisdiction, and
determination
are
largement of
official
springboards
for
thing higher,
more
more
vague
duty to represent the
the country from which
members
use
and
personal; (2) members
seldom
are
The ICC body was created in
1887, to regulate railroad freight
positions
reaching
remunerative.
as
some¬
attractive, and
(4) A single
"reformer" or
and
mense
because
of
lavish
a
extension
dangerous
power
and
"innocuous desuetude."
It
abroad, by
raising .the
a
weakness
sion
government tn
world
of
might be set up.
The
Federal
Board's
Reserve
Condition Today
The
being a
for
.
steadiness
today,
and
^correction,
closely linked up with
ury
the i-r
Department, and is
inference
like The United
Interstate
subject
to
but
a body
Nations, which is
few
and
gradual
in
favor
from
the
career
of
the
Commerce Commission
of
the
creation
of
any
nated to
subo
the fiscal
especial importance. -A
governmental committee
of
,
instead of
great independent pow
Board
policies of
pig-headed crank
has now swelled into an author¬
Administration.
Thereby ^
"do-gooder" upon a commission is ity so great as to be almost a law
robbed of much of that auth
able to
negative completely its unto itself—a condition to which
given it in 1913; and it is
usefulness.
As world governors,
every
government
bureau
as¬
nearly "harmless" for some of
boards and commissions are sim¬
pires.
purposes
expected of it oy
ply impossible.
It; seems unlikely that anyone creators; e.g., its control ov
There is an important distinc¬ at
rate
of r; discount.
all,;familiar with history would
Yet this
tion
between
a
have the hardihood to draw an something that was then d
"standing"
or
"permanent" committee of
,
This acted
palsy; and it illustrates tn
and
evil that W0H .;
paralyze any council or c0"11*! J
like
en¬
ignorant popular prejudice against
railroads) saved it from a condi¬
tion of
money
of
(given to it
deep-seated
a
ing
rate of discount here.
^
^
.
^
Number 4972
Volume 172
.
.
The Commercial and Financial
Chronicle
,
(2557)
have, even a harder time to main¬
itself or preserve
of independence.
tain
a
till
sem¬
Can
A
able for
ciples of World Government con¬
template the picture of a "World
Reserve Board" today attempting
to rule over the finances and the
currencies,
the banking opera¬
tions and the business affairs of
pic¬
the
States or Great Britain
have
Canada
or
a
sentatives
have
would
be managed by
from Pakistan,
the Board
whole
lines
such
of
world
in
repre¬
so
and
of
hardy
China,
would
ticle
.
The Aims of> The United Nations
*
,
employment
the
an
'
All
this high
Just such
a
heen
advlntage
influencl to th4
lending
our
bitious
plans
countries
the
world; for
in
foreign
w
confiderre
SS
of
conduct of affairs
hL
politics
been
of
-
'
•
,
an
Oligarchy
popular
nnt
pWn
democratic
or
ah
t
while
employment
is
extremely
Economic
WW
What
«
Remedy
Nations
Has
•
(
at p. 36.)
The
rru
Has
For
the
tive.
make efforts to guard
against Rus-
United
The
bership of the 60 countries in thefold of The United Nations. You
impression
will
of
realize
the
thought that "rich" America will' themselves
furnish
This
any
all
the
defense
unpleasant
truth
derisive
needed.,
has
that
world
a
The
been
is
fit
laugh.
United
govern-
which
ministered by those
conspicuously - failed
Doctrine,
people content with the
making
^
Umted
then
ment
extension of the Monroe
Discord.
Nations
aggression.
has gained ground that the Atlantic Pact is to work like a
European
The
Y
TT
The
This
na*
a stressing absence of tions possessed of some character
self-reliance and initia- and authority, or at least
supposed
Countries are reluctant to to be. Read over the
full mem*
old-time
pro-
difficult.
Munich,
the
There is
-
maae
SI?™18 combination of the
a s?Vnd,. wa^ P°llcy> sian
the
two
ar¬
*
that
full
a
a
errors
United Nations
really
a
foreign
selfish
The United Nations is
distrust of self has
antf
sm¬
TTnited
our
tragedy of
Pact
of
The
forfeHed
The
Atlantic
has
abandoned by
our
fbsition of
-
The
sroiind
Lpping down froiS
case,
on
in ruin.
yet
;Y
*
Lordship
admission
crux
to
as-
this.
as
.*
such
lean
exchange, and repolitical and social
mrtrr
f^frUr80 ar1en his Tap05 If- 01
if-n
as
the
only the fool¬
attempt any com¬
plete explanation in such
fective, there is
?i
I31116 P°ssessed many of the nations or form of government. It is
inia statement from countries in Europe since the oligarchy where, of necessity,
Keynes, shows that making of the Atlantic Pact, strings are pulled by a few
T
the precise
answer,
Egypt and Iraq?
to
sac-
29
+
?wi S
ever
United States
pointedly differed
not hesitate to
all
business.
development
History
shows
own
work
pro-
duction
gardless
mar¬
a
Our
or
"within hailing distance." What is
the reason?
When learned men
France
or
the
farms
own
at
mines
to be made available whether
not
they contribute to
are
mean by the term.
contemplate a com¬
"bull
and
itself'
a fairer
opportunity to
achieve it than any other nation*
but we have
never
come
even
United
or
seat,
the
have had
"World Reserve
Would
Board"?
for
opposite.
The less said
the better.Dare any one suggest
a
of
«
continuous
occurred?
what nations would constitute the
membership of
and
Has
as
to- do.
to
seems
important
at Bretton Woods in
to what great things the
World Bank and the International
tures drawn
were
another
•
employment"
It
credit
Fund
to
pass
waging
or
keeping its
mills
the full, will
"Full Employment"
ket"
the
peace
on
real danger.
In
everybody tends to
everybody else; and the
rifice the business and welfare of whole has no
more
stability than
others
It has been forcibly ob- a house of
cards, where all the
served
by Mr. Philip Cortney parts stand together in
perilous
in his valuable
work, -The Eco- uncertainty, no card sure of
nonll.c. Mmich,
at p. 36, "In and every one relying on the next,
socialist language
full employ- The displacement of a
single card
ment is an end in
itself, and jobs brings the entire- structure down
and
It would be of interest to learn
just what the- advocates of "full-
plete
of
intent
■
instrumentality imagin¬
i
bankrupt, their currencies depre¬
ciated if not worthless, and their
Think
.
great aims of the United Nations.
nations that compose The
United
Nations, most of them
gone?
j
assembly is about ,the
making
We
war.
the 60
1945
'
world
the most ardent dis-; clumsiest
even
has
moment
supreme
passed.
blance
•
the
is
who
to
ad-
have;
govern
only to raise
The
Nations
charter
is
a.
of
about
as
of
reconciling
the
two realized thus far by only a few of valuable for world
government
things?
Each one is viewed by jus Americans. The late Professor as is the
;
plan for a universal
internationalists as an "essential," Arthur T. Hadley, of
Yale, once language.
How
Very cautiously,
many
of
the
however,- it for
any
sound
world
economy, said: "Plans for making every one swarming millions of
may be suggested that, perhaps*
this world
"Full employment" has become a rich
missions-; it is now: in order to look the
usually end by ipaking every ever heard
of
heart of the problem lies 'far
"esperanto"
ox*
at two
of the objects or aims
fetish.
International trade holds one
poo r."
Doctor
below the surface, and is in the
Hadley's "volapuk"?
Would any of thenk
so high a
which are forembst in the list of
place that months of de- thought holds good with a differ- surrender
the
very character of human nature
speech
of
their
results which The United Nations
liberation and ponderous sums in ent application: "Plans for
making fajhers and forefathers, derived'
itself and-in the way that bus¬
wasdollars
created to accomplish:
(mostly
of
American every one safe may produce little from a- period "when
(1) iness is
the memory
forced to- accommodateThe prevention of war;
taxpayers) have been devoted to else than skulkers and cowards." of man runneth not
(2) The its methods to
to the conhuman
conduct, the
employment of "international ma¬
subject at international gathtrary" in favor of a substitute
rather than follow
any rigid or
chinery for the promotion of the
erings, notably at Geneva and U. S. Policy a Tragedy of Errors which might be the
ideal plan;
most scientific
Here are the views
economic and social advancement
Havana.
A
happy world under
It was a capital* error for the cally framed
of two very careful thinkers of
language that schol*
of all peoples"'
United Nations rule, but without United States
In plain English, our
to enter a w&rld ars and savants ever
own
constructed?
land, one in the latter international
this last includes "full employ¬
trade, would be the federation. All sign-posts of ex- The one is full of life and
part
of the
19th
power,,
century;
the drama of "Hamlet"
ment" as the greatest
without the perience pointed the other
step to such other an esteemd economist of our;
way. and is a nation's own production;
Prince of Denmark.
an end.
Y Y,Y
\
Our
geographical
own time,
location; our the other is mechanical and dead.
only recently deceased.
The situation is replete with commercial interests; our habits of So also is the frame of The
United
-Universal Peace
Views of William Walter Phelps
embarrassment and perplexity.l
thought and our political tradi- Nations; a thing of cardboard and
Desirable and noble as is this.
tions and customs; the advice of plaster of paris, that is threatIn
our
House
of
Representa-;
goal,- 'one must
be
Disturbing Shadows for the Future our statesmen for a century—all ening even now to fall to pieces;
a
careless fives, Hon. William Walter
Phelps
reader of history if he
Wp
havp
hardiv
mnrp
than
these should have served to warn in the using. To quote the words:
supposes used this language in 1874:'"Evenus
from so michievous a step.
that such machinery as the United with
of Gentz, the Austrian statesman
honest currency, we shall skimmed the surface of a very
Underlying Reasons
Turning away from this not very
inspiring picture of our own ex¬
perience with governmental com¬
••
means
for Failing to
.
Avoid Panics and "Hard Times"
•
.
.
.
r
Nations
offer
can
respect
can
inspire
or
command
confidence
does its business
effectuate the desired result. This
weakness cannot be better, stated
than by Mr. Nicolson
in
the
them; and this basis is
grows
Curzon little faith in inhad
ternational
too
ing
staging
of
that
such
results.
apparent-
often
sions."
says:-
in¬
the
mind',
currency
of
either
or
best,
goods
the
inflated\ the
international con¬
or
Harold Nicolson,
But
actions
p.
speak
42.
are
terribly serious-4more so than
"cease-fire" orders from a body
that
lacks
letters
of
to
power
enforce.
In
If
war.
they
disappointing
feeble
are
negotiators,
as peace
80 as
^Vithin
the
and
director °f
last
few
may
our
armies
in
Asia
have been puzzled to know what
Were the true and
ultimate aims
of
tfte United Nations, especially
as
the
we
constantly
are
army neared the 38th
Certainly,
we
in-
our
]n prosperity.
Turmng Po n
in Business Cycles,'" Preface, by
parallel.:
American
homes have wondered
has
what
Trade
bpeakmg
wonqerea.
of
International
of
I
Observations- like the foregoing
must be met, they^cannot be; pg
.fored, however embarrassing; tothose who would compel business
activity, and would galvanize into
Mysis of
veto)
he will
never
stir
second
place.
patriotic
government
hands
world
in
reins
really
were
kinds
of the
would
if'the
of
in
men
fog
jjjf *or
e
"^Possible for
5JS
worth
living?
With Bail, Burge Go.
George Canning, flung defiance
at the rest, and recognized the
it
be
dependence of Spam s colonial
CLEVELAND, Ohio —Paul H.
subjects in South America, as did Gaitber has become associated
a^s9 0UY °^n Pl(;Sident Monroe, w-t^ Ba^ gurge & Kraus, Union
American
any
nation
manded the
Minister,
be
in
the
Has
people
or
in-
(Special to The Financial Chronicle)
—,«,„
or
tradi-
tions of individual freedom?
every
L Gaither Is
Presently,
of The
Englishman reared
not
Spain
Foreign
life
Nations?
to
in
great
£,ni
tablished
de-
?ar
Commerce Building, members of
Monroe Doctrine.
jyjew York and Midwest Stock
Thereafter,
all
that England Exchange. Mr. Gaither
tect
of
its
own
fortunes,
let sought to do in continental affairs merly
associated
with
mistakes be what they may?
Is was, on special occasions of im- Russell & Co. for many
there any nation that would en- portance, to join in that somewhat
trust its future to any series of vague but useful combination that
right to be the archi-
world committees that
be
"This
formed?
thine
own
self
so
sacred
maxim
ever
could
above
be
all, to
true," is a
that
no
set
of
worthy of freedom has
been willing to forget it.
people
ever
The
a
blind
Fallacy of One World
almost
and
thoughtless
drift toward what is called
"unity,"
but what is only
than
too often hardly
mere
"getting to-
a
gether." This movement is showing itself in both church and state.
if6only
•
take conditions
are
PaPer
Would
United
tolerable
her
who
thmfi of
Would
the commissions
compose
chievously
the
came
to be called the "Concert of
absent,
or
^where
their influence is feeble and inef-
Axe Securities
Europe." In this way, she found
that when she did intervene, her
influence
a
of weight.
was
She
Our
own
country
once
was
for-
Gottron,
years,
Corp.
Formed in NYC
was
Axe
looker-on across the Channel.
stood in
been
Securities Corporation has
formed
Axmnilp
with
offices
Vnvir
at
ruv
730
in
position to play very much such
a
part in European affairs, even
perhaps in Asiatic affairs Our position in the Western World, removed from Europe not only m
mileage, but (what .was more 1mportant) from the mean jealousies
and selfish intrigues of European
politics, coupled with our wea_j.
Fifth Avenue, New Yoik City, to
a"do8?ength and our d's'"tore?to
and Hugh J. Lanktree have be-
^
-
,
...
wa"7
-rf
,
continue the investment business
0f Leffler
Corporation,
**
Patton, Lanktree With
Central Republic
Co.
(Special to The Financial Chronicle)
OMAHA,. Neb.—John H. Patton
=n^
territory
come associated with Central Remight have caused our counsels public Co., Farnam Building. Mr.
and advice to be respected and patton was formerly co-manager
heeded m moments of unsuai
0maha
office of
Paine,
danger or difficulty. Wemsed to
and Webber, Jackson & Curtis and in
be
generally
respected
trusted;" even "though
^
-
-
A nation which is
love
and co"nt.^ anf
^ ^•
d •? 'J3
i
°f.a proposal to interfere rnis-
live
greased
trade
•» i.
•
™thusias;rn
of
of
sort
have; to
-
international
Ji J»/?i
polltl% *Jow dlf.£lcult
°n
j f9undatl0nf'v
we
What
•
more
.make
L
m
•
as The United Nations.
this:
ht
par-
®9. prominent at the Congress of
Vienna> Upon .the shifting sands
Ar
conference, that at Verona in 1822,
she broke away abruptly because
is
the
aims, (and subject to the
of
aack a'
It
Which falls
upon'a military
and
far
a
wars
_
the great powers. But in the fifth
*
and Commerce
-
„
been
peopto
existence an international trade,
responsibility whether
profita.ble or not. Advo- got together in large numbers or
leader .categ of uninterrupted and ex- masses,, the result must necessarhls' troops supPlied
tended' international trade may ily be an increase in strength and
mod
Napoleon once observed,
if wen
solidity. > This,
however, occurs
pause
to reflect that bpth
fK
°WS WmseJf to be guided ^full employment" and "complete only where there is a; real com-G coipmissaries, He willnever interliational trade" cannot jre- munity11 of^ interest" "along with
'-.-.mY-.x-.
in
ihprn,
2 y' ?
-7? ceivlequal treatment and eq^al something akin to similarity as
fundamental attributes, such
emphasis,, that if he consideration at the hands ; of
must
await
the
race
language, religion, coupled
decisions of a
Q
—
legislators. The two horses do not
commission made up of reprewith those of character, training,
evenly in the same shafts.
and habits of life.
Conditions of
sentatives of many nationalities if
you; insist upon "full employthat sort make it possible for insnd
races,
divided in language ment,": as having first consider¬
dividuals to join together for some
ed
religion, as well as in opinions ation, you must be willing to UUII11UU11 guuu. But where these
common
good.
q
us
When the
success-
The existence of the United NaA Clash Bound to Result Between
«Flln Employment" and Enforced tions is itself but one example of
Maintenance
-
a
Leonard P. Ayres.
well
months, the Commander-in-Chief
of
be pro¬
^SQf^ consume aJmost as much
thehi in hard times as
$
boards and commissions for
wag-:
'irmiJT
rmms.
to
fire, Korea-has pointed
government byv;
to the weakness of
ing
have
usitig
them up, or wearing them out,
and replacing
them.
Most ,of
them are necessities of life, and
for
words; Guns, tanks and airplanes
50
goods
duced in fairly regular amounts,
than
louder
produce
their
durable
in waves or surges of
durable
;
.
the United Nations could succeed:
ing little in volume from month
to month and from year to year.
By contrast, they manufacture
their
non-durable
goods
in comparatively steady volume
ofproduction.
These
non¬
they
tracts—"Curzon, the last Phase,"
py
•
wise?;,example.
com¬
Suppose
overlooked.
Y
output, instead of manufacturing them in steady flow, vary¬
"
pan¬
misled
on Turning Points
Cycles," Colonel Ayres
:
tions
to
discus¬
worst
compromises
which
public
the
from the Late
Business cycles
result from
the fact that all industrial na-
complicated,
vexatious
At
achieved
At
long,
were
aceas
meetings
achievements
concrete
they
in Business
from
or
Napoleon ended, she resolutely refused to become a partner in that
ful
government
of
the
whole dreamy and impossible Holy Aliiworld by a. series of committees ance. For a short period she was
is
impossible,
there
is
neverwilling to try what might be actheless one other side to the pic- complished
for
united
action
ture
which
ought
not
to
be through the conference system of
-■
A Quotation
If
England herself had set
We close with oniy
suggestions
said, it is clear that the
>In his work
"
dramatic
and a
need of suhordinat-
consequent
and
the
<•
few
very
ments.
one
the world
Colonel Leonard P" Ayres.
public anticipation
volves
ing
'
•
conferences, know-
well
as
grows older."
*■'
Curzon"'
:
wider
a
credit cannot
which
fol-
large subject.
A world which
on
escape
lowing passage'from his "Life of
Lord
have panics.
still
to
liked,
just
as
we
we were not
intervened in
1823, with most
suits, so we did once moie in lUlio,
when President Theodore Rooseveit persuaded Russia and JaPa
to meet at
portsma"^' Nj
e
the past was an officer of Burns,
potter
&
Co>
Joins Dickson Staff
(Special to The Financial Chronicle!)
CHARLOTTE, N. C.—Elbert C.
terminate
the Russc.
-.Japanese Blackwell is with R. S. Dickson &
War. These are striking lllustra
v—
----Co., Wilder Building, members of
np„
tions of our inf]iuen ,
P
the Midwest Stock Exchange.
.
o
haps not entirely the only ones.
stocks
Tomorrow's
hesitant fashion.
a
28, 1950
Of
Walter
Whyte
course
=
about the new year,
frightened off let
that
intention of doing
hasten to assure you
have
no
*♦.
in
a
into
V
bring. If there
quotations
(34) Stocks now in the best
position for 1951 should be those
an
as
Tight
gains tax above the present
(7) Most labor groups
be successful in getting
backlog of demand for
sixth changed.
round of wage increases in 1951.
Domestic Trade Will Be Less
Although
there
may
be more
(21) Credit curbs will cut into
strikes in the first part of 1951,
a
the
demand
sound In¬
good
successful
will be the
The
year
follows
values
investor
one
who
carefully planned invest¬
program.
Such a program
ment
will
a
emphasize
diversification
not only by company and
and
automobiles
for
(36)
next
where
demonstrated.
be
can
un¬
will
rates
Stocks
come
25%
remain
will not figure,
in
as
in the past months'
like good chain store stocks
'
(35)
Investment Trust func]s
pension funds, and insurance com¬
panies will provide an excellent
adopting sales taxes.
(20) Despite renewed efforts to
increase
the
long - term
capital
Outlook Will Continue
Labor
I
states
and/or
cities
additional
into an oxygen
their patient
that have not been popular
flation hedges
with
looked for next year
be
can
tent.
don't know what
Because I
curbs,
Washington may
planners at
rush
*
*•
❖
what 1951 will
the
simpler language, the
will determine the im¬
idea
of all I have no
First
taxes
auequate sources of revenue.
Further increases in such taxes
result of government
a
as
that we are, and
means
sales
such
some
find
declining too last
that business is
to
mediate trend.
a
V
*t,
of
probably continue to be,
news market.
Putting it
will
news
such thing.
:any
referring
expect. Be¬ of this
fears and what to
me
holidays are over. I'm not
the
(l3) The nSt?^. Averages3'^
higher during \Z
"This is a government-made
inflation road block.
slump; let's get rid of the con¬
(19) States and municipalities
trols!"
will again be under pressure to
(6) If in 1951 it becomes evident
cry
am.
first half of next year, but
some
time during
1951 they will sell
lower than current
public may then goods. Congress will see the value
will increase. The
emergencies.
its hopes, They're something else. All
write
long look ahead and
fore you are
the Christmas - New
period. They wait until
Year
I should take
At this time
an¬
issued
are
during
WALTEfc WHYTE =
By
be
to
seldom
nounced
iar«!
avoid
such
work somewhat
Outlook foi 1951
the holidays have
decisions
Major
Says —
Financial
something to do with it.
had
will move out of
bon.b-vu nerable cities and
having investments in
r»
wit
people
Business and
'I*
$
sjt
Markets
I
Thursday, Decembe r
...
relations. The danger of
war
mains.
Until
it
disappears
majority of Continued from first page
is that they've acted in
the
for
said
be
a
Chronicle
and Financial
The
Commercial
(2558)
SO
-
industry
the whole
but also by quality. Over-concern
household equipment. Completions tration will not pay in 1951.
compared with 1950.
look to the market for clues.
(8)
Tightness
in
the
labor of fewer dwellings will also act
(37) Highest-grade taxable cor¬
insignificant.
The market is saying that the supply will be continued as the as a damper on furniture sales.
porate bonds should hold in a
j!.
(22) Falling demand for hard narrow price range during
particularly of
first blush of inflation is over year wears on,
195^
goods should mean a stabilization but I see no reason for individual
Having sounded off about (hence the hesitation) and the highly-skilled workers.
of the public's spending for food investors
(9) The Taft-Hartley Law will
buying them. For my
what I won't write about, I
new
selling recently coming not be repealed during 1951 but and lower-priced soft goods.
forecast
for
long-term govern¬
(23) The trend forecast in No. 22 ment bonds, see No. 30 above. The
might point out some of the in presages unsettling or even may be amended. The Administra¬
will mean a decline in department
obstacles the market will be
only
corporation bonds which
bad news. This is particularly tors of the law will continue to
store volume, but I predict a rise interest me are convertibles.
wink at some of its clauses.
faced with in the immediate
evident in the action of the
in the sales of variety chains and
(38) With income taxes slated
and near future. Practically
Commodity Prices Will Remain
industrial averages.
of drug chains.
to
increase
in
1951, tax-exempt
are
othej reasons they're
any
the
will
news
have to
I
be
there will be fewer for
year as
,
all of them
relations
our
on
European countries,
with the
Firm
❖
*
ijt
and its pos¬
war
effect
sible
interrelated to
are
the Korean
change the picture
somewhat there is this to say
To
plus the taxes that will be
levied to implement our for¬ sequent
eign policy.
,
they fall
an¬ these
levels,
anybody can
problems I'll glad¬
if
How,
75.
back, but hold
you can look for
period of strength.
If
swer
below the
figure; the rails below
225
❖
sis
indus¬
the
decline
trials should not go
these
another
ly turn over this space to him.
*
*
*
f
^
sis
*
❖
Last week I ended the
umn
by warning that a
tion
was
the
around
don't
I
Because
if
know
col¬
advising holders to clear
some
of
their
holdings in
and
the
matter
minor
that
attitude
how
take
I
no
for the worst.
