The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
•'V*. AD.X
U3RARY
•
11 1950
JAN
to mi
a %mv
Reg. U. S. Pat. Office
Volume
Number 4868
170
-
EDITORIAL
Price 30 Cents
York, N. Y., Thursday, December 29, 1949
New
,
;
Business Prospects
.
As We See It
".i
*■.;*
-
■
••
'
Mr.
enterprise, and would in fact sustain and preserve
free enterprise. To the thoughtful student it is
evident enough that whatever • may be said of
them, and whatever may be supposed by their
sponsors,
measures
creators
ent
more
most of
cline. in
the
Let
In
F.
ator
behavior of this year's
sion
or an
been doing of late months
Continued
on
and
both of these names can be justified if we
appropriate figures. If we look at the most
inclusive figures bearing on the state of business—the
Gross National Product—I think Secretary Snyder is
Of course,
justified. Gross National Product in 1948 was $262 bil¬
lion; the average annual rate for the first three-quarters
of 1949 was $260 billion.
This is only a minor fluctua¬
tion—not even an adjustment.
)
33
page
on
page
28, 1949.
and Outlook
'
Due
December
ardous, until this year it entails vir¬
tually, no risk at all. This diminu*
Otiwld B. Woodward
tion in the occupational peril results
speak¬
ing, everyone has become a forecaster. My tabulation
through 6:15 o'clock last night showed that the number of
forecasts for 1950 issued to that time slightly exceeded
the number of persons above the age of 18 in the Ameri*
can
population. This excess arises from the fact that
some
business executives make pne forecast for their
sales departments and another for their accounting de¬
partments and from the usual phenomenon that a num¬
ber of professional economists have two or even three,
;
4,from the fact that, practically
different
in
opinions.
prediction
This virtually universal participation
means
that
forecaster can escape the
every
Continued
*An
address
American
by
Mr.
Woodward
Statistical Association,
outlook for 1950,
Street, New York 5
'
Bond Fund
Troy
Albany
OF COMMERCE
Bond Dept.
Teletype: NY 1-708
New York
NATIONAL BANK
'
.
1
r
,
4
Municipal
'
*•
'
•
New
1
An interesting
«S.
„
NEW
,
COMPAN Y
Booklet available for
bonds
Institution*
'
ANGELES
1899
.
"
.
New York
Cincinnati
Chicago
Denver
Columbus Toledo
.
.
•*
-
»•
„
*
MEMBERS NEW YORK
CLEVELAND
CHICAGO
LOS
ESTABLISHED 1891
(Incorporated)
BOSTON
YORK
Established
Dominion Securities
Grporaxioh
Goodbody & CO.
OTIS & CO.
.
workout situation
,
Corporate Securities
SANDERS
England
Public Service Co.
and
VAN CIS,
CITY OF NFW YORK
San Fmimmcd Lo« Angeles
BONDS & STOCKS
and
stocks
Underwriters and
be obtained
from authorized deulers, or
THE
OF
Agency: 20 Exchange PL
CANADIAN
canadian
may
CHASE
.
';•*
Distributors of
Department
THE
Head Office: Toronto
Williamsport
Seattle Portland,Ore.
•
Bond
OF NEW YORK
Scranton
Washington, D. C.
Prospectus for this Open-End
Company
the
.Bonds
CANADIAN BANK
Harrisburg
Buffalo
Wilkes-Barre
OF BOSTON
Investment
of
New York City, Dec.
Municipal
Canada
THE NATIONAL CITY BANK
PHILADELPHIA
BOSTON
Exchange
<Jfie
'
meeting
33
State and
THE
CHICAGO
V:
across
■
Wall Street, New York 5
: '
page
Monthly Commercial Letter
Providence
\
at
on
upon request
White,Weld&Co.
BOSTON
business fore*
INVESTMENT SECURITIES
64 Wall
40
years,
BUSINESS IN 1950?—The "CHRONICLE" of Jan. 19, its "Annual
Established 1927
@ 1.05% to 98l/2
Members New York Slock
v
Issue," will include th« reviews of over 200 of America's foremost
R. H. Johnson & Co.
(When, as and if issued)
;
•
Necessity for Forecasting
550 Branches
15, 1954-62
*
<«S
General and Refunding
Priced
the
.
:V
•
out-
28, 1949.
.
banking and industrial executives on the business
1/4% Bonds
in
quo
••r;" <"
■
Port of New York
Authority
and
economy, -o
During recent
by Mr. Newbury before a meeting of the
;■
'
.
32
American Statistical Association, New York City, Dec.
WHAT'S AHEAD FOR
Review
business should be called a reces¬
Continued
spending. Con¬
income
casting has become steadily less haz*
Someone
look at the
that what
The
1949 has been a pe¬
ways
year.
i
j
'V''; V:
the "most prosperous
adjustment.
*An address
Mr., Lewis has
as
national
'
characterized
depression
we have
evei^had." Early in DecemD. Newbury ? / ber,
at Senator Paul Douglas' subjawgsr•
Fisca 1 Policy, the Sen¬
and Secretary ZV9H&? Snyder argued whether the
it
York
(1) slightly
(2) smaller
maintaining rsfalus
\
;.
-
-
some
culiar
of special statute
from jail had they
production of coal
their tyrant, Mr.
be carefully observed
it
assigned
the
features of the cur¬
significant
rent year.
matriculate, it need hardly be suggested
Lev/is.
approach
-
"
t
pot in 1950 will aggregate slightly
less than in 1949. Criticizes policy
of
to
'
'
reduced government
cludes
trend toward
Expects aggregate debusiness to reach 10%.
wish
I
•
"
agricultural products; (3)- lower exports
and larger imports; (4) some de¬
cline! in automobile sales; and (5)
subject of business prospects of the
coming year by reviewing some of
strikingly exemplified is all
only drastic provisions
could possibly save producers
arbitrarily chosen to limit the
as
have the miners through
demand for
early 1950, but
downward
'
will be dominated by:
for business capital;
year
demand
-
this than in the recent behavior of John L. Lewis.
To the
J"
end of year.
icould: not possibly
that
for
coining
lower
continuation of pres-
mean
business level in
looks
of labor relations and labor unionism.
Nowhere
wilt
tors
these so-called
fail to
damage, and in the end destroy the American
system we have so long insisted upon having.
There are many, however, who appear to lack
conviction on the point, and there may be a good
many who fail to realize how far along the road
to something quite the opposite of the American
system of free enterprise we have already trav¬
eled.
Thoughts of this kind must have been
stimulated in the minds of the more thoughtful
during the past few weeks, and particularly dur¬
ing the past week, by developments in the field
and
welfare state
in
private construction and in heavy manufac¬
turing industries, combined with short upward trend
in soft goods. Holds offsetting fac--
machinations
1
'
Life insurance economist contends business conditions
Newbury, after reviewing and interpreting develop1949, forecasts for 1950 a downward trend
new
r
Mutual Life Insurance Company of New
ments in
in
-
•*
B. WOODWARD*
Vice-President,
Second
-
"
promoters, was-and is to insist that
are intended
to "save" free
Deal
Fair
*
,
Westinghouse Electric Corporation
j Possibly one of the most effective political
tricks of the New Deal leaders; and now of the
j
.
By DONALD
Enterprise"?
What Do You Mean, "Free
their
Retired Vice-President,
:
:
-
Copy
for 1950
eat
By FRANK D. NEWBURY*
a
115 BROADWAY
Dallas
Buffalo
NEW YORK
•
-
.
105 W.
IRA HAUPT & CO.
Members New York Stock
and
<
STOCK EXCH.
111
40 Exchange Place, New York S.N. Y.
ADAMS ST.
CHICAGO
<
WHitebaU 4-8181
;
Boston
Exchange
other Principal Exchange*
Broadway, N.Y. I
Teletype NY 1-2700
Telephone: Enterprise 1820
WOrth 4-6000
Teletype NY 1 -702-3
and Dealera
2
(2634)
THE
TRADING
MARKETS
The
IN
Home Insurance
FINANCIAL
CHRONICLE
Security I Like Best
Forum
for
Selections
Alabama &
a
all sections of the
country participate and give their reasons
Maryland Casualty (Com.)
Participants and
continuous forum in which, -each week, a differ¬
of experts in the investment and advisory field from
ent group
Great American Insurance
Thursday, December 29, 1949
Their
Constituting
Westchester Fire
COMMERCIAL'&
Sugar
favoring a particular security. Selections may be suitable
for individuals, for trustees and for institutions.
Stocks
Jacques
—
Coe,
Jacques Coe & Co., N. Y. City.
Louisiana Securities
Associates Investment Co.—Albert
ALBERT McGANN
Securities Co., Inc.,
Corporation
South
It's
120 Broadway, New York 5
Bend, Indiana
in
for me to meet this
challenge for my long experience
Teletype NY 1-563
BArclay 7-5660
the
stock
common
Associates
Investment
of
Co.
vinces
security
every
investor
able' to
fojcpONNELL & CO
Members
New
i
York
Stock
New
.
York
Curb
Exchange
Exchange
Albert McGann
,
prominence
tradition
£*
"
Floor, Kentucky Home Life BIdg.
KENTUCKY
2,
Long Distance 233-9
seen
in
1918
continue
which
earnings
importance to
our
promises
which
to *
high-level'
of
close
time
same
■
■'
:'
■.
■■
^
i
favorable
this
Dan River Mills
'
■
.;•»
industry
-
Engaging primarily in
ized forms of
financing, with
emphasis
upon automobile
uiiiiiiiiiiiiiiiiimiiiimiiiiiiiimiim
NORTH and SOUTH
ing
war
of
plus
a
a
is
sound
leading metal
This manufactur¬
of
receivables
made
years
supplying
services
.
t
'■
-
F. W.
CRAIGIE&CO.
RICHMOND, VIRGINIA
Teletype: RH 83 &
Telephone 3-9137
an
and
is
the
has
of
inevitable.
these
become
which
finance
vital
commodity it sells finds
to
appetite which ha^ yet
whetted. I A true growth
be
stock, it rates institutional appeal
pnH
a
legal rating in the state of
Indiana.
make
is
Senior
'*
"v
'
Partner,
Coe
&
Co.,
In
like best at this
ations which
have been
been
and
the
consumer goods to
recent published fig¬
point to a continuance of the
prime
sales
importance
financing
of
in
system.,
instalment
business
our
y
.
Recent
statistics, published
the
by
curities
been
with
mm COMPANY
&
208 South La Salle
St., Chicago 4
Tele. RAndoIpil 6-4696
Tel. CG 451
time
t i
u a
o n
the
to
repeat
were
to be
pears
the
bonds
ing
bond
issues
this
the
from
the
is
.season
liquidated
sold.
Companies.
few
at
all
with
levels, supporting my conten¬
industry has a con¬
pre-World War
tinued sound future, and that As¬
sociates Investment
Company will
have a comfortable niche in
the
industry.
shares
could
of
mean
consumer
at
financing
least
40% more
business for this particular enter¬
prise, despite other business fac¬
tors
which
may
or
may
not
be
favorable.
The investor finds
many strong
points of protection in this se¬
curity.
the
lias
industry
sugar
been
burdened
all
words,
,
of
1
.
For
dividend
pay¬
■
,
the
past four years, sugar
group have been in a
down-trend. During the past few
months they appear to have sta¬
as
a
bilized, and the past weeks have
suggested indications of what may
be
Up
the
beginning of
a
substantial
>>*~nd
Both
investment
senu-apecuiative
clined
to have
The current market price the sugar
a
minded
interests
poor
are
and
in¬
opinion of
industry and shares—
CHICAGO
DETROIT
PITTSBURGH
.
LAMB0RN & CO., Inc.
99
WALL
STREET
NEW YORK 5, N. Y.
SUGAR
Raw
—
Refined
—
Liquid
Exports—Imports—Futures
DIgby 4-2727
and
-
of
the
com¬
their
in
the
This
LONDON OFFICES:
tre¬
resulted
-
on
prices for
It has taken
in
all
many
this
time
world
up
consumption
with the supply.
World
was
War
3
Bishopsgate, E. C. 2
I
to
8 West
49
*
Smithfield, E. C. 1
Charing Cross, S. W. 1
Burlington Gardens, W. 1
64 New Bond Street, W. 1
Indonesia
a
capacity,
stroyed.
OFFICE—Edinburgh
Branches throughout Scotland
production
world.
expansion
11ncorporated by Royal Charter 1727
prices
induced
cane
Royal Bank of Scotland
HEAD
high
War -1
potent factor in bring¬
ing about an over-supply of sugar.
During World War II, the sugar
producing capacity of Indonesia
was virtually
wiped out. Out of
about 3,200,000 tons of potential
more
than 90%
TOTAL ASSETS
£155,175,898
Associated Banks:
«
Williams Deacon's
de¬
was
Today Indonesia is
v
Bank, Ltd.
Glyn, Mills & Co.
pro¬
ducing approximately 220,000 tons
a
year.
over
a
should
take
While it is estimated that
period of time
Indonesia
regain most of its former
producing capacity,
many
years.
In
the
it will
mean¬
while, world population keeps in¬
creasing and practically most, if
not all of Indonesia's
crop, would
Over-the-Counter
Quotation Services
stay
in Asia rather thaii come
either to the U. S, A. or the Eu¬
ropean
market.
for 36 Years
1
Indications for the
present are
production of cane
for, 1950 will be slightly
higher than 1949—practically all
that
world
,
sugar
of.it in British India.
beet
,
Y.|
GENEVA, SWITZERLAND
overproduction and served
the
not
continuity
NEW YORK 4, N.
no
with, existing work¬
the
blanket
a
sugar
consequence,
most people
had any firm belief in
ments.
a normal
the
and
deadly of
"uncertainty."
In
very
for
that the future of the price
that
have
that
select
They have had
times
tion that this
A rise to only
and
friends—principally
sugar
still below the
afield
path
beaten
far
N. Y. Cotton Exchange Bldg.
as
finance
to
extraordinary
After
go
Exchange
Exchanges
when \ the
Most
able
increase
Coe
the securities of the Cuban Sugar
of
relationship of instal¬
financing to national income
I
other
Inc.
Trade
incurred only dur¬
are
harvesting
over
also
that
- reason
And
were
practically
are
World
threshold
for
of
preferreds outstanding—
or
bank loans
catch
is
Exchange,
Board
New Orleans Cotton
.
there
years.
It
Exchange'
stringent and uncomfortable.
panies
for
Jacques
Commodity
Chicago
Exchange
Cotton
with
This time the reverse is true
in almost every instance. Among
the
leading Cuban sugar com¬
as
on
York
'
Exchange
burdened
heavy bank loans.
working capital positions
world
ap¬
Curb
V
V
well, and Cuban
preferred stocks and
mendous
pressed. Then,
when the sit-,
Stock
York
•••:
:
-
bound
are
reason
substantial
as
rapid
de¬
reason
pattern
request
as
companies
sugar
all
have
York
New
the debacle of 25 years ago.
i After World War I
most of the
after
trouble; and
where the se¬
Board of Governors
of the
Federal Reserve System show that
II
Bought—Sold—Quoted
results
had
never
The
of
amount
New
New
v
certain
mending the purchase.
84
Mexican Eagle Oil
this
.
sugar
a
.•'•*•••
■
,•
selling at levels
from 10% to 15%
yield
promptly
un-
•'
Members
wish
we
consequently are underpriced.
During World
War
II
sugar
prices advanced only moderately
were
New York City
yV.
-
securities
Their
Jacques
.*
.
that
fundamentally
so
that
involved
JACQUES COE
point
that
are
to be different
well
healthy flow of
to
is
problem,
market
a
ment
on
no-inventory
:V;
H. Hentz & Co.
:
remembered
important
which
the normal
Memorandum
The
sugar
slightly in excess of $12
share to be liquidated within
average time of
18 months.
pe¬
V
general blinking should
prevail with respect to post World
War II period.
to
1856
of
different
of clearing up,
I risk recom¬
ures
Bell System
kind
accounting
market, and
MUNICIPAL BONDS
7,
subsidiary which
profitable),
volume
The
-
(namely
subsidiary was acquired in
to help offset the
decline
1942
in
autos
branch offices
our
Established
high — and
subsequently
prices collapsed, most of the sugar
companies went bankrupt and had
to be reorganized.
It is elemen¬
tary that 25 years later, the same
profits
account
war
ing capital.
financing of
to
Co.,
sky
when
has
ment
Direct wires
sugar prices first soared
diversified and
ice
NY 1-1557
Birmingham, Ala.
Mobile, Ala.
immediately after tne first world
war,
basic .facts
income
be
are
the
-
should
season
furniture line.
VIRGINIA—WEST VIRGINIA
;
It
"dead"
include the serv¬
organizations for the instal¬
Exchange
New Orleans, La. -
experi¬
:
panies
manufacturer
Since 1932 Specialists in
'
splits
increase
company
stabilizing
riods.
popular;
quite
.
this
to
past
upon
during both post world
where there
the insurance
.
the
instal¬
&
to the behavior of sugar securities
sales, the operations of As¬
sociates Investment Co. are well
LD 33
CAROLINA
1918
,
ment
Lynchburg, Va.
Tele. LY 83
since
writing about the security I
time, I must pref¬
ace
by explaining that basically
I am an
explorer, and prefer to
special-' dig into situ•
'
"
and
an
■'
Scott, Horner &
Mason, Inc.
yearly
dividends
a
There
ac¬
working in
company help¬
investment which
consider top-notch.
ing to forge
I
'
record
continued
produced
stock
$41,500,000, at
displaying the
business, earn¬
forces
HAnover 2-0700
White,
Cook
Stock
St., New York 4, N. Y.
particularly with respect
per
morg
ings, dividends and resources in
its history.
That record reflects
the
4' ;
to
largest volume of
Moore-Handley Hdw. Co.
the
based
and
income
this company
should, report
net worth at the end of
this
the
American Furniture Co.
largely
ence
only when
earned, currently having deferred
Compared to a net worth
slightly more than $100,000 in
a
A.
Cincinnati, O.
York
New
Louis, Mo.
its
its
business
J.
—
Newhard,
spoon,
St.
method which takes discounts into
tivity.
year
Trading Markets
management
emulate
has
from
and
economy
to^be still
Members
General Motors—William Wither-
been
in addition to several stock
1918.
riiffiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiai'
and
dividends
cash
M.
in
growth
Municipals
J. A. White & Co.,
na¬
its overall policies will
to
"Further,
by Mr. E.
considerable
vital
Bell Tele. LS 186
Ohio
long-term
a
a
its young yet seasoned
executives,
has reached
third
place - among
the independent finance
compa¬
nies in the
industry which has
of
r
clientele
up
our
has
progress
,
building
that
feels
si-
Morris, who is still its current
leader; this company today, with
BANKERS BOND
LOUISVILLE
advancing
dealer
of
areas
capitalization.
Founded
5% Preferred
1st
u
Much
in
record.
Kentucky Stone Co.
r
tion.
made
and
Common
,
b
best market
signs of abating. For support to
my
argument, let's turn to- the
Common
Incorporated
the
hum¬
maintain
Steiner, Rouse & Co.
25 Broad
Rarely
and dividends that does not
show
American Air Filter Co.
m
of
and
P.
tensen, Denver, Colo.
to
one see a
tional
ness
Corp.
of: $3.60
Gerald
—
points, about this company.
As a
result of the progressive and far-
ble
beginnings in ,1918,
climb to na-
r
Tel. REctor 2-7815
Black Star Coal
own
rather
YORK 5
120 BROADWAY, NEW
dividend
Refining
Peters, Peters, Writer & Chris-
?
estimated
sighted policies which have been
followed, this company has developed.to its present 107
company .such
branches emanating from the head
as
this, start¬
office in South, Bend, Ind., into
ing
from
mand.
does
}
annual
an
Frontier
quar¬
of
the
underlying
fundamentals.
The intangible of
management is one of the stronger
equities
should
de¬
Since 1917
$0.90
cognizance
feature which
an
to
rities Co., Inc., South Bend, Ind.
of the market price to take greater
meritorious
Rights & Scrip
rate
Bought—Sold—Quoted
McGann, Albert McGann Secu¬
yield 7.5% at the current market.
I consider this yield too
high in
i elation to
any risk involved, and
predict an eventual realignment
that
me
for
minimum
con¬
has
Specialists in
terly
the
this
wm
L
dividend
easy
with
to reflect ade¬
seem
quately the estimated 1949 earn¬
ings around $8.50 per share. These
earnings support a recent increase
President, Albert McGann
Hew York Hanseatic
!
of 48 does not
sugar
estimates
also
incorporated
Established
46 Front Street
CHICAGO
on
page
1913
are
slightly higher—practically all of
Continued
National Quotation Bureau
Increase in
28
New York 4, N. Y.
SAN FRANCISCO
V
Volume 170
Number 4868
THE
COMMERCIAL
FINANCIAL
&
CHRONICLE
(2635)
Railroad Securities Outlook
Article* and New*
Business Prospects for 1950
v
Railroad
Securities
The Blind
—Joseph. R. Donaldson
Prospects
/y.
"
.„______J__L____1_
V
1931 Contrasted With 1949 :y
f—M. Jt Bonn________
-
K
l-i
-
4
"
—-—-
of Industrial Use of Atomic Enegy
Sterling Devaluations:
..
.
Public Attitudes Toward
—Hon.
Charles
6i
A
7
'
Activity to Continue
/Class I
•
8
Fixed
\A Tax Increase
.10
•
1
>.—Clyde
:
*
i' 11
-
Revised—John Bunam__
13 I
'
:
|
!_*_
_-___
I
'
21
Martin Joins International Bank.
Retrospect.
J
-
./r -:
*'•
{•
r;C-'•
-„*■
-V
;
Regular Feature*
Bank
See It
and
(Editorial>___
Insurance
Stocks...
Business Man's Bookshelf
Canadian
.
__l__,__L_Cover
_____(
;
-
-
Bankers___H
i___
;
Wilfred
Offerings
Securities
J
;Railroad Securities
with
side.
pushing
move
this year,
so
is
there
profitable
dollar
of
as
probably
coal. From
revenue
repre¬
by coal the net income is
This is certainly true
1945
of coal.
and
1946,
and
-
18
$700 million to close to $400 mil¬
21
lion
Now
Securities
20
36
in
______
._
Registration
The State of Trade and Industry
Security I Like
i_
i
stressing
the growth of gross ton miles and
revenues," which were way ahead
of previous peaks, such as 1929—
5
Best
2
.Tomorrow's Markets (Walter Whyte Says)
Washington and You
of the war,
40
v
They
year.
were
about $9 billion in the last years
30
_;
a
compared with $6 bil¬
charges; in
1936, 53%;
In
faced
were
cut
1929
.
and
Weekly
1
Drapers'
land,
The
COMMERCIAL
FINANCIAL
and
by Mr. Hahn before
the Smith, Barney & Co. organi¬
CHRONICLE
.
Gardens, London,
Edwards & Smith.
c/o
Reentered
Reg. U. S. Patent Office
WILLIAM
25
B.
Park
;
•
DANA COMPANY, Publishers
Place, New York 8, N. Y.
25, 1942,
York,
N.
Y.,
fixed
WILLIAM
WILLIAM
D.
SEIBERT,
President
RIGGS, Business Manager
vertising
plete
records,
■tate
issue)-
statistical
Other
Chicago
(general
and
issue
corporation
and
city news,
Offices:
3.
Til.
post
the
in
Dominion
Canada,
Other
of
Countries,
Other
every
—
ad¬
$25.00
Monday (com¬
quotation
$25.00
news
and
market
news,
bank
135
S,
(Telephone:
.
La
Salle
State
St.,
0613);
Act
at
charges,
We
March
f
they
per
per
Note—On
the
rate
U.
made
y,
are
(on the basis of 1948), in order to
save
amount
an
equal to fixed
charges, the roads would have to
"
'
per
maintenance
seventh, Which is
Fixed
charges
only
onebig difference.
a
in
1929
one
were
and one-third times working cap¬
ital;
last
year
they
were
one-
quarter.
fixed
;
In other words, in 1929
charges exceeded working
capital,
last
and
St.LouisI.Mo,
•••
i.
.
Tv
•
—
Monthly,
(Foreign postage extra.)
Earnings Record — Monthly,
(Foreign postage extra.)
'
v
f
O.*
'
'
.
.'
/
-i
■
.* ...J
*
Members
y
1 7
1
\
Midwest Stock Exchange
•
fiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiifivffrttmif^
| Pointers
=
For
on
Selling j
clever, helpful hints E
i for selling securities read rj
5 the
"Securities
Sales-
=t
E man's Corner," a regular
E
E feature
in every Thurs-
E
5 day's
issue
capital Was
charges. •
four
of r
the E
E "Chronicle."
11
.
working liiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiumiiiiiiiiH
year
times
fixed
I have here
a
preliminary study
bonds which you might be in¬
on
terested in
in
out
of
son
seeing before it is put
"white."
tention
I
draw
particularly to
Pacific
Gas
a
at¬
your
compari¬
Electric
and
and Southern Pacific. I call
special
attention
if
to
study
these
count.
and
bonds
of
it
because,
selected
balance
you
income
ac¬
sheet
items,
you will see for yourself why it
does look as if there is a pretty
big-spread in the prices of the
Pacific Gas and
Pacific.
bear
I
South¬
not
trying to
Pacific Gas but trying to bull
am
Southern Pacific.
■
When you con-
Continued
on
page
20
FIRST FOR YOU
because it reaches
For
oj
42
years
al[
The New York.
..Times has been the world's largest
High Grade Public Utility and Industrial
financial
advertising medium.
PREFERRED STOCKS
whole financial
your
Spencer Trask & Co.
Members
New
York
Stock
Exchange
-
Why? Because it reaches the
year.
Publications
STREET
mm
reduce
interested in ojferings
of
$38.00
SECURITIES
509 OLIVE
,
in
$42.00 per year.
community...tells
advertising story where it
counts
the
most.
r.
Members New York Curb Exchange
year.
25 Broad
year.
account
of
of exchange,
in
had to cut
a third. Now
maintenance charges
-
S.
year;
per
the
fluctuations
New
York
remittances for for¬
funds.
Street, New York 4
HAnover
Hubbard
.
Albany
-
,50 Congress Street, Boston 8
2-4300
In
eign subscriptions and advertisements must
be
In
;
Members
.
to
equal to
New
;
of
had
drastically.
amount
an
Eng¬
of
States,
and
$35.00
and Quotation Record
Monthly
clearings,
etc.).
office
United
Territories,
Union,
Bank
Thursday
the
under
Subscriptions
Possessions,
Thursday, December 29, 1949
Every
at
Pan-American
DANA
and
revenues
save
railroads
second-class matter Febru¬
Subscription Rates
9576
HERBERT D. SEIBERT, Editor & Publisher
C.,
1879.
'
REctor 2-9570 to
as
ary
8,
E.
Copyright 1949 by William B. Dana
Company
t
INVESTMENT
'
year
contraction
maintenance
order to
1949.
Twice
last
"the
with
zation, New York City, Nov. 18,
Published
STIX & Co.
ceived little recognition.
Back in
1929 fixed charges were 11% of
ern
*Address
"Not available this week.
Teletype-BS 126
bond
stock
Salesman's Corner
Securities
The
bright
when rail¬
prices were
much
higher ;than now, people
were stressing the debt reduction
of the railroads through reorgan¬
ization and purchase and the re¬
funding operations, which had re¬
duced fixed charges from about
37
Utility
income
In
13
Prospective
Public
in
the
large part of earnings, too,
from
the standpoint of
a
road
39
Our Reporter on Governments
Security
and
for
large part of the coal
a
of trainloads
*
I
their
faced
commodity.
15
May___
Report___
HUbbard 2-3790
a
have
now
j
1923
STREET, BOSTON II
from the
probably larger than that derived
from the movement of any other
23
Notes
Reporter's
so
However, these adverse devel¬
each
12
Observations—A.
•Our
.
success. ;
nothing
31
Funds
produced by traffic
debt' re¬
funding and purchase, retention
of a large part of earnings and
particularly the postwar inflation
traffic
net
7
Bargeron
30 FEDERAL
and the steel, which is not used very much and
big bite out of. 1 have been trying to popularize
Without these setbacks, it—I can't yet say with any great
took
all
sented
Indications of Business Activity
NSTA
Hahn
because
19
From Washington Ahead of the News—Carlisle
News About Banks and
F.
Connolly & Co.
INCORPORATED
of November
8
Dealer-Broker—Investment Recommendations
Walter J.
fixed charges were 14% of main¬
tenance charges.
This is a ratio
8
Einzig—"Dollar Gap and British Election"
ago, I; showed
of the vitally
some
That about
traffic that did not
8
—i
__
study I prepared
gross;/in 1936, 16%; last year they
were"4%'of gross.
In 1929 fixed
charges were 33% of maintenance
and
Dealer Briefs
Mutual
Walter
would not think
into 1950
8
14
Coming Events in the Investment Field
]
good
opments
We are
i.__^.____:____________,10
Securities
Bought—Sold—Quoted
greatly
growth,,,reorganization,
the railroads would probably have
had a net income for this year of
v*'-'
V!
longer
a
were
at least $550 million.
;,V:
\
*•
As We
changes
has"
earnings.
—39
•'■
•
than
although
strike
35
___
:
'-■/'*
charges
part
21
Export-Import Bank Grants Credit to Ecuador_____:
six
no
the
years
summer,
the complete cessation
of coal mining in
October and
19
Buying Agents Expect Good Business in Next Quarter
CORP.
and 'these
industry in the first half,
adversely affecting railroads in
the Southeast and -New England..
A three-day coal week during the
21
PRENTICE
Common Stock
Of wages and rates. Every item in
$400^ the balance sheet and the income
million net income is to be earned account "is larger than it used to
this year is being accomplished be—tha.t "is
every
item except
despite heavy snows in January debt, stock and fixed charges.
}
These great changes have re¬
and February which ate into the
18
Reports Acceleration in Savings Deposits Gains
REED
38, New
important changes that have taken
place! since 1929 and 1936. Thesb
textile
Nov. 1___^.
on
are
in ratio fashion
rail-;
18
$88 Billion
four
months
westerns roads', earnings,
the face of bad business
Myron Matthews Sees Another Good Year for Builders.;.
In
In
10
Debentures_L7-__^___-;__1-__--__-__-Ci-_l__t
last
"changed
about
earned
all,"'it
you
2
|.
the
has
stressed.-
in
rs-
a
in
factors
current attitude.
17
STREET, NEW YORK
Telephone: WHitehall 4-6581 :
stock prices.
in the 90's.
were
were
31
last
been
},
so
common Was
.
in
two times. All
'
■
_l.y_____._-_
National Banks' Assets Exceeded
(1949
But
attitude,
year
Yes, But .y(Boxed)_U._
Wm. McChesney
fact
mo re
"
;
,
Changes in Capital Structure t
were
of
y
roads
15 '
16
bonds
mat¬
in
.
and
Income
a
y e a
At; Taft-_L^y__:__15
Ascribes Britain's Plight to Outmoded Manufacturing 7
FIC Banks Place
of
*
history,
as
fixed
Phelps____
Best_____L___
way up
rail¬
which
Public Relations in Investment Banking—E. William Noland__
The Security I Like
1;
York Central 35, Pennsylvania 45.
the
Faring in Consumer Credit
—J. Walter Bell____l__
in
only; eight
11
Cheyfitz__:_;.i:__-,l_^i-'_^__i_--_^______-___i 14
William
times.
1949
there ^
:: Labcr-Management Showdown in the Decade Ahead
Banks Are
earned
Milwaukee
road
*
10
Salesmen Wanted—Captain Eddie Rickenbacker
How
be
one-half
dismal
a
ter
;
How Tar in Social Legislation?—Hon. Robert
will
and
Many other factors
Strength were emphasized, in¬
cluding the great improvement in
working capital. Bond prices were
of
but
j/
Cooperation in Securities Industry—Clement A.?Evans__
T.
!
'
confetti
make
99 WALL
of
people
year
Tomorrow's Cargo Aircraft—W. W. Davies__
—Edward
two
lion in "1929.
in
milliod.
as
i
X 9 'i
Martin, Jr._:
income
net
,
._.
The Dow Jones Averages Should Be
7
*
think
9
May Mean Economic Tailspin
—Hon. Joseph W.
7
don't
We'll pay sober cash for them.
Most
Domestic Effects of Capital Export Under Point IV
Salant
Railroad
charges
about
,
8
—Clarence W. Fackler.
S.
Lists best buys in railroad securities. T
pay.
1949 will be close to $400
1
1
____
__
Four-Pronged Attack Upon Equity Capital Problem
—Walter
mail
.
8
.
But
those obsoletes!
6 J
Who Is Really Socialistic?—Max J. Wasserman
-
Says i
improvements in capital structures
and are now less vulnerable ito depression. Looks for
higher
railroad earnings in 1950 and substantial increase in railroad
carriers have benefited from
5
Hopkinson,
Sawyer____L____:
GO ON,
GET TIGHT!
improved investment attitude in railroad securities.
an
,j
f
—i-
Owning Securities—Rensis Likert__
1949 High Level of Economic
J"
4 |
Stocks Dislike War Threats—Bruce Ellsworth
The Equity Capital Problem—Edward
AMD COMPANY
Ascribing depression in railroad securities as psychological
effect of pleadings by management for higher rail
rates, Mr.
Hahn contends that there are now strong reasons for
expecting
.3
t
__
___,
Lt. Gen. Leslie R. Groves_-___^_
\
.
_
Smith, Barney & Co., Members New York Stock Exchange
Cover
Hahn___-________
Outlook—Walter F.
Spot in Corporation Advertising
-
'
llCHMTlin
By WALTER F. HAHN*
y
—rrank D. Newbury and Donald B. Woodward
y
b. s.
Page
I
V
t
I ND E X
'3
Chicago
-
Teletype—NY
Glens Falls
2-8200
-
©fit Kctu Ifork Simejj
"All
1-5
Schenectady
-
Worcester
the News That's
Fit to Print"
COMMERCIAL• &
-THE
(2636)
4
sales
opinion in the
in
Advertising
By JOSEPH R. DONALDSON
Joseph R. Donaldson Associates
*
Writer advocates integrity
as
advertising to establish a corpora¬
entity and its individual importance in the national
Believes so-called institutional advertising misses
an
economy.
most
important segment of public.
Suggests correlation of
practical mediums to bring about better understanding
of security values and relation of market prices to real worth
well
increased
as
vertise
Most
corporations
that
recog¬
and
expenditures,
tion
the
on
promo¬
their
of
him.
As
long
they
as
suffi¬
can
ciently sustain the confidence of
the larger interests to muster a
majority of proxies at the annual
meeting,
they
do
not
concern
products, the
themselves with their other stock¬
widening
holders, either existing or poten-
their
f
o
markets
sing
c r e a
tial.,
in-
the
and
their
Some
few
more
eral most
sales.
for¬
;
Joseph R. Donaldson
stitutional ad¬
vertising is that it "sells the comT
pany" and to a limited extent the
usual institutional
campaign,
less it is either too exalted
un¬
or
too
folksy, does that. The trouble with
institutional advertising is that it
^'sells the company"
only to cer¬
tain segments of the public; and
one
of the most important seg¬
the security owning and
dealing public, is not among those
that are effectively reached.
Everyone
who has ever lis¬
ments,
advocate of advertis¬
ing is well informed as to the evils
which descend upon a corporation
advertise
itself
as
its prod¬
institution.
an
The effects of this neglect of pub¬
lic opinion are
it is surprising
well known.
But
how few people,
including
corporation
officials,
realize the evil effects of failing
advertise to the financial
com¬
not
does
other
have
a
to
make
a
market
narrow
An¬
important fact is that
the
history
of. corporations reveals
how frequently new capital must
be sought.
It may be;,that the
company is offered the chance to
acquire another company or busi¬
ness at a bargain price; it may be
that the business has increased
so
rapidly that its working capital is
completely absorbed and must be
augmented; or it may be that new
capital must be raised to replace
that
dissipated
in
unprofitable
years or to meet competition by
adopting expensive technological
that
is
avail¬
the
reputation
will
decline
rather than advance, but
then, candor, with regard to
what the company.is doing besides
losing
money,
will
provide
a
inaccurate, incomplete or obsolete
Market prices can no
longer be manipulated and never
information.
were
appreciable period
They are determined by
over
of time.
the
any
investing public and by no
They are directly related
else.
They do not judge the
caliber of the management by in¬
A
stitutional advertisements couched
other
in
to
well
informed
public has
There is likely
advantages.
be
more
active
trading in the
and stock
about
But
we
the very
talking
are
-from
tails
that
—
-
what
various and all
are
nizance of
did
take
all
those
with
work in American
numerous
to
money
industry
they
are
small
part
...
a
are
group. .But
relatively
to
a
of / the
American population and they are
scattered
the
through.every) part
United
tion
of
States.
The
Securities
1949
of
edi¬
Dealers
.of
North America lists 1,021 pages of
member and non-member firms
,
and
their
and
cities
District
branches in
in
of
48
794
states
„
towns
and
the
260
Columbia. .Of
pages
21, a total of 485
indicating that well over
pages,
50%
are
of
those
professionally
gaged in the distribution of
rities and in guiding the investing
public in the accumulation and
preservation of its wealth are op¬
erating
outside
of
the
larger
nancial
centers.
(A
number
of
firms
those
New York
unlisted
City
substantial
is
in
others doing
public business.) In
no
listed
floor brokers,
are
traders and
munities there
fi¬
but
many com¬
broker
one
dealer but each of these is im¬
or
portant and the so-called out-oftown
dealer, in the
least
mass,
is of at
much consequence as the
total of those in the larger cities.
as
Many
hungry for information
the handicap of dis¬
are
because
of
Every ad¬
and
manager
sales
di¬
rector knows that in order to sell
the
company's products, he must
speak the language of the man
who buys them.
But not every
corporation
official
is convinced
that in order to reach, interest and
convince the investor, the com¬
must first find the man, ap¬
proach him through the channels
by which he is accustomed to re¬
pany
ceive
.
financ'al
his
and then talk
to
him
information
in
his
own
language.
*
This lack
of interest in the in¬
vesting public
managements
based
on
a
the part of
on
i
of
investors
greater
of
stockholders.
adhere-to the 1870 conv;ction that
and
more
places
more
type
of
goes
directly to the mark.
time
a
sold,
itself
activity
valuable by-product, a
costless advertising that
a
Every
listed security is bought or
the
transaction
is
visually
recorded in every office and in
practically every branch of every
member
paper
firm
is
and
printed
the
in
company's
every
news¬
and financial periodical that
carries
There
of
branch
are
ft
recently published statement that
8,000,000 families in this country
are security owners.
But even if
that is
accurate
an
represents
only
facts
will
indicate
using an expensive general
proach in order to reach the
man
of
out
sons
why
a
and
are
United
few of the
corporation
can
finan¬
positive
means
of
reaching these
^
huge
rea¬
needs
a
figures
look
totals of
they
but
waste.
A
such
on
small
man
pub¬
beside
general
are
all
may
the
publica¬
and
meat
buy
a
five
cent newspaper or a 15 cent maga¬
zine
in
order
_
to
look
at
the
on
rather;
are
be divided
those devel¬
can
(1)
page
But the
industrial
the question
of the
industry
as
discuss
the
ing to what
of
the
that
is
what
been.
as was
that
concern
no
that
way
produced, accord¬
we
commonly think
it.
It
did
cooling
the
heat
water,
to
water,
a
of
Now, the industrial application and, by using certain elements in
of atomic energy
properly
think,.; into
first, the
two
falls, I
classes:
major
feel,
use
have
The industrial power is limited
peculiar situations at present.
Its development for general use
to
certainly
I
away.
number
a
have
not
of
years
changed
the
opinion I expressed in 1946 before
the NAM that it would be at least
ten years,
and that assumed that
have the same drive
would
success
toward
in that
as
success
have
we
during
the
It would take ten
years be¬
fore we would have a reasonable
war.
chance
of
having
the
economic
use
of atomic
energy for indus¬
trial power within our
grasp.
Cost,
The
one
that
dollars and
present
can
Factor
a
for
reason
of
pated
time
there
in
way
be made
is
simply
cents.
is
which
loWer
At
antici¬
no
those
than
the
costs
the
cost
of the generation of power
that
through
that
to
power.
But
at
now
of
assumes,
by the
disposal,* and
our
course,
that
price of coal will continue
under the leadership
Lewis.
But despite
up
time,
expensive.
present
to
of
the
go
Mr.
difficulties of
generation
of
i
by
54th
power
the
through
transcript
Gen.
Groves
Annual
American
in
'
^Stenographic
address
costs
of
before
Congress
of
Industry, sponsored by
the National Association of Man-
ufacturers, New York City, Dec. 9,
25 1949.
'
vi
at the
be very
would
':./''
'
expensive
It is true
that
usually they
would have
very little to do.
But when you,
needed
them, you would need
them badly, and they would be
men
who demanded wages that
would be far above any demanded
by any union of today.
large
a
to
of
very
run your
staff
plant.
Now, what would be the ca¬
pacity of such a plant?
To make
it economical at all, it would have
to
be of enormous capacity.
It
would have to be something not
lor
use
there
in
tie in to
New
an
isolated
much
isn't
area
demand,
where
but to
system like that serving
City, to tie in with
a
York
something like the Columbia River
system.
It would not be some¬
thing that would be a normal,
out-of-the-way use. It is true that
if you had a
tremendous demand
an isolated section,
it might pay you, but it is very
difficult for me to set up the re¬
for
power
in
or the conditions, you
might say, that would make it a
feasible thing to think about. •'
quirements,
Navy May Be Atomic Powered
I
would
miss
that
from
there
situation.
an
it
means*
would also have to have
,You
,
that, the in¬
herent
the
produce
men
bomb.
is
steam—and
been
greatly exag¬
gerated/Certainly, I have not kept
quiet about my feeling on that
from the day that the American
people first learned of the atomic
boiler plant, produce steam
your
—not water steam but a chemical
of atomic energy for
industrial power. Its
possibilities,
I
was
in any reasonable method
generating electric power.
Of
course,
it would be possible to
take a
small degree of heat
us
has
progress
was
sential
/
;
should
.;•/
it
certain
temperature, but it was short of
that steam point which is so es¬
anticipated, or as rapid as it
should be, is beside the point. The
today
as
the reasonable way to pro¬
as
duce
that has been made. Whether that
question
There
steam.
steam could be
should review what has hap¬
pened since V-J Day, the progress
rapid
//->
pile
the
much
very
very,,
;;■'<•// yV.
then,
Now,
we
progress has been as
was
built at Hanford did not produce
first,
part
it
greater.'
V;.:
first
for the increased cost,
reasons
but
development that has been
reported in Russia?
1 To
the
result
a
f
wasn't in charge and I don't know
is, what is the effect
American
on
war
great deal more ex¬
a
Why, I don't know.
pensive.
The other part of
use.
built since the
ones
have been
in this country which
given us a greater knowl¬
edge of atomic energy, and par¬
ticularly knowledge applicable to
car-
.
Continued
as
opments
means
And yet there are efficient and
no
a
a
cial message.
tions
but
who
ten
or
ap¬
one
public. The most obvious is the
specialized financial publication.
States.
are
five
possibly be interested in
lications
These
unwisdom
literally
offices
the
the
build
to
simple.
build a
it cheaply.
I
thing to
building them under wartime con¬
ditions, and we didn't know from
one day to the next what design
would be required and we had to
change and change and change.
devel-
less
of
metropolitan centers and they
over
something
of the total population.
A moment's consideration of these
Circulation
all
figure, it still
and
rather
are
terrible
a
pile
have
than 20%
smaller newspapers outside of the
scattered
a'
scattered members of the financial
on
they have a man's money favorable financial climate to live
they need not bother further with in as well as
sunny skies in the
once
One may be inclined to doubt
or,
into two classes;
had
business of the country.
the
list of transactions
a
securities seller and the securities
sell its securities in¬
itially in order t^ ra;*e the capital
to get started. But far too many
distribution
More
Trading
company.
produces
hundreds
must
more
begin to think and talk about the
exchanges.
pany
part of
and
more
ing of the importance of the
buyer to the compnrv. Of course
management realize* that a com¬
the
produces a larger
of
stockholders
and
geographical
people in
name
understand¬
on
and
number
some
undoubtedly
s
lack
interest
more
is
/
■
reasons
v-The
opments..
believe,
twofold,
toward
its affairs.
of
They originate an impos¬
portion
of
the
investment
It
are
■/they
affect
industry, I
Leslie R. Groves
ing
conduct
vertising
to
was
thought it was awfully expensive
during4 the war, when we were
.
..
we
leads
perfectly safe to tell
now, certainly
disagreed with me in
who
on,
unanswered.
cation.
This
think
ten years from
The
still going
greater
and facilities for communi¬
Even
time—and
1945—I
them then.
of other ques¬
en¬
secu¬
who
that
be
out.
years'
from
1946 on the ground that
unduly pessimistic, are now
talking about 25 years instead of
the ten that seemed too long to
respon¬
tions
worked
1945 and
I
sible, and lots
cog¬
put
and
.was
j
The invest¬
ing public, the buyers and sellers
of securities, the stockholders and
this
great that it
so
are
ten
dated
would
those
why
hap¬
pen
thing.
one
and
after
is
you
years
.
ago
mation about; the company to the
securities selling and buying pub¬
lic
I
as
hap-
„pened
now
of conveying infor¬
means
devel¬
recent
be
can
then,
-
opments-
tance
liquidity.
today, headlines
of all
-
and substantial disclosure of their
The
advocates
will be years before all of the de¬
varieties and headlines discussing
not so much
great majority of
-".
and
power,
atomic energy
develop¬
atomic energy are what
on
read
you
tection to stockholders because of
them
knowledge- of atomic
I think the most recent
ments
company's securities, a great
pro¬
Russia's
porations which, if they but real¬
ize it, have nothing to hide and
everything to gain .from l'rank
'
be made avail-
not
decentralization of factories and industrial plants.
gather
they ; are
able
to
that is submitted to
relating to Ihe company's
piles of atomic material could
Points out, however, valuable use of isotropes may be
-made in industrial research and medicine: Sees serious threat1
well-operated, successful, progres¬
sive and growing American cor¬
affairs.
energy gives little hope for;
by industry. Says cost is prohibitive,
power
able.
~
information
or
pf atomic
use
even
cushion.
V
Leader in development of atomic
/early
-
and Saint Louis
reflect actual values and
incompetent guesses based on
not
who
risk
their
their judgment by pur¬
currently and accurately informed,
chasing
securities for
long
or
which is seldom the case today,
short-term investment or specula¬
he can and does rather
precisely
tion do not judge
a
company's
appraise the value of a security
status by
its advertising.
They and his
appraisal is reflected in
judge it by its profit and loss market
prices.
generalities but by the specific
it
prices
When new financing is contem¬
money on
statement.
bad,
,
to its integrity is
about
Former Director, "Manhattan Project*
m
is
plated it is important that market
\A-.>;/■?://w
'
to the extent and accuracy of pub¬
lic information. If the investor is
people
is
Vice-President, Remington Rand, Inc.
.
com¬
a
Obviously, if that informa¬
tion
By LT.-GEN. LESLIE R. GROVES*
^
.
lady
a
That
these,
required for New
York
City, Chicago occupies 70
pages, Philadelphia 41, Boston 38.
Los Angeles 30, San Francisco 25
advances.
c*e
munity.
The
wise
a
in order to meet the tax bill.
vertising. The
theory" of in-
to
it is
and
able.
this category who
sacrifice sale in
stitutional ad¬
or
breaking
large > stockholdings well-
estate
ally called in¬
ucts
One is
makes provision for the future by
arranging his affairs so that his
that is gener¬
that does not
■
progressive
stockholder in
this something
an
{•
;
of taxation
trend
up of
nigh inevitable
corpora¬
tions add
to
•'
•
important facts.
the
makes
ing
..
overlooks sev¬
course,
v/hole
that the
ward -look¬
tened to
i".,V. '•
' ■
'This, of
of
for
as
virtue.
"
to ad¬
based
primarily, upon just one
thing and that is the amount of in¬
formation
Prospects of Industrial Use of
Atomic Energy
.
standing that
as
Thursday, December 29, 1949
of
company
her
enjoys
pany
a
integrity
The
not so.
phasizes importance of cultivating investors in remote places
not reached by usual methods
nize the value of advertising con¬
centrate their advertising efforts
its
advertise
to
for large
financing. Em¬
activity, creating protection
stockholders and advantages in arranging new
that
mass. - >
difficult for
as
more
as
and
public
-V;
j
The means of developing such a
favorable opinion among the fi¬
nancial public are quite simple.
It
depends
basically upon the
standing of the company as to Its
integrity. It is, therefore, it's irv
tegrity that a company should ad¬
vertise. To put it in a few words,
it is "integrity advertising" that
is the blind spot in Jhe average
corporation advertising policy.
At first thought, it may - sound
The Blind Spot
tion
field
CHRONICLE
FINANCIAL
therefore
is any
It
is
like
minds
your
to
the
dis¬
idea
change in that
true
that
vessels
will be powered by atomic energy;
that
naval
vessels, particularly*
will
be
to
be
some
have
so
powered.
possibility, if
a
navy,
of
Continued
There
we
that
on
will
continue
being
page
2Q
Volume 170
Number 4868
THE COMMERCIAL & FINANCIAL
f
>
f
Sterling Devalnations:
was
notes contrasts with
unemployment
was
the past week
noted
munities.
.
in
some
com¬
capacity.
made further progress the past week, rising to 94.5% of
....
:■ ,'
■
"
" -
.
...
*
In the automotive
ended
week
Nov.
field last week
that
19
total
was
output has
the first time
since the
exceeded
100,000 units
The estimated figure by Ward's Automotive Reports, both for the
United States and Canada, was placed at 115,495 units.
'
With regard to the advance in steel prices, it is understood
:
thai
the greater number of the large steel producers have followed the
leadership of United States Steel subsidiaries within a weeK.
Smaller companies are reported to *be following suit with present
indications
pointing to the completion
adjustment by the turn of the year.
i*' v
■
■
price
.
.
'
V
-
amounted
This
42,700,000, the United States Labqr Department an¬
was a slight gain over October.
But it was 750,000
below the total prior to the coal and steel strikes.
Seasonal layoffs
and
idleness caused by
steel shortages just about offset the return
of striking steel and coal workers to their jobs.
Unemployment in
November dipped to 3,400,000, off about 200,000 from October.
'
The recovery of business in December from
from the recent steel and coal strikes was more
the setback suffered
rapid than had been
expected, according to the National Association of Purchasing Agents.
An air of "general optimism" was reflected in reports to this organi¬
zation as the year approached its close with predictions of "good
business" for the first quarter
of the
new year.
its issue
of Dec. 26 states
aa-lollowS:;
"As the year-end approaches, the
economic forecasters are saying
fairly good business weather during the first
quarter,. These predictions are made at a time when some of the
major industries are driving at full speed to make up for past losses
.
that,
we
can
occasioned
expect
by strikes.
"steel
7
*
■
automobile
"Most noticeable exceptions to
these optimistic signs are found in
fuel and transportation.
Revenue railroad freight car loading^ are
down substantially from levels of a year ago.
Bituminous coal output
is
roughly 25%
below production in corresponding weeks of 1948;
three-day week. Production of petroleum also is
due to the current
lower, but by a much lesser margin than coal.
"Economists
in
insurance
two factors which will
help to buoy purchasing
early 1950.
in
see
One is the $3,000,000,000 to be distributed to veterans
The other is an estimated $1,000,000,000 in
Series D savings bonds which were sold in 1940 and will mature ir.
1950.
Bond redemptions will be an important factor throughout the
1931
and
the sizable
sum
of $3,867,000,000 with Great Britain receiving tne
largest portion, followed by France, Western Germany and Italy in
that order.
\V
The year-end
review, covering aid through Dec. 20, showed ar
allotment of $1,810,072,000 for industrial goods and $1,767,233,000 foi
Another $278,000,000 went to
food and farm products.
shipping
pay
costs to carry the goods across the acean, while $10,980,000 was spent
for technical services such as bringing foreign production teams here
to
American methods.
learn
1931....
all
those
1949
t i
*ECA said there
"distinct drop" in dollars set aside for the
This, it said, reflects "a basic principle of the
plan—that the European countries should require a decreas¬
was a
ing-amount of ECA dollars as their economic recovery progresses."
RECEDE SLIGHTLY DUE TO
OPERATIONS
w
n
n n
a
ed
planlessly
bodm—to
Moritz
J.
Bonn
October, 1929,
and 6%. Un¬
fluctuated
around
cash
tc
billions they
States, and tc
had gone down to 5% in February
and to 2.5% in May, where it re¬
mained for the
true —for
it
Tt
even
to
level.
41/2%
It
movements of the
(June
thought of making plans for meet¬
ing the outcome. If ever proof
was needed, that planners cannot
plan, because they hAve neither
enough insight to understand is^sues
nor
adequate foresight to
anticipate
nor
sufficient
cour¬
age to meet. their consequences
(July), for when security prices
are jumping by 30 points in three
months, one cannot stop the boom
by adding half a percent to the
when - they stare them
in the face, here it is.' The one
loan
British
the
excuse
Government
claim is the prodding of some
American friends, who indulged
can
in
noble
the
sport
of
backseat
driving, being unaware of the dif¬
ficulties
of
the
skill
limited
road
of
the
-
and
of
driver.
the
The
devaluation was in¬
evitable, does not exonerate a
planning government; planning is
senseless, if it does not enable
that
plea,
one
to avoid situations where
decisions
desired
1931
The
crisis
was
crisis of
a
the
to, the obtuseness of thq
Party, who opposed the
policies of its own Chancellor.'
Labor
below 5%,
not
could
and
otherwise the Treasury
the
convert
the
relieve
£30 million
5%
The
opposition naturally exploited
vacillations, by telling the'
world that England was going to
the dogs.
The result was a flight
of capital and a heavy loss of
war
its
budget by
it wa*
that credit
restriction< would cause increasing
unemployment.
When the crash
came in the United
States (Au¬
about
moreover
a
year;
frightened
gold.,V
become
rates fell to 1.5%.
was
of confidence.
of
agricultural
resulting in a fall
prices which hit over-indebted
of
farmers
hard.
Their pur¬
chasing power in domestic mar¬
kets shrunk.
The great agarian
oversea countries, who depended
on
very
restore
their
a
press
saw
given moment.
their
Their defaults
United States.
reduced
pretty badly
their
purchasing
clearly,
which
was
that
second
Great Britain's income
foreign investments fell from
£250 million (1929) to £165 mil¬
industry will wind up the year with total
steel production very close to 77,500,000 net tons of ingots and steel
for castings.
Finished steel shipments for the year will exceed
57,000,000 net tons, according to "The Iron Age," national metalworking weekly, in its current review of the steel trade. It was riot
a record year because of the
partial satisfaction of demand pent up
on
as
General Partners
from
during the
pleasure in announcing that the
following Certified Public Accpuntants
have been admitted
manent
war,
the spring recession and the steel strike.
topped any pre-war year by millions of tons.
It was
better than the boom year o£ 1929, the magazine adds;
:
But it
14,000,000 tons
operations, between 85 and 95% of capacity, will
continue at least through March of this year. This prediction is made
despite squeamishness in some quarters and is based in part on the
fact that automobile manufacturers are optimistic about the imme¬
High-level
diate future, see good
business ahead for at least six months.
For this reason, this trade authority states, flat rolled
in strong demand-, for the first quarter of 1950,
continue
Jjil
u
UwV
'
•
*
Continued
steel will
for it is
on page
30
lion
(1930)..
in
the Firm
as
of November
1,
1949:
,
:
The rise of American wages ac¬
a fall of cost of pro¬
duction had bred the myth of per¬
companied by
prosperty,
as
industry
profited for a time at the expense
of agriculture. The price fall had
been caused by physical causes,
not by credit restrictions or high
rates of interest; neither bumper
crops nor bad harvest, are occa¬
sioned by money manipulations,
though efforts at mitigating their
consequences
can
be
MR. STANLEY E. SHIRK
MR. EDWIN C. NELSON
SAN FRANCISCO OFFICE
SAN FRANCISCO OFFICE
NEWARK OFFICE
MR. PHIL0 R. ZIMMERMAN
MR. WILLIAM B. WOOD
SEATTLE OFFICE
HOUSTON OFFICE
made
through them. In the late 20s, re¬
dundancy was combated by credit
NEW YORK OFFICE
MR. JAY M. SQUIRE
MR. ARNOLD R. TERNQUIST
!
.
'
govern¬
largest party
Continued
automati¬
a
opposed by the
BARROW, WADE, GUTHRIE & CO.
take
Mc¬
heading a na¬
did not im¬
foreigners sufficiently; they
foreign
debts, and
paying for
Even so their abil¬
ity to buy manufactured goods
had greatly declined, and with it
their imports from Europe and
on
return
His
bulk of the
An outflow
reduced them
it.
very
ment
of notes and credits available
gold
a
Mr.
government
exports tried to
problems by default¬
used their exports for
the
at
tional
gold
agricultural
solve
ing
standard
of
Nor did
Donald's desertion from his party
Popular opinion holds the gold
The
The attitude of
undermined.
Labor did not make for
Gold Standard not Responsible,
■'"'V
for Crisis
ume
could
banker who had lost a
to be withdrawn when confidence
/
over-production
commodities
a
gust-September, 1929), it was not
considerable part of his own kcap->
fought in- New York by raising
bank rates but by lowering them. ital, but was unwilling to contract
his operations.
She worked op a
In June, 1930, they were down to
very large scale with borrowed
2.5%, and in the early days of the
British crisis (1931), New York money, and that money was bound
commodities,
of
purchasers at remunera¬
prices.
It started with an
'-/J;
.Great Britain at that time had
responsible for the crisis.
reserve of the Bank of
England it argues is determined
almost automatically by the vol¬
number
crisis of Sterling was a cqii-:
crisis, due in no $matt
degree
•
The British rate had to be kepi
over-production in the sense, that
a
and
fidence
un-
inevitable.
are
bank rate.
rate
depression was not brought about;
by deflationary measures of the
bank.
Quite possibly a timelyrise of the bank rate might have
eased it by expanding credit. For;
and to 5%
1928)
bank
the figures of unemployment. The
raised too late
was
is
quite impossible to point
automatic connection between;
to
partly with the object of keeping
the English bank rate stable at a
low
the year.
of
rest
*
,
is
it
May,
1930, to April, 1931, but unem-;
ployment rose from 15% to 20.8%.
In July it reached 22% though the
rate had been lowered in May to
2.5%.
Through October and No¬
vember; 1931, it fell- a little to'
20.9% in December,: though in
September the bank rate had.
gone up to 6% and remained on
that level through January, 1932.,
In
that ;w month
unemployment
climbed again to over 22%, reach¬
ing 22.9% in July, 1932.
In the
meantime, however, the bank rate-
it, the New York bank rate wa
lowered to 3.5% in August 1927
s
—
power.
This week the steel
in
3%
remained stable at 3% from
out of hand. Instead of controlling
took
the
planners
fully two
months after they had first made
and
CHRISTMAS DAY, HOLIDAY
American
had gone down to 3.5%, it
had risen to 13.7%. The bank rate
exchange boom in New York ge4<
mm
t he
hurt British investors
STEEL
nearly all
It declined from 5.5%
10% from March to October, 1929:
in March, 1930, when the bank
keep something over for their own
use.
Cheap credit made the stock
devalua-
o
1 a
sufficient
pay off the 10 odd
owed to the United
con¬
cerned;
with
creditors
iappened —
e r y
much
against the
will of nearly
v
their imports.
Marshall plan nations.
Marshall
1949
ievaluation
tive
Marshall plan aid extended to Western Europe during 1949, the
Economic Co-operation Administration currently reports, amounted
to
the
between
not find
*
lowered
was
employment
prosperity was the
it was to be secured bj
credit expansion all round.
By
pumping .money into, Germany,
nationalizing both her industry
and her agriculture, the United
States prolonged the life of the
reparation scheme. Increased pro¬
duction was to provide Germany's
devaluation of
refunds.
next decade."
out this
it had gone to 6.5%
goal;
squarely
ingot operations are holding at around 95% of capacity.
industry is going strong and is preparing for a
record-breaking spurt on new models in January, with some over¬
time operations scheduled.
Electric power output, which annually
touches its seasonal high point in December, has established new alltime records of output in two consecutive weeks.
;
The
dismissals
bear
not
the American crisis
Permanent
resembles the
original.
A
comparis o n
lip their minds before they
Viewing the prospects for the year ahead, the;magazine "Steel,"
in
to
rate
The
to
nounced.
led
more
remu¬
1930, and to 2.5% for May, June
and most of July, 1931.
During
level, end is not yet in sight.
••
employment in industrial, wholesale and retail lines
less
use
(February, 1929), at the height of
the
of British
History, we are often told re¬ expansion in agriculture nearly
peats itself, though as a matter everywhere, which naturally stim¬
of fact, it is merely copied; in the ulated additional production.
hands of inferior craftsmen, the
Credit Expansion of the '20s
copy rarely <
bears this out.
/'V',"1;'.'V;
'■*;
"
-November
industfy-wide
of the
bank rate
the time.
production for export would seriously contract home consump¬
Points out British worker, in fear of unemployment in
regime of plenty, holds down output and accepts austerity.
Concludes, because 1949 devaluation was fixed at artificial
Electric power production the past week again pushed through
its high point to establish another all-time peak.
Not to be outdone,
steel output
Says 1931 crisis
tion.
«
.
recent devaluation.
exports and points out diversion of large-percentage
slightly under the level for the similar week in 1948. A moderate in¬
Tr.is
The facts do
caused by over-production, whereas. 1949 devaluation was
result of under-production.
Foresees little increase in British
manufacturing lifted total industrial production for the
country slightly above the level prevailing in the preceding week, but
notwithstanding the increase, over-all output continued to hold
*
making it
iis
explanation of the 1931 crisis. The
was
A rise in
in
more
se¬
and increased unemployment.
Dr. Bonn reviews British devaluation of Sterling in 1931 and
Business Failures
J
crease
nerative.
Auto Production
Industry
contracted by
expensive and
By M. J. BONN
Price Index
or
curities had. to be sold and credit
Commodity Price Index
Food
5
loss, the
pre vent--this
bank rate had td be raised
1931 Contrasted With 1949
Carloadings
Retail Trade
State of Trade
and
cally. '.'To
J
Electric Output
:
(2637)
.
■
Steel Production
The
CHRONICLE
page
26
THE
(2638)
6
COMMERCIAL
&
FINANCIAL
CHRONICLE
craze
Stocks Dislike War Threats
another
Co., Inc.
New
international tensions
should
we
ful
war
with Russia,
Since
the
ment
have
lowers
stock
market
confusion
of
reigned
equities.
break
fol¬
among
In
face
the
of- unprece¬
dented
pros¬
ed
in
which
followed
was
by
tion of Lincoln
and
at
far
below
ly
would
short.
though
been
inter¬
national
firing
April, 1861,
velopments
have
lower.
received
attention
earlier
made
The
de¬
Bruce Ellsworth
in
Fort
on
forced
The
battle
the
prices
of
discussions of stock prices, it does
its
in the years since
tation
1946.
There have been periods of in¬
ternational tension before in our
tensive
conduct
of
the
with
war
bull
of
victory
touched
which
market
until
and an examination of
stock prices during those periods
reveals
a
threat
nant
of
striking similarity to the
During
war
such
times
became the
influence
on
lifted
did
prices
prevailing good
stock
tant
the
domi¬
securities, and
not until the pressure of fear
did
off
was
to
any
Charts
of
prices during three impor¬
and
which
comparable
fear
of
.war
periods
existed
in
are
not
acted
in
the
of
war
crisis.
declined sharply
ing/ the
war
market
same
manner
tained
Stock
hi
to. make
advance
Europe.
any
during
while tension
The
was
1911
sus¬
and
mounting
preparedenss
con¬
down¬
into
the
the
the
hearts
and
war,
fortunes
confi¬
new
of
year.
The stock market break of 1946
of
resulted
from
a
postwar
depression.
However, the state of the nation's
during the last three
years
hardly justifies the trend
of stock prices since then. A more
economy
reasonable explanation of the dis¬
pirited
action V
would
sphere.
another
war
seizure
of
cluded
inter¬
threat
of
eastern
European
the
fall
was con¬
of
Czecho¬
in
February, 1948; the
blockade; the collapse of
Berlin
the
the
Russia, which
with
slovakia
in
The
t
prices
has been strong. The
the
nat'ons by
stock
lie
to.
seem
national
of
Nationalist
above
armies
all,
in
China;
the
ever-present
threat of the Russian atomic bomb
taken their toll of investor
*
have
psychology.
fears
as
In
the
strong
face
of
war
in
1857-61,
1909-14, and 1937-41, it is not sur¬
as
prising that stock prices have
responded to
ings,
news
higher
of
the
face
should
we
of
the
has
for
un¬
expect
experience
continuation
a
in
long
trend
existence
of
1946
international ten¬
as
sion i. exists. I Either
break
which
since
actual
out¬
with
war
Russia, pro¬
vided that it appeared likely that
we
would win, or a turn in the
tide of the cold
a
bull
new
peaceful
conclusion
would
war
could produce
war
market,
be
Also
of
the
the
cold
and the Russians persist in
our
peace
time,
mind from
of
there
to
appears
jarring
time
be
to
our
of
living
can
once)
Wade,
Broadway,
extended
period of time.
.the
same
y
Fpr
the
cess
cash
the
ex¬
re-
quired for
capital expen¬
ditures,
announce
tified
that
the
public
been admitted
&
following
accountants
as
Co.,
City,
cer¬
have
general partners
in the firm: Edwin C. Nelson and
Arnold
cisco
R.
Ternquist,' San
office;
William
Houston office;
B.
Fran¬
New
1946
1947
1948
1949
1950
ark:
1951
York; Jay M. Squire, New¬
and
Seattle.
Philo
-
R,
-
:
Zimmerman,
r"
.
•
\
■
listings,
poration
new
with
E.
to
funds,
after
retaining earnings
or
taxes.
In
paid
were
pared
to
the
1946
years
of
as
1929
and
com¬
about
75% in 1939. I believe this
change
in corporate policy is
largely due
to the
difficulty and expense of
obtaining new funds, particularly
equity funds, from the public.
These equity funds are
variously
capital,
usually
stbeks,
risk capital, venture
as
equity capital, and are
by common
except in
the
case
of
smaller
businesses where there
one
or
represented
still be direct ownership by
may
or
mon
more
individuals.
Com¬
stocks in substance
represent
; share in the ownership
business enterprise.
a
of
Certain profound
changes
taken place in our
economy.
a
New
being obtained more and
by going into debt; In 1946,
68%
of
financing
all
securities.
new
by the
was
In
1947,
76%, and in 1948
it
by
insurance
was
were
factor
a
expenditures for armament, which
postpone the probabil¬
of
ities
suostantial
though
even
High
taxes
Coupled
reduction,
result.
and
individual
undoubtedly
with
this
a
factor.
the
is
double
net
earnings
then
and
stockholder
again
to the
portion paid
the
on
out in dividends. Some credit to
the individual stockholder
against
his dividend income for at
least
portion of the
a
corporation
tax
would
paid
to
make common stocks
by the
that
degree
more
attrac¬
tive/
The combined effect of high in¬
dividual income taxes and inheri¬
tance
for
taxes
paying
(including
them
to
dry
at
provision
death)
have
purchases
up
stocks
common
by the
of
upper and
middle income groups, which used
furnish the principal iield for
to
risk-taking finance.
A
vast
income
pur¬
tax
war
corporate
are
over
companies,
no
taxation of corporate
income, first
to the corporation on all its
of debt
84%. Most
over
of these debt securities
chased
corporate
use
the
together
tended
have
money is
more
of
the
earn¬
dividends,
in
66%
referred to
upon
for this dan¬
reasons
accompanying policy of
costly relief for Europe and huge
Hopkinson, Jr.
through 1948, about 40%
ings
briefly to touch
World unrest has been
has
going
beginning.
.
portion
after
of
national
our
taxes
has
accumu¬
lated in the hands of little
people.
More wealth in the hands of little
people is fine. It means more peo¬
and
other institutional buyers. In
1946, common stocks represented
about 12% of new corporate fi¬
ple
nancing, in 1947 about 10V2%, and
rations
in-1948 only a little over 8%. Most
of- the common stocks went to in¬
dividuals
either
directly,
in¬
or
directly through investment trusts,
in which they purchased
partici¬
pations.
sented
The balance
was
repre¬
When the need for
equity capi¬
is so real, why have corpora¬
tal
tions
largely been forced
so
debt
to
their
get
blood?
j-
needed
into
life-
..
Potential Equity Capital Plentiful
reason
is not because there
not
.
amount
compared
$57 billion
assets
are
lowing:
of
about
with
in
a
$200 billion
figure of about
1939.
These
liquid
represented by the fol¬
/
can have electricity, electrical
appliances,
telephones, automo¬
biles; but individuals and corpo¬
It
Government Securities,
Accounts,
the
must
burden.
savings. However, it is un¬
fortunate that circumstances have
coaxed
such
vast
into
sums
so-
safety first, with such little
willingness of the owners to risk
10
even
to
own
dustry,
20%
or
of
their
savings
finance American in¬
and
the
very
industry that
produced these savings. Such pol¬
icies have caused a rapid flow of
vast sums into
panies
and
insurance
our
savings
com¬
institutions.
They in turn must place these
funds in safety first channels. Can
they continue to find safety first
increasing funds?
Surely, if such trend continues,,
for such vast and
there will be no such
thing as
safety first, for the simple reason
there will not be sufficient risk
capital down below to provide the
safety.
There is another
tion
43
the
vestment- of
the
Joint
Economic
on
in
In¬
Committee
Report.
Wash¬
ington, D. C., Dec. 16, 1949.
as
1929
large group of
people.
The
propor¬
income
national
distrib¬
pensions and other forms
of relief has
22
Subcommittee
first
of
uted
67
?A statement by Mr. Hopkinson
the
carry
natural
that
these people
should seek safety first witn their
safety
$68
_
.'Checking Accounts
Currency
on
taxes
is
to
first
Billion
before
the
pay
enabled
-
,:
Saving
who
be
called
by preferred stocks.
Wood,
Stanley E. Shirk,
additional
in
spite
now, in
gerous
trend and some
possible remedial steps.
a cor¬
the alternative
the
York
value
were owned by
exactly
people who held them at
I will try
some of the
plenty of potential equity
available.
According to
recent U. S. Treasury
figures, in¬
dividuals now hold liquid assets
(not including life insurance), in
Guthrie
New
billion;
new
year
money
120
Stock
market
a
of the stocks at the end of
the
is
Barrow,
stocks
changed
hands,
which
that over 85% (some cer¬
tificates changed hands more than
over
The
Accounting Firm
many
all
York
New
listed
standard
be raised
a p
regarding equity prices.
New Partners In
1939 of $46.5
of
little
ground for unrestrained optimism
contrast,
means
most
satisfactory
and could be dynamically bullish.
However, as long as fear remains
the
Exchange had
industry to im¬
it
of
on
proving
pro¬
ductivity that
earn¬
and
past
inconclusive
been
as
of
and
way
only about $73 2 billion. Last year
less than 15% of all the shares so
over
higher
dividends,
not
paralleled prosperity in the United
States.
f
In
are
V
tivity,
of
have
listed
which
the public for
The Cold War
to
of
By.
rais¬
problem of
blood
help ordinary investors.
con¬
is. only by im¬
spring
investors,
four-year bull market began
a
and
DURING PERIODS
INTERNATIONAL UNREST
pe¬
prices
1910, follow¬
scare in 1909.
The
failed
in
OF
and
that
fear
Period
has-been noted in other
in detail.