If they
hold, you've taken
far
the
market
hasn't
de¬
some profits and still have a
clined, or for that matter has
partial position. If they break
it gone up. The best that can
and your original position is
sound you can average it at
a lower figure.
So
preparation for the blow.
do
article
time
Securities
Executed
They
Chronicle.
are
presented as
Schwelckhardt Co.
Members
New
York
San
York
Curb
Stock
formed
Exchange (Associate)
Stock Exchange
offices
with
Hibernia
the
in
New York 5, N. Y.
14 Wall Street
COrtlandt
Teletype NY 1-928
7-4150
Private
Building
Trade
Wires to Principal Offices
Francisco—Santa
Barbara
Mon terey—Oakland—Sacramento
Fresno—Santa
to
act
distributors
and
eral
as
Partners
Schweickhardt,
in
municipal
madket and
rities.
underwriters,
dealers
are
gen¬
secu¬
Erwin
member
Orleans
Stock
D'Antoni.
Per 100 Shares Plus Tax
•
DuPont
@*2
Apr.
72% Feb.
Mar;
Richfield Oil. @18% Mar.
€en'l Motors. @ 17
Mar.
Y'gst'n Sheet @ y0V4 Mar.
....
Atlantic Rfng. @
Climax Moly. @
•
30 $587.50
19
425.00
12
312.50
27
312.50
2
275.00
@ !1% Mar. 24
@ '2% Feb. 28
pfd. @ ?0y4 Feb. 28
United Aircr. @ 33% Feb. 19
412.50
nosti
was
was
partner in Schweick¬
Co.
Service
Mo. Pac.
Explanatory pamphlet
on
387.50
request
THOMAS, HAAB & BOTTS
Members
Put
&
Calls
Brokers <fc
Dealers Aslsn., Inc.
50
Broadway, N. Y. 4, Tel. B0 9-8470
&
half of the year
W. 8, Salomon With
(13)
average
1950.
for
first
W.
S.
ciated
Equities, Inc.
Equities, Inc., 30 Pine St.,
York
City,
Salomon,
with
banking
announces
formerly
various
is
not
so
in
trend
the
1950
of
Barring
total
the
down,/this
was
optimistic
as
it
supply
that
asso¬
itnernational
institutions,
has
Vice-President
in
since
1950,
the
available
1951 than for
government
will
raise planting quotas as part of its
attack
on
inflation. If the weather
favorable, the
extremely
gov¬
ernment will be blamed for farm-
price weakness
years
hence.
heard
a
charge
more
plentiful next year
for
next
the thought
on
in
start
will
will be held
that World War III
1951.
loelieve
she
Polituro boys
There
in
will
1951.
of
Federal
be
an
These
II;
in
but
and
force
they
retard
excess
during World War
will be inflationary
efficiency, economy
and incentive.
(18)
More
we may see
Deficit
taxes"
of
increased
to
Financing
June
Federal "sales
purchasing
luxury and certain nonessential
&
over
ban lots.
The
(42)
result
of
National
high
taxation.
increased
and
Congress
for
result of the
money
ness
has
such
turned
time
a
supplies should
down.
are
not
in other sections
outbreak
early
adversely affect the
will
big
for
Lower
draft
will also curtail such
year
the
and
volumes
business
demand
estate.
real
city
sustenance farms
well in price as
will be spurred by those
Small
hold
should
demand
up
outside
refuge
seeking
the big
commer¬
farms, however, should weak¬
cities. Demand for large
cial
the year progresses.
as
en
(44)
back
swing
The
toward
furtnei
damper on new building. There is
preceding no incentive to build homes 1°
begin to rise until after busi¬
not
at
the
hu£e
a
year.
a
Income
if
Later,
federal deficit ,wj]^
the last half of! trie
rearmament,
arise during
(29) As
as a
with
along
plans
goes
Administration's
caused by the
of an
scare
Korean-China War and fears
(43)
budget surplus
see a
Increases
have much effect
on
likely
to
prices.
will act as a
control
rent
rental income.
.,1
(45) Tighter credit controls win
make it more difficult to purcna
Federal Reserve support purchases
ceiling of Federal Reserve
sales.
conditions,
price
be negligible.
Under
changes
such
should
1951
about
Board
oyer
prices for these
materials
able
giving the Federal
powerful controls
member bank loaning poli¬
and
can
for at
pay
new
a
Orders
Defense
(47) Those who can
means
War
III
Uncertain
(32)
dicate
period
I
see
that
nothing
are
to
in¬
Hons,
(48)
j
Pr(head.
expecte
,
•.
..
.
,
political
r
*
^
contracts
tight-fisted re
The
^
>
these
as
subject to
now
entering a
of improved international
we
order
reducing ov
profit from such
business should be
ever,
do so shou
defense
holding up
of
volumes 'and
Not too much
comes.
Wi
Politics
and
Increase
such
World
least hal
home.
attempt to get
or
wor^1.1?1anuPi1)
This will
saved their m
those who have
cies. Congress is not likely to pass
controls,
however,
unless
commodity prices go a lot higher,
and
improve.
should
cost of
(31) A great deal will be heard
in
residential
older
t*e
Stock Market and Bond Outlook
discourage
in new
blanket
speculation in vacant subur¬
(41) The coming decline
building will throw a wet
demand.
30, 1951
The first half of 1951 may
actually
commercial
Nonessential
building will also be hit.
next
After
will
greater decline than other
a
lines.
to
hand out the sooth¬
But
syrup.
There will be heavy pres¬
for
satisfied
be
excess
profits taxes will be milder than
those
in
another
episode like "Korea" in 1951.
ing
Reserve
tax
do
it
unexpected jabs at us, while the
anti-inflation
burden
taxes, both corporate and personal,
will be increased again in 1951.
State
and
municipal taxes will
remain high.
profits
we
wants
now
will
She
cer¬
have her satellites continue taking
and the
Taxes Will Be Higher
The
is
by continued
up
high National Income and by
tary needs.
(16)
Russia
—
(40) New home construction
suffer
not based
are
year
credit
easy
properties, an
should weak. •
(30) Government bonds will, be
(46) As building volume slack¬
mili¬ held
tightly between the floor of ens in 1951, the quality of avau
in 1950. Prices for meat, how¬
ever,
again in the land.
prediction,
With prospects good for
(15)
be
(27) Business and financial fore¬
casts
during the latter
part of 1951.
been
of their foreign department.
food
of
result
down
(28)
failures, the
crop
should be larger in
sure
elected
Since
half
forecast
no
of
competition from
increasing
Europe.
income for 1951
less than that
Farmers'
should
credit. Much
mortgage
on
of the recent boom was the
foreign merchandise. The cry for
not
(17)
UNO
any
almost nothing
and small easy payments for
feel
tainly heading for war, but
closing.
now
Farm Outlook Good
Mr. Anag¬
Company.
New
during the first
levels that existed
Vice-President of Weil
UNO
be above the lower
next year may
Exchange, than
Mr. Schweickhardt
a
hardt, Landry &
225.00
475.00
Canad. Pacif.
Cities
diction recognizes that
rising supply of feed grains, meat
450.00
27
formerly
re-'
during 1951. This pre¬
living costs
main high
R.
Evangel N. Anagnosti and Vincent
SPECIAL CALL OFFERINGS
on
domestic •manufacturers will
increased tariff protection will
the should be
of
Rosa
New
depressant
a
as
(12) The cost of living will
is
Francisco
Chicago Board of
San
La.—Schweick-
hardt & Company has been
Exchange
spec¬
however, and
downward change in the tax
curbs
Ut>) As was the' case this year,
many
the latter part of 1951.
Formed in New Orleans
New
stockpiles could then
strongly
(14)
NEW ORLEANS,
price
peace
a
prices.
Wv
Schwabacher & Co.
of
might otherwise seem, for there is
likely to be a weakening of the
farmers'
income position during
the author only.]
oil
Pacific Coast Exchanges
-
necessarily at any
those of the
with
coincide
those of
Orders
not
in this
expressed
views
[The
real
a
event
the
Such
scare.
act
present
in
threat
strategic supplies.
of
stockpiles
panding
materials
storm, I prepare
Pacific Coast
shrink¬
ments, I look for continued
com¬
some
these,
the price level for age in our exports during 1951. outlook might cause a sudden
December 31, 1950. In sonfe lines Imports, however, should rise turnabout in prices for
municipals.
the drop may be quite steep from further. Total foreign trade should Investors
should see to it that
the high levels of late 1950, Retail not be much changed, but the ex¬ their bond maturities are carefully
prices for 1951, I do not now fore¬ porters will be on the short end diversified, with some part of
of this business with the importers their
cast.
bond funds maturing each
(11) The year 1951 should prove gaining.
year.
an excellent time to keep a tight
(25) It will become more diffi¬
grip pn inventories. Commodity cult to convince Congress that Real Estate Activity Will Decline
speculation for the rise will not additional heavy credits should be
(39) The real estate outlook for
granted abroad except for war 1951 will be strongly affected by
pay in 1951. Futhermore, our ex¬
coming
a
when
1951
in
in
ulation
with
pared
they'll hold, but I do see signs
reac¬ of down in the market action,
corner
decline
mild
There has been
mand.
(24) Barring new war develop¬
commodities will be marked by a
On any sub¬
for the market.
bonds should continue in good de¬
Foreign Trade Outlook Fair
Wholesale prices of many
(10)
tja-
k
outlook
for
Number 4972 .iThe Cormhercial and Financial Chronicle
172
Volume
Continued
jockeying for position in the
by
"presidential race for 1952. Most of
Congress' time rwitt/,he:,spent on
Internationa 1 Problems; but either«
War or Peaee eould eome early in'*
1951, which could make many of
the" ahh^'ftt^et^M&:'.'useless;
1
(49) In Domestic , Matters, de¬
spite recent election changes in
alignment, Congress . will,
party
from
(2559)
":v:
'
•
W:
crisis it
Economic Progress
been
while relatively small in
themselves, constitute an "extra"
win
sometimes
will
with
methods
used with
ditions
could
be
to restrain
under
pressures
<WJvmi
however,
which
some success
inflationary
the
con-
of
complete mobilization
"Had enough?"; but their
are
not, from a practical standwill be short - lived. Too
many
persons are following • the point, appropriate to the present
state of affairs. Under the stress
pernicious doctrine of asking for
of all-out war extremely severe
higher wages and shorter hours,
fiscal measures and widespread.
speculating in stocks and goods,
controls were both necessary and
growing rich on paper, voting
slogan
reign
war!
no
war or
.
Courtland Mfg. Go.
L Stock Offered
Straus,
&
Heimerdinger
net
tal.
New
...
The
tive dividends in each case.
the courage and determination to
cut off remorselessly the frills of
Edgerton Co. Adds Two
(Special to The Financial Chronicle),,
.
.
ANGELES, Calif.—Jack F.
Clarke and George T. Wood have
been added to the staff of
Edger¬
Wykoff & Co., - 618 South
Street, members of the
Exchange. Mr.
previously with J. A.
A.
Chronicle)-
(Special to The- Financial
-
LOS ANGELES, Calif .—Steph¬
Titus is-now with Witherspoon
.
en
Co., Inc., 215 West Seventh
;
St.
SAN FRANCISCOj'
Pabstj-Jr. is
thrnnah
Chronicle)
_
_
wno
e
Uiai
urge
•
.
_
thin
.
-
t i vt a * t
summed
bv
ud
savint?
that
jJ
nation, the Canadian concept of
whatever
shortcomings as
our
in& quite apart from itg value-to the good life stems from a belief
the individual, has once again a in the inherent value of the in-
terms of dividual, a belief which has its
roots deep in religious principle
and democratic tradition. These
are values which we take for
granted and it comes rather as a
aiH a
h I
nj..
'Oil
Arthur S. Leland died of a heart
of 93.
Mn Leiand was senior partner of
Arthur S. Leland & Co., New York
City, private bankers. '
.;
22'at the
The Inflationary
...
age
■
Threat
war years
-
and well into the post-
w^ho,rt ™nonAw
costs andI without corresponding
gams mprod.ictoity can accompish nothing but a wage-price
spiral—a race wnicn no one can
w^n- Putting the matter in its
us.
I would not
suggest
these objectives can be easily
ments confronting us.
for
that
moment,
a
attained.
war
the matter; National
this /.fitinol stage nf
critical otorto of
Iiqfernational developments cannot
be irlaintained
"on the-cheap."
Increased
use
SS
for
demands
some
however,
1
-
Allyn & Co., Inc., 100 West MonrQe
was
with
the
on
In the
ast Mr. Xero
Co.
Wayne Hummer &
unlisted
trading
depart¬
ment.
E. E. Mathews Adds
(Special to The Financial
Chronicle)
BOSTON, Mass.—Gerald Barnes
is with Edward E. Mathews Co.,
53 State Street.
With Tifft Bros.
(Special to the financial chron[u.b)
SPRINGFIELD Mass.- Robert
H. Marchese has become affiliated
with Tifft Brothers, 1387 Main
Street, members of the New York
an(j Boston Stock Exchanges.
learn
Indeed, we are coming to
that- national security in a
With Waddell & Reed
dan(Special to The Financial Chronicle)
gerousiy uncertain world must be
gerousiy un productive effort, by
PETOSKEY, Mich. —Robert J.
and by liberal
use of Tx-uesdell is with Waddell & Reed,
period it was frequently argued that any important change Paid !or by
in llio hcicie pattern nf interest Sacrillce an
in the basic nattprn of int.prfst.
rates was unnecessary and unde- common siense.
sirable. This line of thought was not forget that
of .manpower and of course heavily influenced by happy country
defense taevitably ^.vyartime experience, when, the To say th^
is by.no means
however,
Jj.:4-.'.'}L+
ifirity'at
hitherto. To meet it will test
those qualities of enlightened and
intelligent citizenship which will
determine not only our national
to
a
during the
/oeninto ona
resolute and united.
Within the experience of a sinSle generation this * country has
played a worthy part in two
World Wars and in postwar reconstruction. We have also achieved
tremendous economic and social
progress. Once more we face another challenge, different in nature from those confronting us
tween industry and labor gener- stature but also our influence for
aBy> That mounting living costs P
y.
*
lead to wage adjustments should
Tero With A. C. Allyn
occasion no surprise. But the in(Special
The Financial Chronicle)
f®capab*e a , ls;+ nevertheless, CHICAGO, 111.—Robert J. Tero
that widespread attempts to obiur_iwucu
tain[increases in income out of hag become associated with A. C.
we
ation. Thus is^was that
This
....
Arthur S. Leland
Dec.
irrr\ n
World War II. To
wntlj^Hartfi, &, CQ.
J*
attack
ivrnwi-innA
■;
ciscG-iStockrExchanges. ..Ha
...
half times the level at the
one
control employed in
attempt such a
widespread
f
Mejia,. Russ Building, members
of the Naw; .York. and. San Fraq-
formerly
slower rate. It is now about three
anci
&
.*
be
thg
process of sav-
,
a„„;ne PurcnasinS P°w
of the dollar,
course
under existing conditions
Any prolonged economic trend
Calif—Wil¬ could introduce serious elements usually seems to build , up a
with Da vies of friction into the economy.
philosophy justifying its perpetu-
With Da vies & Mejia
(Special to The Financial
liam Hi
the thrill of the ski slopes
winter's day.
There
clear
a
^
and^hro g
■**
Joins Witherspoon
&
frQm
therT there remaLs^hriimculty o£ Proe°rti°" 40 the concurrent simplest possible terms, if weand
end of 1939/an expansion far out
as
a nation insist _on doing less
level
aeainst
increases
in
the ^crease in production of goods iess f
** ca" nai1aiy
and less
price of imported goods. These, fnd services. Admittedly much of complain for the dollar does less
if
plus the important problem of ob- «>is
increase was unavoidable,
Values to Defend
taining public acceptance of the Nevertheless, apart from other
I have endeavored
to outline
regimentation involved, are the contributory influences the enorpractical
obstacles' confronting mous. change in the relative size these basic objectives of an effectthose, who urge that we should
the monetary base the broad
?nou iu fulldamental fact01. in has been a ive approach to the economic asnow. return to the mechanism of t«Mamental factor m tne oroaa
^ challen j
deyeIop.
Hogle & Co.
-
directly
allocated
ficpni rr^acnrpc:
sterft ,iiscal-measures anH
0tPrn
Los Angeles Stock
was
follow?
?^.erannmf"'al °utlay ,and.to Pre- special significance in
from the standpoint of the treasufy> was not however accomPushed without substantial addiany one phase of economic activity * ^.9ns
money supply. In
accomplish very little unles^Pjher words .money-could be kept
all other aspects of the economV^heap only
its becoming more
are
similarly hrought under. '.rer. P^W^hus, in Canada, the acstriction.1 To -control price;',i*-is toe.,money supply tripled during
necessary
.to
regulate -supply
he six war years and has conthrough .allocation, and ^rationing tmued to expand in the postwar
and to restrict demand
through Period although at a considerably
Spring
Clarke
The Importance of Saving
It
~L
"compromising fiont to the nation's welfare. As a great
demands, trom any quarter, for savings institution we are very
unnecessary additions thereto, conscious of this fact and careful
arla^aJ?s
' a.s ln. ™ie pas ' ac~ and energetic attention is there-
can
ton,
game,
on
com? ^ mind aiso th°se funda"
giving
trpni
}™e; Such an objective requires foregoing that the
preferred stock may be re¬
prices ranging .from $30
per share on or before Dec. 15,
•. The lesson which is plain to be
1952, down to $27.50 per share seen in
past experience, therefore,
after Dec. 15, 1960, plus cumula¬
is that direct controls applied to
deemed at
LOS
little
a
stringent economy in the adminis- cannot provide a smooth A
—ai. transi•
tration ot ,tne tunds which the tion from a peacetime economy to
public provide.
partial mobilization. Intelligent
taxation and saving were in turn - r Secondly, it is, I think, obvious public
cooperation
is
vitally
facilitated. These measures,
to- that defense against the forces of necessary.
Hoarding or panic
gether with control of salaries and inflation now requires a bold and buying on the part of producers or
wages made the price ceiling pos- flexible use of the weapons of of- consumers cannot but weaken our
sible. None of the various devices ficial monetary policy. The last national economic fabric.
Moreworked perfectly but there was an
war was financed, in Canada as over, we cannot possibly achieve
element of rough justice-and'^con-; in the United States and in the our-broad objectives of national
sistency in the over-all program United "Kingdom, against a back- security without a high sense of
which, in an atmosphere of ex- ground of low and declining in- social responsibility on the part
treme
urgency,
commanded the terest rates. This feat of financial of those concerned with collective
patriotic support of the public.
} management, convenient as it was bargaining and with relations be-
used for additional
-
than
past
supply and, because fewer'
consumer
goods were available,
proceeds will be
working capi¬
,
more
had
we
the
things that add color and
enjoyment to the Canadian scene
-^of holidays at the beach, the
close packed excitement of the
hockey
match
or
the
football
aspect
._.„7
mechanical
Co., manufacturers of
..The
were
in
civilian
preferred stock at par ($25 per
share) of Cortland Manufacturing
.
accustomed
of the
program - reinforced
High taxation and enEach
distribution limited and
York, on Dec. 20 publicly offered
12,000 shares of 6% cumulative
toys.
Korean
t
One thinks too of
those
?eP highei taxation in good spirit fore being given to this phase of shock to realize that over large
11 ™ey are assured of the urgency our activities.
areas of the earth's surface they
to the dogs, emergency
the other.
of. the need and the equity and
•
are not recognized as ideals. To
/
thusiastically conducted
savings wisdom of the measures adopted.
The Public's Responsibility
preserve our legacy and to enrich
campaigns restrained civilian de- But they also have the right to
As I have already indicated fis- it we, with other nations of good
mand; controls on production and" expect some tangible evidence of Cal and monetary measures alone will, must at all costs be strong,
acceptable.
Democratic for selfish reasons and
letting the country go
develop-
the
beds in safety.
economic j^e"^1 aspects of our heritage-—
f
,
. nt action by the centhe fieedom to worship as ones
a bank ln raisinS the rediscount conscience dictates, the deep conrate comes therefore as a clear fidence in firmly grounded and
and welcome official recognition impartial institutions of law to
which flexible interest which even the processes of gov fa
n play ln an anti-infla- ernment must be subject, and the
an''«bnf,id
quick sense to
to
go should tl0nary program.
remedv iniusticprecognize and can
Perhan* it
herenpp to
nerence to pay as you
he the foundation stone of a program suited to the needs of the
u
f
apparent,
-seems
that the
Dictatorship. The Republicans
a
^
T1
It
gradually headed
One Party System and finally
of
apparent th&t the low
was
decade
eration of the Canadian people in
all walks Of life can be enlisfed
tion,
onslaughts by New Dealers.
are
before
re-
needs
rates of interest to which
^
We
capital
the
expanding
Well
ment.
its
on
meet
vigorously
dominated by conservative
inVoIving^a'degree of inflationary for the task.
'
'
coalition of Northern Republicans
potentiartar out of nrooortion to
1
and "unregenerated'' Southern
its size
,?
.
Fiscal and Monetary Policy
Democrats. When the heat is on in
From
thp
stanrinnint
nf
am/a
tough fight, the North-South
Different Conditions, Different
ernmental responsibility it need
coalition will still be able to curb
Methods
hardlv be said
that
strict ad
(50)
to
sources
*
-
still be
for a
demands
motis
11
page
31
A,
_
„
T
.
Above: al , t
we hiave
much o
11C
-—
Inc.
.
Joins Edw. D.
Jones
(Special to The Financial
Chronicle)
ST.
LOUIS, Mo. —Robert M.
of rate of saving was determined furt of material r sou :
This^re- much more by patriotic motives harv^s^ ^ ^ ^ gusbing from Br.-^;n is now affiliated with Ed-'
adjustment could, of course take than
monetary considerations, prairie
Qf yast forestSj ol ward D. Jones & c
300 North'
place through the processes of in- when the demand for capital could ^
^ northland with its full Fourth Street, members of the
flation
by competitive bidding be regulated by direct^xpntrols
With Pohl & Co.
Qmise not half disci0sed, and of New York and Midwest Stock Exthe part of government and and
when the inflationary lmaimost breath-taking pace of changes. Mr. Brown in the past
(Special
Chronicle)
'-/
I CINCINNATI, Ohio—Alfred C. public for scarce resources. We plications of an expanding m0^y industrial growth. But the Cana- was with Herrick, Waddell & Co.
have never in this country had to supply were temporarily masked d_an
^
Qf Jife
j suggest, and prugh, Combest & Land,
LeFeber is with Pohl & Co., Inc.,
undergo the cruel hardships of by the price ceiling. Moreover, in gomething
more
than a living
Dixie Terminal Building.
With Dempsey-Tegeler
runaway
inflation and I would the early postwar period there gtandard something above and bej
; i:
not by any means imply that such was the fear that higher interest
^
Sum total of our mate(Special to The Financial Chronicle)
j
rrlnf
ohnnt
mQrlTPT j v/iava
^
With Merrill Lynch
danger faces us now. But we rates, brought about by market /
potentialities.'
LOS ANGELES, Calif—Leslie!
our
readjustment
standards of living.
—
'
to
m
the
'
on
Financial
.
•
o
__
d11+
Lmn
urn
n^r
a
PORTLAND, * Oreg.
Russell
is
—
Bruce H.
Lynch,
Merrill
with
for
i~—
i
Chronicle)
(Special to The Financial
decadeblthe mo^^ubtle
suuue
decade, tne
'
more
•
_
a
processes
piutcaoca
i+u
oil
creeping inflation with all its
attendant strains and injustices,
The new turn of events brings
of
lorees,
might
cfonary
be
Their impact. But whatroaeAhinfl mnv
cionarj in
uuiwij m
ever v
vaU/^il"*r oiioV>
Fenner
Wilcox
Beane,
&
iith
with
a
heart
attack
the
at
He had been ill for
ing
a
stroke.
retirement
a
Mr. Loew
was a
Whitney, Goadby
age
year
of 7>7i
follow¬
seem
to
it the
it the
J before'
member of H.,
& Co.
N.
and^ forTrigh/govem^e^tg1/ policy
of a dis- E Hart has joined the staff of
have
cost-of-Tivhig
.
What are the elements
~—-----
-i-i ..i
v_
validity such reasoning may + innfli/plv r~!aTiadian life which we Dempsey.Tegeier & /-</-. 01 n liVxucf
tinctively Canadian life which we
Co., 210 West
h
have haa m the »***, ». would seek to preserve «dif PnmVafter Seventh Street. He was previoushad in iue past, it 77
lor ourselves
1
ever
seem to have no application to the
manifest danger of a present
manifest danger of a present situation. In the face of an
further erosion of the value of a intensified inflationary threat of
dollar which on the basis of the indefinite duration, cheap money,
E. Victor Loew
hidex, has already accompanied by further sizeble
7O
OI
its purchasing liH-J. caoco in UIV
B. Victor Loew died Dec. 26 of lost over 40% of life ■ pui LFlCtOlIlS increases All the supply of money,
Pierce,
Building.
*
unduly defla-
foom^the standpokft
of the
well^
will come alter
_
R
» r
things jy wlth Conrad, Bruce & Co.
which together make up jhe
With Marache Sims
strands of a rich and satisfying
The Financial Chronicle^
work
pattern There is the sense of op- LOS ANGELES, Calif.—John H.:
^
.
portunity the . chance 1 P . p).
and for those who
us?
They comprise many
(Special to
choice in a land ^ere
frontiers Dana is; now
,
®ffl^ted6^lthg^!
The Commercial and Financial Chronicle
32
Thursday, December
...
(2560)
The
Indications of Current
following statistical tabulations
latest week
week
Business Activity
or
month ended
Latest
steel
Indicated
Equivalent to—
ingots and castings
Ago
n
71
uec. ji
100.8
100.1
1,930,600
1,944,200
that date,
in
or,
*
81.7
1,575,800
petroleum institute:
and condensate output —daily average
oil
Crude
AMERICAN
1,716,300
5,744,870
'
7-""
Total
GAS
ASSOCIATION
(M
gas
(bbls.)
and distillate fuel oil
Residual fuel oil (bbls.) at—
6,002,000
5,389,000
19,188,000
BANKERS
18,329,000
2,555,000
7,263,000
—Dec. 16
8,567,000
8,611,000
8,783,000
8,056,000
Domestic
105,468,000
108,490,000
25,047,000
28,382,000
22,267,000
76,913,000
80,964,000
87,117,000
82,450.000
Dec. 16
:
109,647,000
23,152,000
Dec- 16
(bbls.) at—•
110,943,000
41,598,000
43,307,000
45,600,000
62,786,000
Dollar
92,760
81,517
$242,687,000
34,972,000
10,013,000
43,998000
8
391000
19,060,000
18,585,000
16
547'oon
2,281,000
of
Nov.
warehouse
1,977,000
credits
foreign
stored
countries"
and
Dec. 16
Dec. 16
cars)
Revenue freight
772,902
766,743
837,065
639,728
680,044
674,931
704,130
583,183
shipped
29,483,000
25,102,000
9,131,000
$383,336,000
$250,686,000
FAILURES—DUN
&
BRADSTREET,
INC.—Month of October:
Wholesale
CONSTRUCTION
ENGINEERING NEWS-
—
Retail
RECORD:
Total
'•
,
construction—,
S.
U.
construction
Private
$692,041,000
—
21
Dec- 21
——Dec. 21
—Dec. 21
—
construction ———
State and municipal—
Public
—7—
———
Federal
:—
$136,510,000
$235,119,000
$155,507,000
112,439,000
77,641,000
142,919,000
80,135,000
579,602,000
58,869,000
92,200,000
75,372,000
70,304,000
52,587,000
79,061,000
53,146.000
509,298,000
6,282,000
13,139,000
22,226,000
(U. S. BUREAU OF MINES):
and lignite (tons)—.
OUTPUT
Bituminous
Construction
Total
Dec. 16
Dec. 16
Dec. 16
11,686,000
11,420,000
11,845,000
9,052,000
853,000
751,000
854,000
152,600
*141,500
149,100
19,100
DEPARTMENT STORE SALES INDEX—FEDERAL
TEM— 1935-39 AVERAGE=100_
.-Dec. 16
RESERVE
650
554
368
584
Manufacturing
Electric
INSTITUTE:
liabilities-
Dec. 23
—
DUN
&
7,032,740
6,985,421
6,507,509
5,993,943
Dec. 21
174
150
145
196
Total
liabilities
gross
iron
(per
DUN
FAIRCHILD
4.131c
4.131c
3.837c
3.835c
Piece
Dec. 19
$52.69
$52.69
$49.69
$45.88
Men's
Dec. 19
$45.13
$45.08
$40.75
$26.92
Domestic
Export
Lead
refinery
refinery
tin
Lead
(St. Louis)
Zinc
(East
St.
24 200c
24.200c
at
24.425c
18.425c
139.000c
136.500c
78.250c
177000c
17.000c
17.000c
12.000c
.Dec. 20
16.800c
16.800c
16.800c
11.800c
.Dec. 20
at
DAILY
MOODY'S BOND PRICES
17.500c
17.500c
17.500c
9.750c
corporate
•
.
.Dec. 26
101.31
101.32
101.54
104.50
—
115.63
115.43
115.63
116.02
-Dec. 26
119.82
119.61
119.82
121.46
Dec. 26
118.80
.
118.60
118.80
119.82
.Dec. 26
114.85
114.85
115.63
109.60
109.24
109.24
107.80
.Dec. 26
Group
Utilities Group
115.04
.Dec. 26
Baa
Public
112.19
111.81
,111.81
110.88
.
.Dec. 26
115.82
115.82
115.80
117,20
-Dec. 26
119.00
119.00
119.00
120.02
.Dec. 26
2.40
2.40
2.39
2.17
.Dec. 26
2.87
2.88
2.87
2.85
.Dec. 26
2.66
2.67
2.66
2.58
.Dec. 26
2.71
2.72
2.71
2.66
Dec. 26
2.90
2.91
2.91
2.87
.Dec. 26
Industrials Group
S.
Government
Bonds
3.21
3.29
.
3.19
3.21
.Dec. 26
3.05
3.07
3.07
3.12
.Dec. 26
2.86
2.86
2.86
2.79
.Dec. 26
"Railroad Group
Public Utilities Group
Industrials Group
NATIONAL
2.70
2.70
2.70
2.65
Orders
INDEX
PAPERBOARD
received
Production
Dec. 26
PAINT
505.2
476.9
347.8
\-
Dec. 16
204,724
243,978
228,399
167,383
Dec. 16
239,164
243,297
237,895
at
DRUG
105
106
103
92
723,350
377,366
Dec. 16
—
REPORTER
PRICE
681,676
721,122
INDEX- -1926-36
AVERAGE=100
Dec. 22
<
146.5
145.1
139.2
124.6
Odd-lot sales by dealers
Number
Number
of
of
EXCHANGE
orders
Dollar value
COMMISSION:
35,209
28,586
Dec.
1,018,326
1,076,459
850,965
_Dec,
—
Cotton
other
$44,167,628
$37,324,115
Blankets
Customers'
short
other
sales
34,892
23,798
31,856
319
311
377
187
31,423
34,581
23,421
31,669
1,062,907
700,913
897,933
945,517
j3ec"
II——II—~~ Dec
value
and
11,716
12,667
14,279
6.987
1,050,240
686,634
890.946
$36,398,654
IIIIIIIII_Dec.
shares—Total sales
of
Short
Dec
sales
Other
$42,311,304
$25,626,727
405,170
199,740
sales
I
350,080
405ll70
199,740
3501080
354,780
351,210
228,910
291,120
Dec'
111111111 Dec!
291,120
Round-lot purchases by dealers—
Number of shares
;
396,690
WHOLESALE
PRICES
NEW
SERIES—U.
DEPT.
OF
-
$30,473,26
Furs
products
III"
171.2
Dec
19
151.2
187.7
186.5
184.9
155.3
All commodities other than faim and foods
products
and
lighting
and
metal
♦Revised
allied
products
171.5
_
barrels' of
231.3
226.0
219.8
Hats
105.4
77.3
143.0
71.9
137.9
135.0
90.4
141.8
141.8
135.1
_
_
_
_
134.7
80.8
143.4
90.0
144.8
__
67.3
74.1
143.0
_
_
neckwear
142.3
157.7
,
and
156.3
76.2
130.7
caps
_
including
and
overalls
children's
_
_
127.2
84.4.
132.2
_
130.2
127.2
_
85.8
131.9
77.8
175.7
and
Infants'
175.4
82.0
wear
Socks
131.6
Underwear
74,7
130.4
Electrical
household
appliances
_
_
—
HOUSEHOLD
VACUUM
SIZE
CLEANERS
(VACUUM
—
of
86.3
132.6
78.8
144.8
89.7
133.4
87.0
331,445
253,516
£14,969,000
£44,158,000
£15,799,000
203.4
STAND¬
CLEANER
ASSN.)—Month
72.4
121.2
265,310
_
_
180.7
146.6
_
72.2
133.8
_
Luggage
151.6
133.2
coverings
Radios
79.2
87.3
122.2
Furniture
122.2
180.9
—
—
149.6
152.1
_
122.4
151.3
_
Shoes
MANU¬
Nov.:
Factory sales (number of units)
NEW
CAPITAL
MIDLAND
ISSUES
BANK,
IN
GREAT
BRITAIN-
LTD.—Month
of
Nbtr^l'1
PERSONAL INCOME IN THE UNITED STATES
(DEPARTMENT OF COMMERCE)—Month
September
personal
and
(in billions):
income
I
228.3
*225.4
total
147.5
*145.5
disbursements
salary
150.3
*148.5
66.1
*65.6
41.8
*41.7
receipts,
employer
producing
Distributive
—t.
industries
industries
industries!
Service
Government
„
——
employee
Other labor
!
—
contributors
for
180.2
180.5
177.5
transfer
OF
AND
U.
S.
252.3
240.6
205.3
19
165.4
*164.5
162.4
145.6
l9
169.3
*169.3
income
and
dividends
166.6
138.3
136.0
134.9
135.4
186.2
185.1
180.4
168.4
*18.4
$5,8*48,750
$275,000,000
257,076,619
256,936,999
12.6
*12.0
DI¬
SECURITIES
November:
sales
—
$11,531,250
U. S. GOVT. STATUTORY DEBT LIMITATION
of Nov.
face
any
30
(000's
amount
one
omitted):
that
be
may
outstanding
time
^ncnrtfOOO
$275,u
Outstanding—
gross
public
debt
Guaranteed
obligations
Treasury
Total
gross
public
not
owned
by
and
256,98
the
23,504
debt
000
,
29,327
21,761
guaranteed
obligations
Deduct—Other outstanding public debt obligations not subject to debt limitation
>
qR2
^
Total
328
nii
$257,100,124
$256,958,761 $257,0
749
,
490
707.084
711,040
L—
$256,393,040
$256,747,720
$256,261,833
18,606,959
18,752,279
130.7
19
3.0
39.2
.17.0
*207.3
$275,000,000
IN
2.2
*46.1
21.4
.
19
44.6
$10,695,000
of
17.4
20.6
3.4
11.4
TRANSACTIONS
39.4
*3.0
211.5
GUARANTEED
purchases
__
income
A.—Month
Net
income
payments
nonagricultural
56.4
18.8
3.4
rented
TREASURY MARKET
155.1
253.1
and
133.8
*22.4
2.8
Personal interest
Total
Total
18.9
23.5
131-6
social
income
Proprietors'
187.9
i9
Dec!
~~^Dec!
foreign crude
70.6
152.8
apparel—
Shirts
160.9
tw*
H
535,000
179.2
DeC'
Dec'
materials
products
figure. ^Includes
184.7
iq
_Dec
I
Building Materials
Chemical and
19
Dec. 19
Meats
Fuel
*173.8
Dec!
Foods
Metals
174.7
r,PP
_
Textile
19
-II-II—II Dec!
Livestock
66.1
143.2
housedresses
Underwear
Total
dgc
Grains
63.7
185.2
82.0
"
155.6
brassieres
Net
LABOR—
commodities
152.5
106.1
_
Hosiery
at
Farm
comfortables
—
RECT
1926=100:
All
147.0
apparel—
Shoes
As
S.
—
Underwear
Floor
147.6
186.9
_
insurance
933,801
Round-lot sales by dealers—
Number
_
_
ancl
Men's
76.8
88.9
.
_
goods—
155.4
114.4
155.2
—
•
«
and
'
31,742
—1_~I_—Dec
—IIII_Dec
sales
Customers'
Dollar
156.3
114.7
_
silks
Corsets
$30,688,357
Dec.
total sales
79.0
wear
79.4
-
_
Women's
25.561
Dec'
Number of shares—Customers'
132.7
_
.
Less
sales
80.7
—
_
children's
wash
Sheets
776,625
$41,167,123
short sales
Customers'
—
_
Commodity
34,021
Odd-lot purchases by dealers (customers'
sales)—
Number of orders—Customers' total sales
Customers'
78.8
133.0
(COPYRIGHTED
_
and
Total
sales
l
140.8
134.0
PRICE
Woolens
Total
Dec.
:
—
78.8
133.2
141.4
'
.
•
furnishings
Wage
1
total
142.6
134.6
RETAIL
100
=
Domestics—
(customers' purchases)—
shares—Customers'
276.3
■
(1935-1939=
—
goods—
of
STOCK TRANSACTIONS FOR THE ODD-LOT ACCOUNT OF ODDLOT
DEALERS
AND
SPECIALISTS
ON
THE
N. Y.
STOCK
EXCHANGE—SECURITIES
*321.0
1,248,00
204,204
Dec. 16
(tons)
AND
$278,000
133.7
INC.
—
and
ARD
(tons)
Unfilled orders
$312,000
$325,000
«.
FACTURERS
Percentage of activity
OIL,
511.6
ASSOCIATION:
(tons)
$23,894,000
OF COMMODITIES-
apparel
China
COMMODITY
$15,254,000
YORK-
Shoes
;
Average corporate
MOODY'S
1,989,00
306.4
NEW
OF
1):
apparel
Clothing
MOODY'S BOND YIELD DAILY AVERAGES:
U.
1935-39
Aprons
.Dec. 26
Aaa
Railroad
1,303,000
1,450,000
omitted)
November
Hosiery
-
AVERAGES:
S. Government Bonds.
Average
18.200c
24.425c
154.000c
I
U.
24.200c
24.425c
Dec. 20
Dec. 20
Louis)
of
DEC.
Rayon
Dec. 20
at-
at
York)
(New
Dec. 20
at
at
York)
(New
2,410,000
OUTSTANDING—FED¬
BANK
(000's
30
goods
Piece
Electrolytic copper—
Straits
$11,897,00
2,927,00
5,833,00
$16,649,000
PAPER
—
Women's
M. J. QUOTATIONS):
&
4,775,000
.
PUBLICATION
OF
Home
(E.
1,871,000
2,009,000
—
BRADSTREET,
&
Infant
PRICES
$5,355,000
liabilities
RESERVE
Dec. 19
ton).
Scrap steel (per gross ton)
METAL
58
648- %
4,683,000
—
Nov,
of
Composite index
(per lb.)—
Pig
90
43
143.5
service
ERAL
AS
Finished steel
:
1,598,000
liabilities
Commercial
INDEX
AGE COMPOSITE PRICES:
IRON
64
BRAD-
INC.
STREET
.
109
364
$5,949,000
_
100)—Month
INDUSTRIAL)
1
liabilities
CONSUMER PURCHASES
AND
(COMMERCIAL
FAILURES
.
75
707
liabilities
COMMERCIAL
SYS¬
(in OOo kwh.)
output
•
■
-
As
EDISON ELECTRIC
91
^
181
69
314
618,000
(tons)
anthracite
Beehive coke (tons)
number
number
Wholesale
147
63
339
Commercial service numbers
Construction
coal
Pennsylvania
150
number
number
Retail
COAL
onn
$383,377,000
-
Manufacturing number
CIVIL ENGINEERING
$172,619
between
—
BUSINESS
83,381
30:
:
goods
162,719
BANK
shipments
on
2.640,278
2,394.178
OUT¬
RESERVE
RAILROADS:
freight loaded (number of ca-s)
received from connections (number of
Revenue
126,949
:
exchange
Based
2,757,951
2,549,485
141,673
—
ACCEPTANCES
YORK—As
NEW
OF
Total
ASSOCIATION OF AMERICAN
2,905,553
therms)
therms)
(M
Exports
Domestic
Dec. 16
Ago
10,225,000
(M
Imports
"ec. 16
Year
88,356,000
sales
DOLLAR
2,319,000
Mnes—
Month
3,139,986
(M therms)
gas
STANDING—FEDERAL
8,231,000
at--—----—
Gas, oil
5,869,000
19,702,000
(bbls.) at—
unfinished gasoline
and
Kerosene
115,925,000
2,171,000
Dec. 16
oil output (bbls.)-————
;T—--—-Stocks at refineries, at bulk terminals, in transu and in pipe
Finished
4,979.300
8,297,000
lfi
fuel
Residual
5,882,400
Previous
Month
$233,972,000
sales
sales
gas
2,267,000
(bbls.)———-—-—--7--—distillate fuel oil output (bbls.)
and
Gas, oil,
*5,825,220
For
—
therms)
gas
Natural
8,864,000
output
Kerosene
lfi
Dec. 16
(bbls.)
stills —daily average
Gasoline output (tbls.).
to
runs
of that date:
Octobeif:
of
20,498,000
gallons each)
Crude
are as
Latest
93.1
Mixed
(bbls. of 42
either for the
are
Month
Ago
Manufactured
american
of quotations,
cases
Year
Month
Week
Dec. 31
tons)
(net
Steel
Previous
Week
STEEL INSTITUTE:
operations (percent of capacity)
IRON AND
AMERICAN
on
1950
production and other figures for the
cover
Dates shown in first column
month available.
or
28
%
19
221.8
221.0
218.1
190.6
19
138.5
138.3
135.8
115.0
Grand
Balance
able
total
face
under
outstanding
amount
above
runs.
•Revised figure.
of
obligations
authority
L
issu-
ir
* >
-
738,161
yolume 172
Number 4972
.
.
The Commercial and Financial
.
Chronicle
(2561) ' 33
Conservative Lending Rules
Continued from page 13
A word of caution
loan purposes
is
exceeded.
if
come
it
Modification
that
appears
controls will provide
and
rials
present
mate¬
more
for
men
may
the
national
defense than are required.
conditions
these
there seems little likelihood of
an
early lifting or important modifi¬
cation of the curbs. On the other
hand, if our situation abroad be¬
critical,
more
comes
is
effort
fense
or
if the de¬
stepped
up
more
financing
conservative
has
ing
not
affected
been
yet
the
event,
any
rules
are
changed, and we've got to adjust
our
lending to the new rules.
The
restraints under real estate credit
controls of Regulation X, as
the
as
consumer
well
credit controls of
Regulation W,
are
character and
as
deflationary in
such
are
a
wel¬
rapidly, it is possible that the re¬ come relief from the prolonged
strictions on new building may
period of inflationary influences
become more severe.
which
has
let
been
foisted
upon
see
to it that
on
valuation
is
,
its,
est
increase
relative
the
relatively
population.
in
increase
in
occurred
of
areas
greatest
This is
shown for the decade of the 1940s
by areas, as follows:
Increase in
Area
Housing Units
West
44.7%
South
25.9%
North Central
18.9%
East
North
17.3%
During this period, while popu¬
increased 14.3%, the num¬
lation
ber
of
increased
Hence the number of per¬
23.6%.
sons
units
dwelling
dwelling unit decreased
per
from 3.53 in 1940
It
is
that
also
The
units
urban
their
own
own
homes.
850,000 residential housing
annually, which the new
designed to per¬
figure which has been
regulations
mit,
1950.
encouraging to know
than half of all
more
families
to 3.26 in
Is
a
are
new
less
construction
given
to
no
shelter
loans
paid
for
short market. With
a
limitations
new
tional
prices
excessive
or
materials in
conven¬
on
buildings
on
started
We
very
mortgages
units.
We
servative
us
have
on
should
presently built
adhere to
con¬
appraisals in valuing
ex¬
pleased
.
to
seems
superfluous to reiter¬
ing policies.
All loans should be
Loans should be diver¬
amortized.
sified, with the majority in resi¬
dential
properties.
Large loans
and
loans
on
special
purpose
.
under
the
regulations.
In
New
MolageDi/sion6 of The "l///
ican
Bankers
ducted
-
and
-
answer
FederaTCReseiTe ° Housing0' and®
Finance Agencv
werethereto^
tions.
will
FHA and
answer
aues-
A transcript of this meeting
be
soon
members.
available
ABA
to
Similar meetings
have
representatives
others in many cities.
•
■
„
i
Conclusion
In
we
conclusion, let
as
lead
me
say
that
bankers should continue to
the " way
conservative
in
spending must be curtailed, and a
"
~viTed^S ZlTeTJ
conI the need of extensive government
Association
question
a
mortgage lending. We should keep
abreast of the
changing conditions
We should
support the controls invoked by
avoided.
Loans
should be geo¬
the government to assist in the
graphically diversified within the defense program—not just the letarea
or
areas
where
the bank
ter
of
the
regulations but the
makes mortgage loans.
spirit as well.
substituted.
Without this, if we
For good
or evil,
real estate
take into consideration the broader
Items of Current Mortgage
credit controls are with us. They
Interest
aspects of our economy, no con¬
offer
a
challenge to mortgage
trols can be successful.
Without
There are a number of items not
lenders to prove that a construethis, our efforts for an adequate
pertaining to the regulations tive
job can be done in the field
national defense will be impaired.
which are of current interest to
of home financing without the
It is in the interests of good
many bankers interested in the
props of excessively liberal Fedbanking that every support be mortgage field that may be ap¬
given to that which is good for propriately discussed here.
our
national economy. All busi¬
Continued from page 10
Here is one that may become
ness must exercise self-control in
important. A belief has been ex¬
these difficult times and not place
pressed by some mortgage experts
selfish temporary interests ahead
that the continued fixed rate of
of the general welfare.
People interest which prevails on both
respect courage, and we as bank¬ veterans' and FHA loans does not
ers and leaders in our communi¬
permit a flexibility that would
ties must stand four-square for
always assure a smooth function¬
what -we
believe
to
be right
ing of the financing of home con¬ fore implies rejection of an ordi¬
against any compromise with th'e struction. Upon the elimination of
nary insurance method
or must
safety of private enterprise or 100%
guaranteed veterans' second concede the use of rather flexible
with the security of our people.
mortgage loans — under Section price ceilings.
Also, in this period, it is just 505(a)—several large life insur¬
Compensation for war damage
as
important as at other times ance companies entered the mar¬ is not a direct aid in prosecuting
that banks be prepared to do their ket for veterans' first mortgage
a
war,
since it is basically a
share of financing the amount of loans (under Section 501) in large means
of
doing equity among
construction desired in our econ¬ volume. This has been of material individuals.
Indirectly, this may
generally
should
buildings
imply wiu not &
morale of the
the
i
in
'
ate, but we, as bankers, should
always keep in mind other firmly
established sound mortgage lend¬
con-
/in //1//1 p//Sta,llCn keing
Controls must be supplemented
(L ,
% / // ?
Reserve b sound government fiscal politi/m helping lenders to aUth0r/ cies. All nonessential government
ties
operate
of the Federal Reserve Board and
It
whichBcontrols
get helpful' to
satisfactory reports concern- people.
been conducted by
isting structures.
a
But it is clear that
basic causes of inflation, and that
the regimentation of our economy
/.
been
eral aid.
trols alone will not cope with the
£
n
Aug. 3, 1950, financing in¬
VA
stitutions may be inclined to reach
for
of
from project
Federal Cooperation
Home
before
ing to ,the .1950 census, there are needs of the military against all
now over 46 million dwelling units
inflationary forces. We must urge
in the United States compared that
government inflationary pro¬
to 37.3 million in 1940.