STOCK PRICES
it
to
riods
1912
.v-
I
the
instilled
soon
in
appears
War
in
tne^market
gradual turn in
war
dence
end
Although the beginning of the
First World War may have seemed
remote and unimportant to many
Americans, the stock market re¬
shown here and will be discussed
/Iv:
of
States
a
1864.
Pre-World
as
respond
news.
the
resultant inflation and expec¬
history,
present.
United
Run
tory for the Union, the more in¬
not appear that the "cold war"
has been accorded its due weight
Frame
carried
the
capital funds
produc-
prove
war
lower, and the
ward
trend
persisted until the
spring of 1942. The entry of the
in
fought in July, 1861, and al¬
though the result was unsatisfac¬
1940
with
the
the life
discouraged the advance.
of
siderably
was
in
fall
of
even
Bull
soon
The
year.
Sumter
The actual outbreak of
war
which
completely wiped
the promising gains that had
out
Al¬
ing
September, 1939, was greeted
by a brief upswing in security
prices, but the progress of the
Carolina
compromise. The events of late
1860 brought a break in the stock
be
justified.
South
cerned
of German aggression, in spite of
the settlement at
Munich, cut it
at
of
accompanied by a break
A sharp rally fol¬
in 1938, but the pressure
lowed
in December, despite many efforts
secession
SEC prospectuses do not
*Your Committee is rightly
in
the
pattern,
market
together with
Lays blame also on high
margin requirements and heavy capital gains tax as well as
trouble and expense in
complying with SEC regulations. Says
belief that these levies will continue.
in the market.
in November and
most meaning¬
normal¬
March, 1915, stock
an
1937 was
the
over
less
what
into
same pattern
in the stock
market prevailed from 1937 until
1942. The business depression in
slavery
and
rights issues mounted stead¬
ily. The situation was brought to
a head in late 1860, with the elec¬
levels
In
began
banker, commenting on decline in use of
I equity capital by business
corporations, points out it is not
*
due to drying up of potential source of such
funds, but arises
from current high corporate and individual taxes
the
at
settled
war
.Former President, Investment Bankers Association
I Prominent investment
The
states
al¬
an
By EDWARD HOPKINSON JR.*
Partner, Drexel & Co., Philadelphia
was
advance
halted
was
the
Equity Capital Problem
The
Exchange
Pre-World War II Period
1857 brought
sharp decline in security
a
tension
have fluctuat¬
France
prices
than four years of indecision
in the market. During this period
from
1947
to
1949,
stock prices
Stock
stalemate.
a
more
perity
York
into
Pre-Civil War Period
prices,
The
advance which
lasted for almost two years.
The depression of
about
an¬
of liquidation.
wave
Marne, and
success¬
.;
j
bewilder¬
and
a
when market could become dynamically
bullish.
of. 1946
or
with
Meanwhile, the German
of
continuation
war
coincided
closed from Aug. 1 (when hostil¬
ities began) until Dec. 12, 1914.
stock prices,
on
expect
inconclusive market trend until end of cold
1913
July, 1914, when war ap¬
peared to be unavoidable, brougnt
Investment Counsellors, Colorado Springs
After reviewing effects of
Mr. Ellsworth contends
sharp drop in stock prices,
and
By BRUCE ELLSWORTH
E. Barret Griffith &
of
other
Thursday, December 29, 1949
to
increased from 1 Vz %
5%
distributions
at
now
present.
run
at
all
can
dividends paid
corporations
Such
$11
some
billion per year, nearly 1V2
times
by all Ameri¬
in
Continued
1948.
on
Such
page
Jtf,vf..
25
Voluriie 170
Number ,4868..
THE
COMMERCIAL
FINANCIAL
&
CHRONICLE.
(263&V 7
of those
spending units with
in money income
$10,000
From
Washington
Ahead
Securities
of the Ne
'
tween
Only one percent of those
spending units who hold no liquid
Dr. Likert gives results of survey conducted for the Board of
Governors of the Federal Reserve System covering ownership
of
"My
Day" to him, basting him with fulsome
praise and saying she hoped he went on to bigger
and
better} things in order, that more people
I
stantially increase
enjoy his unselfish devotion to his fellow
}. .•
'■
••
; ' •
; •.>.f
,
try to read the Lady's column regularly in
keep abreast of what she is cooking up.
by no means as naive as it reads.
It is,
attitude toward
It
is
instead, fraught through with cunning.
A
men¬
tion of the pretty roses she saw in some
what
ance's yard
spending
acquaint¬
kind, you may
Naturally I was interested in just
what is behind this unusual build-up of Reuther.
i
There was quite a sprinkling of conservatives
at/; the
dinner, a surprising number of very
respectable
caused
Carlisle Bargeron
service
a
of
purpose
some
since
him
;
I
: names.
to
asked
attend.
wondered
about
of
one
these
said,, well,
He
himself.
it
units
r
four
United
States
■;
thinks
Reuther
displayed
corpora¬
defined5
as
persons
living
in
same
dwell¬
ing
the
meet.
fourth
round
who
some
own
estimated to
of the
dividual
common
What
man,
did
it
it
as-
was
hailed at the time, in the slightest^
accomplish, however
was
quarters with having shown enlightened leadership
for heading off a fourth round wage increase.
The
theme
Murrays is that
good
we
this
told.
attitude
What
they
They
power.
are
is
'*
Reuthers
to have such
are
we
and
restraining influences,
are
against
up
continuous
a
of
less
surge
on
the part of the masses under them.
If they were
statesmanlike, if others of smaller statue were in their places, the
country would, indeed, be in an awful mess.
unrest
I
tion
the
in
convinced it is the sheerest bunk.
am
In
conducted
nances'
the
Reuther's organiza¬
there
are unquestionably seekers after his
scalp.* Reuther, on
hand, is a seeker after Murray's scalp. Murray's berth
his own organization, the Steelworkers, is secure, and I doubt
Michigan
And
among
is
in¬
stock.
the
on
Fi¬
University
System. Four consecutive nation¬
wide surveys made by the Survey
Research Center
1949 have
formation
common
as
during 1947, 1948
yielded similar in¬
to the
thing is
one
* ;
certain:
very
if
there
is the
the clients of Messrs. Reuther and Murray
continuous
stir
stock/
ownership of
The bulk of these
responsible than Messrs. Reuther and Murray, themselves.
The CIO's
and
threats
of
literary and educational activities
the workers in
a
But in the old and relatively
labor-management relationship the bitterness
out
immediately the strike
ticularly in
the
motor
day in and day out.
agement;
and in due
there
is
stant
There is
You
never
under Messrs.
his
from
Reuther
of
initiative,
the
steel
.
increase
in
You
workers
the
ill
and
have only to
to
wages, or this was not
Three
*A
talk
during
Public
direction
of
the
President
the country's economy..
appreciate
the
men
Investment
of
in
a
case.:
and
ruled
How would
CIO,
on
strike
so
their
leader
Murray,
own
Dr.
Likert
at
the
Forum
of
the
Bankers
obtained
was
stock
common
can
JERSEY
CITY, <N.: J.—Murray
Montgomery
firm
name
Street
under
of'Kauder & Co.
the
does
not
(it remains about 10%),
spending units in the older
age groups have more funds in¬
vested in stock as their age in¬
creases.
>
relation
of
head
The
the
of
the
to
stock
of
the
this.
spending unit
fessional
proportion of spending units
out.
Similar results for the
income
obtained in 1948..
were
Chart
shows
I
1947
the
relation
' r
be¬
ing units whose occupation falls in
the ownership
the
As will be ob¬
such
marked
own
served,
there
tendency
people
for
in
.
is
a
very
appreciably
the
higher
more
income
groups to own common stock than
in the lower income groups/
proportion
of
who
groups
varies' from
less than
to
comes
and
on
comes
different
own-
3%
$2,000
16%
of
to 46%
over
for
for
from
common
those
money
The
income
stock
with
income in
those
$5,000
with
to
in¬
$10,000.
It
is strik¬
"other
collar"
white
sales
as
clerical
and
The
up
of
common
stock. The influence
contacts, exposure to informa¬
tion
about
sales
and
stocks
solicitation
difference
between
4%
since
two
in
the
•
doing.
;
They
Union
an
•
was
the
not
income.
The
size
relation
of
Chart
of
ownership
community
V.
is
Continued
that only 46%
on
.
,
a
raise
would
hurt
you
Dated
Railway Company
January 1, 1950
VA% Bonds, Series A
•
Due January 1,1975
he
Price 100% and accrued interest
put in the light of having
| The issuance and sale of these Bonds are subject to authorization by the Interstate Commerce Commission.
Copies of the Offering Circular may be obtainedfrom the undersigned.
~
•NEWARK,
N.
J,— David
engaging in
a
N.
HALSEY, STUART & CO. Inc.
securities
business from offices at 786 Broad
Street.
shown
December 29, 1949.
to
in
Among spending units
$2,500,000
First Mortgage
in
and
occupational
Peoria and Pekin
were
9%
do not differ appreciably
groups
con¬
hurt the counrty's econ¬
Knoller is
probably
reflected
is
the
an offer to sell or a solicitation of an offer to buy these securities.
offering is made only by the Offering Circular.
So if
work,
stock, but only 4%
common
man¬
a
group,
of the skilled and unskilled group
own
$7,500
for those with in¬
own¬
Nine percent of the spend¬
group.
tween income and
stock.
have the largest
groups
ing common stock—15% for each
of
common
in
The business and pro¬
Chart IV.
lowly captivity, they have
be
shown
ownership is
This announcement is not
par¬
position to grant
But this
that
occupation
Commerce estimate derived from
income* paid
own
increase
those
(Special to The Financial Chronicle).
N. Kauder is engaging in a secu¬
rities business from offices at? 75
54 which
with age
Knoller in Newark
Opens
Although the
units in
spending
aggregate amounts of.
ing, nevertheless,
3, 1949.
national esti¬
a
figure
10% less than the Department of
Association
realize the recent
accomplished "something" for them. *?
Kauder & Co.
owning
their
of
gains,
gotten
like the boss to tell
you
Then to add to the steelworkers'
go
units
America, Hollywood, Fla., Dec.
got together in New York at
couldn't give you a raise because it would
omy?
by
Education
.
the
spending
whom
of
proportion
Their unions do not lend them¬
either entitled to and the companies were
determining factor at all.
all
The workers in motors and steel
•
pretty thoroughly regimented.
predicament
in the
the
of
to 11% for the group from 45
up
to 54 years of age.
When these figures
expanded to
were
mate,
;
amount
units
and recriminations
With
pressing for them to show activity, it is of their
selves to individual
reported
each
the
corpo¬
stock increases with age from 2%
AFL days
anything good about the
wrested
was
can
industries, the agitation keeps
Frankly there is not that fire.
are
settled.
sane
time, another wage rise will be wrested from him.
constant fire
a
steel
increase
wage
a
and
was
'
pitched to keep
are
understand that there would be bitterness and recriminations
went
Of
strikes, nobody is
perpetual state of hatred for the employer.
the period of a strike.
been
units,
1948 income.
1948
more
of strikes
has
ample, in the October, 1949, issue.
to! necessitate
as
constant
calling
results
interviewed. 3,500
we
asked
were
of
the 'Board
Governors of the Federal Reserve
and
example,
1949 Survey of Consumer
spending
}\:
Federal Reserve Bulletin—for ex¬
their
to
for
accuracy
For
of
A
Finance
the
on
of
proportion
of
owning common
in
made
surveys.
assets
The
The
by the Survey
Research Center of the
of
ownership
stock.
ex¬
^Consumer
of
Survey
rate
these
one
results ar$ based
unit to
ing
of
are
have
shows the relation
r
six million,
common
owns
Chart III
i
e
stock
than
more
in
Bulletin.
liquid
the age groups over
substantial number of
a
described
Reserve
who
to
the age of the head of the spend¬
checks
other
Reuther's is in any real jeopardy,
of
These
1949
over
in this instance
the
towards
don't realize how fortunate
we
in these places of
men
are
behind
in
spending units
to put Phil Murray and
the Steel industry in an awful spot from which we are to get increased
steel costs.
Murray, himself, has been credited in many respectable
/■/:.
since
be
been
Federal
units
tend
in
resources
of
in stock.
to
individuals
common
more
re¬
number
total
of
-
have
surveys
the
these
are
The methods used in these
stock
form
invested in
Even
stock.
common
than
But how accurate
sults?''
own
the
are
spending
t h
major
penses.)
Rensis Likert
increase.
I am told by experts on the subject
that there is, indeed, a lot that; doesn't meet the eye in this pension
plan, that it could not have been more favorable to management if
management had drafted it, that it doesn't mark any great advance
wage
<
in
stock
own
only.
in
funds
more
liquid assets than
They differ from those used by
the polls since they use long in¬
tensive interviews with respond¬
ents selected by means of proba b i 1 i t y'
sampling.
Numerous
be-
and
longing to the
same
family
pool their
•
American people.
a
all
one
all
some
for which he deserved the affection, of the
The rare statesmanship, I take it, lies in Reuther's
having talked the workers into taking pensions instead of demanding
of
tion
is
statesmanship
rare
one-half
stock
(A
'incomes
friend
common
Almost
common
spending unit
the
union
conservative
hold
common
negotiators working far into the
night in order to meet a deadline. The deadline was met, a pension
plan was announced and the day was saved. •
• > \
my
than. $500; about one-fourth own
stock
valued
by them at over
own
the
Now,
one-third
spending units who
; who
and
about
stock valued by them at less
$5,000.
held
recall that a year ago the Ford workers voted down a
pension offer in favor of a raise in pay.
This year, a few months
ago, there was an awful hullabaloo about pensions with threats of
a strike rending the air over a period of several weeks.
We read of
management
stock,
common
own
of those spending
holding between $500 and
$2,000 of liquid assets own com¬
mon stock; 13%
of those holding
between
$2,000 and $5,000 and
34% of those holding $5,000 or
more
of liquid assets own com¬
mon
stock.
It is significant that
many more spending units tend to
percent
units
stock.
You may
Ford
Ten
marketable
had
at
million
the
in
what
he
But
than
more
time he thought Reuther had rendered a signal
country in preventing a strike of the Ford workers.
the
to
has
assured.
rest
on
the average as the
holdings of liquid assets increase.
ownership of securities.
At the beginning of 1949, about
8% of all spending units, or some¬
and
common
increases
stock ownership, and recommends
by investment bankers to improve public's
order to
bonds
own
The proportion of spend¬
ing units who own common stock
common
continuous research
.
deposits)
stock.
stocks
common
(government
bank
by spending-units comprising various income
groups. Places unfamiliarity with stock, together with feeling
stocks are not safe, as leading cause for not acquiring them.
Sees adequate financial resources in hands of public to sub¬
tribution to the human race, and if I am not mistaken, he was
given
a scroll to this effect.
A few days later Mrs. Roosevelt devoted her
of common
assets.
By RENSIS LIKERT*
assets
couple of weeks ago, Walter Reuther was given quite a testi¬
monial dinner in New York.
Speaker after speaker lauded his con¬
■
the ownership
stock and the ownership of liquid
Director, Institute of Social Research, University of Michigan
A
could
own
Chart II shows the relation be¬
By CARLISLE BARGERON
men.
over
stock.
common
•.
page
22
COMMERCIAL
THE
(2640)
8
bridges
ways,
of
dential
year
of 1948. Sees 1950 starting off at high rate
prevailed in second half of 1949.
that
The year
1949 was one of high
level economic activity. The gross
national
the
to
estimated
an
total
of
billion,
$259
less
than 2%
be¬
the
low
time
all-
high
of
1948. The pace
economic
activity
was
uniform
not
oughout
r
1S49.
the
During
first
the
of
half
year
the trend
Charles
Sawyer
m o
'
but
d
firming
in
o
activity
Industrial
production
struction recovering.
The
with
and
con¬
major change in the
com¬
the
gross
national
product was in business inven¬
tories.
In 1948, inventories were
rising to meet postwar require¬
ments, but by the end of that
year the need for further accu¬
mulation
a
*
subsided.
had
stocks
of
the year
In
just ended there
moderate decline.
Excluding
was
/
changes
these
than
of
/
dollar and
real
a
Purchases of
personal
was
in
in
higher
both
a
sense.
services,
1948.
year
In
ond
econ¬
Production
moderately below 1948 in al¬
most
all
major segments. Most
nondurable goods industries
durable
as nonferrous
metals, rail¬
freight cars, and certain elec¬
trical appliances—the decline was
substantial.
on
a
ana
government
goods and
services
than offset reduced demand
more
for clothing,
The
million
6
industrial pro¬
the strong showing of
construction
activity.
The
high
Significant
relation
in
to
the
economy's well-being in 1949
was
maintenance
the
the
at
come
billion.
With
in
rates
personal
level
lower
effect
in
funds
of
1948
1948
in
of
in¬
$212
personal
1949,
tax
plus
volume
than
$7
billion.
nonfarm
Grand
The
dwelling
Co.
it
the
to
somewhat
save
did
in
the
the
previous year and
time
same
maintain
than they
more
were
abled
e
the volume of their
at
to
ex¬
penditures on goo s and services
at virtually the same level as in
1948.
year
available
now
1949
for
the
necessarily prelimi¬
nary.
They may be cited, how¬
ever,
in summarizing the major
patterns of business activity dur¬
ing the
are
year.
The national
guished
from
income,
gross
clined
from
to
estimated
an
1949—or
It
is
$2^1
as
distin¬
product,'1 de¬
bhiion
$222
in
1948
billion
interesting to no'e that
small
in
drop of less than 2%.
a
reduction
is
this
accounted
lor
bv price declines du"mg toe
year.
Price reductions reflected the in¬
in
crease
supply
made
possible
by the expanded nap-city to pro¬
duce, the increasing competition
in
most
urgency
markets, the diminished
of requirement for many
types of eoor's
mand
from
sation of
mclucli
abroad,
"g
and
t^e
the
de¬
Total
inventory buiiding char¬
wanes
and
postwar peak.
higher in 1949 than in
1943.
were
both
stock.
the
would
have
been
farm
and
country
much
sharper
it not for the large volume
agricultural commodities re¬
anxious
to
are
of
dis¬
of their holdings.—/. C.
Bradbury, Bradbury-Ames Co.
Meriden, Conn.
from
the
market
through
government loans and price sup¬
port purchases.
;
>
t.." :
There
to
appears
vestment
bank
"than
be plenty of in¬
money
seeking
business
continued
,
The
interest.
ad¬
vancing stock market could make
these liberal {yields
disappear
during
ness
births, - by
amount, for the first
the
of
end
the
firms
of
the
in
total
operation
3.9 million
prewar
At
war.
the
year
a
time
r;i)
the
in
about
rise
expenditures
government—including Federal
well
as
state and local.
increases
were
and
grams.
tures for
in
Public
works
as
He
at
me
Max Wasserman
he
he
business
another
• ■
conductor.
,v:;;
■
said,
•
.
have
"you
this
on
train
with
no
I
off at the next
'
the
train
have
a
remonstrated.
at
tops
ticket
for
Dijon
Dijon,"
makes
"That
expendi¬
schools, hospitals, road¬
about
to
$2.75
nine
"The
at
hundred
includes," he went
"six
on,
hundred francs for the ticket, plus
50% supplement, or 300 francs,
for
failing to buy the ticket be¬
boarding the train." Antici¬
pating
my
question,
he
again
opened his time-table and showed
fore
me
more
fine
print,
official
the
basis for the price. I paid the 900
francs.
-\
Next
the
ductor
three-starred"
turned
to
con¬
of
one
my
French compartment companions.
"Sir," he said, "your ticket is also
irregular. You need three rubber
stamps on it to get the 30% re¬
duction called for by your special
ticket and you only have two. I'll
Continued
no
on
34
page
Dealer-Broker Investment
It is understood that the
;
to be quite a de¬
good investment stocks
in the security business.
We as
members of the
Pittsburgh Stock
Exchange continue to
trend in the
see
an
up¬
coming year.—W. J.
firms mentioned will be pleased
send interested parties the following literature:
to
;
Effect
line
of
Coach
Fares
on
Air¬
Industry—Review—John
Lewis &
York
H.
Co., 63 Wall Street, New
Chicago
Over
-
the
Stock Index
York—Study—Spiegelberg, Feuer
&
Co., 30 Broad Street,,- New
York
Counter
-
—
Industrial
4, N. Y.
Booklet recording
Power
&
Light—Brief
comment—Geyer
&
Co.,
Wall
(Canada)
Investment
Dealers
Seigniory
Quebec.
Club,
Association
tion
at
Security
the
of
Common
Warrants—Sidney Fried—
M.:, Associates, 220 Fifth
Avenue, New York 1, N. Y.—$2.00
of
Traders
the
Cavalier
Hotel.
brief analyses
Co.
and
Port¬
Light &
/
Chemical
Co.
—Analysis—Fahnestock & Co., 65
Broadway, New York 6, N. Y.
H.
per copy.
Mexican
dum
Na
Associa
are
Montana Power
land General Electric Co.
Lindsay
Speculative Merits
Stock
'
Convention
of
Meeting ai
R.
tional
Quotation
Bureau, Inc., 46 Front Street, New
York 4, N. Y.
Montebello
Sept. 26-30, 1950 (Virginia Beach
Va.)
Annual
stocks—National
Inc., 63
Street, New York 5, N. Y.
Also available
LG-year performance of 35 indus¬
trial
1950
—
Wall
Street, New York 5, N. Y.
Florida
5-8,
14
Consolidated Edison Co. of New
EVENTS
June
Authority
Co.,
&
5, N. Y.
Industrial Growth Prospects for
the Dominion of Canada—Milner,
Ross & Co., 330 Bay Street, To¬
ronto 1, Ont., Canada.
COMING
Transit
Circular—Blyth
Carothers, W. J. Carotbers & Co.
*
*
*
South La Salle
Associated Transport, Inc.—Cir¬
Oil—Memoran¬
Eagle
Company, 203
Zippin &
—
Street, Chicago 4,
111.
.
cular—Wm. J. Mericka & Co., Inc.,
150
Missouri
Broadway, New York 7, N. Y.
Baltimore
Ohio—Circular—
&
Hutzler, 60 Wall
Street, New York 5, N. Y.
Pacific—Circular—Ira
I-Iaupt & Co., Ill Broadway, New
6, N. Y.
York
Salomon Bros. &
Also
available
are
circulars
on
Piramount Pictures and Pullman,
Inc.
:.
kik-fk.k-ikyk
-
Berkshire
Fine
Spinning Asso¬
ciates—Circular—Ames, Emerich
& Co., 105 South La Salle
Street,
Chicago 3, 111.
New
England
Co.—Special
&
Co.,
Ill
6, N. Y.
Dictionary of Labor Law Terms
—Commerce Clearing House, Inc..
New York
1, N. Y.—Paper—=-'$1.
States
Merits
R.
H.
M.
Avenue,
Common
Sidney Fried —
Associates, 220 Fifth
New
Paper—$2.
of
—
York
•
:
1,
N.
Y.—
Electric
Corp.—
Analysis — Dreyfus
&
Co.,
50
Broadway, New York 4, N. Y.
Chicago
Eastern
&
Comment—H.
Speculative
Stock Warrants
pro¬
time.
answered.
he
,
Dijon. This train only
takes passengers who are going to
Lyons or further. Unless you are
willing to buy a ticket to Lyons,
I
"Nine
asked.
a
for
stop."
amounted
the
'/
and
I
francs,"
This
with
"Sir,"
"But
queried.
conductor
much?"
francs
me.
ticket
or
mand for
expen¬
aid
train
this
There continues
Principal
military
the foreign
of
in
stated
that
licked, and I knew
was
the
"How
hundred
t s,
e
Central
in
print
t
stop?"
above the
An
important demand factor
throughout the year was the sub¬
fine
French
our
ticket, then at me.
Then, in a
cool, official tone, he addressed
the settlement of the steel strike.
level.
stantial
came
departed.
has been great'.y increased since
to;
15%
this
a
Recommendations and Literature
end
close
k
Pittsburgh district
ofj
was
cap,
c
Pittsburgh, Pa.
Business
small
since
the
of
was
print. Paragraph
"Will you buy a ticket to Lyons
or shall I put you off at the next
on
Meriden, Conn.
the
number
with
stars
the early investor
his reward.—William H.
Rybeck, Wm. H. Rybeck & Co.,
arrested.
business
book, there
get
In 1949, busi¬
discontinuances
exceeded
was
the
again
once
may
year, the sharp postwar growth in
the number of business establish¬
ments
fat time table. In the
a
of
conductor
so
opportunities
favorable
produced
the rule
me
three-starred
further. I
This second conductor, with three
stars on his cap looked first at my
better
.
While
the
ticket
a
it.,
con¬
a
I'll have to put you
were
moved
I asked him to show
and
page of very fine
on
have
must
only took passengers for Lyons
in
desirous
owners
Power
from
prices
You
51
returned
first
situations
the
of
Lyons to board this train."
middle
of
Presently
We consider
best
of Canada 34th Annual
ditures
salaries
of
downward
drift
clear.
legalistic
t i
of
An additional
is
to
frenchmen
check
started
prices
ces¬
acteristic of 1943.*
i.
farm
the
Consumers
actor was the less urgent require¬
ments in foreign countries.
The
of
Figures
•;
the
in
difference," he replied, "the rule
middle class
his
posing
1949, and this heavy output,
following the bumper crops of
1948, accounted in large part for
decline
of
one
the
,
common
one
the
in
consequence, consumers were able
as
"contact
more
number
units
express
,
Rapids, Mich.
Rapids,
such
Farm production was also large
payments, dis¬
posable personal income was ac¬
tually higher than in 1948. As a
-
"Utility Minded" cities, is still
investing in good utility equities
during the year, however, reached
the 1 million mark, exceeding the
previous high established in 1925.
re¬
tax
somewhat
of
a.m.
dressed in
manner
and
Grand
producers' plant and
equipment, and privately financed $19 billion, and topped the 1948
net exports of goods and services. record
by 3%, A rise in publicly
The decline
in
business
inven¬ financed
building activity in 1949
tories
in contrast with the rise
more than offset a decline in
pri¬
in 1943, however, resulted in a vate
commercial
and
industrial
moderately lower volume of in¬ construction. Nonfarm residential
dustrial production and employ¬
building maintained last year's
ment.
8:10
Paris,
total
value of construction put in place,
both private and public, exceeded
the
the
looked
.
was
goals and not of ideas, the country
quizzically
and
cars
In contrast with
duction
1949.-
BRIEFS
the other hand, estab¬
new
record
output of
than
more
not
journey
opponent and a
closest to it is the U. S.
through to
in¬
automobile
comes
Sunday morning last Spring,
boarded
ers
activity
DEALER
road
trucks.
houses,
half of
goods industries
—such
One
I
ductor
showed moderately declining pro¬
duction trends during the year.
some
in
two
inventory rebuilding.
In
GIs
r
the sector most directly
was
which
insurance
the
railroad
a
an
trip. Short1y
out
of
during the
production.
unemployment
industrial
is considered in terms of
a
in the previous year.
year—was
was
the
to
on
France, in which
supporter of socialism take part, and points out, if socialism
the
materially different from the high
rate which prevailed in the sec¬
omy—and the center of the mod¬
erate
had
in
affected the
output
The weakest sector of the
This
lows
business
of
Tnis, along with the rise in the
work iorce during the year, re¬
sulted in unemployment averag¬
ing about 3 l/fe million in 1949,
compared with the minimum level
of 2 million
with
payment
volume
Total employment in 1949 aver¬
aged 58.5 million, 2% below 1948.
automobiles,
more
record
which
the
conversation
narrates
from Paris to Dijon, in
offing.
incomes of corporations.
lished
oiitput
1948,
in
lower
were
of
industrial
for the nation's
than
the
farmers, declining
prices were responsible for. the
drop
in
their
incomes.
Lower
prices as well as a smaller volume
dustry,
1949
the
case
business inventories, total demand
in
however,
in
the
reduction
Dr. Wasserman
Resi¬
year.
Business demand for
train in Paris, bound for Dijon.
plant and equipment and foreign
In my third class
compartment
demand
for
our
goods, on the w
e r e
t w o
other hand, were declining. Thus,
other
voyag¬
the new year will start with a
affected by the reduced needs for
oi
ponents
prietors,
d erately
wnward,
there
was
a
subsequently
general
was
small
in
total number employed/ Earnings
of corporations and of farm pro¬
goods
services,
amounted
t h
purchasing power,
higher wage rates more than
of
and
of
the
offset the
value
market
total
dividend
in dollar and in
as
from
rising
were
measures
whicn
product
con¬
early part of the year, was at peak
rates.
Government expenditures
national product in 1949 at $259 billion, only 2%
peak
the
Really Socialistic?
By MAX J. WASSERMAN
high rates prevail¬
construction,
rebounded
year-end review of business situation, Mr. Sawyer esti¬
below
the
at
throughout
ing
Secretary of Commerce
Consumer demands
1948.
tinued
mates gross
Who Is
At the end of' the year business
By HON. CHARLES SAWYER
Thursday, December 29, 1949
struc¬
increase.
activity was moderately below the
postwar high reached at the close
Activity to Continue
In
other
and
tures continued to
1949 High Level of Economic
CHRONICLE
FINANCIAL
&
Beaver
Hentz
Western
Light.
Co.,
60
Street, New York 4, N. Y.
Also available
Rayon
Illinois—
&
are
brief data
Standard
Power
Service
Haupt
Broadway, New York
,
Riverside Cement Co.—Analysis
—Lerner
& Co.,
10 Post
Square, Boston 9, Mass.
Texas
Utilities
—
Office
Memorandum
—Goodbody & Co., 115 Broadway,
New York 6, N. Y.
on
Pacific, North American
and
^
Public
survey—Ira
&
Zonolite
Co.—Circular—Swift,
Renke & Co., 135 South La Salle
Street, Chicago 3, 111.
Volume
170
THE
Number 4868
FINANCIAL
COMMERCIAL" &
(2641)
CHRONICLE
9
small
A
Domestic Effects of
Four-Pronged Attack Upon
Equity Capital Problem
v
By WALTER S. SAL ANT*
Dean, Graduate School of Business, N. Y. University
Member,
.
Research
Investors'
Committee,
•
Fackler, forecasting more serious shortage of equity
(1) timely action he taken to increase
Europe to
,
public knowledge of security investment; (2) a broadening
of field of institutional investments; (3) resort to greater vol¬
of share
for relief of
The
of
far been
so
Knowledge
tion
for large and established business
of Finances conducted under the aus¬
busi¬ pices of the Board of Governors
corporations required $55 bil¬ of the Federal Reserve System
that
most
of new funds in the years showed
people who
enterprises.
Commerce
ness
lion
The
Department
reports
that
employment
and
security investment is often per dollar, as
domestic conlacking among these low income
groups.
The Survey of Consumer sumption or
poten¬
a
population.
about
current problem
a
owners.
the
export of U. S. capital for
development purposes may be ex¬
pected to stimulate U. S. produc¬
all
investment
19l8
and
this huge
who know about stocks
If
—the high income groups—do not
forms
tion
generally have the money to buy
them, and those who have the
provide
enterprise made by the
a dilu¬
existing stock issues re¬
sulting.
But
'
would be deceiving our¬
t
we
selves
the
and
from these
public
to
great lower income
groups—do not know about stocks.
This is a situation that the people
money—the
deduce
figures that the equity
securities business
in
First, retained earnings are of no
much to
help to newer enterprises and less
and
profitable enterprises that have no
considerable,
amount
of
Secondly, business prof¬
declining as the post-war
are
held
a
penalties
dividend
profits shrink.
Smaller and
have
step up
while
even
to
will
good deal of time
a
thing
that
the
has done
securities
to attract
investment by
Western Europe
trade with the United States after
can
sav¬
ends.
investment
Foreign
.
dollars
enable Europe to earn
United
outside " the
thereby
direct
States
continuing
finances
to
deficit
"with
and
United
the
States.
contributing
solution
of
to
the
a
constructive
European dollar
raised yearly a few years ago.
problem, could permit Europe to
with -unusual facility be¬
Another helpful device is the buy from us and could also make
cause of the very favorable condi¬
development of the common trust
tions under which they have oper¬
*
funds
Abstract of paper ;by Mr.
by
our
trust
companies.
ated since the war. We have had
These provide a more economical Salant
read before American
a sellers' market in which almost
and efficient method of investing Economic Association, New York
anything could be sold at a profit,
many small trust funds in diver¬ City, Dec. 28, 1949.
because of
numerous
prevailing
sified equity as well as fixed in¬
shortages.
Friends and relatives
capital
have been willing to invest money
in
small businesses to
new
many
supplement Veterans' Administra¬
tion guarantees, because the risks
seemed
slight.
The number of
business concerns in the country
million
of almost
has increased by almost a
to
a
new
record
high
4,000,000 since 1944. But the end
of postwar shortages and the re¬
turn of a normal buyers' market
with keen competition bring the
risk element back into business, as
should be the case under our sys¬
business
curities
market
wider
in
ment
as
a
•
be
.
done,
and
.
■
done
a
able
let
me
summarize
the
to solve this
There has
the
problem.
distribution
savings, in this coun¬
try. A much larger proportion of
the nation's savings belongs to the
therefore of
middle
r
and lower income
groups
"Statement of Dean Fackler be¬
fore the Joint
mittee
on
Congressional Com¬
Economic Report,
new
Chairman of the SEC
of investors is good
product
available
to
we
efforts
are
to
need not cause difficulties
growing American economy.
effects of a grad¬
ual increase
in imports are no
more to
be feared than those of
secular increases in productivity.
plus
for
a
The employment
the
To Be
likely to fail in our
restore
development of an import sur¬
ual
United States civilian economy.
States
unusual -condi¬
are
multilateral
Orvis
nondiscriminatory world trading
and
convertibility of currencies
for current transactions. > r
Special Partner
Co., 14 Wall
&
Brothers
Street, New York City, members
of the New York Stock Exchange,
announce,
that,
effective
Jan.
foreign
investment Floyd
goods and services if the annual
rate of , increase ir.
gross investment abroad exceeds
the average rate of return on for¬
eign assets. Two numerical ex¬
of
25
for
Y.
years.
percentage
amples illustrate (a) the possibil¬
ity of avoiding an import surplus
indefinitely without raising net
foreign investment to a large pro¬
portion of growing gross national
product and (b) the possibility
that the limit reached by a neces¬
sary
Norman Barnes & Co.
CHICAGO,
Barnes &
a
ILL.
Norman
engaging in
—
Co., Inc., is
securities business from offices
Street.
Offi¬
Barnes,
Pres¬
Pease,
Vice-
at 111 West Monroe
cers' are
ident;
Norman
William
President;
and
D.
Florence
Barnes,
import surplus would be a Secretary and Treasurer,
tors
Par Value $5 Per
and
offer to buy, any of such Shai es.
Share
evidenced by Subscription Warrants, to subscribe for these shares have been
holders of the Common Stock of Montana-Dakota
Utilities Co., which rights expire January 4,1950, as more fully
set forth in the Prospectus.
Subscription Price to Warrant
Holders
$13.25 per share
file
Copies of the Prospectus may be obtainedfrom the undersigned only by
undersigned may legally offer these securities under applicable
the
good for the country.
persons to whom
securities laws.
people hesitate to advo¬
wide -ownership of common
Many
stocks because of the heavy losses
incurred
BIyth & Co., Inc.
by those who held them
in the early
'30's.
This same rea¬
soning would apply to the owner¬
Robert W. Baird & Co.
of
The
fact
common
of
the
stocks
matter
are
is that
priced
rela-
Continued
on
page
24
Merrill Lynch, Pierce, Fenner & Beane
The Milwaukee Company
Incorporated
homes, farms and other
property that depreciated severely
in the Great Depression.
ship
Kalman &
December
28,1949.
1
Keeler will become a
Mr. Keeler has
does not require the eventual de¬ special partner.
been a general partner in the firm
velopment of an import surplus
Continuing
issued by the Company to
for the inves¬
the
Washington, D. C., Dec. 15, 1949.
useful
there
Common Stock
f Rights,
The
cate
shift in
of incomes, and
been a great
when
accentuate rather than re¬
.
has
ican business by the rank and
First,
proportion to increases of av¬
productivity year in and
year out, making exceptions only
erage
Montana-Wyoming Gas Pipe Line Co.
billion; and in 1948,
This year, it is prob¬
that more than $2 billion of
1947,
$1.6 billion.
to
steps that investment bankers —
the securities business—can take
tions, not merely normal cyclical
changes. With moderately expan¬
sionist domestic policies and no
secular inflation abroad, the grad¬
in
150,000 Shares
shortage
ness.
best, perhaps the only way to
achieve this result is to raise the
offering of dies e Shares for sale, or an offer to buy, or a solicitation of an
The offering is made only by the Prospectus.
individual in¬
actually sold
group
promised to undertake what
alleviate this threatened he can to help the investment
of equity capital. It is banking business to do a more ef¬
vital, I believe, that timely action fective job of distribution of se¬
be taken now, instead of waiting curities.
This is bound to con¬
until the shortage has really be¬ tribute to a solution of the equity
come acute and serious damage is
capital problem.
done to the presently strong finan¬
I am convinced that the wide
cial structure of American busi¬ ownership of the shares of Amer¬
now,
the
by
trend.
can
incomes and stable prices
In the first
corporate securities on balance.
In 1946, they bought $600 million;
in
an
a
invest¬
securities
investors.
half of this decade,
vestors
This is not
developing
direct
for
corporate
individual
real
making
is
in
also
^headway
promotion and expansion than in
Much
be
en¬
SEC statistics show that the se¬
corporate securities were absorbed
on
balance by individual inves¬
tors.
This is a very promising
the recent past.
inflation
securities.
come
Newer concerns are bound to
find it far more difficult to finance
tem.
to the un¬
countries in raising
of living eventu¬
to
Without substantial, continuing
of foreign investment by the United
probably? not be able
a
satisfactory level
ERP
The
abroad.
rather than stable money incomes
and
declining prices. ' Probably
duce any difficulties that may ex¬
ist in maintaining given levels of
finance
gregated $200 million. This is sev¬
eral times as much money as they
businesses
raise equity
newer
able
been
to
America
Hollywood
the United States,
and
would
money
projects.
standards
would
Cotton, tobacco and wheat
panies that provide low income would be among the chief bene¬
investors
a
convenient medium ficiaries; one-fifth to one-quarter
for investing in a diversified group of our production of these crops
of equities. Net sales of open-end goes to Western Europe.
Thus a
investment company shares in the substantial export of U. S. capital
to the underdeveloped areas, by
first nine months of this year ag¬
other factors, put pressure
managements
payments
upon
of
at
Salant
-'./•
substantial foreign
develop open-end investment com¬
by
imposed
Investment
the securities market has been to
Section 102 of the Revenue Act, as
as
done.
States
joys the secular increase in its
productivity inHhe form of rising
spend where
they please, it can have an impor¬ employment and production. But
tant effect in sustaining U. S. ex¬ even if this is the case, it would
ports to Western Europe. Without increase the present or future
ings of lower income groups into
third less than last year. Sec¬
1950.; Tax
gave
One
retary of Commerce Sawyer pre¬
dicts another decline in profits in
well
week
be
nec¬
foreign investment increases.
that case, foreign investment
In
Walter S.
that they are free to
attention to this problem.
business
preliminary data show, will
year,
be
and
the
of
last
Beach
inflationary boom comes to an
end, while dividend-payments are
increasing. Retained earnings this
to
Association
Bankers
to retain.
its
job has
convention
earnings
An educational
correct.
selling
can
be
relation of
general level of money wage rates
our
areas
dollars
may
the
expand
to
without
tion
in
confined
in¬
and
ally reduces world political in¬
stability and international ten¬
sions, our domestic military and
foreign grant expenditures may
in time be reduced by more than
|Hm
with
be
a
facilitated if the United States
invest¬
equity
as
transfer of interest and amortiza¬
If capital assistance
their
the
oped
It is encouraging to note that the
the
that
capi¬
be confined to
the dollar cost of de¬
derdeveloped
y
underdevel¬
do
capital problem has been solved.
cannot
to
velopment
in
made
investors
stockholders, without even
of
amount
lp|
that
came
in business
direct
loans,
probably
About
alone.
sum
export cannot
ment, or "needed currencies" and
V
40% would not buy stocks with sur¬ foreign countries
make
from re¬ plus; income are influenced by
deliberate eftained earnings, which is equity lack of ^familiarity with stocks,
forts
to
recapital in its most desirable form. rather than by lack of confidence
p 1 e n i s h
These retained earnings constitute, in them as investments.
their reserves.
It can be said, in fact, that the
in effect, an additional investment
1947
of
United
If it is to do this, however,
tied
|||iHHH^
expenditure,
except to the
extexit
sources.
tal
whole
would
for
consumption to income.
The ease of developing an im¬
port surplus depends in large part
upon
the relative movement of
money incomes and prices in the
rapid
painfully
a
field
adjustments that
any
essary
readjustment of some of our re¬
much,
as
•
.
unnecessary
abroad
the
provide
longer time in which to make
a
,.
whole.
as a
opportunities for pro¬
expand
vestment
opportunities for productive investment abroad would
greatly expand the field for investment
(4) revision of tax laws
stock
common
By and large, an equity capital
tial, rather than
finance continuing deficits with the
tion of
*
shortage has
enable
can
dollars outside the United States and thereby
U. S. Maintains recogni-
earn
greatly
Capital by corporations and institution by them
of regul^rjyad^higher dividends; and
V
foreign investment
of the
ductive investment
League
capital, recommends:
ume
tion
Member, Council of Economic Advisers
Government economist asserts
Dean
>
Capital
Export Under Point IV
By CLARENCE W. FACKLER*
Assistant
proportion of a growing
national product.
The problems that arise in con¬
nection with the servicing of for¬
eign. investment are present also
in connection with the servicing
of domestic investment.
Recogni¬
gross
-
Company, Inc.
Woodard-Elwood & Co.
■
Piper, Jaffray & Hopwood
COMMERCIAL
THE
(2642)
10
CHRONICLE
FINANCIAL
&
Thursday, December 29, 1949
formance.
A Tax Increase
Bank and Insurance Stocks
tinue
May
From
the
insurance shares.
proposes
that
1949
will
be
the
most
on rumors Administration
multi-billion dollar increase in income taxes as sub-
stitute for wartime
the annual
available, current indications
profitable period in the history of
Although it will be a number of weeks yet before
are
anti-icing
excises, contends tax increase at this time
might have such depressive effect
are
/
to precipitate
as
must
improvement in underwriting operations. It was not until the
middle of 1948 that the adjustments in rates and the leveling off in
prices enabled underwriting to become profitable for the first time
in several years. This year fire insurance companies have enjoyed
a full
year of favorable conditions in the underwriting end of the
business. The decline in prices and fire losses have been of consider¬
able importance in the excellent
results
will
taxes
that
be
=■
■
v
.
perhaps excise
it
to
Whereas in
of
it may exceed
their
investment
to
over
are
indicated for
!and
the favorable showing of last year.
part of this large gain in underwriting earnings and
will be absorbed by higher taxes. During the
period when statutory underwriting losses were being experienced
tax bills were nominal. Now that operations are extremely profitable
the
gain in taxes will show
an
Nevertheless, operating earnings after taxes for 1949 will show
improvement over those reported for last year. Results
substantial
and 50%.
'
showing
concerns
'/://+
improvement of between 10%
an
These favorable conditions in the
business have been reflected in
a
operating end of the insurance
liberalization of dividend policies.
to
stock
their cash distributions.
pay.
dividends.,Other companies have increased
dividends, present
In spite of these larger
payments are still conservative in relation to earnings and over the
next year
Thus
further increases
these
favorable market for the
panies.
Many
in
reached
the
of
20
seem
likely.
shares
of the various fire
have
stocks
advanced
insurance
highest
the
to
to
a
com¬
.
r
for failure to take prompt action
in the last session of Congress.
law
The
of
diminishing
returns
already set in, business was
suffering from these unjust levies,
and people in the affected indus¬
tries were losing their jobs. This
distress pattern still holds
true
and will continue until these taxes
levels
>
,
Administra¬
tion spokesmen that they are now
considering repeal would carry
far more encouragement
if the
record were not already so bad.
Since April of this year leaders
of
the
Truman
Administration,
in
lished
that
executive
the
gressional
they
con¬
pub¬
announcements
15
some
and
have
branches,
either favoring or
or all
were
considering repeal of some
comparison of market prices
and
years.
,
over
the past two years. In cases where
stock dividends have been paid, Boston, Great American and Hart¬
ford, the share prices have been adjusted.
1943
1949
High
Aetna
Fire
Low
v: High
Price
Price
Points
12-28-49
Low
Secre¬
Commerce, Mr. Sawyer,
July 27, on Aug. 26, on Dec. 12
other occasions has stated
on
directly
indirectly that these
repealed. Ranking
or
12-31-48
Change
best
Mr.
Truman
it
is. about
49%
41
61%
49
+ 12%
have
67
51
71%
61
+ 10%
Now
22
151/2
18%
14%
21%
173/4:
+
65%
53%
64
46%
63
58% V
64
48% : 763/4
63%
54
59%
48
67
59%
+
81%
631/2
69%
53
80%
68%
+ 12
77%
56
61
44%
75%
60
761/2
108% -35%
91%
82%
+ 9
statements.
+ 15%
95
made
President
has
Truman
an¬
lion dollar tail
Elimination
it.
on
a
Continental
Federal
Insur.__
Insurance
__
Fidelity-Phenix
Fire Association
Fireman's
Fireman's
Fund
—
____
,
(Newark)
14%
15%
19%
11%
ican people now carry so that the
can
proceed
and
illiberal plan
socialize
to
America.
at this
crease
time
A
would
effect
with
have
that it
aging
er's
be
on the Speak¬
signed by 136 Republi¬
desk
Members of the House
from
fcr
the
carried
calling
Ways and Means
Committee to be discharged of the
excise tax repeal bill so that it
House*
who sin¬
taxes
should
be
48%
+
signatures
wilk
gain in the long run.- There
undoubtedly be a much more
expanding use in the immediate
repealed, to add
to the petition
when they return in January, in
effort
an
to
future
this legislation
coming
pass
The
whereby cargo can be
quickly and efficiently
in and out of the airplane.
American
people and,, I
majority of the Congress
a
in
are
mood
no
at this time.
to
sent
by
to
What
want
is
the
of
taxes.
measure
by
itself
*-25%
+
Hanover Fire
36
30
32
34
313/4
+
88 y8
91% -75
115
903/4
27
30
36
Insurance
Ins. Co. of N. Amer. 132
97%
23 ;
108
92
132
National Fire
61
48
49%
National
40%
303/4
373/4 30%
79
90
Union
Phoenix Insurance._ 1041/2
St. Paul Fire & Mar.
37%
Security InsuranceSpringfield F. & M.
30%
81
66
50
United States Fire„
67
41
k 56%
31%
+
87/
+ 13
>;
.
45%
+
76
37
23
1%
33%
35%
103
463/4 40
60%
36%
+ 11%
-
the
44
60%-
66%"
It
developed
and
has
upon
express
3%
business
is
its in¬
fancy. It would
d
e
the
oi INDIA. LIMITED
serious
a
to
error
NATIONAL BANK
and
in
now
+
+ -3
this
of
un-
restimate
problems
involved
in
~
Bankers
INSURANCE
STOCKS
to
the
Government in
the air
Kenya Colony and Uganda
London, E. C.
Branches in India,
Burma, Ceylon, Kenya
Laird, Bissell & Meeds
Members
New
York
Stock
Exchange
m BROADWAY, NEW YORK 5, N. Y.
■i
Telephone: BArclay 7-3500
.Bell Teletype—NY
Zanzibar
banking and exchange business
air of
a
Conversion to
small fraction of any sur¬
1-1248-49
(L. A. Glbbs, Manager Trading Dept.)
Trusteeships and Executorships
also undertaken
face
traffic, together with the de¬
velopment
of
new
markets
proceeds,
*
v.
-
before
70th
a
to
has
Harder
35,000
,
/
-
:
MASS. — John
added to
been
staff of Hemphill, Noyes,
on-time
&
Parsons
Square.
Co.,
•
-
10
paper
G..
the
Graham, %
Office
Post
'
.
*
,
Shields & Co. Adds
per-
BOSTON,
presented
Annual
Meeting of
Society of Mechani¬
Engineers, New York City,
MASS.
staff of Shields &
cal
Street.
.
.
.
'
Lincoln
Co., 24 Federal
In the past he was with
Hunnewell & Co.
.
Chronicle)
—
Davis, Jr., has been added to the
the American
and Nov. 28, 1949.
together
(Special to The Financial Chronicle)
BOSTON,
(Special to The Financial
of
v
With Hemphill Noyes Firm
ability to maintain high sched¬
*Digest
was
used to retire
555,000.
sound
growth.
Banks
outstanding will amount to $459,-
prime importance in the air
freight operation of the future is
and
~
r
-
The
reliability
"
issue
Federal
$86,205,000 de-,
As of
the close of business Jan. 3, 1950,
the total amount of debentures
probably carrying
20,000 pounds and the
25,000
pounds in payload.
ule
* '
bentures maturing Jan. 3.,
one
carrying
will
Credit
The
par.
were
There probably will be
basic sizes of such
other
■
the
with $30,370,000 cash in treasury,
two
to
of
debentures
of 300 miles
excess
15,000
intelligent
£2,500,000
The Bank conducts every description of
hour.
transports,
analysis
W. W. Davies
and steady
at
...
asset
least
-assurea
£2,000,000
Fund
per
at
the
•
£4,000,000
Paid-up
Reserve
the
proach and an
-
Subscribed Capital
Capital
of
future, but: a
reasonable ap¬
_
Colony, Kericho, Kenya, and Aden
and
freight
market
Head Office: 26, Bishopsgate,
„
■
ing speeds in
*"■•'.
•.
G. Newcomb, *
New York fiscal agent for the
banks.
The financing consisted of
$55,835,000 1.30% consolidated de- .
bentures dated Jan. 3, 1950, due
Oct. 2, 1950.
The issue was placed
of air transportation,
the cargo airplane of the future
will be a high speed transport. It
should and will be capable of do¬
mary
•
made Dec. 20 by M.
now big
primarily indirect
savings
available
will
the .passenger, guarantee a highly expanded mar¬
ket for the air freight industry of
markets.
The
air cargo, air the future.
/ '
freight
por¬
Inasmuch as speed is the pri¬
tion
■
Intermediate
-
1+4
+
of
realization by the shippers of the
is
be
BANK
'
A successful offering of an
been
5%
*
reduction will be
the avoid¬
equipment
this
in
FIQ Banks Place Debs.
as
transportation
business.
mail
+
a material increase in
freight market. A large
air
and procedures.
design and operation.
+27
31%
47%.
(1) speed;
Air
+ 26
49
100
73%
35
31%
106
•
stage, stresses
+ 53/4
60%
.
75%
103
.
.
373/4
>
303/4
36%
Prov.-Washington*
41
29
343/4
obtained
are
will permit
its
merits.
facilities are still in early
future requirements in aircraft specification,
(2) schedule reliability; and (3) simplicity in
+24%
Home
such that
which
transportation
rates
lower
Aircraft expert, pointing out air cargo
2%
124
233/4
air
of
The
By W. W. DAVIES*
5%
Hartford Fire
a
to be taken
should
on
be
There is still a long step
in reducing the costs
plane.
American
spending in
more
will
efficiency
strong point in the design and
operation of the future cargo air¬
White
chance
no
the
less
repeal
considered
be
maximum
Any "package" deal
next
excise tax
Simplicity of equipment and
simplicity of design to permit
to increase taxes
Congress
has
House
containers
pre-loaded
handled
session.
think,
of
and pallets
first month of the
in the
Tomorrow's Cargo Aircraft
3%
31
^
taken by simplicity and
ance of special costly
+ 4%
,52,.
26% 203/4
was
ship¬
able
their
•
483/4 40%
it
for
ently accepted means of shipping
and handling rather than the de¬
velopment of special and costly
equipment which offers question¬
I do that these
as
which
airplane in the future
design and work toward pres¬
to
Democratic
Members of the House,
cerely believe
in
terminal
the
in the cargo
brought to- a vote in the
The
signatures of 218
members are required.
invite
be loaded directly
truck
to
terminal but
the
at
can
An effort will have to be made
be
hereby
the
ping.;
Manager of Aircraft Engineering, United Air Lines, Inc.
311/2 24%
American
required
the material
can
T
available and standard
handling equipment. It
be designed so that ad¬
ditional loading facilities will not
introduced
I
utilize standard pack¬
can
now
must also
which
June 30 still lies
on
car.
materials
jobs.
petition
tank
is done by
It must be designed
to permit the rapid loading
unloading of such freight. The)
airplane / must
be
designed so
and'-might
precipitate the country into a tailspin which would cost millions of
A
gondola
railroad
a
ores as
and
a
generally
Workers their
carrying
with sufficient doors of adequate
economic
on
with
done
step
7%
54% 47%
Glens Falls
Great
words,
designed
size
in¬
tax
3%
15%
.
other
that
dollar tax program to.be added to
the back-breaking load the Amer¬
its extravagant
is
Insurance
20
In
cannot, be
simply for the immediate market
can
be exploited in the air
cargo field.
Tnis necessitates a
wide open cabin in the interior
where
all
types
and
sorts
of
freight can be properly handled
$600,000,000 in excise taxes will
be coupled with a multi-billion
Administration
airplane
car, or
'
Insurance
Boston
in
broad
cargo.
as
a
+ 12%
67
fly
+ 43/4
76% 56%
Finance Committee
similar
to
multi-bil¬
of
Washington, not
58
that
a
Ways and Means Committee and
72
information
appears
$600,000,000 kite with
people
Senate
be
not specified
operation,, it
its usage for
of
types
specifically for refrigerated cargo
work or carrying of fluids such
the
to
obtainable
now
enactment.
of the
the airplane
designed for
cording
taxes should be
►321/4 481/2
—
Agricultural Insur._
Amer. Ins. (Newark)
The
taxes.
of
tary
on
excise
the
development
a
the
Democratic members of the House
Current
-Price Range-
of
other
carrying
mere
House.
statements by
be
and
sound is frequently deceptive. Ac¬
can
repealed.
They are now considerably higher than
at the end of last year and have proven to be one of the best acting
groups within the general equity market.
'
Some of these considerations are summarized in the following
over
must
|This sounds promising but
depressive
whatsoeve
both
contributed
have
factors
underlying
strong
study by the White House.
conditions
was no reason
cargo
for
There
+ince.
The
Many of the leading organizations have declared or announced their
intention
Means
question of what
to do about excise taxes is under
(leaders / ever
are
'++//++;;
■
and
Com¬
had
almost proportionate increase.
will vary with the policies and experiences of particular companies.
On the average, however, gains of around 25% -30% are indicated
with individual
House
by Ad¬
ministration
Hon. J.W. Martin, Jr.
income
investment
in
mittee
>
Of course,
.
been
up
Ways
yields. This combined with the larger volume of funds has boosted
levels.
1949,
has
the
i
in¬
on
2,
bottled
ing securities. As a result many insurance companies have increased
their holdings of quality common stocks which provide attractive
investment income to record
was
troduced
Feb.
gains of 8%-10%
income,
the
prewar
levels
With premium volume
showing further moderate gains, a larger volume of funds has been
available for investments. As the pressure on capital funds has eased
considerably within the last 18 months, a larger proportion of
available resources could be invested in equities or other high yield¬
1949
return
■
excise taxes to
+.:.+;
;■
■
spokesmen
repealed after all,
is welcome if
late.
My bill
expected.
now
companies was equal to approximately 10%, this year
As
effect
the
to
underwriting profit margin for a representative group
the
17%-
Administration
from
nounced that the
still
while
be
basically
carrying and
period,
tailspin that would cost millions of .workers their jobs.
The recent deluge of statements
in earnings this year will result primarily
substantial gain
from
1948
will
tion
economic
an
air
and
equipment.
>
the insurance industry.
The
navi¬
and
conditioning
+ |
Undoubtedly the next five to
ten years in tne air freight opera¬
Minority House Leader, commenting
in fire
'
reports of the various companies
communications
in
est
gational equipment plus adequate
dividends and equity prices,
earnings,
standpoint of
the
.
Republican Leader, House of Representatives
ending has been an excellent one for investors
the year just
con¬
to
capable of negotiating all weather,
conditions, wnich requires the lat¬
MARTIN, JR.
By HON. JOSEPH W.
will
and
aircraft operation as it is
to present passenger aircraft op¬
The
eration.
airplane
will
be
Tailspin
;
This Week—Insurance Stocks
is
important
as
cargo
Mean Economic
By EL E. JOHNSON
This
be
to
Volume 170
Number 4868
(2643111
Salesmen Wanted
By CAPTAIN EDDIE RICKENBACKER*
Cooperation in Securities Industry
CtEMEr^T
'
By
President and General Manager, Eastern Air Lines, Inc.
Declaring crying need today
(
Seventy-eight
years
in
ago,
Emerson
the
of
—one
world's
greatest thinkers and philosophers
—spoke these
immortal
lines:
-
•
"If
man
a
write
can
a
book,
preach a bet¬
better
ter sermon, or
make
t h
better
a
etrap
mo us
hi
an
he
builds
house
his
the
in
the
will
woods,
world
e"
k
a
m
Capt. E. Rickenbacker
beaten
1
a
path
? to his door."
»
Since
then, millions of people
scores * of
languages,
have
in ;
found
one
and guidance
in this rather sweeping statement.
inspiration
But, today, this no longer holds
true. All around us, in worldly,
as well as in spiritual affairs, we
i
salesman
man
(■
■../ ■
and
Says his organization represents all groups
business, and advocates setting-up a permanent
joint committee, under Chairmanship of Hal Hi Dewar, to ex-
only
When I
poses and
Unless
function
we
with
the
to >
in
plan
,
business.
invitation
Your
so
of
many
are
r
the
and
ity of
some
'
with
meet
to
gentlemen who
for the manage¬
you
responsible
ment
V
'
operational stabil¬
of the most important
in the country, I feel has
given me one of the greatest op¬
portunities I shave had this year,
how
superior
because
services,
search you
will
no
With
V
all
Emerson,
sell,
to
the
sooner
mid-twentieth
about his
and
of .the
we
century
•
Mr.
to
respect
due
forget
super-mousetrap of the
mid-nineteenth
century the bet¬
ter it will be for all of us." - : /
If
Mr.
Emerson
were
among
if he had to earn
his bread and butter by selling
hotel facilities as you do, or sell¬
and
today,
us
accommodations
line
air
ing
we
as
do, he would soon realize that
his statement to the
the truth of
effect
world
the
that
to
comes
with
the whale-oil and the free-lunch,
with the one-horse shay and tax7
who
those
wait,
has
gone
free travel.
We
may
have the best mouse¬
trap, but unless we also have an
of manpower
that
takes
mousetrap- to
womanpower
super-duper
who
people
well
becomes
mousetrap
piece.V
It
y,
aimless
is
wait
to
to
come
for
our
1
con¬
door.
They will beat no path through
the woods.
First, they do • not
have
the
time - to
do
it,
and
secondly, some energetic competi¬
will intercept them on - the
tor
way.
I
that
/
;
So
-y'1,.!.
let
Hoofr
which
get
us
little
a
Mouth
and
consider
I
an
*,
*
of
more
Disease,
essential
part of any salesman's qualifica¬
tions in the art of salesmanship—
"hoof it" to get to the people,
and "mouth it" to tell them about
his, product.
•
The
salesman
the
*An
,
V
tion,
all
on
and
a
talks
to,
matter of per¬
'.:V/
:-;V-
■
address
1949.
Sales
New
.
Now
ble
by
Captain
Managers'
York
City,
■•./'■'
Associa¬
Dec.
17,
lessly formidable.
i
Perhaps we can get somewhere,
biit let us start Out by
defining0
ahd the reaction might objectives and establishing def¬
more
-1
among them
my
sincerity I
to
want
at
the
that
say
outset
'don't
I
know how
can
we
achieve
this
;<
•
-
disastrous than if we
You
Clement A. Evans
highly to
desired
be
to
objective;
suggest
ana
I
have
no
partic
no
should
"Pnnnor
1nn
•
a
You
it
up
very
cannot
like
it.
wear
radio
a
ceiver picks up a broadcast
sage on a given wave
It is
re¬
mes¬
length.
:
attitude coupled with a
set of actions that please, and in
some
instances
displease,
the
an
public
your
—
guests,
'.'yy.
passengers.
and
our
i
Technologically,
our problems
'different.
Your
somewhat
are
original problems are of design,
layout and location of a fixed
entity. We move in a fluid called
air
our
problems, therefore,
—
deal
with
time,
distance,
travel,
New
we
both
of
with
deal
people
away
variation .in
a
York
Stock
-
was
reservations
few
venienced
gers
is
disgruntled
or
Particularly, what
build
passen¬
That
contacts
have
none
is
our
for
men
you
do
story?
-
job
our
and
contracts
existed
before.
Create de¬
products. SELL!
too.
of
our
most
important fields of activity is
business, the hotel business.
your
one
desks.
Continued
And
on
I
will
not
have
even
be
considered
varying
these
-
can
realized that
a
sin
page
29
to
perhaps
interests;
be resolved if it is
we
not
are
working
I
cussion to die here.
should
we
have
It may be that
an
for such a great task, namely* Hal
a
majority, who are like¬
Dewar whp is soon to retire as
wise members of the NASD. Each;
President of this great institution.
Of
these organized groups?, has a
Hal Dewar has
th^ distinction of
purpose and ai place and wach^ is!
having been "Chairman of/, the
championing a viewpoint and as-:
NASD and President of the IBA.
not?
-
I
these
raise
This is
To
to-eye.
There
which
be
can
no
the
question that
not an
Holders;^\/>
v;
Offer
,■//!.;/■ ■/;■'"//'y'/"
:
Republic of El Salvador
Customs First Lien
1
■
4
"
8% Sinking Fund Gold Bonds, Series A,
Dated July 1, 1923, Due July 1, 1948;
'
7% Sinking Fund (Gold Bonds, Series C,
<
'
r
"
Dated
;
July 1, 1923,; D.ue July 1, 1957; and
Certificates of Deferred Interest
-
.
4
issued with respect to
don't know their minds
.'•/
(Scrip Certificates)/
Bonds of Series C,
''
-
Frankly,
not
I
am
one
of
always in agreement
v
>
Fund Dollar
3% External Sinking
Bonds, Due January 1,1976.
NOTICE OF EXTENSION
those
on
this
Association
The time within which the Offer* dated
the
above Bonds and
y
y
April 26, 1946, to exchange
the appurtenant coupons
for Republic of
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* 1950 to January 1,1951.
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, 1951 to July 1, 1952.
Copies of the Offer may be obtained upon application to The
National City Bank of New York, Corporate Agency Department,
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.
El Salvador 4%, 3%%
due January 1, 1976,
'
REPUBLIC OF EL SALVADOR
of
America, Hollywood, Fla„ Dec, 6,
1949.
an<l
or
I don't think that it is ne¬
cessarily a bad thing for the in¬
dustry. We would not be open to
suspicion if we came into court
with a pat story, or if we were
mouthing platitudes or presenting
a
seemingly opportunist position
merely to gain a personal objec¬
Bankers
;
Convertible Certificates for
refuse to agree on programs.
ment
am
of
in fact
occasions when they see eye-
tive.
We
would
ultimately be
In
New
York
City, Chicago,
Detroit, Miami, Boston, New Or¬
*Statement by Mr. Evans at a
leans, St. Louis, and in dozens of
panel discission on "Cooperation
other
cities we
serve,
Eastern
in the Securities Industry," held at
Air Lines has men whose main
the 38th Convention of the Invest¬
jobs are to contact the hotel
transportation
we
have honesty of purpose and un¬
questioned sincerity perhaps it
Certainly the view¬
score;
generate business
—
new
where
matter
.
ally, means added effort and cost.
is SELL
this
representative
too
guests which, automatic¬
or
about
suming an understandable posi¬
He understands both organizationsExchange tion. And who is to say that they
thoroughly, knows their points of
should
frequently this industry has pre¬
many.
'
y/>: ' sented opposing viewpoints before
This, as you know, is not good pfficial governmental bodies, and,
salesmanship, nor good service, the finger
of scorn
has
been
and requires reselling the inqon- pointed at us as discordant groups
.
viewpoints?
to remind you that the NASD
this matter of conflicting public
viewpoints is the great sore spot
We make reservations as you in the business. I
suspect that this
do, and sometimes we find we is the starting point of coopera¬
have
oversold
the
number
of
tion, because it is the point pn
seats
in
our
airplanes, as you which
criticism
most
often
is
sometimes
find
that, by " some heard or referred to; that it is
miscalculation,
you
have
con¬ true cannot
be gainsaid.
Quite
a
do
presenting a united front to Con¬
gress, to the SEC, or to any other
governmental body, is to establish
and emphasize integrity.
If we
and
points of the two groups are not
always parallel, although there
are
serve
firmed
to
not waiver
.
...
However,
need
us
Perhaps what
agreement and of conflict., He
questions, gentle-j has a broad knowledge and under¬
men, because I
think that they; standing of all phases of the secu¬
them to eliminate certain
funda¬
should be raised to indicate how! rities business. And he demon¬
mental selling practices and argu¬
far we must go before we can be¬ strates his courage by
daring to
ments?- If so we must establish a
gin to approatch an understanding! bring this controversial matter of
starting point and prepare for a
of the subject of cooperation with¬ non-cooperation right out in* the
long and laborious journey, em¬
in the securities industry. I don't: open.
'
boldened and bulwarked by the
do it in order to. cast doubt upon!
In conclusion, gentlemen; f re¬
thought that the goal can be at¬
the feasibility of the project or toi iterate my thought which is that
tained but not right
away.y Or do raise mental
barriers. But I don't we have a logical start toward a
we just want the associations like
want to over-simplify the subject goal
merely by discussing this
IBA
and
NASD
to
cooperate?
either.
We can't sit down and; matter of cooperation. Where do
Again, how? Do we want to work
I frankly say
We we go from here?
out a system for a solid front when willy-nilly find:! an answer.
don't have before'us just one prob-; I don't know the answers, but I'm
we get before the Securities and
lem which can be isolated for so¬ perfectly willing, in fact anxious,
Exchange Commission or ,sa* Con¬
lution. There is involved a whole to join a responsible search party
gressional committee, or do we
i
series
of problems.
Sir Oliver looking for them.
mean
we
just want to tell the
same
•
accommodation
gage,
the
public.
broker; if. so, how do we want
intangi¬ these honest and sincere competi¬
tors to cooperate?
cannot put your
Do we want
You
lit.
on
pick
to
initions and then let
-in. .our desires.
exploratory
committee, one that sits constantly
in some degree
and meet frequently to see if we
ularly impressive ideas to. ad¬ of all these divisions or segments
can get down to a common
meet-^
vance, but I am perfectly willing, of the business.
There are mem¬
in fact
anxious, to explore the bers of .the New York Stock Ex¬ ing ground. In event there - de-*
thought and to examine the vari¬ change and the Association of velops support for this idea I'd
like to now propose as chairman
ous -ideas that may be advanced Stock Exchange
Firms who are
of such a representative group a
either now. or in tne future.
members of the NASD; and there
I think that as a
beginning we are many members of the IBA, n^an who has every qualification
be
traveling
service is
thing.
hand
business
in
are
SELL! SELL! And
a
Rickenbacker at Luncheon of the
Hotel
the
serve
mand
...:
clients-
actual customers he will
It is
centage.
'
potential
calls
more
secure.
*; /
•
more
We
common.
food, dispense court¬
esy or do not, and provide' com¬
fort for the traveling public. * V
Must Go After Customers
sumers'to
so
from home. We both handle bag¬
the
museum
a
' *
.
have
our
the desire, as
have
show
our
solely for our own selfish needs
the Progressive;
arid an immediate dollar profit.
Miners, and they don't move in
There is an investor interest': at
concert by a long shot.
So why;
4
«
is ;it a crime for the securities: stake, too.
I hold firmly to the belief that
{business to
represent
varying;
this entire subject of cooperation
shades of opinion or belief? Our
should be explored and rwe should
various groups represent different
not be content to permit this dis¬
activities, so why shouldn't there
And
eixamine into the phrase:
um+V,
4V»<->
Cooperation with' the Securities
much in common.
;
'
//" Industry;" What,' exactly, do we
The hotel business and the air mean by that?
Are: we talking
line business, I believe you will about
cooperation
between
the
agree, have* one
basic thing in dealer in unlisted securities *and
activities
our
and
the money to buy it, our
as
hotels
motion.
organization
the pur¬ found out
on
-
out.
in order
to "stay
sold," you must take
your wares to market and labor
by the sweat of your brow to re¬
tain your business—to labor at a
profit—to keep your job.
order
In
business.
greatest economy at the highest
efficiency near maximum capac-;
ity," we cannot * stay in business
and make a profit. And if you
people fail to sell enough rooms,
day after day, the same as if we
air - line "operators
fail to' sell
every seat on every flight, day
after day, none of us will remain
that, no matter how
splendid your product, no matter
one
briefed
objectives of this round be far
pattern,
;OWh little business can't be hope¬
k
proof
j
was
understandable
an
-
was emphasized that there
appeared forthrightly and bespoke
keep his job very long. Nor can
organizations who employ such should be no platitudes. I think our. honest, ipinds, even though
this is the best
salesmen expect to! stay-in. busi4
they might not always be wholly
that
ness very long.
in. concert.
I might point to the
<
! / start
could be made
It makes no difference,
fact that;there lis an American
whetheif
tow a. r d
your
mousetrap is a mid-town
Federation of Labor and a Con¬
co¬
commercial hotel; a DC-3 or DC-4 achieving
gress of Industrial Organizations
and they are not always in agree¬
operation3 be¬
airplane; a seashore, desert .or
mountain resort* or a fleet of our tween the di¬
ment on what is. best for labor.:
And there is often a split within
New-Type Eastern Air Lines^ Con¬ verse interests
stellations— the problem is the that comprise
these v individual,... combinations.;
same. .! ■' * /'
.There is a United Mine Workers:
1;'//1'■!1y////'''• -jy the investment
find
your
progress in
bringing to¬
gether conflicting ideologies and
ambitions, if the conflicting and
seriously- complicated
economic
problems can be sorted put into
;
plore whole matter of cooperation.
;
1 'i
on
make
IBA and NASD.
expect: to
call
can
day
a
'
table it
s
neighbor';
though
No
a
'
in securities
'
speech in California, Ralph Waldo
*
Speaking at
IBA^ panel, discussion, NASD Chairman, though
admitting conflicting viewpoints of various segments is great
sore spot in securities
business; belittles differences between
salesmanship, Captain
Rxkenbacker points out nation has reached turning point
frcm fool's paradise of super-duper prosperity to lower plateau
of realism which goes with peacetime activities. Holds business
must now operate with greatest economy at high efficiency and
near maximum
capacity to make profit Stresses need for more
and better salesmen. ;
!
I T
for
is
"
A. EVANS*
Chairman, National Association of Securities Dealers, Inc.
Franks said here yesterday that
.the World, is making progress in
its march toward peace and in its
patient effort to achieve economic
equilibrium.
If the
world4 can
Pecember 29,1949
By Manuel Enrique Hinds
Minister of Finance and Public Credit
COMMERCIAL
THE
(2644)
12
CHRONICLE
FINANCIAL
&
so
An
of
prospectus
request
upon
NATIONAL
SECURITIES
RESEARCH
&
CORPORATION
120 BROADWAY, NEW YORK 5, N. Y.
Living Costs
■
secular
growth of the nation.
will
'
•i/.'"'-'" v'
;
i
'
believe that this long-term growth
continue, subject of course, to inevitable setbacks from time
There
is
reason
every
to
1870
to time.
I
AMvmrAwr
say
^1
s
more?
Prospectus
•
W
may
P
Timing Formula
on
be obtained
from authorized dealers, or
Corporation
announces
the
"aggressive" portion of the portfolio.
SELECTED INVESTMENTS COMPANT
Edson
B.
editor
financial
Smith,
>135 Sosth La Salle Street
of the
Chairman of the Fund's board of trustees,
CHICAGO 3, ILLINOIS
M.
Tappan, Vice-President
of the
Stewart C.
& Evarts;
Corp. '
1
The
Diversified
Boston /'Herald,", is
which also includes Robert
Bradley & Co., Inc.;
Woodworth, partner in the law firm of Lyne,
Woodworth
and Thomas S. Keegan, President of Investment
Research
/:+;■' 1'
'
1
advisory board includes James V. Toner, President, General
'
Director
and
Manager
the
of
Prescott
Durfee
Boston
Edison
Fund;
Jennings, private trustee and
Trust
Co.,
Company;
1950
1940
Fall River,
Mass.;
Mass.;
Director of the B. M. C.
a
and
Raymond M. O'Connell,
Corporation, with headquarters in Boston,
Investment Research
way of thinking the chart is illustrative of two points.
place, it shows that regardless of any intermediate swings
in business activity, the productive capacity of the United States has
had a long and steady growth upward.
Secondly, when one looks
at the over-all trend line, the intermediate ups and downs assume
our
"Judging solely
the basis of past experience, it can be said
certainty that if the country is to continue
with its present economic system,, there is every reason to believe
|
with
degree
some
that there will be
The
nub
of
evitably,
the
for
on
of
continuing upward trend of industrial production.
is that increased industrial production in¬
the long run, translates itself into increased value
the
over
a
matter
of
owners
industry,' and those who share in the ownership
of American industry today (through common stocks) are those who
will profit by such ownership in the future."—From Vance, Sanders'
"Brevits."
„
.
,
,'.,
,
The Container
"Your bank takes elaborate
uables
!
\
,
the Contents?
or
precautions to protect whatever val¬
If securities are included,
locked in your safe deposit box.
are
who is keeping watch over their value? Which is more valuable, the
container or the contents? There is little point in guarding printed
certificates
unless
is
someone
taking
to
care
that they remain;
see
valuable.-
"Many people
Robert E.
Vice-President and Director of the Gloucester National Bank.
:
"To
r
Noble, President of the Greylock National Bank of Adams,
Investment
1930
In the first
Warren Institution for Savings,
Boston; Joseph W. Lund, Vice-President R. M.
Inquire about=
1920
relatively minor importance in relation to the whole picture.
formation of
The Formula Fund of Boston, an open-end investment trust which
will operate on the principle that proper timing of purchases and
sales of securities is the key to successful investing.
The Fund will
have an approved list consisting of both "defensive" and "aggres¬
sive" sections, the proportions to be invested in each depending on
specific predetermined individual price levels for equities in the
Research
Investment
IKC.
1910
1900
1890
no
New Fund Formed Based
3r JiU EnJCl
1880
.
change in present dividend rates (and their
long-term trend has also been upward) the purchaser of soj.nd
common
stocks today yielding 5% can expect a return, including
growth in value, of SVz% a year over the long-term. Need one
Thus, assuming
Jkjm ifjft JCi
States since the Civil War.
/During the past century, living costs in the United States have
risen 344%, or approximately 3*/2% a year on the average. ;While
published common stock price averages do not go back a century,
during the past 50 years the Dow-Jones stock indices have also
shown an average growth of about 3Y2% a year, in addition to div¬
idends paid.
/V":
+/:+':, +/
This growth in value of 3'/2% a year is the result of compounding
earnings plowed back into the business in conjunction with the
and
program
that the
U.S. INDUSTRIAL PRODUCTION SINCE THE CIVIL WAR
Common Stocks Parallel Rise in
OpenTnVes^meTfTArpount
Details
the United
By HENRY HUNT
5IMEHT PROGRAM
statistics and business trends
of current
maze
a
longer-range outlook becomes cloudy, if not completely obscured.
"To give an example of what we mean by this, we present the
following chart which depicts the trend of industrial production irt
Mutual Funds
NiATIONAL
lost in
Thursday, December 29, 1949
;
•
that the
suppose
common
stocks of sound
com¬
panies. will show an increase in value over any long-term period
during which the general economy has advanced.3 This is true only if
great care is taken over the original selection of securities purchased
and if they are then subject to constant and professional supervision.
"The following is a graphic presentation of what can happen to
securities that are not supervised in this way—and also the results
that are possible if they are supervised.
<
<
,
;
..
A Series
is designated as the
of
York
New
and
Stocks, Inc.
are
principal underwriter.
Mr. Keegan is President
corporation, Ralph S. Battles and Mr.
Smith
Vice-Presidents, Charles L. Ryan is clerk and Arthur R.
ORIGINAL PORTFOLIO OF INCORPORATED
Magee
Treasurer
of
the
December
Shares
is Assistant Treasurer.
and
other
material available
investment
.6
:
K
dealer,
v
or
search
local
your
from
■■
■
William
descriptive
from
Fund.
<#*
..
R.
Walsh,
Huch W. Long
"
>
and
Company
CHICAGO
LOS
elected
Executive
"One
who is
100
American
Smelting & Refining
50
American
Telephone & Telegraph
of ? the
of
the
a
Long Time
principal difficulties faced
trying to manage
by the average person
U
Eastman Kodak
investment account is the ever-present
an
(general Electric
40
It is often easy to become
100
Illinois Central
100
request
U./S. Steel
Vacuum Oil
Value Then:
INVESTMENT
COMPANIES
"None
All
New York
Chicago
•—
—
Los Angeles
of
the
showing
are
loss
today,
A
investing tlieir capital
Diversified Investment Company
profits
quarter of
purchased.
gain
have
,
<
,/
bankruptcy.
expanded, im¬
a
century has passed since that portfolio
Since
distributions,
same
have shown an increase in value of 50% for
period during which the original portfolio shows a loss.
IN
Decrease in
BONDS
Increase
+
through
that time the management of Incor¬
porated Investors has, of course, made many changes in its holdings.
By so doing, shares of Incorporated Investors, allowing for capital
the
(Series B1-B2-B5-B4)
(11/12/49) $147,000.
companies has been
at the moment.
All
v;'
a
first
was
INVESTMENT FUNDS
above
(Socony-Vacuum)
Value Now:
$164,000.
proved and modernized their plant and equipment since 1925. And
yet, even after allowing for all stock dividends, splits, rights and so
forth, the investor who made,no changes in this list would have-a
"Almost
Certificate/! of Parti cipal-ion in
(Indiana)
Texas Company
5
100
THE IORD-ABBETT
Lord, Abbett & Co.
unmanaged portfolio
in
Difference
-
managed
=
portfolio
—10%
+50%
Professional Management.
»
~
+.
"The contents of your
safe deposit box need constant supervision
satisfactory results. If you yourself are not a professional
manager, why not contact your investment dealer and
iearn how the management of Incorporated Investors can
perform
this service for you?"—From "The Parker Corporation Letter."
PREFERRED STOCKS
KI-K2)
Standard Oil (N. J.)
100
Custodian
(Series
Standard Oil
100
Shares, Inc.
upon
Norfolk & Western Railroad
100
WMi ©K
Prospectus
*
New York Central
50
Mil
.
/ Gillette
100
American Business
—R—
,
V/100,/ Electric Storage'Battery^
'100
Kinds
^
Atchison, Topeka & Santa Fe
100
,u
/
Keystone
"
'
.
■
100
For
problem of keeping his views objective.
ANCELES
Secretary
.
,
'
Street, New York 5
been
£
Foundry
-
.
INCOHPOMATEO
Wall
'
American Car &
former Vice-President of Investment Re¬
a
Corporation, has
.j
48
31, 1925
100
Prospectus
t
INVESTORS
to achieve
.
investment
COMMON STOCKS
(Series S1-S2-S5-S4)
Prospectus
may
Outlook for Automotive
be obtained front
Industry
The
Tke
following is an excerpt from Calvin Bullock's December
"Perspective," which discusses the automotive industry:
Keystone Company
of Boston
;
50
Congre.iA Street
Boston
'
Massachusetts
"A
I
1
]
Prospectus
your
may
be obtained from
local investment dealer,- or
source of strength directly
supporting the demand for new
lies in the large number of very old cars still owned
by families
with incomes high enough to buy a new car. In
1949, 47% of all the
cars
—
cars
THE
PARKER
200 BERKELEY
CORPORATION
ST.^BOSTON 16, MASS.
owned
by the upper fifth of urban families (receiving the
highest
over seven years old; In 1941 only 7% of the
cars
by the upper fifth were that old. .This element of
incomes)
owned
can
also
one-third
were
be
of
viewed
all
on
prewar
a
strength,
slightly different statistical basis. About
in existence are owned by spending
cars
'
Volume
170
Number 4868
units with incomes before
THE
taxes 'of $4,000 or
COMMERCIAL
are
the peak of 58%
near to
to
seem
Frank Carr
be
possibly
congestion
in urban
adverse to
more
Our
ownership than
car
in
By JOHN T. CHIFPENDALE, JR.
the highways and inadequacy of parking facilities
These may possibly explain why a smaller proportion
the level of income received it
can be shown that only 77 % of those
highest incomes own cars, compared to 84% in
1941.
In the quintile just below
only 68% own cars, compared to
72% in 1941, and in the next lower quintile only 50%, compared to
59% in the prewar year. Factors other than congestion on highways
and
with
streets
the
explain this situation.
Some families may have
dispose of a worn out old car which they have not
yet replaced with a new one. It is even possible that some of the
families in the higher income levels may have risen from much lower
been
may
The government market is
income
seems
in sales.
It also
may
be rational to expect
But the heavier burden of proof
is
intentions
the
strong demand) unless lower yields
collapse.
A survey of consumer
ensuing 12 months revealed as strong
beginning of the
The potential demand for trucks cannot
manner as the demand for cars.
But truck
be
analyzed in the same
have already declined to levels that could possibly
In September sales of new trucks were about 19% of new
the
regarding the growth trend which is evident."
be lows.
sales.
car
1935-1939, dis¬
years
.y;
,
The Dow Jones Averages
the
.
ly
First National
,
.
Beach, Flor¬
ida, and in
April, 1936,
joined John
,
~
"
John
Joi
amounts
.
:
recent
'
-
..
.
.
in
advance
.
taken
*:i "'"-"X
prices
compared with the
as
:
sizable
in
on
V
;
for
reported
these
Writer maintains stocks used to compute Dow Jones Averages
now fail to give true
picture of market's action and are out
of
some
the
in
expected,
been
sizable
most
the
longest
INSURANCE
the
of
just
have
The
method
of
figuring
the
Averages
has
been
little, if any, changed since they
were
first adopted many, many
years
ago.
in: this
give
The present
writer's
averages,
opinion,
fail
to
true picture of the actions
a
of the
market, as for example: one
day, recently, the first hour av¬
erages showed that the industrial
level had declined $1.42.
This
decline
seemed
to
amaze
people in the board
many
for the
market, in general, showed but
small fractional changes during
that
rooms,
particular hour.
A few
mo¬
ments
later, however, the news
printed an explanation of
how these figures were arrived at
ticker
present list of 65, thereby giving
it
a
balance.
better
ligations
certainly
seems
unfair
of the
list
because
decline,
few
a
that
tention
.
of
they have made only
.'"•
been
has
that
stated
cline
during
in
the
the
■'
have
would
two-year
stock
.
;V,,
also
true
by a decline of
points in the stock of
(a stock selling
over $200 per share) and one
two other high priced stocks
five
Chemical
Allied
for
or
which had smaller declines.
cline in
Join Wertheim & Go.
the
After
first
We
erages
are
the
av¬
New
One
York
firm
100 stocks in their
dividing them as fol¬
lows:
10
Manufacturing
6
-
/"
•'
•
.
•'
Utilities
Steels
&
5
RR.
5
Equipments
T
Grade
10
Grade B
Dow-Jones
A Rails
principal
Rails
30
•
This
stocks
WIS.
.
20 Rails
should
be
Main
added
is
now
Ziegler
Street,
&
affiliated
Co.,
West
215
Bend,
more
to
.
.
1
*
ANDERSON,
the
S.
C.—Glenn
well
as
reported
some
-
could
few of
a
to The Financial Chronicle)
MICH.—Richard
C.
'
%
John Blair Opens
John
E.
Blair
is
engaging in
a
securities business from offices at
232
East
50th
Street,
New
York
City.
used to take care of
.
.
.
companies and pension
...
the
in
funds
>
A not insignificant
.'>■■■■■
-
»*.,»
.
.
\
•
.
:
.
v
.
.
„
u. s.
TREASURY
1960/65 were also supplied the market
★
-
town
Ihe
is
with
Commercial banks have about completed year-end changes,
; *
taking on some of the higher-income eligible??
certificates.
.
.
Out-of-
.
deposit banks have again been good-sized year-end buyers
2V2S due 9/15/67-72, despite the high
selling.
.
...
★
★
.
Also the
.
.
few of the smaller com¬
quite
the September 1967/72s.
as
been some
have
and although
a
means
to be
many
#.
♦
7
.
.
eventually disposed of, they have not had as many
the 2%s.
,
.
.
Proceeds from the sale of the 1955/60s,
Victory bonds.
.
.
non-taxable institutions, have
.
a
broad market with stability.
one
•
,
.
.
'
»
'
maturities
being
■
.X;
HAPPY NEW YEAR!
shifted
;<
sizable,
8c Co.
-
INCORPORATED
The l%s of 1954
of the bread and butter issues ef the
near-term
Aubrey G. Lansvon
The 1952/54s continue to be
well bought and trading in these issues is active and
appear
.
of the 2%s coming into the market,
which have been let out mainly by
very
NOTES
BONDS
purchase of the longest eligible issue has been
the
21/zs of 1.956/58 are being sold by
takers
CERTIFICATES
of
level at which the issue
because
There
BILLS
This has been a combination package in many in¬
with commitments in the 1%S and certificates.
note.
Street.
.3
continue to be fairly active
of these life companies.
v ,>y
..
securities
Earle
7
Spaulding is with McDonaldMoore & Co., Penobscot Building,
certain of these
to acquire the 1%% notes.
as
fire
of the 2%s due
recently by
business from offices at 120 West
a
v.-
.
market, since they have been competing with
institutions,
I
with
engaging in
t.
COMMERCIAL BANKS MARK TIME
which
S.
j
7
INACTIVE
It is said the proceeds were
.
been put in the
■
Martin is
believes that
Jr.
C.
H.
MICH. —Lloyd
Stock Exchange.
(Special
7.7"';
7
v
mercial banks in order to take on
.
T.
Glenn S. Martin Opens
Industrials
writer
B.
—
con¬
15 Utilities
-
Ziegler & Co.
Wis.
Averages
/'
♦
.
stances
(Special to Tms -Financial Chronicle)
North
of:
./
*
a
Tuyl.
MILWAUKEE,
with
Foods
20
The
Van
Twitchell,
5
j
was
Stores
10 Motors
-
*
he
With B. C.
.
7 Coppers
4
.
tied in
,
sist
thereto
■,
to The Financial, Chronicle)
DETROIT,
.■
'
Bradley Higbie Adds
(Special
DETROIT,
trade
in three of the leading
these concerns, because it is
on
in the government
amount
»•
f
•v,v
With McDonald-Moore
these companies, with a large-sized
along with sizable amounts of the l%s and
-
V-
and have
1960/65 have been the main
F.
Co.
Abbe
Prior
<
~
been
-
.
.
of
name
Oils
8
.
2%s due
the largest institutions
of Van Tuyl & Abbe and Burnett
15
,
the
Richard
Richard F. Abbe
instance, uses
averages,
York
New
under
for
newspaper,
have
the partially-exempts
of
purchase of the longest restricted issues.
business
in
not well balanced and
need to be revised.
.
invest¬
influence
an
savings
his
own
ment
therefore,
list of stocks used in
the
•
c o n-
ducting
misleading. It
that
course, have been
is quite evident,
New
has
been
which would, oi
of $1.42
institutions
same
The not-so-large life companies
Stock
Abbe
the industrial list was off the full
amount
the
COMPANIES
LIFE
private placements
Exchange. Mr.
that
assumed
the
of
the
of
members of the Detroit Stock Ex¬
City, members
York
Co., Penob¬
members
change.
institutions.
York
New
If such an ex¬
not been made it
been
have
These
.
the short and intermediate-term taps were let out by
Co.,
120
Broadway,
Bailey &
longest partially-exempt bond.
have
with
theim
r
&
This
particular hour.
would
balance, but ih some
doing much in the market, it is evident that a strong market
as¬
E.
Building,
Detroit Stock Exchange.
fire companies being able to get hold of desirable amounts of the
LARGE
year,
become
sociated
houi
surely could not be construed as
showing an accurate picture ol
the
market's action during that
planation had
the
of
F. Abbe will
Richard
the de¬
during that first
amounted to only 33 cents.
Fire insurance companies
on
Lin-
staff; of
bit of switching within the group for the
a
meant
has
,
joined
Charles
scot
the
has
of the 2y4S
some
Although the big five life insurance companies have not been
90% of the indus¬
about
>
dardes
Chronicle)
MICH.—Steve
Bradley Higbie & Co.v Guardian
Building, members of the Detroit
.
.
buyers
issue of attraction for
■v,
and
June
Financial
to The
DETROIT,
Nelson has become connected with
of extending maturities.
This
Tne
list
trial
active
doing quite
.
.
,
good part of these funds have been going
a
market.
most
bonds.
being reported recently which resulted
Dow-Jones Averages consist of 30
industrial stocks, therefore
equity
been
purpose
Richard Abbe Will
with
in
Treasuries than have been repurchased,
more
.77,/"•
^
the
Savings institutions have been
•
of the tap issues
buyers
is indicated
the
among
lost
contributed
some
the
into
by stating that $1.09 of the $1.42
was
been
because it
it cer¬
tainly proves that the list is not
equally balanced and needs to be
revised in order to bring it up to
date.
also
they have let out
he
consistently
If this was
money.
most distant tap
cases
de¬
market
.
.
over
interest
public agencies
the entire nation./
lives
in
Arlington
of
With Charles E. Bailey
1959/62/ along with eligible bonds, in order to get funds to re¬
one
the pres¬
ent set-up in the Dow-Jones Av¬
erages
institutions.
these
have
if
had used the signals of
is
1967/72s which have been getting much of the recent at¬
from
invest in the
fractional changes.
It
it
buyers,
non-bank
many
financing
Carr
Co.'s
&
Nuveen
n
the
(Special
the largest buyers and they have even parted
90%
of the rest of the list should also
suffer when
for
have
December
highest price stocks in the
industrial
that
It
anu
of state and municipal bonds.
consum¬
Despite the attraction, which the nearer eligible restricted ob¬
Dow-Jones
of and the f bid¬
negotiation for new is¬
syndication
sues
Chicago.
from
year
been
;i'7
.
the
ding
Heights and is a member of the
Union League and Bond Clubs of
ACTIVE
COMPANIES
responsible for all of the firm's
new issues, including
activities in
Mr.
,
but nonetheless it was
switches
taps
7
/■
..
.
had
as
securities
mated.
FIRE
sale
underwriting department
co.'s
6c
is
Nuveen
extends
three longest taxable
of the
eligibles did not/however, bring as many of these bonds into the
market
of date.
into the Victory bonds,
issues,-which were being
going
previously.
The
Frank C. Carr
Nuveen & Co.
dominate the government mar¬
ket, although there have not been as many changes made by certain
institutions as has been the case in the past.
Shifting and switch¬
ing seems to be largely confined to savings institutions now, because
they are still letting out decreasing amounts of eligible issues. . . .
The swapping of securities to improve income, by these institutions,
goes on as it has for several weeks but the bulk of the reinvestable
tap
Palm
Bank in
.
2%% obligations.
previous¬
with
tne
was
setter.
pace
to¬
Mr. Carr
day.
bonds continue to
longest maturity the
n-
a
nounced
Year-end operations continue to
now
the
the
firm
with it considerable
The restricted
.
.
VICTORY BONDS POPULAR
intermediate
in
country,
bank group the
.
Should Be Revised
'
In the
especially
By JOHN BUNAM
.
are
bring
will
1950
early
.
This is about the average relationship for
houses
(because of
to be witnessed. . . .
2Ms% due 9/15/67-72 seems to be the
front runner, although the 1%% note and the 1952/54 2s are
not far behind.
..The partially-exempts have also been active,
.
mu¬
nicipal bond
funds is
sales
|
that
be the market leaders with the
on
year.
belief
purchases of most issues.
those who predict a
to buy cars over the
demand in July, 1949, as at
a
largest
buying of Treasury obligations has resulted in sizable year-end
.
C.
the
of
one
market, and this will have to be done at intervals
The
Frank
...
the
decline
some
To be sure, the low interest rate
insignificant forces in the trend of quotations of govern¬
Federal again sold long-term issues to stabilize
ment securities.
.
the
been
not
reasonable to expect a return of old-fashioned selling
efforts next year.
showing the effects of the demand for
which means it will close the
...
—
appointed Manager
unue.wiiiLig department of
John Nuveen &
Co., 135 South
La
Salle
St.,
\
investors
its best levels.
Dept.
of the
policy of the monetary authorities and the absence of higher-income
obligations in refunding operations and in financing the deficit have
forced to
"It
institutional
year at or near
levels and may never have owned a car.
,
from
ILL.
Carr lu.s been
on
areas.
CHICAGO,
13
Mgr. of
John Nuveen
Governments
on
-
1941
of higher income urban families own cars
today than in 1941. Divid¬
ing the number of urban families into fifths arranged according to
families
Reporter
The only factors today that
in 1941.
(2645)
better and with liquid
assets of $1,000 or more.
•
"Such factors of strength lead one to view with less alarm tht,
fact that 56% of all families now own a car, a ratio of car ownership
very
CHRONICLE.
FINANCIAL
&
in
markett
the
new
15 Broad St., New
York 5, N. Y.
-
Telephone WHitehall 3-1200
Teletype N. Y. 1-3690
>;
THE
(2646)
14
COMMERCIAL
CHRONICLE
FINANCIAL
&
Thursday, December 29, 1949
question
Labor-Management Showdown
Canadian Securities
The Canadian foreign trade out
look continues to darken.
with
trast
the
In
con¬
highly favor¬
easy
Assistant to President, Motion
of govern¬
purchases
Canada
bulk
mental
the
was
conditions
the
of
and
war
British
fixed
prices.
proceeds of which were con¬ the first place there will be the
into U. S. dollars, it is British necessity to.buy as far as
the
vertible
Canada has a possible in non-dollar areas. Sec¬
major problem in finding outlets ondly as a consequence .of the Do¬
for her essential exports, in addi¬ minion's reluctance to follow, the
tion to which the Dominion will drastic currency devaluation ex¬
doubtlessly be obliged to accept a ample set by the various sterling
apparent that
now
<
>fi
'
.
,
solved and holds task is not
likely
in
produce
to
course
are
highly
results
detrimental to Canadian interests.
The
economic
closer
which Britain
now
relationship
seeks with the
banks.
However, as it would tend
general interest in
to broaden the
Canadian
the
dollar
the
banks
north of the border would receive
compensation
in
the
form ,: of
a
Scandinavian countries will cer¬ predominant share in a largely ex¬
tainly lead to increased British panded market. In the event of
imports from this area of pulp, the adoption of this course of ac¬
paper, timber, and farm products, tion, as an alternative to further
which items have since the war devaluation, it is probable that the
supplied by Canada. dollar would suffer an initial de¬
of the drive cline. Some liquidation of finan¬
to obtain essential imports from cial dollars would probably take
other
than
hard-currency areas place as £n immediate reaction as
been largely
in
Also
furtherance
has
Government
British
the
no.unced the
signing of
a
an-;
result^ of
a
$616 mil¬ official peg
pact with Yugoslavia. Canadian deficit in its U. S. com¬
unfortunately for Can¬ mercial account. Such a decline
ada, the Yugoslavian side of the would ultimately bring about its
bargain provides for supplies to own correction by the attraction of
Britain of timber, grain, and non- a greater volume of U. S. invest¬
Once
more
ferrous
encroach
on
preserves,
A
again ment dollars, which would tend
previous Canadian to offset the weakness of the com¬
mercial dollar.,
»
;■ ■
During the week activity in both
recent
unfavorable
metals
further
development
as
which
far
will
as
Canadian
export prospects are concerned is
the
gradual British movement to¬
wards
system
reestablishment of the
the
the
of free enterprise in
various commodity markets.
It is
reported from London thaL the
marketing of lumber is about to
be returned to private hands and
there is the confident anticipation
that the open markets in grain
will shortly be restored.
Under
CANADIAN BONDS
GOVERNMENT
PROVINCIAL
MUNICIPAL
the external and internal sections
of the
an
.
bond market continued
extremely restricted scale.
izing
chines,
on
The
indus-
does
Labor
of!
catastrophic
as
a
T. Cheyfitz
Edward
That part of
the
struggle which is old
power
revolves around the issue of
man¬
agerial function. With the estab¬
lishment of collective bargaining
national policy, it was
inevi¬
table
that
this
struggle should
take place.
The entrance of the
union brings a new force into in¬
dustry—a force that challenges
every aspect of management and
its practices.,
a
as
the
In
1920's managerial power
little
with
entrenched
was
passed.
have
the
post¬
poned that. Government dictated,
to a large extent, the industrial
relations pattern,; Industrial ex¬
pansion made it easy for industry
to acquiesce.
The showdown was
postponed...
would
But
Showdown Decade.
are
now
of that showdown.
J,'
the
Two—It will have to accept
the
for
of
success
earns
Three—It
economy
specifically
work
and
enterprise
the
its living.
have
will
to
give
some
thought to freedom as well
to
(Steel case is an
bringing government
collective bargaining.)
as
security.
example of
into
The
labor
getting
of
job
and'
he had he would
tive
has
bargaining, the power strug¬
struggle may not be as difficult as
it first appears.
For one thing,,
the British experience may help.
The British worker thougiit that
by changing the kind of economy
get participation.
The latest
report of, the British
states "The
Trade Union Congress
National Union
of
Mine Workers
complained to the TUC of a
gle around the "kind of economy"
takes place in the political arena
but reverberates in the workship.
growing sense of frustration and
cynicism." The Railwaymen, after
nationalization. (Statesman and
It
po¬
Nation) The "Statesman aid Na¬
tion" concludes: "Consultation has
is not
getting
failed to work because nobody has
political
to devise means of consultation at
itself in
expresses
litical action.
Labor's
new
a
action..
action
today. we
of
kind
;
',
;
labor's
V
political
But
new.
are
labor
'.
,
,
Non-Partisan
Labor's
League,
enough
continuously."
British
nationalization
all levels,
•
>.
taken the matter seriously
workers found that
does not guarantee participation
organized in 1936, com¬
—the big issue in the modern in¬
t break
from: Labor's
dustrial economy.
.
faire policy of 130 years.
been
which
was
pleted
;
the
on
a
one.
the economy.
j Contrasted to the older phase of
the power struggle which takes
place primarily through collec¬
upon
war
.
We
collaborative
a
management to resolve the power
entrenched.
the, *1940's
being
cease
depression (1929
style)
and
the growth of the
unions, it was inevitable that se¬
curity would become a key word
in the minds of millions. Security
looms
large in
labor demands
chal¬
1940's the union
•
Ordinarily
the
By
becomes
must
threshold
The 1950's will
the
laissez
wanted
labor
Now
'
protection and help in organizing.
the
The,
if
new
Wagner Act reflected the
policy. The switch was com¬
pleted in 1943 with the organiza¬
tion of PAC.
PAC's philosophy
embodied
in
the
a
plea for basic changes
Phil Murray in
struggle will be intensified
only because factory relations
must be
economy.
for
Industry
an
Council
oy ac¬
/
If the United States can resolve
government
and
in industry;
productivity
struggle
power
it
harmonize
can
participation it will have done
what
other modern industrial
no
society has achieved. There is no
more- urgent
domestic problem.
At any
rate, the 1950's shall be an
Very interest¬
interesting decade.
ing, indeed.
comes
clarified, but also because
entering a cost-conscious
: The
American - Federation of
likewise staged a year-end rally period. In such a period decisive Labor, was paralleling this new
following their recent decline. The action by management becomes trend in labor politics. In 1930
upward movement was led by the imperative.
It must make deci¬ Bill Green had called unemploy¬
industrial group closely followed sions on work measurement, on ment insurance communistic.
In
Bendix, Luitweiler & Co., 52
by the Western oils, among which methods, on personnel, and the 1948 the AFL had pretty much en¬ Wall
Street,
New
York
City,
Federated Petroleum and Royalite many other things which make for dorsed the same program as has
members of the New York Stock
were prominent performers.
efficiency. Everyone of those de¬ CIO. The power struggle over the
C.P.
R. was also notably strong as a re¬ cisions
run
smack
into
union kind of
economy we are to have
sult of the Supreme Court ruling
power and union challenge.
Re¬ is in full swing.
in connection with the Board of cent examples are the "speed-ofManagement and labor have a
Transport's September judgment work" strikes at Bendix, Ford, and
stake
in
this
power
struggle.
which gave the railroad only an Singer.
But the people have a greater one.
8% rate increase. Although some
The power struggle over man¬ For upon its resolution depends a
investor interest was
shown
in
agerial function is not confined standard of living, national se¬
the golds and base-metals these
to the workshop.
It has its po¬ curity, democracy. I use the word
groups lagged far behind the in¬
litical
resolution and not outcome for the
remittance
mas
demand.
Stocks
we
Bendix, Luifweiler to
are
Admit F. L
aspects.
dustrials and oils.
1
to
The
Financial
PEORIA,
ILL.\— Henry
L.
Dersch, Jr., has become associated
Byllesby & Co. of Chi¬
Mr. Dersch has been doing
as an
individual dealer in
Peoria.
Joins Moreland Staff
STREET
(Special to The Financial
NEW YORK 5, N. Y.
BAY
R.
CITY,
Chronicle)
MICH.—Kathleen
McMorris has joined
of Moreland &
Co., Bay City Bank
Exchange.
and
struggle
power
the
on
political
front.
The
rial
struggle
function
essary
It
war.
labor
with
come
and
the
the manage¬
really an unnec¬
is
confused
"rights."
go.
They
industrial
by
rights
changed
Now
are
environment
changes.
The right to lay off has
been
sharply
modified
by
the
seniority •list.
But
managerial
function
needs
struggle must be resolved
amicably, intelligently. If it is not
power
we
to
remain
intact.
Every economy must have sound
managerial function. It goes with
the industrial society.
It matters
shall
other
follow
industrial
nations to falling living standards,
internal disunity, disintegration.
The
over
is
ade
question
then
is
the. next dec¬
of
this:
Can
the
struggle be resolved? One
another we shall have" the
power
answer
by 1960.
Is
it
by Mr. Cheyfitz at
possible
to
struggle?
unrealistic
as
they
are
Mr.
& Co.
\
nual Congress of American Indus¬
ers
try, New York City, Det." 9, '1949.
somewhat " upon *
has
recently
been
Vice-President.
as
-'
•
-
'
-
V
'
'
State Bond & Mtg. Adds
j
struggle can be re¬
depends upon the lead¬
business and
labor and
solved.
Scheffey
associated with George R. Cooley
candid.
power
the Labor Forum of the 54th An¬
of
L.
Frank
-
i
The
will .admit
Exchange,
Scheffey to partnership on Jan. 2.
resolve the
The
extreme
Left>and the extreme Right are in
agreement that it is not. One says
liquidate management. The other,
liquidate the union. Both are as
;
power
Frank L. Scheffey
way or
Struggle Can Be Resolved
*An address
Scheffey
man¬
the staff
Building, members of the Detroit
Stock
Labor
agement have extended the fight
to Capitol Hill. The Taft-Hartley
Act is the recent example of this
Chronicle)
INCORPORATED
Political
Action.
as
NY 1-1045
League,
One—It
ingredients
cident, but prosperity today
only by planning."
business
WORTH 4-2400
the
Given
plan said: "Disaster comes
with H. M.
|
the kind of economy we are
have.
have
combative institution and become
in which it
not
result of cover¬
ing in connection with the Christ¬
cago.
WALL
■••t
struggle over
the managerial function was not
enough to keep industrial rela¬
tions steaming we have another
element in the battle—the struggle
over
also
will
It
accept some changes.
power
power
largely
(Special
TWO
Function
:As if the
.
lied following their recent weak¬
Henry L Dersch, Jr., With
H. M. Byllesby & Co.
A. E. AMES & CO.
j
•
labor.
As for
to
generally
Struggle Over Managerial
econ¬
,
;i ' '■.< principles of the profit
<
calling
ness,
ma¬
get goods
;
business
a
Business must accept the
goal of security and develop tech¬
niques (insurance) to give at least
limited security to the individual.
men,
not
by
Three—This is
government.
of materials,
omy.
P A C
.
autos.
omy.
Unless management is allowed to
toi
o r
as
of par¬
developing
new
techniques of managerial leader¬
ship which fold the union into its
practices.
plant—stock¬
workers,
and:; AFL's
f
well
ticipation
and methods, society
and services.
Destroy the managerial function
and you destroy the modern econ¬
;
relations
-
CORPORATION
CANADIAN STOCKS
the
owns
determine the future of the man¬
arbitrage
rate
was
slightly easier but free funds ral-' agerial function in America. The
corporate
egos as
it appears.
direct the .flow
the removal of the: lenge. In theh!930's labor begins
to organize.
The Wagner Act is
and also in view of the
trade
lion
as
is the outstanding fact character¬
CIO's
be • highly welcomed on this side
also encountering little
difficulty in finding ready suppli¬ as it would enable banks in this
country to participate in dealings
ers of commodities previously fur¬
nished by Canada.
The British- in commercial dollars, a field now
py
the
Canadian
Scandinavian trade and financial monopolized
now
who
holders, '
.
are
negotiations
difficult
as
not
trial
indi¬
with the
the
in
1
.
struggle in
power
Labor-management relations in
are
continuing in the
pattern of a power struggle. That
America
—
they
^
three¬
a
Two—Solve the problem
today. In part
growing proportion of inconvert¬ area-and South American coun¬ this
powe r
exchange.
tries, Canada's competitive posi¬
struggle is
tion in the world's export markets
Grounds for any complacency
old
dating
is adversely affected.
concerning the retention of the in¬
from the pas¬
It is not surprising therefore to
dispensable United Kingdom and
sage
of the
British
Commonwealth
markets note increasing discussion north of
Wagner
Act.
the border on the advisability of
«re almost daily undermined.
Not
In part, it .is
lifting all exchange restrictions new
only are the British authorities
dating
and permitting the Canadian dol¬
entirely frank with regard to their
from
the es¬
intentions to buy as little as pos¬ lar to find its own level in one
tablishment of
sible in hard-currency areas but free market. Such a step would
.
•
Cheyfitz, calling attention to
ible
,
?
it has
can
an-,
accept
can
factory.
Develop
techniques of participation. Build
hieture Association of America
J
'
must
it
One—Must start
vidual
labormanagement relations, says next decade will determine future
of managerial function in America. Says we are on threshold
of a showdown and problem is how power, struggle can be
resolved. Points out principles on which struggle can be re¬
-
at
With the initiative
ent circumstances appear all the in private hands, however, the Do¬
will
be
more ominous. Whereas previously minion
doubly
handi¬
there
was
an
almost unlimited capped as far as competition for
market
for
Canadian
surpluses, British markets is concerned. In
able
immediate postwar years the pres¬
«
Mr.
ol
principal beneficiary
long-term" purchases
'
.
If it
change.
By EDWARD T. CHEYFITZ*
the wartime procedure
whether
fold job.
In the Decade Ahead
By WILLIAM J. McKAY
management
is
swer
to The Financial Chronicle)
(Special
NEW
Monti
',
ULM/MINN.—Glenn A.
is
with
Bond
State
and
It
government.
The
Mortgage Co., 26^ North Minne¬
sota
Street.
"
r
«
'•
J
Volume 170
THE
Number 4868
COMMERCIAL
CHRONICLE
FINANCIAL
&
15
(2647)
the!
probably around 5 to 10% of
How Far in Social
How Banks Are Faring
In Consumer Credit
Legislation?
By ROBERT A. TAFT
U. S. Senator from Ohio
*
Senator
-
j
:
,
*
How far should
medical
ing and
necessities
Our
subsistence?
based
primarily
every
If this is a local
o n
merit,
on
have
plete
ing
The
for
it
have
free
provided
all
in
for
homes
the
*
ob¬
an
'.
*
should
assistance
think
only
be
given when the need is clear.
Second, it should be given only
if complete
and
tion
a
control of administra¬
the
in
latitude
broad
too
unem¬
alizes
medical
only so¬
but nation¬
care,
it.
In the third
place, the assistance
given, while it should be consist¬
ent and universal, should not pro¬
how
been
making out in
clear
understanding
make
banks
consider
their
That
have
his own way.
The only
by which people can be
that every child is en¬
equality of oppor¬
Under the
the
brought
up
ernment
those
Most of our local commu¬
have
nities
in a
assumed
not
a
institutions.
assumed
these
defi¬
to
housing, except
While we have
obligations, it is
is
one
the
aid
should
give free
below
Gov¬
Federal
education
the
good
assist
local
in
aid States
medical care to all
for it, should
communities in elimr
imum decent
in
I
a
crisis
min^
housing, and should
undertake
to
assist
ord.
is
that
of
banks
consumer
in
not
was
depression
end of
thing to improve our
subsidized housing we can eliminate extreme hard¬
or free food to those who are able
ship and poverty and give equal¬
to pay for it.
The New Dealers,
ity of opportunity to all. I agree
labor
politicians, and Socialists
■
\' >.•' T'. '1
have tried to take advantage of with them.
the
early
began
rec¬
after
until
the
the
Thirties
enter' the
to
instalment loan business
appreciable
1941,
numbers. " At
the
the United States
as
involved
in
World
War
consumer
instalment loans outstanding
was
instalment
sumer
to
loans
outstand¬
to $3,529 million by mid-
rose
The banks' share had risen
$1,837 million,
or
52%. The
divided
was
leriding institutions
lows:
as
finance
consumer
re¬
the
fol¬
among
com¬
panies, $827 million; credit unions,
$347
million;
industrial
banks,
$219 million; industrial loan com¬
panies, $167 million; miscellaneous
lenders, $132 million.
the
From
middle
end
to
ment
that
the rates
he does not fear competitors who
have to price their services higher
of
companies,
than his.
Most of the loans above
are
As to the other types
it
will
satisfied
with
institutions
loan
doing,
and
may
protect managers of such
in
The
same.
in numbers
instalment
his
bank
down
the
field.
want to know why
apparently fallen
has
on
business
loan
taking this
from
the com¬
job
away
of
y
is
risen to
:
in volume of
busi¬
though the movement
started way back in 1911, and there
ness
even
has been
tendency for many of
the past
a
these institutions during
decade
into
commercial
regular
The
miscellaneous
different
very
themselves
transform,
to
banks.
lenders
than those who
serve
of
classes
bor¬
quali¬
The manager of the bank's per¬ fied to borrow from the personal
sonal loan department can cor¬ loan departments of banks, and
rectly answer that what the banks the business of credit: unions is
by
the
nature
of
the
haven't
taken
already
they limited
wouldn't really want. The busi¬ method of operation involved in
ness of the consumer finance comcooperative oi'ganizations.
panies.
rowers
'
4
•'
would
be
a
source
of
loss
to
a
•
are
■
*
,
Conclusion
*
Banks will continue to
the
'
.
*
i:
dominate
instalment
consumer
1
loan
There is. and will be, coin-
field.
petition, but this competition will
fundamentally bank against
and the whole portfolio
generally presents more risk than
a bank, lending depositors' money,
could profitably assume.
be
short, the banks- and the
companies serve, different classes
each bank will need
people, and the overlapping of
these classes—the only
zone
of
ment
bank,
In
of
real
competition—is
very
small,
rather
bank
banks
than
against
other
types of consumer lenders.
this
inter-bank
competition
In
to know the
instal¬
of its consumer
true costs
operations so that its
business may.be conducted at a
profit.
'''
;
loan
Lehman Bros, to Admit Three New Partners
while
com¬
commanding
a
consumer
po¬
instalment
j
V
*
field.
.
attained
or
and
banks
companies haye
much importance
by $1,671" million, of
clear that the banks
grew
sition in the
■.
loan
by more
(by $1,053,
or by 134%,
the total for all institutions
It
in¬
consumer
industrial
never
companies, which is next
the
field, the story with
regard to competition is much the
industrial
consumer
of lending
stalment loan
of
increased
specific)
bined
loan
the
,
billion dollars
a
to be
loan
,
1949, consumer instal¬
loan outstandings of com¬
mercial banks
than
1941
of
of
instalment-
simple
charged by
the companies on large as well as
small loans are of necessity higher
than the charges made by banks.
One may fear a price cutter, but
$1,858 million. ©Pthis amount the .panies indeed runs into, largp fig¬
banks held $784 million, or 42%. ures, but after all what is it comT
posed of? A considerable portion
After sagging during the war
of it represents
small loans of
to a low point in 1943, total con¬
from
20
to
150
dollars which
have
opinion, the American
people feel that we have a suffi¬
ciently high income so that per¬
haps for the first time in history
my
more
An official may
apparent from
It
90%;
States to provide food.
present system; it is a radically
different proposal to
give free
medical
C. Wm. Phelps
Dr.
1916?
development for the
reason
in size to that of the banks in the
in
job
credit
average
inating slums and providing
In
It
foregoing principles,
that
States
/
:
those unable to pay
quite true that in many parts of
the country
they are not sys¬
tematically carried out, largely,
believe through lack of funds.
work.
national income, should
nite obligation for
in
believe
I
he is
reasonably decent
tunity he can have only if
home.
We must not create a deter¬
to
finance
a
consumer
other
rent to hard
this
Take, for example, the case of
the business done by the consumer
banks
done
le^al
small
in
It is impossible to see serious
competition for the banks' from
icism by bank officials.
M?de
old
for
development cut into
consumer
departments from unjustified crit¬
The Progress
mainder
way.
Our Constitution also has
us
serve
prospects.
the
back
business of the banks?
jobs that their personal
departments
future
supported is out of the effort of
those who are earning their own
faiths have taught
obligation to those who fall
behind in the race for a decent
■Our religious
us our
to
the
and
1
in State ;
$300 that the consumer finance
credit unions, and other nonbank companies can get are those which
banks consider too risky to ac¬
types of lending agencies.
This point regarding the nature cept, and therefore do not constiture business lost to competition
of the "competition" in consumer
loans merits some discussion.
A by the banks.
consumer
loan field
$300,
established
Will not this
operations
finance
tal ment
n s
not
as
the
from
i
1949.
pays
fear
consumer
the
ing
high a standard, certainly
high as that of the man who
■-
banks
have
method
titled
'
look at
a
vide too
education.
taught
to
s o o n
take
to
of
companies
the
consumer
situation that banks have nothing
became
cializes
loan
people which do not significantly
overlap.
It is because of this
many
on
II, the total amount of
Truman medical plan not
ployed.
In education, we - have
gone much farther and provided
free primary and secondary edu¬
cation, and to some extent college
living.
a
involved.
to
permit
consumer
companies to make loans
excess
maximum
.
con¬
great
a
published
States and local communities.
The
in
postwar oppor¬
war
as
selection of methods is left to the
pay
in general hospitals.
We
provided food and clothing
relief
education,
it clearly
from primary and sec¬
education,
however,
I
ondary
medical
unable to
those
*
Apart
the chronic sick and for the aged.
for
in
think it has
I
.
In this country, our lo¬
cal governments have long pro¬
vided free housing, medical care
and subsistence for orphans, for
have
has
ligation to do so in cases of need.
poorhouse was a
completely inade¬
a
the
only a
Constitution,
interest
assistance.
problem.
care
com¬
a
the
were
credit
borrowers
legislation
finance
6f Southern California
good job in
tunity for commercial banks. Per¬
haps it is not
right to spend money and
States
through financial
aid
to
quate method—of dealing with the
We
the
Government
has the
English
method—but
do
to
to
in
satisfactory job in provid¬
minimum decent subsistence
secondary
families.
their
unable
power
average
health and welfare, but
Robert A. Taft
^
minimum living for themselves
a
During
articles
sumer
to
behind and are unable to provide
or
the
or
a
Federal
are
who fall
many
and
Under
tive system of
this
kind
there
Principally
be¬
are constitu¬
for the lowest income groups.
un¬
competi¬
a
Government
States
below
are
or
wealth
recog¬
nized that
many
tax
willingness.
we
the
If
obligation, how
tionally limited in their
and
always
it?
into
cause
cording to his
But
all.
to
Federal
come
ac¬
ability
the
does
man
working
life
gives free medical
care
to everybody, why not free
food, clothing and housing?
has
system
of
government
American
been
of
a
of
But what of the trend
credit,
Dr. Phelps indicates commercial banks have increased con¬
sumer instalment loans
outstanding from 1941 to middle of
1949 by more than $1 billion or 134%. Foresees more com¬
petition among banks for this business, with little effect on
finance company volume, because banks and finance companies
serve different classes of
people.
charity, to forward their plans to
socialize
the
furnishing of the
care,
better
Asserting banks have done
instinct
American
natural
the
government go
better
education,
better hous¬
promoting
better
der
Professor of Economics, University
facilities.
•
<
in
By CLYDE WILLIAM PHELPS
present
on
and radically different proposal to
give medical care, housing and free food to those who can
afford it, advocates Federal financial assistance to States
unable to afford proper educational, medical and housing
J
j
j
thing to improve
one
system of social security
v
'
^
Taft, asserting it is
number
•
•.
; y,
The Future Prospects
care,
.
,
of the banks' position in
What have the banks
y What
the future?
to
hope
fear from
or
tion?" The real
banks
wilT continue to
competition
from
face, and
confront,
other
''competi¬
competition which
is
banks—not
from
Francis A. Callery
consumer
Morris Natelson
Herman H. Kahn
finance
companies and the other
nonbank types of consumer lend¬
ing agencies.
loan
sumer
NSTANotes
The increased con¬
business
that
a
bank
Lehman Brothers,
One William
capacities
SECURITY TRADERS ASSOCIATION
at the dinner,
which was a huge success, appear elsewhere in
today's
'
issue.
lery, Herman H.
Natelson.-
Brothers
has been associated
with Lehman Brothers for some
been
notable
years,
credit
Vice-President
been
in
Russell-Long Firm
(Special to The Financial
.
LEXINGTON,
Lee
has
become
KY. —Irvin
associated
N.
with
Eddy
has
opened
offices
Milk Street to engage in
West Short Street.
curities
business.
types
not by
a
re¬
striking increase
of
each
of
the
of consumer lending
The theory
BOSTON, MASS.—Randolph L.
Russell, Long & Burkholder, 257
a
business
institutions.
Randolph L. Eddy
in Boston
Chronicle)
accompanied,
the
other
With
growth in the consumer
business of the banks has
duction, but by
.
at
45
the se¬
as
new
partners are Francis A.
Mr. Callery
having served as Financial
of
Consolidated
Vultee Aircraft Corp. during the
analyst
ated
tail
he
member
department.
I
with
the
for
a
as
has
of
associ¬
been
firm
22
Lehman.
has
and
years
prominent in the firm's re¬
activities.
store
has
been
industrial
In
of
head
addition,
the
firm's
department, which de¬
war
partment is charged with research,
ton
and
new
is
director and member of
years.
He attended Prince¬
University and served in the
First World War in the Flying
Corps.
of consumer lending
Natelson
Mr.
Cal¬
Kahn and Morris
years
various
security
a
industrial
of the
18
in
and in recent years
perity of that class of people who
can meet bank requirements. The
j
The annual Christmas dinner of the Seattle Security Traders As¬
sociation was held at the Olympic Hotel on Dec. 9. Pictures taken
was
served
partners will be admitted to
the firm after Jan. 1, 1950. The
new
He
banks, and from the growing pros¬
SEATTLE
has
old.
hope to gain will come, as it
does now, fundamentally from the
bank's own customers and those
who have been customers of other
may
he
when
runner
a
Street, New York City, invest¬
ment bankers, announce that three
Since his resignation from
Consolidated Vultee, he has been
may
appear
to be that
every actively engaged in independent
lender is competing with every oil development as a member of
other lender in town for the same the firm of Callery & Hurt of
business. The fact is. that the dif¬ Fort Worth and Houston, Texas.
Mr. Kahn has been with the
ferent types of lending agencies
are
serving different classes of firm for 22 years and started as
a
business
Executive
Committee
Utilities
Realty
&
also
a
director
Dye
Works
director
panies.
activities.
of
as
of
General
He jfe
Corp.
United
well
several
of
as
He
the
Piece
being Ja
other
com¬
Public Relations in Investment
mutual
State
The
Top executives of
nation's
our
long way in the di¬
becoming public re-?
ready gone
rection
a
of
lations
con-
scioas.
They
still
to
have
far
but
ap¬
go
pear
to be de¬
termined
to
Smallerenter-
prises
be-
are
inning
g
take
to
their
from
cue
the
big
and have
ones
begun to real¬
ize
the
great
extent
which
E. William
Noland
success
m
a n v
in
—
i
'•
stances, sheer survival—rests
their
to
their
n
-
ability to create public good
The term "public relations" ac¬
means more
implies, unless
lie"
in such
than the
one
a
way
name
defines "pubto encom¬
as
including a com¬
pany's own workers.
In many
firms, industrial relations is the
everyone,
pass
over-all term used to describe the
of
work
that
department
whose
job it is to handle the multitudi¬
nous problems in human relations.
Itt
includes, of course, the per¬
sonnel department and the public
relations
which,
department,
subscribes
one
to
definition
of the
latter, supplement
other
and
of
actually
these days of
if
justifiably
a
broad
the
function
one
an¬
overlap.
In
gro^wfrig labor union¬
ism, industrial management has at
progress
by
state¬
ployees.
But successful manage¬
seen
the wisdom—some¬
times,
necessity — of keeping its
good will pipe lines open, of pay¬
ing a great deal of attention not
only to its employees but to
other
segments
of
its
public
American
institutions, the com¬
bank, is recognizing the
mercial
merits of
carefully planned and
effectively executed public rela¬
tions program. There come to my
desk every day splendid examples
a
of how various banks
are
spread¬
ing good will by "telling their own
story." There are newspaper and
journal advertisements depicting
by pictures
as
well
as
words the
functions of the commercial bank
in
its role as a pub¬
lic servant, its belief in and prac¬
our
economy,
tice of basic human
primary
of
its
stockhoHers.
The
busi¬
com¬
appreciation possibilities. The cap¬
physician makes a thorough
physical diagnosis of his patient
able
nity he represents, must learn: the
details
informed
potential
are more
talk
the
than
he
prescribes l'cr him;
securities
sales
he is to be
relative
nancial
Educating Public
the
of
on
biggest jobs of the
public relations officer of
vestment
in¬
an
banking firm is that of
educating both the. actual and po¬
tential investing public. The mis¬
has ob¬
Some of the many items the
speech of the public relations of¬
ficer
and
his
could
well
include
has
conceptions the average person
concerning, the nature and
dividual
legitimacy of the work of the in¬
of
firm
in which the in¬
ways
investor
today
is
pro¬
the
other
no
sales
repre¬
investment bank¬
an
build
a
strong
clientele; his job is that of selling
"service," not "stocks and bonds."
The
copy
these:
tected
(1) The
sentative
ing
There is
which
can
Sales
advertising
are
fi¬
marital status, and a multitude of
factors
determining his
invest¬
decision.
use
client's
income, tax
bracket, distribution of assets, age,
basis
couched in layman terms,
vious merit.
his
to
status—his
ment
so simple to us, we shall
explain what they mean.
of adequate substitutes,
the
representative, if
credit to the frater¬
a
strength,"
The
Job of
One
before
have to
company
few people recognize
the investment ; banker
part
industries,
governments has played in the realization of
public bodies that issue our complex and diversified in¬
on the other hand.
dustrial facilities, our expansive
nesses,
securities
.nose
It is that transaction wherein the
investment
bankers
communications
and
transporta¬
to¬ tion network, and our far-reaching
gather
gether capital from millions of in¬
vestors, and the financial institu¬
public utilities system.
and
that
enterprises
the mainte¬
who
with
it
nake
and
which
they deal,
available
government
to
for
There
are
still too many people who believe
investment
the
shyster,
is
banker
a
swivel-chair profiteer
unsuspecting in¬
a
preys
upon
tion of Securities
(2)
expansion of the facil¬ vestors, the; kind of person with
ities and services. The investment
whom one can afford to deal only
banker,; therefore, buys and sells, if he wants ito&gamble. They do
so
the success of his work de¬ not
know,
because
they
have
fends upon the quality of the hu¬ never
been
properly told, that
man relations job he does with his
they can buy from their invest¬
:ustomers and clients.
Actually, ment banker the same high qual¬
like the commercial banker, he ity securities as their commercial
sells service
which is
personal service
—
—
of the most difficult
companies
insurance
banks,
and
fraternal
r
•
:
The need for public recog¬
nition
Representative
1
The importance of this emphasis
the
upon
"personal
touch"
and
"human
relations"
aspect
of a
sales representative's job assumes
of
the
importance
of
the
ther
intelligent
realizes
securities
been
sales
that,
representa¬
although
business
always
famine, pe
of feast and
one
the
has
with sufficient patience and
underwriting function in invest¬
can,
ment
foresight, handle the "bad" times
banking—that the work of
trader, who buys stocks and
the
bonds from
them
to
investor and sells
one
another,
important
yet
is
deservingly
often
relatively
a
small part of the revenue-produc¬
ing activity
ment
(3)
sizable
a
invest¬
by
ment
banker
which
is
such
invest¬
the
compensated
for
the work he does and the risk he
sales
way
times
to
as
happened,"
the
psychology.
"to
face
the
of
notion
of
one
selling
Wi^ingness to return
the
essential
voicing
was
tenets
sagest
music"
to
is
absolutely
for
success
securi¬
a
ties sales representative.
recent
months
representatives have
Destruction
the
The
representative who said, "If
In
that the investment banker is in¬
terested solely in wealthy people
make
belter.
even
you sell an investor a stock and
it drops, you should return to see
him as soon as you can to discuss
takes;
(4)
a
"good"
what
explanation
of
the
of "spread'V-how it is
means
in
of
An
meaning
the
of
banking firm;
and
nance
Dealers;
dom
;
sales
many
the wis¬
seen
of
spending a substantial—.
often a major—part of their time
reassuring those investors whose
organizations buy.
things to sell.
The one
public
relations
officer —development of the theme tnat confidence in the stock market
:hing nearest a man's heart, next finds that a very substantial part America was built by a lot of lit¬ has been shaken. These men who
tle people pulling
to
his wife and family,
together, that have been meeting considerable
is his of his job of educating the public
most present large portfolios had
pocketbook.
Since it is the in¬ in investment
banking involves
buyer resistance born of more
vestment bankers' job to handle speaking to all types of clubs— simple beginnings, that the rate of than
two years of declining
or
or advise in the
"handling of that professional, civic, and business— return or appreciation per share is oscillatory markets are making
pocketbook, he cannot afford to and even in schools and forums the same on 10 shares of a given of the present a period i'or re¬
stock as on 100 shares of
make mistakes.
it;
"j
Consequently, the when the appropriate time arises
building customer confidence. Our
of
one
all
The
.
banker
must
possess
or
be created.
can
There is
greatest
fare
awareness that their wel¬
rests
upon
his
honesty
and
vestment
spokesman.
integrity.
The
A
Program
{banking
the
ramifications.
fronr the
way
firm has
It ranges all
promotion
harmonioujr relationships
of
among
the officers and employees of the
company itself to assisting in the
handlirrg
of
companies
publicity for those
in whose stock the in¬
vestment firm has
ing interest.
least
all
(1)
itself
of
active trad¬
an
It should
the
include
at
following:
underwriting participation, stories
its officers and
employees,
about
of
the
work
speeches
at
schools
and
professional clubs
topics and
on
on
profession has
currently
we
all
can
walks
of
the
to
civic
current
investment banking,
participation in fund-rais¬
ing and promotional campaigns for
charity and community improve¬
ever
afford
we
forts
of
to
bank
manufacturers
There
No
confine
found
longer
our
ef¬
presidents, wealthy
and
are
their
kind.
those who will
of course, that the sales
representative's time is worth too
argue,
to
"waste"
on
such
small
buyers.
Obviously much of the
selling will have to be done by
telephone and letter, combined
with
an
occasional
personal
But these small customers
are
call.
ex¬
tremely important to us for at
least three good reasons: (1) they
will make money for us if we de¬
sign selling
techniques
that
will
minimize expenses; (2) they will
be among our most loyal custom¬
ers and boosters if we treat them
right
(this is the important part
public relations ..angle!);
and
(3)
they
will
be
made
stronger believers in the indi¬
of
the
vidual
truism
it
cannot
lie
must
and
—
deposit
a
Encouragement
New'
of
.;
Another function of the invest¬
banker
ment
that
should
phasized, although
be
em¬
is an indi¬
one, is the role he plays in
encouraging people to start new
it
rect
businesses. To start
needs
one
have
to
urge to start a
the
"know
a
men
business,
how"
with
that
the
afford
initial
investment
because
the
he
great,
function
the
with
respect to
through
ing.
of
is
the
too
undertakings
counseling and
proper
to
the
man
indirect financ¬
banker
who
aspires
can
to
business
regarding
sources
of outside private loans
and the most appropriate type of
capital- structure to justify the
new
a
loan sorties he will have to make.
The
sales
relations officer gives varies, ob¬
and,
viously, with his audience.
have
retreat
or
seaside resort
even
The
type of
speech
the public
The
of
he
is
ambassador
in
such
a
way
"service,"
expand
confidence
to
good
—
all
among
future,
our
individual
our
in¬
so
enterprise
sys¬
tem.
Report Bear, Stearns
Buys 25% of
Distributors Group
According
as
to
do
Leslie
to
Gould's
column in the New York "Journal
American"
a
last
&
Stearns
night,
Co.
has
interest
25%
in
Be.ar,
acquired
Distributors
Group, Inc. The price paid, it
was
said,
The
around
was
article
goes
Stearns
&
on
$150,000.
to
Co.
say
that Bear,
bought
out
the
interest of Frank L. Valenta.
Mr.
Frank
work
give
even
rests
Group
his
prime
to
—
and
of
mountain
a
will
his
quent get-togethers at
j
ability
of
are
American way
our
maintain
Valenta
plan and
our
have been guilty in the past. Upon
representative of an
banking house is the
public relations director's "right
hand man."
By,the very nature
investment
company's
good will
and promoter of sound public re¬
lations. ..This can be true, how¬
ever, only if he is willing to be¬
that thereaten
the
business
new
The investment
start
a
involved
an
important
encouraging the in¬
amounts
advise
banker
serves
auguration
what
in
transcends
short-term, personal type of fi¬
nancial gain of which many of us
timately tied in with the survival
men
underwrite
to
risk
in
like many
mission which
groups
investment
cannot
political
changes; instead,
other groups, have
business,
establishing and operating it, and
capital. Of these three essential
elements the last, money, is often
the scarcest.
While it is usually
true
cataclysmic
economic
with
new
of life.
ers
enterprise
system,
less
to the debilitating "isms"
predicting
we,
;
...
is not that of idly lamenting
stock market "ills" or of
present
safe
in
.
job
make
invested
it
be
idle
bOXeS.
need
one our
We must consider the farmer, the
skilled and unskilled worker, the
small manufacturer and the stove-
keeper.
the
money
a
Our po¬
had.
life.
to
of
order for money to
Enterprise
tential customers today are
in
Propagation
that in
*
.
public
much
Publicity for the company
(e. g., its growth record, its
coordination
deserves
to educate is the broadest
Outline
The public relations program of
an
investment
broad
banker
(5)
never
foresight, energy and an occasion when he needs to be
Human,
understanding that make the least apologetic about his mis¬
for the most careful
handling of sion; anywhere any aspect of our
people, the highest sensitivity to individual enterprise system is be¬
their feelings and needs, and the ing discussed or defended, the in¬
and between them and dealers.
This can be done through fre¬
best
those who
least
a
program
the
security, income, and
and, at the same time,
sufficiently subtle not to insult
the
need for
h$gh quality advertising
clients
of
customer
given
a
those
bination
to
and other
ment);
The present
offer
in
Exchange,
(3) Establishment and preserva¬
its members and member firms, tion of
friendly and cooperative
have at long last recognized the relations
among investment bank¬
busy carrying out
the basis of
on
the
hand and
one
The New York Stock
three-fold program.
which,
analyses made by the research and
analytical department of his firm,
tive
the
on
active
broad public relations
transaction
meager; very
rectors
of
public
rela ions
to
formulate and execute their pro¬
Y, Stock Exchange Program
a
bonds
and
N.
has
between the buyers of stocks and
largest banks employ full-time di¬
grams.
he
sense
even
greater proportions during
periods of a declining or ill-de¬
fined stock market. It is here that
principles in
home office
and
branch
offices
the treatment of its employees, its
with that of field
representatives);
expression of willingness to serve
(2) Promotion
of
its customers "beyond the call of
satisfactory
duty," and its deference to the community relations
(e.
g.,
wishes
strictest
obligation to suggest to his
only
those
investment
com¬
an
as
One of the most conservative of
speeches and advertising copy
language that is understandable
clients
against hostile,. unscrupu¬
vestment banker is amazing; gen¬ lous
dealings on the part of his
University has aptly called eral knowledge of the importance investment banker—the work of
the "formation of capital."
It is of the role ; of the investment the Securities and
Exchange Com¬
the job of serving as middleman banker in our type of economy is mission
and the National Associa¬
the
well.
actually
phrase
must
York
investment
ment has
We
present.
our
that
and use that
the proper treatment of its em¬
not
is what Dr. Jules I. Bogen of New
its
oa
is
"intellectually
industry, and a multitude of advanced" in matters financial. If
things having to do with financial we are going to insist on using
matters about which the invest¬ such terms as
"capital structure,"
ment
banker is freer and more "equity
value,"
and
"monetary
function of the investment banker
times neglected
its buying public,
investors, and, in fact, its com¬
petitors, in order to concentrate
vestment terms that often
in the
reception; and speak¬
throughout
the
country are
providing the
means by which local groups can
learn of the work of the Exchange
through its individual members.
the
also, we shall have to talk
his language—and it may well be
the language of the
big investor
too.
It is entirely possible that
the
growth and probable future of the
industry, the company's position
ers' bureaus scattered
economy
In
moral
manufacturing company we ascribe to men of wealth a
its stock¬ sophistication in dealing with in¬
supplemented
justice to his professional mission.
are
who has participated in
"Money at Work," has enjoyed
our
example,
picture,
motion
the
advertising in
his firm indulges.
If we
going to sell the small cus¬
which
pany's financing. This information
can
cover
such
subjects as the
enthusiastic
In
For
tions
upon
will at every turn.
tually
be
can
is true of the
same
ments from the investment banker
Exchange is the most uni¬ able to
versally read of all financial ad¬ itself.
vertising;
stockhold-
to
does by way of keeping
informed of its
of the
there.
get
service
holders
possess
Thursday, December 29, 1949
tomer
customers.
the job a
and use fore¬
sight, energy and human understanding for careful handling
of people, Dr. Noland outlines components of public relations
program as: (1) publicity for the company itself; (2) promo¬
tion of satisfactory community relations; (3) preservation of
cooperative relations among themselves and with dealers; and
(4) maintenance of complete information services to stock¬
holders and customers. Says main job is educating public.
businesses and industries have al¬
and
ers
University of Iowa
Pointing out investment banker must
interest;
Maintenance of a complete
(4)
Research Professor, Institute for Research in Business,
business
every
the time for keeping each
as
information
By E. WILLIAM NOLAND
CHRONICLE
other well informed about matters
of
Banking
using
by
better,
day
FINANCIAL
&
COMMERCIAL
THE
(2648)
16
recently
Vice-President
come
end
to
resigned
of
head
his
L. Valenta
President
trust
sources
&
of
known
Fund, Inc.
as
as
a
Distributors
firm,
own
Co., and be¬
a
new
open-
Natural
Re¬
Volume 170
THE
Number 4868
COMMERCIAL. &
'
FINANCIAL
'
*.
'
CHRONICLE
(2649)
f
t
Seattle; Security Traders Annual Christmas
Officers
of
the
Seattle
Security
Traders Association:
Robert.-A. Nathane,
Merrill
Joe
& Beane, President;
Arnold Taylor, Wm. P. Harper & Son
& Co., Vice-President; Homer Bateman, Pacific Northwest Company, Secretary;
/'-/-/•■/
V
Waldemar -L. Stein, Bramhall & Stein, Treasurer
Lynch. Pierce, Fenner
17
Party
Phillips, Pacific Northwest Company; Jack E. Jones, Hartley Rogers & Co.;
Taylor Patton, Blyth & Co.; Ed. Easter, Dean Witter & Co.
v: '.r.
.
Don Meyer, Foster & Marshall; Andrew
-
&
Jordan, Jordan
Co.; Harold H. Huston, Harold H. Huston & Co.;
v'
Barney Lee, Hughbanks Incorporated
LETTER
A1
Pritchard, Pritchard & Co., Vancouver, B. C.; Charles
Dale/ Vancouver, B. C.; Robert A. Nathane, Merrill
Lynch, Pierce, Fenner & Beane, Seattle; Harold W;
Lefever, A. E. Jukes & Co., Vancouver, H. C.; W. Hudson/
Pemberton & Son, Vancouver; B. C;„ J . -
THE EDITOR:
TO
w
,
The British worker stands as the
what
was
good
enough for his father was good
enough for him; also the tradition
of labor in following the footsteps
of the father had something to do
with it.
As new machinery cut
proponent
Blames Britain's!Plight on
of
Waiter BeH
sees
basis of England's
in failure to devise and
use
economic difficulties
labor saving machinery to increase
:
bor
.
Chuck Easter, Blyth & Co., Inc.
,
saving machinery so as to in¬
her unit of production per.
crease
jman power, thereby making her
table to ; continue to outsell her
competitors
IWith
such
in
4
sales
foreign
she
Edward A. Kole
have
Editor, The Commercial and Financial Chronicle:
-V
t
economists
Most
in
writing
of
England's troubles of today seem
to
date
her
troubles
from
War I with World War II
in
the
blow.
crippling
World
putting
There
is
question that these two wars
have been
devastating to Eng¬
no
land's
but the question
might be properly asked: Do her
economy,
troubles all stem from these wars?
/ There is
ten
history
more
than
a
bit of almost forgot¬
that
an
might have had
incidental effect
on
A. Kole
Edward
•
announces,
:
the;
partnership for the
had V sufficient balance of trade
formation of
general practice of law, consisting'
of his son,
effective
the firm
of-
//;• j
<
a
Shephard, and himself,:
Jan.
/
■
..
1, 1950, under
To find another type
manpower.
;
to pay for
of work was ments, merchant marine suprem¬
acy ahd her tied-in colonial trade
V/;
confined to Nottingham but soon
enabled her to keep on an even
It is unfortunate that this -feel¬
keel.
'With' her foreign invest¬
spread to Yorkshire, Lancashire
ing should have bxisted in Eng¬
and other
surrounding
counties land.
ments dissipated and the center of
Being a country that has
and assumed the proportions 'of
banking moving to the United
depended on other countries for a
riots. At first no personal attacks
States these sources of "invisible"
great part of her food and > raw
were
made
and
there
was
no
income have been drastically re¬
products she should have been the
bloodshed. However, with the ex-*
country
to
lead f the"v world in duced/ i / pansion of the movement which "Yankee
ingenuity/' a term spoken 17 It is clear to everyone that Eng¬
soon
embraced all of industrial
land's economy is very much out
derisively by some Britishers.' r:
England the rioting became so se¬
of balance and much against her.
^During the 18th Century*-and
rious that
soldiers
were
called
'She has allowed the U. S. to forge
part of the 19th England was selfahead with mass production meth¬
upon./
'.//r
supporting in foodstuffs and on
In an attack on a plant owned balance was at one time an ex¬ ods until she has become a minor
by a manufacturer named Hors- porter of grain. However, she had Competitor. The United States, a
well rounded out and almost selffall the soldiers fired upon these to
import cotton, silk and dyes as
production of her
.
Forms Kole and Kole
against tradition.
unit
.
.
markets.
would
her food and raw prod¬
men became idle.
Many felt they ucts',and maybe a little left over.
had to do the work they were / Before
these two world wars
trained to do or not work at all. England's banking, foreign invest¬
down the number of workers such
J.
Ken Easter, Dean Witter & Co.; John R. Lewis, John R.
Lewis & Co.; Albert O. Foster, Foster & Marshall;
.
name
Kole
Kole.
will
and
Offices
be main¬
tained
39
at
Broadway.
E d
w
a
d
r
Kole for many
years has spe¬
cialized in the
legal
the
end
of
securities
field
been
has
and
advisor
to many
ers,
deal¬
brokers
and
writers.
Edward
A. Kole
under¬
His
Shep|j;ard was
England's industrial progress, or workers who were attempting to well as timber, bar iron, hemp, sufficient1 country, had much less
need to attain this industrial lead-* formerly connected with the New
decline, whichever way you damage the plant and a number sugar, tea and tobacco.' The metals
York City Police Department and
want to put it. About 1779 a half of workers were killed. :< Shortly and textiles were fabricated and ership than was England's need,
was decorated with the Sherman
Horsfall shipped
wit by the name of Ned Ludd got after this incident Mr.
to
continental1 Europe. j The one bright spot in England's Day Medal for valor.
was murdered and this caused the
it into his head that the new tex¬
Her trade with the Orient and Af¬ industry is quality manufacturing.
tile machinery that was being in¬ government to pass a number of rica was negligible compared to She excels in many lines but qualson
her
.
stalled
cause
at
of
that
many
period- was- the repressive acts which finally ter¬
workers4 being minated with some hangings and
that with the continent.
tion
as
a
Her posi¬
manufacturing
nation
This move¬ was made supreme because of
He started out many deportations.
ment continued until 1816 when
on a one man campaign to break
fhany harbors and short hauls
it suddenly died out supposedly by
op the new stocking frames that
export.
She maintained this
the death or eclipse of "General"
Were
being used, believing that
premacy for most of the 18th
thrown out of jobs.
her
for
su¬
!ty goods costworking people mass
more and the who
by,
)urchases- today
made
fere
satisfied
the
world
over
are
with
lower
grade
Grontal & Co. Will
Admit Four Partners
products.-If England-cannot enter
On Jan. 2, Gruntal & Co., 30
and the world market on a mass pro¬
During the' latter ducing basis, if she persists in out¬ Broad Street, New York City,
manufacturing * processes members of the New York Stock
best interests of the workers.
of these two periods she increased moded
It is curious that chronicles of
give a small amount of Exchange, will admit Frederick M.
her population and had to depend which
Apparently very little more was those times state that the general
more
and more
on
the outside products per worker unit, she has
done along these lines at that time, public
Stern, Mark Sandler, Howard J.,
was
sympathetic toward
little hope to survive in the world
but in 1811 the movement became these rioters. It is this phase of world for raw materials and later
Buxbaum and Milton Goldberg to
for
trade.
Perhaps the
for foodstuffs. She was noted for contest
quite * serious. Bands of masked the case that gives importance to
Messrs. Stern, San¬
her wool products and for a long spirit
of the Luddites has had partnership.
men,
operating mostly at night, the actions of the Luddites. Were
time her domestic supply of wool more to-do with England's troubles dler and Buxbaum were formerly
began a general attack on new the majority of the British people
of today than was caused by both
was sufficient to maintain that in¬
partners in Stem & Co.
,
machinery, mostly textile and lace against mechanical advancement?
World Wars.
*
"
"
making. These men called them¬ If so that may account for the dustry, but that position was lost
Harry F. Kattenhorn will with¬
J. WALTER BELL.
to Australia.
selves
Luddites
and
were
sup¬ consistent opposition with which
draw from partnership in the firm
England should have been the 128 W. 11th St., New York 11,N.Y.
posed to be led by a man known new methods have met within
such prograss was
inimical to the Ludd.