This in¬ grams for civilian purposes which
crease of over 8.7 million units2
have been originated in recent
is the greatest numerical decadeyears be discontinued and that a
to-decade increase in the country's
policy of government economy be
history. Understandably, the great¬
foster
premiums, unusual builders' prof¬
.
>
controls
new
conservative appraisals. We should
liberal spending Adminis¬
tration in Washington. Any regu¬
In the light of the new building lations are
objectionable at best,
regulations, it is of interest to con¬ but at this time our economy
sider briefly the housing needs of needs a
deflationary program in
the nation and .how, they have the nondefense sector. We must
been and are being met. Accord- take a firm stand outside the
by
Housing Requirements
the
no
materially.
In
under Regulation X
price.
Bankers
appraisals, and recently conserv¬
appraisals have run below
cost or sales prices. We must not
come
development.
sales
or
ative
institutions claim that their lend¬
Until
determined,
are
whereas
cost
they have the benefit
savings which
usually have relied on their own
Defense Program
ing
.
unless
ap¬
Value of real estate for
propriate.
Mortgage Lending in
might be
in this type of loaning.
be
*£££*.JwtateSE
resour=ces
they
have °r may
acquire' and to release those re"
sources whenever P°ssible to in"
the mllltary needs 01 the nationIf .the emergency, which makes
credit 'controls necessary, is ot
short duration, concern over the
effects of public regimentation if*
not of serious importance. But it
long required, their effects could
have damaging influences. Incenfives are lowered, and black markets come into being. The worthy
objectives, which were the goals,
become endangered of fulfilment,
In the savings and mortgage
field, the course of bankers is
clear. We must meet the challenge
of defeating inflationary forces
which would undermine our na~
tional economy at a time when our
full strength as a nation is required to the utmost. We must
cooperate in supplying the needs
of the people with mortgage ac¬
commodation within the framework of established national policies.
\
Government War
Damage Insurance
conceivable
taxation to
that the burden of.
provide compensation
property owners would reduce
general morale more than lack of!
complete compensation would do,
It is therefore appropriate to consider limitations on the protection
offered.
If limitations are
to
more
than meeting
adopted where a governmental
requirements of new omy. In this connection, we must support to the established 4% rate. be
compensation is the basic policy it
a significant factor in the war
family
formations
and
normal give earnest attention to the re¬ If these companies should desert
would be desirable to provide ex¬
effort, since it affects the morale
cess coverage on a regular insur¬
housing obsolescence. When this lationship of savings funds to the market, a period of difficulty of the
people. The morale of the
fact is considered in the light of mortgage loans. On June 30, there in financing veterans' loans may
ance basis.
Furthermore, certain
operators of productive property
our
present relatively favorable were in the banks of the country occur.
It seems, therefore, most is essential to the industrial effort classes of non-business property
housing situation, and the require¬ $57.2 billion of savings deposits; desirable that the Veterans' Ad¬ upon which modern wars have may properly be excluded from a
ments for defense,5 the proposed
$19.7 billion of these savings funds, ministration and FHA should be hinged. This raises a question as public reimbursement program.
goal
of
850,000
housing units or 32%, were invested in mort¬ prepared to meet a lack of demand to the advisability of putting a Such property as museums, public
seems
quite adequate.
gages.
Many banks actively en¬ for such loans at the presently compensation program upon a parks and theatres owned by non¬
estimated
as
the ordinary
gage
Despite the controls, with the
high volume of mortgage loans
already in their portfolios, there
is reason jjo believe
that most
bank mortgage lenders will be
able
maintain
to
a
satisfactory
in 1951.
controls
volume of mortgage loans
As a matter of fact, the
favor the
more
conservative lend¬
always advocated
larger down payments. The con¬
trols also favor the conventional
have
who
ers
mortgage
both
since
and
FHA
conventional loan restrictions
for the
call
percentage of down
same
payments, but it is easier to ar¬
range a conventional loan.
Un¬
questionably,
the
of VA
volume
loans will be reduced because of
the required
though
have
a
down payments, al¬
controls should not
the
material influence on
tial down
lend¬
substan¬
who have insisted on
ers
payments.
Spot checks indicate that
lend¬
the
most
ers
who
liberal
have
effects
through
available
terms
FHA and VA
the
offered
are
of
the
feeling acutely
new
savings and mort¬
seek to approach
a mortgage portfolio that is 50%
of time deposits. Other banks feel
that 30%, or even less, is an ap¬
propriate ratio for a bank of
mixed deposits.
Since some banks
have reached either their statu¬
tory or self-imposed limits, we
must not overlook the decline in
savings deposits which has taken
place in recent months.
Many
banks, therefore, need to redouble
their promotion of savings in or¬
der to have sufficient funds to
take care of legitimate mortgage
requirements.
Bankers at this
time should espepially emphasize
savings, as a sound savings pro¬
gram on a broad scale is one of
the needs of the nation in combat¬
prescribed low returns by permit¬
ting flexible interest rates.
Again, although in the past the
ABA has taken a dim view of
gaged in the
Lending
Bank Mortgage
controls,
business
"open-end mortgages," we have
been revising our attitude some¬
what." this type of mortgage, as
■
,
Urban and rural non-farm
residential
Units
a
trailer, railroad
boat, tent,
hotels, missions, military
homes for the aged.
car,
not
etc., but
facilities,
for/ ifnphoyenibnts
to
the extent
plus the new ad¬
exdeed the original
amount of the mortgage contract.
This device is being used increas¬
that the balance
vance
ingly
does not
by
our
the
vided
competitors.
readvances
are
Pro¬
made
conservatively and
within the
spirit and letter of both Regula¬
tions
X
and
W,
we
believe the
open-end mortgage has merit.
It seems wise also to watch the
development of new materials and
ing inflation.
those
who
who
choose
insure
basis, since profit
not to insure,
for too little,
cluded
war
may be ex¬
remote from the
equity to any
institutions
as
too
effort and from
claim
Property of!
sentimental or associative value
those
only
should of course be ex¬
result
cluded.
In matters of this kind
morale and effectiveness consid¬
the experience of the industry
erably diminished by war loss of
their property.
Another consid¬ may be drawn upon to advan¬
tage.
eration is the amount of possible
those who make
rors
irretrievable er¬ individual
applications and
who fail to insure as a
of naivete may have their
their
in
on
as
to justify a
the public purse.
This paper has addressed itselD
which could be enough
the private insurance primarily to the narrow problem
of financial
protection of non¬
industry if there should be a mis¬
property from war
calculation of rates by the indus¬ productive
damage risks.
Its conclusion is
try.
On the other side of the
that the method of the War Dam¬
picture is the desire of the indus¬
age Corporation involved a sub¬
try to avoid giving government
stantial
waste of effort and
agencies so large a role in cover¬
damage,
to
ing
wreck
casualty
risks
as
to
lend
who would like
the insurance in¬
comfort to those
to
nationalize
inequity to property owners.
conclusion is
This?
not clear for pro¬
ductive property.
The compensa¬
In view of the peculiar
character of the risk involved and tion for war-imposed damage in
hesitate to promote
the possibility of a cooperative general involves many more ques¬
the
mortgage
business at this
effort between the government' tions
of policy which must be
time on a basis of national policy
and the industry, this fear should
might consider that while the
considered before a conflict if the
not be permitted to dictate the
government wishes to hold resi¬
best results are to follow.
Prom¬
heating. Some of the newer sys¬
dential
construction to 850,000
type of program adopted. In any
tems may afford so much greater
inent among them is the question
units, it appears at this time not
comfort
and economy that old event careful consideration must
of
compensation
for
persona?,
to want to curb the building in¬
systems may become virtually ob¬ be given to the problem of the
dustry below that figure. Hence it
injury.
The fact that our pro¬
Those banks
which
may
accelerate obsolescence as
soon as the housing shortage is a
thing of the past. For instance, in
the last few years there has been
technological development in
new
that have adequate
funds but that
policy,
rules are
(the term usually used in describ¬
es building starts) increased in the changed, to make mortgage loans
decade $5.9 million.
Dwelling units in¬
to those who really need more
clude
detached house, a tenement, flat,
adequate housing or in those areas
&partment, living quarters for a watch¬
where there is housing shortage;
man or superintendent, a tourist cabin,
2
you/ ma'y'"knpw, permits readvShcesUOf0 funds" to the borrower
insurance
voluntary
those
building
techniques
solete.
would seem to be a proper
dustry.
type of
,
protection to be given
to
cedure was defective in one area
productive property.
ventures in the build¬ ''
of financial protection in World
The same qualifications do not
ing field.
There is a-possibility
War II emphasizes the need for a
property,
that builders may develop projects affect ; non-productive
comprehensive study of the prob¬
■for families of higher incomevtt. but there are some qualifications.
lem.
is argued that many of the highIf damage is extremely high it is
so long as the loans are' Eligible
salaried can't afford new homes
under the credit controls/''
unless
or
until
We
the
must also
adjust our
ing to new
'
'
/
v
The Commercial and Financial Chronicle.:
34
Thursday, December 28, 1950
.
(2562)
Continued
from
America National Trust & Savings
A.
William
and
Vice-President,
14
page
Association
of
San
John
.
to
Francisco
A.
has
McDougald
been
pay a
News About Banks and Bankers
3rd
Naval
District
U.
the
of
declared
$
$
Jan.
both
2,
record
of
stockholders
to
St.
&
*
Walter J.
Beadle
ft
and
tional Bank
been
to the board
of
of Philadelphia, Pa.,
A. Potts, President.
and
place
of
to
semiannual
go to London as the Chief of the
Economic
Cooperation
record Dec. 22.
R.
G. Rincliffe joined the Phila¬
delphia Electric in 1923; in 1945
000.
Deposits
$36,974,000,
year was elected
Executive Vice-President and di¬
*
rector.
*
Sidney B. Congdon, President of
has
member
been
of
the
reappointed
Federal
Council from the
the
year
1950, it
was
for
Bank,
announced
ital,
member of the Federal
Mr. Klinker is
past President of
surplus
of
the
as
and
The
being a director of a number of
companies, he is a past President
Pentland,
the
bank
City
Bankers.
Chapter, Amer¬
are:
-
■r
* <*
been
bank
connected with
staff,
has
Anglo Bank
predecessor institutions since
1902; in 1915 he
if
and
was; made
In
1916 he
and in 1919
has
Of¬
Treasurer
other
Exposition.
the
of
Trust
Presidents
old
Anglo-
The
retiring Vicebe
assumed
by
Company.
three
will
officers
first
the
on
of
<:
*
increased
Cal.,
A
*
completed
its
capital,
*
Mr.
bank's
was
Santa
Lamm
in
staff
President
to
and
in
Dec.
on
Clara
He
is
the
1910,
Assistant
1923.
of
10.
Uni¬
joined
December,
elected
department
Vicesuper¬
on
its organization in
1946.
*
ing
•*
*
Purchase-of
The
Whittier
Na¬
Dec.-16, according to Frank L.
King,
President
of
California
Bank.
As part of the sale and
purchase
Trust
Jr., The Citizens and South-
Morgan,
To be called
of
California
and
Vice-;
H.
Manager;
Chris
Cashier,
Assistant
con¬
C.
C.
and
Hoyt Mitchell, Assistant Trust Of¬
ficer.
J. Frazer
The Whittier
of
Resources
National Trust and
total
it
and
has
been
management
The Dallas Bond Club is
in
'1
1
Savings Bank
approximately
$16
under
since
its
million
the
same
founding
1901.
■'
*
.
Intention
tors
and
on
*
the
+
what we must do f w
long
and
service
each
present
crisis progresses
if
suppose
plea
for
the
know
that.
peace?
Little
.
Russians
They
if
do
pinch
tions
a
believe
we
Of
brave
large.
War
World
as
III
there will be a measure
on,
and
t
will
always
so
be
accompanying
people in
But relatively few
wars.
the water level.;
No,
as
inflation. There always is
'
f
to us, and their
vast, it would be like
pebbles into a lake to
Producti0n
our
tenth
won't
than a tenth
worse
course
drags
unknown
raise
wanted task,
defense
for
any
us
was a
we
people, a
tough people hardened to deprivaare
work, that
war
his
on
billion
$50
atomic
an
economy
r
$300 billion goal and
reach the
military opinion to
contrary notwithstanding.
one
.
oniy with greater tenacity, effort
war, some
Does
central authority,
a
regain them. Busi-
in direct
or
carries
tSSS&STiand
major
the
squarely
A
■
.
the
If
it
P
ness as usu, m a ^ar ec0"°my
means f°r those not in military
more
recognize the is-
meet
_
e
liberties. Once we.sur-
ser.ve our
fall-
are
But that is
in the face of danger. And that is
single bomb
will follow
a
Many
do not
we
and
sue
tod£y
country are worse off
this
only win such a war |n 1950 than they were 10 years
by convincing the Russians that.
b f
w
ld War n The only
they cannot defeat us, Our couns
we can
try
can only be defeated by defeating ourselves. We will defeat
ourselves
free
to
when
enterprise
outdo
abandon
we
heritage
and
the^ Russians
m
try
f
*
part of direc¬
management of Bank of
show her
enterprise system
der the
under
yes,
-Of
are
as
war
can
itself:
function
all out
the
,
the
battle
free
our
>.
of
every
So
as it
-w,
as
well
raay,
,.r ■
v
»
rememb*
us
A.
t£
industry
at work- in
money
through
and' commerce
in
"the'
stock
market,-
,
wavs
as
One
if
let
■
:>nveshmmts in tn.e sioac
much".01; otherwise, let him do-just;
Modem
World. War III
.
intensifies,
World War III
keeping one's
un^
.
may'.;and in the spirit of a famous
ask,*-where will be the battle
front
uia<
,
doubled his talents. .;:
greaterf stress* investments
front.
his money
^
^ wor^ wisely and profitably ft s
ih -fact
improved 'his lot ,uarid
^ach to do his part. If that m__ ip
^deferisefV
fought in the factories
on
well
at
strain of
defeated,
that
whoever kept
^
our-
toMo!with;outf£■■«'
nwketTWenty To cpmunce
must
we
j
regi-
the more
them
to keep
the
in
talents
their
"hid*
gr0und"
economy, a mode of life; for which;
we are; so HI suited.
;
Russia that we; cannot be
wh° are worsfe off are thos
ones
who
our
mentation of our people and
not
miral
in
sav
"Damn
the
torpedoes;
ahead""
city and town and farm
America? We must produce
.
'
,
,
Pleasant f°I
War 1S
expanding pace, we must the thick of it, or those behind the
transport and exchange goods as iines But there are some things
freely as in peace time no matter'
an
what the
rebuild
^vorse
handicaps. If and when
factories are'destroyed, we must
them
or
build
new
.
ones,
Money must be found to do this
in
war
as
in
peace.
Money must
be found to pay for an
war
DALLAS BOND CLUB
reminding members to reserve May
30, 1951 for the Annual Memorial Day Outing (location and details
to be announced
later) and Oct. 12, 1951, for the Annual Columbus
Day Outing (location and details also to be announced
later).
Office
Vice-President;
Dolde,
Durrett, J. H.
Company, Atlanta; Lloyd B. Hatcher, Trust
Company
of Georgia,
Atlanta; J. Hollis Austin, J. W. Tindall & Company,
Atlanta; .Wayne Martin, Milhous, Martin &
Company, Atlanta.
Whittier
President
Hilsman &
>V
Angeles,
Los
sists of Milton A. MacLean,
Yearley, IV, The Robinson-Humphrey
the Executive Committee:
of
Bank, the bank's official staff
Bank, Atlanta.
on
strong
sufficiently
for it, by running for our render them to
shelters — figuratively we wm never
across
the
Cre*ar'y~^reasui er—Morris, Norris and
Hirshberg, Inc.,
At J 31113.
To serve
Company
bank's trust business.
Georgia Security Dealers Asso¬
Club, Atlanta, the following officers
elected for the calendar
year 1951:
National
California
agreement,
wholly owned affiliate of Califor¬
nia Bank, acquired the Whittier
At the annual
meeting of the
at the Capital
City
ern
their
What has all this
Whittier, Cal., by California Bank
of Los Angeles, was completed on
S. Budd,
white
to
is dropped.
';
tional Trust and Savings Bank of
Vice-President—James
bleed
usual."
as
pioneer forefathers did
our
bomb
stock
Morris
Some don't like the expression:
"Business
,
visor of the bank's credit depart¬
ment and was assigned to that
Company, Atlanta.
as
what
throwing
40th year
his
of
graduate
versity,
and
Alexander
literature
pattern. That is all she has
asked her satellites to do, pltis
taking orders-from Moscow m the
they have already done,
as
country is
$
;
own
drompped°ron Russia'" t whl^brmg °£ that
*
service with the bank
President
Red
the
borg,
a
GEORGIA SECURITY DEALERS
ASSOCIATION
minded, Russia will-have
war, for we will have
replaced our economy with her
.
,
so
rearrangement of their economies,
the
year.
Cal.,
were
.
the Nazi's strategy was
outlined in -"Mem. Kampf." It is
to strangle their weaker neigh-
was appointed Cashier
Vice-President, Cashier
duties of the
Robert
Jr.,
C.
Canadian
.
won
same
.
bravely.
International
A. Lamm, Vice-President of
California Bank of Los Angeles,
ciation
^
.
get
as
Pacific
cap¬
Ben
Jack
doing the
lives!
our
suit if
A.
Budd, Jr.
their descendants
on
shirk from
we
Manager of the branch bank oper¬
ated by Anglo at the Panama-
ap¬
NSTA
S.
.....
.
I
Shame
appointed an speaking—before
was
Cashier
of new stock.
James
of other
number
a
.
well.
de grace. And some of us
the
of
$1,000,000 by the sales of $150,000
IV
and
give them the cou-p
effective Dec. 14, from $850,000 to
Yearley,
*<
Co., St. Lawrence Corp.,
Hollinger Consolidated Gold Mines
Stock Market and World War III
weakened
Jose,
Alex.
McDougald
7
page
until
The First National Bank of San
<1
from
member
Chairman of the
Tobin,
President;
Richard
S.
Wright, First VicePresident; John A. Elbon, Second
board;
Continued
adversaries
California
of
John A.
director
a
Massey-
companies..
ter, in point of service the oldest
$80,000
bank
Do¬
Stores
Harris
issue of
our
ican Institute of Banking. Mr. Sut¬
and
ficers
a
the San Francisco
*
designated
profits.
Vice-President.
a
posit Insurance Corporation.
Besides
of the Association of Reserve
an
been approved by the Federal De¬
Advisory
Council since Jan. 1, 1949.
$50,000
undivided
noted in
were
Ltd.,
of
effective
plans to increase the
voluminous
1906; he was "^lbAssistant Cashier ,ih
1917, and in 1924
16%
year.
provisions
being
stock dividend
a
became
26, page 1604.
plainly,
Assistant
000
Oct.
with
in
entered
pointed
are
proved charter, is $400,000—$320,-
Dec. 15 by George C.
Brainard,
capital
The
he
surplus of the bank, accord¬
the
Dec. 12.
present Anglo Bank, whose employ
and
ing to
$1,000,000,
minion
messerp^ei*,
London, Paris & AipdSp&n v What is the enemy's over-all
Ltd., a predecessor br the strategy? One can read it in the
and
Advisory
(Cleve¬
Chairman of the board of directors
of the Federal Reserve Bank of
Cleveland. Mr. Congdon has been
a
for the
South Broward County, Fla., in 25
years is announced.
The capital
Fourth
$4,000,000, by
di¬
a
of
executive
an
City Bankers and of Bankers for
lywood, Hollywood, Fla., first new
banking institution established in
as
land) Federal Reserve District
on
*
of
Banking,
of
his banking career as a
The opening of the Bank of Hol¬
The National City Bank of Cleve¬
land,
increase
an
deposits of last
over
bank
the
tee .and
Commerce
to
San
Foreign Trade. Mr. Klinker began
cents
With this cash dis¬
of
the
Bankers Association, and a mem¬
ber of the Association of Reserve
bursement the total dividends paid
February of this
*
75
of
and
council member of the American
during 1950 will amount to $150,-
made Vice-President in charge
^electrical
operations and in
was
*
of
Exec¬
Chapter, American In¬
stitute
($75,000) per share was declared,
payable Dec. 31 to stockholders of
Adminis¬
tration's Mission to Great Britain.
of
dividend
Association
ers
Assistant
an
of
the
utive Commit¬
of
Seattle, Wash., from $3,000,000
of
was
Francisco
Martinsville, W. Va., prior to locat¬
ing in Palm Beach in 1947.
Mr.
Reynolds, Jr., also stated that the
ecutive Committee of E. L. duPont
the
formerly
was
Bank
Trust
President of the California Bank¬
Cashier of the Old National Bank,
President and member- of the Ex¬
who resigned
has announced
Crown
Co., Chairman
of
placed also in
charge of the banks and bankers'
department, embracing correspon¬
dent bank relations.
He is a past
sociated with the bank since 1949
bank's board of the late Sydney E.
Hutchinson.
Mr.
Beadle, Vice-
he
National
capital
it tee
President of
of
the
in
is
Vice-
rector
For
1939
In
Bank
their month¬
ly meeting held Dec. 14, elected
Charles W. Snyder as Assistant
Cashier. Mr. Snyder has been as¬
Philadelphia Electric
Company, fills the vacancy on the
takes
been
the
the
increase
The
Mc-/
Executive
omm
and
,
.
Mr.
to.
*.
*
partment and of the exchange and
collection operations of the bank.
that the directors, at
rector of the
Batt
First National
The
in Palm Beach, Fla.,
by Frederic
Mr. Rincliffe,
Executive Vice-President and di¬
deNemours,
of
plied during the past, years.
Bank since 1917, start¬
capacity of Assistant
many years he has
in charge of the foreign de¬
in
Cashier.
Wiley R. Reynolds, Jr., Presi¬
dent
announced
William L.
ing
$
V
C
t
reelected
been
the
the Anglo
Louis Chamber of Commerce.
*
G. Rincliffe
of R.
directors of The Philadelphia Na¬
has
NationaLBank in
has
Louis,
the
banking field in San Francisco in
1907 and has been associated with
Presi¬
McDonnell,
year
Mr. Curran entered
President.
Chairman of the board of the St.
1950.
Election
A.
William
dent of the First
of the close of business
as
Dec. 20,
announced
payable Feb. 28, 1951 to
stockholders of record Feb. 20.
Dec. 27, and also a quarterly divi¬
dend of 50 cents a share, payable
under the
it has been
by Allard A. Calkins,
the
head
office,! Toron*:
semi-annually, will be
by savings deposits in all
individual pass-book accounts in
the bank starting Jan. 1, compared
with the rate of 11/2% which ap¬
active service at
from
of
Chairman of
earned
Francisco,
San
of
retire
end
bank's retirement plan,
50 cents
dend of 50 cents
Bank
will
payable Dec. 20 to
stockholders of record Dec. 13 and
special year-end divi¬
a share, payable
a
National
the
dividend
tra
Trust Company, Boston, on Dec. 18
declared
a
share, 60 cents of which is an ex¬
The directors of the State Street
Dougald
pounded
Presidents of the Anglo California
Dec. 12
dividend of $1.10 per
merce!,
a
that a rate of 2% per annum, com¬
Curran, Victor Klinker
Sutter, veteran Vice-
S.
Louis
and
tional Bank in St. Louis on
Navy department.
&
John
directors of the First Na¬
The
S.
San
elected
substantially increased rate
savings interest next-year was
indicated on • Dec.1 22 by L.. M.
Giarinini, President.
Under the
new
schedule it is contemplated
Francisco'.bankers,
-Three
director of The Canadian
Bank of Com¬
of
Setchel, Cashier.
expanding
economy. Our securities
kets
are
the
heart
and
mar-
arteries
among
which are,
still Worse, among wmcp a
*oss
one s freedom to th
,
the
,•
with
one's own life; and above all, the
f
,
self-respect through
loss ot one s sen respec
defeatism and failure to d
•
speak, to do as one pleases
,
part.
through which this life blood must«
flow*
Opens Office
JX0VA0?BALTIMORE,
prise
system;
That
the
it
can't
government
everything?