19th
Centuries.
.
as
"General"-Ludd.
At first it
was
British industry
since that period.
first country to
devise and use la¬ December 28,1949.
on
Dec. 31.
<
THE
(2650)
18
Public
COMMERCIAL
Utility Securities
"By
in an address before the New York
Analysts Dec. 21, described the outlook for
General Public Utilities.
The company is now in the last stages
of becoming an integrated holding company, controlling only five
major subsidiaries in Pennsylvania and New Jersey, and one in
the Philippines.
This contrasts with the 300 companies in half the
states of the Union which once comprised the predecessor Associated
Gas & Electric System, dominated by Howard C. Hopson, who died
recently.
During 1949, GPU sold New York State Electric & Gas
and Rochester Gas & Electric to its own stockholders, realizing
"Al"
Tegen,
Security
of
to
"Meanwhile:
will
stock)
used
some
funds
be
retire
to
in
sold
the
months.
.
Proceeds will be
Electric
Associated
of
tion
due
basis.
from
for
because of current
subsidiary have
The
United
Electric
is
a
little
harder
trying
continue
to
taper
will not
tial
new
interfere
with
from
business
of Manila
Electric—a
Manila,
the
of
dent
Manila
at
damaged
been
Yet
substan¬
Board
has
been
practically rebuilt since the
war
1946, in which year the assets were
$27 million excluding intangibles).
The property was
during the war, and some additional amounts may be
recovered
in
to
.
GPU increased bs dwider.d from an 80 cent to a
$1 rate recently.
President Tegen feels th*t dividend policy should be
geared to the
income received from
domestic
subsidiaries.
On that basis
the
possibility of
a higher dividend rate is indicated when the
expected
corporate income is realized, possibly during the second
half of 1950, though no definite forecast wasrinade.
increase in
Giving effect to
ture at the
end
of
transactions, consolidated
October
was
as
follows:
Subsidiaries
the greatest
as
force
Notes and
B~nk
i
19,710,000
5.4
Loans.
Preferred Stock
—_
compels
his Fair Deal
are
us
49,525,942
——$225,408,442
of
and front of
Bank Loa^s
Total—Parent
Total
—
^Includes
year.
2.2
132,840,101
36.3!
$140,790,101
turns
the
Del¬
The
ano.
feld, Jr. & Co.,
re¬
one-year
governors
of
group were Alexander Mul¬
ligan of Brady, Baird & Garvin,
Paul Sheridan of Goodbody &
Co.,
and
Hugo Florio of Milton E.
1,
national
banks
in
United
and
States
sions. The
as¬
are
due
in
probably repaid later in
November from proceeds of the sale of
bonds and preferred stock
by
«i
subsidiary. The balance of the loans are to be paid as
they mature
from available funds.
*
* • • t
Of the parent company bank
loans, $4,000,000 represents a loan
Electric Co. and is due Nov.
3, 1950.
The GPU
bank loans
amounting to $3,950,000 are due serially in five
made by Associated
years,
beginning in 1951.
*
DislricI No. 13 of
NASD Eloets
The
were
$23,439,000,000,
$861,000,000, or nearly
following have been elected
members of the Board
and
District
District
No.
13
of Gover¬
Committee
of
the
of
National
Association of Securities Dealers,
Inc.:
Board of Governors-^Charles P.
Cooley, Jr., Cooley & Co., Hart¬
ford, Conn.; W. Fenton Johnston,
Smith, Barney & Co., New York.
less
than
the
at
the
amount
end of
1948.
26.50, in comparison with
was
same ratio in
June, and
December, 1948.
The banks held obligations of
the U. S. Government, direct and
guaranteed,
of
$38,332,000,000,
re¬
of
1949,
as,
deposits
in
27.03
which
Preston Delano
is
000,000,
of
more
the
banks
on
than
$81,000,of nearly
June
of
an
increase
this
and
year,
$3,352,000,000,
since
last
vestments
assets in
41.83%
of
$2,735,-
than llk%
or more
or
an
10%,
These
43.34%
were
of
in¬
total
November, compared to
in
June
and
New York.
since
increase
nearly
December.
District Committee—George LJ
Austin, G. L. Austin & Co., Hart¬
ford,
Conn.; Harry R. Amott,
Amott, Baker & Co., New York;
H. Warren Wilson, Union Securi¬
ties Corp., New York; William L.
Canady, W. L. Canady & Co., Inc.,
39.69%
Esiabrook to Admit
Scott and Leach
in
George
Scott
N.
and
Orin
T.
sions held in November amounted
nership in Estabrook & Co., mem¬
cember
to
bers
securities
change, on Jan. 1.
Both
been with the firm's New
York
office at 40
some
cent
loans, $10,530,000
Nov.
on
about the
national
last.
Included
deposit figures
deposits
were
is
re¬
ber
the
were
officers
on Jan. 19, 1949, at
Washington Hotel in
George
this city.
nors
than
more
000
$3,350,000,000
1
of
annual dinner
the
The percentage of loans and dis¬
counts to total assets in Novem¬
were
30,
was
installation
ported for June 30 but $380,000,-
4%
the
posses¬
sets
1949,
which
ac¬
An
planned at the Association's third
an
increase
$3,000,000,000 since June, but a
decrease of $265,000,000 since De¬
intangibles.
Of this amount, $8,700,000
elected two-
the
that
Net loans and discounts
000,000,
100.0
bank
were
year governors of the Association.
$1,105,000,000.
covered
4,988
tive
Nov.
38.5
—$366,198,543
—
Consolidated
Of the subsidiary notes and
one
Preston
The
$7,950,000
Capital and Surplus
& Robinson, and
Negri of William I. Rosen-
Elected
On November 1
call, and
$300,000,000 more than reported by
the 4,997 active banks as of Dec.
31, 1948.
Parent (Including AELEC)
Vanderhoef
Jack
Reiner & Co.
June
61.5
Hammill & Co.
Marks of Brickman, Landsberg & Co., William Mullenbach
freedom,
to add that the President
the head
the date of the previous
Total Subsidiaries
Assistant
the
Al
National Banks' Assets Exceeded $88 Billion
banks
13.5
Vice-President, Treasurer
Secretary, respec¬
son,
offending.
4,993
»-■
Governors.
Co., James Clare of Goodbody &
Co., and George Lang of Shear-
should
we
take note of the fact that
ported by the
42.6
of
Sergeant-at-Arms
organization were: Wally
Weil of Andrews, Posner & Roths¬
child, Nelson Goetz of Reich &
Harry S. Truman.
this, indeed to most of it,
must
we
And candor
and
amount
Percent
—$156,172,500
Ex¬
Financial
and
least for Americans, is as much, if not more, en¬
dangered by our own domestic policies and pro¬
grams as by any threat from abroad.
over
Amount
Long Term Debt-,
capital struc¬
Curb
Association.
&
of
Comptroller of Currency Delano also reveals increase in U. S.
Regarding the domestic subsidiaries, Mr. Tegen is hopeful of
bond holdings, which now constitute 43.34% of total assets.
retaining all remaining properties under the Holding Company
Act.
The two New Jersey
properties—Jersey Central Power &
The
total
assets
of
national showed a decrease of
$216,000,000;
Light and New Jersey Power & Light — have been linked with
banks on Nov. 1, 1949, amounted and
deposits of banks of $7,717,Metropolian Edison, and high tension transmission lines are now
to
more
than $88,000,000,000,
it 000.000
were
$771,000,000
more
being constructed to inter-connect Metropolitan Edison with its
has been announced by Comp¬ than in June.
Postal savings de¬
neighbor Pennsylvania Electric Company—the largest system com¬
troller of the
posits were nearly $4,000,000, and
Northern Pennsylvania Power is not inter-connected, and
pany.
certified and cashiers' checks were
Currency
retention as a separate "system" under the Act
be requested.
This program remains to be worked out with the
SEC, but the man¬
agement feels very rtrcngly that remaining properties are retain¬
able, with the possible exception of gas properties in New Jersey.
Clerks
tively, of the organization. Elected
Corresponding Secretary, Record¬
ing Secretary, Sergeant-at-Arms
;
may
New York
elected
ability to provide freely by his
take exception.
claims from the U. S. Government, although new
war
legislation will be necessary to obtain this.
the
Ex¬
Presi¬
duPont
($16
since
on
Curb
William Mirabella of Francis I.
In this
at
not
added
of the
Co.,
elected
of Joseph McManus &
Co., who has been named honor¬
ary Chairman of the Association's
the belief of free peoples in
foreign countries; and we must
safeguard at home the belief in our¬
to
not wish
cash
Electric
has
valued
been
Hannafin
,
million
&
Fischer, formerly Treasurer of the
organization, succeeds Daniel
strong and
a
has
change Floor
Truman
President
welfare.
own
To much of
so
much because of dollar licenses, but
requirements for new construction and the
recapitalization problems.
It is possible that Manila may sell some
$7.5 million senior securities in 1950,
Presumably this would be
used for new construction, unless some funds are remitted to GPU
to reduce the $10 million open account.
:
because
the New York
of
change,
strength is
selves and belief in freedom
goods having already been approved under the
But it is uncertain whether any income will be
payment for
regulations.
drawn
the
Anthony
floor
for human welfare."—President
its
off
heavy postwar
subsidies to the island economy.
Moreover, there has been heavy
buying of luxury items from the United States and to check this
trend the Philippine Central Bank recently imposed licensing require¬
ments on dollar payments.
Mr. Tegen believes that the regulations
now
were
August Fischer, order clerk for
Tucker,
"We have revived
changes in the Philippines, but earnings of that
increasing rapidly over the past two years.
is
they
and
efforts for his
been
States
when
of total deposits.
not lose faith in his
forecast
to
June
de¬
more
Co., Howard Schaal of
Clark, Dodge & Co., and William
Menagh of Laidlaw & Co., were
be earned in 1950, not including any income
Manila
total
Elect New Officers
themselves in many
outlook
of
present-day world
where man's personal
independence is cramped by
the complexities of his economic
existence, it is the
duty of government to see that each citizen does
Manila.
The
in
$5,984,000,000,
$156,000,000
were
N. Y. Garb Clerks
in
must
our
of
7.35%
were
7.43%
security
fend it with their lives.
bility that domestic subsidiaries might earn about $1.65.
Corporate
net income of GPU is expected to be $1.06 per share in 1949 and it
may
than
long as freedom remains a force for human
welfare, men will cherish it in their hearts and de¬
$1.88 of which about $1.43 was earned^ by the Pennsylvania
and New Jersey subsidiaries and 45 cents by Manila Electric. Monthly
earnings are continuing to gain over last year due to rate increases,
etc., and results for the calendar year may approximate $1.50 for
domestic subsidiaries and 50 cents for Ma'nila, it is estimated.
Con¬
tinuance of this upward trend is expected for 1950, with the possi¬
hoped that $1.20
we
profits $1,214,000,000 and
$335,000,000. Total capi¬
accounts
posits,
"As
were
is
tal
which
active faith in freedom.
part or all of the period, hence it is necessary to
adjustments to reduce the figures to a pro forma
For the 12 months ended Oct. 31, such pro forma earnings
for
various
make
and
that the real basis of
Current 12 month's earnings include income from the New York
subsidiaries
efforts
our
peace
give to weapons
defense may obscure the fact
of
and
Company
of
divided
reserves
competition with
social progress, but the atten¬
with the balance to be invested in Metropolitan Edison
New Jersey Power & Light Company.
Nov. 3, 1950,
banks on Nov. 1,
1949, was
$1,914,000,000,
including
nearly
$21,000,000
of
preferred
stock.
Surplus was $2,521,000,000, un¬
material goods in
our
times to be in
sale of new bonds and preferred
next three
bank loan
the
million
$4
a
through
The unimpaired capital stock of
the
have not spared us problems at
home. Not only do the
security
needs of our nation seem at
Electric Company debentures.
It is expected that the equity interest
in Staten Island Edison (from which the parent company has already
realized
$41,000,000 last December.
i
sharing of
generous
search
proceeds of about $58 million.
This and other funds were used
retire $60,588,000 holding company debts including Associated
net
Thursday, December 29, 1949
the past few years, we have restored to
many peo¬
ples, faith in themselves, faith in their freedom, faith
in the certain triumph of confidence over fear. Just
as
long as we continue to face
our
world responsibilities with
the
courage
and realism we
have already shown, we shall
deserve the right to hope—and
work—for lasting peace.
General Public Utilities
President
CHRONICLE
Yes, But
By OWEN ELY
Society
FINANCIAL
&
in
are
the
re¬
demand
of
individuals, partner¬
ships, and corporations of $46,416,000,000, which increased near¬
ly $2,000,000,000 since June, and
time deposits of individuals, part¬
nerships,
and
corporations
of
$18,936,000,000,
a
decrease
of
$73,000,000. Deposits of the U. S.
Government of $2,022^006,000 were
$574,000,000 more than in June;
deposits of States and political
subdivisions of $5,183,000,000
December
last
of
and*
States
Obligations
political subdivi¬
year.
$3,719,000,000, an increase of
$308,000,000 since June, and other
000,
an
Cash
with
held
$2,193,000,increase of $71,000,000.
of
were
$1,069,000,000,
Federal
Reserve
reserves
banks
of
$10,609,000,000 and balances with
other
banks
liabilities
for
borrowed
$170,000,000, com¬
pared to $14,000,000 in June and
money
were"
will
be
admitted
of the New York
to
part¬
Stock Ex¬
Wall Street for
have
time, Mr. Scott
Roger
H.
as Sales Manager.
Williams will retire
from the firm
on
Jan. 1.
of
$7,999,000,000, a
total of $19,677,000,000, decreased
nearly $700,000,000 since June.
Bills payable, rediscounts, and
other
Leach
Shanley Dead
F.
Sheppard Shanley, partner in
Manning, Shanley & Co., Newark,
N. J., died of a heart ailment at
the age of 38.
.
'
Volume
170
Number 4868
THE
COMMERCIAL
Sees Another Good Year for Builders
David
Myron L. Matthews, Vice-Pres¬
of
the
publishers
Daily
and
Inc.,
Dow
Service
Reports,
foresees
i
to the
has
the
than
industry
section
be¬
have
at
two
Myroa L. Matthews
he
years,"
writes
"To understand
this it is
only necessary to recall that the
building industry, like every
other, rode high, wide and hand¬
from
some,
and
more
the
end
of
the
particularly
war,
after
the
of construction
industry con¬
trols, with more business at its
doorstep,
regardless
of
prices,
than it could handle.
set of the year now
evident
that
At the out¬
year,
while
across to
cleared
The
for
some
done.
entirely
a
year
to
2
to
5%, either
of
are
15%
(in
where
from
depending
ago,
the type of build¬
upon
ing and how carefully the design
and layout for it has been han¬
of
does
there
has
been
also
going
deal
in
have
not
trially
otherwise, will have to
or
take it upon
time
cause
so
tential
faith that
now is the
Furthermore, be¬
build.
to
many
thousands of
investors
have
po¬
been
a
of overhead
level
of
and
the
already
on
down
through the subcontracting trades,
building industry will be working
peak capacity throughout the
new
year."
Coffin, Betz&Co.
half
of
1949,
an
questionmark
building
ominously black
hovered
industry
over
to
as
the
whether
its volume of activity and prices
would react
dustries,
along with other in¬
of which suffered
setbacks, and if &o, when
severe
some
For those whose
and how much.
memories
short, it should be
are
that
recalled
in
the
opening
D.
PHILADELPHIA, PA. — Harry
Brown, Jr., and Owen O. Free¬
will
become
partners
in
man
Coffin,
Street,
York
New
Co., 123 South
members of the
and
Philadelphia
&
Betz
Broad
Stock
been
Both
Exchanges, on Jan. 5.
have
with
associated
the
firm, Mr. Freeman as Manager of
the
municipal bond dept.
Mr.
Brown in the past was an officer
of Stroud &
Co., Inc.
building
Weekly Firm Changes
nowhere to the
same
extent
as
for
The
items.
other
savings
in
building prices have come about
largely
through
better manage¬
on the part of builders, im¬
proved techniques, the disappear¬
ance
of
shortages
for
various
construction materials and equip¬
ment
ment,
a more
realistic approach in
Exchange
following firm
changes:
Leo
Tyrrell will retire from
D.
partnership in Biddle, Whelen &
Co. Dec. 31.
Lawrie W. Burnham will with
draw
from
Burnham
&
Co.
Dec
profit margins, a willingness
on
the part of builders to "take
less" in order to keep their or¬
Henry Cartan and Gertrude Y
Rice will retire from limited part
ganizations together and going, an
improvement in labor production
at the site of construction, a sub¬
Jan.
for
prices
few of the items of building
contractors'
a
materials and equipment which
aggregate loom
builder's budget.
"The
been
1949
healthy
painful
to
the
in
large in the
readjustment
Davies
in
It
is probably
now
alert and acutely aware of
position in the general econ¬
omy of the country than at any
time since the early 30s, when this
its
over
investing public and the cancel¬
lation of $7,000,000 in subscrip¬
tions. He also tried the Haupt &
Co.
case
of
in substantial loss to the
Unterberg
was
attorney with
an
Utilitiesv Division
Public
the
of
the Commission's Washington of¬
fice.
Morris, limited part
in Hayden,
Stone & Co., wil
the
from
retire
firm
on
John H. Kaplan will
H.
on
Hentz
&
Co.
Lynch Offer
Four Scholarships
31.
Sydney P. Bradshaw, member
of the Exchange, and Gordon A.
Hardwick will retire from
Howard
from
Mont
Scott & Co. Dec. 31.
E.
Duryea
retire
will
scholarships to be given
each year to the children of its
employees,. Winthrop H. Smith,
managing partner pf the .broker¬
age firm announced at the annual
dinner of the firm last night.
Mr. Smith explained that one
scholarship
will
be
granted each year in the Pacific
Coast, mid-Western, Southern and
four-year
All
areas.
children
of
employees will be eligible to com¬
scholarships which
on the advice of
educators appointed
will be granted
of
board
V.
The
first
scholarships
will
be
given for the next school year be¬
G.
considered
will be
by the Exchange De¬
cember 29.-;
e ■/
Jr.
vK< fv
1
:•»,
will
play
an
of
choice
of
the
by
of the
Prime
Einzig
is
Minister
bound
be
to
by the dollar position
And the choice of
prospects.
the next Parliament and Govern¬
ment by
the electorate is bound to
be influenced by the same factor.
For this reason,
political prophets
now
busy learning all they
about the dollar gap and the
are
is
of
likely to respond to the appeal
Government and Opposition,
the
the
they are watching eagerly
monthly trade returns and
factors
that
liable
are
to
the
the
effect of
the
gold reserve.
on
quarterly figure for the end
of September showed a recovery
of some $80,000,000 from the low¬
point reached on the eve of
the devaluation, and there have
est
official hints that
since
the
beginning of October there was a
further net influx of gold.
We
shall know more at the beginning
of
January
the
reserve
when the change in
during the last quar¬
published. But
it would be idle to place too much
reliance on these quarterly fig¬
which
ures
can
Government
influenced by
be
policy
over
can
a
be realized in
rela¬
a
Dollar assets
tively short period.
order to make
better showing, or
Marshall aid
accountancy can be adjusted to
ensure that certain receipts should
There are,
limits to the extent to
the gold returns can be
The
reason
why the gold figures
have assumed such importance
in
politics can be
traced back to the experience of
charge of sales for Knickerbocker
1931,
Inc., 20 Exchange Place,
New York City, principal under¬
standard
Knickerbocker
domestic
when
panic
crisis
over
gold
the
resulted
in
Mr.
Pettit
has
been
a
Socialists
is
well
representative for
Knickerbocker Shares, Inc., in the
towards
eastern
are
territory since 1945.
the
transfer of millions of votes from
to
Conservatives.
#
Fund.
during the second
be in an upward
direction, quite possibly Mr. Attlee may wait till the last minute
the
and
election
would
not
be
held until July, after the publica¬
tion of the quarterly gold figure.
Needless
to
say,
the gold re¬
is not the only factor liable
serve
to influence the choice of the date
of the general election. Mr. Attlee
and
his
see
if
advisors
Mr.
waiting
are
Churchill
responsible
Tory
to
other
or
will
leaders
make the mistake of
pronouncing
against the policy of
full employment, food subsidies
and social security measures.
In
particular they are looking out
themselves
for any word which could be pre¬
sented to the country as indicat¬
ing the
Conservative
tention
of
to
ment
Party's in¬
unemploy¬
allowing
increase
considerably.
opportunity
is provided by Conservative lead¬
The moment such
an
Mr. Attlee is certain to decide
ers
upon
immediate
an
irrespective
dissolution,
the
of
position
and
prospects of the gold reserve.
the
absence
of
the
date
the
of
such
some
In
event,
will
election
be
determined by the view taken by
on the
prospects
the Government
of
rise
a
ably
fall
or
Such
serve.
without
in
the
gold
situation is
a
precedent,
re¬
prob¬
at
any
rate in Britain.
ter of 1949 will be
British
The
the
of
should
The
been
during
reserve
reserve
quarter
the
influenced
and
Paul
Dr.
election
date
gold
quarter
1950, then the
election is likely to be postponed
till June.
Indeed, if the tendency
possibly d e
cisive'part.
The
the
first
"cooked."
Pettit,
of
on
disposal,
that
it
possible for the Treas¬
to register a further increase
ury
im p o r t a n t,.;,
which
leaders,
remembered
This
by Socialist
and
goes
a
long way
explaining why Ministers
doing their best to underrate
The view taken by the Govern¬
ment on gold prospects need not
necessarily be shared by the
jority of the electorate.
For
thing, the public has
inside
information.
ma¬
one
access
no
to
If Mr. Attlee
should decide in favour of
a
Feb¬
election on the ground that
improvement in the gold posi¬
tion during the last quarter of
1949
is not likely to be main¬
tained in 1950,
the public may
ruary
the
vote
under
the
influence
of
the
reassuring gold figure in January.
One thing is certain.
lic
will
about the
from
the
learn
not
the
The pub¬
full
truth
gravity of the situation
official
quarters until after
general election.
exhortations
to
work
Meanwhile
harder
are
offset
by optimistic pronounce¬
ments, and anyone who tells the
full
truth
is
denounced
by the
aiming at discred¬
iting the British economic effort.
Government
as
the
Smith, Barney Co. Partner
Smith, Barney & Co., 14 Wall
Street, New York City, members
gravity of the economic situa¬
tion.
Were they to admit that de¬
valuation appears to have failed
Minneapolis Assoc. Add
(Special
to set into motion
adequate influ¬
ences
making for the closing of
the dollar gap, it would be politi¬
cal suicide.
For a further sharp
to
The
Financial
Chronicle)
MINNEAPOLIS. MINN. —Min¬
decline of the
will
admit
partnership
Nelson
on
Schaenen
to
Jan. 1.
(Special
DES
W.
to
The
Financial
MOINES,
Brown
has
Chronicle)
IOWA—Charles
become
with T. C. Henderson &
pire Building.
affiliated
Co., Em¬
neapolis
Associates,
Inc.,
Rand
Tower, have added to their staff
Lingell M. Aus, Lionel O. Sirke-
1950 conjures up
of the New York Stock Exchange,
Joins T. C. Henderson Co.
Scherer,
dol-
position
a r
Jr., has been
appointed Vice - President in
writer
appear,
ar¬
March.
the other
or
would be
1
V.-P. of Knickerbocker
D.
February
losses,
be
hand, from the information at the
however,
K. D. Petlil, Jr.,
Transfer of the Exchange mem¬
bership of Russell G. D'Oench to
it
fall into this quarter.
the firm of Starkweather &
Albert
for
would
that
would
substantial
election
Should
opinion
for April
admit
ranged
devaluation
college
the
the
ret";,
available about
Lynch, Pierce, Fenner &
is establishing four $2,000
for
to
then
during the first half of 1950.
Very little actual information is
Dec. 31
retire from
Dec.
have
influence the British gold reserve
Merrill
pete
the
of
Government's
various
Eastern
be
gold figure
that'.';
public. As a result of the Haupt can
case, the Commission reversed an chances
of its reduction
in the
earlier opinion and handed down course of the next six months or
its opinion which is the law today.
so.
In order to be able to foretell
Before joining the Enforcement when Parliament is
likely to be
Division of the Commission, Mr.
dissolved, and how the country
wholesale
Richard L.
ner
Meija
&
1.
perhaps
members of the Co, Dec. 31.
though
industry.
more
nership
gomery,
has
of
Shares,
delivered
the
among
which resulted in the
$3,000,000 to the
case,
can
gold fig¬
ure for January will make a satis¬
factory showing. Should the Gov¬
the
;;
There
Britain's
'
Mr. Unter¬
other mat¬
Commission,
berg handled,
Karl
and
the
*"
The New York Stock Exchange
has announced the
31.
price of con¬
lumber, and
miscellaneous small adjustments in
'• 4
,
While at the Securities and Ex¬
pany
both
if necessary.
little doubt that the
be
ernment
..
be
election
spects the de-
Untcrberg
ginning September, 1950.
tempo with the times for overhead
stantial drop in the
struction grades of
rrm+ters.
return
■ -
all the necessary arrangements to
be able to have an early general
velopment ;of V
David
broker-dealer
change
doubt
in
se¬
in
can
no
and
curities
for
its ;
of
And
there
spe¬
in
The
—
Britain
its
of
result.
by the firm.
New York Stock
But
cialize
a
measurably
for
food,
clothing,
automobiles, ' radios
and
tele¬
visions, etc.
Prices dropped for
too.
will
in
in
and
.
respect
Where
City,
Beane
To Admit Two Partners
months of this year prices dropped
construction,
respect
date
ay,
York
New
he
w
Merrill
material
suppliers and manufac¬
turers. For a while, during the first
d
the
conclusion,
de-
profits from the
builder
this
at
on
watering of warborn conceptions
and
Unterberg, '32
r o a
ENGLAND
outlook
tion—both
resulted
does
It
at
has
Un¬
terberg
in January, but looks for reversal
reserve
is obscured by the uncer¬
tainty regarding the general elec¬
the
of
not
down from
Therefore, the investors in plant
or structure, commercially, indus¬
quality and quantity of materials
and equipment going into it.
apace
joining
B
gold
1950
building in¬
the housing
mass-produced products.
arrived
this
LONDON,
economic
is
He
personally held stock of
Park & Tilford which, upon fail¬
ure of a rumored
"whiskey divi¬
dend" to materialize as expected,
or
up
The
it,
of from
range
Every structure is built-to-order.
dled, as well as the writing of the
specifications governing the kind,
"While
to
prac¬
lars
narrow
very
section
Prices
10%
more)
cases
were
private
tice.
in
when April figure is reported.
the
its
been
1949.
price
or
further
be
not
increase
1950,
3,
return
EINZIG
Pointing out Britain's dollar position will play important part
forthcoming Parliamentary election, Dr. Einzig foresees
Labor Government leaders aiming to have election take
place
when report on gold reserve will show increase.
Foresees
involving the sale by
D. A. Schulte of millions of dol¬
that
down from
now
industry's
than in either 1948
outside
justified.
The
will
standard
they
to
PAUL
in
and
Exchange
Commission's New York Regional
Office,
re¬
signed
h i s
post effective
Jan.
19
Gap and British Election
By
En¬
fluctuations in 1950 except within
dustry,
were
are
There
and
prices
the house-
money
levels.
customers
may
Senior
ters, the Playboy Motor Car Com¬
decks
1950.
current
its
adequately
customers will get more for their
what
convince
and.
the public, it
has witnessed
"1949
cleaning.
price-tags.
has
of the
housing,
operational techniques.
in store, the
industry would
have to deflate its balloon some¬
now
to
truly represent the world's most
phenomenal example of achieve¬
ment in the way of mass produc¬
tion
prices under custom - built
year
good
a
analyzed
was
closing it
was
This
an
completing its most
initiates little.
It
gotten
sail¬
for
outside
devoted
were
are
clear
least
is
basis, if the truth of the matter
looking ahead
ing
This
performs only upon order.
Oper¬
ating as it does upon a standby
'read¬
justment'
it
now
prolific
completed
their
which,
of
which is
them,
who
disjoint-
more
has.
it
(2651)
Dollar
Attorney of the United
Securities
States
firm
builders
end
suffered
not
ments
re-
ntation
hind
to
industry's soundness that it
1949
e
year
spectacular
over a period of nearly
it is adequate testimony
20 years,
builders.
post-war
to
recoveries
ahead
"With
20s.
Alternately experienc¬
ing periods of extreme depression
modest
Unterberg,
forcement
late
from
CHRONICLE
Unterberg to
David
great industry first felt the pangs
of the economic collapse of the
and
good
a
year
for
Service,
the
of
Building
sailing
clear
o r
Dow
FINANCIAL
Join N. Y. Law Firm
Myron L. Matthews of Dow Service, Inc., holding 1949 read¬
justment has been healthy, says decks are now clear for good
year, with prices from 10% to 15% below postwar peak.
ident
&
land, Guy F. Blichfeldt, Miles A.
gold reserve during
the prospects of
reduced rations and of unemploy¬
ment
through cuts in imported
raw
materials.
Fears of such de¬
velopments might make the his¬
tory of
1931
repeat itself.
It is in order to reduce that risk
that the Prime Minister has made
Bowler, Earl W. Cravens, Walter
H.
Diers, Richard M. Engebretsen,/
George W. Fried, Viola E. Hamil¬
ton.
Robert W. Incerra, Victor E.
Kremer, William A. Lawin,
F.
Olson, and Henry W. Scott;
THE
(2652)
20
COMMERCIAL
&
FINANCIAL
CHRONICLE
degree of vulnerability to depres¬
sion or to other adverse develop-?
I
ments.'
which
of
Some
ical
in
1936."I
mentioned
before
has
but
the
at
knocked
transportation
the
the situation in that respect is en¬
dividend arrears on its only preferred stock
tirely different. The lessened vul¬
issue and the latter on its first preferred stock, virtually all of which
nerability is also indicated by the
is owned by Baltimore & Ohio.
«
*
high operating ratios with which
Analysts who have followed these situations closely are of the
the railroads can now earn fixed
opinion that hopes for any stock recapitalization in either instance
charges.
Operating ratios can be
are premature.
Missouri-Kansas-Texas is in the process of 'work¬
higher than they ever were and
ing out a plan to eliminate the interest arrears on the Adjustment
Bonds.
It seems fairly certain that nothing will even be started fixed charges still be earned. Most
railroad companies, on the basis
along the lines of providing for the back preferred dividends at least
of
1948 figures,
can earn
fixed
until the bond plan is entirely out of the way.
Moreover, with the
purchase fund that will be set up to retire the securities being given charges with operating ratios
has large
former
Talking
down.
In September, 1946,
transportation ratio was 47% of
gross; in 1947, 45%,,, of gross; in
f948, 38%; this year. 30% of gross;
and in October, 23xk%.
In three
years' time,
the ratio has de¬
ratio of fixed charges to mainte¬ creased about 18 cents on
every
Generally speaking the railroad market in the past week or so
nance.
In 1936 fixed charges were dollar and the
company does $30
Jhas been backing and filling in a rather narrow range.
Individual so
large in relation to mainte¬ to $35 million worth of business
issues, however, have displayed independent and sporadic strength,
nance
that a big cut in mainte¬ annually.
You can see what will
mainly on the basis of rumors rather than any specific developments.
nance did
not save much money happen to net income when there
There have been persistent rumors that stock recapitalization plans
in relation to fixed charges. Today are
no
abnormal
expenses
for
for Missouri-Kansas-Texas and Western Maryland were imminent.
The
prised and often
point of buying.
same
ratio
how vulnerable tne railroads were
Rail Rumor Market Active
condition
time
h'erer just
appear
maintenance to improve phys¬
on
fully realized un¬
til early this year, when I pre¬
pared tne statistics that appeared
in my recent railroad bond article,
never
Thursday, December 29, 1949
maintenance.
(
•
;
:
„
-
Maintenance Maintained
;
speaker
,
holders of.the Adjustment 5s for their back interest, it
will be quite
around
90%.
feasible nerability
This lessened
vul¬
this
talk
it
and
disjointed
so
iwith
as
be
may
I hope
little
a
will bear
something
jspecial that I want you to think
about.
It is important to realize
in
me
I
connection
that
you
recall
with
1949
earnings
expenditures
almost at the 1948 level,
maintenance
held
up
indicated in Sep¬
difficult to find sufficient earning power to work opt a
despite lower gross,1 and the ratio
tember.
September traffic was of maintenance to
stock recapitalization.
:r
7 ^ , V ;* r
gross increased.
Be¬ I thought that was a little out of
Western Maryland has also had a bond plan, but this has just down 25%, which is a lot.
tween 1929 and 1932 railroad traf¬
recently been declared operative.
This plan was for; the purpose
line so I make a check the other
of extending, on a voluntary basis, the maturity of the 1st 4s, 1952. fic went down 50%, much more
day air the way back to 1918. Not
The details of this plan were discussed in this column some weeks than between 1937 and 1938 and in
one
year since 1918 has the
between 1920 and 1921.
Twenty- maintenance ratio ever
ago.
The bonds to which the exchange offer was made are out¬
gone up
five per cent is half of what hap¬
standing in the amount of $44,177,000.
Of these some $20,000,000
in a year of decreased gross. That
had been deposited on Dec. 20 when the plan was declared opera¬ pened between 1929 and 1932; yet increase in
maintenance, or rather
tive.
The exchange offer has been left open until Jan. 12, 1950 and in September Glass I Railroads that
steady maintenance in the
earned
fixed
charges close to face of decreased
presumably additional deposits will be made in the interim.
It
gross,- took a
three times. This decrease in'vul¬
seems almost certain, however, that the company will be left with
piece out of 1949 earnings, but
not
reflected
in will
a sizable 1952 maturity problem.
Until this has been finally solved nerability * is
probably not carry over into
it is difficult to see how a stock recapitalization plan can be worked prices yet because so many of us 1950.
still
tend to emphasize adverse
out.
•
'
-;.
I
Another factor in 1949 was that
Illinois Central common also reacted bullishly to rumors, which factors, but we are on the thresh¬
in the face of a decrease in vol¬
rumors also appear to be ill-founded.
No dividends have been paid old of a changed viewpoint. Al¬
ume, transportation ratio held just
on Illinois Central common since: 1931
and no dividends were paid most all of the adverse- factors
about even with 1948.
Since it is
on the preferred from 1932 to 1947, inclusive.
When dividends were have been thrown into the rail¬
about the same as last year with
resumed on the senior equity last year it was generally assumed road
picture.
October earnings
was
any group gives
a
opportunity to air pet
I
have
now
such
an
opportunity.
Most people think of
markets as being two kinds, bear
and bull, but I think there are
three kinds, bear, adjustment and
bull.
A study of
years
makes
the last 30
40
or
good case for this
1 t.iink that we have been
theory.
a
in
an
adjustment market follow¬
ing the bear market' of 1946 and
will ultimately wind up in anpther bull market.
I mention it
at this time because* after three
four years of adjustment mar¬
of ups and downs, we find
Or
I prepared rather hurriedly for
the
to
to
an
theories and
"
I
pleased
kets
ourselves
in a market quite-sim¬
ilar to the markets of 1938-41 and
1932-35. We emerged from both of
these on the up side. Psychologi¬
cally the theory that' we inay' be
coming out of an adjustment mar¬
ket
has
serves
merit
and, I
thought/
some
think, de¬
;
,
,
.
| Another idea thaf
interest
some
fear of.
liave
may
has to .do with our
depression." The" possi¬
a
bility of depression has been
in
permost
had~a
not
minds
our
years.: Since
the
bear
have
we
market
up¬
three
for
teens
a'de¬
or
pression that was not immediately
preceded by an excess of specula¬
tion in-the stock market. .1921
followed
the
of
excess
■
1919.
•
1929-32 followed the financial
ex¬
,
distributions
common
time.
However,
dividends
this
and
would
preferred
has
also
be
stockholders
delayed
instituted
within
instituted
suit
short
a
for-
back
action
on " the
common. > Reports
last week that regardless of the
preferred stockholders'*, suit, directors were going to declare a
year-end common dividend of $3.00 a 'share.
were
current
Illinois
in
financial quarters
Central
has also had ,a bond plan, which has been dis¬
cussed in detail in earlier columns and which ;has
recently been
-declared operative.
Out of some $52 million of bonds that had been
offered an extended lien, it is reported that
$25,200,000
will be bad but everyone realizes
There will be a possible cut
that.
in the C. & O. dividend but I don't
I mentioned as one of the favor¬
able
factors
ened
railroad
that
have
strength¬
bonds the
inflation
of every item in-the balance sheet
and income account, except debt,
accepted. stock and fixed
charges.
These
At the same time that that announcement was made the
plan was changes have not
yet been appre¬
extended to cover an additional issue—the
$8,736,000 of Collateral ciated.
Even less appreciated is
4s, 1953. Even if only a nominal amount of this bond is deposited,
the
fact -that inflation has in¬
it is obvious.that the question of the
company's 1951-1955 matur¬ creased the
earnings of some rail¬
ities may no longer be considered a serious one.
Dividends should road
companies although decreas¬
be resumed on the common early next
year.
r
ing the earnings of others. With¬
The final stock notably affected
by recent rumors has been the out the
wage and frieght rate in¬
preferred stock of Chicago, Milwaukee, St. Paul & Pacific.
The creases of
the past three or four
stock is not cumulative but unless the full
$5.00 dividend has been
years,
Kansas
City- Southern
paid in each of the three succeeding years, holders of the
preferred would not be earning $17 lk this
have control of the company.
So far this has been an academic
year;
As a low cost operation
question because of the voting trust.
The voting trust expires next
this road was a net beneficiary of
year.
Unless payments aggregating $7.00 a share are made by next
inflation and also of its location in
Dec.
control, when it passes from the voting trustees, will be
the South West.
Had wages and
vested in the preferred rather than the common
stock.
To forestall
rates remained as they were in
this it is possible that a substantial dividend
may be paid on the
1945, Kansas City might today be
preferred stock within the next 12 months.
It seems hardly likely,
however, that such a payment will be forthcoming over the near- earning only about $10 per share.
There is one further reason why
term as has been rumored.
inflation is important and that is
its
Continued
from
page
probable
I
permanence.
do
not
3
as
carried
be
When
down
earnings
to
income.
net
figures
for
the
next six months come
in
debt
a
Gas
finance
to
&
Electric
very great increase
its
expansion,
while Southern Pacific effected
a
large decrease in debt with just
as much growth; when
you
about
consider that Pacific Gas & Elec¬
tric has paid out a large part of
its earnings in dividends, while
Southern Pacific has saved about
$300 million in ten years; when
you make a comparison of cover¬
age for fixed charges
(allowing
for
Southern
Pacific's
non-oper¬
ating income of $10 million in all
three
years
sence
of
covered
and
the
ab¬
non-operating income in
Pacific Gas & Electric), you may
wonder why Pacific Gas'& Elec¬
tric 2%s are worth over 100 and
Southern
Pacific
2%s
are
worth
only 82.
The ratio changes that have
in
curred
other
railroad
interesting
bonds
oc¬
have
implications.
Using Southern Pacific again,
fixed charges last year were about
3%% of gross.
Now when fixed
charges
are
such
a
low percentage
of gross, there is very little
prac¬
tical
difference
between
and senior bonds.
ficiency of operation.
In the past
two years they have come to real¬
ize that the beneficiary of infla¬
the prices and yields of Union
Pacific debentures and mortgage
bonds, both selling on the-same
Kansas
yield basis.
the
of
a
It is hard to conceive
company's being able to
earn
the top part of 3xk% and not the
bottom
part;
furthermore,
you
will
probably never solve
nancial problem, should one
a
fi¬
occur
for Southern
Pacific,.by reducing
debt, as in the past. You will no
longer be able to solve a problem
by reducing fixed charges any
further because they have gotten
too
small.
tinkering
Nothing is solved by
with
3Vz%
of gross.
When fixed charges
tion
is
search
lead
to
attitude
a
completely differ¬
on
the
part
of
Government and in fact this
now
be
our
may
taking place.
One factor that is present
today
junior in the debt picture is the lessened
for
is
one
of
operations in the
Pacific, formerly one of our
higher cost operations and now
becoming one of our lower cost
In this case Diesel
ones.
locomotives
electric
large factor. An
today can do
tremendous things.
The manage¬
job
are
a
management
that
wtih
moved
Western
has
done
Kansas
into
the
sometime
such
a
good
City Southern
Chicago Great
back.
Among
other
things, the new group com¬
pletely dieselized the road. Trans¬
portation ratio dropped from 45%
to under 30%
in three years.
The
railroad is spending
money freely
is
There
in hundreds of
"
ore
point
more
I
to mention in connec¬
possible
a
depression.
With railroads' fixed charges $400
million, about 4V£%" of this year's
gross of $9 billion, we are not go¬
ing to have again what we have
had for 100 years in this country,
every
panic
i.
After
war.
a
it is always
for railroads
sary
capital
to
neces¬
make
expenditures.
large
This
was
the Government let the rail¬
cause
roads
true
down
run
and
it
again this time.
has
been
Large ex¬
penditures for locomotives, cars of
all kinds, signals, tracks, and so
V
forth have been necessary. All of
these things cost a lot of money,
and the railroads have been cry¬
ing poverty in part because of this
outlay of funds. One reason why
they have been able to spend as
much
they have is that in the
last ten years, retained net income
'was $3 billion, which is large in
as
relation
to
$8
billion
worth
of money, and
of
it is true
today. Santa Fe paid $16
in
the last two years
$48.
per
share
and earned
Kansas City Southern in the
last
two
earned
years
$38,
gave
the stockholders $5, and kept $33.
Seaboard
earned
$19
and
the
stockholder
received
$1.
or a depression. In the '30's
early '40's it was easy to solve
a
railroad financial problem by
putting the railroad in bankruptcy
and then cutting debt and fixed
charges. :
In 1936 Seaboard had,
fixed charges of 24% of its reve¬
nues.
But in 1948 fixed charges
But
there
will
be
larger divi¬
tion
Earnings
we
are
time
in
in
Prospect
important fact is that
now
faced
about
a
for
year
the
first
with
good
earnings.
Comparisons are very
important. Unfortunately, many
people do not understand earnings
absolutely,
but
only
compara¬
tively. Increases in earnings tend
to
make
pany
people examine
and its stock.
a
com¬
Many people
do not realize how substantial
earnings
capacity
some
of
an
these
carriers have today and will have
You
revenues.
financial
no
can
problem
reorganiza¬
wiping out of oebt and
and
I think that in the future
charges.
will
railroad
resulting for
something entirely different
happen in the event of
♦financial
problem
a
instance from-further inflation of
accompanied
not
wages
by
rate
increases, or in the event of a de¬
pression or other adverse factors.
The Government will step in and,
in
one
the
way
or
railroads
another, will give
either by
money,
purchase
control,
subsidy.
If
I think that a
or
that should happen,
large segment of the debt, perhaps
90%, whether income or fixed in¬
bonds,
first mortgage or.
terest
debenture, will probably
off
100.
at
Bankruptcy
longer solve
a
be paid
will no.
financial problem
because debt and charges are now
so
small in relation to revenues.
The Best Buys
People
always
what the best
at
Another
of
that
see
would be solved by a
as
dends,
Higher
1.6%
were
the necessity for spending dimin¬
ishes,
of railroad bank¬
time there is a
and
true after the first World War be¬
the tremendous change in South¬
ern
V
waves
improved economy in
For instance, there is
operation.
ment
ent
Southern
cost
operation.
ratio, etc. We have seen increas¬
ingly in the last year or two this
gross, they could be cut to 5% and
a
considerable
improvement in
well
City
'
country with smaller than aver¬
age ratio
factors, transportation
alert
earnings effected, but that is no
longer possible. This change may
low-cost
lowest
20% of
were
the
'
*
ruptcies
amounts
with them is to increase ef¬
cope
;
inflated
been
namely,
been
imagine that railroad wages debt. When
money is going out at
freight rates will go down. a fast
clip, management does not
Certainly there is no indication of feel
too liberal as far as dividend
jsuch change now. Management policy goes. This was, for instance,
'more and more has begun to real¬
true in 1921, 1922, and 1923 when
ize that the changes are
largely the railroads were
spending large
As time passes,
permanent and that the way to
shall probably see current dif¬
ferences diminish.
There is good
evidence that this will happen in
we
had
of the increase in gross has
Carried down to net.
Railroad Securities Outlook
sider that Pacific
collapse of security values which
cases.
out, we are
going to be surprised at how much
and
has needed
1938-39
the
excessively high
prices of 1937.- 1946 was not
risen, it follows should like
almost automatically that with an
tion with
anticipated for 1950, a good part
of the increase in gross is going to
•
followed by a depression but by a
tenance ratio has
increase in volume of business
much else bad ahead.
see
decreased volume and since main¬
'20's.
followed
stock
.
that
the 'late
of
cesses
a
want
to
know
buy is.
If you are
a market, prob¬
low level of
ably 1he best buy is something
selling at a very low price which
does not have much merit.
But
the stocks I
like that do have
merit
include
Santa Fe.
which
earned
$28 in
nine
$15
in
1946.
$20
in
1947,
1948, and $12 in the first,
months
of
this
year,
as
against $17 last year; Illinois Cen¬
tral, which earned $5 in 1946, $10*
1948, and probably
in 1949; Rock Island,,
in 1947, $15 in
$10
or
$11
which earned about $11 last year
and
nine
which
earned
months
of
$7
in the first
this
year,
as
against $8 last year; Denver & Rio
higher
ex¬ Grande, which through bookkeep¬
amine and when they examine ing
earned
$16 last year and
the finances of some of our rail¬ which, without much bookkeep¬
next
year.
roads
they
"when
earnings, they
But
are
they
will
going to be
see
sur¬
ing, will earn about $7 this year
Volume 170
Number 4868
THE
but which could earn much more
next -year;. (Great Northern, which
earned between $7 and $9
last
three
years, and
in the
will
earn
about $6.50 this
year
iron
completely
month ago; Kan¬
because the
stopped about
a
City Southern which, on a
system basis, earned $21 last year
and $12 or $13 the year before
sas
and which will
earn
about $17.50
tioned
as
one
the
of
rail
i
I
banks rise by $94
1
tual
according to a
report just is¬
sued
Si
ation
tual
•
^
As for bonds, there is the list in
my
bond
recent
memorandum
(mostly, rated A and Baa), eligible
for institutional accounts.
If you
want
Associ¬
of
Mu¬
Savings
Banks, and
President,
earn
.
Kingman,
tional
bination of especially adverse fac¬
tors. : There are others but I carinot mention every one.
by Henry
President, Na¬
com¬
a
Henry
S.
Kinsman
lis.
As in every
month
;;
i
Composite opinion is optimistic, with some reservations for
possible adverse effects of new domestic legislation and world
politics.
million.
At the close of November regu¬
lar
deposits
were
almost
5%
higher than at the close of No¬
vember, 1948, while other depos¬
its were up nearly 14%. Over the
Same period the number of regu¬
lar
accounts rose
1% and the
A composite opinion of purchas¬
ployment, however, is generally
ing agents who comprise the Na¬ reported on a more selective basis.
tional Association of Purchasing
Agents'
Survey Com¬
mittee, whose
Chairman
!
During
r
is
C.
t
Di¬
Specific Commodity Changes
Markets continue the show of
strength reported in November.
Except for steel prices, however,
they show no. marked up or down
trend.
On the up side:
Cornstarch, dex¬
trine, grains, eggs, dried fruit,
peating Arms beef, coffee, fuel oil, leather, high
Corporation, grade lumber, mica, rubber, steel,
chases,
Win¬
chester Re¬
Division
Olin
•.
f
textiles.
Indus¬
Down
o
tries,' Inc., bags,
Alcohol,
were:
paper
iron, castings, cellulose
N ew Haven, acetate molding powders,
enamel,
Conn., finds poultry, pork, paint, wastepapefj*
as
the
year salt cake, tallow, tin, copper, wire^
November
ends: Business
gray
In tight supply;
conditions still
During the first 11
savings banks
strike
added $785 million to their mort¬
ide.
feeling of op¬
Recovery from the major
is
progressing
timism.
Aluminum, coal,
steel, wax, zinc ox¬
copper scrap,
reflect general
Robert C. Swanton
lion and of U. S. governments by
months, of 1949 the
e
rector of Pur¬
flecting the continued gains this
year, in contrast to the lag during
the third quarter of 1948, the in¬
crease in regular deposits of $646
million during the first 11 months
of the year has been 50% greater
in 1949 than in 1948.
b
o
Swanton,
number of other accounts 4%. Re¬
begin¬ $113 million.
ning with November, 1948, except
February, 1949, the increase ex¬
Business
R
the; savings
banks increased their holdings of
Farmers
and
mortgage loans by $94 million,
Mechanics while decreasing their holdings of
Savings Bank corporate and municipal securities
of Minneapo¬
by $11 million, of cash by $24 mil¬
setbacks
rapidly than originally esti¬
gage portfolio, which was 23% mated, and production, usually off
at this season, is holding up well.
more than in the comparable pe¬
Order
books, they report, are
riod of 1948 and 8% greater than
firm and of slightly longer range
for the full year 1948. Over the than a month
ago. A strong trend
f Although
special purpose and
first 11 months holdings of cor¬ toward price stabilization (steel
club accounts dropped sharply as
and municipal securities excepted) is reported. Inventories
a
result of annual payments to porate
are down, but there is some in¬
depositors
of
$ 176
million
in rose $215 million in 1949 and $425
dication of an increase. Employ¬
Christmas Club checks, not less million in
1948, whereas holdings ment is good for this season of
than $45,006,000 of this amount
of U. S. governments fell $101 mil¬ the year but buying policy is still
was redeposited in regular savings
lion in 1949 and $442 million in cautious.
accounts. Total deposits now ag¬
speculative bonds that
ceeded that for the comparable
might have a bigger price lift, the
month the year before. The rise
logical place to go is to the in¬
reflects both a gain in amounts
come-bond
field.
The
income
deposited and a drop in sums
bonds have recovered relatively
withdrawn.
*
more
more
Canada
Reports from
indicate
Canada
continuing high level of busi¬
ness in
December, about the same
a
in
as
the
United
States.
Dominion has had
more
Inventories
creases.
The
price in¬
down.
are
„
little
1947
sold
since
ever
price
decline.
100
at
their
three
1946
and
that
Bonds
ago
years
are
21
Next Quarter
leaders, representing earnings of
$7 in 1946, $9 in 1947, $12 in 1948
and about $9 this year; Texas &
Pacific with $11 to $15 in the last
three years and about $9 to $10
this year despite a loss of oil traf¬
fic; J Southern Railway, which
earned $5 in 1946, $7 in 1947, and
$5 ta $6 in 1949, despite
(2653)
Henry S. Kingman, President of National Association of Mutual
Savings Banks, estimates during November mutual savings
banks gained $82 million in deposits^ compared with gain of
$55 million in November of previous year. Mortgage loans of
1
stock
$12.50 in 1948 and which will
CHRONICLE
Buying Agents Expect Good Business in
Regular deposits of the 531 mu¬
savings banks of the nation
people don't like, but which will gained $82 million during Novem¬
sooner
or. later
do
better
and
ber, 1949, as compared with a $55
which earned $6 in 1947, $11 in
million gain
1948 and will earn $8 this
year;
for the same
Southern Pacific, which I men¬
month in 1948,
in 1949; Seaboard Air-Line, which
FINANCIAL
&
Reports Acceleration in Savings Deposits Gains
movement
ore
COMMERCIAL
selling in the 50's and 60's.
The
ones
I
like
include
Seaboard,
Denver, Frisco, Gulf Mobile &
Ohio, Great Western, and Erie.
Speaking of Great Western, the
monthly interest charge on Great
Western incomes is $10,000 or gregate $19,065 million.
Employment trend is much lower
than in the States. Buying policy
is
the
same
as
in the United
Canadian industrialists are
troubled over the decline of ex¬
States.
-
$125^000
In
year.
a.
Great "Western
raised
The
1948.
the
main¬
tenance
charges from $400,000 to
$800,000.
Any company that can
raise maintenance charges $400,000 in one month has pretty good
income bonds when they take
only $10,000 a month to service. :i
-Before
I
close
I
would
like
A
I
feel quite
is going to
the
sure
estimate
to
six
first
reservations
By JOHN BUTTON
for
"Think and Speak Sparingly of
and Your Problems"
Yourself
OTHERS SOLVE THE DIFFICULTIES WHICH THEY ARE
an
Except for the advance in steel
prices late in the month, the De¬
cember
price trend was dominated
tendency to level off and
FACING.
by a
stabilize.
80% reported no move¬
ment in their
principal purchased
While
commodities.
Purchasing
Agents realize the steel increase
will spread into the cost of many
fabricated items, competition is
expected to hold the over-all ef¬
fect to a minimum. The action in
steel is not expected to become a
starting point for an inflationary
price spiral.
ments
have
increased
permitted
deliveries of associated goods and
inventories
some
been
hay#
moderately.
creased
airlines get
more
in dollars for
moving 6% of mail
do for moving
the other 94% of it. It is only just
that they get more money and I
think they will.
than
the railroads
To sum
small world—we all look alike when the chips are down.
up
briefly: Psychologi¬
cally and factually there are
now
interest.)
THEN LIVE OUTWARDLY—LIVE A LIFE OF FRIEND¬
LINESS, OF INTEREST, OF UNDERSTANDING, IN THE HOPES
Exchange
the New York Stock
firm
of
Proskauer
Rosshon will
&
be formed with of¬
fices at 11 Wall Street, New York
in¬
DevelopMr.
Martin is
now
Assistant
Secretary
of
Treasury,
which post he
the
will
continue,
giving
part
time
to
the
International
Bank.
Martin
Mr,
was
formerly
head
N
of
the
■
York
ew
Ex¬
Wm. McC.Martin.Jr
change.
John
S
.
Hooker of
Maryland has been ap¬
pointed alternate U. S. director of
the bank.
,
,
•
,
Robert Baird Co.
To Admit Partners
MILWAUKEE,
W.
Baird
&
consin Ave.,
Buying Policy
.
the
right track—life is short and turbulent at best.
HOW WE WEL¬
COME THAT FELLOW WITH A SMILE WHO COMES ALONG OUR
Co.,
WIS.
110
Robert
East Wis¬
members of the New
" The
ules
of the
trading department.
and
Abraham to Admit
Abraham & Co., 120
New York
New
York
admit
Broadway,
City, members of the
Stock Exchange,
will
Bleibtreu,
ex¬
John
N.
reports reveal 23%
change member, to partnership on
are adding to pay rolls, with 52%
HE MUST BE SURE OF IT HIMSELF.
f
Jan. 1, 1950.
Mr. Bleibtreu re¬
Learning to be a successful salesman me&ns developing a maintaining late November labor
successful sales personality.
became associated with
To be a real person requires self forces. Many of those laid off in cently
mastery, understanding and faith. To all of you who want to make October and November have been Abraham & Co. In the past he
this next year the best you have ever had I
say, "Let's start from recalled, indicating that, as steel was active as an individual floor
OF INTEREST AND BENEFIT TO ME—
Partners will be Richman
Proskauer and George Russhon, the ground up next year—it's never too late to do
both exchange members.
Happy New Year and Many, Many, More.
City.
Inter¬
general pattern remains York Stock Exchange, will admit
I am not a believer in some of the later day adventures into the within a "hand-to-mouth to 90- Robert W. Haack and Carlton P.
field of metaphysics, of religion, of psychiatry.
These things are a day" range. A movement from the Wilson to partnership on Jan. SL
lower side of the bracket into the
study in themselves—a lifetime study.
But as just another human
Both have been with the firm for
being I have watched men accomplish success who believed in what 90-day column is noticeable. With
some time, Mr. Haack as Manager
they were doing. All of us are in the dark—we all want to be on inventories low, production sched¬
AND DREAMS OF YOUR FELLOW MEN.
THE THINGS THAT ARE
On Jan. 1
the
of
Turnovers
holding up, order books firm,
prices showing more stability,
WAY AND BY HIS ATTITUDE SHOWS US THAT WE DO BELONG; buyers are looking at future com¬
WE ARE O. K.; WE HAVE SOMETHING TO GIVE TO THE WORLD mitment schedules with more con¬
a
financial regard from such a TOO.
The man who develops the faculty of thinking of others and fidence.
change that ought not long be de¬ forgetting himself BEGETS CONFIDENCE.
The very act of self
Employment
layed.
'
forgetfulness appeals to our own inner consciousness and says to us,
"Hold up your head—keep your eye on the ball—^it is all for the best
Normally,
industrial employ¬
—this fellow 1 am talking with is so sure of it HE IS THINKING OF ment slacks off during December,
Proskauer & Russhon
present with us strong reasons for
expecting a change in public re¬
gard for railroad bonds and stocks.
1 hope you join me in reaping
and
ment.
Stock
Inventories
Industrial inventories generally
continue to decline.
Steel ship¬
increase in
to know that the
By tnternat'l Bank
national Bank for Reconstruction
Self
give the
are
reported; satisfactory.
Few
preservation—self interest—our own problems—our desires, hopes and
mai( ratds ambitions—to us!
items, except steel, are really hard
they loom important- To the great world around us
because certain recent dockets of
to
get.
Inventories are steadily
WE DON'T EXIST.
But how we welcome the man who comes along
the Interstate Commerce Com¬
and makes us live for a moment—who listens to our ideas, our stories, coming back into balance follow¬
mission tend to suggest that pretty
and who takes AN INTEREST IN OUR WORLD.
Is your business ing strike-caused maladjustments.
strongly. While on the subject of
selling?
Do you want to develop a sales personality that will take Stocks are being held to known
air mail rates, it may interest you
you to the top in your own chosen field of work?
(Here comes self production schedule requirements,
Government
railroads
a
are
production.
Martin Named to Post
director
Your
It is
.shortages
some
the
Commodity Prices
to
job is selling. Your job is convincing others^ Your job is
showing others where their "best interest lies." Such is the essence
can, if necessary, reduce if they
of salesmanship.
The other ddy I spoke with a carpenter.
He said,
are losing traffic.
Passenger busi¬
"I take pride in my work.
When I do a job it is done the best I
ness bulks large in only four com¬
can do.
When I build a kitchen cabinet the doors meet and the edges
panies — New
HaVen,
Central,
are planed smooth.
I give my employer eight full hours of work
Pennsylvania and Long Island,
a day."
He was a happy man.
I asked him, "How are you doing?"
though it is true that the pas¬
He answered, "I feel fine."
senger loss of C, & O. has gotten
;/
"I feel fine."
That is the reply of a man who KNOWS THAT HE
a lot of publicity in recent years.
IS GIVING A DOLLAR'S WORTH OF LABOR FOR A DOLLAR'S
Also, according to the ICC for¬
WORTH OF PAY.
Here was a man who needed NO UNION to keep
mula, most railroads, except New
him busy or to fill his pay check every week—he thought of the
Haven, show a loss on passenger,
FELLOW WHO PAID HIM HIS SALARY FIRST.
The law holds!
business. However, there is a mis¬
If you want to reach a father, speak well of his children.
If you want
conception about that loss. It
a friend take an interest in another's welfare.
If you want to be a
actually includes all of the busi¬
successful salesman TALK AND THINK OF BENEFITS TO YOUR
ness that is not classified as freight
CUSTOMER.
The foundation for successful salesmanship, for. excep¬
and includes mail, milk and LCL.
tional earnings, for the top rewards in the field of selling start with
These items are not receiving the
FORGETTING YOUR OWN PROBLEMS AND TRYING TO HELP
publicity as loss items that they
be.
the
Power
holding beck
months, with
possible ef¬
William McChesney Martin, Jr.,
fects of new domestic legislation
has been appointed United States
and world politics.
executive
cover
Securities Salesman's Corner
say
something about passenger
fares, in connection with the the¬
ory
that railroads ought to be
given increased rates which they
should
this
extend
few
countries.
industrial
of
consensus
Purchasing Executives shows an
expectation
of
good
business
through the first quarter of 1950.
September
ports and the increased competi¬
tion
from
devalued
currency
a
better
job.
The
survey
moves
V\1
into
Atrm An
"f
easier
tirill
nlplr
supply,
em-
broker.
•
&
COMMERCIAL
THE
(2654)
22
Continued from page 7
profitable
Public Attitudes Toward
Owning Securities
comments
are
to do with his money
put it in a savings account or in
a
checking account, buy govern¬
ment savings bonds with it, in¬
living in cities be¬
and 1,000,000 own
stock and the proportion
-common
units
owning stock decreases
to 5% in communities ranging in
vest
real
in
estate,
with
stock
size from
2,500 to 50,000.
There
slight increase in frequency
of ownership in rural areas, the
mon
is
do
proportion being 8%.
what do you
a
Charts
I
V
to
show
that
there
are
substantial
•amounts of savings available for
iAvestment in common stock, only
•a
very small proportion
of the
spending units who have the re¬
sources
to invest have actually
in
invested
corporate stock. One
how extensive the
market is
ontapped
for
revealed
when
was
common
we
at¬
tempted to find a group of spend¬
ing units in which stock owner¬
ship was high.
We were not suc¬
cessful, even though we took a
group made up only of business
or
professional people with in¬
comes over $5,000 and who were
over 35 years of age.
Even in this
group we found that only 30% of
the spending units owned stock.
However, the importance of age
is shown by the fact that among
young, high-income
business or
professional people, only 10% of
tfee spending units own common
clear
that
Stock
the
from
pose a man
and
the
to
.
stock;
spending
$3,000
iv.
results
in
shown
The
results
for
in
Chart
wise
to
unfavorable
toward
of
able
$38,500
or
.bonds
incomes
and
those
of
$5,000, 83%
over
income
likely to
in
vest
groups
are
more
income of
not
safe
the
as
of
question:
that
his
units expressed the opinion
a
close
has some money over
above what he needs for his
he
needed to spend all
person
time
become
"Sup¬
feeling of
Over a long pe¬
counting collapses, your
studying
an
could
stocks
insider,
friend
who
not
or
and
have
was,
hope
from
to
gains.
proved." ',
unfamiliarity with stocks or the
feeling that stocks are not safe,
many
COMMON
I.
(4)
ern
An
sav¬
That
has
been
1
{
electrical engineer and
living in a large east¬
city with $20,000 income says:
"Investing in real estate and
requires a good
piece of cash and full time study
a very
amount
the
you
of
The
markets.
the
average
We invested 7
was
well
are
Chart VI
as
%
y
'
preceding
to
answers
arid
than
stock
m o r e
double."
a
1
quotations
based
are
as
the
on
single question
a
con¬
betting on having an inflation¬
period that will push stock
up.
I'd put my money in the
cerning people's attitudes toward
bank
definitive.
ary
or
results
in savings bonds."
Purchases
the
a
stock
in
than
a
turkey farm
have
a
return
of
6%
ing
interest.
our
tion,
there
where
except
manipulation
up
(2) A chemist in
an
a
there
been
stock.
are
available
that
in
cor¬
invested
Apparently
fear,
stock.
common
Taxes
are
business
has
rarely mentioned.
investment
The
choices
two
infla¬
tain
has
the
attempting to ob¬
funds
more
form
in
risk
for
business
in
Either
it can blunder along and follow
the costly trial-and-error method
and
down."
city, with
buy
now
sub¬
distrust, and a lack of familiarity
are important reasons for not buy¬
Farm mortgages would pay only
4%.
The stock market hasn't
risen much to reflect
the
the dis¬
to
resources
not
porate
right,
because the prices for gilt-edge
securities
are
low
at
present
with
on
those who
among
some
stock
stantial
says:
"The stock market is all
these
and
resources
even
own
with a $12,000
large investment in
the
have
and
small
city
a
data
indicate, however, that far
people own common stock
fewer
following:
veterinarian
A
These
tribution of ownership of common
Among the comments made fa¬
voring the purchase of common
are
Obviously,
only indicative and not
are
extensive results
more
stock
stock.
common
stocks and bonds
invest ' in
interest
The
but
from"this £
realized
small.
was
equal amount in
an
a
says:
stock,
.says:^
stock,
large eastern
or
income of somewhat
it
of
capital.
utilize the
can
resources
of
the scientific method and discover
CHART II
PROPORTION
STOCK
II.
Spending
Who Own Common Stock
'■
OF
OWNERS
COMMON
Units
with
OF MARKETABLE
STOCK
Liquid Asset Holdings (Govt,
of Various Size
Bonds and Bank Deposits)
'
•
common
interest
The
kid,
a
"You may make a little more
on
been
to
otherwise
OF MARKETABLE
Spending Units in Various Income Groups
(y
government
consultant
CHART I
PROPORTION OF OWNERS
$24,000 income
(1)
ings bonds would equal common
a
just
was
(7) A sales manager from
large city in the midwest with
income and
stock
millions
$10,000 and large
is easy to lose.
buying them.
I
common
"I would buy common stock.;.
(Why?) Well, for instarie'e,. we7
put $5,000 in a savings account, i
but I know what it did to me!"
midwestern
income
,
stock?
in'1929.
me
a
investment in
Stay away
I'm speaking from ex¬
perience of what happened to
"Common stock is good if you
riod,
of $18,000
$100,000 in his
says:
"Common
gamble at the right time, but it
reason
store in
income
over
business,
.'\:V,
a retail shoe'
large eastern city, with
a $14,000 income, sizable holdings
of liquid assets
and substantial
wholesale
a
from it!
liquid asset holdings, says:
are
are
over
an
income says:
:
own
right,
a
substantial
a
(4) A manager of
city with an
who invested
away
tax accountant from
midwestern city, with
to
up
risky."
,
Favoring Stock
A
make
chance, he
stock is too specu¬
common
(3)
large
because
stock
all
to
investment."
can buy stocks and
better returns, but it is
lative."
they would not in¬
say
common
are
all
your
"With good advice in buying,
and if he is willing to take a
You are better
(6) The president of
mortgages and pre¬
are all right.
Cor¬
bonds
in debt.
up
with
gamble and he'll
a
at
on
(3) A general counsel for a
corporation in a large eastern city,
him
lead
are
expect
express
negative opinion.
The reasons
given for the unfavorable atti¬
tudes
vary
with
income.
The
a
lower
but
with
10%
little
a
will
trick
no
substantial
any
he
corporation stocks
good right now. They're
cheap and they earn a lot. It's
very
business from a large midwestern
ferred stock
unfavor¬
an
"I think
liquid
says:
ing it."
says:
poration
than
moderate
and
by buying more government
bonds and being contented, and
receiving less interest and hav¬
and
think
"I
holdings,
off
common
express
attitude;
end
large holdings in
liquid assets and corporation stock
Eighty-seven percent of
the spending units with incomes
$3,000
stay
(2) A physician in a large city
in the Midwest, with an income
stock.
over
and
or
someone
invest in
to
anxious
not too
are
Tel
but
smarter
So I just rely on their
judgment
it too."
and
stock,
■'1
■.
guys
buy.
from
show
IV
units
with
money
incomes over $3,000 and
also again for those with incomes
over $5,000.
As will be seen, the
majority of attitudes are clearly
Tel
what's left is the stuff that the
Chart
spending
a
before the small investor
could ever get wind of it—so
;
data
in
long
all
In connection with
We obtained reasdns from
answers
/
,
good
for not
spending units have resources that
they
could
invest
in
common
stock.
Why is it that they do not
do so?
Why
.
technician
stock, I've had so little ex¬
perience in that that I really
don't know much about it, but
it too
personally, I consider
speculative, too risky. Another
thing, any really good, desirable
stock, I think, is gobbled up
income,
spending units
with over $5,000 income, did not
express
an
opinion about com¬
mon
stock:
They are omitted
Ownership
is
all
of
over
of
20%
and
stocks
It
.
$5,000
asset
"Stock is all right if he buys
in
com¬
choice?
stocks
common
"About the value of investing
The
■corporate stock.
Cons Toward
.
sets, says:.
unfamiliar with them.
higher income groups, how¬
ever,
more
often mention that
These
Pros and
it?
specific unfavorable
about
studio
A
over
has neither the time nor
(5) A young partner in a man¬
ufacturing corporation in a large
eastern city with an income of
close to $12,000 says:
large city on the West Coast, with
an
income of almost $10,000 and
a
moderate amount of liquid as¬
think of it?"
30%
with
they
results
show
the
substantial markets available for
stock.
About
units
of
indication
buy
or
that
make
you
nowadays-
You didn't discuss common
al¬
though
seock
think
you
units
tween
cC
do
50,000
the
«£
What
expenses.
would be the wisest thing for him
Thursday, December 29, 1949
the money."
follows:
as
(1)
living in metropolitan areas, 10%
common stock. Eight percent
earner
common
Unfavorable Comments
Some of the
own
CHRONICLE
'
"
,
safe
even
or
stocks.
FINANCIAL
46i' 1
7
CHART III
y ;
PROPORTION
34%
,
OF OWNERS
COMMON
HI. Spending
OF MARKETABLE
STOCK
Units in Various Age Groups
(Age of Head of Spending Unit)
/it
IS/.
zoY»
/o
9i.
3%
4/
"
□
f/pOO
a
□
'/.OOO
□
*Z.OOO
*3,000
*4-,O00
-1,000
-3,000
-4,000
'3,000
'%
_______
*3,000
-7,300
_
*7,300
*70,000
-/O, OOO
<r/»ort
I
<
TVonz
4
□
_____
*7-499
*SOO'/,99 9
*1,000-4999 *3000
9r mart
□
33-44
13-34
78-14
43-34
33-64
63or Over
CHART IV
^
PROPORTION OF OWNERS
OF MARKETABLE
COMMON STOCK
IV. Spending Units in Various Occupational Groups
CHART V
PROPORTION OF OWNERS OF MARKETABLE
COMMON
STOCK
CHART VI
ATTITUDES
IN
TOWARD
COMMON
Spending Units With
Income Over $5,000
Spending Units With
Income Over $3,000
fleo
/si.
'if.
44%
Cov
INVESTING
STOCK
A/oi
/vmtf/ar U/tik
30%
67%
33%
33%
/of.
A/et Soft.
43%
Ctfitr
/of.
Co*
-
Volume
in
a
170
Number 4868
systematic fashion what kinds
of common stock
how
to
people want and
motivate
them
invest
to
in such securities.
of
Securities Industry
economic
The
one.
available
data
clearly indicate that tnere
adequate financial resources
the hands of the public for
stantial increase in
are
in
sub¬
a
ownership of
common
stock.
problem
is
The
do
people
be
safeguards
are
the
What
to
necessary
pro¬
What steps
effective
people to purchase
The
and
trust and
developed?
public?
most
prob¬
want
the necessary
can
familiarity
be
fundamental
motivational
a
What
tect
found that 25%
ceiving
of the people
income
in
the
re¬
United
scientific
in
will
motivating
common stock?
solution
this
of
&
Charles
FINANCIAL
CHRONICLE
E.
was
Co. in
that
this
among
bought
bonds
more
they had been buying.
75%
who
had
not
only 12% bought
group
than
Among the
exposed
bonds than
been
more
they had been buying. Factor "X"
was
influence about which the
an
Treasury
Department
something. By working
doubled
the
could
it, they
on
proportion
do
exposed
to it in the Third War Bond Drive.
Our survey after the Third
showed
factor
creased
in
the
50%
"X"
had
de¬
not
importance.
who
Drive
Among
exposed to it
were
it
increase
an
the
of
70%
in
of Series E
the
dollar
bonds sold
&
'
Si
Lincoln
The
trustee of the Union
a
Bank
May, 1948.
Trust
I
it
Savings
Bank
of!
age
was
&
Prior
to
from
1923-1931.
the past 31 years, has been Presi¬
dent since 1940. During his Presi¬
entering the field of in¬
vestment
counsel, he
Federal
Reserve
with the
was
Bank
dency, the
the
and
increased
Guaranty Co. of New York. Mr.
Brundage is a member of the In¬
vestment
Counsel
America
and
Association
director
a
from
$135,000,000
to1
$375,000,000.
Mr.
Hooper, j
who is also a trustee of the
bank,
has been actively engaged in fi¬
nance
and industry for over 30
over
of
the
of
Morristown Trust Co.
*
Barnard
of
the
*
*
Title
&
still
director
Trust
in
among which are American
chine and Foundry Co.,
Third
Ma¬
action
find
is
cycle of research and
required.
what
out
Research
should
be
to
Brooklyn
factor
If
done;
results
of
action to test the research results;
further research and then action
bond
guided
were
asked
once
more
bonds
all
the
additional results.
about
60%
On
aide,
combine/i,
persons
who
to
buy
application
cycle is needed. V
of
buying.
this
,?
,
Research Essential
Will this research prove useful?
Only
actual test will tell, but
an
I believe
it
will.
lems has proved
on
similar prob¬
were
its value.
Note,
for
example, the motivational re¬
we
did for the Treasury
Department during the war to
help increase the sale of Series E
search
bonds.
Immediately
Second
War
terviewed
after
the
Drive, we in¬
Bond
nation-wide
a
sample
volume
obtained data
we
on
the
of
bonds the respondent
buying and the increase
in his purchases during the drive.
At another point in the interview,
had been
obtained
we
spondent
data
each
whether
to
as
from
re¬
he
had
bonds.
buy bought ad¬
pattern of
This
N.
Co.,
of
Dec.
New York,
23
other groups and also held for the
the
the
Thomas
buying of bonds through payroll
savings.
Also, as we determined
recently, this pattern still holds
for savings bonds purchases.
Motivational
judgment,
research,
assist the
can
Bankers
ment
better
in my
Invest¬
to
serve
American business in
securing for
requires. This
it the risk capital it
research
can
this
in the
job
economical
possible.
manner
Bush
Bedford
Terminal
II,
of
on
President
his
to
York
York
Savings
announced
New
the
to
At
Dec. 15
Dry
rectors
Dock
'-4V:-';
Bankers
Manufacturers Trust Company of
New York, announces that Louis
Noll
of the bank's Comptroller's
Department has been appointed an
cer
tant Treasurer in the
Foreign De¬
partment; Gil M. Hostage to As¬
sistant
in
Treasurer
the
Donald Bidgood
ment;
Mercer
to
Install¬
to'' Assis-
Assistan^^Treasurer,
Assistant Secretary. Mr. Noll en¬
tered the banking business in 1920
Manager
and
He
4s an alumnus of
University
and
a
of the
member
tion of
Cost
National
Associa¬
Accountants.
Office*
Gould
velopment
Henry C.
Treasurer,
Queens.
The Board of Directors of J. P.
Morgan
Co.
&
Incorporated,
their regular meeting on
appointed
the
following
at
Dec. 21,
as
As¬
Walter
of
Credit
the
Board
sistant Vice-Presidents: Walter H.
has
Chittenden,
who is concerned \vith foreign ex¬
change matters.
The directors of J. P, Morgan
& Co. Incorporated at the same
meeting transferred $10,000,000 of
undivided profits to surplus.
-v
George
and
Kraham
staff
3Ianhattan
of
the
Bank
Company
York, at 40 Wall Street
nounced
C.
on
Dec.
tached
to
the
to
of
the
New
were
an¬
22 by Lawrence
Marshall. President:
Andrews
of
Walter P.
in
Donald
effective
if
it
an¬
nounced that, at the annual meet¬
ing new officers were elected.
They are Millard S. Trotter, who
made
Secretary of the bank,
John M. Robert and
who
Rose D. Hill,
elected Assistant Vice-
were
charge
Hines
E.
Secretary.
of
was
Messrs.
Blanke
and
a
quarter of
y '■y
'
have
it
Announcement
Dec.
21
that
dividend
the
made
was
second
a
at
] /"•<"'
on
liquidating
of
rate
$3
per
share, payable to the stockholders
Continental Bank
of
New
Trust
&
York
and
on
after Dec. 28, was declared by the
directors at
Dec.
also
a
special meeting
The
15.
stockholders
been advised that—
f
on
have
been filed
have
in
court
by your
of addi¬
tional
an
Assistant
was
Secretary in
and Mr. .Hill
Robert
Assistant
Secretaries
July, 1943. Walter R. Wil¬
liams, Jr., who comes to the bank
in January, was elected Treasurer
at this meeting.
He comes from
the Savings Bank Association of
is
It
A
number
accountings still remain to
filed, and this will be done as
rapidly as the necessary informa¬
tion with respect thereto can be
be
page
442,
tion
of
of
we
the
$3
also
of
Jan.
27,
1949,
reported the declara¬
first
dividend
at
the
the State of New York, where he
rate
has been Executive Secretary.
since the taking over of the bank
per
share,
to be paid
S.
MacPhie
Walter
*
.
Whichard,
folk, has been elected
of the
Virginia, at Rich¬
mond, according to an
ment
by
Thomas
of
has
visory
for
the
the
of
m
years.
brother founded
a
Inc.,
of
ad¬
bank
Whichard
Company,
and
Brothel's
he
that
now
company
President
as
the
on
number
a
of
Boushall,
Mrt
bank.
for
Ill 1900 he and
firm
announccv
C.
served
board
Norfolk
well
Nor¬
member
a
general board of directors
of The Bank of
the
of
m
as
Whichard
of
Realty Co.
;
it
<
The
*
Winters
Trust
Co.
^
National
of
Dayton,
creased
its capital
$3,000,000 to
from
the
sale
Bank
&
Ohio, in¬
of Dec. d
as
$4,000,000 by
$1,000,000
of
new
of
stock, according to
a
letin of
of
the
Office
recent Bul¬
the Comp¬
troller of the Currency.
elected
President
Street
In
State
Bank
16
Sinske
it
previously
Vice-President,
he
ident he
that
which
to
1941.
As Pres¬
succeeds the late
of
the
sistant
that ,the
Rockland-Atlas
Dec.
20
ment of 50 cents per share.
payable
27
Dec.
de¬
Both
share¬
to
holders of record Dec. 20.
*
*
election
The
staff
with
the
Tulsa,
Henry
three
regular
posi¬
National
Second
New
of
Haven,
been announced
Conn.,
who
has
•;
directors
Trust
'
ft
of
Okla.,
Palisades
Englewood,
a
33 Vz % stock
increasing
its
capital
from $300,000 to
W.
$400,000, Douglas
Morgan, President, announced.
The directors' action will
sented
final
to
the
approval
be
pre¬
stockholders
their
at
for
annual
meeting, Jan. 24. The increased
capitalization will be achieved by
transfer of $100,000
from surplus
to
capital
account.
After
this
stock dividend, the bank will have
$400,000 capital, $600,000 surplus
and approximately
$150,000 un¬
divided profits, according to Mr.
Morgan.
it
Herbert
if
D.
Lawsjon,
Vice-Presidents
ton,
Dec.
D.
15
C.,
it
of
Bank
was
First
Na¬
has
increased
been
$750,000
of the increase was ef¬
the sale of new stock
fected
by
while
the
further
brought about by
of $250,000. The
effective
increase
was
stock dividend
a
capital be¬
it was
new
Nov.
30,
indicated in the Dec. 5 Bulletin of
the
the
Office
of
the
Comptroller of
Currency.
it
Thornton
«S«
the
Cooke,
Columbia
Kansas
who founded
National
City,
Mo.,
Bank
©f
in
1919, will
retire
from
active
banking on
Dec. 31, when he will relinquish
the
post
board
on
Chairman
of
of
the
He will, however, remain-
board
the
and
the
Executive
Committee, according to the Kan¬
the
of
City "Star," which states that
post of Chairman will not be
filled.
take
"In
bia
From
the
the
"Star"
also
we
following:
its
thirty
years
National's
increased
the Colum¬
business
has
until
deposits, at the
last call, were $25,221,346.
The
bank now is headed by Charles L,
Aylward,
who
was
Assistant
Cashier, the first to hold that
office when the bank opened in
1919.
Mr. Cooke took the Chair¬
in 1947, the Presidency
thereupon passing to Mr. Ayl¬
ward, then Executive Vice-Pres¬
manship
ident."
*
:
Jr.,
and
elected
National
Washing¬
announced
on
by Pres. C. F. Jacobsen.
:-
Mr. Cooke, now 76 years of age,
gained
his
first
banking
expe¬
rience at the age of 12, when
it
John P. Sippel have been
Metropolitan
the
of
the
'
the
have declared
dividend,
Fie
.
sas
of
Company
Assistant
:y
it
it
The
N. J.,
become
V
later.
year
has
by Pres. Louis L.
Hemingway, it is learned from the
New Haven "Register" of Dec. 11,
they are Louis L. Hemingway,
Jr., who ; becomes an Assistant
Cashier; Herbert F. Kusterer, of
Woodbridge, also elected Assis¬
tant Cashier; and Harry O. Copeland.
a
the
named As¬
Trust Company ©f
&
if
Bank
entered
was
to the extent of $1,000,000, raising
it from $2,000,000 to
$3,000,000;
■'
officers'
to
capital
tional Bank
came
I
*
of
members
Cashier
The
on
Sinske
E.
clared an extra year-end dividend
of 25 cents per share, in addition
to
the
regular
quarterly
pay¬
are
Mr.
bank in 1927 and
of
Mr.
Executive
was
post
a
named in
was
Holtoa
"Journal"
noted
was
recently
the
of Milwaukee,
Milwaukee
the
Dec.
was
of
Howe,
and
announced
Bank
i
issue
our
W.
National
obtained."
In
Cashiers,
John
were
directors
this second
liquidating dividends of $3 per
share, the trust company will still
have remaining general reserves
of approximately $4,700,000 with
which to meet any contingent lia¬
bility on its part, as well as to
defray all future expenses of
liquidation.
Between May 1,1948,
when the bank went into liqui¬
dation, and the present time 114
corporate I trust accountings and
147
personal
trust
accountings
Union Dime staff in 1920 and
made
*
it
II.
Stuart Franckum.
•
payment of
the
1934 to
became Cashier in 1930.
tant Cashier
■
"After
with
Bank from
pointments to the office of Assis¬
Trust Officer.
;
be¬
1935.
Vetter.
tions
it
Assistant
advanced to Assistant Vice-
been
century ago.
a
it
institution.
been
As¬
Mayer
with the company about 20 years.
Mr. Mayer began as a messenger
Presidents. Mr. Trotter joined the
have
Bidgood to Assis¬
bank,
Assistant
since
of the Bank's Purchasing Depart¬
ment;
an
ings Bank, of New York, has
at¬
Louis P. Pfeffer to
Vice-President
the
tf
Divi¬
W. Gates to Assistant
Vice-President in the Midwestern
sistant
of
William L. DeBost, Chairman of
the Board of the Union Dime Sav¬
Mr.
sion; John
Division:
Co.
.
1935.
Vice-President
Midwestern
Commercial
J.
Howard; Blanke
William
Company
Chairman
Trust
and
appointed
of
;
was
The following promotions in the
official
Jan. 1.
H.
S
..
been
Cashier
of The
u;
at 46 Wall Street, has
that John E. Dobbin
announced
Page, DeWitt Peterkin,
Jr., John
P. Schroeder, Robert B. Whitney
who are engaged in general bank¬
Kimball,
Bank
New York,
*
*
George
Vice-Presidents
to
Department,
rt *
Trust
Before
year.
associated
and George C. Newcoinbe,
Assistant
Cashier,
was
appointed
Cashier.
New
ap¬
•'
Assistant Trust Offi¬
an
and
of the
G.
National
Kardashian
R.
Department, Queens;
Whitney to Assistant
,
*
ing,
Lawyers
company.
made
appointed
Assistant Treasurer, Business De¬
has been with Manufacturers
WiRjamsbridge
the
of
and
elected
•.vere
Harvey D. Gibson, President of
York
?■;/.
Bank:
it
Presidents
meeting of the di¬
the
of
Kraham
was
1939.
'.
■
Company of New York, Robert S.
the
since
recent
a
if
it
Robert J. Lusk and Lewis
Franklin
;it
'■
Assistant Secre¬
as
regular
Power,
were
,
CAPITALIZATIONS
New
it
,.i
the
mes¬
1909,
the
ident.
Banking
on
as
Mass., George P. Buell was
appointed
Assistant
Vice-Pres¬
of
York
in
company
the
before achieving
promotion, according
the Rochester "Times Union,"
Pi.
BRANCHES
REVISED
been
Federal Land
Mr.
ton,
%
Department announced
Finucane.
land-Atlas National Bank of Bos¬
Savings Bank.
and
new
Norman M. Sinske
ssFWV'#v
State
Security
Rochester,
known by
monthly meet¬
ing of the directors of the Rock-
tary. Mr. Quinn will be in charge
Personnel,
Advertising
and
Public Relations.
York
the
of
»:<
of
New
of
present
At
the election of Arthur J. Quinn
tc the office of Assistant Secre¬
The
the
in
a
National
national bank examiner
a
had
Dec.
21
of
NEW
coming
Dec. Ifk
on
tary and Secretary.
Bank
on
Banking;
Sippel will
duties at the be¬
President
>jr..'
/
E.
he served also
«
change of name of
the Dry Dock Savings Institution
NEW OFFICERS, ETC.
it
Bernard
senger
of
Buildings Co., to
«
New
New
certificate
CONSOLIDATIONS
the
Bay-
increased
was
Y., has been made
service
Edward
that approval had been given to a
News About Banks
York,
of
of
Gales, who advances from
post of Treasurer, entered
Bank's Board of Trustees.
The
of
II
announced
election
«
also show how to do
most
capital
Bank,
Company
Pres.
relationship held for all income,
occupational,
geographical,
and
of 1,800 income receivers. In each
interview
not asked to
ditional
the
Vice-Presidency
Edward T. Bedford
the
Mr.
ginning of the
he
post
Suburban
President
$500,000 to $700,000 through
Trust
of all those
asked
to
buy / three
bought additional
bonds.
about 20% of those who
Only
least
the
Washington.
it
The election of David Gales to
were
moti¬
At
vational research
who
times
1
■.i(
buy twice bought extra
to
Red
the sale of $200,000 of new stock.
they had been
About 70% of all those
bonds and about 80%
National
if
National
New
from
bought
asked
continuous
A
Dec.
Bayside
war
are
all
of
th«
of
of
Assistant Cashier
as
Whichard
it
than
the
by
campaigns
Commerce, Brooklyn
American
This
personal solicitation.
was
the
marked relation to
of factor "X."
presence
Chapter
new
of
and
financial, industrial and
philanthropic organizations
Drive.
a
Chapter
Institute
of
trustee in
President
Guarantee
is
and
years
Townsend,
American
bank ! assume his
of the
resources
the
A
former President of
,
continuous
action.
and
Good¬
"Post"
16, stated that Mr. Law-
a
Washington
President, to President. Mr.' assumed his
Gretsch, a trustee of the bank lor has resigned
Clark, with whom he
associated
was
|
effective;
Fred.
1:
Cross and Wagner College.
program
is
son
this, S. Oliver
the Washington
dent,
firm, Mr. Brund¬
partner of Scudder,
own
a
Stevens
Jan.
on
changes
sold showed
research
of
problem
integrated
an
of Dec.
Gretsch, Presi- while Mr. Sippel has been a na¬
to Chairman of the Board;! tional bank examiner in the Bal¬
John W. Hooper, Executive Vicetimore District.
Mr. Lawson, who
by Mr. DeBost. Before
forming his
following
announced
single
study would be of little value. A
motivational
for
in
man,
announced
the
has
Y.,
Chamber of
calls
Keportmg
Brooklyn,. N.
Qrive over the Second
Throughout the war bond
drives, the volume of war bonds
complex,
i
*
23
Savings Bank at the annual
meeting on Dec. 21, it has been
only 16% bought more bonds than
they had been buying. There was
volume
elected
(2655)
Chemical
by" the*
Brundage, general
1932 of Brundage,
Story & Rose, investment counsel,
since
partner
Dime
47%
The fundamental problem faced
how
been exposed to a factor "X." We
States had been exposed to factor
by the investment business is not
lem.
COMMERCIAL
"X"- and
Task
an
THE
his
father, Col. Sidney G. Cooke, or¬
ganized the Bank of Herington,
Kansas,
and employed him
office
boy.
tered
the
as
an
The latter later en¬
University of Kansas*
Continued
on
page
24
24
COMMERCIAL
THE
(2656)
FINANCIAL
&
CHRONICLE
Thursday, December 29, 1949
Continued
23
Continued from page
from
9
page
News About Banks
And Bankers
returning thereafter to a banking
career.
♦
♦
*
Four-Pronged Attack Upon
Equity Capital Problem
tively conservatively in relation
earnings and dividends by any
historical
comparison.
The De¬
to
California
Los Angeles,
directors of the
of
Company
Trust
CaL, have elected Golden R. Lar¬
son Assistant Treasurer, Frank L.
President,
King,
last
since
staff
company's
the
of
member
Larson
Mr.
May,
A
announces.
was
formerly associated with the War
Assets Administration as Chief of
Budget Division
and from
to 1943 was review exam¬
the
1933
Corporation,
Insurance
Deposit
Federal
the
with
iner
Wash¬
at
Prior to that he was with
ington.
State National Bank in
the Utah
Salt Lake City for ten years.
*
*
Don
■
has
been
of Union
Bank & Trust Co. of Los Angeles,
Vice-President
Cal.* and Hal W. Cross advanced
from Assistant Cashier to Cash¬
known
by
Mr. Cam¬
entered the employ of Union
ier, it has been made
Pres.
eron
R.
Ben
Bank
&
Meyer..
Co.
Trust
in
1920
to the post of
Vice-President.
He
the
di¬
rectors'
of
committee
trust
listed
on
Exchange
1929.
industries
They sell at about 10 times earn¬
ings, of less, today.
Listed com¬
better
stocks gave an average
yield
of 31/2% in 1929; they yield 6ver
6%
today.
By contrast,
highgrade bonds yielded more than
5% in 1929, and nearer V-ktfo to¬
mon
loans
had
on
whereas
stocks
incurred
been
to
buy
margin in the twenties,
today brokers' loans on
negligible
and
in¬
generally are buying for
cash, not on margin.
Those who invest directly in
common
stocks today, generally
speaking, are thus getting good
value, by any standard of his¬
torical comparison.
are
vestors
Institutional
of
the
Investors
A second
point of attack on the
problem of the threatened equity
capital shortage is the broaden¬
ing of the
market for
equity
capital among our financial in¬
stitutions, the custodians of much
the larger part of the liquid sav¬
ings of the nation. Both because
of law and because of tradition,
the vast sums collected by Amer¬
of Louisville and later was
ican financial
since its
ciated
tion
with
Bank,
inception in
1936.
asso¬
Merchants
the
Baltimore,
Na¬
Md.,
Assistant to the President.
as
From
insurance
ings
institutions
and
life
—
companies, banks,
loan societies and
sav¬
the
September,
can
people
into
debt
1947, he was associated
With the Burroughs Adding Ma¬
chine
the
He
Co.
became
tvas
named
working
1947,
Cashier's
associated
with
department
Assistant
September of this
and
Cashier
in
year.
almost
exclusively
instruments.
i.
'
•
Sims
Reeves
will
the
with
York
of
c e
L.
Johnson
&
that
Co.,
120
Broadway,
as
ment
manager
and
trader.
Mr.
Reeves
past
in the
was
as¬
sociated
with
Blair
Co.,
and
&
Inc.,
his
own
Greene & Co.,
orvr-'iiptiprl
investment
business
in
New York.
have
manage¬
resist the
concerns
or
much
so
due.
Inability to
cipal is the usual
cial
is
6r later the principal
sooner
comes
interest
rates and tax
care of that—as
advantages take
that
that
meet
to
And
bond
it, the
becomes
prin¬
of finan¬
cause
embarrassment.
resorts to
by
on
a
a
risks of
stock
institutional
so-called
involve
scale
scale
in¬
"formula
purchase
of
down, and their
minimize the
is
easy
first, but the
stock
tical
habit-forming
more
a
pleasant at
corporation
more necessary it
borrow
more,
until
financing becomes imprac¬
and
the
business
is
headed
for the financial rocks.
The Investors'
up,
their
in
resources
common
stocks.
ticular
ate
of the managements
financial institutions to
this—changes that
What
can
a par¬
interest
in
managements
seeing
resort
corpor¬
to
stock
Exchange, and
of
in¬
do much to
Management
been demonstrated
Newsome & Co.
an
Can
Do
Business management itself can
members of the New York Stock
C.
tive
of
until
ous
of
divi¬
regular
major policy objec¬
our-stronger enterprises
was
a
'20s.
me
the
Then
in following the acorn to oak pat¬
tern
of growth/ have depended
numer¬
to
start
on
valuable
pression
of
'30s
the
illprofits tax
the
and
urtdistributed
of/1936-39 all conspired to make
dividend
disbursements
er¬
more
shoestring, produce
and services for
a
goods
mankind,
and also
sdlit-ups of the '20s, the de¬ undue
Section 102 of the Revenue
imposing
punitive
a
become
a
millionaire
a
benefactor to the
obstacles
must
world,
be
not
placed along the road to prevent
acquisition of equity capital for
small
Under
concerns.
conditions
du
prevailing
Ford Motor Company
a
surtax
or
a
Pont
out
emerge
vestors.
v
■
*
•
n'
for
equity securities and would
Treasury relatively little.
Furthermore, this cost would be
covered
several
times V over
by
two items of economy that are
either assured or readily attain¬
able.
I refer specifically to the
$1.5 billion reduction in defense
expenditures disclosed by Secre¬
tary of Defense Johnson and by
the $1.3 billion reduction in Fed¬
eral expenditures' that could be
achieved " forthwith through lib¬
eralization of the regulations un¬
As Senator O'Mahoney
cost the
which
which
mortgage loans
insured
home
has prop¬
erly pointed out, those who pro¬
pose a reduction in government
revenues should also make speci¬
fic suggestions
as to
how such
reductions
revenue
I
estimate
offset.
be
can
(subject to correction)
that reduction in the tax rates on
smaller
such
corporations
I
as
outlined would involve a
revenue loss of about $300,000,000.
have
No
material
would
loss
revenue
develop in making Section 102 in¬
applicable
to
small
businesses*
since the assessment for which this
made to vet¬
are
for
equity
the
selling
mon
stocks
a
better market
securities.
public
some
This
by the
has
success
utility industry in
$750 million of
to
out
a
trader, like regular dividends.
The most popular single equity in¬
vestment in America, the capital
stock
of the American Telephone
Telegraph Co., has paid 9% each
year in the past 30 years.
And
raise
new
com¬
capital
more
than 800,000 investors in this
country
ed
erans,
so
would
be
not for the life of
(1) Paying out
&
do much to foster
J.
aintenance
dends
der
League has
ties by:
A
attitude
many
ship in Ridgway, Newsome & Co.,
120 Broadway, New York
City,
to
of
enterprises,
largely on retained earnings as a
major source of equity capital. If
diversification of their activities -we still believe in the system of
where they are now in a highly free enterprise
which makes it
possible for a young enterpriser
cyclical field.
/•■_;/■;/■/."
ratic.
money
a
that
on
not
and
quiry like yours
bring about.
31, William C. Ridg-
Jan. 1 the firm's
study
many
,
drug—it
percentage of
a
portfolio of
way, Jr. wiil retire from partner¬
changed
industrial
great
our
that
clear
•
is
mainly
stocks.
common
The
achieve
on
makes
section provides has seldom been
that these mortgages
imposed upon small concerns irt
purchased by financial the
past.
This revenue loss of
financing to a greater extent, be¬ institutions rather than by the
$300 million would be far mora
versification minimizes the risk cause this will make
both
the Federal National Mortgage Asso¬
than offset by the two items of ex¬
involved in selection of specific bonds and
the
stocks
that
our
ciation with Government money.
penditure reduction mentioned. *
issues for institutional portfolios. members hold sounder and more In a
period when financial insti¬
/Next, let us consider how gov¬
tutions are so eager to buy mort¬
I believe it would be wise to valuable investments.
ernment can facilitate the flow of
authorize all financial institutions
including
insured
mort¬ venture
Corporate
managements
can gages,
capital into larger busi¬
to
invest a specified moderate promote a wider market for equi¬ gages on veterans' housing, I can¬ nesses. American business history
the
be
States
.
,
fixed—low
timing hazard and avoid depend¬
upon the highly uncertain
art of
business forecasting. Di¬
of
will
: A
,
they
ence
&
name
businesses.
smaller
business history in the United
.
most
issue
to
investment
connected with Lawrence Turnure
Dec.
liquid
strong
,
of
position, and by developing more
sources
of income through
Act,
B. W. Pizzini & Co.
On
a
for
stable
with,
Peter Prealer to Join
To Be J. C. Newsome & Co.
maintaining
very
larger propor¬
study made by Scudder, Stevens tion of total earnings over a
period
& Clark has shown that investors of
time as dividends, where equity
that do include equities in their
capital is to come mainly from
portfolios, like the eleemosynary selling stocks and not from with¬
institutions, have achieved a sub¬ held profits. The liberal dividend
stantially higher average yield policy of the public utilities has
Peter M. Preater will join the over a period of
years,
while done much to broaden the market
investment department of B. W. keeping principal intact, than do for their equities.
the
institutions
that
Pizzini &
buy only
Co.,
Inc.,
25
Broad
(2) Returning to regular divi¬
bonds. It would require, however,
Street, New York City, as of
dend policies.
Investors in equi¬
Jan. 2.
Mr. Preater was formerly changes both in legislation and in
ties, as distinct from the in-and-
Co.-Blyth & Bonner.
dividends in bad,
times to sustain
by
I
1
Corporation cannot
of a small business
bonds. We have made bond fi¬ on "unreasonable" accumulations because,
while
yet
small
but
nancing very attractive for cor¬ of surplus, has the same effect to growing fast, it is compelled to
turti over so large a proportion
porations in three ways. Bond some extent.:
../
/, ;'/"■■
of its earnings in taxes and/or
interest is a deduction from tax¬
If we want a wide market for
able
income
for
corporations, corporate equities, every assist¬ dividends that there is nothing /
left to make expansion possible.
whereas dividends must, be paid
ance
and encouragement - should
There are several things tax-wise
from taxable income. A corpora¬
be given corporate managements
that can be done to remedy this
tion that sells 3%
bonds must to return to a
regular dividend
situation.
In the first place, cor¬
earn 3%
on such capital to meet
policy, so that the investors in
porate income tax rates should be
the interest. A corporation that their
shares will have reasonable
changed so as to' reduce the tax
sells common stock paying 6%— assurance that dividend
payments
on
the first $50,000 of corporate
and
most
corporations must will be maintained in the future.
income to,
say, >10%,
the next
promise more than that to find
$100,000 of corporate income to
What Government Can Do
a
market for
their equities —
:
would have to earn 10% so that,
Since Government has assumed 20%,. and the next $50,000 of cor¬
porate income to 25%. VThe pres¬
after a 38% corporate income tax,
so
much more important a role
ent 38% rate would then apply to
there would be 6% left for divi¬ in our
economy than in the past,
income in excess of
dends.
it can do much, along with the corporate
,
$200,000, instead of applying to .
banking
profession,
Furthermore, the easy money investment
corporate
income in excess of
policy of the Treasury and the institutional investors and corpo¬
$50,000. In the second place, Sec- 1
Federal Reserve System makes it rate managements, to promote the
tion -102
of
the
Revenue
Act
easier for corporations, as well as development of a vigorous, ade¬
should
be
amended
to
provide
the Federal Government, to bor¬ quate market for; equity securi¬
that the surtax may not be im¬
row
at
extremely low interest ties.
/
' ,
' .
*
posed upon any/ business whose
rates.
I
am
Low interest rates, as well
fully aware that the retained earnings'-are less than
as
tax
advantages, make bond budget is unbalanced today, and
$200,000.
TheSe two changes in
financing exceptionally tempting.
that other witnesses before this
the tax law would make a larger
Yet I believe it is the duty of committee have said much about
proportion
of
the
income
of
corporate managements to finance the desirability of economy and
smaller businesses available for
at higher cost with equities so far the balanced
budget.;
There are financing expansion and for new
as
feasible.
Bond financing, for a few
changes in tax law and ad¬ Ventures, and so provide equity
the average industrial company, ministration
that can be made,'
apital to smaller concerns that
should be used for emergencies. however, that would do a
great can rarely sell stock to public in¬
The trouble with bond financing deal to
develop a healthy market
temptation, admittedly
strong
today,
to
finance
minimize
vestors.
sale
to
financing is like
to
stocks
as
is
progress
has been
developing techniques of
stock portfolio manage¬
common
the
year,
corporate
do
can
our
Significant
made in
plans"
resident
of
manufacturing
prefer
of the first of
R. Sims Reeves
often the
indus¬
the. chemical and
as
exclusively
New
City of-
one
expanding
and
such
electrical
become
brackets
in
corporations gen¬
erally can do a great deal to sta¬
bilize their dividend payments by
building
up
reserves
in
good
advised
thing
that
some
tries,
associated
f i
—
so
—
vigorous
Join L. Johnson Go.
R.
industries
invest little in
J'J
.
For
thing, it forces them to buy the
securities
of
companies
that
older
l
or
most
choose to issue bonds
R. Sims Reeves to
investors
stable than most
more
is
z
First, let us consider how more
venture capital*can be. procured
telephone
But
/,
+
,
entirely
with Union Bank & Trust Co. in
to
true
business is
business.
the
that
know
"
uation is stronger and a surplus
';
r
*
.
.
like—are invested
al¬
entirely in bonds and mort¬
gages. Over the long run, it is not
healthy to force this largest seg¬
ment of the savings of the Ameri¬
1921
particularly
offerings.
ments
not
a
common
important
group
of
the new utility stock
of
buyers
is
develop
their
income
an
that billions of dollars of broker's
we
Mr. Cross, a native of Kentucky,
had his first banking experience
with the Citizens National Bank
bank
been
to
for
individual
lower
One
And
should
This
because
the
do
can
market
stocks.
forget
day.
as
advancing to As¬
sistant
Trust
Officer
in
1921,
Trust
Officer
in
1929,
Senior
Trust Officer in 1944, and now
£as been Secretary
Stock
York
New
clerk,
escrow
stocks
all
that
sold at 16 times earnings in
stocks
#
Cameron
R.
elected
the
has cal¬
Commerce
of
partment
culated
this year, to supplement its bond
financing program. We can study
the
successful
equity financing
of the public utilities to great ad¬
vantage, since it provided clues
to
what
managements in other
We
f" '
9
.
available for debt reduction;
during this
dividend in each year
difficult period a
The
'
t
are
holders
satisfied and content¬
of
A.
T.
&
T.
stock.
can
justify
see
me
the
how
revised
fiscal
year
to
cover
purchases of
home mortgages by "Fannie May."
The specific proposals I would
Government
action
make
for
foster
equity investment
which find it most diffi¬
nesses,
cult to raise equity capital in the
market.
open
(2)
Reform
the Revenue
ference
of
Section
102
the
flow
equity capital to enterprise.
■
(3)
tax
limited
A
credit
maximum,
an
to
encourage
in stocks by
ment
same
$9
present double taxation of corpo¬
income
A
distributed
more
tion of
bilization of future dividend pay¬
ments
are
beneficial to the entire
Revenue
Act
venture
sured* for
cause
the
were
capital could be as¬
businesses, be¬
larger
of
fear
this
makes
102 of the
liberalized,
Section
If
economy.
assessment
an
section
far
ef¬
more
fective than any revenue collected
under it would indicate.
I pro¬
pose
two amendments to that sec¬
tion.
First,
that
an
amendment to pro¬
surtax
imposed
the
corporation
that
invests
its
a
re¬
invest¬ tained earnings in fixed tangible
individuals by
initial modest abatement of the
rate
the acquisi¬
productive assets and sta¬
to
for thereunder would not apply to
dividend income up to a moderate
tion of double taxation must
the
new
retained
that
demonstrated
earnings devoted
vide
of
dends.
received
of
Act, to avoid inter¬
with
has
more
(1) Tax relief for smaller busi¬
price
has^fluctuated, it is true, but
to
are:
Many of these holders bought the
stock during the boom of the '20s
and they have held it through the
greatest of all depressions.
The
they have
one
budget
item of $1.3 billion for the current
as
divi¬
thorough correc¬
await
the time when the budgetary
sit¬
assets,
whether in its
another
enterprise.
amendment
surtax
not
of
in
or
provide
that
an
the
imposed thereunder would
apply to
reserve
to
own
Second,,
sums
for the
set aside
as
a
exclusive purpose
paying dividends
upon
stock in
•-
Volume
later
170
Number 4868,
THE
COMMERCIAL
CHRONICLE
FINANCIAL
&
(2657)
at the same rates as are subject to much more fluctua-' if there is to be an adequate sup¬
prevailing at the time that tion than those of public utilities, ply of either new capital for old
the reserve was created.
more
attractive to the rank and companies or
pure venture capital
The
first
amendment
would file of smaller investors, because for new enterprises.
overcome
the
uncertainty
and a dividend reserve., would insure
Now, who is being hurt? Not
amendments to make the Act
would relieve the undue
workable
the
that these further conferences will
the maintenance of dividends to
a
to pay out dividends that are pro¬
duced
by Section 102.
At the
greater extent when earnings are
less
favorable.
At
the
present
present time, many managements
fear that Section 102 will be ap¬
time,
the
establishment
of
such
part from
securities.
Internal Revenue may hold that
A third proposal which I would
earnings invested in assets which like to make to ease the shortage
arc
not
directly connected with of venture capital for large and
the
current
"beyond
business
the
retained
are
of
works
new
of $1,000 for any
duction, then employs two
larger
ments in any one year, is
ticular importance for the
that
in
investors
show
pay¬
taxpayer. Admit¬
a
the
correcting
direction
double
reason
stocks
common
of
taxation
of
beginning in
the
in¬
corporate
which is distributed
come
of par¬ dends
increasing interest in
an
as
divi¬
imposed by our present
as
laws. \ If we are in earnest
about reviving a market for equity
tax
cur¬
capital in this country,- however,
yield, rather than in it is high time that a start were
capital gains. The Survey of Con¬ made in this direction. This
pro¬
Finances carried out under
of
System,
ber
revenue
,
as
issue
posal involves
a loss of Treasury
which, according to un¬
the
Federal, Reserve official estimates,, would be about
described in the Octo¬ $300,000,000 per annum. But here
the auspices of the Board of Gov¬
ernors
of
the
Federal
Reserve
again the reduction is only a frac¬
Bulletin,
throws
much
needed tion of the total
savings from
light upon the attitude of people lower defense expenditures and
,
toward
investment
in
corporate
from the liberalization of veterans'
Of those who favor the in¬
stocks.
return.
who
man
alone,
starts
men—these
little
£
500,000
tions
—
little
7%H
'
Positive, effective and early
tion
striking ability of the public util¬
ity industry to sell some $750,000,-
ac¬
required to encourage the
flow of venture capital into small
rank
and
averaging
and
file
of
establishment
serve
of
of
out
investors
country.
The
dividend
a
earnings
do
being
are
going remarks that I
of
hurt;
much to make the shares of indus¬
trial
corporations, whose earnings
cooperative
carried
out
effort
to successful
can
I
not,
am
all revenues,
individual
but
what
to
or
from
page
fruition,
tax
ties
Equity Capii al Problem
mentioned
raising
in
and
able
rates
are fine, provided we en¬
industry to carry the burden.
the
past, industry has been
In
at
the
if
held
capital
a
surtax
lesser period.
Only
like they will have to raise it some
negligible credit for any
is permitted to apply
against ordinary income. This tax
tends to freeze property in the
3
hands of old
able
to
some
2%
or
can,
raise
4%
per
Possibly they
year.
will
it
of
new
output
Now it looks
year.
per
but
amounts
man-hour
require
huge
equipment re¬
quiring billions of risk capital.
meantime
the
men, many
we
see
our
In
best
of them young, unwill¬
losses
affects
kets.
it
year,
simply because they have partici¬
more
pations in pension trusts and be¬
cause increased salaries mean lit¬
and
after
taxes.
Additional
Factors
Stock
Additional
common
on
rate
bearing
are
on
the
margin requirements and the cap¬
gains tax, which tend to re¬
strict trading, particularly short-
trading, which kind of trad¬
ing has a definite tendency to
modify violent swings im prices
term
or
down.
The Federal
Reserve Board has
modified the margin requirements
so
that you can
borrow up to 50%
would
for
assist
in
pres¬
At half the
probably
revenue
transactions.
the
produce
Treasury
promoting
more
This would have the
desirable by-product for both the
Federal and State governments of
transfer
curity
taxes
dealers
of
and
more
for
se¬
income
which, in turn, they would
upon
pay more taxes.
This
ital
either up
it
mar¬
Treasury—for 11 years
of $155 million per
ent Federal revenues.
v
markets
our
by the fact
insignificant rev¬
less than 4/10 of 1% of
more
Market
factors
stock
Bearing
adversely
proven
brings
average
ing to take the risks of leaving
their present jobs to take bigger
and better jobs at higher salaries,
tle
is
to the
enue
and
liquidity of
This
that
an
the
owners
is
because
a
the
desirable
market
objective
for
new
or
fresh increments of equity capital
(whether additional or new is¬
sues) is influenced largely by the
nature of the secondary markets
.
from
ex¬
re¬
rules
stockholders to subscribe.
capital gains tax is
the rate of 25% on all profits
The present
at
after
a
six-month holding period
tion
of
earnings
through reten¬
or
through
in the securities indus¬
thoroughly subscribes to the
general principles embodied in the
try
Securities
1933
complete
tion
to
requiring
Act,
disclosure
of
informa¬
the investor in connection
with
a
both
the
security
or
supply of
capital. It follows that a vig¬
obtaining
orous
a
and
favorable
'active
market
on
the
issue. However,
industry and
securities
in
York
other
Stock
markets,
Exchange, and
is a desirable
the
company
by answering his?
questions and furnishing him wit&
agreement
upon
changes which will make the pro¬
cedures more workable and less
,
\
was
-
V
referred
to
curities and Exchange Commission
in
an
address last week, in which
he
stated
of
the
"that the unworkability
present
the
financial
firms
exchanges
of
techniques estab¬
lished in the statute has been ap¬
their
and
dealers in
numerous
curities
form
organized
branch of¬
whole
the
covers
even more
unlisted
se¬
that
network
a
country
and
man,
or
walk
can
in the
man
in
the
to
one
organization whose in¬
and
opinion
him
the
of
information.
This
missionary if
matter and
integrity ©£
you
ambassador, or
please, not only
fully conversant with
his subject but have a background
of personal experience in the in¬
vestment business, both in and out
of the large financial centers, so
as to speak the language and ap¬
preciate the problems of the deal¬
should
ers
be
that he encounters—both large
through its final remote tentacles
and small firms in both large
of
small
mail, telephone and telegraph,
reaches
virtually
every
stock¬
holder, investor and buyer of se¬
curities for income or profit—in a
communities.
does
whom
the
accustomed
s
are
established.
well
Since
continuing success of American
enterprise, through dealing in its
securities, they welcome accurate
information and data
sincere
pertaining to situations that will
interest
to
clients.
and
customers
their
.
;
management
depend
investor is
the
customers'
clients.
and
wise
them
is
of
a
not
bines
their livelihood depends upon the
be
is
It
poten¬
people
to
present and
in¬
wiibt
invitation, with selected
to
to go for financial and investment
advice./ Investor confidence
in
them
upon
horse
These
tial.
and,
of communication with in¬
both
and
many
brokers, salesmen, research staffs
dealer, whether an unlisted house
or
a
member firm, is the basic
vestors,
with
but
partners
customers
means
In
stances he will talk not only
word, every member of the finan¬
public—in the country.
The
pull
upon
the load
in
any
but
that
one.
com¬
Whether
team.
a
is selling frozen foods, the
right of a chaih store to lower
prices or the advantages of in¬
vesting in a corporation's stock,
one
effective
the
way
is to use all
together. Publication ad¬
vertising
attracts
attention and
carries the perstige of print; di¬
rect mail reinforces the publica¬
weapons
tion message and augments it
more
tical
door
with
information than it is prac¬
to
print;
and through the
the representa¬
thus opened
tive walks in to get action out ©f
If a corporation is to get its in¬
tegrity advertising acrbss, there¬
fore, it must reach the dealer or¬
ganization as well as go directly
to the investor through the finan¬
favorable frame of mind.
cial
its
way
publications.
One excellent
to reach the dealers is, of
to
course,
in
may
do
through
so
financial
publications.
selling, direct
other
these
But,
mail
be and is effectively used to
There
reach the dealer.
are
com¬
who
prospect
a
is
already
in.
a
Every transaction in a listed se¬
curity is recorded on the tape and
issuer's name brought to visual attention in every office ©f
every
member firm and in many
unlisted,
If
newspapers.
it
ap¬
in the "National Quotation
Sheets"
that
reach
practically
pears
every
dealer in the country that
handles
over-the-counter
secur¬
good many of them,
This
costless
advertising
that
keep security
dealers in¬ ities.
formed frequently and regularly/ makes public the extent of activ¬
as
to their financial status, their ity in a stock and it is this activ¬
business activities and every as¬ ity that indicates, quite definitely,
the degree of acceptance and ap¬
pect of their progress that is in¬
teresting and significant.
There proval accorded to the corpora¬
panies, and
a
ought to be more. The most com¬
mon complaint heard from stock¬
holders,
dealers,
as
in
a
well
as
from
lot of
companies to reach an
intelligent decision about
companies' securities.
-
many
cannot find
about what is going on
is that they
out enough
Finally, the
use
those
of representa¬
tives, in effect, salesmen, has often
been demonstrated to be most ef¬
parent for
fective in reaching
held
tant
open
;
public is the
the
fices, together with the
as
certainly since 1940 have
recognized that the provisions of
the Act relating to dissemination
of information during the waiting
period, and the prospectus deliv¬
ery
requirements have never
worked.
Representatives of the
industry and of the SEC have
labored sincerely but unsuccess¬
fully for a number of years past
an
reading
required
in the financial business.
member
mission
reach
Several
buy them.
securities dealer organization. The
same
to
a
equally efficient and widely
channel
through which to
reach
the Securities and Exchange Com¬
years." He has again
the door to continued
*m'ot rtudv of the problem by the
thing in itself—and that this is
Cemhnission and representatives of
one of the things which must come
New
for
and
private placements as alter¬
native means to public distribu¬
tion.
I
believe that practically
everyone
convince
so-
called
by the new Chairman of the Se¬
secondary market (listed
unlisted) for older securities,
good
new
rights to
needs shall be met
capita]
A
offerings of common stock-under
distribution by way of
whether
to
for securities already outstanding.
therefore, is the first step toward
a
as
expensive.
This problem
purchase or carry listed securi¬
ties and to 75% to take up new
to
arises
is to open the door,
through which the sales¬
representative, or am¬
terest
used
regulations. These considera¬
tions are weighed when the ques¬
tion
effect
are
An
of securi¬
their
as
bassador
everyone
which
funds
with
Acts
main
Effective
of
advertising are in
selling a product, an institution or
an
idea, their true purpose and!
cial
■
time, labor and
involved in meeting the
Securities
affairs.
means
the door
actually
rates
the
are
its
about
other
those who
quirements of the various Federal
individuals'
for
cas¬
siduously and read by others than
and
benefits
it
pays
has/ever been made shows
that such publications are read as¬
connection
public distribution
pense
The
f
:,i.
Spot
through
back with
investment.
Regulations
considerations
be
must
SEC
of
Other
the
6
technicians.
profit on the
Every investigation
1
government.
raising
along similar lines.
Effect
with
Continued
publications
4
page
that
1
whether it be to the
that
clear
am
be
for the benefit of the entire nation.
from
thumb
or
money
unbalanced budget and more
an
inflation.'
ment
rallying point about which
fied
ually. But when he
in favoj
am
vide
a
financial
their
opinion on in¬
study of the prospectus
registration papers by quali¬
and
the Act as inter¬
the
Commission,
is
by
toons
They
ising and should give us the en¬
couragement to cautiously experi¬
a
telligent
what a
financial publication charges, you
haven't a chance to build business
can
be sure that he does it only
from profits.
,r
V
;;
because he thinks he can get his
Let no one think from the fore¬
who
men
Committee, in its report, can pro¬
such
base
always
proved the backbone of our coun¬
try for generations—these are the
re¬
would
of their dealers, in¬
advisors, rating services
struggling to get big, which have
at
small
in this
savers
advice
vestment
other
corpora-;
men
large businesses, if additional from the present all - too - high
jobs are to be provided to absorb peacetime levels is not the
way tc
least 6%. the 700,000 persons who, accord¬
get more tax revenues,. but that
When commercial banks generally
ing to the Department of Labor, on the other hand, some judicious
pay 1% on deposits, mutual sav¬ are added annually to the nation's
decreases
in
tax
fates
may
so
ings banks 2%, and savings and labor force, As
investors, we feel stimulate business activity as ac¬
loan
associations
2lk%
to
3%, that only a cooperative effort on
tually to produce more tax rev¬
common
stocks which yield
6% the part of investment bankers,
enues
in 1 toto.
In other words
are in a relatively very favorable
institutional
investors,
business there is a law of diminishing re¬
position. Plainly, these facts give managements and
the
Govern¬ turns.
The recent experience of'
ample proof of the growth of ment will suffice to solve this
Canada along these lines is prom¬
yield - consciousness among the problem in time. We feel your
yields
for
course
■
000 of stock to investors this year
at
reading by individ¬
wastebasket/but pf
those who want them,
copies must be available. The av¬
erage investor must depend upon
who
The Blind
and
is
for
and
from
Continued
home mortgage terms which, as am interested in is the maximurr
savings in stocks, the outlined before, would lead to a
tax revenues that can be raised
majority ascribe their preference shift of the FNMA portfolio to
without having a depressing effect
to the higher yield provided by
private institutional investors.
on
business itself, the source of
This attitude is supported by the
intended
preted
vestment of
such securities.
pur¬
expen¬
start
of
returns
these
to
even
uals reach the
Nevertheless,
as
proprietorships, then partner¬
ships, building out of earningsthere are millions of them, there
are some 3,700,000 tax returns ol
unincorporated
businesses
and
only
average
solicited
procedure .is
though rules for ex¬
pediting prospectus delivery have
been adopted, the mechanics of
prospectus delivery are still highlyunsatisfactory. Most prospectuses
much in¬ the
very
This
and
technical and legalistic document.
three
who
men
effectively
reading himself
the prospectus since the prospec¬
tus is by nature a complicated,
machine to increase his pro¬
or
gain
the inves¬
the
doubtful if
can
formation
alone,
little, buys
saves a
is
It
investor
nothing but the deter¬
mination to work, sweat, save anc
rent dividend
sumer
net
who start in bus¬
come, equal initially to 10% of
the dividend income not in excess
regular divi¬
to
tor.
little
men
build—the
tedly, this is only
than
with
These little
to the stockholder for dividend in¬
My second proposal, looking to
rather
the real protection for
of
materially because of the
maintenance
fraud, misrep¬
resentation and the like, constitute
he
be
chase.
its sive
safeguards.
utterly foolish to take
pro¬
this
to date.
dends
that
weakening
sions of the Act for
com¬
iness with
limited enforcement of Section 102
the
be
risks
the
dictate
would
sense
would
established corporations is to pro¬
vide in the tax law a tax credit
needs
Of course,
posal would not reduce
income
mon
income
if he did, plain
even
without
more
My own opinion is that the reg¬
istration process itself, requiring
as it does complete disclosure, to¬
gether with the liability provi¬
nothing to put into indus¬
try, and
Congress some constructive
fundamental
tax exempt
on
Out of taxable
Treasury
reasonable
the business."
he has
interest
prospective investor before he c&i
industry, and it is to be hoped
to the
primarily the rich man—the rich
man
has quit, he can live on ac¬
cumulated wealth, often in large
dividend
reserves
consisting of
plied to them if they do not pay cash or government securities in¬
out the bulk of their earnings as vites the
application of the surtax
dividends, because the Bureau of under Section 102.
based on the theory that a copy
of the prospectus must reach eadh
lead to something that may bring
years,
those
pressure-
> 2*
to
advertise the
rity
the all-impor¬
in order
company's integ¬
dealer organization
by,
furnishing
information
tion.
•
The number of
are
corporations that
presenting their story, adver¬
tising their integrity, to the finan¬
cial public through organized di¬
rect mail campaigns and, aboveall, direct and
contacts
units
of
with
the
repeated personal
all
the
far-flung
security dealer net¬
work, is increasing.
It is becom¬
ing the hallmark of a successful,
growing corporation that realizes
its obligation to protect its stock¬
holders and the value of fostering
its
sources
of
new
capital.
26
THE
(2658)
Continued
from
4
page
;
COMMERCIAL
CHRONICLE
FINANCIAL
&
Nagasaki, place the two
together that one
bomb would take out two plants,
it is true, they were three miles
.
crash off until he is out of office
apart, but that is what happened.
they had been four miles apart,
only one plant would have gone
years.
with that
true
at
case
piants so close
Prospects of Industrial
Use of Atomic
Energy
being used to thing else that would give off the
But the only
power airplanes, I think it is very same indications.
doubtful.
There are possibilities safe
thing to do is to assume
of using atomic energy in the pro¬ that it was a bomb.
Now, the effect on American in¬
pulsion of airplanes, but they are
far in the future, they are very dustry
of that development, I
expensive, and the question is think, is much greater than the
Whether the expenditure of the effect
of
the
progress
in this
material in the flight would be country. It brings up immediate¬
justified at all under the most re¬ ly, how will American industry
mote conditions.
protect itself and our nation in
Of course, if you want to go to the event of a
war,
not only
the moon, why, then, you have against the use of a bomb but
got to use it.
It could be used, against the threat of the use of a
and you could probably get away bomb?
done.
As
with it.
But I would
see
rea¬
no
believe
■I I
you can
To
next
the problem.
the uses that do
seem as if they had a future, what
has happened there?
I believe
they have progressed in just about
as fast a way as we anticipated.
The? are gradually coming into
?
Now,
It
use.
to
as
well
was
that there is
in
know
1945
great field and
a
growing field for the
of
use
a
ra¬
dioactive isotopes, particularly in
research. Research, of course, has
been
popularized
when
it
comes
Jo medicine, but I believe that in
the
find that the use is even
greater in research on plant life.
It is one way that I know of to¬
day that a great deal can be
We may
learned
what and why and
wherefore of the growing of
Jhe
plants.
stance,
We want to know, for in¬
on the use of fertilizers,
Whether
good,
the
fertilizer
whether
stalk
it
builds
or
of
use
to
as
does
merely
fruit,
radioactive
isotopes,
•
-
•
'I.
't
•
As to the
industry,
'
'• 'v
r
''
••
'1
•
f
V
\
.
.
of the isotope in
use
for
that
,
•
i
builds
by the
and
be determined.
can
any
strictly
industrial
purposes, I believe that there is
a
possibility there, but how it will
come, I don't know. I think it re¬
quires some of this new approach
that Mr. Crawford told you about.
It certainly cannot be done with
knowledge that we have to¬
day. But the thought has always
been there; the possibility of us¬
ing the radioactive isotope as a
any
to move
cars
for
we
New
York
;
to the
well for
any
that
E
should
if
the
but
country,
break
It
ample,
an
Ford
As
its
to
medical
,
.1"; '? C*
treatment
ailments, there is
of
every
prospect that there will be
some
development along that line, but
I do not anticipate that it will be
as
great in its usefulness as in
medical
research
tool to be used
used,
That
eventually
used
It
is
a
the X-ray was
the microscope has been
as
used.
itself.
as
as
a
is
it
not
saying
won't
cure
come
that
to
be
we
Power
in
Russia
Now, as to the other develop¬
ment, and the development that
to
.
me
us
to
seems
be
should
of
be
the
there
sion
in
sians
was
an
Russia.
thing to
equivalent
only
explo¬
proper
is that the
have
of
announced
atomic
The
assume
now
that
primary interest to
today, the President
that
one
a
what
Rus¬
bomb,
we
had
the
in
New Mexico in July of
1945, one
that
not
necessarily
can
be
ex¬
cap¬
by
all
board.
course,
the chain.
choice.
explosion.
have
and maintain
ing.
Or
we
our
can
partway
between.
tion
them all in the
a
bomb
or
whether it might have
been the failure of
a
pile
or any¬
I
should
believe
should, in the location of
plants, look into this situa¬
new
put
we
we
Of
of
concentration.
same
a
the
of
kind
a
bank
the
1
r ea
thought that nobody who is
defeated in a war today continues
to exist, in the sense that we want
He stays
nation stays
the
but it is
a
alive, perhaps,
alive, perhaps,
slim existence.
very
but
succeeded.
of
rate
of
the latters' demand for
budget
the
can
a
bal¬
have caused it.
other
confidence in the system of
ernment.
crash,
unbalanced
the
budget,
and
this budget deficit, which the La¬
bor Party was unwilling to cor¬
rect adequately, not only gave Mr.
McDonald
the
chance
to
take
refuge under the benevolent wing
of
Mr. Baldwin,
but shook the
world's faith in Britain's financial
soundness.
ine
It is difficult to imag¬
today how high Britain's pres¬
tige stood;
ment
of
she
was
financial
the embodi¬
honesty.
The
blindness of the Labor Party had
shaken confidence, notwithstand¬
ing the superb moral courage of
its
Chancellor, Philip Snowden.
Managed Currency No Remedy
Had Britain in those
sessed
Don't
put
place. Don
ferent.
a
days
pos¬
managed
would
not
currency, the
have been dif¬
Lack of confidence would
have deprived her of her reserves
rapidly as would happen now
but for exchange control, made
workable by the generous support
We
must
know
States and Canada.
conducted
properly,
must
we
why
they
weren't
and
who was responsible—not for the
sake of raking up ghosts from the
past, but so that when the future
the present, the people
in power will not make .the
comes, or
now
mistakes that
same
the
past, if
that
so
any
and
made in
were
made, and
were
will
we
nation
continue to
not
be
a
have
happen to
us
what has happened
to Ger¬
many, Japan, and other nations in
recent years.
lent her
your plants so close to the
other man's plant that a miss on
him will get
you, or, as was the
The financial help recently ex¬
tended
to Great Britain
is'nearly
ten times the amount of what
was
ldan
so-called
mutiny of Invergordon (September 16), where
friction
some
arisen
had
little
a
which
above
had I been
barely
million, at the end of
£ 121
reached
September,
1931,
a
in
1933
the
after
;:ater
million,
£191.8
two
—
debacle.
Two
years
months
(November, 1933), when the
United
States
had
too
off
gone
sterling
in New York was
Yet neither trade
unemployment had conspicu¬
worth $5.1479.
nor
ously improved.
A'
r
Effect
..1,
>
.
of
is
It
1931
next
decide
-
-,y*'
v\
Devaluation
of
out
the reduction of pay to naval rat¬
ings.
It loomed in the eyes of
frightened capitalists as the be¬
to
whether
devaluation
impossible
the
not
or
much
did
to
1931
good
to
Britain, for it was almost imme¬
diately followed by a complete
reversion
through
of her
the
economic
introduction
policy
of
tar¬
,
iffs and. at the Ottawa conference,
of preferential arrangements. Ex¬
ports of British produce
from
rose
£389
million
(1931)
to
£396.
Imports fell from £798 to £732
million; the adverse trade balance
was
considerably reduced. - The
production of consumers' goods
(1925-29 basing 100)
had risen
in
73
1931
they
later it
fourth
back
was
producers' goods
better.
They rose
tfte third quarter. 1931
the
fourth;
later
year
a
down again to 85 and
were
The
90.
quarter
the
75;
little
in
third
in
77
year
a
a
96
the
to
and
72
to
in 1931, when it did not
The last shock came
from the
repaid; the rest
from 89 in
her.
save
freeing of sterling from
the shackles of gold had not done
much for production,
plus
labor
were
available
In
the
and
though sur¬
unused
on
large
a
capital
scale.
two
years after devalua¬
unemployment
had
risen
(1931) to 2.881
tion
from 2.666 million
million
(1933);
by
it
1935
was
just above 2 million—the number
of
unemployed had, of course,
ginning of Communism in Gre^t
In March 1935 it had just
risen.
Britain.
Great Britain was forced
to
devaluate
because
nomic system
her
built
was
on
eco¬
world
reached the
Weekly
96.75
devaluation
Britain.
lost
was
on
Great
She almost preened
her¬
valuation
well
was
every
dishonest
never
before
creditor.
with
debtor,
been
mankind
Now
Bank
of
longer true.
had
by a
learned
England"
was
no
The greatest creditor
country had failed.
Great Britain
abdicated from the economic
leadership
of
mood
same
which
in
it
used
to
horror, that the saying "safe
the
had
known
the
of
world—in
the
absentmindedness
she
to
have founded her Empire. Yet she
was extraordinarily lucky. All her
rivals clung for the time being to
gold and the fall of sterling gave
her
the
was
chance
of
supposed
undercutting
them. The prices of imoorted raw
materials and foodstuffs continued
to
decline,
wholesale
prices
re¬
mained almost stable; British costs
of living steadily moved down¬
from
ward
136
to
she
167
had
1933).
the
got
worlds.
The
(December, 1920)
For once
(April
best
budget
was
Government
convinced
the
no
both
balanced.
Coalition
was
of
r;;;.':
world
danger
Communism
of
The
elections
that
there
Socialism
Great
(August, 1931)
or
Sterling
own
level.
had lost
By
over
down
to
20% of its value, be¬
3.89
the dollar;
at the rate
in
of
more
than
30%
or
over
the
10%
over¬
long
as
remained
(Sep¬
meagre
been
heavy.
benefitted
moder¬
as
her leading rivals
gold standard.
the
on
Once they ceased to
offer opportu¬
nities for currency dumping, these
petty advantages disappeared, but
the
not
resulting
consequences
from
having attained them. Brit¬
ish
credit policy had helped to
mitigate the German crisis. It had,
however, intensified her own en¬
tanglements.
The
devaluation
forced Germany either to follow
Britain's example—which was next
to
impossible,
for
could
she
not
hope to solve the reparation ques¬
tion by
defaulting
having
creditors,
on
her private
made a
just
agreement with them—
or she had to take a course of se¬
vere deflation/The Bruning gov¬
standstill
ernment had really no
choice. In
country where the word
a
"inflation"
mass-hysteria, one could
with the value of the
currency.
Deflation pressure in¬
released
not tamper
the
creased
number
of
unem¬
ployed from 4,355,000 in Septem¬
ber, 1931 to 5,668,000 in Decem¬
ber, a figure which rose to 5,773,000 12 months later, and greatly
helped
the
advent of Hitler.1
It
proved very clearly, that devalua¬
tion might benefit a devaluating
country temporarily at the cost of
its
November, 1932,
$3.28, the loss was
120%
ately
this
of
had
Britain
Great
by
to
price
achievement
find its
October, 1931, it
allowed
was
to 94
tember 1933),
Britain.
in
pre-crisis (1929) level.
had fallen from
wages
The
The true inwardness of the act
of
ing
„
1932, £50
million
£130
that
as
of the United
In January,
were
Bank
gov¬
know
as
about.
The rapid rise of unemployment
way
capital
it
the
In this respect
the
million of
in our government. We must have
panic
for
strangle enter¬
attract
to
which had fled.
gold,
That, to me, is the fundamental
thing that ought to be considered
today.
We must have confidence
d y
gold standard at
foreign creditors,
is rather the
result
don't,
having seen the evi¬
dence personally—whether it was
partway be¬
Personally, I think
go
in
behest
anced
standard of liv¬
go
had
as we are
tween.
course, we don't know—at least I
not
stay
million
our
decentralize and
can
be safe, or we can
that
atomic
We
of
thus a
standpoint of de¬
centralization.
sults of
an
the
from the
nor
It
had
The
way
£130
even
top
a
spread
rise
a
production; they
will merely cut out one link in
menace
I would like to leave with you
the
confidence, and for the time being
defense
the
Every big plant, in the
manufacturing plants, is
prise,
later. Yet the gold reserve of the
,
self on having discovered, if not
invented, a novel device for get¬
among foreign businessmen (July
ting out of trouble; though de¬
14, 1931).
This being so, neither
advantages, of
of
degree that
a
be
con¬
not to
was
destruction of everything that we
believe in,
^\
she had lost it.
report
the potential targets
out
hardly
Distrust
level while the
bank rate was being lowered and
before the publication of the May
would not be able to strike all
of
pould
franc
and
reached
advantage is that
the enemy, in attempting to bomb
us,
It had served its purpose,
which
which had been unable to stop the
1931 Contrasted With 1949
Unemployment
in those decentralized plants, even
if we do not truly practice decen¬
tralization.
tember could be reduced to 5% in
It would not have been the
tion.
that date she raised it from 2.5%
the
goes
it
annihila¬
an
to 3.5%, and a week later to 4.5%.
decentralization, no
matter where
those
big plants
are put, because one break in the
chain, 1 one; link, and our mass
dropped from the air but if placed
the ground can be exploded
End can give off all of the re¬
near
* >i
million, and the certainty of
a balanced budget could halt the
drain of gold.
Until July 23, the
bank had made no attempt to stop
it by raising the bank rate.
On
cars a
are
but
serious,
very
would not have been
foreign trade.
The 6%
imposed late in Sep¬
February, and to 3.5% middle of
March.
quarter;
£15
That is not
There
that
loan, (equal to 73% of the bank's
highest gold reserve) nor the ex¬
pansion of the fiduciary issue by
actually
we
mean, for
automobile plant
production
a
country that would
our
been
with
5
page
"national."
dollar
a
bomb.
Atomic
.
tinued to such
with one
They will have to go and
look for them.
They won't wipe
itself.
from
country
called
we
system that
the
of
people.
company.
in
use
division of
have
threatened
were
rate
fared
year—but turning
out everything going into those
cars.
It could not buy wheels
catalyst, for example, or the use
from some company; it could not
of it in some particular
process,
buy all its piston rings from one
jiormally a chemical process— or two companies; it could not
something of that kind may prove
buy its fuel pumps, as was testi¬
to be of value.
You know that it
fied earlier this year, I believe—
has been used in oil exploration.
that 84% bought from the same
That may continue, and may con¬
tinue to be of value.
we
Sterling Devaluation:
carried
tell, us
Chrysler does, but one
of turning out,
say,
a
thousand
War.
bank
to
or
capable
It is
culties in
of
Continued
able not of turning out the num¬
ber of cars that General Motors
or
complete annihilation.
that in the time of the Civil
valuation, which was supposed to
be responsible for Britain's diffi¬
from
would
have.
reason
this:
American
decentralize
that
the
down
is
observation
people today are
convinced, down
in
their
hearts, that they have got any¬
thing to worry about.
They feel
that everything will come out all
right. As a people, they are think¬
ing as the average elected official
feels who is responsible for gov¬
ernment
affairs, when govern¬
ment affairs
are
not going too
well. He always hopes that some¬
thing will happen to keep the
really had
real decentralization, not that we
scatter our plants throughout the
mean,
existence
our
not
that
not
Well, to have
decentralization
complete lowering of the
would
never
threatened before in
with
of
been
would like to have it. The
with in
standard of living of our
It
the
hundreds
things have been conducted prop¬
erly in the past; that if they were
for
effective
means a
in
the last few days about the
American industry.
really
par¬
probably
deal
through
We
have
up
to exist.
the
You
great
a
same
it.
We have country that has been
built
means
means
handle
can
point of de¬
(who have never
responsibilities)
to
we
system
successor
security of the United States in
my opinion is not as sound as we
of the loftier plan¬
some
is the ef¬
our
his
and
It is all very
be carried out.
ners
in
wartime situation, and you are
undoubtedly
tired
of
reading
about my views on this subject
and that.
I would like, however,
to emphasize to you that the real
centralization; how it should be
carried out, if at all, and how it
can
that
covers
subject.
seen
papers
J:'>£*:
comes
that
and
anyway,
this country. It
plants, perhaps. It
ticular
Any employer,
any industry here, would be im¬
mediately affected by that, not
only in the event a bomb was
dropped but by the threat of a
That
years
in
believe
have
City.
bomb.
life
J
half mile. That is
a
of
for
now
putting them all in the
place.
the
of
some
means
not
Just how bad
would be faced
what
of the radioactive isotopes.
use
hours
decentralization
smaller
would depend
entirely on how fast the news
spread. Last Summer, during a
very nice Saturday and Sunday,
Ihere was a traffic jam out here
on Long Island. It took something
ten
number
of
the panic would be
like
It
in this country
on
a
picture, those
New York City.
reasonable
decer' i-alization.
fect of the changes
thing,
on
the
is
a
we
exist today, I do not believe that
atomic energy is the solution to
that
the decentralization that has been
going
ot you who live around New York
the objective or have to suffer in the subways
have, of course, is a little i here at
any time, just what would
nearer at hand, and for that ob¬
happen if there was the threat of
jective, undet conditions as they an atomic bomb being dropped
The
bomb.
one
me,
way of
for trying to go that distance.
son
If
it
to
Thursday, December 29, 1949
when practised
leading economic power,>it
spells
chaos
and
anarchy
all
competitors;
a
round.
The
In
•
1931
strained
V"
•
Recent
V-Vvs-Y-'
Sterling Devaluation
Britain's
everv
nerve
friends
to
save
had
her
Volume
170
COMMERCIAL
THE
Number 4868
FINANCIAL
&
(2659)
CHRONICLE
27
durability. it will not come up again before ficiently by a. precariously bal¬
budget
accompanied
by
has not it is over; import prices in de¬ anced
mild
semi-coercive
direction of
been caugnt yet by a genuine fear valuating countries must rise.
catastrophic
financial and eco¬ lar. Great
labor into export industries.
In
that
As
case,
stable
money
nomic reactions which would fol¬ less in the United States and else¬ of inflation; the bulk of the work¬
represent declining real long as British Labor is content
low in its wake, but they had a where, and the United States can ing class feel safe as long as ris¬ wages
with stable
incomes and stable
much
stronger foreboding than buy over 40% more in Britain, ing prices are offset by more or wages. But it is in the power of
workers
to
increase
their purchasing power, output will not
the British themselves—that she and of its devaluating camp fol¬ less speedy rising wages. Where the
take
lowers. This redistribution of the wages are automatically adjusted home
rapidly,
at
stable increase sufficiently, and costs will
was leading the world toward an
not adequately decline.
But the
abyss.
This time foreign opinion world's wealth by a socialist Brit- by agreements based on costs of money wage rates by turning out
more exportable goods.
Increased British are slowly learning that
abetted, nay even impelled her to tain in favor of the capitalist living indexes, this catching-up
not
output per man or shift would leisure is the most expensive lux¬
United States may perhaps be in¬ can
take that step; it was greeted as
easily
be
stopped;
it
an act of constructive statesman¬
terpreted as a belated act of grati¬ threatens to release an all round automatically cut costs by spread¬ ury a nation can indulge in, for
tude for the $6 or more billion demand for levelling up wages. In ing
overhead
expense
over
a while all other luxuries must be
ship. - Yet 18 years ago, before
devaluation
had
become
almost which British labor has grudg¬ these circumstances, ceilings and larger number of salable units. paid for by hard work, it is se¬
can
hardly
hold Without monetary deflation the cured by doing nothing. The Con¬
universal, it had been recognized ingly accepted from the much be¬ exhortations
down rising costs of production,
price level would slowly decline tinent used to reprove the English
as
a
means
for exporting a na¬ labored minions of Wall Street.
and with them the magical, but and real wages would rise.
Sev¬ Upper Class for not being on the
tion's unemployment troubles to
Britain Has Not Got the Goods
purely temporary advantages of enty years ago, progressive econ¬ job from Friday afternoon until
other countries.
It had aroused a
Unfortunately there is no guar¬ devaluation are bound to vanish. omists struggled hard to make Monday morning. In the good old
good-deal of moral indignation.
This time it was accepted as the antee that this sacrifice will suc¬
Some
Observers
consider this employers understand, that higher days when Britain sat on the top
of the world, she could very well
ceed.
Were the United States to the natural
natural way for
getting out of
salutary course, which wages and shorter working hours
afford it.
Now that Britain is liv¬
would in the long run reduce la¬
economic difficulties of one's own spend 42% more dollars on Brit¬ events
should follow
when the
bor
costs
and
increase
profits. ing on the bounty of the United
ish goods than before devaluation,
making. It had dealt a very heavy
price level has sufficiently risen,
States, the whole nation has be¬
blow at the very principles of the the problem might be solved. But total purchasing power and total Many employers finally learned
the lesson.
In the meantime or¬ come week-end minded.
Ample
International Money Fund, which this implies their buying expanded output will, they imagine, balance
ganized labor seems to have for¬ leisure is a high social ideal, but
had been founded with the object British imports at predevaluation properly.
But when this happy
This will not be done, equilibrium has been established, gotten it. It will remember it per¬ it does not create wealth; it is de¬
of
preventing such happenings; prices.
rived from it.
yet it received its blessing.
The partly because dollar costs for costs are bound to be so high, that haps only after it has found by
bitter experience, that scarcity in
In the long run, the spectre of
standards of both the world's eco-' many British goods were too high nothing but another devaluation
the long run makes for more ter¬ real
and British deliveries too tardy, would make
nomic morality and
scarcity—not merely the re¬
of its eco¬
many goods salable
but partly too because Britain has in dollar countries. Moreover mil¬ rible unemployment than plenty.
turn of some coupons—and of ris¬
nomic
from devaluation.
They
may
have
long
chain
foreseen
the
not
of
by 30%
the
has
added
40%
over
purchasing
power of the
Britain can buy
to
dol¬
30%
it
has
physical
some
Fortunately this country
intelligence have gone down
not
considerably.
conditions
The
which the pres¬
devaluation
ent
to
was
cure
dollar
the opposite of those
prevailing in 1931.! Great Britain
today is suffering from over-con¬
sumption and over-employment,
she did in
as
from
1931
and
unemployment,
She does not raise enough goods
to
imports, for her
for her
pay
investments and for
overseas
the payment of her
In
debts.
must
the costs of
imports and thus
this
in
way
1931,
prices continued to fall.
ain's
do
planned
not
In Brit¬
imports
economy,
depend
movements
import
as
so
much
price
on
government pur¬
as on
chases and controls.
They
be
can
reduced
by cuts of the type an¬
nounced before devaluation was
decided
; But
upon.
cuts
no
are
remedy until they hurt so badly,
that
people try to get rid of them
by, greater output at lower labor
costs, and increased exports. When
cuts
are
not offset
by imports
from other areas,
a
larger share of
the national income
domestic
on
be spent
can
the
and
products,
supply of goods available for ex¬
ports is actually diminished. For¬
eign markets, moreover, contract
for countries whose exports are
admitted
not
to*
for
pay
United
and
have
their
States
imports.
not
may
The
in
react
this way
for they are giving away
goods,* but Canada does and has
badly suffered from them. Cuts,
price
prevent
not
do
moreover,
rises of essential goods which must
imported to keep the industrial
going;
they drive up
costs of production all round.
be
Devaluation defrauds those for¬
They can, it is true, buy
rency.
the
same
amount of goods as be¬
until
fore
prices
rise,
provided
that their assets are released
the
goods
their
are
accounts
blocked
and
permission to use them is tardily
given, their claims shrink in value
as
prices rise.
By this process,
Great Britain's 3.5 billion of fro¬
zen
to
debts may
finally be reduced
billion.
The creditors can
2.45
by devaluating their
own currency to the same degree.
All members of the sterling area
avoid
this
with
the
have
done
situation
exception
so.
is
But
of
Pakistan
their
worsened,
overall
for
they
to
pay
more
for
greater
shift from
one
employers
additional
for export
merely to
devaluation
get
the
number of dollars
devaluation.