Once
be
done?
must
enough
of
do.' business from
us
Md.-Evanna B.
Ridgely is engaging in a
wood Road.
securities
offices at 4027 Dcep-
Number 4972
Volume 172
.
.
The Commercial and Financial Chronicle
.
(2563)
•
Securities Now in Registration
Circle Wire
Aeolian-Skinner Organ Co., Inc., Boston, Mass.
,
(letter of notification) 34,099 shares of 4% cumu¬
lative preferred stock to be offered to stockholders only.
Price—At par ($1 per share). Underwriter—None. Pro¬
ceeds—For working capital. Office—215 Sidney St., Bos¬
Now 27
Dec. 11
& Cable Corp.
200,000 shares of common stock
filed
ton, Mass.
City Stores Co., Philadelphia, Pa.
shares of convertible preferred stock
(par $100)., Price—To be supplied by amendment. Un¬
derwriters—Lehman
Brothers, New York and A. G.
Co., Chicago. Proceeds—From sale of stock,
together with funds to be received from a long-term
Becker
&
Reid & Co.,
Expected next month.
or
Alabama Life & Casualty Insurance Co.
10,000 shares of capital
Underwriter—None. Pro¬
Office — 718-720 Empire
Price—$20 per share.
ceeds—For working capital.
($1
par
Corp.,
Hollywood,
filed 80,000 shares of common stock.
1
Nov.
Mines
Gold
share).
per
Underwriter—None.
Calif.
for
Price—At
stock
Cleveland, O. Proceeds—To retire notes and
purchase and remodeling of factory building. Busi¬
ness—Manufacturer of industrial electric controls.
Proceeds—For
Colonial
Acceptance Corp.
$1,500,000 junior subordinated sinking fund
debentures due Dec. 1, 1958, and 30,000 shares of com¬
mon stock (par $1), to be offered in units of $500 of de¬
bentures and 10 shares of stock. Price—$500 per unit.
further development of mine and for working capital.
.
(1/16)
Dec. 20 filed 50,000 shares of convertible preferred
Bldg,. Birmingham, Ala.
Alhambra
third week of January.
Clark Controller Co.
(letter of notification)
stock.
•
Nov. 20 filed
Ampal-American Palestine Trading Corp., N. Y.
Dec. 8 filed $5,000,000 of 15-year 4% sinking fund bonds,
series A, due 1966. Underwriter—None.
Proceeds—To
develop and expand agricultural, industrial and commer¬
cial enterprises in Israel.
r.
Underwriters—Straus & Blosser; and Sills, Fairman &
Harris; both of Chicago, 111. Proceeds—To reduce bank
loans.
•
Argo Oil Corp., Denver, Colo.
18
Dec.
stock
(letter
5,750 shares of capital
the market (approximately
Price—At
&
Co., New York.
•
filed
Dec., 18
50,000
$1).
Advisers
writer—Associated
Under¬
Corp., New
Nov. 15
stock
Proceeds—For investment.
York.
Atlantic
.
Management
Nov.
Dil Corp., Tulsa,
and gas
Corp.j Tulsa, Okla.
properties.
account
Nov.
and 25,000 shares
Price—$1 per share.
.
Underwriter—Mitchell-Hoffman
Md.
&
Co., Inc.,
Baltimore,
Proceeds—To promote
sale of Foster pitching arms
with automatic feeds for use in baseball batting ranges.
Office—2439 N. Charles St., Baltimore 18, Md.
• '
Axelson
Dec.
13
stock
Manufacturing Co., Los Angeles, Calif.
(letter of notification)
(par
12,000 shares of common
$3) to be offered to employees. Price—$8
Proceeds—To partially reimburse company
per
share.
for
shares
•f
Belvedere Country
■'
acquired on the open market. Office—6160
South Boyle Avenue, Los Angeles 58, Calif.
CDub, Inc., Hot Springs, Ark.
Dec. 15 (letter of notification) $160,000 of first mortgage
4%% serial convertible bonds, to be sold in units of $500
and $1,000 each.
Underwriter—W. R. Stephens Invest¬
ment Co., Inc., Little Rock, Ark.
Proceeds—To retire
first mortgage debt and for corporate purposes.
Birmingham
;
Oct. 17
stock
(letter of
to
be
Fire Insurance Co.
notification) 10,000 shares of common
(Ala.)
offered
to
present
common
stockholders.
Price—At par ($10 per
share). Underwriter—None. Pro¬
business. Office—221 No.
St., Birmingham, Ala.
ceeds—To
21st
•
enlarge
insurance
Boston Herald-Traveler Corp., Boston, Mass.
Dec. 14 (letter of notification) 1,300 shares of common
;
(no par). Price—At market (approximately $14
share).
Underwriter — Paine, Webber, Jackson &
stock
per
Curtis, Boston, Mass. Proceeds—To selling stockholder.
"*
Capital Bakers, Inc., Harrisburg, Pa.
Dec, 18 (letter of notification) $300,000 of general deben¬
ture 4% bonds, of which $30,000 are to be issued each
year to
employees. Price—In
Proceeds—To
writer—None/
Office—58 North 13th St.,
•
units of $50 each. Under¬
debt.
retire outstanding
Harrisburg, Pa.
(1/5)
131,025 shares of capital
stockholders of Rochester
Button Co. of record Dec. 18 on a share-for-share basis.
Price—At par (1 per share). Underwriter—None. Pro¬
ceeds—To pay off five-year note to Rochester Button Co.
and for working capital and general corporate purposes.
Office—300 State Street, Rochester, N. Y.
Capital Plastics, Inc.
Dec. 26
(letter of notification)
stock to be offered to common
Central Illinois Public Service Corp.
Nov. 13 filed 267,600 shares of common stock (par
to be offered initially to common stockholders at
of
one
plied
$10)
rate
held. Price—To be sup¬
Underwriters—The First Boston
Blyth & Co., Inc. Proceeds—For construction
offering—Tentatively expected mid-January.
share for each 10 shares
by
Corp. and
program,
amendment.
'
Chicago Bridge & Iron Co*, Chicago, III.
12 (letter of notification) 8,746 shares of common
stock (par $20). Price—$34.30 per share. Underwriter—
None. Proceeds—For working capital. Office—1305 West
Dec.
105th St., Chicago 43, 111.
Proceeds
—
—
For
working
capital.
27, N. Y.
Cooperative Association,
Business—Farmers' coop¬
erative wholesale purchasing association of the federated type.
Price—At 100 issuable in multiples of 100.
Statement effective Dec. 7.
Continental
Engineering
Co.,
Carrizozo,
N. M.
(letter of notification) 490,000 shares of common
stock. Price—At par (50 cents per share). Underwriter
—None. Proceeds—For working capital. Address—P. O.
56, Carrizozo, N. M.
Cosmopolitan Hotel Co. of Dallas, Tex.
Dec. 13 filed $1,500,000 of 2% debentures due 1965. Price
—At face value. Underwriter—None. Proceeds—To pur¬
chase debentures of Statler Dallas Co., Inc., which com¬
Will construct Dallas hotel. Business—A non-profit
corporation under sponsorship of Dallas Chamber of
Commerce to secure construction of hotel.
pany
Culver
23
Oct.
Corp.,
filed
of which
Chicago, III.
stock (par $5),
to stockholders
To stockholders at
132,182 shares of common
4,818 shares are to be offered
127,364 shares to public. Price
and
—
public at $6.25 per share.
Proceeds—For investments.
$5 per share and to
writer—None.
Telephone Co., Corydon,
Under¬
Ind.
(letter of notification) 1,700 shares of common
stock to be offered to company's telephone subscribers.
27
Price—At par ($25 per
ceeds—For cash
•
Foods Co.,
Fairmont
Dec.
share). Underwriter—None. Pro¬
equity to secure loan allocation by Rural
Administration.
Electrification
Omaha, Neb.
(letter of notification) 12,000 shares of common
14
(no par) to be offered to employees. Price—$25
Proceeds—For general corporate purposes.
stock
share.
Omaha, Neb.
Fedders-Quigan Corp.
June 21 filed 103,402 shares of series A cumulative con¬
vertible preferred
stock (par $50) to be offered to com¬
on basis of one preferred
share for
held.
Price—To be filed by amendment
mon
stockholders
each
12 shares
Underwriter—Smith, Barney
Proceeds—To pay promissory note, to complete purchase of a new plant at El Monte, Calif.,
and for additional working capital.
Statement may be
along with dividend rate.
&
Co., New York.
withdrawn.
It
was
reported
on
Oct.
5
that
company
completed purchase of El Monte plant.
has
Felters Co.,
Boston, Mass.
1,750 shares of common
stock (par $10). Price — At market (estimated at not
more than $10 per share).
Underwriter — H. C. Wainwright & Co., Boston, Mass. Proceeds—To two selling
stockholders. Office—210 South St., Boston, Mass.
•
14
(letter of notification)
(1/15-20)
shares of $4 cumulative preferred
stock (par $15). Price—To be filed by amendment. Un¬
derwriter—Eastman, Dillon & Co. Proceeds—To redeem
Food Fair Stores, Inc.
22
Dec.
filed
80,000
37,807 outstanding shares of $2.50 cumulative
stock
Nov. 29
Box
Eureka
Nov.
Nov.
Kansas
14
preferred
(par $15) at $53 per share.
Providence, R. I.
12,000 shares of common
stock and 10,000 shares of preferred stock.
Price—For
common, $2 per share and for preferred, $10 per share.
Underwriter—None.
Proceeds—For operating stables,
General Racing Corp.,
Dec. 6
(letter of notification)
buying, selling, trading, etc. in racing horses.
Building, Providence, R. I.
Office—
818 Industrial Trust
Greenwich Gas Co., Greenwich, Conn.
Sept. 1
(letter of notification) 8,000 shares of $1.50 pre¬
(no par) and 9,777 shares of common stock
ferred stock
(no par), to be offered first to stockholders. Price—Of
preferred, $25 per share, and common $10 per share.
Underwriter—F. L. Putnam & Co., Boston, Mass. Pro¬
ceeds—To retire bank loan and for working capital.
Financing
Postpoifed—On Dec. 1
company
financing plan is being prepared and
stated a new
will be submitted
to stockholders.
Insurance Co., Philadelphia
notification) 64,000 shares of capital
stock (par $5).
Price—$4.50 per share. Underwriter—
Jenks, Kirkland & Co., Philadelphia, Pa. Proceeds—To
increase capital and surplus in order to offer additional
lines of insurance, including automobile casualty and
Dansker Realty & Securities Corp., N. Y. City
liability coverage. Financing may be abandoned.
Nov. 20 filed 300,000 shares of 6% cumulative convertible
Hammond Lumber Co., San Francisco, Calif.
preferred stock (par $5) and 300,000 shares of class B •
common stock
(par 35 cents) to be offered in units of
Nov. 17 (letter of notification) 7,000 shares of capital
one preferred and one class B share "on a best-efforts4
stock (par $20). Price—$42.50 per share. Underwriter—
basis." An additional 25,000 shares of each class of stock
None.
Proceeds — For working capital.
Office — 417
are to be issued to underwriters as additional compensa¬
Montgomery St., San Francisco, Calif.
p
tion for resale to public. There will be reserved for con¬
Hearn Department Stores, Inc., N. Y. City
version of the preferred stock 1,300,000 shares of class B
Nov. 17 filed 40,000 shares of 5% cumulative convertible
common stock. Price—$6 per unit. Underwriter—Dansker
preferred stock being offered for subscription by comBros. & Co., Inc., New York. Proceeds — For working
Continued on
Daily Reporter, Inc., Tuscon, Ariz.
Nov. 22 (letter of notification) 1,500 shares of preferred
stock.
Price—At parol$100 per share). Underwriter—
None. Proceeds—For equipment and operating expenses.
Hamilton
Oct.
2
Fire
(letter of
page
Offering—Expected after the first of the year.
Las Vegas, Nev.
Dec. 8 (letter of notification) 300,000 shares of common
capital stock. Price—At par ($1 per share). Underwrit¬
er—None. Proceeds—To purchase machinery and equip¬
capital.
Desert Products, Inc.,
ment.
Douglas & Lomason Co.,
6 (letter of notification)
Dec.
*
Price
To be added to general funds.
of the company
underwriter.
$10).
City, Mo.
filed $1,000,000 of 5-year 3%% certificates of
indebtedness and $2,000,000 of 10-year 4Y2% certificates
of indebtedness to be offered to members of the Associa¬
tion and "to others."
Underwriter—None. Proceeds—
Proceeds—To purchase oil
Automatic Baseball Equipment Corp.
(letter of notification) 300,000 shares of common
stock (par 25 cents), of which 275,000 shares are to be
the
None.
Consumers
Dec. 7
for the account of the
(par
Office—2340 Eighth Ave., New York
; .«•
sold" for
—
non-cumulative
$12.50 per share.
and 4,000 shares of 7%
stock
Underwriter
Okla.
(letter of notification) 48,046 shares of capital
Price—At par ($5 per share). Underwriter—Con¬
tinental
(letter of notification) 20,000 shares of common
(no par)
preferred
13
stock.
$49,000,000 of sinking fund debentures due
Community Finance Corp., N. Y. City
Price—First at $20.20 per share, then at market.
•
Dec. 19 filed $4,500,000 of first mortgage
Office—1202 Jones Street,
000,000 four-year construction program. Bids—Expected
to be received up to 11:30 a.m. on Jan. 9.
Associated Advisers
Fund, Inc., New York
shares of capital'stock (par
(1/9)
Underwriters—To be determined by com¬
petitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; The First Boston Corp.; Glore, Forgan & Co.;
Morgan Stanley & Co. Proceeds—Toward cost of $370,-
share).
per
Co.
Edison
April 1, 2001.
Underwriter—Carl H. Pforzheimer
Proceeds—To A. E.. Johnson, Presi¬
dent, the selling stockholder. Office—1100 First National
Bank Building, Denver, Colo.
$17.37%
13 filed
Dec.
,
per
Commonwealth
of notification)
$5).
(par
15.
El Paso Electric Co., El Paso, Tex.
bonds due Dec.
1, 1980. Underwriters—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Stone & Webster Securities Corp.; Merrill Lynch, Pierce,
Fenner & Beane; Salomon Bros. & Hutzler; Kidder, Peabody & Co.; White, Weld & Co., and Shields & Co. (joint¬
ly); Equitable Securities Corp.
Proceeds—To redeem
$1,000,000 of 3%% bonds due 1978, to repay bank loans
and
to reimburse treasury for construction
expenses.
$1 unit of notes). Price—$2.12y2 per $1
Underwriter—Greene & Ladd, Dayton, O. v-loan .of $15,000,000, to be used to refund outstanding obProceeds—For working capital. Office—Municipal Air¬ v ligations and to provide funds for additional working
capital and other corporate purposes.
Expected second
port, Middletown, O.
unit of notes.
11
share. Un¬
State¬
(par $30). Price—To be filed by amendment. Under¬
writers—Goldman, Sachs & Co., New York, and Fulton,
•v:
share for each
Dec.
per
Duggan's Distillers Products Corp.
Oct. 27 (letter of notification) 340,000 shares of com¬
mon stock (par 10c).
Price—75 cents per share. Under¬
writer—Olds & Co., Jersey City, N. J. Proceeds—To pay
balance of purchase price for building ($20,000) and for
working capital.
Dec. 22 filed 60,000
promissory notes and 50,000 shares of common stock
(latter to be reserved for conversion of notes on basis of 1
Price—$57.50
Proceeds—For working captial.
ment—Effective Dec.
•
Mfg. Corp., Middletown, Ohio
Oet. 2 (letter of notification) $50,000 of 4% convertible
Aeronca
Jan. 3, 1951.
on
derwriter—None.
Price—$15 per share. Underwriter—Van
Corp., New York. Proceeds—To four selling stockholders.
Offering—Expected after Jan. 1, 1951.
ADDITIONS
SINCE PREVIOUS ISSUE
to be made
(par $5).
Alstyne Noel
INDICATES
35
stock
None.
Detroit, Mich.
6,000 shares of common
(par $2). Price—$14.25 per share. Underwriter—
Proceeds—To Thomas S. Hough, the selling stock¬
holder.
Office—5836 Lincoln, Detroit 8,
Mich.
Co. (1/3/51)
Nov 10 filed 200,000 shares of common stock (par $15),
of which a maximum of 125,000 shares are offered to
common stockholders of record Dec. 21, 1950 at rate of L
share for each 50 shares held, the remaining 75,000 shares
Dow Chemical
to be offered
for subscription by
employees up to 10% of
onNa payroll deduction plan. Both
offerings will terminate ton Jan. 29, 1951 and are expected
their
annual w.a£es
New York.
Boston
Philadelphia
Pittsburgh
Chicago
Cleveland
San Francisco
Private IVires to all
offices
36
'
Chronicle
Commercial and Financial
The
30
...
(2564)
from
stockholders
Knon
each
on
shares
seven
the basis of one preferred share
of
held
stock
common
NEW ISSUE CALENDAR
for
Dec.
on
18,
Closed-end investment company.
rights to expire Jan.
10.
Price — At par
($25 per share). Underwriter—None. Proceeds — From
this offering, plus a $2,000,000 term bank loan, to be used
to repay bank loans, for improvements to properties and
for working capital.
Statement—Effective Dec. 15.
1950;
Holeproof Hosiery Co.,
(letter of notification)
1951
January 2,
Rossville
Ramie Products
Preferred
Dyestuff Corp
Dow
Chemical Co
New
St., Milwaukee, Wis.
Wilcox-Gay Corp
Noon
Ctfs.
burgh 22, Pa.
•.
(letter of notification) 5,500,000 shares of com¬
to be offered present stockholders on a pro
Dec. 18
mon
Hooper Telephone Co., Hooper, Neb.
Aug. 18 (letter of notification) $30,000 of 33A% bonds
Price—In
1970.
excess
of
102%.
Wachob Bender Corp., Omaha, Neb.
January
Infra Roast,
Inc., Boston, Mass.
(letter of notification) 207,000 shares of common
stock to be initially offered to
stockholders; unsubscribed
shares to public. Price—At par ($1 per share). Under¬
writer—None. Proceeds—To finance the purchase of 100
coffee-roasting
machines.
Office—84
January
Investors
Preferred
1951
January 16,
.Preferred
Clark Controller Co
Office—2243
Phoenix, Ariz.
January
Mutual, Inc., Minneapolis, Minn.
Emerson Electric
Dec. 22 filed 4,000,000 shares of
capital stock
Price—At asset value, plus
(par $1).
Underwriter
loading charge.
1951
17,
Preferred
Mfg. Co
1951
January 23,
—Investors Diversified Services, Inc.,
Minneapolis, Minn.
Business—Mutual investment company.
Bonds
Southern Natural Gas Co
Oct. 6 by amendment filed 120,000 shares of class A
vertible common stock (par $1).
be
......Common
Nevada-Tungsten Corp.___
con¬
Price—$5 per share.
Underwriter—Sills, Fairman & Harris, Inc., Chicago, 111.
Proceeds—To pay off promissory notes and for working
capital.
*
1951
February 6,
Carolina Power & Light Co., noon (EST)
Bonds
Price
None.
—
At par
($100
Proceeds—To
share).
per
Underwriter
.Wisconsin.
•
—
C.
Proceeds—For
Lemon & Co., Wash¬
capital and to
working
redeem unexchanged old
preferred
i
stock.
Lytton's, Henry C. Lytton & Co.
Nov.
17
filed
Price—$8
per
83,000 shares of common stock (par $1).
share.
Underwriter—Blunt Ellis & Sim¬
mons, Chicago, 111.
estate of Henry C.
Dec. 18.
n
Proceeds—To the executors
Lj'tton.
Issue placed
Statement
of
withdrawn
one
New York 13, N.
Co., Evanston, III.
Nov. 29 (letter of notification) 300,000 shares of common
stock (no par) to be sold to a group of 20 individuals.
Price—$1 per share. Underwriter—None. Proceeds—For
operating capital, and to complete purchase of tools, dies
and inventory from Kurtis-Kraft, Inc. Office—1000 Grey
Ave., Evanston, 111.
National Shirt Shops of
Dec.
stock.
Cromer- Brokerage
Price—At
the
(10c
per
share).
ital.
Underwriter—
•
'
1
Price
None.
Mercantile Acceptance Corp. of California
Dec. 4 (letter of notification)
5,000 shares of first pre¬
ferred stock, 5% series.
Price—At par ($20 per share).
'
Paul,
Underwriter—Guardian
cisco.
Securities
Proceeds—For corporate
Corp.
purposes.
of
San
N.
basis.
Co.
(no
Portland, Ore.
common
sha^);. Underwriter
pejr
—
corporate' purposesM Office—206
Underwriters—Kalman
&
Co., St.
111.; and
Business—Manufacturer of gas and electfic
water and, space
heaters.;
.'•
»
5
>
'
•
-*
Box 2656,' Phoenix,
'
«
Electronics & Television Corp.
(letter of notification) 40.000 shares of common
15
Dec.
;
1
Skiatron
100). Price—$3 per share.
Underwriterd'Avigdor, New York.
Proceeds—To complete
tests, to purchase equipment and
stock
(par
"Subscriber-Vision"
for
general overhead.
•
Socony-Vacuum Oil Co., Inc.
(letter of notification) not exceeding 5,000 shares
of capital stock (par $15) to be sold through the New
York Stock Exchange.
Price—$24.50 per share. Under¬
writer— None.
Proceeds — To holders of outstanding
Dec. 22
series A scrip
South
certificates issued on Dec. 10, 1948.
State
Uranium Mines
Noy, 30 filed 560,000 shares of
per
share).
Ltd.
(Canada)
Price—At
capital stock.
Underwriter-Optionee—Robert Irwin
explora¬
Proceeds—For commissions,
tion and development expenses,
South West Box Co.,
and working
capital.
Keokuk, Iowa
(letter of notification) $200,000 10-year
ordinated instalment debenture bonds.
6% sub*
Price—To be
sold
Nov. 20
Minn.;
Pacific
Asbestos-Cement
Products
Corp.,
Los
of $100 plus accrued interest. Underwriter
Proceeds—For corrugated machine,
U ••
in multiples
—None.
Telephone Co., Tallahassee, Fla*
(letter of notification) 10,000 shares of common
(par $10). Price—$11.25 per share. Underwriter—
Wagner, Reid & Ebinger, Louisville, Ky. Proceeds—For
construction and improvement.
!
r
Southeastern
stock
to be offered to
Southern Discount Co., Atlanta, Ga.
Sept. 18 (letter of notification) $191,500 of 5% subordin¬
ated debentures, series E. Price—At par. Underwriter—
For $100,000 of debentures, Allen & Co., Lakeland, Fla«
$100
per
limited group of individuals.
a
Underwriter—None.
share.
Price—
Proceeds—For
Address—C/o John R. Skidmore, Sec¬
retary, 3265 Rowena Avenue, Los Angeles, 27, Calif.
Privat-Ear Corp., New York City
12 (letter of notification) 112,500 shares of class A
stock
(par $1) and 112,500 shares of common stock
working
Ga.
Proceeds—To reduce bank loans and for
tal. Office—220 Healey Bldg., Atlanta,
capi¬
Securities
Price—$2.05 per unit.
Corp., New York. Pro¬
ceeds—To purchase patents and
Fire & Casualty Co., Knoxville, Tenn<
(letter of notification) 5,000 shares of capital
stock (no par), to be offered to company's employee
and
agents.
Price—$9.50 per share.
Underwriter—
equipment and for work¬
None.
(par 10)
to be offered in units of
and
share of
one
common
Underwriter—Aetna
Mission Appliance Corp.,
Hawthorne, Calif.
July 24 filed 50,000 shares of 6% cumulative convertible
(Mountains.
Address—P. O.
Prescott, Ariz.
Ariz.
($1 per share).
Underwriteroperation of Silver Knight Mine
par
Angeles, Calif.