There is
same
as
before
valid
to
reason
British
exceed
that
stimulus
rapidly
could
amount' under
20%
Britain's
just where it
the
dollar profits.
of greater
increase of
An
that
assume
production
leave
would
dollar
shortage
before devalua¬
was
tion.
She
might,
ports
the
of
switch
course,
the so-called unrequited ex¬
over
countries like India to
States, thus avoiding
to
United
payments
About
her
on
released
were
frozen
British
of
15%
debts.
exports
last' year
(£267
million) for this purpose. Such di¬
actual
of
level
Owners
paupers.
gilt-edged securities who can¬ does not dare to use the word
switch
over
into
equities, "deflation," nor the methods by
holders of policies and pensions which it is worked. In the minds
of most bright progressives, defla¬
are being systematically robbed of
their share of the national income, tion is but an alternative term for
which
they , bought
trusting
the
To them the State is not a
State.
benignant provider of welfare, but
a
thief who, under cover of eu¬
phonious phrases, is taking away
their property.
They have been
unwise enough to try and provide
for their old age by their own ef¬
forts, instead of calling on their
citizens to do
fellow
it for them.
The government
leaders, flatter
themselves that they can keep the
price level fairly stable. They do
not mind a slow rise, which will
permit them to reap the benefits
devaluation. It will not bring
version would threaten the stabil¬
of
ity of India's economy and her po¬
them about until it can furnish a
litical relations with the Common¬
sufficiently
The needs of the
wealth.
Slates
and
India
United
an
strong
incentive
for
increase of the national output.
moreover
are
hardly identical, and the overall )ii British Worker's Attitude
problem, insufficiency of all Brit¬
:Fear of plenty —as -the har¬
ish exports, Would not disappear.
binger
of
unemployment — has
Again, additional exports might made the British worker choose
be diverted from the home mar¬
"leisure
preference," or if one
ket.
Here, too, the scope is lim¬
ited.
large percentage of Brit¬
A
ish consumption consists of capi¬
tal
goods,
of
goods
consumers'
and of services which are not ex¬
portable.
No price reduction will
induce
United
to
British council houses or
buy
States
consumers
spectacles made for the health
services, or solicit medical attend¬
The offer—now being
ance.
drawn—of
ance
free
medical
with¬
attend¬
for tourists to Great Britain,
would
only
secure
were
Britain's
it
main
lar
owners.
the
United
additional
dollars
become one of
attractions to dol¬
to
Nobody
States
who knows
imagine,
can
that their citizens will rush
over
in shoals to be treated free of cost
by
can
at
British dentists, so that they
spend their hoarded dollars
Ascot
or
Stratford-on-Avon.
A diversion from the home mar¬
ket
of
a
considerable
percentage
wants
to
put
it differently, "au¬
Britain's
tional
actual
their extra efforts—besides being
uncomfortable
their
security,
essential.
are
—
may
strong
undermine
incentives
Incitements for en¬
trepreneurs, though badly needed,
cannot
be
very
effective; even
when
they
profits
means
are
allowed to obey the
motive,
for
they
imparting
have
them
few
to
a
output would,
would if
The gov¬
ernment
attempt to obviate its
pressure on prices by frantic ap¬
peals to keep wages stable and
income
anything be expanded.
to
save.
aware
of
money
They do not seem to be
of the inherent immorality
asking people to postpone pur¬
original
sin.
It must not be
touched—though if it is called
"disinflation"
it
may
not
be
deadly. Discount policy and even
open
market operations are of
course
of little avail in a world
one
itself, that
instantly transform bank
has
which
can
persuaded
into physical capital by
charging half a percent on it.
Within the range of its suction
money
draw goods out
power money can
production process; when
this limit has been overstepped,
of
the
almost invisibly
genuine inflation.
It
has to be syphoned off in some
cheap
money
into
fades
But governments who have
pinned
their
faith
on
cheap
money, do not dare to go boldly
way.
for fear that the en¬
into
reverse
tire
credit structure
When
down.
may
tumble
have
they
waited
long enough it happens anyhow,
the
as
depredation
gilt-
the
on
edged bond market in England is
clearly demonstrating.
The
way
out is a reduction
been
market to
another,
will
have
shot in the arm,
and unlike the 1931 devaluation,
merely
a
The decision of
be repeated.
may
the General Council of the Trade
Unions Congress to recommend
a
until 1951 as long as
the price index does not fall be-*
stop
wage
low 112
and
(the present day figure),
does
rise
not
above
im¬
118
plies the willingness of organized,
workers
to
somewhat
accept temporarily
reduced
a
of
standard
Experience can only show
whether
this
potential fall of
5.36% in the purchasing power of
wages and
the "rationed unem¬
ployment" occasioned by the gov¬
ernment's
reduced
expenditure
will be sufficiently painful to in-r
living.
duce
part
ing
in
efforts
strenuous
more
the
the
of
on
result¬
workers,
at lower
be off¬
set in part by smaller spendings
on
amusements or by diminished!
savings and greater dissaving. In.
any case, it is a first recognition
by British Labor of the plain fact,
a
that
larger output
The
costs.
no
pressure
may
national socialist govern¬
ment is in a position to impose
Austerity has
the stability it hankers after on
not hurt him very much—Any¬
of
government spending, espe¬ the economic forces which move
body who has observed austerity
cially on non-reproductive capi¬ the world. In 1931, sterling was
on the Continent during the first
tal goods.,
When this is done allowed to find its own level. It
world war or later in the year
on
a
sufficiently
large
scale, was stabilized as a convertible
1947, knows that well. British au¬
workers on such projects will be¬ currency after the cataclysm which
sterity is an irritant rather than
come
redundant,
and
transfer British devaluation had started,
an incentive.
Were it not so, the
with a little gentle prodding to had somewhat subsided.
Today
members of the government would
there is no flexibility, and though
not dare to go round the country export industries needing a larger
labor supply.
That part of the the shock following devaluation,
and tell the voters, that they are
national product which has been so far at least, seems to have been
better off than they ever have
less violent, the end is not yet in
non-reproductive
and
non-ex¬
been, and if the voters really felt
portable, will be reduced in favor sight.
hurt,
they
would
not
believe
of
another
increasing
portion
them.
But when people fear that
sterity preference."
working population which prefers
comfortable scarcity to competi¬
moreover, contract the volume of
tive plenty.
A painful rise in im¬
physical goods available for do¬
and costs of' living
mestic consumption, while the na¬ port prices
of
imports
chasing when informing them in
from hard currency countries, and
the same breath, that they will get
their purchasing power very
less for their money a few months
quickly contracts.
hence.
It is bad psychology too;
Devaluation after all is a gratis
once
the potential investor gets
transfer of part of a nation's pur¬
really
frightened, he loses all
chasing power to other countries. sense of proportion, and buys not
It' means selling your country
what he really
needs,' but an.y
short. If not a cause of a nation's
stuff which may or may not be of
pauperization, it is a revelation
of it. The devaluation of sterling use in the distant future, provided
have
have to provide the
output.
It
for
stimulus
otherwise
When
available.
are
and
pressure may
the
not
sales in order to
more
machine
eign creditors whose claims afd
expressed in the devaluation cur¬
will slowly be pushed down to
ing prices will induce
and employees to raise
output at falling costs
to all the world; not
of
means
no
izing that some sort of monetary
about 20%
re¬
duce consumption—it did not work
in
some par¬
government is slowly real¬
The
lions of people with rigid incomes
who are already suffering badly,
A re¬
duction of 15% would necessitate
Great
free economy, devaluation
almost automatically raise
a
to
over¬
production
new
order
In
ticular goods like whisky.
no
not
goods.
prices, apart from
are
in every way
the
got
succeed, Britain must first reduce
might provide incentives, were
government strong enough to
hold down wages.
This was not
the
necessary
tion,
for
after the 1931 devalua¬
the continuous fall in
raw material prices
foodstuff and
was
pushing down costs of living;
repeated for ag¬
it will hardly be
ricultural prices are
pegged. Had
the
United
States
adopted the
Brannan
plan, under which the
farmers'
income
is kept stable,
while prices of farm products are
allowed to fall,
costs of living
would have gone'down. But next
year
is
an
election year, and as the
which
The
scheme
the scale
were
to
enough
to
shock
a
show
their comfort,
both
might
work,
of dismissal large
give
and
workers
the
sure
(Special
is
able
to
apply is large enough to produce
that shock, and without it the na¬
tions movable output will hardly
fast enough to neutralize
both rising import costs follow¬
ing devaluation and lesser dollar
income per unit, without which
sales cannot be expanded.1
United States has
deliberately
created
temporary
unemployment
by
strikes in order to bring about
relative scarcity in the
Chronicle)
Financial
Upland, Neb.^
and John W. Micek of
Neb.,
>
now
are
Waddell
&
Benkelman,
associated
with
of
New
Reed,
Inc.
York.,
1
;
D. T. Moore & Co. Admit
grow
Labor in the
The
whether the pres¬
government
sometimes
to
Walter Nielsen of
their income
their
is doubtful
Reed, Inc.
that
very
it
Two With Waddell &
the
to
them
job had been based on
unstable foundations — the
bounty of the United States. Yet
and
James
the
W.
will become
member
Brooks,
York
New
a
of
Exchange,
Stock
partner in the ex¬
change firm of D. T. Moore & Co.,'
Street, New York City,
50
Broad
on
Jan. 1.
an
individual floor broker.
He has been active as
markets of
i
.
its
particular products; it can evi¬
dently afford it.
British Labor's
preference for relative scarcity
and limited output is suicidal; for
Britain's output must buy over¬
seas
With Hegeman Co.
(Special
to The Financial
STAMFORD,
S.
Vezina
has
foodstuffs and raw materials,
American farmers do not
without
be
It
s^em to
greatly enamoured of the plan,
be sold to dollar coun¬
can
tries.
can
which
hardly
she
be
cannot work.
increased
suf¬
with
Hegeman
Street.
Chronicle)
'
CONN.—Richard
become
&
Co.,
affiliated
300 Main
Continued, from page
2
it in Russia and the Ukraine.
ex¬
sugar
in
1947
8.35
in
1948
pacity
3.50
in
1949
which
'
companies suffered substan¬
tial inventory losses because of a could very well show earnings of
drdstic break in prices for black¬ between $4.50 and $6 for 1950.
strap
molasses,
a
by-product. Regular dividend rate is 50 cents
of 25 cents
These losses taken during the 1949 quarterly—an extra
fiscal year, were a major factor in was paid in 1949, $1 in 1948 and
and
to be
not
do
we
burden
a
All other things
fiscal year.
1950
The current
It
being equal, and figuring no profit
on -molasses—earnings for most of
ice is 19.
be our judgment that
would
pi
with
price and proauction condi¬
tions during 1950 as related div¬
idends for these two companies
will not be
From
less than in
1950.
attempt to inyade that sugar pro¬
estimate in the
For instance, we
Vertientes-Camaguey,
case
of
which
earned
«
in
world
earnings
selling
Zv.olasses
price
during
^
•
$3.50
to
the aver¬
and
sugar
The divi¬
1950.
rate of $2
dend
of
.
,
for 1950, depending upon
age
safe and
appears
at
$12%,
the
is 16%.
.•
The stock has gone
would
I
years.
other
like to
yield
stock
the
on
Cuban
J.
White
A.
The
Co., Cincinnati, O.
&
security I
like best is the
obligation of a school district or
a community in Ohio whose econ¬
rests upon agriculture, where
omy
the
land
rich
and
ductive
is
pro¬
and
princi¬
ers are
pally
of
man
descent.
Such
Ger¬
bond is
a
listed
not
■
any
on
exchange,
usually
is
it
not "rated"
by
national
rating service
any
group
its
"mar¬
substantial
and
ketability"
is
admittedly not
Sugar Stocks
what the bank
J. Austin White
examiners
is
also to want),
appear
superb.
Such
the
security will not satisfy
a
the
is
make money by capital ap¬
to
But it is an excellent
individ¬
preciation.
investment for banks, for
uals, trustees, institutions, in fact
for anyone who wants safety of
who
and
principal
And, in accordance
income taxes.
i
.■
.
..
,'
■
;
'..v
Denver, Colo.
forum
for the oil, which he had to
buy in the Wyoming markets.
Along came the war. He was suc¬
ket
Peters, Writer & Christensen,
When the
with Emerson's law of compensa¬
v..-'..
GERALD P. PETERS
V
with
cessful
subject matter of this
with
and
Senator
the
United
Government
bonds,
Series
E—
seventy-five—what could be bet¬
States,
having
constructed
ter? And then
I
read, during
the
last
ten
bears, while
E,
of
the
5
is
little
that
Gerald
P.
Peters
ad¬
vertising in
local security about
a
which most of
of
know
us
some
us
Robineau, who runs
the company, is young, intelligent,
capable,
earnest,
hard-working
in
successful.
this
When
business
in
he
started
1940,
got his little skimming plant up in
Cheyenne, as a result of a suit
company/, a
first
He
small
earnings.
very
took
plant and made
out
of
it.
He
that
a
burn
over so
both sour
unit
the
that it could
and sweet crude.
He then began to develop a mar¬
two
is
or
three
changed
so
actually
though
bonds,
o
funds that do not pay Federal in¬
come
taxes.
This is particularly
the
of
true
longer
of
maturities
called
Like
has
(Butte),
nil
in
in
oil
up
Zimmerman
in Wyoming; he has
Maudlin
Gulch, over in
Western Colorado; he has some
oil in Kansas; and he has a big
field
in
Fiddler
Creek,
up
in
Wyoming.
Based
at
on
the
in 200
came
the
for
Future," prob¬
ably many securities will be sug¬
gested as "inflation hedges.",. As¬
suming that there is such a thing
as
a
satisfactory "hedge against
inflation," one should realize that
there is need for a hedge against
capacity for
add
well, which
day, if run
year, he would
year income to
$2,000,000
a
a
a
his company.
half million
a
outstanding, it doesn't take
much
mathematics
that
one
would
well, if
mean
to
is used
far
is
turning
gasoline in this
only
the
o
be
course.
abate
yet
to
dollar,
real
a
threat
Washington
indeed
The people maj
one.
this
seems
a
sending
by
more
conserva¬
tive Government that will be more
reluctant to
spend, and give away,
the American taxpayer's dollar. If
spendthrift
Government as we
with the philosophy
have,
now
Federal expenditures cannot
that
reduced
be
and
the
■
finest
He has not
octane
of
any
only
to
way
is by levying
taxes, then we shall be faced
only with a greater threat of
not
with
the
increasing loss
an
individual
freedom.
Such
The
a
than
inflation,
against
intended
inflation,
runaway
a
but also
veritable Socialist Govern¬
This
ment.
Government,
in the
"protecting" the
of
people
from the inflation which the Gov¬
itself
ernment
Shackle
v
3, *
,
r
the
1
«
is
causing,
people
•
' %
•
to
Newhard, Cook
St.
If I were asked what
oi
vestment
,
.
(not
will
merely
>
4
•
security
the present
time,
hesitation
out
I
ductive and
rich
is
land
and
would
the first
of
when
has
\ Such
be
dependent
difficult to
lect
proven
of
upon
the
time.
no
as might be true in
community. Gener¬
ally speaking each farmer is his
own
employer, and there is uni¬
formly a greater degree of ecoaomic stability in a community oi
many small employers than in a
community of a few large employ¬
William Witherspoon
in such
ers
enviable
tax
of Ohio have
of meeting
record
favorable record of tax
large, speculative or
investors.
The
most
I believe, is that
Motors
General
it
has
diversification in
a
wide
a
Not only has
of products.
range
the
manu¬
facture of automobiles in all
an
price
classifications
wide
also
but
a
of
non-automotive items.
This lends a degree of stability to
range
their
promptly.
obligations
that
of General Motors; therefore, that
is my selection.
':
■
place, the farm¬
areas
re-
investors, whether they
or
universal stock,
»y.
,wv
small
conservative
Further, the rich land can be
produce enough to
permit the farmer to meet his ob¬
ligations, including the payment of
second
to
itself
stock
a
t
attractive to the largest
be
number of
be
of
a
problem
seems
the selection
into
could
relied upon to
the
■
solve
ers.
In
are
present
Hence,
the
industrial
his taxes.
ones
available
managements,
an
attrac-
e
which
one
any
the
of
many
tiv
se¬
issue
one
out
concentration
employment under one or a few
There is
crop.
like
I
best, I find it
are
community would
a
common
a r
stock
will likely
continue so.
Agriculture is gen¬
erally well diversified throughout
not
particu-
1
stable in the past, and
Ohio.
asked
what
place, the economy
communities
such
stocks."
However,
principally of German descent?
In
at
with¬
"Com-
be,
o n
m
pro¬
whose, taxpayers
type of in¬
preferred
my answer
safety of principal is provided
in a bond of a community whose
economy
rests upon agriculture,
the
Co.,
&
Louis, Mo.
that
where
Fulton
in
WILLIAM WITHERSPOON
economy
safety
Was-
County,
District
School
County, Celina School District in
Mercer County.
;;;
because ii
provide
best, the pay¬
on rich farm¬
Fulton
in
District
seon
security I like best is prob¬
"hedge'
ably more suitable as a
against such a shackled
This
the company's business that is not
payments,
present in
even
in
attribute
from
the
corporations—an
many
ment.
1932-34, results not only
ability to pay taxes in
depression years as well as in
attitude
desirable
more
fore,
such
that
ber
levied
taxes
represents
farmer's
created
also
his
highways,
won
for
themselves
Ohio
have
the
for
favorable
These farmers
mans,
icans,
of
and
have
are
descent,
an
ings
many
a
thrifty
Wherever
farmers he will almost
As
poor
land."
And
you can
be
other
words,
a
community with
omy
I
an
a
such
favorable
and favorable type
been
costs
re¬
level
normal
more
lower
or
;
peak
in
earnings
of
year
1949 may
the
in
early
impair
the
of
payment
the lush $8 per share annual
dividend
if
the
Sloan
Messrs.
comment
of
Wilson
and
to
is
measure
the disbursements.
They
pointed
econ¬
out
divi¬
recently
that
dends in the pre-war years aver¬
about 85%
aged
that
of earnings and
something
economy
approaching
this
proportionate amount might
obligations promptly.
a
share if
per
had
reduction
the
to
cur
capable in their business and want
With
the
experienced
even
and with taxpayers who are
to meet their
margin
decline in earnings that must oc¬
rely
like such a
obligation of
stable
at
$15
1950's, but consider the amount of
by capable management.
In
$14 and
higher
Some
from
one
their keeping the land good,
bond because it is
between
selling prices.
experienced banker-farmer put it
upon
to
through
"These fellows just aren't attracted
by
profit
duced
invariably
find that the land is rich.
estimated
share, would have been in the
the
finds these German
1949,
of
year
been
neighborhood of $12
work¬
conscientious
and
one
full
the
have
somewhere
for being hard
reputation
for
which
universa
almost
the high side, historically
on
centage
they are of German
and they have won foi
themselves
of
speaking—possibly by 2 to 5 per¬
points.
However, earn¬
in¬
Amer¬
for
been
mar¬
margin
to have been some¬
appears
what
But
years.
ing,
They
course.
maintained.
profit
22.5%
ing the first nine months of this
year
not Ger¬
are
profit
General Motors before taxes dur¬
vestor in bonds of such communi¬
ties.
earnings
Hence,
come.
are
The
reputation, both for paying their
taxes promptly and also for beint
are
per¬
produc¬
present
should remain good if
enviable
an
to
years
gins
in
the
on
disposable
and
maintain
should
place, the so-called
farmers
the
with
tion schedules for at least several
taxes.
"German"
de¬
replacement
sonal income in the United States,
busi¬
his livelihood. There is thus
a doubly compelling reason for the
farmer to want to pay his real
In the third
This
war.
automobiles
of
number
the
the
commensurate
mand
ness,
estate
very
is rapidly being filled.
Nevertheless,
land
only
during
"vacuum"
payable
the
on
not
but
home
is
bond
a
been
1949.
during the past few years,
by the deferred demand
ous
the investor should remem¬
more,
during
caused
Further¬
taxes.
have
The demand
for automobiles has been prodigi¬
good" when they have paid
estate
sales
its
large
paying their taxes, than any othe*
group of people in the nation.
At
banker put it, these people
real
of
manufacture,
of General Motors, and there¬
ness
one
their
invest¬
conservative
dominates the total busi¬
course,
toward
"feel
of
Automobile
prosperity, but also from a comnendable desire to pay such taxes
Probably the farmers, especially
in the rich areas of Ohio, have a
more
name
out
area.
highest
of
the
of
less
such
that company.
He
But the
inflation, where
people lose confidence in the gov¬
loosely,
determine
$4.00
with
I like
which rests
ment of
shackled
a
prospect is hardly conductive to
investments in common stocks.
threat of runaway
at capacity,
a share
run
about
or
the result is
economy
of
Deal,
Nazism
gree, and
butes
inflation
word
The
balance the budget
With fewer than
would be: Pettisville Locel School
Fair
the
the
good farmers, both of which attri¬
misfortunes.
other
the voters elect to return the same
first
barrels
agriculture and with the farmers
principally of German descent
The difference is only one of de¬
called
be
so-
inflation.
"The Security 1
forum on
Best
usual
against
"hedge"
In this
the
as
ernment credit and in the sound¬
He
ing land in Ohio with diversified
Socialism,
Communism.
Deal,
Facism,
which
Further, such a security is not
examples of the type of
New
from
such bonds.;
many
selling about 85%
shares
skimming
turned
these
high quality, afford sufficient yield
that they can profitably be pur¬
chased even by institutions and
he has found oil.
market,
cracking
then
last
situation
he
fact, for this reason alone, some of
too
to
cracking unit
the
now
high yield to compensate for theii
relatively low marketability.
In
his own, and controlled, mar¬
ket, and about 15% to the major
distributors, and since that time
and he
with the Bay Petroleum Company,
I-e went in with a very small
and very small
the
to
know
Maurice H.
aqd
the
to
and
more," namely,
Frontier Refining common. I like
it for the following reasons;
some
about 85%
sold
distributors.
years,
chance to do
a
out and
production
During
I
"Here
said,
the
tion, these bonds carry a relatively
recommended
oil, he had refining
he had to gear the market
own
for
and
<
oi
major
distributors an.d about 15% to his
security
man,"
one-sixth
about
at
purchase
no
He went
of
So
I
said,
"No,that'sout,
the
to
value.
had
And
dollar.
certainly,
octane
proceeded
plant
then
still
purchase
price
succeeded in
in Cheyenne
and
purchase was completed.
The plant came into his hands. He
the
on
the
That
lost
you
I
40%
then
that
its
Series
the
of
gasoline plant,
for airplane gasoline.
He ran it
successfully
for
two
or
three
years, until the end of the war,
a
and
you may have
gained 25%
•on
hundred
O'Mahoney
Government
first mentioned, I said
was
Federal
pays
debt
the
about
Government
recom¬
whose aim
person
ask
-
Three
des-
so
hardly
burden.
bond which
speculator.^ It is not
mended for
•
proved
need
structive to Europe and England.
It matters little whether such a
whose taxpay¬
% examiners
seem to want. But the quality, the
inherent
soundness
(which the
■
have
principal, with commensurate in¬
come, in an economy which prom¬
ises to be disrupted by ever in¬
creasing
governmental
controls
and taxes. ; Now why do I feei
place during 1950.
\>\.
.
which
expects to do it again.
to be in a position where
advances
could
take
appears
trols
is
averages
entire
business, but all the people) with
more controls, the same con¬
think from here on, Mr. Robineau
as
The
an¬
see
Thursday, December 29, 1949
ever
to
one
its equal and I
that is
one
from
share in the last ten
a
sugar
trend.
the
line.
of represen¬
producing company
shares since the beginning of 1947.
At
current
levels,
these sugar
shares are not very far from their
lows; one can detect a modest im¬
provement in recent weeks, which
suggests the beginning of an up¬
tative
through
for automobile gaso¬
over
it would
necessitate supplying Japan from
ward
expect its continuation. Priced
we
Formosa—any
price
sugar
composite
$2.50
from
of
turned
We present herewith a chart of
1948
2.08 in 1949
,
towards
turn
can
gasoline
original refinery, and the govern¬
ment
refinery, which has been
Communist
Chinese
the
other countries.
4.25
.
would
it
the
ducing country could advance the
$5.28 in 1947
,
:
;
standpoint,
follow
all
J. A. WHITE
political
be well to
attitude
an
he
1949.
international
Companies based on the
anticipated . production
and
an
average
selling price no lower
than
1949, should be higher in
the Sugar
seil
to
45 dollars
$1.50 in 1947.
them
expect
earnings for the
on
sul¬
gasoline in this territory, He has
developed his own market.
He
has developed his own distribu¬
tion.
He has developed a ca¬
Cuban At¬
sugar
rent
less
with
out
comes
$10.68
higher.
1949, the Cuban
reducing earnings for the period.
These losses should be non-recur¬
it
that
whichearhed
lantic,
pected to be substantially
During the year
CHRONICLE
phur in it than any other cracked
In the same manner,
The
is
for
demand
FINANCIAL
&
gasoline in this territory, but he
has polymerization, which means
Security I Like Best
The
world
COMMERCIAL
THE
<2660)
28
pre¬
in
vail
policy
of people, one
■
V
't
I
'
should
'•
-
C
subsequent
'
I
,
n
'
>
prevail,
1V-.
-
•
■'i
■-
,
If this
years.
"
earnings
i„
,
■
.
'
t
•
,
Volume 170
have
would
Number
decline
to
$10 per share to
annual
THE
4868
under
to
jeopardize the $8
could
paymentand
de¬
COMMERCIAL
stock should attract those
common
with
investors
speculative
-a
clination.
CHRONICLE
FINANCIAL
&
what
you gentlemen, individual¬
ly and collectively.
means
in¬
If the
'
and
men
happened? Some 6t them
of them went into
lines
other
of
endeavdr,
29
ity will, in the long run, help to
reduce
the
costly
number
of
empty airplane seats and unsold
died—some
in all de¬
women
(2661)
some
"
cline to
around
In summary
$6 per share and
still permit an annual dividend at
mon
the
fers
regular $5 rate.;
Even
rent levels of around 69-70
approximately
turn
for
in
even
time
on
General
yields
good
of
re¬
prevailing
stocks.
common
Motor's
cur¬
investment,
anyone's
-
this
high yields
,
stock
common
attractive not only for the
appears
high
7.2%—a
$5
on a
annual dividend the stock at
yield
that
antici¬
be
may
com¬
of General Motors of¬
stock
the
therefore, the
large investor
an equity
with an ex¬
cellent past record and although
he may not be as interested in the
large return, he should, neverthe¬
less, be interested in the good
possibilities of capital apprecia¬
of
a
proven
The
tion.
small
of
concern
is offered to the
same
investor, but the high rate
will
return
appeal
probably
enticingly to him. The trus¬
General
pated during the next few years,
more
but also for appreciation possibil¬
tee should be attracted to
ities.
Motors because of its "blue
and
Dividends
between
of
$5
$8 per share cannot continue
to be
iod
paid
of
protracted per¬
over a
several
years
without the
price of the stock eventually
flecting that condition by
stantial appreciation.
re¬
sub¬
a
Hence, this
while
characteristics,
chip"
should
it
the speculator because
of the capital appreciation possi¬
bilities during the next few years.
appeal to
Hence, this issue appears to be a
universally
stock.
^attractive
■
-
common
.
*
!
partments of management think in
terms
of "Service," the task of
from
be
able
going
to
half
mishandled
or
In
You
be
to
salesman,
a
from the porter
that
and
right
goes
she is
or
be
to
This
camaraderie
tween
Business
i
tele
has
from
built
been
personnel
your
the
be¬
clien¬
dollars every
assure
the
business
taking,
no
of
care
80%
to
high
as
90%
as
of
me
or
air line in
of
capacity before
break-even
your hotels,
:;r: ; ••■■;
in
the ;needs and
people than
the red.
;
fly out of
we
;;.i
v7.',:
Assuming that these break-even
seat sales and house
arbitrary and cannot
Sales
To
succeed,
counts
are
be reduced by
pull
with
there is but one way to
might.-,;
boys, can we >hope to
the: same
consideration
your
receive
from
them,
■•■,"'0
•
..
'
hotels
regularly
convention leads
and even
guest lists which are
solicited by; our sales personnel
in the joint name of the hotel
and Eastern. This is Service, gen¬
Some-
supply
resort
,
with
us
tlemen,
and
traffic
like
of consideration.
that kind
Day
customers
our
in
and
out
day
,
have
we
representatives, reservation
clerks
and
visiting and
agents
talking to our pas¬
prospective passen¬
and
sengers
sales
counter
sell
them to use
Eastern when they travel—go on
business trips — attend conven¬
trying
gers
to
vacations—and go
tions—take
fishing
on
All of
large volume of hotel
hunting trips.
or
which has
a
at its
patronage
terminal points.
that, in
I mention this to prove
addition to being so
similar in
business
we
activities,
are
We
bring people from near and far to
is
that
and
SALES¬
through
MANSHIP.
in this
idea—no magic formula about it.
Salesmanship is an American in¬
vention.
It began with the prercvolutionary Pack Pedler.
nothing
is
There
new
but
that
it
years,
salesmanship must be the fuel
will make it go places
in
.
,
salesmanship.
while
And
ous
;v
;
is
it
v
the
true
vari¬
vital
that
forms of advertising are
aids
elements
the
sales,
to
•'
,
door, or we take them from
ments, the Hoof and Mouth Shock
miles away.
Brigades of Salesmen—the„ vigor¬
ous
push-button warriors — the
air
transportation
for
your
guests
through the efforts of your trans¬
portation people.
.
,
r/>■„■
Our
yours,
hour
the
Sales
Measure
Must
,
24-Hour
Basis
sales success,
on
the same as
must bes measured on a 24The loss, created by
basis.
room
fighters who ring door-bells.
that remains unsold to¬
must have the abil¬
A salesman
ity to contact all types of people.
He must know his own business
thoroughly that he can answer
so
*
all
questions
satisfactorily he
so
clients
his
convince
will
that
he
produce and will deliver the
can
offers to
he
services
and
goods
ship with Father Time, because if
economy
they do not sell today, they have
a chance to sell tomorrow.
In the
need of
no
rooms
and empty seats
advantage you
The only
have is you don't
broke at the rate of 200 to 300
miles per hour. ; •
;
go
Then, too. our problems of how
enough profits to stay in
are very similar in their
men
unless
of
in business
facilities stay "sold."
us
our
can
stay
problems are so iden¬
tical, it is fortunate that the solu¬
Since
our
:
the
on
of
return
peacetime
-
eco¬
nomics and the need to go out and
work for business. In other words,
to make
four sale^ grow ywhere
only one sprouted before.
During the years that led up to
,
actual
after
years
ended,
combat
we
We
,
are
turning
now,
at long last, on the
Tpoint
from
that
We
are
that lower
cold
on
now
our
way
down to
plateau of realism and
time activities.
returning
glad that we are
that level because
am
to
to put
er
goods
sales
on
150,000
sales¬
And it
to create and
shelves.
power
demand
the
take
and
In
Air Lines this
Eastern
In
we
realized
efforts
Sales.
on
is
on
changing
we
To me,
which
must
Service,
our
price,
connection, you hear a
lot of crying on the part of busi¬
nessmen.
It is pathetic to me.
I
talked
have
executives
to
and
sales
know about sales and
We
have
salesmen.
for
men
the
reason
selling.
generation of
We have had no sales¬
lost
a
past 12 or 15 years.
is that business did not
salesmen—turned' into
fusers.
six
We
have
year.
it
center
as
well
our
waiting list
We do not want your order,
just
too
long
clutters
a
lot
up
of
a
our
files and
accounting
that
slump
a
There
for
was
today
ago—there
years
in
—
was
prosperity.
spoiled
so
yours
order-takers
made
us.
going to stand or fall, and that
or
ho¬
resort
or
both in busi¬
are
When
people
'i
; V
<
of
out
should
provide
When
sales¬
services.
talk
we
about
15%
further drop, let
ber
that
happen
the
same
today
that
10
a
or
remem¬
us
America first.
see
words,
thing could
happened in
And I
can
the
fact
In
we
will
be nothing
business careers
for salesmen.
Some of you may
Slipping Back to Normal
that
things
I
begin
to
!
to
back
derstand
your
that I do not
problems
un¬
the
in
pends upon salesmanship.
'
i
addition, it depends on our
ability to prevent a Buyers' Mar¬
ket
from
reaching
the
same
destructive
extremes
cent Sellers'
I
of
have
our
as
in selling.
Show me a good salesman and I
will show you a man who makes
contacts
Not
"good-fellow
cause
he
because
well-met,"
he tells the truth
is
but be¬
about his
in this world with¬
friends, be it business friends,
social friends, or political friends.
Friends
—
people who will help
ready to give you
a
boost, indirectly or directly,
whether
you
are
there or not.
Friendships are our greatest as¬
you,
who
land
anywhere
And, I
globe.
sales talk.'
a
you
no
on
to always re¬
land like our
the face of the
am never
too busy
to sell that idea with every power
at my
.'
command.
believe
1
.
United
the
in
cannot think
States,
of any better
and
1
way
for a person to spend his va¬
than
in
knowing more
cation
this
about
French
the
leans
Michigan
talk to
and
meet
citizens from
their
friends
Or¬
opportunity
fellow
your
pll over our country
their
about
-—learn'
ours.
Florida;
Hill in Boston—
take advantage of the
to
or
in New
Quarter
Beacon
or
of
country
Whether it is
views
then
and
and
ways
—
make new
home
back
go
to old friends with new ideas;"
But more than
home with
that,
new
a
you
will go
respect for our
a
cannot get on
out
urge
member there is
glean
great faith in the fruits
friends.
me
conclude that
a bit of time
obvious sales
quite
rather
a
Yes, this is
Let
re¬
Market.
personal
make
talk.
men
Do not think
In
1
taken
have
to
normal, a lot of
shed tears of selfpity over their hardships instead
of
good honest sweat
through
salesmanship.
"
slip
younger
need
no
They only employ
spenders and collector,?.
anything superficial.
now
un¬
thing, there
left in the world
House Governments have
highest that this land has ever
known—superficial if there ever
And
v-
Welfare States and Poor
to sell.
high tide of prosperity—the
V-
?,
■
do that very
less
You entered your
was
you, gen¬
danger is that
perienced those harrowing times.
a
;
,
not
assure
' --1'
America.
1929. You younger men never ex¬
on
do
tlemen, that my interest in prdmoting this type of/travel is en¬
tirely unselfish. - It happens, how¬
ever, to be completely in line with,
my belief that the main sales ef¬
fort on the part of all thinking
Americans
should,
be
to
sell
and snobs out of those
men,
fellow
Americans in
of liie—a respect
build
in
others
every
walk
that will help us
a
living
loyalty
and love of America that is more
than selfishly
skin-deep.
v'"
,
■
First Sees, of Fla.
Formed in Tallahassee
j
are
During this insane state of af¬
companies discharged
laid off their salesmen. And
new
class
fairs many
I
prosper.
other
own.
It
of
many
engaged in making
want
planes
to
ha vie
spend
time
and
money
visiting 1 other
lands until you have seen your
fact, were zooming into that
super-duper -level of prosperity
which
must
In
In
now
not
before
never
More Travel Ahead
you
ten
or
sets.
do
with.
hotels
'*
1949?
slump nine
no
anything to do
we
as
Service is the key
business and
They could not get it for
They could not get it for
months. You cannot have it.
a
year,
conditions,
re¬
airplanes
in
succeed.
we
%
hv
in
One of the most beneficial by¬
Then, there is this everlasting
products of our high level of pros¬
talk
about
a ' Slump! : Do
you
perity has been a lively interest
realize, gentlemen, that today the
in
the
world
and
its
affairs,
level in industry and business is
coupled with a growing urge to
higher in volume than it was in
travel.
I am one of those who
1939 apd 1940 by 30 to 40%?
believe that to know America best,
What are people talking about
People wanted more goods. He is not only informed
dependable.
He
makes
goods than were being produced— but
friends.
And that is what a busi¬
more services than were available.
ness must have—friends. ".;/
Most people — merchants and
It is trite, but true, that you
owners
of the business and socalled
to
travel,
right
and
our
that
seats
and
You
ness
next
nor
namely,
rooms
sell
either
tels.
will have to prove
that
causes
of
right
one
to
was proven
—
fill
can
can
used
their junior ranks of your various sales
ability to succeed. Men seldom do organizations.
The
number
of
that when they are strolling on young men equipped to face a
Easy Street.
The same applies to Buyers' Market is pitifully small
employers.' They went soft. Now and yet, the very prosperity of
management must again prove its the nation, our ability to keep our
ability to regain and retain its own heads above water and those
leadership. .,v • -! "; ■> ■'..
of the rest of the world too, de¬
: ••;"
men
now
now.
goods off the shelves. *■
because
the
in
;
high
facts, which goes with peace¬
Frankly, I
and
have
now."
entry in World War II, and a
our
thing
one
hand
what
wrong!
week;
in
air
lines and hotels working hand in.
need- them.
re¬
It takes productive pow¬
ployed.
in business unless a large
None
in
in addition to those now em¬
maintain
population engages in-travel
for business, health or recreation.
,
Y But let us reflect a few minutes
The
furnished
was
absorb
could
alone
takes
our
stands
cently by James J. Nance, Presi¬
dent of Hot Point, Inc., when he
said that the electrical industry
business
None of us can stay
share of
time
and better salesman¬
Proof of this
to make
basic aspects.
this
at
more
ship than ever before.
hotel and air line business. Father
against us.
There is
"Tomorrow" for today's empty
v,
organizations in various in¬
sell.
This seems, at first blush, a
dustries and, actually, it is shock¬
rather simple problem to solve.
ing to find out how little some of
But, salesmen! Just get some the
younger men understand and
night, by the seats that remain
empty in flight, can never be re¬
captured.-v:; saelsmen! That is easier said than
Most manufacturers, wholesale done.
Good salesmen do not grow
and retail dealers are in partner¬ like corn in Kansas, and yet our
Time works
"
•
plateau of super-duper prosperity
/
Yes, gentlemen, salesmanship— —a fool's paradise which too many
creative, inspiring and effective people came to accept as normal.
door to that of another hotel
;
hard.
America, and all over the globe.
your
of
To get
work
has 'perity—an
your
In like manner, you arrange
'*
Success
beaver.
But
!
next
built
not
,
satisfaction
salesman
today—not
are
need
need
is.. at
lived in a false prosAlice-fri-Blunderland
created and met the demand built existence where people got paid
upon new discoveries, inventions for
making errors, a period in
and
research.
In
our
modern which everybody won high awards
world, science and invention may with little or no effort.
form the engine and vehicle of our
Now At Turning Point
advancing pattern of existence,
the
Throughout
fight the ever-present elements of
sales resistance are human
ele¬
hundreds
a
must
you
"You
you
Of course,
way.
was
resist¬
it.
new-model
and
coop¬
established
not
was
,
Florida's all-year roles
so
know
not
sales
month! And, I have the best there
twice as
To stay ahead, you must
everlastingly with all your
ahead,
few
"Salesmanship Must Be the Fuel"
our
com¬
plementary one to the other.
lic
■
the
say
you
must combine
Let us always
we
work like
must
Eastern; because we fully realize
that
only
through., cooperating
internal economics,
bring our
services and facilities to the pub¬
to
v
*
everyday
he does not have the sales-
what
remember—to hold your own, you
in
hotel
the
of
Means
Sales with Service..
points
wants
Service
and
every
Rome
as
day,
one
i.
resorts
Commerce
conviction, the business backbone people -who'
public's attitude;'toward our
The same goes for your
people and
even
.
cause
do—how they
or
do
all-season appeal
of
in
erated
not
going to
fotir
winter
great
our
an
hotels,
Chambers
resistance, he is lost. He
stopped cold right there be¬
is
\
company.'
capacity
of
interested
more
frofti
they say
do
that
Florida
they
of
spent about $1,500,000
we
prove
a
into
resort
period
a
to vacationers.
get cheaper."
meets
do it—as it all reflects on
or
say
the
run
before you reach the
point. Our load factor
seat sales must rise above 60%
And, let
year.
there is
you,
in
runs
must
count
house
Your
•
to
our
system amounts
hundreds of thousands
on
many
difficulties
our
parallel channels.
and ours.'
hotel
of
tion
It will
I
am
neighboring
playland has
salesmen
client
product, I
salesmen
When
everywhere they go
means
the
when they see
ance
operator—we
salesman.
a
Over
to
influx
summer.
a
radio
a
and
months,
for
fight
said—"Well,
on
ordinary
manager,
counter
because
Those
pilot, mechanic,
supervisor,, agent
operations, reservations, ticket
or
Florida
the bottom,
and
so-called
wait awhile.
top. It makes no difference wheth¬
he
again,
developing
summer
regions.
they
stamina it takes
down to
go
want your
to the
up
on
low-cost
lack the courage it
hear
crying
expect everyone
we
the
business.
called
Eastern
—what
marvelous
a
to
over
market.
mass
a
Last summer, Eastern led in an
experiment toward
because
rolls
the
They
start
expect everyone to sell—everyone
happy to report that
sell.
takes
customers.
in
Salesmen Wanted
not
to
to
relief
have
do
dissatisfied
or
class institution to
by will find themselves
go
the
on
two-thirds of their time trying to
resell
with
as
ur'
-
-
refer, of course, to the new
low-fare, air coach flights which
may
change air travel from a
order-
change.
Therefore, most of them,
years
for them
spending
Alice-in-Blunderland
rooms...
I
change because they are too old
customers, instead of
and
out
contaminated
were
hotel
better positions,
of those who re¬
taking philosophy, and will never
the
themselves
many
mained
Then they will
confine
to
new
too
that
good, conscientious
by good services.
selling
with
100%
am
Pave the way
salesmen.
er
11 XV'
page
I
salesmen—the
traffic
Continued
but
selling will be a lot easier for the
salesmen, because they will find
big Welcome Signs on the door
mats
of
customers,
instead
of
mile-long tales of woe and bushel
baskets of complaints.
j
Frankly,
into
graduated
TALLAHASSEE,; FLA.
First Securities Company of
ida.
Inc.,
offices
In the air line
business,
of business
the traveler whose
a
we are
brand
friends
—
buying capac¬
—
in
The
Flor-t
formed with
has
been
the
Lewis State Bank
Building, to deal in state and mu¬
nicipal securities.
Cblin English
is President of the new
firm,
i
30
COMMERCIAL
THE
(2662)
Continued
from page 5
CHRONICLE
FINANCIAL
&
;V'•
■/V
Thursday, December 29, 1949
comparing with 246.75
sponding date
Tomorrow's
The State of Tiade and Industry
Markets
Walter
during this period that the automobile industry expects to set pro¬
duction records and expects March to be a record for all time.
This week the steel order picture continues to look good.
Can¬
Whyte
running at about the same rate as they were, which is
practically nil. Order volume has tapered off a little, mostly because
mills are booked so far ahead that consumers are discouraged about
cellations
Says—
=
By WALTER WHYTE=
on
the
Despite widespread
opti¬ horizon as the year ends, "The Iron Age" discloses: (1) Tremendous
mism/ market still not con¬ public works plans; (2) continued heavy buying by utilities; (3) new
road-building programs; (4) a high level of housing construction;
sidered in good shape.
and
(5) good prospects for office buildings.
No time is a good time to increase steel prices—from the political
The great
majority of pres¬
ent-day investors are vocif¬
erously bullish and the bears
silent.
are
The
various
pop¬
However, one prominent government economist told
Age" that the steel industry's primary mistake was that
prices as much as producers of other basic commodi¬
standpoint.
"The Iron
ties—that "if it had done
so
movements
panies had met the new prices
being quoted
daily to "prove" that stocks
are going still higher and end
with the conclusion that any¬
body who doesn't buy today
is
sucker.
a
*
I'm
*
*
afraid
111
to
be
placed in the sucker category
I
because
think
stocks
the wonderful
are
ple
don't
they
say
that stocks
sold, is
than
are.
things peo¬
That old saw
made to be
were
I know, for exam¬
ple, if I wanted to sell
the
operating rate of steel
lower output.
equivalent to 1,716,300 net tons r
1,742,100 net tons one
week ago.
A month ago the rate was 87.7% and production ;j
amounted to 1,616,800 tons; a year ago it stood at 97.3% and !
1,753,800 tons, and for the average week in 1940, highest prewar |
steel
year,
industry for the week ended Dec. 24 was estimated at
5,993,943,000 kwh., according to the Edison Electric Institute.
*
It was 2,663,000 kwh. lower than the figure reported for the
previous week, but 485,703,000 kwh., or 8.8% higher than the total
output for the week ended Dec. 25, 1948, and 1,164,364,000 kwh. in
excess
of the output reported for the corresponding period two
power
FALL
Loadings of
top has been
that the
mean
seen,
have been.
public
take
can
mar¬
thought I
saw
have
ago,
few
a
disap¬
not
peared.
*
*
Ms
freight for the week ended Dec. 17, 1949,
revenue
week.
It
represented
decrease of
a
corresponding week in 1948, and
under the similar period in 1947.
114,829
cars, or 15.2%, below the
decrease of 192,407 cars, or 23.1%
a
only stock you're still
long of is Denver Rio Grande.
You
bought it at 23, it's
29
26%.
If it should get across
and
has
stop at
a
31 before the next column ap¬
pears,
then take
If not,
don't forget the stop.
profit.
your
—Walter
They
are
to
presented
increased
output
as
General
by
attributed by Ward's
and
Chrysler.
The
production during the
week, after being down since November 30.
The total
car
output for the current week
was
made
up
and
cars
20,038 trucks built in the United States and 4,310
2,627 trucks built in Canada.
The
week's
and Canada
a
total
compares
with
94,668
cars
built
in
of 88,520
cars and
the
U.
by
improved demand
Lard
mitments.
prices
supplies.
actual
Cocoa
traders sought to cover on future com¬
continued to rise in the first half of No¬
as
values stiffened
Hog
closing prices
lamb
for
as
Stocks of lard
vember.
week-end,
prices
major producers continued to hold back on offer¬
prices advanced steadily last week.
Business in the
an
continued to rise
were up
receipts fell below
as
around 50 cents
somewhat easier
were
as
expectations;
week ago.
- Cattle and
pre-holiday demand slackened.
over
a
Early steadiness in the domestic cotton market
was
followed by
decidedly firmer trend toward to the close of the week.
York spot
price showed
Strength
inquiries,
the
in
rise of 40 points for the period.
a net
final
a
The New
sessions
influenced
was
by
~
export
good
aggressive mill demand and by reports that cotton
an
had voted overwhelmingly in favor of marketing quotas
growers
on
1950
crop.
.
.
:
>
.
again larger than in the comparable week of
were
as
preceding
the
the
for
entries
a
year
pre¬
>
For the week ended Dec. 8 entries were 247,023
275,766
and
year
a
ago.
season
with
compared
206,684
bales, as against
Aggregate
through Dec. 8 amounted to 1,748,223 bales,
3,369,790 bales entered through the same date
week
last year.
Cotton
consumption during November, as reported by the Bureau
trade expectations, totaling 771,833
bales.fpr thp month.' This compared with 725,602 in October and
685,881 during November a year ago.
..:
of the Census, was about equal to
1948
industrial
and
22 from
Failures
were
and twice the
91
rose
sharply to 196 in the
preceding week, Dun & Brad-
above
in
the
116
the similar
of
1947
the
comparable
week.
However,
Failures involving liabilities of $5,000 or more increased to 154
124 in the previous week and exceeded the 104 of this size
reported
those
a
with
year
A rise also occurred
ago.
liabilities under
compared with 12
a
$5,000,
year
small casualties,
which advanced to 42 from 37
among
ago.
was
■
The
•
Members
York Stock
Curb
Exchange
Exchange
Francisco
(Associate)
Stock Exchange
Chicago Board of Trade
14 Wall Street
New York 5. N. Y.
COrtlandt 7-4150
Wires
Teletype NY 1-928
to
Principal
Offices
San Francisco—Santa Barbara
Monterey—Oakland—c*r»-amento
Fresno—Santa Rosa
discounts,
^
Housewives bought noticeably more food the past week, as preholiday shopping began.- Fresh meats and produce were especially
sought, following fractional to slight price drops on many items.
Canned foods were slightly less in demand, although volume in some
items was modestly larger than for the similar period a year ago.
Interest in television
in
radios
were
also
retail
was
volume
in
States.
In
the
other
prevailed
in
all
regions
except
the West
North Central and West South Central States with
the most notice¬
able rise in the Middle Atlantic and East South Central
States where
about three times as many concerns failed as last
year.
There
was
a
further
slight
easing
in
the
Dun
&
V
Bradstreet
wholesale food price index last week.
At $5.73, the Dec. 20 figure
compared with $5.74 a week earlier.
It represented a drop of 8.0%
below the like date a year ago when the index stood at
$6.23.
The index represents the
foods in general use.
WHOLESALE
sum
total of the price per pound of 31
COMMODITY PRICE INDEX
REGISTERS
FURTHER MILD DECLINE
The daily wholesale
the
period ended
estimated to be from
0 to
commodity price index, compiled by Dun &
Bradstreet, Inc., moved in a narrow range at a slightly lower level
than in the preceding week.
The index closed at 246.26 on Dec. 20
a
substantial in¬
on
Wednesday of last
below Sbat of
4%
Regional estimates varied from the levels of
lowing percentages:
;
a
a
year
ago.
yekv ago by the fol¬
;
East, Midwest, and Northwest
+4;
South
0
—1 tO —5.
to
—4;
+1 to —3; New England 0 to
Southwest —3 to —7 and Pacific Coast
:v;V
-
Total dollar volume
;
-
.
J" ^
.
the wholesale
on
'
..
level continued steady
in
the week,
Much
being slightly below that for the similar period a year ago.
re-ordering was on a spot basis.
The number of buyers at
wholesale centers diminished somewhat.
Department store sales
on
country-wide basis,
a
as
taken from
the Federal Reserve Board's index for the week ended Dec. 17, 1949,
year.
In the preceding
registered below the like week of 1948.
1% from the like period of last
decrease of 4%
a
was
Dec.
17, 1949, sales registered a decrease
of 4%
from the corresponding period
date
Pacific
slight decreases.
1948
dominant feature of
Dollar sales of vacuum cleaners and
heavy.
Other popular items were house¬
For the four weeks ended
over
a
records and light furniture.
Total
week
was
appliance selling.
week
States reported a sharp weekly increase in
gains in the East North Central, West North
the
.
degree in the case of the volume of suits and coats.
The
purchase of infants' and children's clothes advanced moderately, in
England
were
i
»
lesser
lesser
Central, Mountain States and in
volume };
dollar
store
increased seasonally last week.
Con¬
sumer interest in coats rose slightly, while the response to blouses and
sportswear was enthusiastic.
Lingerie was also popular.
Men's ties
and accessories were bought abundantly, but this was true to a
New
there
department
in scattered localities,
a year ago
for apparel
demand
increased by
WHOLESALE FOOD PRICE INDEX SHOWS FURTHER EASING
Schwabacher & Co.
price
with
Increases
on
In
mild, while construction and
increased sharply. All
industry and trade
,
sum¬
week.
relatively
groups had more casualties than in 1948.
according to Dun & Bradstreet, Inc., in its weekly
of trade, were slightly below the level for the corresponding
mary
small
from
areas
Orders Executed
dollar sales,
casualties remained below the prewar total of 249 in the correspond¬
failures
Pacific Coast Exchanges
buying rose moderately in many parts of the country
during the period ended on Wednesday of last week. Aggregate
failures
in the
161
commercial service failures
Securities
IN WHOLESALING
'Retail
wares,
ing week of 1939.
and
Pacific Coast
RETAIL TRADE MODERATELY HIGHER WITH NO CHANGE
crease
BUSINESS FAILURES ADVANCE SHARPLY
retailing the increase
Private
The coffee market developed a better undertone at the
aided
S.
and 24,620 units in the like week of 1941.
year ago
Wholesaling failures dropped despite the general increase.
San
Actual business, however, remained slow as bakers and job¬
keeping with the Yule pattern.
Motors
former's Chevrolet division resumed
week in
Whyte.
past week,
vehicle production in the United States and Canada rose
sharply to an estimated 115,495 units from the previous week's total
of 86,226 (revised) units. It was the first time since the week ended
Nov. 19, that the total has exceeded 100,000.
street, Inc. states.
those of the author only.]
York
the 10-year average.
flour market was featured
bers limited their takings to nearby needs.
Despite
motor
Commercial
[The views expressed in this
article do not necessarily at any
time coincide with those of the
New
of 3,681,-
by inquiries for large
quantities of hard wheat bakery flours late in the week.
The
According to "Ward's Automotive Reports" for the
week ended Dec.
More next Thursday.
New
below last year's record
domestic
equalled that of
AT GENERAL MOTORS AND CHRYSLER PLANTS
now
about
Chronicle.
The
1948
Most of the week's improvement was
The
far above
were
AUTO OUTPUT CONTINUES RISE STIMULATED BY GAINS
however, that the danger sig¬
weeks
3,377,790,000 bushels, only 8.3%
793,000. The total wheat crop was placed at 1,146,463,000 bushels, or
12.7% under last year's revised estimate of 1,313,534,000. Both crops
4.4% FROM PREVIOUS WEEK
totaled 639,723 cars, according to the Association of American Rail-r
roads.
This was a decrease of 29,102 cars, or 4.4% below the preced¬
though it ing
A buying-
kets still higher. It does mean,
I
showed independent strength and closed
moderately higher than a week ago. • In its final report of the year,
the Department of Agriculture estimated this year's corn crop at
vious,^.:'
The amount of electrical energy distributed by the electric light
Ms
Me
This doesn't
nals
active with all offerings easily absorbed.
corn was
,
*
minded
wheat
cash oats market
The
but
8.8% ABOVE
years ago.
may
in
Strength
Entries into the government loan stock declined for the week,
LIKE PERIOD IN 1948
CARLOADINGS
small.
relatively
volume.
Trading in
at 1,281,210 tons.
the market.
a
corre¬
buying of wheat tended to lag; government purchases continued in
small
ingots and castings compared to
ELECTRIC OUTPUT LAST WEEK
and
period
the
a
actual market broadened
This week's operating rate is
of
the
on
undertone last week with net
firm
a
lack of hedging pressure and tightness in the cash market
the movement from the country remained small.
Export
ings.
large
amount of stock, I would do
it when everybody wanted to
buy them. I can see that sort
of a thing going on all through
,
16 by U. S.
companies having 94% of the j
steel-making capacity for the entire industry will be 93.1% of j
capacity for the week beginning Dec. 26, 1949, a decrease of 1.4 ;
points from the preceding week's rate of 94.5%.
Curtailment of operations in some plants on Christmas Day
applicable today
more
ever.
made effective Dec.
com¬
The American Iron and Steel Institute announced this week
accounted for the week's
have
By this week most steel
Steel Corp.
that
changes for
where
during the early postwar period none of
this furore would have been raised."
are
price
reflected
it did not raise
ular theories of stock market
earlier, and with 268.02
v?:''-'-
v".'
Grain markets maintained
are
trying to place orders right now.
There are at least five other bright business prospects
week
a
year ago.
a
decline of 6%.
a
a
year ago and
for the year to
Retail trade in New York the past week displayed much
strength at the close due to late Christmas buying. Department
store sales
This
were
increase
Christmas
as
estimated at 10 to
was
attributed
to
15% higher than a year ago.
extra shopping day before
the
contrasted with the like week in 1948.
.
Federal Reserve Board's index, department
store sales in New York City for the weekly period to Dec. 17, 1949,
According
to
decreased by 2%
week
1948.
a
decrease
For
the
the
from the like period last year.
In the preceding
was registered below the similar week of
of 4%
four weeks
ended Dec.
reported under that of last year.
decreased by 7%.
was
NOTE—On
most
17,
1949,
For the
a
year
decrease
of 3%
to date volume
another page of this
comprehensive, coverage
of
issue the reader will find the
business and industrial statistics
showing the latest week, previous week, latest month, previous year,
etc., comparisons for determining the week-to-week trends of con¬
ditions, by referring to "Indications of Current Business Activity."
i
,,
■
.
_
Volume
Number 4868
170
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(2663)
1
The
Indications of Current
week
Indicated steel
AND
INSTITUTE:
STEEL
Week
(percent of capacity)
operations
Jan.
month available
month ended
Ago
87.7
94.5
Jan.
(net tons)
1,716,300
1
1,742,100
OF
1,753,800
condensate
output —daily average
"gallons each)
——J,
—.~
Crude runs to stills—daily average (bbls.)_
ana
(bbls.
'
——
—
—
Qasoline output (bbls.)
Kerosene
output
Gas, oil,
ui.
-
5,000,150
4,979,300
5,211,050
5,697,300
—Dec-17
Dec. 17
„.
—
————
—
(bbls.)
Dec. 17
115,389,000
5,234,000
5,292,000
5,766,000
——.
18,219,000
18,157,000
17,902,000
2,555,000
2,068,000
2,227,000
r~
7,117,000
8,214,000
Dec. 17
7,263,000
7,037,000
8,056,000
7,853,000
distillate fuel oil output
(bbls.)
.
Kerosene
(bbls.)
Residual fuel oil
22,267,000
82,450,000
(bbls.)
at
23,397,000
27,526,000
85,926,000
92,652,000
*64,476,000
68,620,000
freight loaded
East
Revenue
DUN
—
$214,713,000
$239,478,000
&
CITIES—Month
INC.—215
§668,825
§758,972
754,552
South
§584,885
§592,621
§595,026
668,734
West
72 082,825
36,216,765
25 962,852
75,216,843
60,834,591
46
51,829,002
19,714,248
Central
$17, 918,084
98,797,195
63.325,364
Central
$19,170,505
59,490,694
34,043,573
i
Central
(number of cars)—Dec. 17
freight received lrom connections
15,219,000
$16,043,935
VALUATION
Atlantic
§639,723
(number of cars)
1,161,000
11,606,000
of November:
Dec. 17
Revenue
14,118,000
9,131,000
—
PERMIT
BRADSTREET,
RAILROADS:
AMERICAN
OF
9,514,000
13,734,000
shipped between
and
New England
Middle Atlantic
South
ASSOCIATION
stored
Total
25,227,000
47,760,000
8,796,000
$250,686,000
goods
on
BUILDING
64,445,000
98,225,000
$151,706,000
39,453,000
901,000
foreign countries
76,344,000
62,786,000
Dec. 17
Dec. 17
(bbls.) at
103,380,000
;
exchange
Based
9,494,000
106,146,000
108,490,000
Dec. 17
at
Gas, oil, and distillate fuel oil
.
credits
7,571,000
,
$140,223,000
8,391,000
;
warehouse
Ago
BANK
30:
l
Dollar
Year
Month
16,547,000
Nov.
of
—
shipments
2,537,000
18,329,000
Residual fuel oil output (bbls.)
Dec. 17
Stocks at refineries, at bulk terminals, in transit and in pipe lines—
-Finished and unfinished gasoline (bbls.) at
Dec. 17
and
YORK—As
Previous
43,998,000
NEW
Domestic
42
of
——
:
OUT¬
RESERVE
Domestic
—Dec. 17
—
of that date)
$172,619,000
ACCEPTANCES
DOLLAR
Exports
INSTITUTE:
PETROLEUM
oil
are as
Latest
97.3
1,616,800
either for the
are
Month
BANKERS
Imports
Crude
of quotations,
cases
STANDING—FEDERAL
ingots and castings
AMERICAN
in
or,
Year
Ago
-Equivalent tc—
Steel
(dates shown in first column
that date,
on
Month
Week
93.1
1
or
or
Previous
Latest
IRON
production and other figures for the
cover
ir
Business Activity
AMERICAN
<
following statistical tabulations
latest week
31
22,228,696
16 039,423
548,545
36 ,698,603
Mountain
CIVIL
CONSTRUCTION
ENGINEERING
ENGINEERING
—
11,142,104
8,730,864
14 430,964
Pacific
NEWS-
54,168,235
58,789,593
53 ,293,276
$309,757,155
RECORD:
Total U.
Public
.
Dec. 22
$155,507,000
$119,434,000
$90,244,000
80,135,000
75,379,000
44,949,000
111,832,000
75,372,000
44,055,000
45,295,000
61,403,000
Dec. 22
State
and
53,146,000
38,860,000
35,177,000
50,204,000
Dec. 22
22,226,000
5,195.000
10,118,000
11,199,000
:
——
construction
______——
municipal
—
,
;
$173,235,000
Dec. 22
——Dec. 22
S.'construction—
Private construction
,
United
Total
Net
York
Outside
States
BUSINESS
City™
DEPT.
INVENTORIES,
MERCE
NEW
—-
SERIES
OF
Month
—
$282,974,572
54,703,602
325,281,450
49,415,458
233,559,114
$30,000
York
New
$379,985,052
37,418,647
272,338,508
1_.
City
of
*$31,100
$33,500
COM¬
of
Oct.
(millions of $):
COAL
(U.
OUTPUT
coal
Bituminous
OF MINES):
S. BUREAU
and
11,593,000
*13,500
14,150,000
1,133,000
5,900
"543
342
576
Dec. 17
8,715,000
*9,250,000
——_Dec. 17
618,000
636,000
Dec. 17
19,800
—Dec. 17
580
(tons)w—
lignite
Manufacturing
Wholesale
DEPARTMENT
STORE
(tons)—
INDEX—FEDERAL
SALES
RESERVE
AVERAGE=100
TEM— 1935-S9
——.
9.700-
9,200
14,400
14,900
*$54,600
$58,200
$589,224,000
—
941,000
9,200
14,500
$54,000
Pennsylvania anthracite
Beehive coke: (tons)
$553,482,000
$451,112,000
143,600
SYS¬
CIVIL
CONSTRUCTION
ENGINEERING
GINEERING
NEWS-RECORD
—
EN¬
Month
—
of
November:
EDISON ELECTRIC INSTITUTE:
(in 000 kwh.)__
Electric output
:
Total
,
5,537,122
5,996,606
5,993,943
Dec. 24
—
5,508,240
U.
Private
(COMMERCIAL
1NDUSTRIAL)- -DUN
AND
&
and
BRAD-Dec. 22
—
Pig
ERAL
COMPOSITE PRICES:
Finished steel
iron
(per lb.)
(per
ton)
gross
—»*.——i—I——
;
—
——
Scrap steel (per gross ton)
METAL PRICES
(E.
M.
&
Domestic
York)
(New
Zinc
—
$27.25
$29.92
$43.00
S.
20
•
18.200c
23.200c
18.200c
18.200c
—-t._Dec. 21
18.425c
18.425c
18.425c
Dec. 21
78.000c
78.750c
85.000o,
|
j,
.-..Dec. 21
12.000c
12.000c
12.000c
*
V
21.500c
Dec. 21
11.800c
11.800c
11.800c
*
—-
9.750c
9.750c
9.750c
.
Average corporate
Bonds.
•
Group
(DEPT.
104.16
115.82
115.24
Industrials Group
121.67
121.46
121.25
U.
S.
•
119.61
119.41
115.63
115.43
114.66
107.80
106.74
103.97
Dec. 27
2.17
116.22
Dec. 27
—.
'-Vi.''''
2.85
2.86
2.58
Dec. 27
Group
—
2.89
of
3.07
->
hand
on
Total
vf .%f!
Production
Market
value
of
Market
value
of
2.92 .T/v
3.14
Member
borrowings
on
3.29 fx:.-:-.;;
3.35
3.51
Member
borrowings
on
3.2L
2.80
orders
Unfilled
2.84
346.5
346.4
347.2
396.5
167,383
203,493
179,741
.Dec. 17
204,204
210,286
205,526
194,508
.Dec. 17
92
96
94
96
.Dec. 17
at
(tons)
377,366
2.79
.
,
PRICE
REPORTER
DRUG
AND
PAINT
October
421,332
sales by dealers
Number
EXCHANGE
416,000
124.9
125.8
143.1
short
737.797
$26,958,605
31,856
28,973
19,717
other
Customers'
Dollar
value
247
123
133
industries
Dec. 10
employee
Other
Short
sales
—
Other
i
sales——————-—Dec. 10
Dec. 10
——
—
"
sales
—
———
contributions
$118,085
419,724
228,614
208.4
*210.5
216.3
133.1
*134.8
138.1
135.3
♦137.0
140.3
56.8
58.5
62.7
*40.4
40.4
;*17.1
16.9
21.3
*21.0
20.3
social
for
—
and
interest
transfer
——
rental income
income
2.2
2.2
2.2
and dividends—.
2.2
2.2
2.0
43.9
income
labor
♦43.8
49.0
17.5
•17.4
16.8
11.7
•12.3
10.4
190.5
*193.1
192.9
$1,659,950
payments
;V
7.
—--
28,726
19,594
Cf;.
r.,:
v
520,452
636.647
9,101
4,184
5,458
890,946
809,959
516,268
631,189
$30,473,267
$27,623,674
$18,831,219
$21,071,080
/
•
■350,080
287,700
172,750
$800,000
IN DI¬
SECURITIES
A.—Month of November:
Inc:
en
Net
.
i,
.
$11,531,250
*_■
$257,011,328
purchases
GROSS DEBT DIRECT
STATES
UNITED
of
30
Nov.
fund
General
$256,805,409
4,737,054
AND
omitted):
GUARANTEED—(000's
As
4,421,935
balance
$252,652,994
4,385,070
2.214%
2.222 %
$252,068,355
$848,500,000
558,600,000
$904,400,000$1,022,600,000
529,900,000
600,200,000
$275,000,000
$275,000,000
$275,000,000
256,982,000
256,777,727
252,506,047
29,327
27,631
56,946
$257,011,328
$255,805,400
$252,562,994
749,490
752,571
801,696
$256,261,838
rate
2.222%
$252,589,393
annual
$256,052,837
$251,761,297
18,738,161
18,947,162
23,238,702
160,440
debt
Net
350,080
287,700
172,71 f
228,910
268,420
173,620
295,660
$248,177,924
160~440
UNITED
,v
.-Dec. 10
«—
TRANSACTIONS
GUARANTEED
AND
S.
U.
22,268
819,060
6,987
.
.7:7
RECT
Computed
Dec. 10
_——.—I
—-—-Dec. 10
,—————.————————Dec. 10
Round-iot purchases by dealers—
Number of shares
•
TREASURY MARKET
Mnf
31,669
,
Dec. 10
shares—Total sales
of
Number
industries
Government
OF
897,933
i—Dec. 10
——
sales by dealers—
Round-lot
■
$152,088
465,070
22,401
187
•
4 /;
71.4%
$115,257
17.4
—-—
25,032
538,982
$22,562,168
"
sales
18,427
744,891
$29,448,934
**
—Dec. 10
—Dec. 10
sales
24,869
25,561
776,625
$30,688,357
by dealers (customers' sales)—
other
Customers'
65.466,283
COMMERCE)—Month
salary receipts,
Service
Total
Dec. 10
shares—Customers' total sales
Number of
OF
Total nonagricultural income
Dec. 10
short sales—
Customers'
r
c
131,233,680
billions):
income
employer
Personal
.—Dec. 10
orders—Customers' total sales
of
Customers'
75.9 %
39.8
S. Govt. issuesother collateral
U.
Distributive
323,781
ODDSTOCK
—
Odd-lot purchases
Number
THE N. Y.
COMMISSION:
72,630,605
132,221,476
76.2%
insurance
shares—
of
value
Dollar
ON
SPECIALISTS
73,174,833
132,444,956
—
12-31-24=100-
(customers' purchases)—
orders
of
Number
;
AND
DEALERS
563,441
Commodity
-
124.6
.Dec. 23
EXCHANGE—SECURITIES
Odd-lot
585,517
total—.,
disbursements—
—
producing
industries-.—
Total
155,499
TRANSACTIONS FOR THE ODD-LOT ACCOUNT OF
LOT
1
596.116
bonds
listed
(in
personal
Proprietors'
STOCK
361,412
balances-
listed shares—
(DEPARTMENT
of
Total
1926-26
INDEX
AVERAGE=100
.
288,829
PERSONAL INCOME IN THE UNITED STATES
Less
OIL,
49,183
301.115
3.04
2.60
.Dec. 17
(tons)..
$551,101
71,613
S.„—
3.34
■
•
2.65
Dec. 27
Percentage of activity
$782,944
62,546
credit
free
Stock price index,
•
2.79
INDEX.
(tons)
18,978
accounts—
balances
banks in U.
in
and
2.86
3.12
3.12
-v
Group
received
18,866
of
customers
customers'
of
Wage and
Orders
net debit
to
2.77
.C
PAPERBOARD ASSOCIATION:
NATIONAL
$33,528
$813,106
AS
—
margin
carrying
customers'
extended
2.68
2.59
•v-i;
2.64
Dec. 27
'
COMMODITY
MOODY'S
17,917
$31,069
(000's omitted):
firms
Total
EXCHANGE
STOCK
2.88
2.87
3.29
Y'-v.
2.67
V-2.66
Dec. 27
Industrials
16,794
16,881
Member
2.43
2.20
2.17
2.57'
Dec. 27
,
Group
$14,266
16,889
$30,842
YORK
Cash
Dec. 27
Utilities
$15,611
$13,954
Nov. 30
112.37
119.82
iv
120.02
v
DAILY AVERAGES:
Dec. 27
Public
NEW^SERIES—
of dollars):
(millions
Sales
NEW
106.92
117.00
117.20
117.20
120.22
-
109.24
110.88
110.88
Dec. 27
Dec. 27
Railroad
COMMERCE)
:
110.52
107.80
Dec. 27
corporate———
Average
13,430,401
14,715,660
13)
Total
115.82
119.82
-a
Bonds-——-.
Government
296.8
SALES
ft
Nondurable
117.60
—
YIELD
BOND
INVENTORIES
October
of
Credit
MOODY'S
*285.3
111.81
—
Group..—
$287,000
COMMERCE):
OF
(excl. of linters to Dec.
OF
Month
100.96
104.54
116.02
Dec. 27
—
Utilities
$278,000
(1935-1939=
Durable
: '
104.50
Dec. 27
Public
(DEPT.
MANUFACTURERS'
17.500c
Dec. 27
Railroad
Running bales
23.425c
Dec. 27
—
——,—
$277,000
103.000c
Dec. 27
———
________—_——————
—
GINNING
Inventories:
Dec. 27
Aa
COTTON
PRICES DAILY AVERAGES:
BOND
—^—
CONSUMER PURCHASES OF COMMODITIES-
21.300c
Dec. 21
—Dec. 21
——
at
—
54,195,000
YORK—
NEW
& BRADSTREET, INC.
100)—Month of November
at————
Government
OF
(000's omitted),
30
DUN
.
at_._
BANK
RESERVE
47,378,000
OUTSTANDING—FED¬
PAPER
Nov.
of
242,671,000
188,476.000
$46.91
$26.92
As
3.720c
$45.88
(East St. Louis) at—
MOODY'S
U.
3.705c
$45.88
-
refinery at——.
Export refinery at
(New Ycrk)
Lead
3.705c
$45.88
_—:
j
Straits tin
Lead (St. Louis)
J3.835C
—
QUOTATIONS):
J.
Electrolytic .copper—.
Dec. 20
———Dec. 20
208,441,000
225,442,000
278.4
116
148
161
196
COMMERCIAL
IRON AGE
Municipal
280,662,000
272,820,000
235,223,000
s
312,227,000
276,997,000
construction
construction
State
STREET, INC.
^
41,774,000
Public
FAILURES
construction
S.
EXPORTS
STATES
BUREAU
AND
IMPORTS-
CENSUS—Month or
OF
October
(000's omitted):
PRICES
WHOLESALE
1926—100:
All
•
NEW
SERIES—U.
S.
DEPT.
OF
Exports
LABOR—
Imports
''<>.