(letter of notification) 850 shares of class A (vot¬
ing) stock and 400 shares of class B (non-voting) stock
share
retire bank loans and install machinery and
equipment
in a proposed new plant to be located east of the
Rocky
at
Nov. 27
share).
per
Dec. 19
&
preferred stock. Price—At par ($20 per share).-Underwriter—Lester & Co., Los Angeles, Calif. Proceeds-^To
Price—At
Proceeds—For
None.
•
Office—333
Underwriter—None. Pro¬
working capital. Office—212V2 N. W. Fifth
St., Oklahoma City, Okla.
per
mCping lease and 50,000 snares are to be publicly
pair ($1
Dec.
Price—$100
for
Glore, Forgan & Co., Chicago,
W.
R. Olson Co., Fergus Falls,
Minn.
Proceeds—To
Thomas C. and Cyrus G. Wright, executors of the will
of Grace Clark Wright (deceased).
ceeds—For
-
stock
5
working caiptal.
share.
t
($1
Ltd., Phoenix,
11 (letter of notification) 100,000 shares of com¬
stock, of which 50,000 shares are to be exchanged
Martin of Toronto.
Midwestern Insurance Co., Oklahoma
City, Okla.
Dec. 6 (letter of notification) 1,250 shares of
$5 cumula¬
tive preferred stock (par
$1), redeemable at $100 per
1
par
Proceeds—For
Proceeds—To pay notes and for additional
working
capital. Indefinitely postponed.
'
6%
of
and to retire sales credits.
Pittsburgh 13, Pa.
Knight Development Co.,
$18.75
Fran¬
Underwriter—Clark, Dodge
$40,000
common
(par $100)
Power Co., Fergus Falls, Minn.
(letter of notification) ,4,990 shares of common
stock (par $5). Price—At Approximately market (about
Middlesex Water Co.,
Newark, N. J.
9 (letter of
notification) 5,200 shares of common
stock offered to common stockholders at
$50 per share
one-for-five
At
Silver
Leslie
Otter Tail
Feb.
a
—
•
offered.
Virginia Street, Reno, N-•
Dec.
Montgomery Street, San Francisco, Calif.
on
of
Office—313 Pacific Building,
Inc., Kellogg, Ida.
Oct. 27 (letter of notification)
400,000 shares of capital
stock. Price—37 V2 cents per share. Underwriter—Standard Securities Corp.,
Spokane, Wash. Proceeds—To purchase controlling interest in Pine Creek Lead-Zinc
Mining Co., for development costs and working capital.
•
Proceeds—To four
Nu-Form
stock.
Mascot Mines,
r.
shares
Y.
Office—4724 Baum Boulevard,
mon
Batteries, Inc., Reno, Nev. ,
Dec. 18 (letter of notification) ,75,000 shares of
Bldg., Salt Lake City.
♦
649
and
preferred stock
Dec.
Portland, Ore.
of notification)
(letter
more
Shipley Wholesale Drug Co.
Dec. 15 (letter of notification) 2,900 shares of 4% cumu¬
lative preferred stock.
Price—At par ($100 per share).
Underwriter—None.
Proceeds—To retire $250,000 8%
commop
10-year
par).
Price—Debentures at principal amount and stock at $75
per share.
Underwriter—None. Proceeds—To purchase
plant for processing of perlite ore and for working cap¬
Proceeds—To
Office—328 Atlas
properties.
ore
11
debentures
Co., Salt Lake City.
develop uranium '.xide
Northwest Perlite Corp.,
Dec.
on
debt.
of
Underwriter—
Nevada-Tungsten Corp., Jersey City, N.J. (2/1)
Dec. 7 (letter of notification) 2,000,000 shares of com¬
mon
stock (par one cent).
Price—15 cents per share.
Underwriter—Tellier & Co., New York. Proceeds—For
working capital. Office—15 Exchange Place, Jersey City
2, N. J.
•
nor
Arizona
8,000 shares of
Price—$12.50 per share.
Deetjen & Co., New York.
selling stockholders.
privately.
par
(letter of notification)
(par $1).
share
Delaware, Inc.
Emanuel
Magnolia Lead & Oil Co., Salt Lake City, Utah.
6 (letter of
notification) 300,000 shares of capital
-
18
stock
.Dec.
*
selling stockholders.
Muntz Car
^redemption premiums, in cash. The remain¬
ing 33,050 shares are to be'publicly offered. Price—$25
^Underwriter—Johnston,
guaranties at the rate of not less than
than a fractional share for each $1
Underwriter—None.
Office—395 Broadway,
ment of debts or
Proceeds—To two
D. C.
idends and
D.
of
Underwrters—G. H. Walker &
Co., New York, and Blunt Ellis & Simons, Chicago, 111.
shares for each five preferred shares held. Of said
30,000 shares, 46,950 shares are to be offered in ex¬
change for outstanding 7% prior preferred stock
(par
$50) and 6% participating preferred stock (par
$25) on
the following basis:
(1) For each 7% prior preferred
share two new preferred
shares; and (2) For each 6%
participating preferred share one share of new pre£erred stock—plus in each case accrued and
unpaid div¬
ington,
Drop Forging Co., Springfield, Mass.
of notification) not exceeding 10,000
common
stock (par $1).
Price—At market
(letter
(about $10 per share).
mon
per share,
15
shares
Dec. 12 filed 80,000 shares of
$1.50 cumulative preferred
stock (no par—with stated value of
$22.50 per share),
with warrants attached
entitling the holder to purchase
common stock at
$12 per share in the ratio of two com¬
'
Moore
Dec.
lease
Lincoln Service Corp.,
Washington,
*
1
Segal Lock & Hardware Co., Inc.
Dec. 22 (letter of notification) not more than 100,000
shares of common stock (par $1), to be issued in pay^
•
refining facilities and for
Office—921 Tower Building, Superior,
.working capital.
ployees' Stock Purchase Plan for 1951." The company
anticipates a maximum of 5,000 memberships in the plan
under which any eligible employee may subscribe for '
an amount up to but not exceeding 10%
of his weekly
earnings.
Lake Superior
Refining Co., Superior, Wis.
13 (letter of
notification) 2,100 shares of common
Dec.
stock.
Chester, Pa.
23,529 shares of common stock (no par) to
offered to employees of the company under its "Em¬
Scott Paper Co.,
Dec. 5 filed
1951
February 1,
Kaye-Malbert Corp.
ft
1951
15,
Inc
Corp.
(letter of notification) 1,000
Dec. 14
Equip. Trust Ctfs.
1
January
Food Fair Stores,
Insulite Corp., Phoenix, Ariz.
Dec. 19 (letter of
notification) 113,840 shares of capital
ctock (par $1). Price — $1.25
per share.
Underwriter —
Nonb. Proceeds—For corporate
ft
(1/2)
shares of 6% cumu¬
lative preferred stock. Price—At par ($100 per share).
Underwriter—None. Proceeds—To pay debt and for cap¬
ital improvements and working capital.. Office—Arthur
Kill Road, Staten Island 13, N. Y. Sanitary Products Corp., Taneytown, Md.
Dec. 18 filed 110,000 shares of common stock (par $1),
of which 50,000 shares are to be initially offered to
stockholders on basis of three shares for each 10 shares
held.
Price—At $6 per share.
Underwriters—Ward and
Co.; Investing Securities, Inc., and James C. Kennedy,
Jr., of New York. Proceeds—For construction and work¬
ing capital. Business—Manufacture of hygienic products.
11, 1951
Texas & Pacific Ry
State
ft
purposes.
Office—Resort Field, Pinehurst, N. C.
ital deficit.
Equip. Trust Ctfs.
Rossville Dyestuff
St., Boston, Mass.
North 16th Street,
(10 cents per share). Underwriter—None.
cancellation of notes, to purchase air¬
craft and related equipment and to reduce working cap¬
Price—At par
1951
19,
Erie RR
Nov. 3
automatic
Management, Inc., principal
right to purchase 4,628,096 shares.
Proceeds—For
temporary loans.
-
basis, with Fiduciary
stockholder having the
a.m...Debentures
.Equip. Trust Ctfs.
Missouri Pacific RR
Proceeds—To retire
stock
rata
1951
January 9,
Commonwealth Edison Co., 11:30
Underwriter—
-
Inc., Pinehurst, N. C.
Resort Airlines,
•
Equip. Trust Ctfs.
..Common
(EST)
Proceeds—
purchase of additional machinery and equipment and
working capital.
Office—507 Liberty Avenue, Pitts¬
For
York Central RR.
20,000 shares of
Sharpe, Pittsburgh, Pa.
&
Talbott
Smith,
Common
common
stock (par $5). Price—$14 per share. Underwriter—None.
Proceeds—For working capital. Office—404 West Fowler
Corp.
Sept. 21 (letter of notification) 25,000 shares of common
stock
(par $1).
Price—$3 per share. Underwriter-
1951
January 3,
Chicago, Indianapolis & Louisville Ry.
Noon (CST)
-Equip. Trust
Wis.
Milwaukee,
Dec. 7
due
•
stabilized. Proceeds—To redeem $1,000,000 of outstanding collateral trust 3%% bonds, 12%
series, and for additional capital investment. Business—
transactions may be
35
page
which subscriptions will be solicited and
under
ments
Continued
Thursday, December 28, 1950
capitai..;Office—2016
'60, NV Y.
ing
•
•
share of class A
one
stock.
Bronxdale
Ave.,
"'E^l^te'd after the first of the
New
York
year;^
Railway & Light Securities Co., Boston, Mass.
Dec. 22 filed 252,552 shares of common sttfctoiCpar
$10)
-ft&jbe .offered
to:
common
stockholders-
on
a»
sbarenfor-
Share- basiSO .!Price—To be filed by iamendment:, Under; 1 writer-^Com'pany
expects-to
entef
into
dealer:agreeA\w.nc,4l-n
-'*:•!
Southern
Dec.
11
Proceeds—To
Lyons View Pike,
expand
operations.
Office—427/
Knoxville,Tepn.^^,
.
;
Southern Insurance, Inc., Atlanta/ Ga.
Nov. 2 (letter of notification) 30,000 shares of
cornm°
($10 per share), „UnderwriterNone.< Proceeds—To purchase stock in. Southern Fire.
stock.
Marine
Price—At
Insurance
Ponce De Leon
par
Co.
and
to
reduce> debt..
Ave., N. E., Atlanta, Ga;
0,
Office
*-y.\
"
Number 4972
172
Volume
.
.
.
Southern Natural Gas Co.
American
(1/23)
$17,500,000 of first mortgage pipeline bonds
due Dec. 1, 1970.
Underwriter — To be determined by
competitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; Blyth & Co., Inc. and Kidder, Peabody & Co.
(jointly); The First Boston Corp.; Equitable Securities
Corp.; Kuhn, Loeb & Co.
Proceeds—To repay bank
loans and for expansion program.
Bids—Expected to
18 filed
Dec.
opened on Jan. 23.
be
Dec,
be
to
18 filed 155,546 shares of common stock (par $7.50)
offered for subscription by common stockholders
share for each 10 shares held, with
oversubscription privilege. Price — To be filed by
amendment. Underwrtier—None. Proceeds — To repay
bank loans and for expansion program. Offering—Ex¬
the basis of one
on
an
pected latter part of January.
Spokane Warehouse & Storage Co.
(letter of notification) $270,000 of first mortgage
6% bonds due Dec. 31, 1960, and 270,000 shares of com¬
mon stock (par 10 cents), the bonds to be offered in units
Dec. 4
stock to
of stock
for each $1 of bonds purchased.
Price — At principal
amount for the bonds. Underwriter—Richard W. Bowler,
Spokane, Wash. Proceeds—To purchase building. Office
$100 each, or in multiples thereof, with the
be issued as a bonus at the rate of one share
of
Bldg., Spokane, Wash.
—214 Paulsen
Nov. 22 it
of Pennsylvania
Dec. 8 (letter of notification) 2,950 shares of 5% pre¬
ferred stock.
Price—At par ($100 per share). Under¬
writer—None. Proceeds—For additional operating capi¬
tal. Office—Smedley Street, North East, Pa. Business—
Processes and cans frozen fruits and fruit juices.
Sunshine Packing Corp.
Superior Refinery Owners, Inc., Superior, Wis.
Dec. 13 (letter of notification) 2,800 shares of common
stock.
Price—At par $100 per share).
Underwriter —
None. Proceeds—To purchase, dismantle, move and re-
announced stockholders will vote Dec.
Lighting & Power Co.
reported company plans to issue and self
$15,000,000 of new first mortgage bonds. Underwriters
—To be determined by competitive bidding.
Probable
Dec.
18
tive
this
19 it
was
issue, it is proposed to place privately with a group
companies 16,500 shares of series A pre¬
ferred, the proceeds to be used to redeem all of the pres¬
ently outstanding 16,336 shares of 5% cumulative pre¬
bidders: Halsey, Stuart & Co. Inc.; Dillon, Read & CoInc.; Kidder, Peabody & Co.; Equitable Securities Corp.;
Union Securities Corp.; Harriman Ripley & Co. Inc.;
ferred
gram.
of
insurance
Carolina
Power &
Light Co.
stockholders
stock,
common
shares
The
(there
par
tional
foij
196,580
of
shares
stock
common
$25
share
per
on a
bonds, to be
White,
Co., Inc.; W. C. Langley & Co., Shields & Co. and
(jointly); Lehman Brothers, Goldman Sachs
Co. and First Boston Corp. (jointly); Union Securities
Weld & Co.
&
to
increase
the
ham, Parsons & Co. and Drexel & Co. (jointly).
Probable bidders for common stock: Otis & Co.; Blyth & Co.,
authorized
underwriters:
Traditional
F.
Securities
Union
Inc.;
Shields & Co. and
&
&
W.
Corp.;
C.
•
Chesapeake & Ohio Ry.
4 it was reported company contemplates issuance
Power &
Iowa
19 it
Dec.
Co/,
Offering—February.
in
Light Co.
said company expects to issue
was
securities
Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler.
Bids—Expected in January.
$7,500,000 equipment trust certificates.
&
Proceeds—For construction program.
Co.
Tentatively expected in early part of
Dec.
Langley
White, Weld & Co. (jointly); Lehman
Goldman, Sachs & Co. (jointly); Wertheim
Brothers and
S.
Co.; White, Weld & Co.; Hemphill, Noyes,
Graham, Parsons & Co., and H. M. Byllesby & Co., Inc.
of
and
one-for-six basis). Underwriters
determined by competitive bidding*.
Probable bidders: Halsey, Stuart & Co. Inc.; Blyth «%
than
—For
present plans to issue any addi¬
no
1981
due
(latter to be offered to common stockholders at not less
.
voted
stock.
common
bonds
$5, from 500,000 shares to 1,000,000
management has
February.
authority to issue and sell $6,000,000 of first mortgage
presently 396,000 shares outstanding).
are
or
Indianapolis Power & Light Co.
Dec. 11 company applied to Indiana P. S. Commission
Corp.; Equitable Securities Corp.; Hemphill, Noyes, Gra¬
Carpenter Steel Co.
30
Offering—Expected in January
•
(2/6)
Dec. 22 it was reported company plans issuance of $15,000,000 new first mortgage bonds due 1981. Underwrit¬
ers—To be determined by competitive bidding. Probable
bidders: Halsey, Stuart & Co. Inc.; W. C. Langley & Co.
and First Boston Corp.
(jointly); Kidder, Peabody &
Co. and Merrill Lynch, Pierce, Fenner & Beane (jointly);
Lehman Brothers;
Equitable Securities Corp.; Smith,
Barney & Co.
Proceeds — For construction program.
Registration—Expected on Jan. 4. Bids—Expected to be
received up to noon (EST) on Feb. 6.
Oct.
Proceeds—For construction pro¬
Smith, Barney & Co.
stock.
Moseley
.
37
Houston
Bosch Corp.
was
creating a new issue of 40,000 shares of 5% cumula¬
preferred stock (par $100), to be issued in series. Of
on
•
Natural Gas Co.
Southern
(2565)
The Commercial and Financial Chronicle
1951
to
finance
its
additional
construction program
expected to cost between $6,500,000 to $7,500/of financing will depend on market condi-
which is
Form
000.
at the
tions
A
time.
•
at Cut Bank,
Oil Co. Office—
Superior a refinery now located
in
erect
Mont., formerly owned by the Carter
921 Tower Building, Superior, Wis.
Texas
Illinois Natural
will
Gas Pipeline Co.
300,000 shares of common
Kansas-Nebraska
received
be
Probable bidders: Halsey,
& Hutzler; Lehman
Brothers, Bear, Stearns & Co. and Schoellkopf, Hutton
annually 1952 through 1966.
Co.
&
Inc.;
Salomon Bros.
Pbmero.y, Inc. (jointly).
&
1
Co.
Vitro Manufacturing
(letter of notification) 30,000 shares of common
stock (par $1) to be offered to common stockholders of
record Dec. 15 on basis of one new share for each 5.64
Dec.
rights to expire Jan. 2. Price—$10 per share.
Underwriter—None. Proceeds—For initial working capi¬
tal of Vitro Chemicacl Co., Inc., a subsidiary, to be
formed in December, 1950, to acquire and operate a plant
in Salt Lake City, Utah, for the processing of uranium
and manganese ores.
Corliss
Office—60 Greenway Drive,
Station, Pittsburgh 4, Pa.
Vulcan
Nov. 27
stock
Inc., Wallace, Idaho
notification) 250,000 shares of
20 cents). Price—31 cents per share.
Extension,
capital
Under¬
(letter of
(par
Co., Spokane, Wash. Proceeds—
capital for ore development. Address
writer—J. A. Hogle &
For initial working
—c/o H. J. Hull & Sons,
Wallace, Idaho.
Vernon, N.Y.
Products, Inc., Mt.
Walker Vitamin
•
from 1,500,000 to 2,000,000 shares the increase to
provide "substantial funds for capital additions and
working capital," and "to provide for the conversion of
100,000 shares of unissued and unreserved 4V2% cumu¬
lative convertible preferred stock."
Probable Under¬
writers: Merrill Lynch, Pierce, Fenner & Beane.
of class B
holders
Nov. 30
basis of one share of new class B stock for each eight
shares of either class of stock held; rights expire Jan.
Colorado
•
Dec. 15 it
of
Price—$5.35 per share. Underwriter—None.
Proceeds—For working capital.
Office 17 So. Colum¬
1951.
bus
N. Y.
Avenue, Mt. Vernon,
(R. I.)
subscribed for
Co. Price At
par ($25 per share). Underwriter—None
Proceeds—r or
general corporate purposes. Office—38 Mam St., Wes1950, of which total 4,434 shares will be
by New England Telephone & Telegraph
terly, Rhode Island.
Wilcox-Gay Corp.,
Oct.
25 filed
(1/3)
Charlotte, Miclv
500,000 shares of common
stock (par Mb
Underwriters—Gearhart, Kinnard & Otis, "inc., New York, N. Yy and White & Co.,
St.
Louis
Mo.
Proceeds—To pay obligations to an
unsecured creditors.
Statement effective Dec. 19.
price—$1.62V2 per share.
Winter Park
Dec.
13
(letter of
(Fla.) Telephone
Co.
: t
notification) 1,400 shares
of 5% pre¬
which 150 shares will be offered to offi¬
cers and employees and 1,250 shares to(public,
par ($100 per share).
Underwriter—Leedy,
Alleman, Inc., Orlando, Fla. Proceeds For new q p
whe^\^
:
•
mertt and to build a new
»
•
.
warehouse,
.
certato
England
markets should be served by this
that it has an ade^"ffte^4j?10Q0n_
company* upon showing
of sas "• Neee<5sarv financing,
000, likely to "be 75%
mon
underwriter:
probably about $40,000,
bonds and 25% stock, with^com¬
offered first to
Dillon, Read & Co.
stock to be
stockholders. Probable
Inc.
it
24
together with proceeds from a proposed term loan of ap¬
proximately $2,500,000 with banks and an insurance com¬
pany, will be used to refund $1,175,000 bank loans, pay¬
ment of preferred dividend arrearages of $1,501,500, and
the balance for working capital.
Minnesota
was
announced
company
of¬
The First Boston Corp. and
Weld;,.& '06'\ (jointly); Harriman Ripley & Co.
AleX.'^Owh 8c Sons (jointly); Kuhn, Loeb &
Bids—Expected to be'invited during the latter part
and
Co.
of January.
Emerson
•
Electric Manufacturing
Co. (1/17-18)
announced stockholders will vote on
Jan. 16 on authorizing issue of 100,000 shares of con¬
vertible preferred stock and on increasing authorized
common stock by 250,000 shares.
The company plans
it
14
Dec.
the sale
was
of the preferred
stock first to
stockholders on
basis.
Underwriters—Smith, Barney & Co.;
Van Alstyne, Noel & Co.; Newhard, Cook & Co.
Regis¬
tration—Expected about Dec. 29, with standby to begin
about Jan. 17-18.
.
a
l-for-8
year.
1
Co., Inc.; Salomon
(Inc.)
Electronics, Inc.
shares
stockholders of this company (formerly Finch
Telecommunications, Inc.) voted to create an authorized
issue of 400,000 shares of class A convertible stock (par
shares
iiiM
Foote
-
Proceeds—Ta,repay
capital.
"
.J .b v&wtisi*
and for working
*
5!
Mineral Co.
said it may
C-
i
^1.
will include F. Eberstadt & Co.,
York, and Prescott,
Inc.,' of Cleveland, Ohio.
Hawley, Shepard 8c Co.,
Monongahela Power Co.
;
it was announced company plans issuance and
$10,000,000 of new bonds. Underwriters — To be
determined by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Equitable Securities Corp.; Wo
C. Langley & Co. and The First Boston Corp. (jointly):
Dec
, sale'
'
sell during 1951 some addi- (
tibnal common stock following proposed? *200% stock ;dis- >
tribution-on March 1, 1951.
Traditional-< underwriter:
Estabrook & Co., New York.
Novi?20 company
plan to increase the
stock from 250,000 shares to 750,000
and to split up the present 210,000 outstanding
on a two-for-one basis.
If any new financing,
probable underwriters
publicly offered in the
Underwriter—Gra¬
New York.
Tool Co.
stockholders approved a
Inc., of New
all or part of which are to be
near future.
Price—$2.50 per share.
& Co., Inc.,
20
authorized common
2
indebtedness to RFC
the purchase from
Probable bidders: Halsey, Stuart &
Bros. & Hutzler; Harris, Hall & Go.
Monarch Machine
•
Dec.
.
ham, Ross
(1/9)
company
annual instalments.
(1/10)
'
received by the company on Jan. 10 for
the purchase from it of $5,400,000 of equipment trust
certificates. Probable bidders:/Halsey, Stuart & Co. Inc.;
Salomon Bros. & Hutzler.
be
$1)
Pacific RR.
received until Jan. 9 for
of $7,080,000 equipment trust certificates,
series PP, to be dated Feb. 1, 1951 and to mature in 15
the
Erie RR.
Facsimile &
Missouri
•
Bids will be
„
will
The
bonds or preferred
the company's ex¬
pansion program. Probable bidders for bonds may in¬
clude Halsey, Stuart & Co. Inc.; Shields & Co.; The First
Boston Corp. and Glore, Forgan & Co. (jointly); Otis &
Co.; White; Weld & Co.; Lehman Brothers and Drexel &
Co. (jointly); Union Securities Corp.; Kidder, Peabody
& Co.; Coffin & Burr, Inc.
,
: »
Mississippi River Fuel Corp., St. Louis, Mo.
Oct. 4 it was announced that plans to finance the instal¬
lation of additional compressor units on the company'u
pipeline system in Arkansas and Missouri will be supplued later. The estimated cost of the new facilities is
$5,500,000. Previous bond financing was arranged for
privately through Union Securities Corp., who also acted
as underwriter for a common stock issue in April of this
White,
Inc.
securities within the next year or so.
financing may be either in the form of
stock. The proceeds will be used for
plans to register
of December a proposed
SEC by the end
Light Co.
President, announced that the,^
expects to raise about $10,000,000 through the
sale of new
& Power Co.
Power &
6, Clay C. Boswell,
Dec.
fering of $25,00(1,000 new bonds. Underwriters — To be
determined by ^competitive bidding. Probable bidders:
Oct.
,
■
Prospective Offerings
of the New
Registration—Expected to be effected in February, 1951,
from the sale of the stock,
of Baltimore
the
Shovel Co.
Proceeds—The net proceeds
company
with
Power
$500,000 to equity capital, such shares to be first offered
to present common stockholders on a pro rata basis.
expansion program.
Consolidated Gas Electric Light
Nov.
16.
the company announced it plans the sale of addi¬
tional common stock (par $5) so as to add approximately
reported that corporation may
Proceeds will be used for
is expected of!
Dec. 8,
Inc.
sell $35,000,000 of new
Bids
ferred stock, of
1
about Jan.
Halsey, Stuart & Co. Inc.;
,
Automatic Telephone Co. t
.Dec. 1 (letter of notification) 7,000 shares of common
stock to be offered to stockholders of record Deb. 9,
Westerly
•
was
Co., New York
reported early registration
approximately 170,000 shares of common stock. Under¬
writers—Hemphill, Noyes, Graham, Parsons & Co., New
York.
Proceeds—To
selling stockholders.
Expected
Marion
20
on
"»
MacMillan
issue and
securities in the Spring or early
summer.
Probable bidders for debentures: Halsey, Stuart
& Co. Inc.; Morgan, Stanley & Co.; Kuhn, Loeb & Co.;
Salomon Bros. & Hutzler; Lehman Brothers; Merrill
Lynch, Pierce, Fenner & Beane and White, Weld & Co.
(jointly). Probable bidders for common stock, in event
of competitive bidding: Morgan Stanley & Co.; Goldman,
Sachs & Co. and Union Securities Corp. (jointly); Mer¬
rill Lynch, Pierce, Fenner & Beane; Lehman Brothers;
Shields & Co. and R. W. Pressprich & Co. (jointly).
it
7
building of a new plant. Probable under¬
& Blosser; Estabrook & Co., and Dalian
the
to
Dec. 18 it was
obtain a loan
construction of a pipeline from
Columbia Gas System,
reported that company may issue and sell
should it receive government con¬
was
Rupee & Son.
Texas to Colorado.
Dec.
it
Steel Corp.
writers: Straus
reported company plans to
$12,000,000 to finance
common
!
sent
Interstate Gas Co.
was
Star
additional securities
$1)
(letter of notification) 48,000 shares
stock (par 25 cents) being offered to
of class A and class B common stock of record
Dec.
12,
Nov. 12,
4
shares held;
!
vote
Co.
i
Lone
Foods, Inc.
12, it was announced stockholders on Jan. 15 will
on
increasing the authorized common stock (par
Dec.
Gas
24 company
coln, Neb.
being offered to common
Clinton
Natural
applied to the FPC for permission to
increase capacity from 146,000,000 cubic feet to 164,200.000 cubic feet daily at an estimated cost of $5,201,331,
to be financed by bonds, preferred and common stocka.
Bonds may be placed privately through Central Republic
Co., Chicago. Probable underwriters for the stocks are
Cruttenden & Co., Chicago, and First Trust Co. of Lin¬
Nov.
111., up to 12 o'clock noon (CST) on Jan. 3 for the
purchase from it of $1,200,000 of equipment trust cer¬
tificates to be dated March 1, 1951 and mature semi¬
cago,
Stuart
stock (oar $1),
stockholders of record Dec. 8
on the basis of one new share for each IV2 shares held.
(Peoples Gas Light & Coke Co., owner of approximately
51% of outstanding common stock, will subscribe for its
proportionate share of new stock, plus any other unsub¬
scribed shares.
Rights will expire on Dec. 28.
Price—
$10 per share. Proceeds—To finance proposed pipeline
from Texas to Chicago. Statement effective Dec. 8.
20 filed
Nov.
Indianapolis & Louisville Ry. (1/3)
at the company's office in Chi¬
Chicago,
Bids
v
1
of
Continued
on page
33
38
The Commercial and Financial Chronicle
(2566)
Continued jrom page
requirements,
37
mostly in
Corp.; Salomon Bros. & Hutzler; Leh¬
Brothers; Kidder, Peabody & Co. and White, Weld
& Co. (jointly); Merrill Lynch, Pierce, Fenner & Beane;
Glore, Forgan & Co. Proceeds—For expansion program.
Offering—Expected in March, 1951.
Union Securities
additional
Montana-Dakota
Potomac
Dec.
Oct. 11 company asked FPC for authority to issue
be
stock
from 1,500,000 to 2,500,000 shares.
R. M. Heskett, Presi¬
dent, stated that about $10,000,000 will be raised within
Central
Pipe Line Co.
RR.
Bids will be received until
purchase
the
from
noon
(EST)
Public
$7,500,000 equipment
trust certificates to be dated Jan. 1, 1951 and to mature
$500,000 annually from Jan. 1, 1952 to 1966 inclusive.
Probable
bidders:
of
31,
obtain
Halsey, Stuart & Co. Inc.; Salomon
common
additional funds
Niagara Gas Transmission Ltd.
next
by
of
Texas
Dec.
of
thorized
plans issuance and sale,
equipment trust certificates.
company
from
350,000 shares (209,221.
shares outstanding) to 1,000,000 shares and to effect a
2-for-l stock split-up. The stockholders would then have
preemptive rights in 531,558 of the unissued new shares
while 50,000 shares would be reserved for future sale to
employees and for other corporate purposes. Traditional
(Canada)
of the Niagara border. The
is estimated at $6,000,000, of
underwriter:
which
San
Hayden, Miller & Co.
Diego Gas
&
that
the
intends to
company
Texas
Dec.
19
an
&
Pacific
Ry.
(1/11)
applied to ICC for authority to issue
$4,000,000 equipment trust certificates, series
I,
to be dated Feb.
1, 1951, and to mature in l-to-10 years!
company
sell
bidders:
Halsey, Stuart & Co. Inc.; Salomon
Hutzler; Harris, Hall & Co. (Inc.); Lee HigginCorp.; R: W. Pressprich & Co.; Harriman Ripley-&
Co. Inc. and Lehman Brothers
Co. Inc.
•
Expected
United
18 it
on
Electric Co.
(jointly); Blair, Rollins
Jan. 11.
&
*
.
Electric
Rys. Co.
\ i
reported the New England Electric Sys¬
was
tem will receive bids Dec. 31
Engineering Co.
a special meeting of stock-,
18, 1951, for purpose of increasing au¬
stock
announced
estimated $20,000,000 of equity
securities
(probably preferred stock). Traditional UnderwriterDillon, Read & Co. Inc., New York. Proceeds—For
ex¬
pansion program.
Dec.
Electric &
common
Eastern Transmission
Corp.
was
Bros. &
bidders: Halsey, Stuart & Co. Inc.; Salomon
Hutzler; Harris, Hall & Co. (Inc.).
8c
it
Probable
approximately $40,000,000 in
$8,000,000
6
issue in 1951
and
of its construction program.
stated
was
holders for Jan.
way
cost
Tennessee Gas Transmission Co.
See accompanying item on
Northeastern Gas Transmis¬
sion Co.
•
*
Nov. 22 directors voted to call
of the project
$2,000,000 will be represented by 400,000 shares
of capital stock, par $5, and $4,000,000 to be raised
by the
total
it
Reliance
*•
Canada to export from Tennessee Gas Transmission Co.
gas
care
month
Bros.
Oct. 20, it was announced that this company, a subsidiary
Consumers' Gas Co., plans to build a pipe line in
natural
amount-
Probable
of
Texas
14
shares
held, subject to the approval of the ICC. The offering
price to be fixed later, will be below the market price
prevailing at time of offering. Underwriters—None.
The
sale'of
securities in the fiscal
year to end Aug. 31, 1951.
it ]s
expected that the new senior
securities to be sold will
consist of first
mortgage bonds and preferred stock
and
that a portion of the cash
requirements will be derived
from the sale of additional
common stock.
The bonds
and preferred stock
may be placed privately. The
com¬
mon
stock will
probably be offered first to common
stockholders and underwritten
by Dillon, Read & Co.
Inc.
Proceeds—To be used for expansion
program.
; '
son
York, Chicago & St. Louis RR.
Dec. 8 Lynne L. White, Chairman, announced that the
company plans to offer 33,770 shares of common stock
share for each ten
1951.
Reading Co.
New
new
quarter of
Service
Dec.
one
second
company
order to take
Bros. & Hutzler.
at the rate of
the
Co. of Indiana, Inc.
estimated that, in addition to the $40,000,000 bank credit arranged with eight banks, it may be
required, during the period prior to Dec. 31, 1953, to
Jan. 3 for the
on
to raise additional funds for construction
in
'
*
Nov.
for
Oct.
(1/3)
company
Colorado
$7,000,000." Probable bid¬
$7,000,000 of debentures which company had
planned to issue earlier this year were: Halsey, Stuart
& Co. Inc.; Blyth & Co., Inc. and
Smith, Barney & Co.
(jointly); The First Boston Corp.; Lehman Brothers;Kidder, Peabody & Co.; Harris, Hall & Co. (Inc.). This
latter plan was abandoned last August.
company
New York
of
needed is estimated at about
ders
asked FPC to authorize construction
and operation of a 114-mile pipeline for the transporta¬
tion of natural gas, which, it is estimated, will cost
$2,331,350.
•
Service Co.
necessary
purposes
the next six months.
15
issue
deter¬
Nov. 1, J. E. Loiseau, President, announced that "it will
stock from 100,000 to 150,000 shares and common
Nov.
be
bidding. Probable bidders: Halsey,
W. C. Langley & Co. and The First:
Co. Inc.;
Public
Merrill Lynch, Pierce, Fenner & Beane.
Stockholders on
Nov. 27 will vote on increasing authorized preferred
Gas
plans to
company
Underwriters—To
(jointly); Kidder, Peabody & Co. and Alex.
(jointly); Glore, Forgan & Co.; Salomon
Bros. & Hutzler; Harriman Ripley &
Co., Inc., and Union
Securities Corp. (jointly). Proceeds — For expansion
program.
Offering—Expected in April or May, 1951.
$3,000,000 of notes authorized by FPC last May, are
refunded by permanent financing before April 1,
1951. Traditional underwriters are Blyth & Co., Inc. and
Natural
that
bonds.
new
Boston Corp.
to be
of
expenditures.'
Brown & Sons
with
1950
Southwestern Public Service Co.
15, the company announced that it is
anticipated
that over
$17,500,000 will be raised from the
mined by competitive
$2,-
28
first mortgage 2y8% bonds and
$3,000,000 of 43/,%
preferred stock (par $100).
Proceeds—To repay $3 000.
000 of bank loans and for
construction
Co.
announced
was
Stuart &
800,000 of 2Vz% promissory notes to banks to provide
funds for its expansion program. These notes, togethei
Nevada
it
1
for
Edison
$10,000,000 of
Co.
Utilities
Company plans to expend
and improvements,
Thursday, December
additions
1951.
man
i
if necessary.
$3,500,000
...
for the sale
of its 99.143%
interest in the 82,507 outstanding shares of United
Elec¬
tric
Rys. capital stock (par $100).
Probable
Blyth & Co., Inc. and Lehman Brothers
bidders:
(jointly); Mer¬
Lynch, Pierce, Fenner & Beane, Kidder, Peabody
& Co. and White. Weld & Co.
(jointly); Harriman Rip¬
ley & Co. Inci and Goldman, Sachs & Co. (jointly).
rill
United Gas Corp.
Nov. 16, the Division of Public Utilities of the SEC has
recommended that SEC order Electric Bond & Share Co.
to dispose of its holdings of
2,870,653 shares (26.95%) of
United Gas Corp. common stock. In event of
competitive
issue of bonds.
Dec. 19 it
Niagara Mohawk Power Corp.
Oct. 24 the company estimated
that, through 1951, it will
require not more than $35,000,000 of additional debt or
equity financing in connection with its 1951 construction
325,000 additional shares of preferred
(par $20).Underwriters—To be determined by competitive
bidding.
Probable bidders: Blyth & Co.,
Inc.; Salomon Bros. &
formed to
which is expected to cost
Weld
Hutzler and the Union Securities Corp.
(jointly); White,
& Co. and Shields & Co.
(jointly). Proceeds—To
and
addition
to
the
sale
$52,328,000. This amount is in
31 of $40,000,000 general
Oct.
on
Seaboard
Dec.
Gas
&
Electric
issue additional
common
a
RR.
11
Atlantic Gas
company
Co.
sought Georgia P. S. Commission for
South
Nov.
20
Jersey Gas Co
advisory report submitted to SEC provides
holdings of United Corp. in the stock*
Jersey Gas Co. (154,231.8 shares, par $5 each.)
an
for sale of entire
of South
Co.
Probable
bidders:
Lehman Brothers and
Bear, Stearns
& Co. (jointly).
sidering refunding outstanding $6,500,000 5%% cumu¬
lative preferred stock (par $100) with an
equal amount
stock with
Line
authority to issue $3,000,000 new first mortgage bonds.
May be placed privately. The proceeds will be used to
repay bank loans and for expansion program.
Dec. 20 D. S. Kennedy, President, said
company is con¬
of preferred
Air
was
South
Dec.
White, Weld & Co.; Stone & Webster Securities Corp.
Oklahoma
it
able bidders: Halsey, Stuart & Co.
Inc.; Salomon Bros. &
Hutzler; Harris, Hall & Co. (Inc.).
$118,645,545
expansion program, part of which will supply some of
Northeastern's gas needs. Of the total
financing, 75%
will be in the form of first
mortgage bonds to be placed
privately with a group of life insurance companies. The
remaining 25% would be obtained through the sale of
equity securities. Traditional underwriters for Tennes¬
•
13
reported company plans issuance of $4,920,000 equipment trust certificates next month. Prob¬
Northeastern Gas Transmission Co.
Nov. 8 FPC authorized company to supply part of New
England with natural gas, and authorized Tennessee Gas
Transmission Co., parent, to carry out a
see
Southeastern
Dec.
lower dividend rate and may
stock (par $10) provided mar¬
1 it
was
Michigan Gas Co.
nancing of the proposed pipeline, the acquisition of dis¬
ket conditions warrant such
tribution facilities and the
natural gas,
action, to finance construc¬
Probable underwriters: Lehman Brothers;
Pacific
Lighting Corp.
*
stock,
«
.
13
corporation
estimated
that
approximately
$24,000,000 will have to be raised through the sale of
Michigan
company
securities next year to finance its 1951 construction
pro¬
gram.
Traditional underwriter: Blyth &
serve
Co., Inc.
Pacific
on
basis of
ferred
Telephone & Telegraph Co.
one
shares
share for each
held.
Price
—
10
At
common
par
&
per
securities.
of
Co. Proceeds—To
Drexel
finance, in part, the company's
Dec. 12 it
on
was
up
new
bonds.
Indiana
Gas &
Electric Co.
midwest
The
markets to
operate
as
a
"common
initial
financing has been arranged for
privately, with no public offering expected for at least
two years. E. Holley Poe and Paul
Ryan, of 70 Pine St.,
New York, N. Y., are the
principal officers of the cor¬
poration.
Utah
:
Natural
Gas
,
>
•
/'
.
gas
line from northeastern
in that State.
Utah, to include additional
The estimated cost of the
project
areas
in¬
was
creased
to $32,000,000 (from
$25,000,000 in the original
application), according to John A. McGuire, President,
and the length of the proposed transmission increased
from 325 miles to 469 miles.
•
•
.1
Utah
Pipe Line Co., Dallas, Tex.
Dec. 14 company applied to FPC for
authority to build
a 392-mile
pipeline from Aztec, N Mex. to the Salt Lake
City, Utah, area, at an estimated cost of $22,000,000.
-
Valley Gas Pipe Line Co., Inc., Houston, Tex.
June 27 company sought FPC authorization to construct
a
$144,500,000 pipeline project to carry natural gas from
the
Gulf Coast and off-shore fields in Louisiana and
Texas to markets in Indiana, Ohio and Michigan. Com¬
pany is now in process of completing negotiations for
its major financing requirements.
•
-•
•West
Dec.
of
1
it
Penn
was
Electric Co.
reported company plans to sell $7,000,000
new
common
stock, either to the stockholders or
through underwriting.
If through underwriters, stock
may be sold at straight competitive bidding.
Probable
bidders:
Lehman Brothers and Goldman, Sachs & Co.
(jointly); Morgan Stanley. & Co.; W. C. Langley & Co.
and The First Boston
Corp. (jointly); Harriman Ripley
8c Co. Inc. Proceeds—For
expansion program.
—Expected early in 1951.
Offering
-v
Westcoast Transmission Co., Ltd.
Nov. 10, it was announced that Westcoast Transmission
Co., Inc., its American affiliate, has filed an application
with the FPC
seeking authorization to construct approx¬
imately 615 miles of pipeline for the transportation of
naturaLgas in the States of Washington and Oregon (this
project is estimated to cost $25,690,000). Both companies
are
sponsored by Pacific Petroleums, Ltd., of Calgary,
Sunray Oil Corp. and other members of the "Pacific
Group" engaged in active oil and gas exploration and
development in Western Canada. The completed line of
The First Boston
Corp.; Equitable Securities Corp.; Otis & Co.;
M. Loeb, Rhoades &
Co.; Salomon Bros. & Hutzler.
Southern
Oct. 20 it
was
Union
Gas
Co.
reported company plans to raise between
$7,000,000 and $8,000,000 through the sale of new secur¬
ities next Spring. Underwriter —
Blair, Rollins & Co.,
Inc., handled the financing early this year of $18,000,000
.
Co.
Nov. 21, the company applied to the Utah P. S. Commis¬
sion for permission to extend the
proposed natural
to
Proceeds—For expansion program.
'
16
Probable bidders:
(Del.)
announced that this company had been
both
Carl
&
to $6,000,000 for future
Co.
other
carrier."
Boston
con¬
announced stockholders will vote Jan.
authorizing indebtedness
Edison
include Lehman Brothers.
may
Pipe Line Co.
build, own and operate a petroleum products
pipeline from the Texas Gulf Coast to St. Louis, Chicago
$3,000,000 of 30first mortgage bonds. Underwriters—May be deter¬
mined by competitive
bidding. Probable bidders: Hal¬
sey, Stuart & Co. Inc.; Kidder, Peabody & Co.; First
re¬
Pittsburgh Brewing Co.
,
was
year
series
and
California
Sept. 25, it
States
Nov. 6, the company applied to the Indiana P. S„ Com¬
mission for authority to issue and sell
preferred
early 1951. Traditional
stock may be sold late this year or
Underwriters—The First Boston
Corp.
struction program.
It is
area,
Co.
United
the
subsidiary of Central Electric
Co., notified the SEC that it proposes to offer
Southern
Pennsylvania Power & Light Co.
9 Chas. E. Oakes,
President, stated the company
will require about $34,900,000 of new
capital over the
shares
Michigan
authorized
$55,000,000
Halsey, Stuart & Co.
Inc.; Blyth & Co., Inc.; The First Boston Corp. and
Harris, Hall & Co. (Inc.) (jointly); Shields & Co.
in
Nov.
75,000
FPC
pipeline facilities to
gas
within the next 18 months to finance its 1951 construc¬
tion program.
Total financing may involve
to be used to finance construction
program.
over
Gas
The
Sept. 27, W. C. Mullendore, President, announced that
company will have to raise $50,000,000 in new capital
Co.; Merrill Lynch, Pierce, Fenner & Beane; Union Se¬
curities Corp. and White, Weld & Co.
(jointly); Equit¬
able Securities Corp.; The First Boston
Corp.; Kuhn,
Loeb & Co.; Harriman Ripley &
Co., Inc. Proceeds are
through the sale of
the southeastern
Southern
planning the issuance
of about $10,000,000 new bonds. Probable
bidders: Halsey, Stuart & Co.
Inc.; Kidder, Peabody &
not
<
natural
program.
year
ported that
Commission.
common stock (par $10).
Price—$11.25
share. Underwriter—Wagner, Reid & Ebinger, Louis¬
ville, Ky. Proceeds—For construction and improvement
Pennsylvania Electric Co.
Oct. 4 company was reported to be
next four years
S.
construct
per
share).
Parent—American Telephone &
Telegraph Co. owns ap¬
proximately 89% of Pacific's stocks. Underwriter—None.
early next
P.
to
cumulative preferred stock and
stock, subject to the approval of the
10,000 shares of
and/or pre¬
($100
common
Southeastern Telephone
Nov. 20 this company, a
Dec. 8 directors voted to offer stockholders
the right to
subscribe for 569,946 additional shares of common stock
system to
$200,000 of 6%
$400,000 of
*
of the
the company proposes to issue $3,300,000 of
mortgage bonds, $500,000 of 5% prior preferred
first
Smith, Barney & Co.; Harriman Ripley & Co. Inc.
conversion
bidding, probable bidders
(Mich.)
announced that in connection with the fi¬
tion program.
Nov.
-
stock
$3,200,000 bank loans and for expansion program.
repay
mortgage bonds due Oct. 1, 1980. Probable bidders for
new bonds:
Halsey, Stuart & Co. Inc.; Morgan Stanley
& Co.; Kuhn, Loeb & Co.; The First Boston
Corp.
announced company plans to issue and sell
was
companies, to be about 1,400 miles, will, according
estimates, cost about $175,000,000, to be financed
75% by bonds and the remainder
by preferred and com¬
stock. Underwriters—Eastman, Dillon & Co. and
mon
•
Corp.
Wisconsin Southern Gas & Appliance Corp.
Dec. 22 it was stated
corporation plans to sell this week
$200,000 of 41/2% collateral trust sinking fund bonds
due 1971 and 13,800 shares of common stock to residents
of Wisconsin only. Price—Bonds at 99% and stock, at
$11 per share. Underwriters—The Milwaukee Co., Mil"
waukee, Wis. and Harley Hayden & Co., Madison, Wis.
172
Volume
Number 4972
-
,
.
.
The Commercial and Financial Chronicle'
(2567)
registered for 60,000 shares of $100
convertible preferred which
will be sold to-retire bank loans
Favor? Higher Interest Rates to Check Inflation
par
of its
wholly-owned subsidiaries.
The
rush
for
^
conversion
set
faster
a
last
pace
Institutional investors
were
just
they put the finishing touches to
their
year-end
accounts.
Bond
expressed doubt that they
could have been enticed into the
market even by the most "juicy"
men
opportunities.
of
But
the
as
there
was
year
drew to its close
growing
a
feeling
in
quarters that the municipal
many
1WA<
CI
fi'ea
AAA
M
3U«
fll
lolt
ov
£/4s aue
$63,700
1001.
especially, it was ob¬
served, probably will be active im
that quarter of the investment
of the heavier
investors held $60,205,400 of the
3V8s; $121,000,900 of the 2%s due
1957 and $266,269,200 of the 2%s
current
Wm, T. Cobb to Join
recognized fact that
as
also
Investors Diversified
cor¬
outpouring
this
type
of
new
cordingly.
Thus market observers are dis¬
rather brisk
for issues already avail¬
posed to anticipate
demand
a
able. The forerunner of such a de¬
$260,000,000
mark.
More
recently it had been
shrunken well, below the $.190,000,000 level.
the
is
the
of.
not
imply
unsold
near
portions
it
position of
applies
the
both
the remnants of unfinished
ness, such
sum
the
it up in a few
institu¬
tion to enter any- new lines- at
this time. They are all ' hard at
Wprds. "You can't get
work
an
figures^ for -an¬
nual reports to shareholders."
dressing
up
Investment
In
Association of Securi¬
National
ties Dealers, Inc., Meeting of
Gov¬
vised
.
^
Board of Governors
of
ation
ation
of
Antonio, Tex.)
-
redeem after the turn of the year,
winter
bonds
of
its
Louis
St.
division
Feb.
Stock
be
not
predeter-
considerations"
the
also
but
ar-
for
an
in-
thereafter.
0
alleviation
f|ationary
threat.