■
—————————————Dec. 20
commod'ties
151.0
151.1
151.5
162.0
All
products
and lighting
and
Building
All
177.5
159.5
170.4
145.3
145.0
152.7
137.5
137.4
137.4
,146.8
130.4
130.4
130.5
137.0
169.6
168.7
169.2
174.0
——Dec. 20
190.3
189.8
189.4
202.2
—Dec. 20
Textile
Metals
156.8
156.5
145.4
115.5
115.8
116.2
130.5
Dec. 20
products
commodities other than
Fuel
154.2
155.6
Farm
—
»
materials
metal products
Materials
—„—Dec. 20
farm and foods
—
■
——,—
—
m
—
i
other
.
Dec. 20
—Dec. 20
—Dec. 20
154.5
U. S.
GOVT.
—As
Total
at
of
any
'
Hides
and
♦Revised
years
1946
158.3
170.1
187.9
185.3
185.9
218.3
207.9
211.1
227.8
201.5
198.6
201.9
filncludes 538,000 barrels of foreign crude runs.
161.9
may
be outstanding
Outstanding—
Total
gross
Guaranteed
public debt
obligations
not
owned
by
the
Treasury
gross
public debt and guaranteed
obligations
Deduct—Other outstanding
public debt obli¬
gations not subject to debt limitation
Grand
tThe weighted finished steel composite was revised for the
to date. The weights used are based on the average product shipments
to 1948 inclusive.
§Reflects effect of five-day week effective Sept. 1, 1949.
1941
that
time
193.7
Dec. 20
skins
figure.
160.9
Dec. 20
—■■■————————.
——
———_DeC. 20
205.3
—i
Grains
Livestock
amount
one
Total
.•Special indexes—
STATUTORY DEBT LIMITATION
(000's omitted):
Nov. 30
face
for the 7 years 1937 to 1940 inclusive and
total
outstanding
Balance face amount of obligation issu
under
above authority
Revised figure.
le
£2'
Continued
from first page
balance)
But if
Federal
monthly
The
been
has
there
peak of 195 in the
fall of 1948 to a low of 161 in July
a
nearly
1948
of
for
191.7 and for the first three-quar¬
ters
of
1949
tion
of
176.5—a reduc¬
8%.
was
The FRB Index gives an
exag¬
income,
fluctuations of
general business because it meas¬
of only about
one-quarter of the total civilian
labor force, or about one-third of
If
dp
;•
a
condition
pression year by some people,.
There has been a real depres¬
sion in cotton textiles, some other
textiles, radios, washing machines,
and rubber tires.
The backlog of
find
in
and
forecasts
and
clearer picture
enough
to
business in the sense conveyed by
in 1948 and that
Gross National
about $260 bil¬
The average annual rate of
National Product for the
Method
about
business
lion.
Gross
of 1949 is esti¬
Department of Com-
first three-quarters
mated by the
just $260 billion.1
■3p$irce at
*
accidental "hit" because,
this
Tor
like
take credit
I don't wish to
But
forecasts that turn
many
so
I
of
well., it is the result of several
offsetting errors. I estimated that
out
better than:;1948,
be
would
1949
although it has been worse.;; On
basis of the first three quar¬
the
as
of
results
ter
estimated
Product
billion. It
be $262 billion, as I
I
1948,
Gross,
National
.somewhat low, at $256
1948
turned out to
1949 Drop in
Inventory
1948
at
an
1949
private and government
And in
of private
1949 I made a less
investment expenditures.
investment for
because
mistake
excusable
.
estimate
this
I
consid¬
erable drop in inventory invest¬
failed to foresee the very
1948 to 1949. This drop
ment from
estimate
corresponding
Product will
approximately
and
1948
for
G.N.P. of around
Suppose
in only one year, 1946,
nearly double any pre¬
has
It
figure.
that
situation
my
has
there
was
an
unusual
have
should
at¬
attention. ' In 1949
a slight decrease
been
in inventory investment over
first
three quarters.?
the
In fact, the
of 5 to
10%
over
this period.
The recession in
—-indicated
by
manufacturing
the 17% drop in
durable
Producers'
full
in
"The
forecast
Commercial
Chronicle/' Jan. 6,
published fn
And Financial
was
1949.
some
of
equipment
undoubtedly passed its post¬
peak.
were
nearly the
1949 but
are
expenditures
in 1948 and
These
war
same
estimated to be 20 to
25% lower in 1950.
Changes in business inventories:
because
these
the
of
liquidation
inventories
during
increase
of
of
1949
billion
$1
a
is
im¬
ports
(included in Net Foreign
Investment) is expected to de¬
cline
the
about
U.
S.
one
dollars if
Government
through E.C.A.
These
billion
1950-51
two
are
grants
reduced dur¬
fi^al
latter,
vear.
items
about offset each other
the
ex¬
business—should be included
as a
establishing
in
factor
direct
a
forecast.
Third—Individual industry
smaller
cles
cy¬
product cycles—not the
and
single business cycle—can be used
complete cycle of demand since
the end of the war, with
low
mates of
and check the esti¬
to supplement
many
differ¬
■'
It
is
well
(increase
known
single industry
yet to show
looked for last winter, but
not
A
appear.
"■
investment expenditures
forecast.
a
•,
■
.
:
•
'
*
i-\
'
;'y *
y'
it did
beginning of de¬
that
these
uct
only their average length.
these industry or prod¬
1950.
The trend of demand and
spending should be down in
cycles.
cycles as average patterns of
demand; and in this lim¬
role
they
are
useful
and
dependable.
that
most
are
useful
are
quite familiar:
There
the residential
building cycle. This cycle has had
>
an
is,
average
first,
18-year length for the
past hundred
years.
The current
There is a
completely different
pattern of demand in textiles and
in
s'emidurable
This
generally.
pattern
has
goods
characteristic
the end of the war with low points
in 1945, 1947, and 1949.
Conse¬
quently, it is reasonable to look
for increasing activity in cotton
and wool
soft
textiles, in many other
goods
lines,
sales
ment. store
and in depart¬
during the first
antici¬
We may also
be
conditions
of
cus¬
return.
Finally, there is a cotton con¬
length from the Worland
Field
Worland, Wyo., to a connec¬
tion
Baker, Mont., with the
near
Montana-Dakota Utilities Co. nat¬
ural
transmission and distri¬
gas
bution
system
easterns
serving
of South
and the Black Hills area
together with a
Dakota,
nation
combi¬
dehydra¬
compressor,
gas
sulphur removal plant
tion,
and
at
near
or
Dakota,,
western North
Montana,
the-Worland Field, and
such
pipeline and plant
Montana-Dakota for a term of
25
years.
a
down-trend
manufacturing
in late 1950.
should be better than the
half.
ing";
Montana-Wyoming and
Montana-Dakota have entered in¬
to
a
contract with The
for
Co.
the
purchase
Pure
of
Oil
natural
from the Worland Field.
gas
The first half of 1950
Another
reason
second
for expect¬
upward lift in business
during the first half of 1950 is the
expected to return when distribution of $2.8 billion of new
normal
in
to
then,
in normal times is offset the other in early 1950, but
now
it has largely all patterns are headed down hill
tomer demand
12%-inch outside diameter
a
in new
private construction and in heavy
If
soft goods industries, one tends to
can
Commis¬
lease
heavy industry
Just
from the Federal Power
to
cycle of about 40 months average
disappeared because of the abnor¬
mal
postwar demand for steel,
automobiles, electrical machinery,
and many other producers' goods
and consumer durable goods.
It
received
authorization
to
suant
com¬
to construct, pur¬
proposes
declining trend into 1951.
a
industry is com¬
bined with the' short up-trend iq
that
Montana-Wyoming
The
pany
near
pate
length
of underwriters headed by
Blyth & Co., Inc., and Merrilf
Lynch, Pierce, Fenner & Beane.
Rights will expire at 2 p.nu
(CST) on Jan. 4, 1950.
continue to decline in 1951.
long one because of the war. This
cycle, of course, is closely related
to
investment
expenditures for
private construction..
a
been underwritten by a
has
pipeline approximately 340 miles-
cycle, however, is an abnormally
is
share
for
each
Montana-Dakota
sion
because of the normal
demand of these dur¬
products it will probably
of
half of 1950.
Then there
shares of
seven
pattern
completed two 2-year cycles since
The three patterns of customer
demand
tana-Wyoming
1950, and
use
customer
the basis of one Mon¬
on
group
able
of
I shall
150,000 shares
$5) of Mon¬
1949, at $13.25 per
record Dec. 20,
share,
held
to time schedule. But I shall make
use
of
offering
tana-Wyoming Gas Pipe Line Co.
to
holders of common stock of
Montana-Dakota Utilities Co. of
looked for late in
of
or
The
of common stock (par
cline in overall demand should be
single product
cycles have shown a useful regu¬
larity as to average length and as
more
just
Automobiles have
any overall slackening of demand.
A normal
seasonal
decline was
Principally on account of an
approaching satisfied demand for
These valid objections do not steel and automobiles, the pre¬
apply if we use several single in¬ dicted decline in producers' dur¬
dustry cycles, or even single prod¬ able equipment is confirmed by
uct cycles, and treat them as sep¬ the position and normal behavior
arate individual cycles.
of these 40-month heavy industry
useful.
1
The surplus of exports over
ing
1949
in
in 1950.
small
investment
drop
long-term gradual de¬
cline, I have estimated a decline
estimated for 1950.
decline in gross private domestic
invest¬
a
ventory investment from Jan. 1,
1949, to Sept. 30, 1949, accounts
for $7 billion out of the $8 billion
1 This
rate
at
change of about $7 billion in in¬
v
in
peak levels in 1948
and 1949, and it is reasonable to
look for
includes
lengths, different relative
amplitudes, and continually vary¬
ing phase relations.
construction
Private
com¬
cyclical movements, with dif¬
ited
at
result of its
the
ferent
10%.
look
we
been
tracted
ent
therefore
a
cycle
ness
neighbor¬
am
1950
this is
posite nature. The over-all busi¬
compare
I
1949.
forecasting
has
was
But
billion. These
with
$260
billion
in
G.N.P.
of
figures
of
a
posite business cycle is too erratic
to be of any use in forecasting.
hood of $235 to $240
details.
war
in the
Some
government
products, such as radios and wash¬
ing machines, have gone through
behavior
been stressed
major forecasting
Second—That
By Blyth Go. Group
National
Gross
be
dustries.
gen¬
penditures of an investment na¬
ture—government purchases from
situation in the durable goods-in¬
cycles
of their
mixed
a
force
of
eral business.
equipment
There is
industry cycle.
expen¬
initiating
the
are
that determines the level
unsatisfied demand, but
is that it has shown no
useful
regularity
in
its
timing
and by the middle of 1950, demand
length in the past. I agree with for steel will probably begin to
this opinion. The over-all com¬ decline again.
expenditures in 1950 will
$55 billion and the
the
and
similar
the
business
one
durable
Producers'
investment
First—That
ditures
porary
around
be
investment has been
the distinguishing characteristic
of the business pattern in 1949. In
1948 there had been a consider¬
able increase in inventory invest¬
ment amounting to $6.5 billion.
This increase had been exceeded
in inventory
slightly
annual
average
casting:
is related to the 40-month heavy
survey
informal business fore¬
your own
Sleek Underwritten
nearly $65 billion and
were
were
ment
of
estimate
this
Gross National Product on an es¬
making
foreign
expenditures
nor
Montana-Wyoming Gas
1950
investment
total
I
Investment
based
timate of
in
credits
years
r
loans
and
transactions)
government
on a
accurate forecast.
conclusion, I wish to stress
three points concerning this fore¬
casting method that I hope you
will
remember
and
practice in
In
.
of,about $60 billion in the first
three-quarters of 1949.
have said.
I
setting
may
trouble.
general method can make a
techniques.
in arriving at
'i\ '' Y
'' '*
However, I am assigning a less pointsearlier this year.. These
important
forecasting
role
to products that have already com¬
business cycles than is assigned pleted a declining phase of their
demand should
to them by their more enthusiastic cycle's customer
increase in sales during all of 1950.
supporters. Usually the business
Steel showed the first signs of a
cycle that is considered is related
satisfied
customer
demand
last
to business as a whole; and, usu¬
summer.
The
steel
and
coal
ally. the argument against the use
of this composite business cycle strikes have created a new tem¬
expenditures of an invest¬
nature
(and exclude off¬
ment
engaged
of them has the
one
of
changes in business inventories.
If we use private and govern¬
ment
that
into
forecasting practice of business
not
in 1949 has been at
level except for
high
this
more
programs.
thirty major corporations and in
prospects of 1950.
As
I
have explained, ^invest¬
very
knowledge"
forecaster
now
am
suggest?
and
It is not only
studies.
possible but probable that many
in this audience have bet¬
concerning invest¬
ment
expenditures of a specific
kind than I have, and by using
may go.
conclude that the decline will be
firms. We have interviewed about
Business Prospects
ment spending
the
lead
Suppose we apply this roughand-ready method to the problem
under discussion — the business
a
"little
the
it
forecasters
of
These
do not
ter information
the decline will
how far down it
But we can reasonably
continue,
rough
my
kinds
of you
We needn't guess
to decline.
several
expenditures.
are
field
hand
for industrial construction has be¬
how many
business
better than
have the solid foundation of first¬
of the 18-year residen¬
gradual both because its usual be¬
1 know that the use of business
havior is to decline gradually and
cycle behavior as a forecasting because of the unusual sustaining
tool is highly suspect and to many
effects
of
government
housing
expendi¬
Estimating
For
concept of the business
the usual
inclusion
Product would be
estimates
building cycles; although this
gun
concen¬
1950
of
no
investment
cycle.
about the same
as
in
business
of
of the pat¬
1950 can be
go
business in
that
say
1949 would be just
can
is
estimates of the
We are, apparently, at the
one
estimate
prospects
of
can
directly.
the
tial
obtained. I refer to the pattern of
I also wish to stress
of government ex¬
industries fared as well as or bet¬
penditures of an investment na¬
ter in 194.9 than in 1948.
,
,
ture—public works and military
If we turn our attention to the
components
of Gross National goods and other purchases from
Product we can learn something business by Federal, State, and
local governments—because these
more about the nature of this re¬
government expenditures are not
cession or adjustment.
usually treated as investment,- al¬
•Last year at a similar meeting j
though they react on the economy
in
Cleveland, I was optimistic
way as private inuct
a
tern
changes in Gross National Prod¬
hand, most heavy
other
the
On
top of
reduction will be
this
cific
building and new
construction generally
have been at peak levels for two
checked
be
these
consumption expenditures and
in
something
us
represent newly created money, -.i We can reasonably guess that the
There is another way by which current
demand for houses and
about changes
can
we
the
an
more
investment
than
tures
car
much
out
changes
builders
practically disappeared in 1949.
freight
orders, of
the
in¬
wrong
in estimating investment
expenditures, as I did in over¬
looking the probable changes in
inventories, but usually we can
we
tell
around
of
I
hope
you
will
give
more
weight to my remarks about the
methods of forecasting
than to
the specific figures I have used or
to the resulting forecast. This spe-,
of current cycle, as I have mentioned,
will be longer than the average
$2.8
billion
of
dividends
to length,
because
of the Second
holders of GI insurance policies. I World
War. The upswing of the
am
assuming that the funds for current cycle started in 1934. It
paying the dividends will not has already lasted 15 years in¬
come out of tax money, but will
stead of the average nine years.
is
of
You
nature.
the first-half
distribution
during
This
1950.
of
expenditures
demand
years.
demand
how
1950
trated in the last half of the year.
Residential
unusual favorable
one
and
about the overall pattern of
private
There is
presented,
just
in
gen¬
measured
also
of
1950 business?
factor that will increase customer
I did
as
private
total
the
investment
tomer
Effects of GI Insurance Dividend
the over-all
business by
general
government
<•
industries
of
estimating
why 1949 is called a de¬
see
ago,
year
method of estimating
check
and
further
individual
on
can
V-' Y
r -
look
we
emphasize,
the value
I wish to
employed workers in non-agricul¬
tural establishments.
It omits the
labor force in the most stable in¬
dustries.
with
of
compared
in the FRB Index
dustrial production.
drop
output
the
ures
by total produc¬
(Gross National Product).; I
expect that most, if not all,
these normal patterns of cus¬
more
smaller.
the FRB Index—but
as
is estimated
larger and military expenditures
relatively small change in Gross
National
Product
and
personal
gerated picture of
have
I
can
at about $20 billion in
remain
of 1949.
expenditures by ultimate users
(persons and business firms) were
notably constant.
This is a major reason for the
was
$20
(nine-months rate)
four quarters pro¬
duction declined considerably—as
indicated by
$17
to
about
and
to
these
During
The average
large.
all
as
Index
£<RB
amounted
which
billion in 1948
billion in 1949
business)
from
chases
ex¬
business
try or product cycles be used to
reinforce the forecast for 1950 that
1950. Public construction may be
second and third quarters
indus¬
trial production for longer
pe¬
riods, as we did with Gross Na¬
tional Product, the difference is
However, if we measure
not
con¬
(pur¬
distribution in the
tion fell below
decline of 17%.
of this year—a
investment
these three indus¬
can
in
eral
Cycles Affecting 1950
Now how
latter.
Government
business buy¬
ing for capital account during the
fourth quarter of 1948 and the
first quarter of 1949, and produc¬
de¬
Index
FRB
adjusted
clined from
exceeded
had
of it by the
decline
a
tion
Production
predictions, I
moderate
pect
10%,
is usefully
goods in general
'
private invest¬ related to soft
entirely by and to department store sales.
ducers'
buying and
sumer
recession.
a
length- that
average
private construction and by pro¬
durable goods, and most
November,
July, 1949—was almost
an
inventory recession.
Production
Douglas did—
Senator
Index—as
then
Reserve
in
To repeat my
sumption cycle of about two years
ment is accounted for
from
Index
1948, to
entirely
the
Board
by
measured
mining,
arid
FRB
the
look at manufacturing
we
decline
mated
Prospects for 1950
esti¬
the
that
so
Thursday, December 29, 1949
CHRONICLE
in inventories and decrease in ex¬
port
Business
FINANCIAL
&
COMMERCIAL
THE
(26641
an
funds to holders
of GI insurance
policies by the Federal Govern¬
ment that I mentioned previously.
Paine, Webber Firm Adds
(Special to The Financial Chronicle)
OMAHA,
has
been
NEB.—Philip
added
to
the
Maisel
staff
of
Paine, Webber, Jackson & Curtis,.
Medical Arts Building.
v
Volume 170
Continued
COMMERCIAL
THE
Number 4868
from first page
■ -
\
to
;
.
FINANCIAL
&
CHRONICLE
(2665) : 33
>
report to the executive board by the end of January, qualifications attach t<> accelera¬
tion and multiplier. They will op¬
expulsion of the unions is expected by March."
erate at different
-
and
amplitudes
'
As We See It
If this is
The Wrong "Line"
~
.
not
and if
"bargain" about wages and other similar, accounts of what has been taking place elsewhere
production of co&l throughout in the past few months are to be accepted at face value—
and there is no reason to doubt them—then this
the nation.
"hearing"
/■/,,,
is a "cut and dried affair" with its ultimate outcome
long
Why?
ago decided. Now let there be no misunderstanding. It may
Similar courses on occasion by producers of various be that those who have been directing the affairs of this
kinds of goods — when they have been pursued here or affiliate of the CIO have been taking their orders from Mos¬
abroad—have had the purpose of increasing prices and thus cow, and, if so, it may be a good thing for us all to have
them smashed—if
the profits of the producer.
they really are smashed. That is not the
It is.,unlikely that Mr. Lewis
and his lieutenants would particularly care if coal prices point which interests at the moment. Rather it is the fact
weeks
has
been
less
than
concessions
to
restrict
to
.
,
sharply increased, but his ultimate purpose plainly is
make either the public or the operators pay the miners
were
to
higher price for their services.. There is, of course, a law
the statute books which could be employed to place
rather serious obstacles in the way of Mr. Lev/is, but the
a
on
his tender-hearted attitude toward
monopolists, is determined not to use it,
President, pursuant to
the
union
labor
that this affiliate is accused not
only of following the com¬
"line," but of failing to follow the CIO "line." Of
course, the facts are not stated quite so bluntly, but they
are there for all to read.
Apparently the Moscow sycophants
are
to be eliminated in order to
complete the monopoly
enjoyed by Mr. Murray and his associates.
And who among
against his enemy, if he can find some way of avoiding
Moreover, that law has more to do with limiting or
it.
restricting the
in which labor monopoly may be exer¬
monopoly, .The politicians
way
them all does not shout from the
housetops that he is "saving" free enterprise?
Continued
from first
page
:
ir / »i-r->;v.//•
simply not interested in doing anything/at all about
this "trust," however much they may want at least to make
a
showing against other types of alleged monopolistic action,
point of fact often exist more in the imagination
of zealots than in this real world in which we
But in other
live.
places along the labor front things are
happening, of which the full significance is being
wholly missed at least by such public commentators
as
we have had
the opportunity to read or hear. For
some time now the CIO has been in the throes of "purg¬
been for
so
labeled
or
sians all this must
be shot
or
but it is
by expelling affiliates
seem
;
economic
suppose
would
not
of being
by the CIO will eliminate this sore spot—assuming its
We say only that these things "could be." Whether
such is actually the case remains for the future and the
facts, when revealed, if they ever are, to disclose.
of
a
ing
farce than
eyes
the
conditions
of
to us'to be more
we
arguments being presented scream
wholly incompatible with "free enter¬
given
communist
was
tile
one
"hearing" to permit it to prove it was not
dominated. The Chairman of the "hearings"
a
anti-communist head of the Tex¬
Emil Rieve,
Workers.
dence
next
is
in the
succinct
account
New York
"Times"
"The CIO's
search
of
the
as
'prosecution'
Stanley Ruttenberg.
affair
whole
was
reported
was
At
the
Daily Worker' and of UOPWA publications in an effort
to
show that the union's
line, at specific times, coincided
with the Communist line and differed from national CIO
policy.
In reply, Mr. Durkin read
attacking the hearing
policies
are
decided
as a
a
4,000-word statement
'travesty.' He said the UOPWA's
'by the membership *
* * acting
No
through the democratic organs of their union. * * *
one
and
no
political party has dictated to them.'
hearing ended after Mr. Durkin's statement.
"Hearing committees
on
The
^
all ten unions are expected
I
shall
we
in
become,
years that
the
moment
with
concerned
they
which the
of
attach; I
minus
effective demand
will decline* at
consequence of
the progress made thus far in fill¬
as
the
outlook
of governmental units of all kinds
will
rise
from
least
at
1949.
The
The
will
Conditions
domestic
of
and
toward
for
increasing the
econometric friends.)
IV
With
1950
dominated, I believe, by
changes in the demand for/ and
therefore the prospective produc¬
tion ol:, goods and services in five
cussed
already have
without
so can
much
tion.
All
dis¬
been
extensively, and
forth
set
of the economy.
areas
be
elabora¬
•/'//
:
./'! >■'•
First, the effective demands of
business
institutions
for
capital
items will, I believe, be at least a
little, and perhaps
even more
than
microscopically, smaller than dur¬
ing 1949. Tnis decline will involve
smaller need not only
constitute
1950
than
result
effective
services
in
a
demand
from
tne
little smaller in
This decline
1949.
from
a
reduction
in
agricultural incorpe which appears
to be generally anticipated.
Third, the effective demand for
will be at least a little
smaller, and the supply of goo^s
exports
we
shall receive from abroad will
be at
likely
will
many
to
during
occur
least
a
little larger in
from
ing
during 1949.
1950
production
diminution
and
This will result
the combination of
the
of
abroad,
the
fact that
aid
the
expand¬
be
force
a
o.
the
other changes are
in the economy
ones
globe,
quartz
the
that
I
have
con¬
five
of
sum
un¬
complicated
in
the
that
I con¬
manner,
de¬
prospective
demand
business
from
capital items, from agriculturegoods and services, from for¬
for
eigners for net goods and services/
from
and
the
economy
for auto¬
To
government.
be
more
that
complicated still, I conclude
income
and
likely
to
in
1950 are
at least a
output
aggregate
little less in 1950 than in 1949.
it happens this conclusion
exactly identical, except that
the dates are advanced by one
is
made
the
forecasting session of the annual
national meeting of the American
with
year,
one
prediction
my
ago
year
tomorrow
Association
Statistical
And
Clevt1-
in
the
of
many
at
same
given for that conclusion
reasons
apply today.
that
At
time
examined
I
Pro¬
of
being
built
greatly
so
family
formation.
careful
estimates
the
basis
for
But
do
exceed
the
not
most
provide
prediction
a
of
significant decline in 1950.
points
major
ten
at tnat time.
six
either
were
In my
interpretation,
of
seven
or
those
ten
econ¬
today—and those which have
are
monetary
factors
are
to
be
expected to
omy
/
HI
all
that
present in the American economy
conditions still exist in the
changed
Complications
which
The identification of these five
change
and the direction of
course.
areas
to
reach
conclusion
a
during
downward
the
V"'! /\
;
•
in
come
1949.
about
ag¬
making turns in advance of gen¬
of output and in¬ eral business turns. These series
as
compared with have been selected from the mon¬
gregate levels
1950
/,,/.
//;.,".///^/^
the
In
de¬
umental collection of the National
it is Bureau of Economic Research by
necessary not only to consider the. my colleague, John M. Hart.well,
simple arithmetic of each—even Jr., and a year ago had been pre¬
if
that
attempt to
could
much
be
do
so,
estimated-
but
ponderantly
one
troublesome,
more
for
a
must consider the two well known
of
upturn,
functions:
the
principle
the multi¬
of
acceleration, and
plier. The acceleration
concerns
the effect of
a change in
expenditures upor?
consumption
sales
chine
tool
is
company
upon
ma¬
supplier*
—...
for
theory simply says that a
dollar of expenditure, or (he re¬
duction of a dollar in expendi¬
plier
makes
several dollars
fying effects
a
difference
of
through the rami¬
on
the butcher, the
baker and
the candlestick
It is
usually stated in terms
of
an
Finally,
more
effect of investment
maker.
on
con¬
sumption J but can be broadened
seven
of
at
\
that
\
listed
time, I
what seemed to
of
soft
be
difficult,
a
host
of
1 Fiscal
Policy and Business Cycles, by
Alvin H Hansen, W. W. Norton & Com¬
pany,
Inc., New York.
appears;
on
the' basis of what ap¬
to be the major prospective
1950, plus a reading
plus an examination
with a good record of
changes for
of
theory,
series
of
prediction, plus an examination of
weak and strong spots, I conclude,
stated, that income and output
1950 are likely to aggregate at
least a little less in/1950 than in
1949.
The evidence is not quite
as
in
so
more
list
been diminished.
Thus,
pear
each
in
some
nave
conclusive
is done here.
Furthermore, to make the prob¬
lem
majority (on
the
spots and five factors of strength.
All seven of the soft spots, and
example and not
1950. The multi¬
purely
prediction
ture,
now
are
though
small change in automobile all .five of the strong spots, con¬
may
mean
in
enormous
tinue to exist, though the potency
e.g., a
this
these
decline
a
period. - Some
suggesting r an
not vet do so.
principle
induced investment expenditures/
suggesting
considerable
economic
probable
program
recent
calcu¬
lators, supersonic flights through
stratospheric
theory,
and
my
but I believe these
1950,
be
from,
electronic
mechanical and
aid
outstanding fessor Haberler's postulations' in
significance. You will be aware his great book "Prosperity and
that I have not mentioned housing
Depression," 3 as to conditions toas an area of major change. I am
be expected at the upper turning
suspicious
of it
because
units
point of the cycie and concluded
as
than
1950
supply
change in the demand
sector of the economy
will be at least
will
for phys¬
for finan¬
but, as well,
cial accommodation.
t
appropriate
!
1950
Conclusion For
The
Jand.2
great
be a
of
change likely to occur in each is
At that time I also reported on
relatively easy. Much more dif¬ the status of those statistical series
ficult is the job of summing them
which have, the best records m
be
these
in
will
money.
major
1950
outlook
little
a
deficit
larger,
A
would
several dollars.
(This qualitative factor is one ol
the
great
difficulties for
our
figure
As
Fifth, the effective demand
for goods and services on the part
for
II
The
a
urgent needs.
most
in
of the effects of $1
sum
expenditure
new
cer¬
can
conditions
imagine
from
little
a
one
mobiles, will exceed the stimulus
the
most
are
we
1950, and I turn to that.'
led by Director of Re¬ agricultural
He produced copies of 'The
or
prediction
one
and
Second, the
for goods and
follows:
with
like it
we
truly great confi¬
that
year
There¬
concerned
ical items
A
skill,
their
automobiles
least
And
,
follow, more involved in forecast¬
ing than we are even now/
a
.
the
make with
can
of
-
prise" as we have known it. Take the proceedings in
Washington last week in which the United Office and
Professional Workers of America, a "leftist" CIO union,
was
ail
are
And
major
anything else. What is more, to discern¬
very
to
the
ferent about the outlook.
existence.
seem
wish
of
resources
forecasting, whether
in the process
institutions
and
resources
physical property dare
risk of being indif¬
or
take
taken
proceedings
of
•
money
rather conspicu¬
purged have in considerable and lamentable degree become
the tools of a foreign government—with all that such a
situation implies in light of the aggressiveness of the world
rulers of communism.
It could be that .action now being
But in all else the
those
holders
only hope that the rank and file will not
now
of
change associated with tech¬
nological development and intense
competition means that prudent
They Seem
unions and these leaders of labor
skills,
of any previous time.
of
cost
us.
Fourth,
of
means any such thing as the purgers
believe. It may or may not be that these
us
of
resources
attgin maximum
possible results. And the high rate
that all this
have
goods to
for
the
reduced
allocate them to
fore,
can
we
evoked
society. This society
individuals
not.
But
who
and of physical property,
excess
The
ously labeled.
Not What
let him
injunction.
holding
nonethels^s
so
character
possesses
hanged—at least not openly and blatantly-—
communistically inclined and
the
money,
so
which
to
tainly
for
have
far in
a "purge" which, if successful, will
rid the CIO of certain elements which have supposedly
been
criticism
1943.
considerable
ferences depending on the objects
clines
valuations have increased the cost
of our
goods to foreigners and
ern
little tame, since no one is to
a
of
arises from the necessities of mod¬
tainted and
replacing them with rival organizations promoted by
the "rightist" top national management. To the Rus¬
are
in
as
expect
minus
signs and one with a plus sign, is
a
minus quantity., To speak in a
Prospects for 1950
Thig universality of forecasting ing
a
would
equal numbers, four with
by appeal to
The Master's injunction: "He that
that
good while past, engaged in an effort to get
rid of the "left wing" either by retiring such officers
as
rocks
and
ing itself of its "leftist" elements. The "right wing"—
God save the mark—of the organization is, and has
rise
forced
clude
not, of
course, mean to suggest any slight¬
est similarity between forecasters
also
tney occur in a gallcpmg
wnen
as
cluded
is without sin among
you,
first cast a stone."
I do
which in
m
when they occur in
structure as in 1931.
toppling
a
more
Business
results
same
such changes
large
'
cised than with destruction of that
are
the
expect
munist
even
rn
different environments; one would
*
account of what went on,
accurate
an
*
*
2
as
it appeared a year
Printed in "Commercial and
Financial
Chionicle," Dec. 30, 1948, Page 1.
3 Prosperity and Depression, by
fried
Haberler,
United
Nations,
Success, N. Y., 1946.
Continued
Gott¬
Lake,
on page
34
34
THE
(2666)
Continued
from
COMMERCIAL
33
page
&
FINANCIAL
same as resource
to
sources
Business Prospects
grass
for 1950
two
when
the
could
be
of
re¬
blade
of
use
one
grow
sources
waste;
make
CHRONICLE
same
used
to
re¬
make
three blades of grass grow
or
recently is to squander our assets.
but it still seems to me pre¬ machinery which has
Equally unhappy is the fact that
been installed.
dominantly suggest a decline.
is
preparing
The conclusion seems warranted this over-ambition
And so, now, as in Cleveland
conditions which will make for
last year, I suggest that policy, that this economy could increase
economic instability in the future,
both public and private, snould output and income, witnout strain,
and
instability is both wasteful
emphasize caution and not daring. by something like 10% to 20%,
ago,
and perhaps more.
v
:
Now, having made a forecast as
the shape of things to come in
to
I
1950,
with
this
Is
disconcerted
question.
myself
find
uncomfortable
an
forecast of little
change, of continuation at a level
of very high prosperity—even if
a
little less so—that so many of
us made last year and are making
again this year, likely to be mis¬
leading alike to the public and
to public and private policymak¬
ers?
I'm afraid it can be quite
general
misleading — entirely aside from
the
possibility that it could be
misleading
being wrong.
by
For
it suggests the inference that, since
we've been having and are ex¬
having for an¬
other year at least a condition of
high prosperity, that all is well
pected
to
go
with
the
don't
want
on
American
economy.
be a party to that
assumption, even by
implication. And so I want to add
forecast,
considerations
the
to
asking two
other
the present and
position and outlook for
by
questions about
near-term
the economy.
First, how does the
probable level of output and in¬
come compare
with the possible?
Second, how does the probable
economic policy compare with the
desirable?
^
Probable
Possible Output and
vs.
Income in 1950
The
to the first
answer
I think must be
output, and
question
emphatically that
real
income
in
1950
likely to be significantly less
would be perfectly possible
are
than
without undue strain.
Nourse's
careful
In
1934 Dr.
study of "Amer¬
ica's
Capacity To Produce"* found
that in the prosperous period of
the
latter
192Q's
this
country was
turning out almost 20% less than
possible. No such study is
was
available of the present situation
far as I
so
of
know, but a re-reading
Nourse analysis with ob¬
the
servation
of
the
present
indicates, to
a
study, if
production
strongly
me at
again
level
a
least, that such
made today, would
find
signifcantly
potentiality has tremen¬
significance.
Such an in¬
could defray the entire cost
Federal
Government
if
crease
the
of
used
that
for
be
purpose;
thus it
equivalent of a re¬
peal of the entire present Federal
the
which
load
Or
to
be
below
at
what
is possible without strain.
evidence
points
conclusion.
same
to
the
Available
that something
possible man-hours
data
suggest
like
5%
of
are
not
worked
due
to
it could,
failures
of
institu¬
in
selves
boom
time
failed
and
ures
in recession, the fail¬
aggravating the decline. Pri¬
vate
finance
servative
know
has
by
been
has
I
Gov¬
years.
'Tis
not,
said
that
imitation is the most sincere form
is
of
much
I
concern.
not sug¬
am
of
the
commendable
practices
the
using
merely
an
these
examples
to
ment can't go
broke in the private
but the consequences of its
show the magnitude of the possi¬
sense,
bility.
over-ambition
in
VII
be
can
instability
the value of money—which
probably the
Likely
Desirable
vs.
Economic
most seriously
stabilizing factor of all.
Policy
The
Obviously, since present output
income are substantially be¬
and
low
what
strain,
is
possible
economic
broadest
policy
in
the
the
Obvi¬
is deficient.
sense
therefore,
ously,
without
forecast
of
little change or small decline that
most
making for 1950 repre¬
prediction that economic
in its broadest sense will
are
sents
a
policy
continue defective in 1950—or be¬
come
more
We
so.
therefore
are
ing
and
of
Hoover
report,
is
un-
Those
of
made
absenteeism
re¬
who
us
that
in
are
the
effect
policy being
major
defect.
areas of
demonstrated
amount
of
that
represent¬
nificant
sizable
a
is being spent
And there are sig¬
including agricul¬
funds
unnecessarily.
areas,
ture, housing and social security
questionable if all of
expenditures
and
commitments
where it is
that
represent
of
use
resources
best
beyond question.
And I observe
with
inescapable/ apprehension
future
the meaning, and causes
on
of their forecasts as well
is to
First, policy in too much of the
vate
institutions—aims
it
quo
possible.
as
profoundly
or
Such
to
as
policy
a
inconsistent
which
and
izing
better
resources
The New Half Century
to
It
is
to
seems
an
portant
its
which term, as
methods
util¬
of
which
and
has
that
the
minds
age
even
—
I said in opening,
every
of 18
—
person
turn
our
strongly than
comparison of
more
before to the
ever
im¬
forecasters
we
include
to
appears
above
especially
me
with
present high strength and produc¬
tivity through constant change to
new
VIII
reached
has
what
during the next 12 months.
main¬
near
as
happen in production and in¬
come
economy—both in public and pri¬
tain the status
such great possibilities for further
probabilities vs. possibilities of
sulting from reported illness or advance of the same kind. Prom¬
output and income and likely vs.
stoppages. Some portion of inent among status
quo policies, desirable policies at this historic
this is preventable.
The highly to which both
public and private time.. We are this week closing
significant studies at the Univer¬ groups
contribute, are those deal¬ the 49th year of the most fabulous
sity of Michigan under the direc¬ ing with
agriculture, labor, in¬ half century in human history,
tion of Dr. Rensis Likert are dem¬
vestment, interest rates, construc¬ and preparing to get ready be¬
onstrating that marked increases tion, prices, and taxation.
Every ginning next Sunday morning for
in
productivity are possible by public and
private group could a year of preparation for what
intelligent treatment of motiva¬
appropriately re-examine policies may be a far more fabulous half
tion; 5 this has nothing whatever being followed or advocated. And
century. In that great new period,
to do with the
speed-up or time I should like to suggest to all pri¬ we
can, if we are as wise as we
and motion study and pressure.
vate groups that it is just possible are
perfectly capable of being,
Businessmen widely report pro¬
that the mote is not only in the
sweep on to accomplishments that
duction is, for a variety of rea¬
government's eye, and equally to will exceed our present possible
work
somewhat less than
sons,
is
pos¬
sible in present hours with present
equipment.
all
kinds
Machinery makers of
are
firms could
explicit
that
most
increase
productivity
and
thus
production by
using
presently available equipment.
And finally, we know that pro¬
duction has in fact been markedly
higher
with
in
a
without
view
G.
of
recent
smaller
the
4America's
Edwin
the
labor
vast
force
amount
Capacity
Nourse
past—and
and
of
and
new
To
Produce, by
Associates, Re¬
Reviews
Corporation, 1934.
"Controlling Factors in Eco¬
nomic Development," by Harold G. Moulton, Brookings Institution, 1949, Page 104.
5 Productivity,
Supervision
and
Em¬
ployee Morale, a report from the Survey
Research Center, University of Michigan,
See
also
1948.
suggest to government that all
the guilt may not lie entirely in
the private sector.
The United
States, and the
is true of any
same
other
country,
cannot
make
the
use
resources
best
by
hope
of
fighting
to
available
change
imagination
far
even
present
our
more
attainments
the wildest dream
we
than
exceed
could have
dared to dream at the end of 1899.
The knowledge and the materials
are at hand.
The great scientist
to
Vannevar Bush has stated the fact
Second, the United States Gov¬
cogently, forcibly and authorita¬
tively in his profoundly important
better methods.
ernment
—at
the
is
being over-ambitious
urging of nearly every
major group in the economy.
is utilizing some of present
sources
and
amounts
of
committing
future
It
re¬
large
for
signed
increase
to
standard
of
Inefficient
living
new
the
and
resource
nation's
strength.
use
is
the
•
book,
Free
"Modern
Men,"
which
recommend that you
Arms
and
I
urgently
all read care¬
fully and at once, far better than I
could possibly do.
I quote:
"We
resources,
purposes
neither
necessary
to
honor past obligations nor best de¬
We
ment
we
can
which
in
can
the
barely
now
create
environ¬
an
creative
arts
flourish, in which the human
spirit has an opportunity to rise
and aspire. We can build a society
in which there will be justice and
can
Continued
from
page
good will.
All this is within
our
grasp; we know it, for the per¬
formance of the past ten years is
a
guarantee of the effectiveness
of
the
system
operate
under
of
and
the
principles to which
we
we
adhere.' All
have to do to
ive
to
which
fundamental
bring it about is
that system and im¬
preserve
prove
it
ideals
and
they
hold
and
the
fast
faith
arise."6
6 "Modern
those
to
from
which
/
Arms
and
Free Men,'.' by
Vannevar Bush, Simon and Schuster, New
York,
1949,
Page
232.
8
Who Is
have
to
ask
Really Socialistic?
ycu
to
pay
the
me
700 franc reduction which you got
when you
A
bought the ticket."
long; violent and
between
argument
the
and
the
followed.
conductor
again the
unfruitful
traveller
fine print
in the
But
time
table
triumphed and the traveller
grumblingly paid the 700 francs
supplement.
.,
The traveller had been
ing
a
attend¬
official meeting in
an
and
was
Paris,
entitled to
30% reduction. One of the rub¬
the most thorough ber stamps certified that the con¬
competent study ever made gress was official. A second certi¬
governmental operations, has fied that he had been in attendance.
and
I suggest that there are two
ous.
extent that
grasp.
perhaps
to be made in the ag¬ that we are now engaged in work¬
gregate of the decisions by public ing an appallingly pitiful farce
and private policymakers is and out cf the
plausible compensatory
is likely to be deficient
should, I budget theory.
suggest, indicate the defects we
I hope that other forecasters
are forecasting.
Public discussion will stick their necks out in the
of these defects should be salubri¬
an
more
he explained,
■
designed
to
increase
the
forecasting a happy state of standard of living fastest and the
affairs—even though we are pre¬ strength of the country most.
I am not one opposed to gov¬
dicting a level of business that
would be high in comparison with ernment action
per se nor an ad¬
nearly all past years, and a level vocate of the theory that that gov¬
of per capita consumption that ernment is best which does
least,
would
compare
favorably with but neither do I think that gov¬
that anywhere else on the globe. ernment actions are all above and
predicting
generally available
throughout the population.
We
can
prolong our lives and escape
the ravages of old age, overcom¬
ing the scourges of mankind, epi¬
demic disease, cancer, senility, to
of
private sector instead of one
increase, if
I
realized, should be wholly u£ed of its more grievous past sins.
for either such purpose, but am know, of course, that the govern¬
gesting that such
goods
con¬
measure
during recent
ernment
quite
every
flattery—but one wishes that
government were imitating some
so
them
have had; we
and have
we ever
more
optimism
if so used,
greatly raise the income of low
income groups about which there
concern.
economy;
Other
much
so
causes
the
make
can
tions which overcommitted them¬
,
could
tax
been
not
;
VI
/V*:/
■
This
dous
weakening. Perhaps the ma¬
jor cause of the depth and dura¬
tion of business dips in the past
has
higher.
to
more
1949 this figure would
I
complacent
two
To the extent
in 1950 is lower than
be
that output
that of
Forecasts Should Not Mislead
and
higher than
Thursday, December 29, 1949
have
not
yet
come
to the
end
These two stamps
he had, but he
had forgotten to obtain the third,
to be given
by a railway station
attendant, certifying that he had
bought a ticket.
"Since I have
ticket* it is ob¬
vious that I bought it. What does
that third stamp add to my ticket?"
he
complained.
"Nothing,
just
a
bureaucratic red tape!
And
me, a
of
living
in
this
a
With
standard
country
far
gravest
dangers.
Socialist
theory
that
socialist
enter¬
teaches
us
prise operates at lower costs than
private because it pays neither
interest nor profits. It can, there¬
fore, sell cheaper and the public
gets
for its money. What the
theorists, forget is that
socialist
states,
like
capitalist
states, are always broke. They are
always looking for new sources of
more
socialist
And the state enterprise
revenue.
affords
a
very
So
funds.
in
tempting source of
the
end.
prices
are
raised and the public gets less for
its money than it did under pri¬
vate
business."
f
"The tobacco
ways
been
oly,"
my
monopoly has al¬
high-price
a
first
/7/// //J
countered.,.
"Yes,
there
but
Gasoline
monop¬
companion
is
Gasoline today
others.
are
-
another
example.
costs the French¬
tion—two
"Well," the second traveller in¬
terjected,
for
should
government
have
mistake
live
"you
the
of
known
our
here, work
and / you
better.
American
The
travel¬
ling companion was a natural one.
is a foreigner for one thing.
He
These
railroads
nationalized,
we should
depend upon them to do the right
thing by the public. In the social¬
ist tracts which I have read, I
learned that only capitalist enter¬
prises, such as private insurance
companies, used fine print to fool
the
public.
State
enterprises
would be above that sort of thing.
No/private railroad, no matter
state
how
are
enterprises,
hard
and
the
boiled
capitalist
management, would dare
dulge in such practices."
in¬
to
man
three times the
or
price
age
in
the
United
aver¬
States.
Even the
toughest, capitalistic oil
companies there would not1 price
their
products
that
high/ The
monopoly, as¬
suming that it is reasonably, effi¬
cient, would make American oil
profits
of
tycoons
the
look
thropists."
A
the
flat
many
almost
like
philan¬
>
passing
rupted
oil
freight train inter¬
conversation. It had
loaded with tractors
cars
and
heavy farm machinery. All of
this
was
evidence of the increased
French
industrial
flected'.. The
noticed
"Don't
output, I re¬
traveller ; also
first
this
and
turned
to-
me.
think," he asked me,
"that Europe has made wonderful
progress in rehabilitating its war
damage—which was very severe—
you
"The state railroads," my first and in its economic development?"
companion went on to say, "in¬ Without waiting for my answer,
added:
"Since
you
are
an
herited this practice from the days he
of private railroading. State enter¬ American, I suppose you credit
the Marshall Plan with all of this."
prise is really much better than
you think."
"No,; I don't. I think that the
•
"The state tobacco monopoly,- Europeans deserve the credit. We
,
for instance?" the second traveller
have tried to be helpful, though,
'/" with the Marshall Plan." /
gazing out of the window
"Helpful
with
the
Marshall
watching the carefully cultivated Plan? Why your Marshall Plan
fields, the animals in pasturage, is not designed to be
asked.
I
;/"M
was
the red tile roofs of the houses in
the
villages as our train sped
rapidly through the countryside.
In the meantime, my two com¬
panions were continuing the dis¬
any
helpful to
except yourselves.-Your
one
industry,
port
with
its
surpluses,
unsalable
could
not
ex¬
live
without the Marshall Plan. Don't
tell
it. is. for
me
the
benefit
of
cussion.
Europe. That is a joke! " /
monopoly, the
second traveller was insisting, was /t "Well, if it is a joke, I guess the
joke is on me and the rest of the
indeed a meanly-managed enter¬
Americans, because it costs me, it
prise. If sold cigarettes: of poor
costs all of us, a lot in taxes. But,
quality,
intolerably
bad
pipe
really, we could get rid of these
tobacco; at prices up to five times
surpluses, as you call them, by
higher than those charged by the
distributing them in some other
private tobacco companies in the
way."
United States. The tobacco mo¬
The state tobacco
"You
nopoly,
are
already in a depres¬
States, and if you
a
state
enterprise, in¬
dulged in the shabby practice of
sion
pricing the French working classes
dumped
these
domestic
market,
out
of their smokes.
Could
it
be,
I
thought, that socialistic enter¬
prises, in the end, were no more
moral,
perhaps
even
less,
than
his voice, I forgot the countryside.
far-reaching.
establish
their
of
boot," he complained.
manifold and
can
people
sixty to eighty cents a gal¬
lon, depending on his ration situa¬
private enterprises?
we
depriving
member of the Communist Party
and
a
government employee to
by any means.
The applica¬
tions of science yet to come are
them
than
smokes. But then the fiscal aspect
of state enterprise is one of their
As
He
the
was
other
second
"There
of
raising
ways1
raised
must
be
revenue
the
repetition of
goods
you
your
the thirties."
"I
but
traveller
saying:
a
in
don't
I
realized
7. your
see
experience of
-•
think
convince him.
on:
would
so," I answered,
that
"
I
could
not
*I
In the countryside, outside our
compartment window, farmers in
their long blue blouses and their
Volume
wives
in
tion
of
which
had
protect. They buy what they need
passed.
we
Farmers
shareholders
no
groups on the
platform' talking
and
gesticulating while waiting for the
with
benefit
of
local train
cialism,
if
small
station
their
take
to
produce
to the markets of Paris. Did these
farmers, I thought, feel the same
way about the Marshall Plan as
travelling
companion?
turned from the
ond
traveller
"Here
do
is
I
window, the sec-*
addressed
thing
one
know
not
As
about
bet
you
Marshall
the
Plan. It is working here to bene¬
fit nationalized industries at the
works
I
"In
do
spite of all this,
have
not
I started to
a
is
have
dirigism
A French
Controls
the
really
state
family stopped at
the
as
our
opened
expense
surveyed
the
interior
is
ihev
about to enter and take
it
difficult
very
for
expensive
and
private industry to buy Mar¬
were
door,
though
as
They evidently found
possession.
the compartment
undesirable, for,
shall Plan goods and very easy
after eyeing us coldly and listen¬
the nationalized
ing to the conversation for
them.",
He
'
for
enterprises to buy
,,
then
into
long
a
explanation of the "counterpart
funds" system.
Under this system
the United States gives the Euro¬
goods under a
This government,
however, sells the goods to the
industrialist who ordered them in
government
pean
free
"grant."
the
first
must pay
place and this buyer
his government in local
for the full cost of the
goods.
This local currency is de¬
posited in a special government
acc,ount
called
"counterpart
currency
funds" which
only be spent by
can
the European government for ap¬
proved
My travelling
companion continued by present¬
ing a specific example of the sys¬
tem in operation.
purposes.
"Here is the way it works.
A
textile plant, say at Lyons, wants
looms under Marshall Plan
some
funds.
It
must
10% down
when it places the order.
Then,
■when; the looms are delivered, the
balance
the
of
pay
90%
is
barrelhead.
there
lowed:
are
cash on
due,
is al¬
credit
No
'terms.'
no
In
addition,
our
must pay
the import and transac¬
tion
taxes
amount
on
the Lyons
for
Lyons textile plant
the
looms.
sizable
to
These
Now
sums.
plant fails to
if
cash
well and
pay
its
equipment, all
If it does not, it is, today,
very
hard
to
get
credit.
The
banks
all
have
credit
ceilings,
imposed
by
the
government,
which they may not exceed.
It
is hard, also, to raise funds on the
security markets. '■» A loan may
well cost the Lyons plant 8% or
good.
for
more
commissions
interest,
and fees.
<
"So
textile
our
twice
before
he
thinks
man
orders
Mar¬
For him,
any
Plan
shall
they
ment,
.
.
launched
equipment.
it is no gift.
He pays and pays
plenty for everything he gets. It
is only the government which gets
a
free gift. That is the way the
counterpart fund system works in
left.
a
mo¬
door
and
with
the
him,
went
"serve to perpetuate the
on,
situation that they are designed to
correct.
They also
clients
permanent
keep
of
us
the
old
good
Uncle Sam.
"The
controls
currency
are
a
parcel of the system.
Under them, exporters must turn
over all, or a large part of their
foreign currency earnings to the
government. When importers re¬
quire foreign currency to pur¬
chase abroad, they must ask the
and
part
areas
rency
areas
taxes on their
Marshall Plan imports, but since
it is a government enterprise, it
it merely taking
money out of
one pocket and putting it into an¬
we
-
"The
net
result
this
of
the private business
is
that
firm hesitates
before
ordering any Marshall Plan
equipment. - It must do a lot of
figuring to be sure that the pur¬
chase
will
prove
economically
.
And since the gopds are
expensive, and credit is short, in
many
cases
the equipment, al¬
sound.
though
,
is
not
The plant simply either
badly; needed,
bought.
adds
its
new
old
outout.
will
workers,
machines
Our
never
get
patches up
keep up its
to
industries
their feet in this
on
and the counterpart system,
thaf is, the way the counterpart
system works under our regula¬
tions, is to blame."
way
He went
alized
on.
"Now the nation¬
enterprises
face
no
such
while the soft cur¬
high priced.
So
where it is expensive.
buy
are
This adds to
tion
costs of produc¬
our
and^conseauently makes our
prices high. With our high prices,
exoorting becomes more and more
difficult and again we must knock
the
at
door
reauest
Uncle
of
Sam
dollars.
more
and
If
our
prices were lower, we cpuld ex¬
port more to him and become
more self-reliant. Our high prices,
which these controls maintain, are
the crux of our inability to export
Until
America.
to
prices,
until
or
forced upon
we
reduce our
reductions
us. we
will
are
never
p| our workers." r
war,"
I
interjected.
"Profits in the United States have
been very high.
debate
much
reflected
I
point.
it
in
country
my
on
Yercingetorix in 52 B. C. and
brought
Roman
civilization
to
Europe.
A young couple, evi¬
dently seeking privacy, opened
our
compartment door and then
closed it softly without entering.
The locomotive whistled loudly as
moment ago exists no¬
exist
for
the
weaken
on
this
capitalist
it into two
"soft currency"
splitting
by
parts. One part,
area
moment
a
closed to the other and main¬
their discussion.
The second traveller was won¬
what would become of
Europe in 1952 when the Marshall
Plan ended.
What Europe need¬
ed to do before the aid ceased,
was to let competition enter
the
closed economies of Europe; to
dering
prices; to force manufac¬
unload their
stocks and reduce inventories; to
reduce
turers and dealers to
increase
Above
tempts to be
desired
Europe to cooperate;
to create
complementary economies, not to
self-sufficiency of to¬
the
foster
tally independent states.
These results could be attained,
oninion, by abandoning
the controls and letting
his
in
of
most
nature take its course.
The con¬
and
trols wound up by preserving
they
conditions
the
aggravating
correct. They
made Europe a high-priced area;
an
area of shortages and of low
were
designed
use
able future.
"All
Least
Moscow
in
that
approach
now stand, it
though it will
the foresee¬
in
we
of
hope for is to
can
the
all does it
its satellites.
or
the good old
revolution
the
mean.
should
be
by the state.
..."
They will be
managed in the public interest,
in the interest of all the people, I
"You
are
dupe, certainly," the
a
second traveller
ticed
said
the
in
United
instead
"Now
he
have
States,"
at me, "you
real action on wages,
looking
some
<
getting
you
that does you.
a
capitalistic U. S. A.!
in for ideology rather
than practice, this will shock you.
But the country which approaches
most closely the socialist goal of
maximum welfare for all, is the
least'Socialistic and most capital¬
If
go
you
Just to show you
controlled state treats its
The shortest apparent
istic of all.
quickest."
I
as
the
always
not
:
■
train
The
halt
is
home
way
slowly
ground
to
a
picked
descended
up my baggage,
slowly wound my
and
station crowds
capital of
ancient Burgundy with its mag¬
the
through
way
into the fresh air of the
nificent
structures,
superb
its
wines and food and its lusty folk
who
or
rather
would
read
live
life
than,
about it.
talk
Export Import Bank
Grants Ecuador Credit
The
Export-Import
21
Dec.
of Ecuador
to
the
announced
Bank
on
authori¬
of credits for the Republic
zation
aggregating $7 million
assist the Ecuadorean Govern¬
ment
financing the cost of
States
materials, equip¬
in
United
ment, and services required for
projects which will contribute to
the reconstruction of damage done
by the catastrophic
Aug. 5.
'
total
the
Of
of
and goods, they hand you
theory and doctrine. A lot of good
money
how
goal
one
owned
earthquake of
J:
authorized,
sum
$1.5 million will be devoted to the
financing of machinery and tech¬
nical services which will be made
available to
a
reorganized national
The conversation ceased
as
tunnel
ment
the
at
was
smoke
them.
wheels
in
respite
started
enter
to
our
closed
the
the rails, the rush of
I
windows.
got
and
up
The clackety-clack of
on
the
not
emerged
for
tunnel
narrow
from
the
long.
from
explained at some
length, as our train was passing
alongside of the canal near Dijon,
the
post-war
French
national
wage policy.
In order to hold
prices down, controls were placed
upon both wages and prices.
But
while wages
were pegged and the workers saw
their
purchasing
power,
their
standard of living, sag while the
bosses and speculators reaped a
golden harvest.
Reconstruction
was
not
only attained by the
sweat of labor, but also at the ex¬
pense
of its economic position.
This
policy was based on the
theory of prices which held that
prices are determined by labor
cost.
In a period of currency in¬
flation
accompanied
by
com¬
gave
war
of words,
A
as
the
soon
tunnel,
we
my
prices
rose
modity shortages, this theory does
net
hold
true.
The
theory of
"scarcity value" applies here.
"That
is
socialism
in
practice.
think that a capitalistic
democracy would be able to treat
v/orkers this way?" he asked.
Do
you
The first traveller
abrupt¬
train entered the long
Blaisy.
Our compart¬
in total .i darkness and
our
Lunsuuciion
then
He
He
But
fuming.
our
hardly contain himself.
train was already in the
of
Dijon
slowly coming to a
I
was
could
outskirts
blurted
"Pardon
and the repair and re-
of debris
of the war."
to
production.
but
or managed
simple as the
abandon their at¬
self-sufficient. The
Marshall Planners, he felt,
socialist
a
production.
all, the governments of
Europe should
air
Certainly
as
anywhere
But workers," he continued, "let's go highway maintenance department
continued back to the situation at the close and used initially in the clearing
companions
two
my
taining high prices and a second,
an
open,
low-priced,
economy.
economy was not as
things
look
not
approached the station.
we
ly
If this situation continued
would
world
a
This
a
which
not
this.
is
As
does
"All industries which are fit to
There has been
where Julius Caesar defeated
near
be
able to export."
or
private
and
point
only
where.
exist
economy
you
pictured
interrupted, "for
ties.
More controls were added this
subject"
falling for such a line in face of
during World War II and
all the facts.
In spite of socialist
duringj
„,„erlca» he broke
in>
the
German
occupation.
Then
«prof jts may |0ok large too you, programs, in spite of controls,
came the shortages of the postwar ,
but your American businessmen supposedly in the interests of all
period and the further extension are
reaiiy pjkers compared with the people as you say, we still
of the managed system.
have the same old society for the
ours. The profits which our Euro¬
"I still maintain that these con¬
Our prices
pean
business enterprisers have benefit of the few.
trols are needed,"
broke in the made would, if they published are so high that farmers and
first traveller.
"We have these
any
reliable statistics, create a workers are priced out of the mar¬
controls
because
our
economic public scandal."
ket while the ruling class, which
system is out of balance and does
"And what's more these high you would suppress, still can meet
not provide for the welfare of the
profits do not benefit our econ¬ them.
people.
To correct its internal omy.
Do you think they are
"Your labor unions which are to
and
external 'balance, we must plowed back into reserves which
play la major role in the New
have controls or we would face increase the capital and the pro¬
Jerusalem to which you think we
collapse.
Then we must make ductive efficiency of our indus¬ are headed, are the quintessence
sure
that the basic needs of all tries?
Well, they aren't.
They of stupidity. Instead of bargain¬
the people — especially the com¬ are sent abroad or they are used
ing collectively for higher wages,
mon
people—are adequately met. for speculation. There is no bene¬
they declare they are in favor of
So we must have controls."
fit to our national economy from
lowering prices. Now it does not
At this juncture, I was about these profits.
Marshall Plan aid, make much difference which you
to reply but the second traveller in part, makes up for the failure do—higher wages or lower prices
our
addressed me.
"Let me take up of
enterprisers to reinvest both add up to higher standards
our friend's second point.
I think profits
in
badly
needed
new of living for workers.
But the
that I know more about the way equipment."
point is that labor unions have no
We were now passing through control over
it works, since I am a European
prices.
But by col¬
than you do.
These controls," he the region around Les Laumes lective bargaining, as it is prac¬
creap
other.
profit;
the
Ac¬
government funds. They have no
credit problem.
The state enter¬
pay
an
for
if
you,
of maximum
which creates goods welfare for all the people. No eco¬
which the masses need; not devot¬ nomic organization, real or pro¬
firms, to make a profit. You can ing its, productive capacity to jected, gives it to us completely.
imagine what the earnings of the making luxury items for the rich. The best systems approach it more
better firms were under these cir¬ We
require full employment at closely than the others.
cumstances.
all
times,
not
the
depression"Now if you take socialism in
"Then
our
price control sys¬ ridden capitalism without job se¬ terms of goals, in terms of re¬
tem rapidly became ,a mechanism curity which we have today. Rent,
sults,
rather than in terms of
for v
and
profits
must
be ideas, plans and promises; if you
obtaining
price
increases interest
rather than for the maintenance of plowed under.
Our society will take socialism as an end result,
ceiling prices and the controlled have but one item in its national as an
attainment, the country
income accounts and that will be
prices went higher and higher,
which comes the closest to it is
Now, the hard currency areas are
prise may also
need
after
state.
they need with the help of their
way
"We
produces
of
communist Utopia you
written
being
was
two
or
the pages of history.
survive
the nationalized or state in¬
dustries work it. They order what
"Now." he continued, "take the
capitalism
on
course, profits were high
over the world during and
now
was
government for the foreign cur¬
rency, with all the voluminous
paper work which this entails and
all the 'finagling' that such a sys¬
tem brings into being.
"The
government grants re¬
quests for dollars and other hard
currencies with difficulty.
But
soft currencies can easily be had.
practice."
of
all the
French
to
The complete eclipse
"My
socialist
wages.
controls began
depression of the thir¬
cording
here
Let's take
price
control as an example. During the
war,
the controlled prices were
set
at a point which permitted
the least efficient, the marginal
"Of
modern
or
socialism.
on
the
like.
no good.
Neither
ownership of a few basic
enterprises.
traveller
second
chapter
a
work
35
gone, you can continue
am
between
were
state
chasing jpower
tracing the history of controls in
the
friend
our
as
think.
to
to
us
some
after I
(
increasing the profits of our busi¬
nessmen
and lowering the pur¬
was
again.
The
two from
getting interesting
the
closed
I felt relieved, for the con¬
versation
people
seems
compartment,
of private industry. This
done," he went on, "by making
treated
was
state-con¬
a
—
He
"Now, don't interrupt me," the
trolled system."
-
explain this idea.
to
mustn't exaggerate or
up a few state enterprises
socialist system.
What we
blow
authors.
go on to show that these con¬
sure' trols are not in the interest of
am
socialist
a
socialist
second traveller cried out. "I want
We
yet.
the
to
as
the
to
we
own
so
enterprise—so¬
will.
you
well
this is not the intent of the plan.
into
me.
I
Plan
state
And
arose,
dusted their
slapping it and re¬
sumed the argument.
The first
traveller was speaking.
companions
clothing by
complexities and dif¬
ficulties unknown to capitalism as
bondholders to
or
government funds.
Marshall
he
had its
(2667)
CHRONICLE
FINANCIAL
&
collectivist authors maintained. It
problems. They can, and do, buy
what they require.
They do not
nave to make a profit.
They have
gathered in
my
COMMERCIAL
the fields.
vegetables
the yards around the sta¬
a
small hamlet through
busy in
loaded with
were
Wagons
were
THE
Number 4868
170
and
stop.
it was
And so
out.
please.
I know
you
would like to answer our
compartment companion, but I
get off here and there is just one
point I would like to make before
bidding
you
both adieu. And
me,
the
of roads damaged by
this task
When
earthauake.
completed the equipment and
services will be utilized to put
into effect a comprehensive pro¬
is
of highway maintenance un¬
system and methods em¬
gram
der the
ployed in the United States.
additional
An
$1.5
million
is
allocated to the financing of rail¬
equipment, principally loco¬
road
motives and track essential to the
handling of increased traffic into
the
earthquake
-
affected
area
which will result from the move¬
of
ment
the
supplies
large
of
building materials and equipment
renuired
for the
reconstruction
effort.
:
-!l
'/v'
remaining $4 million will
be allocated to specific 0.projects
submitted by Ecuador and agreed
The
upon
by the Bank and the Ecua¬
dorean
Government.
the projects
of
All
be undertaken
financing
as
will
be
which will
result of this
a
directed
prin¬
cipally toward meeting Ecuador's
longer range reconstruction and
development needs. In this con¬
Ecuador
nection
is
making
ar¬
rangements internally to meet the
domestic
costs.
Credits
tion
established
with
this
payable in quarterly
over
a
interest
V'k.%.
period
at
a
in
connec¬
financing will be
of 20
per
instalments,
years with
annum
rate of
THE
(2668)
36
COMMERCIAL
Securities
•
N. Y. City
ABC Vending Corp.,
#
filed 20u,000
27
Dec.
stock (par $1).
Proceeds—For njw machinery
500,000
Cleveland, O.
Dec. 19 (letter of notification) 1(1,500 shares of common
and 400 shares of series A 5Vfc% cumulative preferred
stock, both to be sold by Allan P. Kirby, President of
tne company, and 500 shares of prior preferred stock to
i-e sold by The Allan Corp., Wilmington, Del.
Prices—
For common, $4 per share; for series A, $80; and for
prior preferred, $85.
Underwriter—Auchincloss, Parker
•
Corp.,
Alleghany
-
♦
Insurance Co. of Florida
Cladmetals
American
•
Armorlite
Lens
Pa.
Carnegie,
Co.,
American-Marietta
Chicago
Co.,
(letter of notification) lu,0uU shares ($2 par)
Price, market (about 10%). Underwriter
M. Byllesby & Co., Chicago.
To reimburse cor¬
—H.
porate
stock.
for
treasury
in connection with pur¬
expenses
Commonwealth
Proceeds—To be used for economic develop¬
share.
&
additions,
debentures will provide for
Automatic
Firing Corp., St. Louis, Mo.
6,300 shares of
Underwriter—G.
Weil.
J.
Walker &
H.
Co.,
St.
a share and sell¬
Chicago, the underwriter, at
.$2.50. Latter, will resell it at $2,375 each
Consolidated
mon
liam
Trotting Races,
Inc.
110,000 shares of common stock ($1 par). To be
at $1,330 per unit, each unit to consist of $1,000
&nd
offered
Uonds and 110 shares of stock.
will be used to build
Y/ith respect to
cf
No underwriter.
Proceeds
racetrack. Three officers also filed
voting trust certificates for 290,000 shares
stock, par $1.
common
Bank
a
Building
velop
12
Dec.
Corp.
of
about
$7
a
two-for-one stock spilt, effective Dec. 20) at
each.
Underwriter—Scherck, Richter
Co.,
St.
Louis.
vertible
($100
($1
snares
par)
par)
value
preferred
6,000
and
stock
stock
(of which 2,000 shares
will be purchased by underwriter at par). To be offered
In units of one share of preferred and two of common
stock at $102 a unit.
Underwriter—Sterling, Grace &
Co., New York.
common
To acquire oilleases and drill, wells,
Beverly Gas & Electric Co.
Dec.
20
be
to
filed
offered
33,000
writer.
notes
shares
of
capital
to stockholders at
lor each two shares
now
1
the
held, at $30
stock
rate
per
of
(par
IV2
$25)
shares
share. No under¬
The proceeds will be used to pay off $575,000 of
held
by
the
Lank loans.
New
England
Electric
System-and
'lis':;
.-.1
de¬
Pasadena, Cal.
be sold at $22 each to Paul W. Heasley
the public. Underwriter—Hopkins, Harbach
&
Co., Los Angeles, Calif.
Kansas
Cooperative Association,
filed
29
indebtedness, to be sold to members.
Underwriter—
None.
Proceeds—For corporate purposes, including fi¬
of
inventories and paying operating
Farmers Purchasing Cooperative.
Chemical
Dow
Offering
at
175,000 shares of common stock (par $15).
to stockholders of record Dec. 20
per
share on ratio of one new share for each
Rights expire Feb. 1, 1950. Employees of
its
company,
and associated companies will
opportunity to subscribe. Proceeds—To
treasury funds and used for corporate pur¬
subsidiary
be added to
Underwriter—None.
Duval
be
of
Texas
Sulphur Co., Houston, Tex.
capital stock (nonpar) to
offered to stockholders at $13.50 per share at the rate
%ths of a new share for each share held.
[Tfre United
Corp., owner of 74.71% of the outstanding Duval
capital stock, has agreed to purchase at the subscription
price any shares of stock not subscribed for by other
stockholders.] Underwriter •— None. Proceeds — To be
used, along with a $2,500,000 bank loan, to provide min¬
and milling
County, N. M. .,
ing
Eastern
Oct.
filed
27
facilities
Harness
to
mine
Club,
Racing
in
potash
Eddy
(1/9-13)
Inc.
shares (5c par) common stocK.
Price, $1 each. Underwriter—Tellier & Co., New York.
Proceeds—To purchase, improve and onerate the Fort
Steuben
•
Raceway. Expected second week in January.
Empire
Dec.
15
to
Building
Material
(letter of notification)
stock at par
tal
1,000,000
Co.,
Portland,
Ore.
1,000 shares of common
($100 each), the proceeds for working capi¬
expand operations and buy
Office—1205
S.
E.
new
machinery.
Grand
Avenue,
No
Port¬
Excelsior Insurance Co.
of N. Y.
(1/10)
10,598 shares of common
share together with option, exercisable
(letter of notification)
after April 1, but not
later than April 11, 1951, to
purchase 10,596 additional shares at the same price, to¬
with
gether
a
further option, exercisable
on
or
after
April 12, but not later than April 22, 1952, to purchase
10,596 additional shares also at $8.85 per share. To'be
sold for account of Virginia P'ire & Marine Insurance Co.
which
owns
31,790
Fitzsimmons
Dec.
16
common
,
'■
7
■
(
r
San Francisco
Private Wires to all offices
Cleveland
Range Oil & Drilling Co., Denver, Colo.
1,702,707 shares of com¬
Price—Par (5 cents each).
Under¬
writer—Inter-Mountain Shares, Inc., Denver.
Proceeds
29
capital stock.
—For
(letter of notification)
drilling of test wells for oil and gas.
Security Bldg.,
Office—711
Denver.
Gibbonsville
Mining &
Exploration Co.
(letter of notification) 250,000 shares (10c par)
stock. Price, par. Underwriter — William L.
6
Dec.
common
To buy and install additional
milling machinery. Office—Hutton Bldg., Spokane, Wash.
Gulf
Atlantic
Transportation
Co.,
Jacksonville,
Florida
May 31 filed 620,000 shares of class A participating ($1
par) stock and 270,000 shares (25c par) common stock.
Offering—135,000 shares of common will be offered for
subscription by holders on the basis of one-for-two at
share. Underwriters—Names by amendment,
include John J. Bergen & Co. and A. M. Kidder
Underwriters will buy the remaining, 135,000
and may
&
Co.
plus 'unsubscribed shares of the new common.
Offering price of class A $5.
Proceeds—To complete
an ocean ferry, to finance dock and terminal taciiities,
to
obligations,
current
pay
and
provide
to
shares of Excelsior stock.
Stores,
Ltd.,
Los
Angeles,
CaL
(letter of notification) 30,000 shares of class A
stock, of which 22,778 are to be issued in ex¬
change for 3,254 shares of Roberts Public Markets, Inc.
at the
rate of seven shares of Fitzsimmons for each
share of Roberts.
working
capital.
which
50,000
150,000 shares ($1 par) common stock, of
to be offered by company and 100,000
are
Underwriter
stockholders.
three
by
—
Any additional shares not: needed for
None
named.
share.
Proceeds—Company plans to use
$315,000 to redeem 3,000 shares 5% cumulative preferred
stock ($100 par) at 105, and the remainder to Improve
lease-hold property and furnish new offices. Business—•
Manufacture
of
women's
suits.
Statement
effective
Price—$10
per
Dec. 15.
Hastings
Manufacturing Co.,
Hastings, Mich.
($2 par) com¬
stock, to be sold by Aben E. Johnson, President of
mon
$7 each. Underwriter—First of Michigan
Corp., Battle Creek, Mich.
Hawaiian Electric Co.,
Ltd., Honolulu
E cumulative ($20
par) preferred and 50,000 shares of ($20 par) common.
Offering—Preferred will be offered to preferred holders
June 21 filed. 150,000 shares of series
rate and
common
will be offered to common
Underwriters—Dillon, Read
& Co. Inc. and Dean Witter & Co. will buy
unsubscribed
preferred; unsubscribed common will be sold either at
to the underwriters. Proceeds—To pay
promissory notes and to carry merchan¬
dise inventories and receivables or to replenish treasury
funds.
The balance would be used for other corporate
public auction
or
off short-term
purposes or
Statement effective Dec. 9.
filed 375,000 shares of
Dec. 21
stock at $8.85 per
'.'...j Philadelphia
equip these facilities.
stockholders at l-for-9 rate.
also be given an
on -or
Chicago
Front
at l-for-3
Co.
Offered
—
$44.50
expenses.
50 shares held.
•
Pittsburgh
•
Dec.
the company, at
Mo.
$2,000,000 Vh% five-year certificates of
indebtedness and $3,000,000 of 4%% 10-year certificates
Nov.
Dec. 21
Bosto.v
and to
Dec. 6 (letter of notification) 2,000 shares
land, Ore.
-
and
Expected
supermarkets, warehouses, parking lots
facilities,
about Jan. 10.
Proceeds—For working cap¬
ital.
underwriter.
New York
other
Nov. 28 filed
Gas
Barclay Oil Co., Inc., ML Carmel, 111.
Oct. 13 (letter of notification) 2,000 shares of non-con¬
15-year 3V2% debentures due Feb. 1, 1959, and $2,000,000
Balance Will be used to acquire or construct
of notes.
additional
Handmacher-Vogel, Inc., New York
Mines, Inc.
200 shares of common
notification)
(letter of
for resale to
America
Dec. 9 (letter of notification) 6,500 shares of captial stock
(following
Silver
stock (par $1) to
poses.
Equipment
&
Caribou
&
Burton
Nov. 4 filed
\
debenture bonds, due 1970,
ratable retire¬
Bids expected
maturity.
Co., New York. Proceeds—To
mining properties. Expected about Jan. 6.
L.
nancing
filed $1,000,000 5%
to
by
(by amendment) 800,000 shares (no par) com¬
stock. Price—$1.25 per share.
Underwriter—Wil¬
Business:
15
etc.
issue
17
ing it to Dempsey & Co.,
Baltimore
Underwriter—Eastman Dillon & Co.
will be used to redeem $2,645,000
1965.
1,
Proceeds—Proceeds
10, 1950.
Louis, is buying this stock at $2.333334
Dec.
entire
City,
(letter of notification)
Leslie
the
Consumers
class B
($1 par) common stock, of which 2,400 are offered by
Allan J. Strauss. 2,100 by Stanley Strauss and 1,800 by
9
of
Nov.
corporate purposes.
Dec.
new
on
Consolidated Engineering Corp.,
Ky.
Dec. 15 (letter of notification)
15,000 shares of $1.20
cumulative convertible preferred stock (no par) to be
sold to company employees at $20 each. No underwriter.;
Proceeds—To be added to working capital for general
Refining Co., Ashland,
(1/10/50)
Proceeds—For
property.
The sinking
construction,
Statement effective Dec. 9.
Ashland Oil
Co., Chicago
fund
Ampal-American Palestine Trading Corp., N. Y.
sinking fund deben¬
200,000 shares ($10 par) class A stock.
Underw riter—Israel Securities Corp. may be underwriter.
per
Edison
filed
First Boston Corp.; Glore, Forgan & Co.
Nov. 3 filed $3,250,000 10-vear 3%
ment of Israel.
(1/10)
Inc.
Stores,
$8,000,000 15-year sinking fund debentures,
shares
Jan.
and the stock at $il
Jan.
due
ding. Probable bidders: Halsey, Stuait & Co. Inc.; The
ment
Debentures are to be offered at par
No underwriter.
25 cents per
chase of additional property.
tures due 1958 and
Fair
$49,000,000 sinking fund debentures, to be
dated Oct. 1, 1949, and mature AprH 1, 1999. Underwriters—Names to be determined by competitive bid¬
13
Dec.
;
Food
Dec. 6 filed
(letter of
and. property additions to convert to automatic dial
operation. Office: 240 W. Monroe Street, Decatur, Ind.
Office—117 E. Colo-.;
21
common
21
will be sold at $10 each.
working capital.
Henderson, Wallace, Idaho.
Decatur, Ind.
notification) $250,000 of 4J/2% pre¬
ferred stock.
Price $100 each.
To be offered initially
to common stockholders.
No underwriter.
For plant
Oct.
(letter of notification) 4,077 shares of capital
stock at $10 each. No underwriter.
Proceeds—To buy
equipment and expand business.
rado Street, Pasadena 1, Calif.
■
Citizens Telephone Co.,
Pasadena, Calif.
Inc.,
Co.,
Chicago
(letter of notification)
111.
the exchange
Proceeds—For
mon
(par $1).
cago,
12
Nov.
Statement ef¬
mineral resources.
105,800 shares of common
Price—$2.75 per share.
Underwriter—•
Blair F. Claybaugh & Co., New York.
Proceeds—For
additional capital for Central Scientific Co., a whollyowned subsidiary.
Office—1700 Irving Park Blvd., Chi¬
Expected at market.
Dec.
New
Devlin,
J.
Cenco Corp.,
stock
10,000 shares of common
stock (par $1) tor account of selling stockholder.
Un¬
derwriter— C. S. McKee & Co., Pittsburgh, Pa.
Price«
Hugh
—
Dec. 20
(letter ot notification)
15
of a cent par vaiue,
respectively. Under-
York.
Proceeds — For
working capital. Business—To back theatrical produc¬
tions, distribute tickets and act as an agent for talent.
writer
Proceeds—To develop
4,000 shares of class A
stock (par $10) at $35 per snaie and 6,000 shares of
class B stock at par ($10 each).
No underwriter. Pro¬
ceeds to increase capital and enlarge surplus.
Office—
243 N. 2nd Avenue, Miami, Fla.
Dec.
shares of 0.1
Mining Corp., Ltd., Vancouver, B. C.
Aug. 29 filed 1,00U,000 shares of no par value common
stock. Price—800,000 shares to be offered publicly at 80
:ents per share; the remainder are registered as "bonus
snares." Underwriter—Israel and Co., New York, N. Y.
(letter of notification)
12
management
fective Dec. 9. Offering expected in January.
Bankers
American
•
Dec.
ISSUK
PREVIOUS
Canam
Redpath, New York.
Hi
SINCE
ADDITIONS
sold at 50 cents and 12.5 cents
to be
"
expand activities.
mid equipment to
Registration
Broadway Angels, Inc., New York City
Nov. 14 filed 2,000,000 snarfcs (lc par) common stock and
Underwriter—Rey¬
by amendment.
be filed
price—To
nolds & Co., New York.
INDICATES
.
common
snares oi
in
Now
Thursday, December 29, 1949
CHRONICLE
FINANCIAL
&
Indefinite.
construction.
(Mass.)
Industrial Center, Inc.
(letter of notification) 25,000 shares of class A
Hingham
Dec.
2
($10 par) common stock.
kins & Co., Boston. For
from the
•
Navy Department.
Huffman
N.
Dec. 21
Price, par. Underwriter—Per¬
operating a plant to be leased
&
Boyie Co., Inc., No. Hackensack,
J.
(letter of notification) 2,000 shares of 6% cumu¬
which 800 shares are to be
principal amount of out¬
standing debenture bonds on a par for par basis. The
remaining 1,200 shares are to be sold at par ($50 per
share), the proceeds to be used for working capital.
lative
preferred
stock,
of
offered in exchange for $40,000
No
underwriting.
Idaho
Dec.
12
...
,
,.
Maryland Mines Corp., San Francisco, Cal.
14,000 shares of common
be sold by Gwendolyn
MacBoyle, executrix for the Estate of Errol MacBoyle,
stock
(letter of notification)
at
deceased.
&
$1.90
per
share,
to
Underwriters—E. F. Hutton & Co. and Davies
Mejia, San Francisco.
;; THE
Volume 170—Number 4868
>
South Carolina Electric & Gas Co., Columbia,
: 7
South Carolina
%
;
Equitable Securities Corp. (jointly). Proceeds—To makecommon stock investments totaling' $13,000,000 in three., Nov. 22 filed $22,200,000 first'and
refunding mortgage
subsidiaries, viz: Arkansas Power & Lignt Co., Louisiana - bonds. Due 1979. Underwriter—Names by amendment.
Proceeds—To
redeem
a
like amount
of
Power & Light Co. and Mississippi Power & Light Co.,
outstanding
so that these subsidiaries can continue construction pro¬
bonds.
Due 1979.,- Underwriter—Names by amendment
Brothers, Blyth & Co., Inc.; Union Securities Corp. and^
v.
-fNEW ISSUE l»LENDAR
2. {•*.'.
.-I*
.
•
1950
January 4,
7 Baltimore & Ohio RR. noon (EST).Equip. Tr. Ctfs.
3
^
January 5, 1950
Northern Indiana Public
Tel-Aviv,
writer—Coffin,
January 9, 1950
a
Cotton textiles.
Debentures
.Excelsior Insurance Co. of N. Y
..Common
Food Fair Stores, Inc.—-—Debentures
Lawrence Gas & Electric Co
Bonds
Missouri-Kansas-Texas RR.
—Equip. Tr. Ctfs.
New
June
1950
year,
v
7
•'
7
—-—..Preferred
Sharp & Dohme, Inc.- -^a
-
77.77
77January 25,1950 /t777'>/7';
Telephone & Telegraph
American
11:30
v
Illinois
.
Debentures
Co.
shares of capital stock (par $100).
Bell Telephone
Nov. 30 filed 389,982
Nov. 29 filed 250,000
Mexico, S. A., Mexico City
shares of 6% cumulative
shares held, either
bination
of' both.
is
stock
•
/
the .surviving
be
to
dividend. 7'. 777
equipment
Central New York
company,/ and
is to
Teco, Inc., Chicago
7,//.-■. 7
7 \7-7 7filed "100,000 shares ($10 par) common stock.
Offering—These shares are to be offered to holders'oil
common stock in Zenith Radio Corp. at rate of one share
for each five held.'-Underwriter—None.
Proceeds—For
and
•
—
Inc., Midland, Texas
shares ($1 par) capital stock.
share-for-share in exchange for
outstanding shares in Limpia Royalties, a trust estate.
A* value of $3.80 per share is placed on the new stock,
and any shares not needed for the exchange will be
sold to Trust shareholders on a ratable basis at this
amount.
Underwriter—None.
To effect an exchange.
Business—Mineral and royalty rights in Texas, New
Mexico, Oklahoma and Arkansas.
part of outstanding bank loans.
made
on
1,000,000
istration
June 27.
•
Malone Darhasana
Dec.
12
(letter
of
shares of common
*
Mining Co., Silver City, N. M.
notification)
such portion
of 1,939
stock held in treasury as are neces¬
meet future expenses, to be offered to stock¬
holders only at $5 each. No underwriter. The proceeds
will be used to meet payments on options, etc. Office—
sary
to
Bell Block,
Silver City, -N. Mex.
(1/17)
Dec. 21 filed 640,000 shares of common stock (no par).
Underwriters—Names to be determined by competitive
Middle
South Utilities,
Inc.
Read & Co. Inc.;
Kidder. Peabody & Co. and Merrill Lynch, Pierce, Fenner & Beane (jointly); The First Boston Corp.; Lehman
bidding.
Probable
bidders:
Dillon,
Offering—To be
7.7-,.
y7
/
7
company
Price—50
cents
and 150,000 by New Yor>
share. • Underwriters—
per
expenses
:
;
and
Proceeds—For admin*
drilling.
Statement effective
7,777 V'--:7
.7-77,77.
employees under the
to
100,000 common shares, with maximum con¬
employees estimated at $400,000 and
from
maximum contributions by the company at
underwriter.
7 7
v
i
:
I
$80,000.
Proceeds—For working capital.
"
No*
'
.
Ultrasonic Corp.,
Cambridge, Mass.
Dec. 7 (letter of notification) $300,000 of 5% debenture
bonds, due I960 (which will have attached 3,000 shares
of class A stock). The bonds are convertible into 40,000
shares ($5 par) capital stock/ Price — $100 each. No
underwriter.: For general working capital. Office—61
Rogers St., Cambridge, Mass.
7
■
18
Royal Crown Beverage Co. of Poughkeepsie, Inc.
Dec. 8 (letter of notification) 8.000 shares of 5% cumula¬
preferred stock (par $20) and 40.000 shares of com¬
stock (par 10 cents) and 18.000 common stock pur¬
mon
chase
like number of common
Underwriter—Raymond V. Edwards, Massapequa,
shares.
;
to
warrants
purchase
a
L. I., N. Y. Price—$30.66 per unit, each unit consisting of
one share of preferred and five shares of common stock.
To retire bank loans for new equipment and additional
working capital. Office—170 Washington Street.
Seaboard
Finance Co.,
Dec. 7 filed 120,000 shares of
(no
par).
Proceeds—To
Corn.
bank
v.-
Los Angeles (1/10)
convertible.preferred stock,
Underwriter—The First Boston
working canital. reduce
loan, invest in subsidiaries. Expected Jan. 10.
77
cumulative
increase
Service Finance Co., Los Angeles,
•
19
Dec.
(letter of notification)
Price—Par
stock.
Tegeler
capital.
($1
Calif.
65.000 shares of common
each).
-7
-
*
Dec. 28 filed 35,000
Inc. /
Funds,
investment company. "
end
United
•
Gas
/
V
y
Underwriter
Business—An open!* V W- 7 *
shares of capital stock.
—Lord, Abbett & Co;, New York.
;
;
? ?
(1/24)
Dec. 21 filed $25,000,000 of first mortgage and collateral
trust bonds,
series due Jan. 1, 1970.
Underwriters—
Names to be determined by competitive bidding.
Bids,
it
Corp.
will be opened at 11:30 a.m. (EST) on
Street, New York. Probable Bid¬
Halsey, Stuart & Co. Inc.; Dillon. Read & Co. Inc.;
First Boston Corp.; Harriman, Ripley & Co. and
is
expected
25
Jan.
ders:
Rector
2
at
Goldman, Sachs & Co. (jointly); Equitable Securities
Corp. Proceeds—To purchase $18,000,000 of first mort¬
bonds, 4% series due 1962, to be issued by United
Co., its subsidiary, ana for general cor¬
gage
Gas Pipe Line
porate purposes.
•
United
7'
/
States
Fidelity &
7
Guaranty Co.,
Baltimore
27
Dec.
300,000 shares of capital stock (par $10)..
by amendment. Offering—To stock¬
the rate of one share for each 3l/s shares now
filed
Price—To be filed
holders at
held.
Brown
Underwriters—Alex.
&
Sons;*
John
C.
& Boyce, and Baker, Watts &
Proceeds—For additional capital
Legg & Co.. Stein Bros.
Co., all of Baltimore.
and
7
surplus.
Upper Peninsula Power Co.
Sept. 28. 1948 filed 154,000 shares of common stock (par
Underwriters—SEC has granted exemption from
$9.
competitive bidding. An investment banking group man-*aged by Kidder, Peabody & Co.; Merrill Lynch, Pierce,
Fenner & Beane, and Paine, Webber, Jackson & Curtis,
may be underwriters. Proceeds—Will go to selling stock¬
holders.
Consolidated Electric & Gas Co. and Middle
West
will
Corp.
respectively.
sell
>
120,000
shares
and
shares,
34,000
.
Underwriter—Dempsey
Co., Los Angeles.
Proceeds—For working
Office—607 S. Hill Street, Los Angeles.
offered in exchange for
229 085 2/5 shares of $3.50 cumulative convertible pre¬
ference stock, series A. at rate of three new shares for
each four oid ones. Underwriters—Alex. Brown & Sons,
Ba1
i
Trusteed
Union
&
Sharp & Dohme, Inc., Philadelphia, Pa. (1/20)
Dec. 9 filed 171,815 shares of cumulative preference
stock
•
The
777.
Worcester, Mass.
(letter of notification) 10,000 shares ($2.50 par)
common stock.
Price, $7.50 each. To be sold by Charles
S. Payson, New York. Underwriter—J. P. Marto & Co.,
Boston.
-7. :..77.7^ 7 ;
: 7; 7 7'-' 77 7; .77.
Murch & Co., Cleveland.
,
,v7
Reed Prentice Corp.,
Nov.
vertible preference
Expected early in January.
;
S. G. Cranwell & Co., New York.
Magnavox Co., Fort Wayne, Ind.; .••••.
shares of class A $1 cumulative con¬
ital.
behalf of
on
Ltd.
Co.,
Dec. 2 filed 100,000
Proceeds—To
I :
about Jan. 10.
or
Power Petroleum Ltd., Toronto Canada
April 25 filed 1.150,000 shares ($i par) common of whiefc.
516,228
stock ($15 par). Underwriter—MayPrice by amendment.
retire bank loans and furnish working cap¬
of
than
more
.
:
7;7''.77 7/7/ :77777;\7f7:777,/7\77/7v-.(
repay
Offering—To be offered
nard H.
issue
the
Employees' Thrift Bonus Plan.
This
number is estimated at more than 14,000 preferred and!
trust
.
Limpia Royalties,
filed
»•
\ stocks for
common
1950
tributions
Lighting Corp. (1/10) 77;
•
7/';.^
Dec. 21 filed 100,000 shares of $4.40 cumulative preferred
stock (no par value); Underwriter—Blyth & Co., Inc.
and others to be named by amendment.
Proceeds—To
tive
25
Office — 811
7 " 7 77 v
and; for operating expenses.
Building, Washington, D. C.
Nov.721
_
change its
•7 Pacific
; Keller Motors Corp., Huntsville, Ala.
May 10 filed 5,000,000 shares (3(? par) common. Under¬
writer—Greenfield, Lax & Co., Inc., New York. Price—;
Nov.
to
Woodward
,
de
To purchase additional plant
facilities,- tools, dies, jigs, etc.; the balance for working
capital. Statement effective Oct. 3 and amendment to
registration statement, effective Oct. 31.
Kentucky Water Service Co., Inc., Louisville
Nov. 21 (letter of notification) 1,000 shares ($25 par) 6%
cumulative preferred stock. Price, $27.50. Underwriters
—Bankers Bond Co. and Smart & Wagner, Louisville,
Ky. To extend water system at Middlesboro, Ky.
Lawrence
(Mass.) Gas & Electric Co. (1/10)
Dec. 1 filed $2,750,000 of series A first mortgage bonds,
due Dec. 1, 1979. Underwriter — To be determined by
competitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; The First Boston Corp.; Carl M. Loeb, Rhoades
& Co.; Otis & Co.; Coffin & Burr. Proceeds—To redeem
$1,500,000 3V8% series A first mortgage bonds, due 1968,
at 10214%, to repay $1,000,000 notes held by banks and
the balance for construction.
Expected Jan. 10.
.
(leter of notification) 25,000 shares of common,
be sold at par ($1 a share) in blocks of no
less than 10 shares.: Proceeds for organization expenses,
Underwriters: Central
Republic Co. ' (Inc.), Chicago;* Blyth & Co., Inc. and
Merrill Lynch, Pierce,; Tenner & Beane, New York.
Proceeds—To retire 5% preferred not surrendered in
the exchange.
Each share of stock exchanged will be
accompanied by a cash payment to make up the difference between the offering price of the new stock
and
$106.61, the redemption price plus a 61-cent accrued
7
Proceeds
.
13
stock
,
outstanding 5% preferred stock.
Proceeds—To reduce outstanding shortindebtedness.'
•
7 7
$1 per share.
Washington, D. C.
Inc.,
Swormco,
Dec.
-
Mexico, S. A.
term
($1 each). No underwriter. Proceeds to
oil and gas in the San Luis Valley, Colo.
S. Franklin Street, Denver, Colo.
r, : .7'
par;
Office—1120
,
convertible
National
at
/ name to Niagara Mohawk. The Niagara Falls Power Co.
will be its direct subsidiary.
Proceeds—To repay $38,500,000 of bank loans obtained in 1948 and 1949 in con^working capital and the promotion of Zenith's "Phonejnection with the construction program of the constituent
vision" device,- whereby television users could pay a
companies and to finance in part the company's,, con¬
special fee for costly television programs by calling the
struction program. This program is expected to require
telephone company and asking to be plugged in.
....»
.about $43,000,000 in 1950 in addition to the $70,000,000
Thermoid Co., Trenton, N. J.
;. :
; 7.
of expenditures since 1947.
' 77''-\7*77'
' 777 •
7
' Dec. 20 filed sufficient shares of convertible preferred!
of common or special, or a com¬
Underwriter—Banco
stock. Price—$1
375,000 shares of common
.
and New York Power & Light Corp.
preferred stock, 100 pesos par value ($11.5607), Offer¬
ing—This stock is to be offered at par to holders of
common and special stock at rate of five shares for each
12
filed
7
*
Sunny Valley Oil Co., Denver, Colo.
7
12 (letter of notification) 200,000 shares of capital
•
.
Industria Electrica de
' '
Canada
Dec.
stockholders pro rata at $100
.Northern Indiana Public Service Co.«(1/5/50)
a share.
American Telephone & Telegraph Co. will be
Dec. 7 filed 211.380 shares ($100 par) cumulative pre-,
given the right to buy 387,295 of these shares and the:
ferred stock. Offering—To be offered on a share-for¬
remainder will be offered public stockholders. Under¬
-share basis in exchange for St like number-of shares ofwriter—None. Proceeds—To pay advances from A. T. & T.
Offering—To be offered to
Saranac Mining .Co.,
share (U. S. funds). Underwriter — None. Proceeds
—Funds will be applied to the purchase of equipment,
road construction, exploration and development.
(1/17).
bonds, due Jan. 1,
be determined by com¬
Underwriters—Names to
,
per
/Niagara Electric Corp., Central New York Power Corp.
;
: :
• .'77„;-7: 7'
Co77--:''''-77f'7
(EST)-—-
a.m;
:'"7:i;7'V:
RR.—rJ_.-r—Equip. Tr. Ctfs.
7777'7-77V:7 January 31, 1950 1
:
;
January 24, 1950 .-777
United Gas Corp. 11:30 a.m. (EST)—-—-—Bonds
No
explore for
petitive bidding.
Probable bidders—Halsey, Stuart &
Co. Inc.; Morgan Stanley & Co.; Kuhn, Loeb & Co.;
The First Boston Corp. Bids expected Jan.' 17.
Corpora¬
tion—Will on Jan. 5 succeed to the merger of Buffalo
;•;'/ ; »- '
Indiana Harbor Belt
June
Niagara Mohawk Power Corp.
January 20, 1950
7 r
determined
be
Dec. 15 filed $40,000,000 of gen. mtge.
Pacific RR————Bonds
-
development and exploration of these prop¬
underwriter.
Office—730 Peyton Building,
Sudore Gold Mines Ltd., Toronto,
.■
1980.
i,
to
pre¬
for, construction of additions and betterments sub¬
sequent to April 30, 1949.
Sale deferred until later this
January 18, 1950
7
Chicago, Rock Island &
Underwriters—Names
cumulative
made
Bonds
Niagara Mohawk Power Corp.-—
stock.
par)
r
Spokane 8, Wash.
payment of the cost of, or in reimbursement of payments
1950
South Utilities, Inc.——-——Common
January 17,
Middle
Inc. and for
Light Co.
(,$100
;
stock
agreement on properties leased to
through competitive bidding. Probable bidders: Kidder,
Peabody & Co.; Smith, Barney & Co.; W. C. Langley &
Co.; Lehman Brothers.
Proceeds—Will be applied to the
7 Western Maryland Ry.__————Equip. Tr. Ctfs.
i
shares
20,000
Inc.
(letter of notification) 400,000 shares of com¬
at par (10c each) to fulfill an assignment
12
mon
of
Mining Syndicate,
Spokane
Dec.
erties.
Jersey Power &
filed
9
ferred
1950
(EST)..Equip. Tr. Ctfs.
January 12,
ments
outstanding bank loans.
January 11,
Southern Pacific Co. noon
Murphy & Co., St. Paul, Minn.
(letter of notification) 6,000 shares
19
(letter of notification) 400,000 shares of common
share. Proceeds—For improve¬
and working capital. No underwriting.
: 1
stock (par lc) at 50c per
572%
prior preferred stock (par $50).\ Underwriter—Piper.
Jaffray & Hopwood, Minneapolis.
Proceeds — To pay
Preferred
Preferred
—
Co
Finance
Soya Corp. of America, N. Y. City
Dee. 15
(A. A.)
Dec.
—
Seaboard
7
-
-
•
•
Commonwealth Edison Co
Pacific Lighting Corp
Under-
Co.,
.
1950
January 10,
-
par) capital stock.
Philadelphia.
Price, par.
textile plant in Israel.
Business—
'
'
\
7
&
Betz
Proceeds—To build
Common
Eastern Harness Racing Club, Inc.__,
u
Co.;
Israel
Dec. 7 filed 500,000 shares ($5
.
(probably Halsey, Stuart & Co. Inc.; Kidder, Peabody &
The First Boston Corp.; Union Securities Corp.).
Expected in January.
*
•
Moller-Dee Textile Corp., Wilmington, Del., and
,
Pennsylvania RR. noon (EST)—Equip. Trust Ctfs.
v
Tentative date of offering is Jan. 17.
grams.
.Preferred
Service Co
37
(2669)
FINANCIAL CHRONICLE
COMMERCIAL &
(no par). Offering—To be
more,
and Drexel & Co., Philadelphia. Proceeds—
To redeem at $75 each
plus accrued dividends any $3.50
preference stock not surrendered under the exchange.
Business—Pharmaceuticals.
7
■>***/■■
•
Prospective Offerings
American
Telephone
&
Telegraph
Dec. 21 the directors authorized a new
000 debentures to
Co.
(J/31)]
issue of $200,000,-
be offered at competitive
bidding.
If
expected that they will be dated Feb. 1, 1950 and!^
1, 1971, that a registration statement will be
filed with the SEC early in January and that bids will
is
mature Feb.
be
opened
at
11:30
a.m.,
Jan.
Morgan, Stanley & Co.; Mellon
/
31. Probable bidders—
Securities Corp.; Halsey,
Continued on page 38
j
■****
•<*
**•*•«.»"«* *
38
4">
v"
'
(2670)
Continued
■
THE
from
37
page
*
,
requirements
'
'
..
Stuart & Co. Inc. and First Boston
COMMERCIAL
W.
ert
provide funds for extensions, addi¬
tions and improvements to plant of the Bell System com¬
Stuart
Baltimore & Ohio RR. (1/4/50)
Company will receive bids by noon (EST) Jan. 4 at its
New York office on its proposed offering of $11,865,000
equipment trust certificates, series BB, to be dated Jan.
1, 1950 and to mature $791,000 annually on Jan. 1, 19511965. Probable bidders; Halsey, Stuart & Co. Inc.; Har-.
riman Ripley & Co. Inc. and Lehman Brothers (jointly);
Salomon Bros. & Hutzler; Harris, Hall & Co. (Inc.).
Dec.
of
27
this
it
Co. Inc.; Goldman, Sachs & Co.; The First
jCorp.; Lehman Brothers; Merril Lynch, Pierce,
& Beane; Reinholdt & Gardner (jointly).
i
tnat
block of common stock
a
owned by New England Public
reach the marketing stage this spring.
Chicago, Rock Island & Pacific RR. (1/18-19)
ICC for authority to issue $55,000,000 first mortgage bonds, due Jan. 1, 1980, the net
proceeds to be used toward paying off $25,760,000 of
notes and to redeem on April 1, next, approximately
$33,400,000 of general mortgage 4%% convertible income
bonds, series A, due Jan. 1, 2019. To be offered at com¬
petitive bidding.
Probable bidders: Halsey, Stuart &
Co. Inc.; Kuhn, Loeb & Co.; Morgan, Stanley & Co.;
Lehman Brothers and Bear, Stearns & Co. (jointly).
The
bank loan was made to redeem on Jan. 1,1950, $25,760,000
first mortgage series A 4s, due Jan. 1, 1994.
Bids—Ex¬
pected to be invited around Jan. 9 and opened Jan. 18
Dec. 20 company asked
Or
19.
Cincinnati Gas & Electric Co.
Dec. 21 stockholders authorized
ber of
an
Presently there
2,493,334 shares outstanding.
are
num¬
Plans
call for the issuance of 560,000 shares
,
early next Spring,
possibly in March, to finance, in part, an $85,000,000
expansion program.
The stockholders will receive preemptive rights for the new stock offering.
Columbia Gas System, Inc.
Dec. 19, the directors authorized
shares
the sale of 304,998
stocks (which represents the unsub¬
1,345,300 shares offered stockholders
Underwriters—Names to be determined by
of
common
scribed portion of
last June).
competitive bidding. Probable bidders: The First Boston
Corp.; Merrill Lynch, Pierce, Fenner & Beane; Halsey,
Stuart & Co. Inc.; Kidder, Peabody & Co.; Lehman Bro¬
thers; Goldman, Sachs & Co.; Union' Securities Corp.
(jointly); Morgan, Stanley & Co.; Shields & Co.; R. W.
Pressprich & Co. (jointly); Blyth & Co., W. C. Langley
& Co. (jointly).
Bids expected toward the end of Jan¬
Commonwealth Edison Co., Chicago
,
Dec.
13
it
it
was
was
indicated
,
,
,
,
,
•
.
Dallas
Dec.
24
that
May,
necessary
Power
of
&
Light Co.
reported
company
$8,500,000
bonds,
planning
for new
sale, probably in
Probable
money.
bidders: Halsey, Stuart & Co. Inc.; Equitable Securities
r
Corp.; Lfehman Brothers; Salomon Bros. & Hutzler; First
Boston Corp.; Union Securities Corp.;
Kidder, Peabody
Co.; Blyth & Co., Inc.; Merrill Lynch, Pierce, Fenner
& Beane (jointly); Harriman,
Ripley & Co.
v
Dec.
in
15
Power
reported
&
expects
new
money in 1950-1951 to
struction program. McGregor
to
raise
$12,000,000
finance in part its
con¬
Smith, President, disclosed
plans have been completed to date on what form
the new financing will
take, although the company
expects to improve its current equity position, which is
that
?
38.6%
of capital. Probable bidders for common stock:
The First Boston Corp.; Dillon, Read & Co.
Inc.; Smith,
Barney & Co. and Blyth & Co., Inc.; Lehman Brothers;
Union Securities Corp.; Merrill
Lynch, Pierce, Fenner
& Beane.
Belt
RR.
(1/25)
Dec. 15 company reported to be
$1,800,000
equipment
trust
planning the issuance of
certificates.
Probable
bid¬
der s:Halsey,
Harriman
(jointly);
Stuart & Co. Inc.; Salomon Bros. & Hutzler;
Ripley & Co., Inc. and Lehman Brothers
Harris, Hall & Co. (Inc.). Expected about
Jan. 25.
■
Iowa Public Service Co.
Oct.
26
announced
that
corporation plans to issue and
sell early in 1950 $5,000,000 of
preferred stock, the net
proceeds to pay for construction costs, etc. Probable bid¬
ders: A. C. Allyn &
Co.; Harriman
Ripley & Co. and
Lynch, Pierce, Fenner & Beane (jointly); Kidder,
Peabody & Co. and Blyth & Co. (jointly); Equitable Se¬
curities Corp.
•
Kansas Gas & Electric Co.
23 plans were announced for
preferred stock
(with
change for existing
share
for
share
a
7%
4%%
and
to
$6
issuance
5%
of
new
a
dividend) in
preferred
stocks
ex¬
on
a
basis, with 7%
preferred stockholders
share in cash. New preferred stock
not issued in
exchange will be sold to underwriters and
the proceeds used to redeem old
preferred issues Probbable bidders: Halsey, Stuart & Co.
Inc.; Blyth & Co.
Inc.; Kidder, Peabody & Co.; Smith,
Barney & Co.; W. C.
Langley & Co.; Lehman Brothers.
also
receiving $5
per
•
Laclede Gas Light Co.
Dec. 21 it was reported that the
company expects to be
in the market for new
capital early next year to finance
part of its $20,000,000 construction
program
1950
S* 1950-1953 period. The
planned
time and form of the
financing will not be known
Line
£C::>
RR.
9 reported that company has under consideration
refunding of its long-term first mortgage 4% bonds
involving not less than $30,000,000. Probable bidders in- '
the
elude Halsey,
Stuart & Co. Inc.; Kuhn, Loeb & Co.; Leh¬
Southern California Gas Co*>
1
t
*!
19
Co.; Merrill Lynch, Pierce, Fenner & Beane; the First
Corp.; Shields & Co.; Kidder, Peabody .& Co. j
Pacific
Southern
Co.
(1/11)
I
"
fi-J
company/has issued invitations for bids, to be
received by 12 o'clock noon (EST) on Jan. 11 at its
offices at Room 2117, 165 Broadway, New York 6, N. y.,
for
until the construction
r
equipment
trust
certificates,
series
expects to offer $7,000,000 in bonds and $3,000,000 in r DD, to mature in 15 equal annual instalments of $902,-'
000 each, and to be secured by new railroad equipment
preferred stock. The bond and preferred stock offerings
are to be sold at competitive bidding.
Probable bidders:
Probable bidders: t costing not less than $18,040,000.
Drexel & Co.; Harriman Ripley & Co. and Union Securi- * Halsey, Stuart & Co. Inc.; Harriman, Ripley & Co. Inc.
and Lehman Brothers (jointly); Salomon Bros. & Hutz¬
ties Corp.
(jointly); Carl M. Loeb, Rhoades &
its
1950
construction
The
program.
company!
$13,530,000;
.
Halsey, Stuart & Co. Inc.
Co.
(bonds); Kidder; Peabody &L ler; Harris, Hall & Co. (Inc.); The First Boston Corp.
(bonds); White, Weld &.Co. (bonds); Smith, Barney!
& Co. and Goldman, Sachs & Co.
(jointly on pfd.);!
Glore, Forgan & Co. and W. C. Langley & Co. (jointly f
on pfd.).
Missouri-Kansas-Texas
RR.
Southwestern Public Service Co.
.j
Dec. 10
reported company will offer additional shares of
stock on a ;one-for-eight basis to its present
shareholders early in 1950.
Offering will represent part
of the company's program to raise approximately- $18,common
(1/10)
$1,650,- f 000,000 in the 1950 fiscal year ending Aug. 31 to finance
bidders.*! its $20,000,000 expansion program for the year. Company
Halsey, Stuart & Co. Inc.; Harris, Hall &.Co. (Inc.); I has arranged for the private sale of $10,000,000 of 30-year
Salomon Bros. & Hutzler; Harriman Ripley & Co. Inc.! mortgage bonds with a life insurance company to provide
the major portion of funds needed in the 1950 fiscal year.
and Lehman Brothers (jointly). Expected about Jan. 10.
The balance will be obtained through the sale of about
Montana Power Co.
$2,500,000 of debentures. In addition to the new financ¬
Dec. 20 reported the company may issue in a few months
ing, company also is said to\be considering plans to re¬
approximately $22,000,000 in new securities, which may Is fund some of its
privately-held indebtedness. Traditional"
include bonds and debentures and
possibly some addi- - underwriter, Dillon, Read & Co. Inc.
tional common stock. Financing of
$10,000,000 or more*
•
in bonds may be undertaken in
Staten Island Edison Corp.
May.
The proceeds are
Dec. 15 reported planning the issuance of about
000 of equipment trust certificates.
Probable
to
be
used for
Dec.
expansion and extension of its gas and
Halsey, Stuart
& Co. Inc.; Blyth & Co.,
Inc.; Union Securities Corp.;
Merrill Lynch, Pierce* Fenner &
Beane; Smith, Barney
& Co.; First Boston Corp.
bidders
for
bonds:
Halsey, Stuart & Co. Inc.; Morgan
Stanley & Co.; Kuhn, Loeb & Co.; Shields & Co.; First
Boston Corp.; White, Weld & Co.
year.
&
in
Dec.
15
500,000
:
Co.
«•
100,000 shares of
new
pre¬
Expected to be sold competitively, possibly
Co., Inc.; Lehman Brothers; Kidder, Peabody & Co.;
Smith, Barney & Co.
,
Electric
Service Co.
1
reported company plans sale of $8,000,000 of
early in 1950, the proceeds to be used to finance
company's construction program. Additional financ¬
ing also is anticipated in the first half of 1950 by other
Nov.
28
bonds
the
subsidiaries
of
Utilities
Texas
Co.
Probable
bidders:
Halsey, Stuart & Co. Inc.; The First Boston Corp.; Blyth
&
Co., Inc., Kidder, Peabody & Co. and Smith, Barney
&
Petroleum
Co.
reported contemplating the issuance of around£
600,000 shares of common stock. Probable
...
Power &
:
.
Co., and Merrill Lynch, Pierce,; Fenner & Beane
(jointly); Union Securities Corp., White, Weld & Co., and
Glore, Forgan & Co. (jointly); Carl M. Loeb, Rhoades &
Co.; Drexel & Co. and Hemphill, Noyes, Graham, Par¬
& Co. (jointly); Lehman Brothers; Salomon Bros.
& Hutzler; Harriman, Ripley & Co. ;
- J"
sons
•
Light Co.
it
5
was
Natural
announced
Gas Pipeline Co.
company
plans
to
build
a
1,400 mile pipeline, which it is estimated will cost be¬
$140,000,000 and $150,000,000. James F. Oates, Jr.,
of Peoples Gas Light & Coke Co., stated fi¬
tween
Chairman
nancing of the new project would probably consist of
75% debt and 25% stock.
If.«bonds are sold at com¬
additional first mortgage bonds to retire
outstanding
notes and to finance its construction
program had been
postponed to about May 1, 1950.
Probable bidders:
petitive bidding, Halsey, Stuart & Co. Inc. head group.
Halsey, Stuart & Co. Inc.; Kidder, Peabody & Co.; W. C.
Langley & Co. and The First Boston Corp; (jointly);
Union Securities Corp.; Equitable
Securities Corp. and
•
Texas
Dec.
19
money
Salomon
Bros. & Hutzler
(jointly); Blyth & Co., Inc.;.
White, Weld & Co. and Harris, Hall & Co. (Inc)
(jointly); Carl M. Loeb, Rhoades & Co.
Texas-Illinois
Dec.
funding of $9,000,000 bank loans, probably in March. On
Sept. 15 it was said plans to do some permanent financ¬
ing of approximately $7,000,000 through the sale of
Pacific
Service
Probable bidders may include W. C. Langley
Glore, Forgan & Co. (jointly); Union Securi¬
Texas
or
Pacific
be
-
&
-
underwriter—Bingham, Walter & Hurry, Los Angeles,
•
April.
& Co. and
new debentures early in the
Probable bidders: Halsey, Stuart & Co.
Inc.;
Inc.; The First Boston Corp.; Kidder,
Calif.
corporation
ties Corp.; Hemphill, Noyes, Graham, Parsons & Co. and
Drexel & Co. (jointly); Harriman, Ripley & Co.; Blyth
Co*.,
Pacific
Electric
Texas
Peabody & Co.
•
announced that sale of this
Dec.*19 reported may offer
ferred stock.
Nov. 28 reported company contemplates sale of between
Blyth
was
by
Northern Natural Gas Co.
new
it
21
General Public Utilities Corp. is expected," to
completed in the next three months. " -v; ' v
Probable bidders for bonds:
$65,000,000 of construction.
Company proposes to sell *
$50,000,000 in common stock and $15,000,000 in long-term
bonds to meet plant and installation costs.
Probable
Merrill
Dec.
Air
Dec.
•
Dec. 24 reported that company's tentative
plans call for
Harbor
4
.
Seaboard
The
no
Indiana
citizens.
&
$30,000,000 and $35,000,000
Light Co.
company
S. invited bids
purchase, as an entirety, of 1,358 shares of capital
stock (par $1 each). All bids must be presented at the
office of Alien Property, Department of Justice,
120
Broadway, New York, N. Y., on or before 11 a.m. (EST)
on
Jan. 17.
The stock will be sold only to American
Boston
^
preferred stock, probably in February, to help
nance
&
Florida
Pa.
reported company may issue and sell approxi¬
mately $20,000,000 of bonds, probably in May. Probable
bidders: Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.;
Lehman Brothers; Harris Hall & Co. (Inc.); White, Weld
$90,000,000 additional fi¬
for the period 1950-1953 to $
cover in part a construction
New Jersey Bell Telephone Co.
budget of $290,000,000. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; The First Boston
Company filed Dec. 8 with the New Jersey State Board
of Public Utility Commissioners a
Corp.; Glore, Forgan & Co.
plan for financing
nancing will be
Silk Corp., Allentown,
the Attorney-General of the U.
for the
Dec.
Nov. 30 reported company plans to sell additional bonds i,
and
28
.
$2,000,000 through the issuance to present
stockholders of rights to subscribe for 592,185 additional
shares of common stock.
Underwriters—Dallas Rupe
Son, Dallas, and Straus & Blosser, Chicago. Proceeds—•
To retire present indebtedness, finance the construction?
of a cast iron pressure pipe plant* and for other
corporate -
Metropolitan Edison Co.
Phoenix
•
additional
purposes.
•
Dec.
man-Brothers; First Boston Corp.; Harriman Ripley! &
Co., jointly.
*
"
,i
\
Dallas, Texas
Dec. 13 announced company plans to issue and sell!
$5,000,000 10-year first mortgage bonds and to raise anf
electric lines.
1950.
uary,
Gas
Light Co.
reported company may refund its out- ?
standing $19,000,000 3^% bonds due Feb.-1,"*1965, andV
$6,500,000 3 Vz % bonds due Dec. 1, 1965, through the is-1
suance of possibly $28,000,000 of new bonds within
the!
next year or so.
For probable bidders, see preceding :
paragraph.
4
;
;
I
!
27
Thursday, December 29, 1949
Co.;|
increase in the
shares from 2,500,000 to 6,000,000 shares.
common
Laclede
Lone Star Steel Co.,
now
Service Co. may
•
Dec.
Power Co.
reported
wa^
company
finally determined, according to Rob-:
&
Fenner
Maine
CHRONICLE
Otto, President.
Boston
panies and lor general corporate purposes.
Central
FINANCIAL
Over one-third of the total is;
expected to be spent in 1950. Probable bidders: Halsey,'
Corp. (jointly). Pro¬
ceeds will be used to
•
are
&
-
Telephone & Telegraph Co.
Dec. 15 company announced a
plan to offer to its stock¬
holders the right to subscribe for
814,694 additionalshares of common stock at the rate of
one
share for
each six shares of common or
preferred held. American
Co.
Utilities
reported
be
to
seeking
about
$8,000,000
new
in a few months through additional sale of about
bidders: Blyth
(jointly); Leh¬
man Brothers; Dillon,.Read & Co. Inc.; Union Securities
Corp.; Merrill Lynch, Pierce, Fenner & Beane and Kid¬
der, Peabody &,Co. (jointly); First Southwest Corp.;
Rauscher, Pierce & Co. and Dallas Union Trust Co.
400,000 shares of common stock. Probable
&
Co., Inc.; and The First Boston Corp.
(jointly).
.
;C.-V
'
Telephone &
Webster-Chicago Corp.
Dec. 9, R. F. Blash, President, announced that he and
Mrs. Blash have entered into an agreement with F. Eber-
Proceeds will be used to retire bank loans and
to provide?
for additional
expansion, additions and improvements..
Co., Chicago, covering a proposed public distribution of
part of their shares of common stock of the corporation.
Telegraph Co. owns 3,003,584 shares, or
90.34%, of the 3,324,604 common shares outstanding, and
640,957, or 78.17%, of the 620,000 6% preferred shares.
Pennsylvania RR." (1/5)'
Dec.
15
before
stadt
No
&
new
tration
announced the company will receive bids at or'
o'clock noon (EST) on Jan. 5 at its office
at*
12
Room
1811, Broad Street Station Bldg., Phila. 4, Pa., for
$10,620,000 equipment trust certificates, series Y, to be
dated Jan. 1, 1950 and to mature
$708,000 annually on Jan. 1, 1951-1965.
Probable bidders: Halsey, Stuart &
Co. Inc.; Salomon Bros. &
Hutzler; Harriman Ripley & '
Co. Inc. and Lehman Brothers
(jointly); Harris, Hall &~
Co. (Inc.); First Boston Corp.
*,
.
Co. Inc., New
York, and Shillinglaw, Bolger &
financing by the company is involved. A regis¬
relating to the proposed offering is
statement
expected to be filed with the Securities and Exchange
Commission in the
near
future.
Western
Maryland Ry. (1/12)
Dec. 14 company was reported to be planning the issu¬
ance of about $2,450,000 equipment trust certificates on
or
about Jan. 12.
Probable bidders: Halsey, Stuart &
Co. Inc.; Harris, Hall & Co. (Inc.); Salomon Bros. &
Hutzler; Harriman Ripley & Co.1 and Lehman Brothers
(jointly); Lee Higginson Corp.
Volume
170
Number 4868
THE
COMMERCIAL
price $20 less than market, when
reach
more
The
debentures
will
mature
The
in
are
dertaken
for
issues, due
new
month, this
mpre than
was
out
next
of
little
week
a
handshaking and
gratulations
tin
the
and
con¬
investment
the
leader
in
that
direction,
ing
over
investment
closing
as
sell
and
at
certain
himself
other day,
prices"
"locked
but
out"
out
equal
maturity,
which
$24,000,000.
graph Co.'s $200,000,000 of
due
provided
out
the
chief
a
to
really begun
Big
Rail
Issue
the
carrying
holders,
of
rail
approval
of
share¬
of the largest pieces
bond business in months
one
looms ahead of the market.
The proposal calls for the sale
of; §55,000,000 in
first mort¬
new
gage
bonds next month to
vide
funds
bafnk
loan
for paying
and
pro¬
off of
redemption,
a
on
April I,
of currently outstand-'
ing general mortgage bonds to- ;
taling $33,400,000.
The
single
a
mortgage debt,
Getting to Market
market next
needed
to
extensive
of which
turn
have
of the gravest
the threat of
a
re¬
the
to
inequitable and un¬
system
of
industrial
that
existed
under: the
Wagner Act, "The Survey" states.
"Another
social
the demand for hew
was
that would have
programs
necessitated large additions to the
already
heavy
encroachments
of
burden.
A
of deep new
governmental
authority, and
even
the
carry
year
of
the
was
1949 levels.
Large gov¬
expenditures for na¬
tax
ness—first
nomic
menace
name
the
in
of
name
stability and
later
surplus
the
was
and
ac¬
expanded
of Federal expenditure
in time of peace and
ing the hope of
a
end¬
balanced budget
the
HELP
^
The
Near-Term
"The
natural
policies,
for
Outlook
however,
may
time,
some
or
velopments
foreseen.
that
Unlisted
house
with clientele
desires
Street
or
near
be
determined
future
i
of them
through
current
stimulating
The
LIQUIDATION NOTICES
Winsted,
in
the
of
the
the
association
to
present
of
State
for
too
small
serious
confidence
CLARENCE
H.
im¬
of
located
but
to
at
Winsted,
notified
the
association
in
to
present
are
of
State
for
of
Con¬
hereby
payment to
undersigned at said bank.
EDWARD
'
Dated
F.
i
f
.
Experienced
servicing
W
STATES
REFINING
AND
home
to
lie
in
the
possibility
of illThere
will
certainly be
instatement
pressure for re¬
the
of
Wagner Act,
for almost unlimited
governmental
tinkering in the economic field
along some such lines as were laid
down
in
the
proposed
Economic
Stability and Economic Expansion
Acts
of
1949,
to
creases
for
and
SMELTING.
COMPANY
MINING
wires.
25 Park
■
the
on
Jan¬
on
1950 to stockholders of record at the
FRANCIS FISKE,
Treasurer.
present levels of
and to finance new
expenditure
spending schemes.
"Congressional action in these
directions could strike a series of
blows at business confidence that
would
all
upset
absence
predictions.
of
an
setback
from
changes
a
from
this
source
the
bility
relations,
ranted
business
in
months
seems
anticipating
favorable
war¬
generally
conditions
in
immediately ahead."
DIVIDEND NOTICES
CONSOLIDATED TEXTILE CO., INC.
de¬
December 21,1949
of Dividend No. 17
The Board of Directors of Con¬
solidated Textile Co.,
Inc., at a
meeting held on December 21,
1949, declared 20£ per share as
SUPERHEATER, INC.
Dividend No. 182
a
•'
•
1
.
.
„
.
•
*
:
*
•
*
«
•
share
on
dividend
all
quarterly dividend
tal Stock of the
•
quarterly
;:
'
the Capi¬
pay¬
January 13, 1950 to stock¬
holders of record December
fifty cents (50c) per
the
outstanding stock
of
the
been declared payable January
the
on
Corporation,
able
of
Company has
1950 to stockholders of record at
business
January 6,
1950.
30,
1949.
R. W.
close
of
Gleason,
OTTO W. STRAUSS, Treasurer.
|iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiipi»niniiiiiiiiiiniiiiiiiiiit!ii|
CORPORATION
| and Electric Association
g1
*
COMMONDIVIDENDNO.11
I
|
|
|
|
|
|
%
s
|
DIVIDEND
The Trustees have declared a |
quarterly dividend of twenty-two/ 1
clared
and one-half
cents
(22)^)
The
Board
per
|
share on the COMMON SHARES
of the Association payable
January 16, 1950 to shareholders
of record at the close of business
|
1
|
Common
;
>
H. C MOORE, JR., Treasurer
December 22, 1949.
NOTICE
of
Directors
has
de¬
quarterly dividend
a
50c per
December 30, 1949.
share
on
Stock,
of
the outstanding
payable
on
February 1,1950, to stockholders
of
record
on
January 11, 1950.
|
|
The transfer books will not close.
|
December
THOS. A. CLARK
22, 1949.
'
Treasurer
|
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiuiiiuiiuuuiuuiiiuniiffiSiiiiiuimiHiiuiiiil
Call for
Address
and
replies
Box
to
& Financial Chron¬
Place, New
New York, N. Y.
York 8, N. Y.
Philip Morris &Co.
The
$1.00
SOUTHERN
share
Stock,
clared
on
Series has
4%
Iron
Ltd.. inc.
quarterly dividend of
the Cumulative Pre¬
regular
per
ferred
been
RflVOm&R
ness on
January 20,
1949.
has
also
declared
OF HIGHLY
PURIFIED
the
WOOD
quarterly dividend of 60r per share on
the Common Stock ($5 Par), payable
January 15, 1950 to holders of Common
Stock of record at the close of business
January 4,
on
SA|ESM/IN
,
experienced
looking
with
firm
private
for
i
that
can
n
25
Park
or
no
*"|
Certificate representing
shares
of
any purpose,
Certificate
or
Common Stock
each
Common
Stock
a
of
shall
until surrendered, and
Certificates for new
of
have
the
been
par
value
issued
of $5
therefor.
Holders of Certificates for shares of
Common Stock of the par value of $10
S
each are, therefore, urged to exchange
such Certificates, for Certificates for
1222, Commercial & Financial
New York 8.
\
<
the par value of $10 each is recognized,
for
handle
Box
1945,
share
opportunity
placements.
'
Pursuant to,a resolution adopted at
the Stockholders' Meeting held on July
10,
Thoroughly
1950.
new
Place, I
?
Common Stock of the par value of
new
Common
Stock
$5
par
value,
for each share of Common Stock of the
The Board of Directors
has'declared a regular
quarterly dividend of fifty
cents (50(f ) per share on the
Common Stock, payable
February 15,1950, to stock¬
holders of record at the
close of business
January
27,1950.
G.
HANSON,
President
Treasurer.
December 9,1949
A
quarterly dividend of
thirty-one and one-quarter
cents (31.25c)
per share on
the Preferred Stock of this
company
payable
to
has been declared,
January 2,1950
on
stockholders of record
December 15,1949.
EDWARD BARTSCH
value of $10.
L.
Dividend on Preferred Stock
CELLULOSE
$5 per share, on the basis of two shares
of
savannah, georgia
PRODUCER
1950.
been
STATES
Roofing Company
de¬
payable
the
\
Comment in finan-
December 21, 1949.
trading
In
unexpectedly
ever-present possi¬
of a crisis in international
<
=
*
.
in¬
tax
meet
Notice
J !,
par
9,
at
WANTED
general
in
1221, Commercial
icle,
Chronicle,
McARDLE,
Liquidating Agent.
December
conditions
as
PHILIP MORRIS*
SITUATIONS
to
Winsted,
-therefore
claims
far
advised Federal legislation.
COMBUSTION ENGINEERING-
|
1
Listed & Unlisted Securities,
the
the
suggest
1 New England Gas
UNITED
sT
hereby
payment
necticut, is closing its affairs. All creditors
the
"As
DIVIDEND NOTICES
r
the
that
coun¬
Place, New York 8.
is
of
to
NATIONAL DISTILLERS
permit man to take fair
plus 65% commission
basis. Box D 1229, Commercial
Con¬
BUNNELL,
Bank
exported
PRODUCTS
Dec. 21, 1949
--
1949.
National
Hurlbut
from
reduce
are
concerned, the most likely
threat to the fulfilment of favor¬
able expectations for 1950
serious
time
DIVIDEND NOTICES
a
The
goods
to
the
in
early outlook. Consumer demand
is still strong, especially for such
Unlisted Trader Available
Liquidating Agent.
Dated December 9,
on
or
goods
drastic
more
diminish for¬
area.
October,
those
20,
Will
undersigned at said bank.
-
in
from
increased;
be
comparatively little loss of
trader
Winsted.
therefore
are
claims
been
yet
declined
tries
likely to
influences of
without
as
near-
Uncertainties
not
imports
area
problem.
comparative
of
close of business December 30, 1949.
necticut, is closing its affairs. All creditors
notified
the
on
countries
while
with
of
of
wide problem of the 'dollar gap.'
Exports
to
the
Marshall
Plan
•
and
and
the foreign trade of
the United States or on the world¬
A
income
the
for events to show what effect the
devaluation of foreign currencies
have
to
dependence
the
has
either
dollar
costs
or.
"Business has passed through a
period of wholesome adjustment
There
at
in
•
pairment
prob¬
for
rightly regarded
February
1,
1950 to
holders of record at the close of busi¬
Bank
are
demand
factors
Chief
"There
may
of
its
on
expansion program.
National
actually
trouble
up
are
the
may
position
v
them
in
They all help, however
are more
by
ex¬
business
term outlook.
another sort.
uary 14,
contacts.
of
some
bolster
Economic tendencies in
the
principal condi¬
active
all
storing
therefore
by future de¬
cannot,,jiow be
twenty-five cents (25A) per share
Common Capital Stock, both payable
•
Not
ing, and
be prevented
of
TKADEll
of
cisive trend.
consequences
The Directors have declared a
quarterly
dividend of l%% (&7% cents per snare) on
the Preferred Capital Stock, and a dividend
WANTED
the
were
indefinite future period.
an
eco¬
in
economic expansion.
of
are
future.
to
dollar
for funds
and will
ofter its employes the "rights" to
subscribe for additional stock at a
located
relatively
are
contribute to the standard of liv¬
con¬
products
mounting
other
1950.
wartime
& Financial Chronicle, 25 Park
non-convertible,
First
new
future
some
high
new
cause
competition, in the field of busi¬
Early
directly to the public
$200,000,000 of new deben¬
The
for
underlying the general
ably
the
seems
1950
of
1948 and
not now
way
resulting in the prospect of the
largest Treasury deficit ever in¬
governmental
.
was
the
face
programs
even
"a year ago
one
was
relations
ex¬
It will go
tures,
Created
"Some of the dangers that faced
avoided,
new
likely to
supports for farm
such
economic life
of
time introduc¬
same
New Problems
System, plans early entry into the
money
with
conditions,
some
seem
of
deferred
American
Telephone & Tele¬
graph Co., parent for the operat¬
ing, companies making up the Bell
(
quarter
these
of
creation
difficulty at
the
tjiat
r
clusive of equipment trust issues.
.»
economic
the long run.
of the few
one
in
output. - The
ceptance of
new problems
are perhaps
less urgent but no less serious in
already has called
$25j760,000 of first mortgage bonds
for- payment Jan.
1 next, using
funds: secured through the bank
loan.
Completion of the program
with
in
road
will make the road
worst
solve
restoration
eign
appears
Estimated
expenditures
ernmental
One of these
for
third
-
The publication states
the last 12 months
ing
Looms
Chicago, Rock Island
still
was
that
economic
& Pacific RR.'s plan for financing
i its .entire
funded
debt now
whether the
or
menace
while at the
as
of
the
time.
changes
been
With the
whether
serious
curred
our
bidding rolls around.
of
have answered that question arid
have
brought some wholesome
groups,
firms each
instead
determine
imminent.
capital, probably running to
the time for
relations
favorable.
high, though somewhat below the
a
unwise public
policy.
Two of the year's devel¬
opments, e s p e c i a 11 y, unless
countered
further
And
•
more
the
foreseeable,
ing
or
will be
insurance
plant and equipment in the first
maturity
through
lower
between
them, will represent just about all
available
investment underwrit¬
hundred
to, will
hands The
power
veterans'
industrial
"These
the
escape
in
topic
Telephone's business since the ad¬
vent of competitive bidding.
a
business
is g rounding
in which the net move¬
inflationary
by the firms which
have become traditional rivals for
•
year
not
problems
prices in general has been
had
headed
*
time
the
measures
business
for
legislators
in
equilibrium demands
by
generally
tions
"Although
price
31
Two banking groups
arc^ form¬
go after this one and will
two
first
that
so
be
Retrospect
"The
of
often-predicted postwar recession
ing to
■
for
for payment.
tinuation
new
Jan.
conversation.
they should.
These
14
might, in the meantime, devise
cult
'
•
would
The
set for 1952
stages—so early that it was diffi¬
-By and large the forthcoming
American
Telephone &
Tele-
be
in
take
refunds of $2.8 billion to be paid
in January.
Once the coal dispute
is settled, the immediate outlook
of
$27,000,000
exception, the final
one
was
mature
will
39
circles indicates little faith in
idea that devaluation
alone
public and very large and
increased
instalments
each, with
higher
levels.
A
year
ago
prices had
passed their peak, but the read¬
justment was still iri - its early
^activity
the closing week were
the individual trust accounts.
well
would
shortage due
purchasing
ready
election.
issue
ment of
through
current
last
toward
The only substantial investment
interests which appeared to main¬
tain
an
element
of
of
con¬
major portion of the
$500,000,000 approved by voters
steel
Liquid assets
the
of
pectation
issue
year-end
American
of
market by the absence of
interest from foregoing sources.
next,
fill.
bonds
such
time, which would
means
New York, it is pointect out that
for the first time since;'the
war,
the
debentures,
of
Guaranty Survey," published by threats were averted, for the time
the Guaranty Trust
Company of being at least, our economy did
"nice orders to buy
some
the
In
active
one
trader explained the
found
1949 in
their
up
situations.
Accordingly,
he had
preparing to is¬
in¬
than in look¬
year
new
the
The
strike
defense, public works and
foreign aid seem certain.
terests, namely banks and insur¬
ance
companies,- are visibly more
books for the
cial
the
tional
Oft-the-Street
in
durable goods as homes and auto¬
a
banking world.
interested
is
(2671)
mobiles.
the
to
stitute
This
probably will con¬
tribute heavily to next year's pub¬
lic offerings in the state and mu¬
nicipal field.
Pennsylvania now looks like
engaged in forming groups to
bid
State
in the
Several large pieces of soldier
bonus financing remain to be un¬
which
about
at that
Veterans' Bonus Bonds
firms
issue to
an
along
$375,000,000
sue
January.
for. those
market
CHRONICLE
early part of March.
1971 and registration is
expected
early next month to permit open¬
ing of bids on the final day of
Except
FINANCIAL
making its plans for
is completed, but not
than $150 nor less than
$100
share.
payment
a
&
Ross G. Allen
Secretary and Treasurer
FINANCIAL CHRONICLE
&
COMMERCIAL
THE
f (2672/
40
Thursday, December 29, 1949
OA SI
pensioners.
The
House
proposed to provide benefits for
totally and permanently
persons
tlfanMed.
on...
: be
of any
BeWnd-titt-StMw Interpretations
/■ Y1 /v
upon
JL (/ M*
would
$3,600
person's income, instead
of the present
Yf
*w
2jL f t/\As
taxes
the first
Payroll
levied
Fin¬
first $3,000.
ally, the House adopted
of
have' outstandings
could
Finally, the purposes for
which VEDC could make small
business loans are much broader
'This is
billion.
the
much re-written draft
a
On the other hand, there is a
This
bill first saw the light of day early considerable prospect that before
in
1946, when handed to Con¬ this bill is finally brought out, it
will contain a provision integrat¬
gressmen by the legislative agents
of a prominent veterans' organiza¬ ing VEDC not only with RFC, but
inent'
their
cies offering
their
might be used for small business,
whether
tongues bulging prominently in
their cheeks, knowing it at that
only
had
riskier compartment of
in
which
With
quietly and
seriously by a number of prom¬
inent Senators.
The last draft
taken
lias been
the
all
bore
up
of
names
a
and all
the
among
were
.
sup¬
of this bill are
enlist all shades of j
to
opinion on its-behalf, and hence
«re not touting their proposition
Instead they have been
publicly.
similar
(
!
persuade
spokesfor small business, before go¬
veterans' groups and from
iTven
lend
to
;
with
little
a
special capital
of
up
representatives of the widest
areas'of opinion.
It is hoped to
"I've
Committee
subcommittee
a
or
thereof.,
the bill
closely the
In outward appearance,
resemble
to
i3eems
legislation.
proposed
the
,
record
setting
rental
How
ance.
far
so
would
create
i could
business loans
of the
loans
of
of
subject
10
the
specified
any
lime limit. RFC's loans are sup¬
posed to be adequately secured.
The VEDC loans could be ade¬
quately
so
as
.
secured
to
assure
OR
a
Intent,
was
"sound/
reasonable
...
prospective
are
later
charge that in
a
they were being discriminated
against
on
account of race, even in
of a Written instru¬
absence
the
ment, then the foundation of the
FHA
insurance
might
become
shaky indeed.
The penalty for
violating the regulation is the ma¬
turing of the mortgage.
second
A
now
provides accounting,
they
are
customers.""- The ^YEDC
could not only provide broadly its
f^ewn
technical service for small
business, but could call upon any
government agency for assistance
in giving such free service.
Whereas RFC is at the moment
limited td outstandings of $1
bil-*
■ ■
question'
is:
first"
of
will
pay.
Under
:
the
is
the
$30
department's
per
former
to
week'
of
/
pro-
be
some
employed,
while
and
three
with
or
tend to
out
pay
higher than paid
the
that
jobless
department
,
every
state
benefits for a
Only two
minimum of 26 weeks.
states
now
do so.
/
groups under UC, and would raise
the rate of payroll taxes.
these
a
than
for
states
unemployment
now
in
•'
most thorough go¬
a
insurance
sinking
for
fund
scaled
from
100%.
and
near
and
program,
' ;
;
and oper¬
owns
terminal properties
Peoria,
second
the
All of its
largest city in Illinois.
capital stock is owned by the fol¬
lowing six railroads: Illinois Cen¬
tral RR.
Co.; The New York Cen¬
tral RR. Co.;
&
The New York, Chi¬
& St. Louis RR. Co.; Chicago
cago
Western
North
Pennsylvania RR.
Co.;
Ry.
Co.;
Ry. Co.
& Illinois Midland
cago
The
and Chi¬
v
Finance Com¬
of the
gag
are
rule prohibiting no amend¬
little debate. They
Cement Stocks:
Riyerside Cement
,
Spokane Portland Cement
intend to take the bill apart in a
series of hearings which
The
its
take
own
period
over-a
weeks.
of
-
committee
time
t
Under
the
collect
means
writing
about
the
House,
average
to
Coplay Cement Mfg.
Glens Falls Portland Cement
its
bill
as
increase
an
SI V ■ ;.!-r
;>
passed
of
LERNER & CO.
by
an
of 80% in monthly ben¬
efits would be provided Federal
compensation.
Oregon Portland Cement
will ex¬
several
version of social security ex¬
tension.
steps
the
'
ments and very
would involve
eventual paying out of more rev¬
enue
'
piqued at the action of
the House in adopting a sweeping
extension of social security under
tend
-
Finally, the department would
cover the self-employed and other
All
give
posed by the House.
'
provide
'
unemployment
to
'
more
by most states.
Furthermore,
f. '
compensation proposals, the Sen¬
ate Finance Committee does in¬
Members
are
'
"r;
.
prices
company
railroad
ates
•*
£
•••■■.
•
attention
mittee
These rates
at
to
The
While it will give probably lit¬
tle
dependents.
would
' "
redemption
bonds will be redeem¬
and
100%
102%
other social security features pro¬
70% of their former
if
wages,
•"
or
104%%.
at
new
'
'
,\
xo-7>
vivors
if single, or up to about $42 per
week
;
The
to
ing over to the House-passed ex¬
tension of the old age and sur¬
of their
50%
or
wages
:
would
minimum
a
,
'
by the trustee
1, 1950, of these series A
purposes
expendi¬
/.*
*
used
able at prices ranging from 105%
large
a very
Federal
to
Feb.
bonds
this
tures.
prop¬
J:
/
beneficiaries
grain,
entitled
would add
program
on
be
com¬
unemployment,
heavy
5%%..
mortgage
the retirement
for
^
con¬
unemployment
of
increment
jobless
Investment
10 Post Office
Securities
Sqoare, Boston 9, Ma**.
Telephone HUbbttd 2-1990
Teletype BS 69
What
praisals to properties which might
HAnover 2-0050
acquire low* r irruket! Values*be¬
cause of racial ciumges in neigh¬
'
may
explore
these
of
problem
the
ahead, with
be expected to
other facets
and
before
going
T
\
Teletype—NY 1-971
'■
| |
•
A".
'
•' '
-
r
'
FOREIGN
White House had backed openly
70
SECURITIES
its direction at the
WALL
Offices
STREET
tel. WHitehall 4-4540
Trading Department
SPECIALISTS
such FHA amendments as
Commissioner
Richards
an¬
120
any
at
5
Executive <fe Underwriting
"j
*
to get a plug
President Truman.
If the
nounced
YORK
f?ARL MARKS & ro. INC.
sumably is
time the $19-billion public hotis-
Hill, Thompson & Co., Inc.
NEW
SECURITIES
All Issues
the "median in¬
bill, which pre-
f ■>.
Firm Trading Markets
i ' FOREIGN
come" housing
from
I
|
borhoods?
Congress
HFC
the
Government
of out¬
securing $2,500,000
weight FHA .will give in its ap¬
prospect of repayment,
management, and legal advice to
small business, .whether or not
of
only
purchasers
or
,j, ■
■
This would in effect make
Federal
watching
agandizing for a general raising
of benefits, liberalization of cov¬
erage, and extension of the period
.s
property. ;
close
.The Labor Department
is
racially-restrictive
a
on
'
for the future.
which
men
bear
will
sation.
interdiction might
with the FHA
or
fact
proposed Veterans
to
estate
disappointed
If
ISeonomlc Development Corp. is
not
real
able to assert either in the courts
At
RFC
is limited to
maturity
the
years;
more.
maturity
the
present
much
dp
of
r
t'f
v
what in effect amounts to federal¬
•
That
renters
service for small business—but
it
/■
to bar the executing or record¬
which could
do in the way of loans and
•{
insur¬
such
beyond
duplicate exactly what the Re¬
construction Finance Corp. can
mow
con¬
intent.
ing
the states.
:
ization of unemployment compen¬
or
covenant
have
pensation, with the states doing
the clerical work.
In a period
in the courts, to go
the original,; specified
$500-million
a
dollar corporation
in
questions
the
House.
troller
later interpreted administra¬
tively
bill
the
revealed,
;
the
whether
1>«»
the objective of as¬
sisting veterans. The retention of
the language about helping vet¬
erans may serve to retain strong
veteran support for the proposi¬
tion.
'■
...
As
of
One
shall be
who hereafter
under
will interest
not the borrowers are veterans,
that FHA
covenant
' t"
the
in
»•••
Congress in 1950, the
Labor Department's program for
properties built for
sale
would
program
■
Although it is not in the cards
mortgages
with
tk-j
-
for action by
persons
or
-
department's plan, Congress
would provide Federal grants to
the
session, the public
killed
been
up
racial
a
nection
is co-equal to
-
to
denied
igp ever, the bill has been modified
to provide that offering credit fa¬
cilities for small business, whether
or
of
insurance
original bill of 1946, with its re¬
dundant references to aiding vet¬
erans as the primary objective of
left
are
the
the difference, under
To make up
under consideration
was
19£9
housing
'
>
banks for
White House order
'he
lag bill
iu
questions, among
in the air by
the terms of the new regulations
issued
by- FHA
Commissioner
Franklin D. Richards, to carry out
others,
&
bonds, series A, due Aug. 1, 1974,
taxes!"-
Let's put a tax on all
it!
got
and
Two important
out - a
near-final , draft
shortly and open it to public hear¬
ings before the Senate Banking
Bank
Hanover
trustee, under the mort¬
standing
the
bring*
Central
gage
the
business.
small
other
funds, will be deposited
Trust Co.,
attention
here and there is for the
not only to bring it up
to date, but to attempt to please
rstantly,
with
,
Finally, another pro¬
getting
posal
/•
;
together
-Proceeds,
Company
to* small
freely
more
business.
ing ahead.
They have been re¬
writing the original draft con-
Commission
authorization/V!V;:
companies
insurance
The sale
subject to Inter¬
Commerce
state
O'Mahoney of the Joint Eco¬
nomic
Committee is trying to
waiting until they were "all set"
with a wide range of support from
bid of 98.5467.
a
bonds is
won
competitive
,
The
Chairman
Board.
Reserve
by
offered
that
to
on
of the
empowered to
guarantee up ;to 90% of small
business loans by commercial
banks. The Small Business Advisory Committee; of the De¬
partment of Commerce has pro¬
posed a loan guarantee scheme
sponsors
:seeking
sale
posed that it be
porters.
The
award of the bonds at
Federal Reserve Board has pro¬
General, formerly Senator McGrath,
and accrued interest. The firm
maturity limit on that agency's
is
series A, due Jan. 1, 1975, at 100%
aid,
The
business loans, be removed,
and
Democrats.
Vice-President Barkley, while
still a "Senator, and Attorney
Republicans
Inc.
first mtge. 3%%"' bonds,
Ry; Co.
the
President has pro¬
posed that RFC's loanable funds
be doubled and that the 10-year
ing.
left to
the way
between, and counting both
in
credit
bills for smal business is impos¬
score
of authors from extreme
extreme right
scheme,
proposed
of
Co.
&
$2,500,000 Peoria & Pekin Union
participate.
VEDC
the
number
Stuart
offering publicly today (Dec. 29)
other gov¬
some:
ernment agency can
then, however, the bill
Since
or
loan
a
'
Halsey,
only the
out that VEDC will take
junior
of consideration, and it has not
,yet been the subject of a hearing.
Ry. 3Vg% Ser. A Bonds
borrowers
the
not
or
veterans,- It may be worked
were
chance
remote
a
Peoria & Pekin Union
credit facilities which
lent
views.)
own
Stuart Offers.
r,
agen¬
with
Congressmen
to
the
bill
xiames,
time
other government
all
with
tion. A number of the most prom¬
/
the "Chronicle's"
bill.
Corporation"
opment
each
reaching
[(This column is intended to re¬
flect the "behind the scene ' inter¬
pretation from the nation's Capital
and may or may not coincide with
the RFC. "
than are allowed to
of the '/Veterans Economic Devel¬
3*4%
taxes
employee and employer by
1970.
$5
.shortly will go "on sale" another
proposed public facility for
fostering of small business.
'
pay¬
tw
the VEDC
lion for business loans,
C.v-There
D.
pro¬
OASI
roll
.WASHINGTON,
a
posed rising scale of
from the Nation'* Capital
50 Broad Street
-
New York 4, N. Y.
AFFILIATE: CARL MARKS & CO. inc. CHICAGO
:■
BROADWAY
Tel. REctor 2-2020
@FedFRASER