►
of the
The
consequences
credit
CLEVELAND,
Firms.
seem
—
to
of additional
.
a
share
on
on
an
a
istered
80,000
shares
preferred
of
$15
which
a course
s
n
plans to issue, to redeem outstand¬
ing stock and to obtain additional
working capital.
Meanwhile City
Stores
Co.
15
COMMON DIVIDEND NO.
and EXTRA
OF THE
k.
CITY OF NEW YORK
Treasurer
The
Trustees
have
FINANCE CORPORATION
declared
of California
the regular quarterly
dividend of
and one-half cents
twenty-two
(llVzi) per share, and an extra
dividend of two and one-half
cents (2}4fS) per share, cin the
f
|
SHARES
COMMON
DIVIDEND NOTICE
s
On December 6, 1950, the
Board of Directors de¬
li
clared
the
of
of
|
|
40
the
Associatio n, both payable
special
a
cents
per
Common
dividend
share
on
Stock
($10
value) of this Corpor¬
ation, payable December
par
January 15,1951 to shareholders
of record at the close of business
27, 1950 to stockholders of
December 29, 1950.
record December 18, 1950.
The Board of Directors
C.
H.
MOORE, JR., Treasurer
also
declared
regular
quarterly dividends of
December 21,1050.
$1.25 per share on the 5'%
Series and the 5% Sink- •
ing Fund Series Preferred
Stocks
($100
par
value),
and 31
Vic per share on the
$1.25 Sinking Fund Series
Preferred Stock ($25 par
.
value) of this Corpora¬
tion, each payable Febru¬
ary
1, 1961 to stockholders,
of record
PHIUP MORRIS'
January 15.1951.
B. C. REYNOLDS
Secretary
York. N. Y.
be-
that the government embarked on
NOTICE
declared
a
City of
dividend of
share on the 7,400,000 shares of
capital stock of the Bank, payable
The1 transfer books will not be
divi<&.
.f
Beckett,
PACIFIC
DIVIDEND
ag-
recalls
closed,.
mmi"': ;iii connection with the payment of this.
NATIONAL BANK
J.
New England Gas
and Electric Association
|
|
December 20,
Philip Morris & Co.
Survey
February 1, 1951 to holders of record
the close of business January 5, 1951. !,
it
December
on
cash dividend for
1
in-
the other."
at
par
a
|
1950.
The
quarterly
regular
Lid., inc.
dividend
of
$1.00 per share on the Cumulative Pre¬
ferred Stock, 4% Series, and the regu¬
lar quarterly dividend of $0,975 per
share
on
the
Cumulative Preferred
Stock, 3.90% Series, has been declaied
payable February 1, 1951 to holders of
record
at the close of business on
SOUTHERN
Iron
1951.
There has also been declared a regu¬
January
15,
of $0.75 per
Stock of the
Company
($5 Par), payable January
15, 1951 to holders of Common Stock
of record at the close of business on
quarterly
on
the
dividend
Dividend
::
-
t
KENNETH C. BELL
Vice President and Cashier
at
recognized,
until surrendered, and
value of $10 each is
Certificates for new
the par value of $5
issued therefor.
Holders of Certificates for shares of
-Common Stock of the par value of $10
.each,are, therefore, urged to exchange
such Certificates, for Certificates tor
f new Common Stock of the par value of
$5. per shafe on.the basis of two shares
of new1 Common Stock $5 par value,
for; each share of Common Stock of
the par value of $10.
Certificate
or
Common Stock of
each, shall
on
Common
Preferred Stock
Meeting held on July
1945, no Certificate representing a
share or shares of Common Stock of
a
Roofing Company
SAVANNAH. GEORGIA
and
10,
the par
STATES
Common
for any purpose,
-
of Directors
E.
choice
40c per
t
1950.
comparative impotence
Guaranty
The
New York has
THE CHASE
>•
Francisco, California
W' WALLACE' Treasurer
December 14, 1950
the Stockholders'
preferred stock.
Checks
be closed.
San
1951.
Pursuant to a resolution adopted
the
1951.
of the year of JO
cents per
share upon the Company's
Common Capital Stock. This dividend
will be paid by check on
January 1J,
19J1, to common stockholders of record
at the close of business on
December
29, 19J0. The Transfer Books will not
January 2,
Food Fair Stores, Inc., has reg¬
cumulative
The Board
broader
of
be facing
DIVIDEND
rTwo store firms have filed with
the Securities and Exchange Com¬
mission to cover projected issues
6,
BRAND, Secretary.
wjth unknown difficulties and
risks
Stores to Finance
20.
13, 1950, declared
the fourth quarter
OHIO
policy,.however, are indeed
The Chase National Bank of the
Two
O.
Common Stock Dividend No. 140
the outstanding common
Company, payable March
22, 1951, to shareholders of record on
March 5, 1951.
per
(
cost
to approve.
1
December
be a small price to pay for any
substantial
Associ-; on the "one hand and
BANKING
ENAMEL
stock of the
|
the
stock
PACIFIC GAS AND ELECTRIC CO.
Corporation has this day de¬
|
(Philadelphia, Pa.)
(^WOR(DWIDfe
common
*
CORPORATION
share
changing
1976, an
operation which it has asked ICC
the
B.
Dividend of forty cents ($.40)
lar
1,
at
clared
use.
Jan.
m„ February
mailed.
p.
be
D? ted
the
on
Corporation, payable February 16,
to stockholders of record at 3:00
o'clock
will
The Board of Directors of the Ferro
of Philadelphia Winter Banquet, an easy money policy during the
not wish
1951 (Dallas, Tex.)
30,
severity of economic depression,
actually to retire the issue. Rather May
it: would set the bonds aside in
Dallas
Bond
Club
annual when credit expansion was desirthe treasury for possible future Memorial Day outing.
able. Easy money continues to be
(This would be done by
1951,
will
Enamel
of
in
increase
"An
!But the company does
the maturity to
He
&
declared
w-s
the
of
DIVIDEND NOTICE
|
armament
of evils
Investment Traders Association
which fall due at that time.
4.
nfiw
FERRO
|
jties
meeting.
21, 1951
share
—
Exchange Firms formidable. Our monetary author-
Exchange
meeting o" the Board of Directors
tcday, a dividend of fifty cents per
a
gressive anti-inflationary general
of Associ-
Board of Governors of
of
Dividend Notice
At
DIVIDEND NOTICES
|
possibie
of Governors
Stock
,
Firms
Feb. 8-9, 1951 (Dallas, Tex.)
ation
Lexington Avenue, New York 17
disturb¬
>»
.
Feb. 6-7,1951 (San
Board
.
„
America
of
Indianapolis office, 5 East
,
re¬
carrying the public debt, while
certainly not to be desired, would
of Associ-
Exchange
Stock
winter meeting.
the
Interstate
Commerce
Commission that it is prepared to
$12,500,000 of first mortgage 4%
„
government securities are held
down, the. possible scope of general credit contral will be closely
restricted, not only during re-
and Election of Officers at
Keeping 'Em Alive
^Southern Railway Co. has ad¬
could
the
Market Street.
wholesale
definite period
(Houston, Tex.)
in
Vanadium Corporation
s
headquarters
mHinnnnniic
For, as long as rates of yield on
Field
Winter meeting.
.
market
^
Jan.
on
his
make
continues, "emphasize anew
importance of combating in- |
flation
by holding the Federal |
budget as close to a balance as |
possible and by selective controls |
on consumer and mortgage credit.
|
(Point Clear, Ala.)
*
V:'
McKmnon
the
EVENTS
engage
DIVIDEND NOTICES
to
flrm of Thomson
ad-
ticle
_
go
in
to
business.
extent of the anti-inflationary |
effects
"These
v
ernors
and'
Dowling will be admitted
fit*™
might be feasible to allow
mjne^
Lav/, Inc.
Feb. 4, 1951
the customers
bankers just
~
busi¬ the Grand Hotel.
•
as
-r.
collecting and pay¬
as
ing bills.
As far
x
Jan. 15^16, 1951
to the dis¬
underwriter
take
to
cluding perhaps savings bonds, to
exchange them for new securities,
as was done during World War I.
But this would be a complicated
William T. Cobb
and costly procedure. It might in-.
William T. Cobb, Vice-Presi- volve the refunding, or possibly
dent of Distributors Group, Inc., several refundings, of the bulk of
will shortly join Investors Diver- the public debt. It certainly would
sified
Services, Inc. of Minne- not be the easy or inexpensive
apolis.
Prior to his association way to finance rearmament, and
cleaning up
of issues as
his customers to clear away
and
severe
and
"It
COMING
earned.
could bi.
as
Rather
and
any
conditions
held
S.
holders of low-coupon issues, in¬
.
changed
partnership in the New York Stock
vent them.
period
dubbed
"clean-up week" in the under¬
writing business. And the term
does
of security holders
losses
Co.
policy today under these
INDIANAPOLIS, Ind.—Edward
redemp¬
tion of savings bonds, unless ap¬
propriate steps were taken to pre¬
Clean-Up Week
This
in
ances
ah.
above
avoid
sult
was
seen
in recent
heavy whittling away of the rec¬
ord backlog which had been built
up in municipal issues.
.with Distributors Group, Mr. Cobb
Some
'months
ago
this
ac¬
7
ri
cumulation was at record levels was with Albert Frank-Guenther
velopment
Building,
420
the capital
on
vantage of higher rates might
the
ac¬
companies
such institutions,
some
and attempts
materials
issues of
curtailed
be
will
Life
securities
McKinnon Admits
part of
structure.
financial
insurance
have serious effects
position of
&
Thomson &
a
their capital funds. A substantial
decline in market prices could
defense ac¬
tivities curb supplies of
the
and
F. Perkins
Perkins
pressure.
.
nation's
F.
a course are im-
Concerning these difficulties
and the way out, the article states:
to
is
there
official
the greatly
hold such securities equal in value
to several times the amount of
pattern
But
pr®sslve-
Banks
the exemption features of mu¬
nicipals.
by
J.
with offices in the Reserve Loan
to
recourse
formed
"Existing prices of government
of higher ,;
taxes, it was pointed out, naturally
will tend to put a high premium'
on:
Admits
securities, although the dif-
securities have become
greater momentum.
The
dilemma.
published
of such
due 1961.
porate taxes already in sight and
likely to be imposed as time wears
along and: the defense effort picks
up'
Survey,"
ment
the
Banks,
field because
®nty
Turning into the current week
market would come in for a sizz¬
ling time in the months ahead.
a
gov¬
guaranty Trust Company of New prospects. The policy has been adpre- York, caries a leading article, en- hered to for almost two decades,
""®d. The Interest Rate Dilem- through good times and bad,
ma m wlJlch ^ is concluded that through war and peace, through
an escape from the dilemma would years of labor shortage and years
ft
?ee™
be through interest rates, of unemployment, through periods
of the including higher yields on govern- of inflationary and deflationary
ceding period.
about out of business this week as
money," at this time, places nation and
easy
The January issue of the "Guar-
week.
total of $3,
135,200 of the issues were turned
in against $2,553,500 in the
DALLAS, Tex.—Jack
has
higher rates for
Treasury securities present practical difficulties.
of
a
in
ernment
American Telephone & Telegraph
Co.'s debentures into capital stock
Figures show that
J. F. Perkins Co. Formed
Monthly review of Guaranty Trust Company of New York
contends
A T & T Conversions
39
have been
L. Q. HANSON,
Treasurer.
A
quarterly dividend of thirty-one
(31.250) per
on the Preferred Stock, pay¬
able January ,2, 1951; and a divi¬
dend of fifty cents (50£) per share
on
the Common Stock, payable
and one-quarter cents
share
December 28, 1959, have
clared
holders
by this
company
of record
at
been de¬
stock¬
to
the close of
business December 22, 1950.
ROSS
•
G. ALLEN
Secretary
and
Treasurer
#l.., -
<«**»*»•+» — ~.
~„r
•
\
■
V
T he
...
-,)
frfr
>40
i*[V
*fv'V
-.:
.,
Si^v;-
^
*<
,•
; ...
Commercial and Financial Chronicle
\; '•
**•.
Thursday; December28 ' 1950
...
•-??;* V-vSN
week, were temporarily laid aside
BUSINESS BUZZ
#>■»
.Wi
-
■■••'
f"'
(2568)
until
Mr.
them.
Wilson
The net effect of all the
•
t
t
.
is
v.<
BeVind-the-Scene Interpretations
from the Nation's
only that
tracts
will
as
C.—Nobody more than a retardation of wage
of much consequence in this town increases.
outside the government takes very
Neither the Administration nor
seriously the Administration's Cy Ching care much about wage
pretty little formula which is sup- stabilization as evidenced by the
posed to guide business in volun- recent rail wage settlement contarily holding down
price in- eluded at the White House. It is
creases.
hardly possible to imagine govIf you ask somebody what he ernment regulation of wages to be
thinks of the formula, he is likely treated as an economic matter,
to
smile and remark,
"ain't it There will be exhortations to'
something," and ygo on to some iabor? yes, to be a little soft on
other subject. If business could demanding wage increases in the
figure out the application of the national interest, and there probformula to its products and if the abiy even will be formulae which
formula were enforced, it would. wm in a totaL kind'of lingo be
cause more problems than the Ad- palmed off as "wage stabilization."
jministration's original excess .
_
,
'
profits tax formula 10 times conHowever, something over seven
»i,
Hi
/,«,,
H1P-
\,'
be
ordered, howBoard
■I
materials
for
If
1951.
is
as
1
should
of $2.1
materials
from
order, or
t0 be,
T
.v
..
,
first
the
In
7
t
its issuance
place,
dictated by the urge
was
of
tion
we
the tough
country
.®P°A
-
^
finds11tseit.it is
ftV is hoped will ° J
it cahI^P"ui not
a
tion
is
^self
of
viewsJ
fund
gold
ofdeferred-
bonds,
interest,
other
exchange, dated April 26, 1946,
has been extended to Jan.
typewriter — the
unfinished work!"
typewriter cover covers my
typewriter cover covers my
"One
from
offer
rate
not
P
rtvA
Av»r»l
Electric
General
former
President's appointment as
did
it
when
(2)
in view of that
added significance
^
director of the Office of Defense
reconciled to
Jan.
are
provide
i4 tirAiilrl merely rlnnllnolA
it would w> ovnl ir duplicate
transmission facilities of the Vir¬
Copies of., the
available
at the Corpo¬
Agency Department of The
National City Bank of New York.
-
power,
Electric Power Co.
ginia
the
In
this
House
$7
1, 1952
1, 1951.
page 14 in the Buggs Island dam would
of Dec. 14) takes on generate power until 1953, and
regulai' $20 billion some where Mobilization,
deficits of annually•> so
last too long,
own
sinking fund dollar bonds
being notified, that the "offer
are
an-
now
re¬
external
it is noted, is that the Administra-
-
this
month
and convertible certificates for 3%
background, the
fac^or \n the
sinking
certificates
"to do -ment for approval.
e
a
sinking fund gold bonds,
vador 8%
7%
4-U
h
following
something
■
far
so
until June 30.
now
Exch. Offer Extended
labor and management must first printed on
submit increases to sthe govern- "Chronicle"
.
.
..
1
con¬
from an
billion for war
up
month
per
of
fast
as
Holders of Republic of El Sal¬
standards for is that a formula will be worked
business
and
industry"
thing out which will provide that,
thereby is understood as a politi¬
despite the automatic wage in¬
cal rather than an economic docu¬
crease
provisions:. in contracts,
ments
let
EI Salvador Bend
"pricing
This
quarter
are
go
"Chronicle's"
the
is expected
About the most that
requirements
any
(This column is intended to
these automatic wage increases.
'[
The
soon.
flect the "behind the scene" inter¬
pretation from the nation's Capital
and may or may not coincide with
labor
few
actually expect wage \
stabilization" to impair: , seriously
the
announcement,
whatever it is supposed
and
given NPA
to nearly $3 billion
year
contracts which
Regardless
of
setting
con¬
up,
indicated, the rate of
average
formula, because
increases,
it is complicated beyond human
ris.es 111 wages as the cost
comprehension in its application
"vin£ index- rises.
to a million items. The attitude of °'. "\e outcome of the last Conihe town is to understand,: with. JTj^onal elections, the^ Adminiseomewhat good-natured cynicism,
a7;011
rates organized
the political problem and political as its chief support.
Hence
try to parse the
in
contracts
tracting
have obtained, along with their
disposition to
In fact there is no
.j
has
revised figures of
no
workers
million organized union
/
founded.
4/
letting of
speeded
However, there are no figures
yet available as to how much
,
1''<
feverish
'
Munitions
WASHINGTON, D.
u,
the
be
definitely.
Capital
will
iV*i
upon
activity of. the last couple of weeks
on the production program so
far
>C}
;
pass
;
•
■
,vHs
I
can
.
AvIIUI
PF*rl«c FVarrL1C5 A idlllV
Charles E.
Frank, who Is retir¬
ing at the end of this year after
million
68
years
in Wall Street, is being
around
production is building
went through with ho^led today ^ 2g) a. a
^Thr^dm^ktrati'oT'is with fiSures- wasunlessthe Private a whoop. finger Senator Robertson Party given by the partners and
that monkeyed put the After on the deal, the
—j'
b0 P?. Administration is power lndustryi
associates of Delafield & Dela¬
forced to fieht
sort of rear enarri with
by the government, could Senate knocked it out.
™ 3* fXtinn
field, 14 Wall Street, New York
take
of
any
conceivable
actlon agamst mIlatIon'
maximum load of power for war
long as war
't.
panicky Administration
which the
>
reacts to
a
VP-
genuine crisis.
a
the formula
Is viewed as having been chosen
*
*
*
obviously for its political effect.
By saying to all business, in efThe new "pricing standards for
lect, that it has no right to raise business and industry" announceprices so long as its gross profits ment, it is noted, is in no way the
before taxes are as high as in the creature of Charles E. Wilson, new
In the second place,
of the public to
mass
thp
the
Valentine, ESA
Administrator, and others before
understand pointee, Dr. . Alan
ment.
*
thoUce
+hic
nunminre
Nevertheless,
this
announcement by a careful reading, does
tvt
a pretty good tip-off on
hannen after mandatory
nappen
give
Mr. Wilson
The
ine
same
same
came
is
is
of
oi
moves
toward
stabilization."
x
^
,
t.
It is pointed out, however, that
indipractical
this announcement gives an
cation
off is
used
a
prior to Dec. 1 will be given
inferential certificate of
Any price increases,
proposed or since put
legitimacy.
whether
Into
existence,
after Dec. 1, will
to submit to the
have
bureau¬
r
Price
increases
since
Dec.
1
the
basis either of (1) hardship, or (2)
increased costs, or probably often,
of both
considerations. And in
considering
"hardship" a very
heavy weight will be given to
corporation profits before taxes,
without figuring corporation net
after higher and higher taxes.
will
previous
have
to be justified
*
Whatever has
*
on
*
come
out of Cy
and many of Mr.
era
of more limited war
production efforts.
just
of the coincidences of Mr.
Wilson's
appointment
as
"mobilization 'was 'the
tion
from
Girard
the
top boss
resigna -
government
last
Public power,
a
battle
to
incidentally, lost
Atlantic states, as a
the
-
"horn in" the middle
On the other hand, new policy
will await the word
formulation
small part of
from Mr.
Wilson
as
to
what he
war
wants. This is inevitable in gov-
production program. The Administration asked for $7 million to
ernment. All the many plans that
all the agencies have been cooking
build
up,
$18
billion
a
.
emergency
line
transmission
Field,
Va.,
from
Buggs Island power project.
Langley
A.
Willis
to
the
just sit
on
desks until they
can
be presented either to Mr. Wilson
or some one who can commit that
official to approval or disapproval.
Robertson
(D., Va.) circulated a letter to his
TT'! "T TV
StoeK Exchange. Prior to his association with Delafield & Deiafield, Mr. Frank had been senior
partner of his own firm - He came
V CV +1 oT"
m
of 20 as a clerk and 16 ycarS
Thus, the plans to expand
war
Potential
SUGGEST
WE
RIVERSIDE CEMENT CO.
CLASS B
A
(common) STOCK
leading producer of
in
cement
fast-growing Southern
California.
Analysis of this Company and
a review of the Cement Indus¬
try available
request.
on
$10.25
Selling about
LERNER &
Investment
CO.
Securities
10 Post Office Square,
Boston 9, Mass,
Tel. HUbbard
2-1990
of C.
tary of the Interior. An old-time
HAnover 2-0050
TVA man, Mr. Davidson was one
of the foremost advocates of Federal development of power, and
public ownership, of power,
Mr. Davidson has been constantly plugging for public power,
Teletype—NY 1-971
'
Firm Trading Markets
regime, the Interior Depart-ment
was
given
control ;over
All Issues
-.4
a
*
*
,
%
4#
■
y*
Products
Garlock Packing
Jessop
Co.
Steel
Permutit Company
r-ARL MABKS & P.O. t»C.
resources;"
This authority is now subordinate
to Mr. Wilson's direction,
complishments of the AdministraMr. Wilson's recent speech betion in the way of "wage stabili- fore the National Press Club (text
«ation'\are expected to be little of
Mr.
Wilson's speech was
Allied Electric
Gisholt Machine
FOREIGN SECURITIES
Under Mr. Symington's mobiliza¬
tion
of power
laler
the New
For
Large Appreciation
Davidson, Assistant Secre¬
mobilization
T!
colleagues alleging that (1) the housing production, reported last
FOREIGN SECURITIES
confabs
about
"wage
stabilization," the long-run acChing's
and making them available for
military production,
week,Ta ,day
after Mr. Wilson was sworn in.
Senator
One
of
cracy.
d.
the
hounced
Symington's gentlemen as well as
his gentlemen's gentlemen will re¬
main on the scene, relics of the
burden of
jiroof before the lords of
'
of
some
ton's gentlemen,
prices in exist
ence
an
of
would rusnin to till,
Production Authority s developi Mr. Davidson it is reported has ^ent of orders reducing the supbeen wanting to resign for: a lpng plies offor the civilian economy,
scarce metals and matime. The resignation Was,; ati^- terials
first things tipped
few exceptions,
City, members of the New York
™
.£aps
face in making his views felt in
that Dec. 1 probably will be the
mobilization program. Mr.
as the breaking point. With
Valentine is one of Mr. Syming
the
of
known his wishes.
t h p r p h v;>rpntin«
Hpvp1nnrnpnt
difficulties which Mr. Wilson will
now.
One
„u't " m'emt' ™chTs
.
fnHmV V "nla' f,ont nf
w
V Rvminetnn hv Mr Wil
•
Vf hnTof mohiVtinn"
°a®Tnt agencies tend to come
to rde^^.ton untll the new i^
dlviduaf in charue has made
animation. Some things that go
an.d cWtfJoc m generat- obviously necessary, of course, are
shortages
initiai ing capacity'inwhich public power on- 0ne of these is the Nationai
initial
.
to fill
PmrinMinn AntVinvi+^'c
the scene.
upon
true
true
shadow-boxing
what "wage
nrice
^P.
aiter^ la a
workings of government expected
big change in power
"Dricr-Drofits" f o^u l 1 was the public. power boys to utilize Thus' a11
decisions about became a member of
cooked^in bv Mr Symington's an- eVerY device they could topower what shall be done are arrested York Stock Exchange.
cooked up by Mr ^ymington s ap- up the expansion of private hold moment in a state of for the
*■
Sill
Will
well as over all other facets of
as
the
of the price announce-
the spirit
With any
production. He said that if priorities interfered with achieving the
already-planned generating ca.pacity, then the private power inboss of the mobilization program, dustry might not be able to do
Mr. Wilson was designated as the job.
chief over economic stabilization
Thoge who h
followed the
postwar era, the Administration is
playing to the lay gallery. Most
people
are
expected to react,
"well, why should business raise
ThafS nT/nurse1 aif the wav
•Tr/mau Administration wants
Truman Arfmfniitratinn wants
*
care
SPECIALISTS
Hill, Thompson & Co., Inc.
Trading
50 Broad Street
J
;v
New York 4, N. Y.
Tel.
Department
STREET, N. YWHitehall 4-4540
70 WALL
5
^
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